EXHIBIT 99.2
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LOAN AGREEMENT
Dated as of June 11, 2003
Between
EACH OF THE PERSONS IDENTIFIED ON SCHEDULE I
ATTACHED HERETO
individually and collectively, as Borrower
and
▇▇▇▇▇▇ ▇▇▇ INC.
as Lender
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TABLE OF CONTENTS
Page
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I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION................................................................1
Section 1.1 Definitions..........................................................................1
Section 1.2 Principles of Construction..........................................................28
II. GENERAL TERMS.........................................................................................28
Section 2.1 Loan Commitment; Disbursement to Borrower...........................................28
2.1.1 Agreement to Lend and Borrow........................................................29
2.1.2 Single Disbursement to Borrower.....................................................29
2.1.3 The Note, Security Instruments and Loan Documents...................................29
2.1.4 Use of Proceeds.....................................................................29
Section 2.2 Interest; Loan Payments; Late Payment Charge; Extension.............................29
2.2.1 Interest Generally..................................................................29
2.2.2 Interest Calculation; LIBOR determination...........................................30
2.2.3 Eurodollar Rate Unascertainable; Illegality; Increased Costs........................31
2.2.4 Payment on Maturity Date............................................................33
2.2.5 Payments after Default..............................................................33
2.2.6 Late Payment Charge.................................................................33
2.2.7 Usury Savings.......................................................................34
2.2.8 Taxes...............................................................................34
Section 2.3 Prepayments.........................................................................35
2.3.1 Voluntary Prepayments...............................................................35
2.3.2 Mandatory Prepayments...............................................................36
2.3.3 Prepayments After Default...........................................................37
2.3.4 Making of Payments..................................................................37
Section 2.4 Interest Rate Cap Agreement.........................................................37
Section 2.5 Release of Property.................................................................39
2.5.1 Release of Individual Property......................................................39
2.5.2 Release on Payment in Full..........................................................41
Section 2.6 Substitution of Properties..........................................................41
III. CASH MANAGEMENT.......................................................................................48
Section 3.1 Establishment of Accounts...........................................................48
Section 3.2 Deposits into Lockbox Account.......................................................50
Section 3.3 Account Name........................................................................51
Section 3.4 Eligible Accounts...................................................................51
Section 3.5 Permitted Investments...............................................................51
Section 3.6 The Initial Deposits................................................................51
Section 3.7 Transfer To and Disbursements from the Lockbox Account..............................52
Section 3.8 Withdrawals From the Tax Account and the Insurance Premium Account..................54
Section 3.9 Withdrawals from the Replacement Reserve Account....................................54
Section 3.10 Withdrawals from the Required Repair Account........................................54
Section 3.11 Withdrawals from the Borrower Expense Account.......................................54
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Section 3.12 Withdrawals from the Extraordinary Expense Account..................................54
Section 3.13 Withdrawals from the Excess Cash Flow Account.......................................54
Section 3.14 Withdrawals from the Debt Service Account...........................................55
Section 3.15 Withdrawals from the Mezzanine Account..............................................55
Section 3.16 Withdrawals from the Ground Rent Account............................................55
Section 3.17 Withdrawals from the Common Charge Account..........................................55
Section 3.18 Sole Dominion and Control...........................................................55
Section 3.19 Security Interest...................................................................55
Section 3.20 Rights on Default...................................................................55
Section 3.21 Financing Statement; Further Assurances.............................................56
Section 3.22 Borrower's Obligation Not Affected..................................................56
Section 3.23 Payments Received Under this Agreement..............................................56
Section 3.24 [Interest Rate Cap Agreement Payments...............................................57
Section 3.25 Lender Reliance.....................................................................57
Section 3.26 Borrower Access to View Account.....................................................57
IV. REPRESENTATIONS AND WARRANTIES........................................................................57
Section 4.1 Borrower Representations............................................................57
4.1.1 Organization........................................................................57
4.1.2 Proceedings.........................................................................57
4.1.3 No Conflicts........................................................................57
4.1.4 Litigation..........................................................................58
4.1.5 Agreements..........................................................................58
4.1.6 Solvency............................................................................58
4.1.7 Full and Accurate Disclosure........................................................59
4.1.8 No Plan Assets......................................................................59
4.1.9 Compliance..........................................................................59
4.1.10 Financial Information...............................................................60
4.1.11 Condemnation........................................................................60
4.1.12 Federal Reserve Regulations.........................................................60
4.1.13 Utilities and Public Access.........................................................60
4.1.14 Not a Foreign Person................................................................61
4.1.15 Separate Lots.......................................................................61
4.1.16 Assessments.........................................................................61
4.1.17 Enforceability......................................................................61
4.1.18 No Prior Assignment.................................................................61
4.1.19 Insurance...........................................................................61
4.1.20 Use of Property.....................................................................61
4.1.21 Certificate of Occupancy; Licenses..................................................61
4.1.22 Flood Zone..........................................................................62
4.1.23 Physical Condition..................................................................62
4.1.24 Boundaries..........................................................................62
4.1.25 Leases..............................................................................63
4.1.26 Survey..............................................................................63
4.1.27 Inventory...........................................................................63
4.1.28 Loan to Value.......................................................................64
4.1.29 Filing and Recording Taxes..........................................................64
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4.1.30 Franchise Agreement.................................................................64
4.1.31 Insolvency Opinion..................................................................64
4.1.32 Management Agreement................................................................64
4.1.33 Illegal Activity....................................................................64
4.1.34 No Change in Facts or Circumstances; Disclosure.....................................65
4.1.35 Investment Company Act..............................................................65
4.1.36 Principal Place of Business.........................................................65
4.1.37 Single Purpose Entity...............................................................65
4.1.38 Business Purposes...................................................................70
4.1.39 Taxes...............................................................................70
4.1.40 Forfeiture..........................................................................70
4.1.41 Environmental Representations and Warranties........................................70
4.1.42 Taxpayer Identification Number......................................................71
4.1.43 Intentionally omitted...............................................................71
4.1.44 OFAC................................................................................71
4.1.45 Ground Lease Representations........................................................71
4.1.46 Condominiums........................................................................72
Section 4.2 Survival of Representations.........................................................73
V. BORROWER COVENANTS....................................................................................73
Section 5.1 Affirmative Covenants...............................................................73
5.1.1 Existence; Compliance with Legal Requirements.......................................73
5.1.2 Taxes and Other Charges.............................................................74
5.1.3 Litigation..........................................................................75
5.1.4 Access to Properties................................................................75
5.1.5 Notice of Default...................................................................75
5.1.6 Cooperate in Legal Proceedings......................................................75
5.1.7 Award and Insurance Benefits........................................................75
5.1.8 Further Assurances..................................................................76
5.1.9 Mortgage and Intangible Taxes.......................................................76
5.1.10 Financial Reporting.................................................................76
5.1.11 Business and Operations.............................................................82
5.1.12 Costs of Enforcement................................................................82
5.1.13 Estoppel Statement..................................................................82
5.1.14 Loan Proceeds.......................................................................83
5.1.15 Performance by Borrower.............................................................83
5.1.16 Confirmation of Representations.....................................................83
5.1.17 Leasing Matters.....................................................................83
5.1.18 Management Agreement................................................................85
5.1.19 Environmental Covenants.............................................................87
5.1.20 Alterations.........................................................................88
5.1.21 Intentionally Deleted...............................................................89
5.1.22 Franchise Agreement.................................................................89
5.1.23 OFAC................................................................................90
5.1.24 O&M Program.........................................................................91
5.1.25 The Ground Lease....................................................................91
5.1.26 Condominium Documents...............................................................92
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Section 5.2 Negative Covenants..................................................................93
5.2.1 Liens...............................................................................93
5.2.2 Dissolution.........................................................................93
5.2.3 Change in Business..................................................................93
5.2.4 Debt Cancellation...................................................................93
5.2.5 Zoning..............................................................................94
5.2.6 No Joint Assessment.................................................................94
5.2.7 Principal Place of Business.........................................................94
5.2.8 ERISA...............................................................................94
5.2.9 Affiliate Transactions..............................................................95
5.2.10 Assets..............................................................................95
5.2.11 Debt................................................................................95
5.2.12 Transfers...........................................................................95
5.2.13 Condominium Restrictions............................................................99
VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS..................................................100
Section 6.1 Insurance..........................................................................100
Section 6.2 Casualty...........................................................................105
Section 6.3 Condemnation.......................................................................105
Section 6.4 Restoration........................................................................106
VII. RESERVE FUNDS........................................................................................112
Section 7.1 Required Repair Funds..............................................................112
7.1.1 Deposits...........................................................................112
7.1.2 Release of Required Repair Funds...................................................113
Section 7.2 Tax and Insurance Escrow Fund......................................................113
Section 7.3 Replacements and Replacement Reserve...............................................114
7.3.1 Replacement Reserve Fund...........................................................114
7.3.2 Disbursements from Replacement Reserve Account.....................................115
7.3.3 Performance of Replacements........................................................117
7.3.4 Failure to Make Replacements.......................................................119
7.3.5 Balance in the Replacement Reserve Account.........................................120
Section 7.4 Intentionally Omitted..............................................................120
Section 7.5 Debt Service Reserve...............................................................120
7.5.1 Debt Service Reserve Deposit.......................................................120
7.5.2 Release of Debt Service Reserve....................................................120
Section 7.6 Ground Lease Escrow Fund...........................................................121
Section 7.7 Required Common Charge Fund........................................................121
7.7.1 Deposits...........................................................................121
7.7.2 Disbursements from the Common Charge Account.......................................121
Section 7.8 Reserve Funds, Generally...........................................................122
VIII. DEFAULTS.............................................................................................123
Section 8.1 Event of Default...................................................................123
Section 8.2 Remedies...........................................................................129
Section 8.3 Remedies Cumulative; Waivers.......................................................130
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IX. SPECIAL PROVISIONS...................................................................................130
Section 9.1 Sale of Notes and Securitization...................................................130
Section 9.2 Securitization Indemnification.....................................................133
Section 9.3 Servicer...........................................................................136
Section 9.4 Exculpation........................................................................136
Section 9.5 Contributions and Waivers..........................................................139
Section 9.6 Reallocation of Loan Amounts.......................................................143
X. MISCELLANEOUS........................................................................................144
Section 10.1 Survival...........................................................................144
Section 10.2 Lender's Discretion................................................................144
Section 10.3 Governing Law......................................................................144
Section 10.4 Modification, Waiver in Writing....................................................145
Section 10.5 Delay Not a Waiver.................................................................145
Section 10.6 Notices............................................................................145
Section 10.7 Trial by Jury......................................................................146
Section 10.8 Headings...........................................................................147
Section 10.9 Severability.......................................................................147
Section 10.10 Preferences........................................................................147
Section 10.11 Waiver of Notice...................................................................147
Section 10.12 Remedies of Borrower...............................................................148
Section 10.13 Expenses; Indemnity................................................................148
Section 10.14 Schedules and Exhibits Incorporated................................................149
Section 10.15 Offsets, Counterclaims and Defenses................................................149
Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries......................150
Section 10.17 Publicity..........................................................................150
Section 10.18 Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets............150
Section 10.19 Waiver of Counterclaim.............................................................151
Section 10.20 Conflict; Construction of Documents; Reliance......................................151
Section 10.21 Brokers and Financial Advice.......................................................151
Section 10.22 Prior Agreements...................................................................152
Schedule and Exhibits
SCHEDULE I Borrowers
SCHEDULE II Properties - Allocated Loan Amounts/Release Prices
SCHEDULE III Required Repairs- Deadlines For Completion
SCHEDULE IV Organizational Chart of Borrower
SCHEDULE V Monthly Scheduled Amortization Payments
SCHEDULE VI Ground Leases
SCHEDULE VII O&M Program Properties
SCHEDULE VIII None
SCHEDULE IX None
SCHEDULE X Franchise Agreement/Franchisor
SCHEDULE XI Special Assessments
SCHEDULE XII Sale Properties
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SCHEDULE XIII Litigation Schedule
SCHEDULE XIV Borrower Defaults
SCHEDULE XV Insurance Claims
SCHEDULE XVI Rent Roll/Leases
SCHEDULE XVII Lease Defaults
SCHEDULE XVII FF&E Deposits
SCHEDULE XVIII Required Lease Work
SCHEDULE XIX Lease Assignments
SCHEDULE XX Taxes
SCHEDULE XXI Permitted FF&E Financing
SCHEDULE XXII Property Manager
SCHEDULE XXIII Non-Wyndham Properties
SCHEDULE XXIV Mezzanine Borrowers
SCHEDULE XXV Condemnations
SCHEDULE XXVI Lease Exceptions
EXHIBIT A Property Account Agreement
EXHIBIT B Tenant Notice Letter
EXHIBIT C Assignment of Interest Rate Cap Agreement
EXHIBIT D Credit Card Notice Letter
EXHIBIT E Irrevocable Proxy
EXHIBIT F Excluded Group
EXHIBIT G Management Agreement
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of June 11, 2003 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
"Agreement"), between ▇▇▇▇▇▇ ▇▇▇ INC., a Delaware corporation, having an address
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Lender") and each of the Persons
identified on Schedule I attached hereto, each having an address c/o Wyndham
International, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(individually and collectively, as applicable, the "Borrower").
W I T N E S S E T H:
WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents (as
hereinafter defined).
NOW THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant 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:
"Acceptable Counterparty" means any Counterparty to the Interest Rate Cap
Agreement that has and shall maintain, until the expiration of the applicable
Interest Rate Cap Agreement, a long-term unsecured debt rating of not less than
"AA-" by S&P and "Aa3" by Moodys.
"Account Collateral" shall mean: (i) the Accounts, and all cash, checks,
drafts, certificates and instruments, if any, from time to time deposited or
held in the Accounts from time to time; (ii) any and all amounts invested in
Permitted Investments; (iii) all interest, dividends, Cash, instruments and
other property from time to time received, receivable or otherwise payable in
respect of, or in exchange for, any or all of the foregoing; and (iv) to the
extent not covered by clauses (i) - (iii) above, all "proceeds" (as defined
under the UCC as in effect in the State in which the Accounts are located) of
any or all of the foregoing.
"Accounts" shall mean, collectively, the Property Account, the Tax Account,
the Insurance Premium Account, the Required Repair Account, the Replacement
Reserve Account, the Common Charge Account, the Ground Rent Account, the Debt
Service Account, and the Lockbox Account.
"Accounts Receivable" shall have the meaning set forth in Article I of the
Security Instruments with respect to each Individual Property.
"ACM" shall have the meaning set forth in Section 5.1.24.
"Acquired Property" shall have the meaning set forth in Section
5.1.10(j)(i).
"Acquired Property Statements" shall have the meaning set forth in Section
5.1.10(j)(i).
"Additional Insolvency Opinion" shall have the meaning set forth in Section
4.1.31.
"Adjusted Prime Rate" shall mean an interest rate per annum equal to the
Prime Rate in effect from time to time plus 1% per annum.
"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.
"Affiliated Loans" shall mean a loan made by Lender to an Affiliate of
Borrower or any Guarantor.
"Affiliated Manager" shall mean any managing agent which is an Affiliate
of, or in which Borrower, Principal, or any Guarantor (or its successor) or any
transferee permitted pursuant to the terms of Section 5.2.12 hereof has,
directly or indirectly, any legal, beneficial or economic interest. Lender
acknowledges that DT Management, Inc. is not an Affiliated Manager.
"Allocated Loan Amount" shall mean, for an Individual Property, the amount
set forth on Schedule II hereto.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"Annual Budget" shall mean the operating budget, including all planned
Capital Expenditures, for each Individual Property prepared by Borrower for the
applicable Fiscal Year or other period that may be specified herein.
"Applicable Contribution" shall have the meaning set forth in Section
9.5(f) hereof.
"Applicable Interest Rate" shall mean (A) from and including the date of
this Agreement through the last day of the Initial Interest Period, an interest
rate per annum equal to 4.5%; and (B) from and including the first Payment Date
and for each successive Interest Period through and including the date on which
the Debt is paid in full, an interest rate per annum equal to the greater of (i)
(I) the Eurodollar Rate or (II) the Adjusted Prime Rate, if the Loan begins
bearing interest at the Adjusted Prime Rate in accordance with the provisions of
Section 2.2.3 hereof and (ii) 4.50% per annum.
"Applicable Laws" shall mean all existing and future federal, State and
local laws, orders, ordinances, governmental rules and regulations and court
orders.
"Application Period" shall have the meaning set forth in Section 7.5.2
hereof.
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"Appraisal" shall mean an appraisal prepared in accordance with the
requirements of FIRREA, prepared by an independent third party appraiser holding
an MAI designation, who is State licensed or State certified if required under
the laws of the State where the applicable Individual Property is located, who
meets the requirements of FIRREA and who is otherwise satisfactory to Lender.
"Approved Annual Budget" shall have the meaning set forth in Section
5.1.10(d) hereof.
"Approved Expenses" shall have the meaning set forth in Section 3.7(b)(ix)
hereof.
"Assignment of Interest Rate Cap" shall mean that certain Collateral
Assignment of Interest Rate Cap Agreement made by Borrower in favor of Lender as
security for the Loan, consented to by the Counterparty, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
"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 Borrower, as assignor, to Lender, as assignee,
assigning to Lender all of 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 Conditional Assignment of Management Agreement
dated the date hereof among Lender, Borrower and 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 to
(or on behalf of) Borrower in connection with a Condemnation in respect of all
or any part of any Individual Property.
"Bankruptcy Code" shall mean 11 U.S.C. (S) 101 et seq., and the rules and
regulations adopted and promulgated pursuant thereto, as the same may be amended
from time to time.
"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) Ground Rent and (iv) Common Charges.
"Bel Age Hotel" shall mean that certain Individual Property located in West
Hollywood, California known as the Wyndham Bel Age.
"Benefit Amount" shall have the meaning set forth in 9.5(d) hereof.
"Borrower" shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and assigns.
"Borrower Expense Account" shall have the meaning set forth in Section
3.1(b)(viii).
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"Breakage Costs" shall have the meaning given to it in Section 2.2.3(d)
hereof;
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which national banks in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ or
the place of business of any Servicer, or special servicer are not open for
business.
"Business Party" shall have the meaning set forth in Section 4.1.37(aa).
"By Laws" shall mean the By Laws of the Condominium providing for the
operation of a Condominium Property.
"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 and
tenant improvements and the acquisition of furniture, fixtures and equipment).
"Cash" shall mean coin or currency of the United States of America or
immediately available federal funds, including such funds delivered by wire
transfer.
"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.
"Change of Control" shall mean (A) the acquisition, including through
mergers, consolidation or otherwise, by any Person or Group (excluding the
Excluded Group) of direct or indirect beneficial ownership as defined in Rule 13
d-3 under the Exchange Act of more than 50% of (i) the outstanding shares of
common stock of Wyndham or (ii) the total voting power of all classes of capital
stock of Wyndham entitled to vote generally in the election of directors, unless
such Person or Group owned at least 50% of the interests described in clause (i)
or (ii) above in Wyndham prior to such merger or consolidation; or (B) the
election by any Person or Group (other than the Excluded Group) of a sufficient
number of its or their nominees to the Board of Directors of Wyndham such that
such nominees, when added to any existing directors remaining on such Board of
Directors after such election who are affiliates or associates of such Person or
Group, shall constitute a majority of such Board of Directors.
"Closing Date" shall mean the date of the funding of the Loan.
"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
all applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"Collateral" shall mean the Properties, the Accounts, the Reserve Funds,
the Guaranty, the Personal Property, Rents, the Accounts Receivable, the Account
Collateral, and all other real or personal property (including any mortgage
notes) of Borrower or any Guarantor that is at any time pledged, mortgaged or
otherwise given as security to Lender for the payment of the Debt under the
Security Instruments, this Agreement or any other Loan Document.
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"Common Charge Account" shall have the meaning provided in Section
3.1(b)(vi).
"Common Charges" shall mean for a Condominium Property all Common Charges
and special assessments imposed pursuant to the Condominium Documents including,
without limitation, water rates and sewer rent.
"Common Elements" shall have the meaning provided in the Declarations.
"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.
"Condominium" shall mean for a Condominium Property, the condominium regime
created pursuant to the Condominium Documents, including, without limitation,
all commercial and retail units and Common Elements.
"Condominium Act" shall mean the provisions of the relevant statutes
governing condominiums in a State where a Condominium Property is located.
"Condominium Board" shall mean for a Condominium Property the organization
managing the Condominium by virtue of the Condominium Act, the Declaration and
the Bylaws, on behalf of all the owners of the Units comprising the Condominium.
"Condominium Board Policy" shall have the meaning set forth in Section
6.1(a) hereof.
"Condominium Documents" shall mean for a Condominium Property collectively
the Offering Plan, the Declaration, the Bylaws and the Rules and Regulations.
"Condominium Management Agreement" shall mean, with respect to a
Condominium Property, the management agreement entered into by and between the
Condominium Board and the Condominium Manager, pursuant to which the Condominium
Manager is to provide management and other services with respect to the
Condominium.
"Condominium Manager" shall mean for a Condominium Property the manager
engaged by the Condominium Board.
"Condominium Property" shall mean each Individual Property known as Hilton
Gateway Plaza, Newark, New Jersey; Wyndham Emerald Plaza, San Diego, California;
and Wyndham Hotel, Lisle, Illinois.
"Condominium Proxy" shall mean an irrevocable proxy given by Borrower to
Lender substantially in the form attached hereto as Exhibit E.
"Contract Rate" shall mean, at the time of any calculation, an interest
rate constant per annum equal to nine and one-quarter percent (9.25%).
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"Contribution" shall have the meaning set forth in 9.5(a) hereof.
"Counterparty" shall mean the Person which is the issuer of the Interest
Rate Cap Agreement.
"Crown Plaza" shall mean the Individual Property operated under a license
agreement with Six Continents Hotels, Inc.
"Cure Contract Rate" shall mean, at the time of any calculation, an
interest rate constant per annum equal to nine and one-half percent (9.50%).
"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 Security Instruments or any other Loan Document.
"Debt Service" shall mean, with respect to any particular period of time,
interest payments and all Monthly Scheduled Amortization Payments due under the
Note for such period.
"Debt Service Account" shall have the meaning set forth in Section 3.1(b).
"Debt Service Coverage Ratio" shall mean a ratio in which:
(a) the numerator is the Net Operating Income (excluding interest on credit
accounts) for the 12 full calendar month period preceding the date of
calculation 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 fees equal to the greater of (1) assumed management fees of three
percent (3%) of Gross Income from Operations or (2) the actual management fees
incurred, (B) assumed Replacement Reserve Fund contributions equal to the FF&E
Factor multiplied by Gross Income from Operations, (C) actual franchise fees
incurred in connection with the operation of the Properties and (D) Lease
Termination Payments; and
(b) the denominator is the aggregate amount of Debt Service and Mezzanine
Debt Service which would be due and payable for such 12 full calendar month
period, calculated at an interest rate constant (said constant includes both
interest and amortization) equal to the Contract Rate and Mezzanine Contract
Rate, respectively.
"Debt Service Reserve" shall have the meaning set forth in Section 7.5.1
hereof.
"Debt Service Reserve Deposit" shall mean an amount equal to $11,331,250.00
"Declaration" shall mean the declaration establishing the Condominium plan
for a Condominium Property.
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"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.
"Disclosure Document" shall have the meaning set forth in Section 5.1.10(j)
hereof.
"Doubletree Club Hotel" shall mean that certain Individual Property located
in Miami, Florida known as the Doubletree Club Hotel.
"Doubletree Tallahassee Hotel" shall mean that certain Individual Property
located in Tallahassee, Florida known as the Doubletree Hilton.
"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.
(S) 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, (a) the short term unsecured debt obligations or commercial paper of
which are rated at least A-1+ by S&P and P-1 by Moody's in the case of accounts
in which funds are held for 30 days or less, or (b) the long term unsecured debt
obligations of which are rated at least "AA" by S&P and "Aa2" by Moody's in the
case of accounts in which funds are held for more than 30 days.
"Emergency Repairs" shall have the meaning set forth in Section 6.4(d).
"Environmental Indemnity" shall mean that certain Environmental Indemnity
Agreement executed by Borrower and Indemnitor 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.
"Environmental Law" shall mean any present and future federal, State and
local laws, statutes, ordinances, rules, regulations, standards, policies and
other governmental directives or requirements, as well as common law, that apply
to Borrower or any Individual Property and relate to Hazardous Materials,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act and the Resource Conservation and Recovery Act.
"Environmental Liens" shall have the meaning set forth in Section 5.1.19
hereof.
- 7 -
"Environmental Reports" shall have the meaning set forth in 4.1.41.
"Equipment" shall have the meaning set forth in Section 5.2.12(f).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"Eurodollar Rate" shall mean, with respect to any Interest Period, an
interest rate per annum equal to LIBOR plus 2.00% per annum.
"Event of Default" shall have the meaning set forth in Section 8.1(a)
hereof.
"Excess Cash Flow" shall have the meaning set forth in Section 3.7(b)(xii)
hereof.
"Excess Cash Flow Account" shall have the meaning set forth in Section
3.1(b)(xi) hereof.
"Exchange Act" shall have the meaning set forth in Section 9.2(a) hereof.
"Exchange Act Filing" shall have the meaning set forth in Section 5.1.10(k)
hereof.
"Excluded Group" shall mean those holders of Series B Convertible Preferred
Stock of Wyndham listed on Exhibit F hereto and their Affiliates.
"Extension Fee" shall mean (i) with respect to the first Extension Term
only, $0.00 and (ii) with respect to the second and third Extension Terms, an
amount equal to one-half of one percent (.5%) of the then outstanding principal
amount of the Loan at the time of the commencement of the related Extension
Term.
"Extension Notice" shall have the meaning set forth in Section 2.2.1(b)(ii)
hereof.
"Extension Term" shall have the meaning set forth in Section 2.2.1(b)
hereof.
"Extraordinary Expense" shall mean an operating expense or capital
expenditure with respect to the applicable Individual Property that (i) is not
set forth on or made or deemed made in compliance with and pursuant to the
Approved Annual Budget (ii) is not an Approved Expense and (iii) is not subject
to payment by withdrawals from the Replacement Reserve Account or paid in
connection with an emergency at the applicable Individual Property. Borrower
shall deliver promptly to Lender a reasonably detailed explanation of such
proposed Extraordinary Expense for the reasonable approval of Lender.
"Extraordinary Expense Account" shall have the meaning set forth in Section
3.1(b)(ix) hereof.
"Fee Owner" shall mean Patriot American Hospitality Partnership, L.P., the
owner of the fee estate in the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Property.
"FF&E Factor" shall mean, for each Individual Property, four percent (4%).
- 8 -
"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as the same may be amended from time to time.
"Fiscal Year" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during the term of the Loan.
"Fitch" shall mean Fitch, Inc.
"Flood Insurance Acts" shall have the meaning set forth in Section
6.1(a)(vii) hereof.
"Force Majeure" shall mean the failure of Borrower to perform any
obligation hereunder by reason of any act of God, enemy or hostile government
action, civil commotion, insurrection, sabotage, strikes or lockouts or any
other reason solely due to cause or causes beyond the control of Borrower or any
Affiliate of Borrower.
"Foreign Taxes" shall mean any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority excluding, in the case of Lender or any successor and/or
assign of Lender, net income and franchise taxes imposed on such entity.
"Franchise Agreement" shall collectively mean those certain franchise
agreements more specifically identified on Schedule X attached hereto.
"Franchisor" shall collectively mean each franchisor with respect to the
applicable Franchise Agreement, as same is identified on Schedule X attached
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 unit
(federal, State, county, district, municipal, city, country or otherwise) or
quasi governmental unit 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 by Borrower
from the ownership and operation of the Properties from whatever source,
including, but not limited to, Rents, Accounts Receivable, utility charges,
escalations, forfeited security deposits, interest on credit accounts, 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 an uncollectible accounts, sales
of furniture, fixtures and equipment, Insurance Proceeds (other than business
interruption or other loss of income insurance), Awards, rents, revenues and
receipts received by tenants and concessionaires located at the Properties,
unforfeited security deposits, utility and other similar deposits and any
disbursements to Borrower from the Reserve Funds.
- 9 -
"Ground Lease" shall mean each ground lease identified on Schedule VI
attached hereto and any ground lease which creates Borrower's leasehold estate
in a Leasehold Property or Substitute Property, as applicable.
"Ground Lease Escrow Fund" shall have the meaning set forth in Section 7.6
hereof.
"Ground Rent" shall have the meaning set forth in Section 7.6 hereof.
"Ground Rent Account" shall have the meaning set forth in Section
3.1(b)(vii) hereof.
"Group" shall mean any Person or Persons acting together which would
constitute a "group" for purposes of Section 13(d) of the Exchange Act, together
with all affiliates and associates (as defined in Rule 12 b-2 under the Exchange
Act) thereof.
"Guarantor" shall mean Wyndham.
"Guaranty" shall mean that certain guaranty of recourse obligations, dated
as of the date hereof, from Guarantor to Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"Hazardous Materials" shall mean petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil; explosives;
flammable materials; radioactive materials; polychlorinated biphenyls ("PCBs")
and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is friable; underground or
above-ground storage tanks, whether empty or containing any substance; any
substance the presence of which on an Individual Property is prohibited by any
federal, State or local authority; any substance that requires special handling;
and any other material or substance now or in the future defined as a "hazardous
substance," "hazardous material", "hazardous waste," "toxic substance," "toxic
pollutant," "contaminant," "pollutant" or other words of similar import within
the meaning of any Environmental Law.
"Hilton" shall mean any Individual Property operated under a License
Agreement with Hilton Hotels Corporation.
"Improvements" shall have the meaning set forth in Article I of the related
Security Instrument with respect to each Individual Property.
"Indebtedness" of a Person, at a particular date, means the sum (without
duplication) at such date of (a) all indebtedness or liability of such Person
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) 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 (f)
obligations secured by any Liens, whether or not the obligations have been
assumed.
- 10 -
"Indemnified Parties" shall mean Lender, any Person or entity who is or
will have been involved in the origination of the Loan, any Person or entity who
is or will have been involved in the servicing of the Loan, any Person or entity
in whose name the encumbrance created by the Security Instruments is or will
have been recorded, Persons and entities who may hold or acquire or will have
held a full or partial interest in the Loan, the holders of any Securities, as
well as custodians, trustees and other fiduciaries who hold or have held a full
or partial interest in the Loan for the benefit of third parties) as well as the
respective directors, officers, shareholders, partners, members, employees,
agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including, but not limited to, any other person or entity who holds
or acquires or will have held a participation or other full or partial interest
in the Loan or the Property, whether during the term of the Loan or as a part of
or following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Lender's assets and business), provided, however, that any
indemnification provided for in any of the Loan Documents shall not, directly or
indirectly, extend to the benefit of or be transferred to any transferee or
assignee of any Indemnified Party (other than to the successor or assigns of an
Indemnified Party succeeding to such Indemnified Party's direct or indirect
interest in the Loan) or to any purchaser or future owner of any portion of any
Individual Property, unless such purchaser or owner was previously an
Indemnified Party.
"Indemnitor" shall mean Wyndham.
"Independent Director" shall have the meaning set forth in Section
4.1.37(aa).
"Individual Property" shall mean each parcel of real property, the
Improvements thereon, and in the case of a Condominium Property the Units,
together with the appurtenant interest in the Common Elements, and all personal
property owned by Borrower and encumbered by a Security Instrument, together
with all of Borrower's rights pertaining to such property and Improvements, as
more particularly described in Article I of each Security Instrument and
referred to therein as the "Property", including any Release Property prior to
its release or Substitute Property upon substitution.
"Initial Interest Period" shall mean the period commencing from and
including the Closing Date to and including July 10, 2003.
"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.
"Institutional Lender" shall mean any insurance company, bank, trust
company, savings and loan association, savings bank, investment bank or similar
financial institution.
"Insurance Premium Account" shall have the meaning set forth in Section
3.1(b)(ii).
"Insurance Premiums" shall have the meaning set forth in Section 6.1(a)
hereof.
"Insurance Proceeds" shall have the meaning set forth in Section 6.4(b)
hereof.
- 11 -
"Interest Period" shall mean, in connection with the calculation of
interest accrued with respect to any specified Payment Date, the period from and
including the second Business Day following the previous Payment Date to and
excluding the second Business Day following the specified Payment Date;
provided, however, that with respect to the Payment Date occurring on July 9,
2003, the Interest Period shall be the period from and including the Closing
Date to and including July 10, 2003. Each Interest Period shall be a full month
and shall not be shortened by reason of any payment of the Loan prior to the
expiration of such Interest Period.
"Interest Rate Cap Agreement" shall mean an Interest Rate Cap Agreement
(together with the confirmation and schedules relating thereto), between the
Counterparty and Borrower obtained by Borrower. The Interest Rate Cap Agreement
shall be written on the then current standard ISDA documentation, shall conform
to the requirements of the Rating Agencies for interest rate cap agreements and
shall provide for interest periods and calculations consistent with the payment
terms of the Agreement. After delivery of a Replacement Interest Rate Cap
Agreement to Lender, the term "Interest Rate Cap Agreement" shall be deemed to
mean such Replacement Interest Rate Cap Agreement.
"Interest Shortfall" shall have the meaning set forth in Section 2.3.1(b).
"Investor" shall have the meaning set forth in Section 5.1.10(g).
"Lease Termination Payments" shall mean all payments made to Borrower in
connection with any termination, cancellation, surrender, sale or other
disposition of any Lease.
"Leasehold Property" shall mean each Individual Property known as ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ and Wyndham Buttes Resort, Tempe,
Arizona.
"Leases" shall have the meaning set forth in Article I of the Security
Instrument with respect to each Individual Property.
"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 zoning, construction, use, alteration, occupancy or operation thereof, or
any part thereof, whether now or hereafter enacted and in force, including
without limitation the Condominium Acts, 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.
"▇▇▇▇▇▇" shall have the meaning set forth in Section 9.2(b) hereof.
"▇▇▇▇▇▇ Group" shall have the meaning set forth in Section 9.2(b) hereof.
"Lender" shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and assigns.
- 12 -
"Letter of Credit" shall mean a transferable, clean, irrevocable,
unconditional, standby letter of credit in form, substance and amount reasonably
satisfactory to Lender in its reasonable discretion, issued or confirmed by a
commercial bank with a long term debt obligation rating of AA or better by S&P
or Aa2 or better by Moodys as determined by the Rating Agencies and otherwise
satisfactory to Lender in its reasonable discretion (the "Issuing Bank"). Lender
consents to JPMorgan Chase Bank being the issuer of any Letter of Credit
delivered to Lender. The Letter of Credit shall be payable upon presentation of
a sight draft only to the order of Lender or, upon the transfer of the Loan, to
another party, as the case may be, at a New York City bank; provided, however,
Borrower may provide Lender with a replacement Letter of Credit meeting all of
the requirements hereof in lieu of Lender transferring the existing Letter of
Credit then held by Lender. The Letter of Credit shall have an initial
expiration date of not less than one (1) year and shall be automatically renewed
for successive twelve (12) month periods for the term of the Loan and shall
provide for multiple draws. The Letter of Credit shall be transferable by Lender
and its successors and assigns at a New York City bank.
"Liabilities" shall have the meaning set forth in Section 9.2(b) hereof.
"LIBOR" shall mean, for the Initial Interest Period 2.5% per annum. For
each Interest Period thereafter LIBOR shall mean the quoted offered rate for
one-month United States dollar deposits with leading banks in the London
interbank market that appears as of 11:00 a.m. (London time) on the related
LIBOR Determination Date on the display page designated as Telerate Page 3750.
If, as of such time on any LIBOR Determination Date, no quotation is given
on Telerate Page 3750, then the Lender shall establish LIBOR on such LIBOR
Determination Date by requesting four Reference Banks meeting the criteria set
forth herein to provide the quotation offered by its principal London office for
making one-month United States dollar deposits with leading banks in the London
interbank market as of 11:00 a.m., London time, on such LIBOR Determination
Date.
(i) If two or more Reference Banks provide such offered quotations,
then LIBOR for the next Interest Period shall be the arithmetic mean of
such offered quotations (rounded upward if necessary to the nearest whole
multiple of 1/1,000%).
(ii) If only one or none of the Reference Banks provides such offered
quotations, then LIBOR for the next Interest Period shall be the Reserve
Rate.
(iii) If on any LIBOR Determination Date, Lender is required but is
unable to determine the LIBOR in the manner provided in paragraphs (i) and
(ii) above, LIBOR for the next Interest Period shall be LIBOR as determined
on the preceding LIBOR Determination Date.
The establishment of LIBOR on each LIBOR Determination Date by the Lender
shall be final and binding absent manifest error.
"LIBOR Business Day" shall mean a day upon which United States dollar
deposits may be dealt in on the London and the New York City interbank markets
and commercial banks and foreign exchange markets are open in London and New
York City.
- 13 -
"LIBOR Determination Date" shall mean, with respect to any Interest Period,
the date that is two (2) LIBOR Business Days prior to the first day of such
Interest Period. Notwithstanding the foregoing, LIBOR shall be redetermined
within any Interest Period two (2) LIBOR Business Days prior to a Securitization
in accordance with Section 2.2.2 hereof for the remainder of such Interest
Period.
"Licenses" shall have the meaning set forth in Section 4.1.21 hereof.
"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 loan made by Lender to Borrower pursuant to this
Agreement and the other Loan Documents as the same may be amended or split
pursuant to the terms hereof.
"Loan Documents" shall mean, collectively, this Agreement, the Note, the
Security Instruments, the Assignments of Leases, the Environmental Indemnity,
the Assignment of Management Agreement, the Guaranty, and all other documents
executed and/or delivered in connection with the Loan (but specifically
excluding the Mezzanine Loan Documents).
"Loan to Value Ratio" shall mean, as of the date of its calculation, the
ratio of (i) the sum of the outstanding principal amount of the Loan and the
Mezzanine Loan as of the date of such calculation to (ii) (a) if the date of the
calculation using such Appraisal is prior to September 11, 2004, the Appraisals
delivered by Borrower to Lender in connection with the closing of the Loan or
(b) if the date of the calculation using such Appraisal is on or after September
11, 2004, the most recent appraised value (based upon an Appraisal of the
Properties dated no more than 15 months prior to the date of such calculation,
which appraisal may be an update of the Appraisals delivered to Lender at
closing).
"Loan Year" shall mean each 365 or 366, as applicable, day period
thereafter commencing on the Closing Date.
"Lockbox Account" shall have the meaning set forth in Section 3.1(b)
hereof.
"Lockbox Bank" shall mean any Eligible Institution selected by Lender.
"Lockout Period" shall mean the period commencing on the date hereof and
ending on July 8, 2005.
"Losses" shall mean any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, direct actual damages or losses, costs, expenses, fines, fees, charges,
judgments, awards, amounts paid in settlement of whatever kind or nature
(including, but not limited to, reasonable attorneys' fees and other costs of
defense).
- 14 -
"Management Agreement" shall mean, with respect to any Individual Property,
the management agreement entered into by and between Borrower and Manager,
pursuant to which the Manager is to provide management and other services with
respect to such Individual Property or, if the context requires, the Replacement
Management Agreement executed in accordance with the terms and provisions of
this Agreement.
"Manager" shall collectively mean each entity set forth on Schedule XXII
attached hereto, or, if the context requires, a Qualified Manager who is
managing each applicable Individual Property in accordance with the terms and
provisions of this Agreement.
"Material Lease" shall mean any Lease (a) demising in excess of 2,500
square feet or (b) for parking operations/facilities.
"Maturity Date" shall mean July 8, 2005 or, if the Maturity Date has been
extended pursuant to Section 2.2.1(b) hereof, the last day of the applicable
Extension Term, 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 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.
"Mezzanine Borrower" shall mean the parties identified on Schedule XXIV
attached hereto.
"Mezzanine Contract Rate" shall have the meaning ascribed to the term
"Contract Rate" in the Mezzanine Loan Agreement.
"Mezzanine Debt Service" shall mean, with respect to any particular period
of time, interest payments, and monthly scheduled amortization payments due
under the Mezzanine Note for such period.
"Mezzanine Default" shall have the meaning ascribed to the term "Default"
in the Mezzanine Loan Agreement.
"Mezzanine Event of Default" shall have the meaning ascribed to the term
"Event of Default" in the Mezzanine Loan Agreement.
"Mezzanine Extension Option" shall have the meaning ascribed to the term
"Extension Option" in the Mezzanine Loan Agreement.
"Mezzanine Lender" shall mean the owner and holder of the Mezzanine Loan.
- 15 -
"Mezzanine Loan" shall mean that certain loan made by Mezzanine Lender to
Mezzanine Borrower on the date hereof pursuant to the Mezzanine Loan Agreement,
as the same may be amended or split pursuant to the terms of the Mezzanine Loan
Documents.
"Mezzanine Loan Account" shall have the meaning set forth in Section
3.1(b)(x) hereof.
"Mezzanine Loan Agreement" shall mean that certain Loan Agreement
(Mezzanine Loan) dated as of the date hereof between Mezzanine Borrower and
Mezzanine Lender.
"Mezzanine Loan Documents" shall mean all documents or instruments
evidencing, securing or guaranteeing the Mezzanine Loan, including without
limitation, the Mezzanine Loan Agreement.
"Mezzanine Note" shall mean that certain Secured Promissory Note dated as
of the date hereof given by Mezzanine Borrower to Mezzanine Lender in the
principal amount of $145,000,000.00.
"Mezzanine Release Price" shall have the meaning ascribed to "Allocated
Loan Amount" in the Mezzanine Loan Agreement.
"Monthly Common Charge Amount" shall have the meaning set forth in Section
7.7.1 hereof.
"Monthly Debt Service Payment Amount" shall mean the amount of interest and
the Monthly Scheduled Amortization Payment due and payable on each Payment Date
pursuant to the Note and Article II hereof.
"Monthly Ground Rent Deposit" shall have the meaning set forth in Section
7.6 hereof.
"Monthly Insurance Premium Deposit" shall have the meaning set forth in
Section 7.2 hereof.
"Monthly Mezzanine Debt Service Payment Amount" shall mean the monthly
amount of interest and monthly scheduled amortization payments due and payable
pursuant to the Mezzanine Loan Agreement and the Mezzanine Note.
"Monthly Scheduled Amortization Payments" shall mean the amount of
principal set forth on Schedule V hereto to be paid on each Payment Date.
"Monthly Tax Deposit" shall have the meaning set forth in Section 7.2
hereof.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Cash Flow" for any period shall mean the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.
"Net Cash Flow Schedule" shall have the meaning set forth in Section
5.1.10(b) hereof.
- 16 -
"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 Liquidation Proceeds after Debt Service" shall have the meaning set
forth in the Mezzanine Loan Agreement.
"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.
"Non-Wyndham Properties" shall mean the properties listed on Schedule XXIII
attached hereto and made a part hereof.
"Note" shall mean that certain promissory note of even date herewith in the
principal amount of TWO HUNDRED EIGHTY- MILLION AND 00/100 DOLLARS
($280,000,000.00) made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented, severed, split, or otherwise modified
from time to time.
"O&M Program" shall mean, with respect to each Individual Property listed
on Schedule VII hereof, the asbestos operations and maintenance program
developed by Borrower and approved by Lender, as the same may be amended,
replaced, supplemented or otherwise modified from time to time.
"Obligations" shall have the meaning set forth in Section 9.5(a) hereof.
"Offering Document Date" shall have the meaning set forth in Section
5.1.10(j)(iv).
"Offering Plan" shall mean the condominium offering plan for a Condominium
Property together with all amendments thereto.
"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 Principal.
"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, Common Charges attributable to the Condominium Properties (excluding
non-recurring capital assessments), utilities, ordinary repairs and maintenance,
insurance premiums, 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 (including any
Ground Rents payable under any Ground Lease) as permitted hereunder, and other
similar costs, but excluding
- 17 -
depreciation, amortization of intangible items, Debt Service, Mezzanine Debt
Service, Capital Expenditures and contributions to the Reserve Funds.
"Other Charges" shall mean all Ground Rents, maintenance charges,
impositions other than Taxes, Common Charges 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.
"Paydown Amount" shall have the meaning set forth in Section 3.2.
"Payment Date" shall mean the ninth (9th) 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.
"Performance Cure" shall have the meaning set forth in Section 3.7(b).
"Permitted FF&E Financing" shall have the meaning set forth in Section
5.2.12(f).
"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 Policy or marked up final title commitment (including those disclosed
in and insured over thereby) relating to such Individual Property or any part
thereof, (c) Liens, if any, for Taxes imposed by any Governmental Authority not
yet due or delinquent or being contested in good faith and by appropriate
proceedings in accordance with the terms hereof, (d) any and all easements,
licenses, covenants, restrictions or other agreements which may hereafter be
granted by Borrower in accordance with the terms 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 hereof, (f) any Lien and security
interest expressly permitted pursuant to Section 4.1.37 hereof, and (g) such
other title and survey exceptions as Lender has approved or may approve 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 Payment Date
following the date of acquiring such investment 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
- 18 -
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 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;
(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
with maturities of not more than 365 days and 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
- 19 -
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) in its highest long-term unsecured rating category;
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;
(vii) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not 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 with maturities of not more
than 365 days and, 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 an 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
- 20 -
withdrawal of the initial, or, if higher, then current ratings assigned to
the Securities) for money market 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 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 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 Governmental Authority and any fiduciary acting in such capacity on behalf
of any of the foregoing.
"Personal Property" shall have the meaning set forth in Article I of the
Security Instrument with respect to each Individual Property.
"Physical Conditions Report" shall mean, with respect to each Individual
Property, a structural engineering report prepared by a company satisfactory to
Lender regarding the physical condition of such Individual Property,
satisfactory in form and substance to Lender in its sole discretion, which
report shall, among other things, (a) confirm that such Individual Property and
its use complies, in all material respects, with all applicable Legal
Requirements (including, without limitation, zoning, subdivision and building
laws) and (b) include a copy of the final certificate of occupancy with respect
to all Improvements on such Individual Property.
"Plan" shall mean an employee benefit plan (as defined in section 3(3) of
ERISA) whether or not subject to ERISA or a plan or other arrangement within the
meaning of section 4975 of the Code.
"Plan Assets" shall mean assets of a Plan within the meaning of section 29
C.F.R. section 2510.3-101 or similar law.
"Policies" shall have the meaning specified in Section 6.1(a) hereof.
"Prime Rate" shall mean, for a particular date, the annual rate of interest
publicly announced by Citibank, N.A. in New York, New York, as its base rate in
effect for such date, 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" for
such particular date. 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", Lender
shall select an equivalent publication that publishes
- 21 -
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, in its reasonable discretion, a comparable
interest rate index.
"Principal" shall have the meaning specified in Section 4.1.37 hereof.
"Prohibited Person" shall mean any Person:
(a) listed in the Annex to, or otherwise subject to the provisions of,
the Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001, and relating to Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (the "Executive
Order");
(b) that is owned or controlled by, or acting for or on behalf of, any
person or entity that is listed to the Annex to, or is otherwise subject to the
provisions of, the Executive Order;
(c) with whom Lender is prohibited from dealing or otherwise engaging
in any transaction by any terrorism or money laundering law, including the
Executive Order;
(d) who commits, threatens or conspires to commit or supports
"terrorism" as defined in the Executive Order;
(e) that is named as a "specially designated national and blocked
person" on the most current list published by the U.S. Treasury Department
Office of Foreign Assets Control at its official website,
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇.▇▇▇▇/▇▇▇▇▇▇.▇▇▇ or at any replacement website or other
replacement official publication of such list; or
(f) who is an Affiliate of or affiliated with a Person listed above.
"Properties" shall mean, collectively, each and every Individual Property
which is subject to the terms of this Agreement.
"Property" shall mean, as the context may require, the Properties or an
Individual Property.
"Property Account" shall have the meaning specified in Section 3.1 (a)
hereof.
"Property Account Bank" shall mean any bank, provided that such bank
remains an Eligible Institution, and any successor Eligible Institutions or
other Eligible Institutions or banks selected by Borrower, subject to Lender's
reasonable approval. Lender consents to Bank One, N.A. being the Property
Account Bank provided, however, the long term debt rating of Bank One does not
fall below A-.
"Provided Information" shall have the meaning set forth in Section 9.1 (a)
hereof.
"Public Company" shall mean a corporation or other Person whose (i) stock
or ownership interests or (ii) depository receipts or their equivalent are
publicly traded on a nationally
- 22 -
recognized stock exchange, including, without limitation, NASDAQ or on the
leading recognized stock exchange in Spain, Germany, Italy, Canada, France,
Tokyo, Australia, Singapore, England or Hong Kong, or in another country which
requires companies publicly traded on such leading exchange to provide public
information reasonably comparable to that required in the United States.
"Qualified Manager" shall mean a reputable and experienced professional
management organization (a) which manages, together with its affiliates, ten
(10) or more first class hotel properties of a type and size similar to the
Property, totaling in the aggregate no less than 3,000 rooms, and (b) prior to
whose employment as manager of the Property (i) prior to the occurrence of a
Securitization (defined below), such employment shall have been reasonably
approved by Lender applying the standards of a reasonably prudent institutional
mortgage lender, and (ii) after the occurrence of a Securitization, Lender shall
have received written confirmation from the Rating Agencies that the employment
of such manager will not result in a downgrade, withdrawal or qualification of
the initial, or if higher, then current ratings of the Securities or any class
thereof.
"Qualified Transferee" shall mean any one of the following entities,
subject to the reasonable determination of Lender that such entity satisfies the
applicable requirements set forth in this definition:
(a) a pension fund, pension trust or pension account that has total
assets of at least $500 million that are managed by an entity
that controls or manages at least $1 billion of real estate
equity assets;
(b) a pension fund advisor that controls or manages at least $1
billion of real estate equity assets immediately prior to any
proposed transfer hereunder;
(c) an insurance company that is subject to supervision by the
insurance commission, or a similar official or agency, of a State
or territory of the United States (including the District of
Columbia), which has a net worth, as of a date no more than six
(6) months prior to the date of the proposed transfer hereunder,
of at least $500 million and controls real estate equity assets
of at least $1 billion immediately prior to any proposed transfer
hereunder;
(d) a corporation organized under the banking or trust company laws
of the United States or any State or territory of the United
States (including the District of Columbia) that has a combined
capital and surplus of at least $500 million and that immediately
prior to a proposed transfer hereunder controls real estate
equity assets of at least $1 billion; or
(e) any entity (a)(i) with a long-term unsecured debt rating from the
Rating Agencies of at least BBB- (or its equivalent) or (b) (1)
that owns or operates, together with its affiliates, at least ten
(10) first class hotel properties, (2) that has a net worth as of
a date no more than six (6) months prior to the date of any
proposed transfer hereunder of at least
- 23 -
$500 million and (3) that controls, together with its Affiliates,
real estate equity assets of at least $1 billion immediately
prior to any proposed transfer hereunder.
"Quality Assurance Reports" shall mean any quality assurance reports of
inspection or compliance from a Franchisor under a Franchise Agreement with
respect to any Individual Property.
"Radisson" shall mean an Individual Property operated under a license
agreement with Radisson Hotels International, Inc.
"Rating Agencies" shall mean each of S&P, ▇▇▇▇▇'▇, and Fitch, and any other
nationally-recognized statistical rating agency which has been approved by
Lender, provided that, following a Securitization, the same has rated the
Securities.
"Reference Bank" shall mean a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market that has an
established place of business in London. If any such Reference Bank should be
removed from the Telerate Page 3750 or in any other way fail to meet the
qualifications of a Reference Bank, Lender may designate alternative Reference
Banks meeting the criteria specified above.
"Registration Statement" shall have the meaning set forth in Section 9.2(b)
hereof.
"Related Party" shall mean any direct or indirect member, shareholder,
partner, employee, director, affiliate, executive officer, principal, agent or
representative of Borrower or any successor or assigns of any of the foregoing.
"Release" with respect to any Hazardous Materials means any release,
deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Materials.
"Release Price" shall mean, for each Individual Property, the amount set
forth on Schedule II attached hereto.
"Release Property" shall have the meaning set forth in Section 2.6.
"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 have the meaning set forth in Article I of the Security
Instrument with respect to each Individual Property.
"Replacement Interest Rate Cap Agreement" means an interest rate cap
agreement from an Acceptable Counterparty that complies with the terms and
conditions of this Agreement.
"Replacement Management Agreement" shall mean, collectively, (a) either (i)
a management agreement with a Qualified Manager substantially in the same form
and substance as the Management Agreement, or (ii) a management agreement with a
Qualified Manager,
- 24 -
which management agreement shall be reasonably acceptable to Lender applying the
requirements of prudent mortgage loan lenders for the management of properties
similar in size, scope and value of the Individual Property by comparable
managers in form and substance, provided, with respect to this subclause (ii),
Lender, at its option, may require that Borrower obtain confirmation from the
applicable Rating Agencies that such management agreement will not result in a
downgrade, withdrawal or qualification of the then current rating of the
Securities or any class thereof; and (b) a conditional assignment of management
agreement substantially in the form then used by Lender (or such other form
reasonably acceptable to Lender applying the requirements of prudent mortgage
loan lenders for the management of properties similar in size, scope and value
of the Individual Property by comparable managers), executed and delivered to
Lender by Borrower and such Qualified Manager at Borrower's expense.
"Replacement Reserve Account" shall have the meaning set forth in Section
3.1(b)(iv) hereof.
"Replacement Reserve Fund" shall have the meaning set forth in Section
7.3.1 hereof
"Replacement Reserve Deposit" shall mean, with respect to each Individual
Property, the positive number obtained by subtracting (i) the actual amount
spent by Borrower for Replacements for the calendar month (the "Subject Month")
which is two (2) months prior to the month in which the applicable Replacement
Reserve Deposit is due and payable (such amount actually spent by Borrower
hereinafter referred to as the "Actual Amount") and (ii) the balance of any
Shortfall (as defined in Section 7.3.1 hereof) from (iii) the product of (a)
Gross Income From Operations for the Subject Month multiplied by (b) the FF&E
Factor.
"Replacements" shall have the meaning set forth in Section 7.3.1 hereof.
"Required Application Ratio" shall have the meaning set forth in Section
7.5.2 hereof.
"Required Common Charge Fund" shall have the meaning set forth in Section
7.7.1 hereof.
"Required Ratio" shall mean (a) if the Mezzanine Loan has not been paid off
in full pursuant to the terms of the Mezzanine Loan Documents, 1.10 to 1.00 and
(b) if the Mezzanine Loan has been paid off in full pursuant to the terms of the
Mezzanine Loan Documents 1.70 to 1.00.
"Required Repair Account" shall have the meaning set forth in Section
3.1(b)(v) 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 Fund Deposits" shall mean the amounts to be deposited into the
Reserve Funds for any given month.
"Reserve Funds" shall mean the Tax and Insurance Escrow Fund, the
Replacement Reserve Fund, the Required Repair Fund, the Ground Lease Escrow
Fund, the Required
- 25 -
Common Charge Fund, the Debt Service Reserve or any other escrow fund
established by the Loan Documents.
"Reserve Rate" shall mean the rate per annum which Lender determines to be
either (i) the arithmetic mean (rounded upwards if necessary to the nearest
whole multiple of 1/1,000%) of the one-month United States dollar lending rates
that at least three major New York City banks selected by Lender are quoting, at
11:00 a.m. (New York time) on the relevant LIBOR Determination Date, to the
principal London offices of at least two of the Reference Banks, or (ii) in the
event that at least two such rates are not obtained, the lowest one-month United
States dollar lending rate which New York City banks selected by Lender are
quoting as of 11:00 a.m. (New York time) on such LIBOR Determination Date to
leading European banks.
"Restoration" shall mean the repair and restoration of an Individual
Property after a Casualty or Condemnation as nearly as possible to the condition
the Individual Property was in immediately prior to such Casualty or
Condemnation, with such alterations as may be reasonably approved by Lender.
"Restricted Party" shall mean Borrower, Principal, Mezzanine Borrower, any
Guarantor, any Indemnitor, or any Affiliated Manager or any shareholder,
partner, member or non-member manager, or any direct or indirect legal or
beneficial owner of, Borrower, Principal, Mezzanine Borrower, any Guarantor, any
Indemnitor, any Affiliated Manager or any non-member manager provided, however,
that if a Restricted Party is a Public Company, the holders of its shares shall
not be deemed Restricted Parties.
"Rules and Regulations" shall mean for a Condominium Property the
instrument relating to restrictions and requirements respecting the use and
maintenance of the Units and Common Elements of the Condominium, as the same may
hereafter be amended.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
"Sale Properties" shall collectively mean the Individual Properties listed
on Schedule XII attached hereto.
"Sale or Pledge" shall mean a voluntary or involuntary sale, conveyance,
transfer or pledge of a legal or beneficial interest.
"Securities" shall have the meaning set forth in Section 9.1 hereof.
"Securitization" 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.
"Security Deposits" shall have the meaning set forth in Section 5.1.17(e).
"Security Instrument" shall mean, with respect to each Individual Property
that certain first priority Mortgage (or Deed of Trust or Deed to Secure Debt,
as applicable) and Security Agreement, executed and delivered by Borrower as
security for the Loan and encumbering such
- 26 -
Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"Servicer" shall have the meaning set forth in Section 9.3 hereof.
"Servicing Agreement" shall have the meaning set forth in Section 9.3
hereof.
"Settlement Agreement" shall mean that certain settlement agreement dated
July 19, 2002 between and among Wyndham American Hospitality Partnership, L.P.,
Hilton Hotels Corporation and the other signatures thereto.
"Severed Loan Documents" shall have the meaning set forth in Section 8.1(c)
hereof.
"Standard Statements" shall have the meaning set forth in Section
5.1.10(j)(i).
"State" shall mean, with respect to an Individual Property, the State or
Commonwealth in which such Individual Property or any part thereof is located.
"Strike Rate" shall mean (1) 3.50% during the first Loan Year and (2) 4.25%
thereafter.
"Substitute Allocated Loan Amount" shall have the meaning set forth in
Section 2.6(g).
"Substitute Properties" shall have the meaning set forth in Section 2.6.
"Substitute Property" shall have the meaning set forth in Section 2.6.
"Survey" shall mean, with respect to an Individual Property, a survey
prepared by a surveyor licensed in the State where such Individual Property is
located and reasonably satisfactory to Lender and the company or companies
issuing the Title Insurance Policies, and containing a certification of such
surveyor reasonably satisfactory to Lender.
"Tax Account" shall have the meaning set forth in Section 3.1(b)(i).
"Tax and Insurance Escrow Fund" shall have the meaning set forth in Section
7.2 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.
"Telerate Page 3750" means the display designated as page 3750 on the Dow
▇▇▇▇▇ Telerate Service (or such other page as may replace page 3750 on that
service or such other service as may be nominated by the British
Bankers-Association as the information vendor for the purposes of displaying
British Bankers-Association Interest Settlement Rates for U.S. dollar deposits).
"Threshold Amount" shall mean, with respect to each Individual Property, an
amount equal to five percent (5%) of the applicable Allocated Loan Amount.
- 27 -
"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 Individual Property is located 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 Security Instrument
encumbering such Individual Property.
"Transfer" shall have the meaning set forth in Section 5.2.12(a) hereof.
"Transferee" shall have the meaning set forth in Section 5.2.12(e) hereof.
"Triggering Event" shall mean the earliest of (i) the occurrence of an
Event of Default, or (ii) the date on which the Debt Service Coverage Ratio for
the twelve (12) full calendar months immediately preceding the date of
calculation (calculated assuming an interest rate constant equal to the Contract
Rate) is less than the Required Ratio.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in the State in which an Individual Property is located.
"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 in effect from time to time as approved by the American Hotel and Motel
Association.
"Unit" or "Units" shall mean the hotel condominium units created pursuant
to the Condominium Documents and described in the Declaration.
"Urban Concepts Report" shall mean, with respect to each Individual
Property, that certain report prepared by Urban Concepts for Borrower and
delivered to Lender in connection with the Loan which report, shall, among other
things, confirm that the applicable Individual Property complies with all
applicable zoning laws, codes, statutes and ordinances affecting the Individual
Property.
"Wyndham" shall mean Wyndham International, Inc.
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.
- 28 -
2.1.1 Agreement to Lend and Borrow.
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 Single 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.
2.1.3 The Note, Security Instruments and Loan Documents.
The Loan shall be evidenced by the Note and secured by the Security
Instruments, the Assignments of Leases and the other Loan Documents.
2.1.4 Use of Proceeds.
Borrower shall use the proceeds of the Loan to (a) repay and discharge any
existing loans relating to the Properties, (b) pay all past-due Basic Carrying
Costs, if any, with respect to the Properties, (c) make deposits into the
Reserve Funds required on the Closing Date in the amounts provided herein, (d)
pay costs and expenses incurred in connection with the closing of the Loan, as
approved by Lender, or (e) fund any working capital requirements of the
Properties. The balance, if any, shall be distributed to Borrower.
Section 2.2 Interest; Loan Payments; Late Payment Charge; Extension.
2.2.1 Interest Generally.
Interest on the outstanding principal balance of the Loan shall accrue from
the Closing Date to and including the last day of the Interest Period during
which the Maturity Date occurs at the Applicable Interest Rate. Monthly
installments of interest only, in arrears, together with the Monthly Scheduled
Amortization Payments shall be paid on each Payment Date commencing on August 8,
2003 and on each subsequent Payment Date thereafter up to and including the
Maturity Date. Interest on the outstanding principal amount of the Loan for the
period through and including July 10, 2003 shall be paid by Borrower on the
Closing Date. The outstanding principal balance of the Loan together with all
accrued and unpaid interest thereon shall be due and payable on the Maturity
Date (including, without limitation, all interest that would accrue on the
outstanding principal balance of the Loan through the end of the Interest Period
during which the Maturity Date occurs (even if such period extends beyond the
Maturity Date)).
(a) Principal. The Monthly Scheduled Amortization Payments shall be paid on
August 8, 2003 and on each subsequent Payment Date thereafter. Upon the
occurrence and the continuance of a Triggering Event, on each Payment Date
Lender shall apply funds in the Excess Cash Flow Account to pay down the
outstanding principal balance of the Loan subject to Section 3.13 hereof.
(b) Extension of the Maturity Date. Borrower shall have the option to
extend the term of the Loan beyond the initial Maturity Date for three (3)
successive terms (each, an
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"Extension Term") of one (1) year each (each, an "Extension Term") to (x) the
Payment Date occurring in July, 2006, (y) the Payment Date occurring in July,
2007 and (z) the Payment Date occurring in July, 2008 (each such date, the
"Extended Maturity Date"), respectively, and, as to each Extension Term, upon
satisfaction of the following terms and conditions:
(i) no Event of Default shall have occurred and be continuing at the
time the applicable Extension Term is exercised and on the date that the
applicable Extension Term is commenced;
(ii) Borrower shall notify Lender of its irrevocable election to
extend the Maturity Date as aforesaid not earlier than one hundred twenty
(120) days and no later than sixty (60) days prior to the then applicable
Maturity Date (the "Extension Notice");
(iii) Borrower shall obtain and deliver to Lender prior to
commencement of such Extension Term, one or more Replacement Interest Rate
Cap Agreements, which Replacement Interest Rate Cap Agreements shall be
effective commencing on the first day of such Extension Term and shall have
a maturity date not earlier than the next succeeding Extended Maturity
Date;
(iv) in connection with the exercise of the second and third Extension
Term, Borrower shall have paid to Lender the Extension Fee on or before the
commencement of such extension term; and
(v) the Mezzanine Extension Term corresponding to the applicable
Extension Term shall have been exercised in accordance with the terms of
the Mezzanine Loan Agreement, unless the Mezzanine Loan has been paid in
full in accordance with the terms and conditions of the Mezzanine Loan
Agreement.
(c) All references in this Agreement and in the other Loan Documents to the
Maturity Date shall mean the applicable Extended Maturity Date in the event the
applicable Extension Term is exercised.
(d) All payments and other amounts due under the Note, this Agreement and
the other Loan Documents shall be made without any setoff or defense or
irrespective of, and without deduction for, counterclaims. Borrower shall not be
barred from bringing a counterclaim in a separate action.
2.2.2 Interest Calculation; LIBOR determination
(a) 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.
(b) Notwithstanding anything to the contrary contained herein, two (2)
LIBOR Business Days prior to the date Lender intends to close a Securitization,
Lender shall redetermine LIBOR in accordance with the terms hereof. In the event
the closing of such
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Securitization shall occur on a date which is not the first day of an Interest
Period, interest on the Loan for the then current Interest Period shall accrue
(i) from the first day of such Interest Period through and including the day
prior to the date of the closing of the Securitization, based upon the LIBOR
rate which was in effect immediately preceding the date of closing of such
Securitization and (ii) from the date of the closing of such Securitization
through and including the last day of such Interest Period, based upon the
redetermined LIBOR rate.
2.2.3 Eurodollar Rate Unascertainable; Illegality; Increased Costs.
(a) (i) If 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) Business Day prior to the last day of the related Interest Period.
If such notice is given, the Loan shall bear interest at the Adjusted Prime Rate
beginning on the first day of the next succeeding Interest Period.
(ii) If, pursuant to the terms of this Section 2.2.3(a), the Loan is
bearing interest at the Adjusted Prime Rate 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 by telephone of such determination, confirmed in writing, to
Borrower as soon as reasonably practical, but in no event later than one
(1) Business Day prior to the last day of the then current Interest Period.
If such notice is given, the Loan shall bear interest at the Eurodollar
Rate beginning on the first day of the next succeeding Interest Period.
Notwithstanding any provision of this Agreement to the contrary, in no
event shall Borrower have the right to elect to have the Loan bear interest
at either the Eurodollar Rate or the Adjusted Prime Rate.
(b) If any requirement of law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender in good faith to make or maintain the Loan bearing interest at the
Eurodollar Rate, (I) the obligation of Lender hereunder to make the Loan bearing
interest at the Eurodollar Rate shall be canceled forthwith and (II) the Loan
shall automatically bear interest at the Adjusted Prime Rate on the next
succeeding Payment Date or within such earlier period as required by law.
Borrower hereby agrees promptly to pay Lender (within fifteen (15) days of
Lender's written demand therefor), any additional amounts necessary to
compensate Lender for any reasonable 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 Loan hereunder. Upon written demand from Borrower,
Lender shall demonstrate in reasonable detail the circumstances giving rise to
Lender's determination and the calculation substantiating the Adjusted Prime
Rate and any additional costs incurred by Lender in making the conversion.
Lender's written notice of such costs, as certified to Borrower, shall be
conclusive absent manifest error.
(c) In the event that any change in any requirement of law or in the
interpretation or application thereof, or compliance in good faith by Lender
with any request or directive (whether
- 31 -
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, if the Loan is then bearing interest at the Eurodollar
Rate, 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, if the Loan is then bearing interest at the Eurodollar
Rate, hereafter impose on Lender any other condition, the result
of which 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 (within fifteen (15)
days of Lender's written demand therefor), any additional amounts necessary to
compensate Lender for such additional cost or reduced amount receivable which
Lender deems to be material as reasonably determined by Lender. If Lender
becomes entitled to claim any additional amounts pursuant to this Section
2.2.3(c), Lender shall provide Borrower with at least thirty (30) days prior
written notice specifying in reasonable detail the event or circumstance 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 and
the satisfaction of all other obligations of Borrower under the Note, this
Agreement and the other Loan Documents.
(d) 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 after the expiration of any applicable notice or grace periods by
Borrower in payment of the principal of or interest on the Loan while bearing
interest at the Eurodollar Rate, 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 the Eurodollar Rate, (II) any prepayment
(whether voluntary or mandatory) of the Loan on a day that (A) is not the
Payment Date immediately prior to the last day of an Interest Period with
respect thereto or (B) is the Payment Date immediately prior to 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 Eurodollar Rate hereunder and (III) the
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conversion (for any reason whatsoever, whether voluntary or involuntary) of the
Applicable Interest Rate from the Eurodollar Rate to the Adjusted Prime Rate
with respect to any portion of the outstanding principal amount of the Loan then
bearing interest at the Eurodollar Rate on a date other than the Payment Date
immediately prior 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 the Eurodollar
Rate 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 Loan in full and the satisfaction of all other
obligations of Borrower under this Agreement and the other Loan Documents.
2.2.4 Payment on Maturity Date.
Borrower shall pay to Lender on the Maturity Date the outstanding principal
balance, all accrued and unpaid interest thereon, and all other amounts due
hereunder and under the Note, the Security Instruments, and the other Loan
Documents.
2.2.5 Payments after Default.
Except as provided in Section 3.23 hereof, upon the occurrence and during
the continuance of an Event of Default, (a) 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 payment was due without regard to
any grace or cure periods contained herein and (b) Lender shall be entitled to
receive and Borrower shall pay to Lender on each Payment Date an amount equal to
the Excess Cash Flow for the prior month, such amount to be applied by Lender to
the payment of the Debt in such order as Lender shall determine in its sole
discretion, including, without limitation, alternating applications thereof
between interest and principal. Interest at the Default Rate and Excess Cash
Flow shall be computed from the occurrence of the Event of Default 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 same rate as the
Loan and shall be secured by the Security Instruments. This paragraph 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 and continuance of any Event of Default; the acceptance
of any payment of Excess Cash Flow shall not be deemed to cure or constitute a
waiver of any Event of Default; and Lender retains its rights under the Note to
accelerate and continue to demand payment of the Debt upon the happening and
during the continuance of any Event of Default, despite any payment of Excess
Cash Flow.
2.2.6 Late Payment Charge.
Except as provided in Section 3.23 hereof, if any Monthly Debt Service
Payment Amount 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
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use of such delinquent payment. Any such amount shall be secured by the Security
Instruments and the other Loan Documents to the extent permitted by applicable
law.
2.2.7 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 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.
2.2.8 Taxes.
If the Loan is bearing interest at the Eurodollar Rate, all payments made
by Borrower hereunder shall be made free and clear of, and without reduction for
or on account of, Foreign Taxes, excluding, in the case of Lender, taxes
measured by its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which Lender is organized or any political
subdivision thereof and, in the case of Lender, taxes measured by its overall
net income, and franchise taxes imposed on it, by the jurisdiction of Lender's
applicable lending office or any political subdivision thereof. If any
non-excluded Foreign Taxes are required to be withheld from any amounts payable
to Lender hereunder (and such Foreign Taxes are not a result of activities of
Lender unrelated to the Loan or Borrower), the amounts so payable to Lender
shall be increased to the extent necessary to yield to Lender (after payment of
all non-excluded Foreign Taxes) interest or any such other amounts payable
hereunder at the rate or in the amounts specified hereunder. Whenever any
non-excluded Foreign Tax is payable pursuant to applicable law by Borrower,
Borrower shall send to Lender an original official receipt, if available, or
certified copy thereof showing payment of such non-excluded 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
Borrower to pay any such non-excluded Foreign Tax when due to the appropriate
taxing authority of which Lender has used its commercially reasonable efforts to
provide Borrower with prior written notice of or any failure by Borrower to
remit to Lender the required receipts or other required documentary evidence,
provided, however, in the event that Lender or any successor and/or assign of
Lender is not incorporated under the laws of the United States of America or a
state thereof Lender agrees that, prior to the first date on which any payment
is due such entity hereunder, it will deliver to Borrower (i) two duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI or
successor applicable form, as the case may be, certifying in each case that such
entity is entitled
- 34 -
to receive payments under the Note, without deduction or withholding of any
United States federal income taxes, and (ii) an Internal Revenue Service Form
W-9 or successor applicable form, as the case may be, to establish an exemption
from United States backup withholding tax. Each entity required to deliver to
Borrower a Form W-8BEN or W-8ECI or Form W-9 pursuant to the preceding sentence
further undertakes to deliver to Borrower two further copies of the said letter
and W-8BEN or W-8ECI or Form W-9, or successor applicable forms, or other manner
of certification, as the case may be, on or before the date that any such letter
or form expires (which, in the case of the Form W-8ECI, is the last day of each
U.S. taxable year of the non-U.S. entity) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent letter and form
previously delivered by it to Borrower, and such other extensions or renewals
thereof as may reasonably be requested by Borrower, certifying in the case of a
Form W-8BEN or W-8ECI that such entity is entitled to receive payments under the
Note without deduction or withholding of any United States federal income taxes,
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such entity from duly completing and delivering any such
letter or form with respect to it and such entity advises Borrower that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-9, establishing an
exemption from United States backup withholding tax. Notwithstanding the
foregoing, if such entity fails to provide a duly completed Form W-8BEN or
W-8ECI or other applicable form and, under applicable law, in order to avoid
liability for Foreign Taxes, Borrower is required to withhold on payments made
to such entity that has failed to provide the applicable form, Borrower shall be
entitled to withhold the appropriate amount of Foreign Taxes. In such event,
Borrower shall promptly provide to such entity evidence of payment of such
Foreign Taxes to the appropriate taxing authority and shall promptly forward to
such entity any official tax receipts or other documentation with respect to the
payment of the Foreign Taxes as may be issued by the taxing authority.
Section 2.3 Prepayments.
2.3.1 Voluntary Prepayments.
Except as otherwise provided herein, Borrower shall not have the right to
prepay the Loan in whole or part prior to the expiration of the Lockout Period.
On any Payment Date occurring after the expiration of the Lockout Period,
Borrower may, at its option, prepay the Loan in whole or in part, upon
satisfaction of the following conditions:
(a) Borrower shall provide prior written notice to Lender specifying the
date (the "Prepayment Date") upon which the prepayment is to be made, which
notice shall be delivered to Lender not less than ten (10) Business Days prior
to such payment.
(b) Borrower shall pay to Lender, simultaneously with such prepayment, (i)
if the Prepayment Date is not a Payment Date, (A) all accrued and unpaid
interest calculated at the Applicable Interest Rate on the amount of principal
being prepaid through and including the Prepayment Date together with an amount
equal to the interest that would have accrued at the Applicable Interest Rate on
the amount of principal being prepaid through the end of the Interest Period in
which such prepayment occurs, notwithstanding that such Interest Period extends
- 35 -
beyond the Prepayment Date, (B) in addition to the payments required in clause
(A) above, if such prepayment is made during the period from and including the
first day after a Payment Date through and including the last day of the
Interest Period in which such Payment Date occurs, all interest on the principal
amount being prepaid which would have accrued from the first day of the Interest
Period immediately following the Interest Period in which the prepayment occurs
(the "Succeeding Interest Period") through and including the end of the
Succeeding Interest Period, calculated at the Applicable Interest Rate if such
prepayment occurs on or after the Libor Determination Date for the Succeeding
Interest Period (the "Interest Shortfall") and (ii) all Breakage Costs, if any,
and without duplication of sums paid pursuant to clause (i) with respect to such
prepayment.
(c) each prepayment shall be in an aggregate principal amount of
$1,000,000.00 or any integral multiple of $100,000.00 in excess thereof;
(d) Mezzanine Borrower shall have simultaneously with such prepayment made
a pro rata prepayment of the Mezzanine Loan.
(e) Intentionally Omitted.
(f) In addition to the foregoing provisions, Borrower shall have the right
to obtain a release of the applicable Individual Property in accordance with the
terms of Section 2.5 hereof, provided (i) Lender has elected to apply the Net
Proceeds of a Casualty or Condemnation of the applicable Individual Property
towards the reduction of the then outstanding principal balance of the Note
pursuant to Section 2.3.2, (ii) no Event of Default has occurred and shall be
continuing under this Agreement, the Note, the Security Instruments or any of
the other Loan Documents, (iii) Borrower pays all accrued and unpaid interest on
the amount of principal being prepaid through the date of prepayment and (iv)
Borrower pays all Breakage Costs, if any, without duplications of the amounts
provided for the immediately proceeding clause(iii) above.
(g) Borrower may at any time (1) prepay a portion of the Loan or (2)
deposit a Letter of Credit, in each case in an amount and to the extent
necessary to (i) cure a Triggering Event pursuant to Section 3.7(b) or (ii)
satisfy the Debt Service Coverage Ratio test or the Loan-to-Value Ratio test in
connection with a Release pursuant to section 2.5.1(d) or (e), provided Borrower
satisfies the requirements of Section 2.3.1(b) hereof. Notwithstanding anything
to the contrary contained in this Subsection 2.3.1(g), Borrower shall not be
permitted to deposit a Letter of Credit to satisfy the Debt Service Coverage
Ratio test in connection with a Release pursuant to Subsection 2.5.1(d) hereof
if the outstanding principal balance of the Loan exceeds 100% of the aggregate
fair market value of the Properties (excluding any Letters of Credit deposited
with Lender).
2.3.2 Mandatory Prepayments.
On the next occurring Payment Date following the date on which Borrower
actually receives any Net Proceeds, including prior to the expiration of the
Lockout Period, if and to the extent Lender is not obligated to and does not
otherwise make such Net Proceeds available to Borrower for the restoration of
the Property, Borrower shall prepay the outstanding principal balance of the
Note in an amount equal to one hundred percent (100%) of such Net Proceeds.
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Any partial prepayment under this Section shall be applied to the last payments
of principal due under the Loan. All Net Proceeds shall be applied to the Loan
and no portion of the Net Proceeds shall be applied to the Mezzanine Loan.
2.3.3 Prepayments After Default.
If, following an Event of Default, Lender shall accelerate the Debt and
Borrower thereafter tenders payment of all or any part of the Debt, or if all or
any portion of the Debt is recovered by Lender after such Event of Default such
tender or recovery shall be deemed a voluntary prepayment by Borrower in
violation of the prohibition against prepayment of the Loan prior to the Lockout
Period and Borrower shall pay in addition to the Debt, (i) the Interest
Shortfall, (ii) Breakage Costs, if any, without duplication of any sums paid
pursuant to the preceding clause (i), and (iii) all other sums due and payable
under the Note, this Agreement and the other Loan Documents.
2.3.4 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 12:00 noon, New York City time, on or
prior to 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 succeeding
such scheduled due date. 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. Borrower shall not be
barred from bringing a counterclaim in a separate action.
Section 2.4 Interest Rate Cap Agreement.
(a) Within three (3) Business Days of the Closing Date, Borrower shall
obtain and shall thereafter maintain in effect, an Interest Rate Cap Agreement,
which shall be coterminous with the Loan (as the same may be extended) and have
a notional amount which shall not at any time be less than the outstanding
principal balance of the Loan and which shall at all times have a strike rate
equal to the Strike Rate. The Counterparty shall be obligated under the Interest
Rate Cap Agreement to make monthly payments equal to the excess of 1 month LIBOR
over the Strike Rate, calculated on the notional amount with interest accrual
periods and payment dates that match those of the Loan. The notional amount of
the Interest Rate Cap Agreement may be reduced from time to time in amounts
equal to any prepayment of the principal of the Loan in accordance with Sections
2.3 and 2.5 hereof.
(b) Borrower shall collaterally assign to Lender pursuant to an Assignment
of Interest Rate Cap Agreement substantially in the form annexed hereto as
Exhibit C, all of its right, title and interest to receive any and all payments
under the Interest Rate Cap Agreement (and any related guarantee, if any) and
shall deliver to Lender an executed counterpart of such Interest Rate Cap
Agreement and notify the Counterparty of such collateral assignment (either in
such Interest Rate Cap Agreement or by separate instrument). The Counterparty
shall agree in writing
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to make all payments it is required to make under the Interest Rate Cap
Agreement directly to Lender or such other entity or account as directed by
Lender. At such time as the Loan is repaid in full, all of Lender's right, title
and interest in the Interest Rate Cap Agreement shall terminate and Lender shall
promptly execute and deliver at Borrower's sole cost and expense, such documents
as may be required to evidence Lender's release of the Interest Rate Cap
Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and
provisions of the Interest Rate Cap Agreement. All amounts paid by the
Counterparty under the Interest Rate Cap Agreement shall be deposited
immediately into the Lockbox Account or if the Lockbox Account is not then
required to be in effect, into such account as specified by Lender in writing.
Borrower shall take all actions reasonably requested by Lender to enforce
Lender's rights under the Interest Rate Cap Agreement in the event of a default
by the Counterparty and shall not waive, amend or otherwise modify any of its
rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the
long-term unsecured debt credit rating of the Counterparty below "AA-" (or its
equivalent) by the Rating Agencies, Borrower shall replace the Interest Rate Cap
Agreement with a Replacement Interest Rate Cap Agreement not later than ten (10)
Business Days following receipt of notice from Lender or Servicer of such
downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the
Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and
when required hereunder, Lender may purchase such Interest Rate Cap Agreement
and the cost incurred by Lender in purchasing such Interest Rate Cap Agreement
shall be paid by Borrower to Lender with interest thereon at the Default Rate
from the date such cost was incurred by Lender until such cost is paid by
Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall contain the following language
or its equivalent: "In the event of any downgrade, withdrawal or qualification
of the rating of the Counterparty below "AA-" (or the equivalent) by the Rating
Agencies, the Counterparty must, within 30 days, either (x) post collateral on
terms acceptable to each Rating Agency or (y) find a replacement Acceptable
Counterparty, at the Counterparty's sole cost and expense, acceptable to each
Rating Agency (notwithstanding the foregoing, if the Counterparty's rating is
downgraded to "A" or lower, only the option described in clause (y) will be
acceptable); provided that, notwithstanding such a downgrade, withdrawal or
qualification, unless and until the Counterparty transfers the Interest Rate Cap
Agreement to a replacement Acceptable Counterparty pursuant to the foregoing
clause (y), the Counterparty will continue to perform its obligations under the
Interest Rate Cap Agreement. Failure to satisfy the foregoing shall constitute
an Additional Termination Event as defined by Section 5(b)(v) of the ISDA Master
Agreement, with the Counterparty as the Affected Party."
(g) In connection with an Interest Rate Cap Agreement, Borrower shall
obtain and deliver to Lender an opinion of counsel from counsel for the
Counterparty (upon which Lender and its successors and assigns may rely) which
shall provide, in relevant part, that:
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(1) the Counterparty is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has the
organizational power and authority to execute and deliver, and to perform its
obligations under, the Interest Rate Cap Agreement;
(2) the execution and delivery of the Interest Rate Cap Agreement by the
Counterparty, and any other agreement which the Counterparty has executed and
delivered pursuant thereto, and the performance of its obligations thereunder
have been and remain duly authorized by all necessary action and do not
contravene any provision of its certificate of incorporation or by-laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution
and delivery by the Counterparty of the Interest Rate Cap Agreement, and any
other agreement which the Counterparty has executed and delivered pursuant
thereto, and the performance of its obligations thereunder have been obtained
and remain in full force and effect, all conditions thereof have been duly
complied with, and no other action by, and no notice to or filing with any
governmental authority or regulatory body is required for such execution,
delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the
Counterparty has executed and delivered pursuant thereto, has been duly executed
and delivered by the Counterparty and constitutes the legal, valid and binding
obligation of the Counterparty, enforceable against the Counterparty in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights 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).
Section 2.5 Release of Property.
2.5.1 Release of Individual Property.
With respect to the Sale Properties and a release of an Individual Property
in connection with Section 2.3.1(f) hereof, and if an Event of Default pursuant
to subsection 8.1(a)(xxviii) has occurred and is continuing a release of the
Condominium Property that is the subject of such Event of Default, at any time
during the term of the Loan, and with respect to all other Properties, following
the Lockout Period, provided no Event of Default shall have occurred and be
continuing, Borrower may obtain the release of an Individual Property from the
Lien of the Security Instrument thereon (and related Loan Documents), the
release of Borrower's obligations under the Loan Documents with respect to such
Individual Property (other than those expressly stated to survive), and the
release of the portion of the Reserve Funds allocated to such Individual
Property provided that such Borrower does not own any of the other Properties
then encumbered by the Lien of the Security Instruments, but only upon the
satisfaction of each of the following conditions:
(a) Borrower shall provide Lender with at least fifteen (15) days but no
more than ninety (90) days prior written notice of its request to obtain a
release of the Individual Property;
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(b) Borrower shall make a payment to Lender by a wire transfer of
immediately available federal funds in an amount equal to the Release Price for
the applicable Individual Property or the Allocated Loan Amount with respect to
a release in connection with a Casualty or Condemnation (provided that the Net
Proceeds of a Casualty or Condemnation applied to the reduction of the principal
balance of the Debt shall be credited against and reduce the Allocated Loan
Amount of the Individual Property that was the subject of said Casualty or
Condemnation), together with (i) all accrued and unpaid interest on the amount
of principal being prepaid, (ii) if such payment is not made on a Payment Date,
the Interest Shortfall with respect to the amount prepaid, (iii) Breakage Costs,
if any, but without duplication of any payment made pursuant to Subsection (ii)
hereof; and (iv) all other sums due under this Agreement, the Note or the other
Loan Documents in connection with a partial prepayment;
(c) 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 for execution by Lender. Such release shall be in a
form appropriate in each State in which the Individual Property is located and
that contains standard provisions, if any, protecting the rights of the
releasing lender. 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);
(d) After giving effect to such release and any additional prepayment of
the Loan to satisfy subparagraphs (d) and (e) of this Section 2.5.1 and subject
to Section 2.3.1(g) hereof, the Debt Service Coverage Ratio for the Properties
then remaining subject to the Liens of the Security Instruments shall be not
less than the greater of (i) (A) 1.16:1.00 (the Debt Service Coverage Ratio for
the twelve (12) full calendar months immediately preceding the Closing Date) if
the Mezzanine Loan has not been paid off in full pursuant to the terms of the
Mezzanine Loan Documents or (B) 1.79:1.00 if the Mezzanine Loan has been paid
off in full pursuant to the terms of the Mezzanine Loan Documents and (ii) the
Debt Service Coverage Ratio for all of the then remaining Properties (including
the Individual Property to be released) for the twelve (12) full calendar months
for which Net Operating Income has been calculated based on the financial
statements required to be delivered under Section 5.1.10 immediately preceding
the release of the Individual Property;
(e) After giving effect to such release and any additional prepayment of
the Loan to satisfy subparagraphs (d) and (e) of this Section 2.5.1 and subject
to Section 2.3.1(g) hereof, the Loan-to-Value Ratio with respect to the
Properties remaining subject to the lien of the Security Instruments (based upon
(1) if the Individual Property that is the subject of the release has an
Allocated Loan Amount of less than $10,000,000, the appraisal delivered by
Borrower in connection with the closing of the Loan or (2) if the Individual
Property that is the subject of the release has an Allocated Loan Amount of
$10,000,000 or more, (x) if the proposed release date is within fifteen (15)
months of the Closing Date, the Appraisal delivered by Borrower to Lender in
connection with the closing of the Loan or (y) if the proposed release date is
on or later than September 11, 2004, an Appraisal dated no more than 15 months
from the proposed release date
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paid for by Borrower (which Appraisal may be an update of the Appraisal
delivered by Lender in connection with the closing of the Loan) after the
release shall not be greater than the lesser of (A) 66.9% (the aggregate Loan to
Value Ratio as of the Closing Date with respect to all of the Properties) and
(B) the aggregate Loan-to-Value Ratio with respect to all of the Properties then
remaining immediately prior to the date of, and without giving effect to, the
proposed release.
(f) If the applicable Borrower continues to own an Individual Property
subject to the Lien of a Security Instrument, the Individual Property to be
released shall be conveyed to a Person other than a Borrower or Principal;
(g) Mezzanine Borrower shall simultaneously prepay to Mezzanine Lender the
Mezzanine Release Price applicable to the Individual Property being released.
(h) Payment of all Lender's reasonable costs and expenses, including due
diligence review costs and reasonable counsel fees and disbursements incurred in
connection with the release of the Individual Property from the Lien of the
related Security Instrument and the review and approval of the documents and
information required to be delivered in connection therewith.
Notwithstanding the first sentence of this Section 2.5.1, (A) the Sale
Properties may be released prior to the Lockout Period, provided no Event of
Default has occurred and is continuing, and Borrower otherwise complies with all
of the other terms and conditions of this Section 2.5, and (B) the applicable
Condominium Property may be released within fifteen (15) days of the occurrence
of an Event of Default specified in subsection 8.1(a) (xxviii) provided there
are no other Events of Default continuing and Borrower otherwise complies with
all of the other terms and conditions of this Section 2.5. Upon a release of the
Condominium Property which is the subject of an Event of Default set forth in
subsection 8.1(a)(xxviii) pursuant to Section 2.5.1 hereof, such Event of
Default shall be deemed cured.
2.5.2 Release on Payment in Full.
Lender shall, 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 Agreement, release the Lien of the Security Instrument on each
Individual Property not theretofore released.
Section 2.6 Substitution of Properties.
Subject to the terms and conditions set forth in this Section 2.6, Borrower
may obtain a release of the Lien of a Security Instrument (and the related Loan
Documents) encumbering an Individual Property (a "Release Property") by
substituting therefor another hotel property of like kind and quality acquired
by Borrower or an Affiliate of Borrower (provided, however, if the Substitute
Property shall be owned by an Affiliate of Borrower said Affiliate (i) shall
assume all the obligation of Borrower under this Agreement, the Note and the
other Loan Documents and (ii) shall become a party to the Note and the other
Loan Documents and shall be bound by the terms and provisions thereof as if it
had executed the Note and the other Loan Documents and shall have the rights and
obligations of Borrower thereunder) (individually, a "Substitute Property" and
collectively, the "Substitute Properties"), provided that the following
conditions precedent are satisfied:
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(a) Lender shall have received at least thirty (30) days prior written
notice requesting the substitution and identifying the Substitute Property and
Release Property.
(b) If the applicable Borrower continues to own an Individual Property
subject to the Lien of a Security Instrument, Lender shall have received a copy
of a deed conveying all of Borrower's right, title and interest in and to the
Release Property to a Person other than Borrower or Principal pursuant to an
arms length transaction and a letter from Borrower countersigned by a title
insurance company acknowledging receipt of such deed and agreeing to record such
deed in the real estate records for the county in which the Release Property is
located.
(c) Lender shall have received a current Appraisal of the Substitute
Property prepared within one hundred eighty (180) days prior to the release and
substitution (i) showing an appraised value equal to or greater than the
appraised value of the Release Property as of the date hereof; and (ii) which
supports an aggregate loan-to-value ratio with respect to the Properties
remaining subject to the lien of the Security Instruments after the substitution
not greater than the ratio equal to the lesser of (A) the aggregate
loan-to-value ratio as of the Closing Date with respect to all of the Properties
and (B) the aggregate loan-to-value ratio with respect to the Properties
remaining subject to the lien of the Security Instruments immediately prior to
the date of the proposed substitution.
(d) Lender shall have received a certificate of Borrower certifying,
together with other evidence that would be satisfactory to a prudent
institutional mortgage lender that, after the substitution of a Substitute
Property and the release of the Release Property, (i) the Debt Service Coverage
Ratio for the twelve (12) full calendar months for which Net Operating Income
has been calculated based on the financial statements required to be delivered
under Section 5.1.10 hereof immediately preceding the date of the substitution
with respect to all Properties remaining subject to the lien of the Security
Instruments after the substitution shall be equal to or greater than (A) (1)
1.16:1.00 (the Debt Service Coverage Ratio for the twelve (12) full calendar
months immediately preceding the Closing Date) if the Mezzanine Loan has not
been paid off in full pursuant to the terms of the Mezzanine Loan Documents or
(2) 1.79 to 1.00 if the Mezzanine Loan has been paid off in full pursuant to the
terms of the Mezzanine Loan Documents and (B) Debt Service Coverage Ratio for
the twelve (12) full calendar months for which Net Operating Income has been
calculated based on the financial statements required to be delivered under
Section 5.1.10 hereof immediately preceding the substitution (including the
Release Property and excluding the Substitute Property) and (ii) the Debt
Service Coverage Ratio for the twelve (12) months for which Net Operating Income
has been calculated based upon financial statements delivered by Borrower for
such Substitute Property in form and substance substantially similar to the
financial statements Borrower is required to deliver pursuant to Section 5.1.10
hereof with respect to the Properties immediately preceding the substitution
with respect to the Substitute Property is equal or greater than the Debt
Service Coverage Ratio for the twelve (12) full calendar months immediately
preceding the Closing Date with respect to the Release Property.
(e) If the Loan is part of a Securitization, Lender shall have received
confirmation in writing from the Rating Agencies to the effect that such
substitution will not result in a withdrawal, qualification or downgrade of the
respective ratings in effect immediately prior to such substitution for the
Securities issued in connection with the Securitization that are then
outstanding. If the Loan is not part of a Securitization, Lender shall have
consented in writing to
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such substitution, which consent shall be given in Lender's reasonable
discretion applying the requirements of a prudent mortgage loan lender with
respect to real estate collateral of similar size, scope and value of the
Substitute Property.
(f) No Event of Default shall have occurred and be continuing and Borrower
shall be in compliance in all material respects with all terms and conditions
set forth in this Agreement and in each other Loan Document on Borrower's part
to be observed or performed. Lender shall have received a certificate from
Borrower confirming the foregoing, stating that the representations and
warranties of Borrower contained in this Agreement and the other Loan Documents
are true and correct in all material respects on and as of the date of the
substitution with respect to Borrower, the Properties and the Substitute
Property and containing any other representations and warranties with respect to
Borrower, the Properties, the Substitute Property or the Loan as (i) Lender, if
a Securitization has not occurred, or (ii) the Rating Agencies, if a
Securitization has occurred, may require, unless such certificate would be
inaccurate, such certificate to be in form and substance reasonably satisfactory
to Lender or the Rating Agencies, as applicable.
(g) Borrower shall (A) have executed, acknowledged and delivered to Lender
or, with respect to UCC-1 Financing Statements, authorized the filing of, (I) a
Security Instrument, an Assignment of Leases and Rents and two UCC-1 Financing
Statements with respect to the Substitute Property, together with a letter from
Borrower countersigned by a title insurance company acknowledging receipt of
such Security Instrument, Assignment of Leases and Rents and UCC-1 Financing
Statements and agreeing to record or file, as applicable, such Security
Instrument, Assignment of Leases and Rents and one of the UCC-1 Financing
Statements in the real estate records for the county in which the Substitute
Property is located and to file one of the UCC-1 Financing Statements in the
office of the Secretary of State (or other central filing office) of the State
in which the Substitute Property is located, so as to effectively create upon
such recording and filing valid and enforceable first priority Liens upon the
Substitute Property, in favor of Lender (or such other trustee as may be desired
under local law), subject only to the Permitted Encumbrances and such other
Liens as are permitted pursuant to the Loan Documents and (II) an Environmental
Indemnity with respect to the Substitute Property and (B) have caused the
Guarantor to acknowledge and confirm its obligations under the Loan Documents.
The Security Instrument, Assignment of Leases and Rents, UCC-1 Financing
Statements and Environmental Indemnity shall be the same in form and substance
as the counterparts of such documents executed and delivered with respect to the
related Release Property subject to modifications reflecting only the Substitute
Property as the Individual Property and such modifications reflecting the laws
of the State in which the Substitute Property is located. The Security
Instrument encumbering the Substitute Property shall secure all amounts then
outstanding under the Note, provided that in the event that the jurisdiction in
which the Substitute Property is located imposes a mortgage recording,
intangibles or similar tax and does not permit the allocation of indebtedness
for the purpose of determining the amount of such tax payable, the principal
amount secured by such Security Instrument shall be equal to one hundred
twenty-five percent (l25%) of the Allocated Loan Amount for the Substitute
Property. The amount of the Loan allocated to the Substitute Property (such
amount being hereinafter referred to as the "Substitute Allocated Loan Amount")
shall equal the Allocated Loan Amount of the related Release Property.
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(h) Lender shall have received (A) to the extent available, any "tie-in" or
similar endorsement, together with a "first loss" endorsement, to each Title
Insurance Policy insuring the Lien of the existing Security Instruments as of
the date of the substitution with respect to the Title Insurance Policy insuring
the Lien of the Security Instrument with respect to the Substitute Property and
(B) a Title Insurance Policy (or a marked, signed and redated commitment to
issue such Title Insurance Policy) insuring the Lien of the Security Instrument
encumbering the Substitute Property, issued by the title company that issued the
title insurance policies insuring the Lien of the existing Security Instruments
and dated as of the date of the substitution, with reinsurance and direct access
agreements that replace such agreements issued in connection with the Title
Insurance Policy insuring the Lien of the Security Instrument encumbering the
Release Property. The Title Insurance Policy issued with respect to the
Substitute Property shall (1) provide coverage in the amount of the Substitute
Allocated Loan Amount if the "tie-in" or similar endorsement described above is
available or, if such endorsement is not available, in an amount equal to one
hundred twenty-five percent (125%) of the Substitute Allocated Loan Amount,
together with "last dollar endorsement", (2) insure Lender that the relevant
Security Instrument creates a valid first lien on the Substitute Property
encumbered thereby, free and clear of all exceptions from coverage other than
Permitted Encumbrances and standard exceptions and exclusions from coverage (as
modified by the terms of any endorsements), (3) contain such endorsements and
affirmative coverages as are then available and are contained in the title
insurance policies insuring the Liens of the existing Security Instruments, and
such other endorsements or affirmative coverages as are then available that a
prudent institutional mortgage lender would require, and (4) name Lender as the
insured. Lender also shall have received copies of paid receipts or other
evidence showing that all premiums in respect of such endorsements and title
insurance policies have been paid.
(i) Lender shall have received a current Survey for each Substitute
Property, certified to the title company and Lender and their successors and
assigns, in the same form and having the same content as the certification of
the Survey of the Release Property prepared by a professional land surveyor
licensed in the State in which the Substitute Property is located and acceptable
to the Rating Agencies in accordance with the 1999 Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys. Such Survey shall reflect the
same legal description contained in the Title Insurance Policy relating to such
Substitute Property and shall include, among other things, a metes and bounds
description of the real property comprising part of such Substitute Property
(unless such real property has been satisfactorily designated by lot number on a
recorded plat). The surveyor's seal shall be affixed to each Survey and each
Survey shall certify whether or not the surveyed property is located in a
"one-hundred-year flood hazard area."
(j) Lender shall have received valid certificates of insurance indicating
that the requirements for the policies of insurance required for an Individual
Property hereunder have been satisfied with respect to the Substitute Property
and evidence of the payment of all premiums payable for the existing policy
period.
(k) Lender shall have received a Phase I environmental report dated not
more than one hundred eighty (180) days prior to the proposed date of
substitution and otherwise acceptable to a prudent institutional mortgage lender
and, if recommended under the Phase I environmental report, a Phase II
environmental report that would be acceptable to a prudent
- 44 -
institutional mortgage lender, which conclude that the Substitute Property does
not contain any unacceptable levels of Hazardous Materials and is not subject to
any significant risk of contamination from any off-site Hazardous Materials.
(l) Borrower shall deliver or cause to be delivered to Lender (A) copies
certified by Borrower of all organizational documentation related to the new
Borrower and/or the formation, structure, existence, good standing and/or
qualification to do business delivered to Lender on the Closing Date; (B) good
standing certificates, certificates of qualification to do business in the
jurisdiction in which the Substitute Property is located (if required in such
jurisdiction); and (C) resolutions of the new Borrower authorizing the
substitution and any actions taken in connection with such substitution.
(m) Lender shall have received the following opinions of Borrower's
counsel: (A) an opinion or opinions of counsel admitted to practice under the
laws of the State in which the Substitute Property is located stating that the
Loan Documents delivered with respect to the Substitute Property pursuant to
clause (i) above are valid and enforceable in accordance with their terms,
subject to the laws applicable to creditors' rights and equitable principles,
and that Borrower is qualified to do business and in good standing under the
laws of the jurisdiction where the Substitute Property is located or that
Borrower is not required by applicable law to qualify to do business in such
jurisdiction; (B) an opinion of counsel reasonably acceptable to the Rating
Agencies if the Loan is part of a Securitization, or the Lender if the Loan is
not part of a Securitization, stating that the Loan Documents delivered with
respect to the Substitute Property pursuant to clause (i) above were, among
other things, duly authorized, executed and delivered by Borrower and that the
execution and delivery of such Loan Documents and the performance by Borrower of
its obligations thereunder will not cause a breach of, or a default under, any
agreement, document or instrument to which Borrower is a party or to which it or
its properties are bound; (C) an update of the Insolvency Opinion indicating
that the substitution does not affect the opinions set forth therein; (D) if the
Loan is part of a Securitization, an opinion of counsel reasonably acceptable to
the Rating Agencies that the substitution does not constitute a "significant
modification" of the Loan under Section 1001 of the Code or otherwise cause a
tax to be imposed on a "prohibited transaction" by any REMIC Trust.
(n) Borrower shall (i) have paid, (ii) have escrowed with Lender or (iii)
be contesting in accordance with the terms hereof, all Basic Carrying Costs
relating to each of the Properties and the Substitute Property, including
without limitation, (i) accrued but unpaid insurance premiums relating to each
of the Properties and the Substitute Property, and (ii) currently due and
payable Taxes (including any in arrears) relating to each of the Properties and
the Substitute Property and (iii) currently due and payable maintenance charges
and other impositions relating to each of the Properties and Substitute
Property.
(o) Borrower shall have paid or reimbursed Lender for all reasonable costs
and expenses incurred by Lender (including, without limitation, reasonable
attorneys' fees and disbursements) in connection with the substitution and
Borrower shall have paid all recording charges, filing fees, taxes or other
expenses (including, without limitation, mortgage and intangibles taxes and
documentary stamp taxes) payable in connection with the substitution. Borrower
shall have paid all costs and expenses of the Rating Agencies incurred in
connection with the substitution.
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(p) Lender shall have received annual operating statements and occupancy
statements for the Substitute Property for the most current completed fiscal
year and a current operating statement for the Release Property, each certified
by Borrower to Lender as being true and correct in all material respects and a
certificate from Borrower certifying that there has been no material adverse
change in the financial condition of the Substitute Property since the date of
such operating statements.
(q) Borrower shall have delivered to Lender estoppel certificates from all
tenants under Material Leases at the Substitute Property. All such estoppel
certificates shall be substantially in the form approved by Lender in connection
with the origination of the Loan and shall indicate that (1) the subject lease
is a valid and binding obligation of the tenant thereunder, (2) to the best of
the tenant's knowledge, there are no defaults under such lease on the part of
the landlord or tenant thereunder, (3) the tenant thereunder has no knowledge of
any defense or offset to the payment of rent under such leases, (4) no rent
under such lease has been paid more than one (1) month in advance, (5) the
tenant thereunder has no option under such lease to purchase all or any portion
of the Substitute Property, and (6) all tenant improvement work required under
such lease has been substantially completed and the tenant under such lease is
in actual occupancy of its leased premises. If an estoppel certificate indicates
that all tenant improvement work required under the subject lease has not yet
been completed, Borrower shall, if required by the Rating Agencies, deliver to
Lender financial statements indicating that Borrower has adequate funds to pay
all costs related to such tenant improvement work as required under such lease.
(r) Lender shall have received copies of all tenant leases affecting the
Substitute Property certified by Borrower as being true and correct.
(s) Lender shall have received subordination agreements in the form
approved by Lender in connection with the origination of the Loan (or such other
form approved by Lender, which approval shall not be unreasonably withheld,
conditioned or delayed) with respect to tenants under Material Leases at the
Substitute Property to the extent such Leases for such tenants are not
automatically subordinate (in lien and in terms) pursuant to the terms of the
applicable Leases.
(t) Lender shall have received (A) an endorsement to the Title Insurance
Policy insuring the Lien of the Security Instrument encumbering the Substitute
Property insuring that the Substitute Property constitutes a separate tax lot
or, if such an endorsement is not available in the State in which the Substitute
Property is located, a letter from the title insurance company issuing such
Title Insurance Policy stating that the Substitute Policy constitutes a separate
tax lot or (B) a letter from the appropriate taxing authority stating that the
Substitute Property constitutes a separate tax lot.
(u) Lender shall have received a Physical Conditions Report with respect to
the Substitute Property stating that the Substitute Property and its use comply
in all material respects with all applicable Legal Requirements (including,
without limitation, zoning, subdivision and building laws) and that the
Substitute Property is in good condition and repair and free of damage or waste.
- 46 -
(v) Lender shall have received evidence which would be satisfactory to a
prudent institutional mortgage lender to the effect that the Substitute Property
and the use thereof are in substantial compliance with all Legal Requirements
and that all material building and operating licenses and permits necessary for
the use and occupancy of the Substitute Property as a hotel including, but not
limited to, current certificates of occupancy, have been obtained and are in
full force and effect.
(w) In the event the Release Property is subject to a Management Agreement
along with one or more additional Properties, Lender shall have received a
certified copy of an amendment to the Management Agreement reflecting the
deletion of the Release Property and the addition of the Substitute Property as
a property managed pursuant thereto and Manager shall have executed and
delivered to Lender an amendment to the Assignment of Management Agreement
reflecting such amendment to the Management Agreement. In the event that the
Release Property is subject to a Management Agreement relating only to such
Release Property, Lender shall have received a certified copy of a new
Management Agreement for the Substitute Property on substantially the same terms
as the Management Agreement for the Release Property and the Manager thereunder
shall have executed and delivered to Lender an Assignment of Management
Agreement with respect to such new Management Agreement on substantially the
same terms as used in connection with the Release Property or such other terms
as would be reasonably acceptable to a prudent institutional mortgage loan
lender.
(x) Lender shall have received such other approvals, opinions, documents
and information in connection with the substitution as reasonably requested by
the Rating Agencies if the Loan is part of a Securitization, or Lender if the
Loan is not part of a Securitization.
(y) Lender shall have received copies of all contracts and agreements
relating to the leasing and operation of the Substitute Property (other than the
Management Agreement), each of which shall be in a form and substance which
would be reasonably satisfactory to a prudent institutional mortgage lender
together with a certification of Borrower attached to each such contract or
agreement certifying that the attached copy is a true and correct copy of such
contract or agreement and all amendments thereto.
(z) Lender shall have received certified copies of all material consents,
licenses and approvals, if any, required in connection with the substitution of
a Substitute Property, including, without limitation, liquor licenses and
evidence that such consents, licenses and approvals are in full force and
effect.
(aa) Lender shall have received satisfactory (i.e., showing no Liens other
than Permitted Encumbrances) UCC searches, together with tax lien, judgment and
litigation searches with respect to the Substitute Property, Borrower,
Indemnitor and the Guarantor, if applicable, in the State where the Substitute
Property is located and the jurisdictions where each such Person has its
principal place of business.
(bb) Lender shall have received a Franchisor Estoppel and Recognition
Letter from the franchisor under the Franchise Agreement, if any, for the
Substitute Property, in form and substance reasonably satisfactory to a prudent
institutional mortgage loan lender.
- 47 -
(cc) Lender shall have received certified copies of the most recent Quality
Assurance Reports, if any, which shall be reasonably satisfactory to a prudent
institutional mortgage loan lender.
(dd) Lender shall have received if the Borrower owns a leasehold estate in
the Substitute Property, (i) a certified copy of the Ground Lease for the
Substitute Property, together with all amendments and modifications thereto and
a recorded memorandum thereof, which Ground Lease would be reasonably
satisfactory in all respects to a prudent institutional mortgage lender and
which contains customary leasehold mortgagee provisions and protections, and
which shall provide, among other things, (A) for a remaining term of no less
than the greater of (1) 20 years from the Maturity Date or (2) 10 years from the
end of the scheduled amortization term of the Loan, (B) that the Ground Lease
shall not be terminated until Lender has received notice of a default thereunder
and has had a reasonable opportunity to cure or complete foreclosure, and fails
to do so in a diligent manner, (C) for a new lease on the same terms to the
Lender as tenant if the Ground Lease is terminated for any reason, (D) the
non-merger of fee and leasehold interests, and (E) that insurance proceeds and
condemnation awards (from the fee interest as well as the leasehold interest)
will be applied pursuant to the terms of this Agreement, and (ii) a ground lease
estoppel executed by the fee owner and ground lessor of the Substitute Property,
reasonably acceptable to Lender.
(ee) Borrower shall submit to Lender, not less than fifteen (15) Business
Days prior to the date of such substitution, a release of Lien (and related Loan
Documents) for the Release Property for execution by Lender. Such release shall
be in a form appropriate for the jurisdiction in which the Release Property is
located. (ff) Borrower shall deliver an Officer's Certificate certifying that
the requirements set forth in this Section 2.6 have been satisfied.
(gg) Mezzanine Borrower shall simultaneously comply with Section 2.6 of the
Mezzanine Loan Agreement.
Upon the satisfaction of the foregoing conditions precedent, Lender will release
its Lien from the Release Property to be released and the Substitute Property
shall be deemed to be an Individual Property for purposes of this Agreement and
the Substitute Allocated Loan Amount with respect to such Substitute Property
shall be deemed to be the Allocated Loan Amount with respect to such Substitute
Property for all purposes hereunder.
III. CASH MANAGEMENT
Section 3.1 Establishment of Accounts.
(a) Borrower shall, simultaneously herewith, (i) establish one or more
accounts (individually and collectively, the "Property Account") with Property
Account Bank into which Borrower shall deposit, or cause to be deposited, all
Gross Income from Operations, and (ii) execute an agreement with Lender and the
Property Account Bank providing for the control of the Property Account
substantially in the form of Exhibit A attached herewith (the "Property Account
Agreement").
- 48 -
(b) In addition, Borrower shall simultaneously herewith establish accounts
with the Lockbox Bank (the "Lockbox Account"), into which Borrower shall deposit
or cause to be deposited all sums on deposit in the Property Account, in
accordance with Sections 3.6 and 3.7 hereof. The Lockbox Bank shall establish
the following Accounts (which may be book entry sub-accounts) into which Gross
Income from Operations shall be deposited or allocated:
(i) An account with Lockbox Bank into which Borrower shall deposit, or
cause to be deposited, the Monthly Tax Deposit (the "Tax Account");
(ii) An account with Lockbox Bank into which Borrower shall deposit,
or cause to be deposited, the Monthly Insurance Premium Deposit (the
"Insurance Premium Account");
(iii) An account with Lockbox Bank into which Borrower shall deposit,
or cause to be deposited, the Monthly Debt Service Payment Amount (the
"Debt Service Account");
(iv) An account with Lockbox Bank into which Borrower shall deposit,
or cause to be deposited, the Replacement Reserve Deposit (the "Replacement
Reserve Account");
(v) An account with Lockbox Bank into which Borrower shall deposit, or
cause to be deposited, the Required Repair Fund (the "Required Repair
Account");
(vi) An account with Lockbox Bank into which Borrower shall deposit,
or cause to be deposited, the Monthly Common Charge Amount (the "Common
Charge Account");
(vii) An account with Lockbox Bank into which Borrower shall deposit,
or cause to be deposited, the Monthly Ground Rent Deposit (the "Ground Rent
Account");
(viii) An account with Lockbox Bank into which Approved Expenses shall
be deposited (the "Borrower Expense Account");
(ix) An account with Lockbox Bank into which Extraordinary Expenses
shall be deposited (the "Extraordinary Expense Account");
(x) An account with Lockbox Bank into which Borrower shall deposit, or
cause to be deposited, the Monthly Mezzanine Debt Service Payment Amount
(the "Mezzanine Loan Account"); and
(xi) An account with Lockbox Bank into which Excess Cash Flow shall be
deposited (the "Excess Cash Flow Account").
In the event Lender waives the requirement for Borrower to maintain the
Property Account and the Lockbox Account, Lender hereby consents to the
Mezzanine Borrower
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establishing and maintaining a Property Account and Lockbox Account with
Mezzanine Lender that would operate as provided in this Article 3.
Section 3.2 Deposits into Lockbox Account.
(a) Borrower represents, warrants and covenants that (i) Borrower shall, or
shall cause Manager to, deposit all Gross Income from Operations and any other
sums generated by the Properties into the Property Account within one (1)
Business Day of receipt, (ii) Borrower shall instruct the Manager to deposit all
Gross Income from Operations and other sums generated by the Properties
collected by Manager, if any, pursuant to the Management Agreement into the
Property Account within one (1) Business Day of receipt, (iii) Borrower shall
send a notice, substantially in the form of Exhibit B, to all tenants now or
hereafter occupying space at each Individual Property directing them to pay all
Rents and other sums due under the Lease to which they are a party into the
Property Account, (iv) Borrower or Manager shall instruct the Franchisor to
deposit any Accounts Receivable for the Properties collected for the benefit of
Borrower and any other sums collected by Franchisor for the benefit of Borrower
pursuant to the Franchise Agreement into the Property Account, (v) Borrower
shall deposit, or shall cause the Counterparty to deposit, all Accounts
Receivable for the Property into the Property Account within one (1) Business
Day of receipt, (vi) Borrower shall send a notice, substantially in the form of
Exhibit D, to all consumer credit/ charge card organizations or entities which
sponsor or administer such cards (including the American Express Card, the Visa
Card and the Mastercard) as are accepted for payment at the Property, directing
them to pay all sums due to Borrower (or to Manager, as the case may be),
directly to the Property Account, (vii) Borrower shall deposit or shall cause
Counterparty to deposit all sums payable to Lender under the Interest Rate Cap
Agreement directly into the Lockbox Account; (viii) there shall be no other
accounts maintained by Borrower or any other Person into which revenues from the
ownership and operation of the Properties are directly deposited, and (ix)
neither Borrower nor any other Person shall open any other such account with
respect to the direct deposit of income in connection with the Properties. Until
deposited into the Property Account, any Gross Income from Operations from the
Properties held by Borrower shall be deemed to be Collateral and shall be held
in trust by it for the benefit, and as the property, of Lender and shall not be
commingled with any other funds or property of Borrower.
(b) Borrower represents, warrants and covenants that, (i) Borrower will
continue to deposit all Gross Income from Operations it receives into the
Property Account, (ii) Borrower, or Lender on behalf of Borrower, shall instruct
the Manager to continue to deposit all Gross Income from Operations and all
other sums collected by Manager, if any, pursuant to the Management Agreement
into the Property Account and (iii) Borrower shall have no right to withdraw any
funds from the Property Account or Lockbox Account Bank, except as otherwise
provided herein or with Lender's prior written consent, but bank fees, returned
checks and credit cards chargebacks and commissions may be debited and paid from
the Property Account.
(c) Borrower warrants and covenants that it shall not rescind, withdraw or
change any notices or instructions required to be sent by it pursuant to this
Section 3.2 without Lender's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned.
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Section 3.3 Account Name.
(a) The Property Account, the Lockbox Account, the Tax Account, the
Insurance Premium Account, the Replacement Reserve Account, the Required Repair
Account, the Ground Rent Account, and the Debt Service Account, shall each be in
the name of Borrower for the benefit of Lender as mortgagee.
(b) In the event Lender transfers or assigns the Loan, Borrower
acknowledges that the Property Account Bank and Lockbox Bank, at Lender's
request, shall change the name of each account to the name of the transferee or
assignee. In the event Lender retains a servicer to service the Loan, Borrower
acknowledges that the Property Account Bank and Lockbox Bank at Lender's
request, shall change the name of each account to the name of the servicer, as
agent for Lender.
Section 3.4 Eligible Accounts.
Borrower shall, and Borrower shall cause Property Account Bank and Lockbox
Bank to maintain each Account as an Eligible Account.
Section 3.5 Permitted Investments.
Sums on deposit in any Account described in Section 3.1(b)(i) through and
including (ix) (other than the Property Account or Lockbox Account) may be
invested in Permitted Investments provided (i) such investments are then
regularly offered by Property Account Bank or Lockbox Bank, as the case may be,
for accounts of this size, category and type, (ii) such investments are
permitted by applicable federal, State and local rules, regulations and laws,
(iii) the maturity date of the Permitted Investment is not later than the date
on which sums in the applicable Account are required for payment of an
obligation for which such Account was created, and (iv) no Event of Default
shall have occurred and be continuing. Borrower shall have the right to direct
Property Account Bank or Lockbox Bank, as the case may be, to invest sums on
deposit in such Accounts (other than the Property Account and the Lockbox
Account) in Permitted Investments. All income earned from Permitted Investments
shall be the property of Borrower. Borrower hereby irrevocably authorizes and
directs Property Account Bank or Lockbox Bank, as the case may be, to hold any
income earned from Permitted Investments as part of the Accounts. Borrower shall
be responsible for payment of any federal, State or local income or other tax
applicable to income earned from Permitted Investments. No other investments of
the sums on deposit in the Accounts shall be permitted except as set forth in
this Section 3.5. Lender shall not be liable for any loss sustained on the
investment of any funds constituting the Reserve Funds or of any funds deposited
in the related Accounts.
Section 3.6 The Initial Deposits.
Lender shall determine, in its reasonable discretion, the initial deposit
amounts (the "Initial Deposits") required to be deposited in each of the Tax
Account, the Insurance Premium Account, the Replacement Reserve Account, the
Required Repair Account, the Common Charge Account and the Ground Rent Account
and Borrower shall deposit the respective Initial Deposits into each Account on
the Closing Date.
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Section 3.7 Transfer To and Disbursements from the Lockbox Account.
On each Business Day, Property Account Bank shall transfer all available
funds on deposit in the Property Account to the Lockbox Account.
(a) Lockbox Bank shall withdraw all funds on deposit in the Lockbox Account
on each Business Day of each month.
(b) Lockbox Bank shall disburse the funds in the Lockbox Account in the
following order of priority:
(i) First, funds sufficient to pay the Monthly Ground Rent Deposit, if
any, shall be deposited in the Ground Rent Account;
(ii) Second, funds sufficient to pay the Monthly Tax Deposit shall be
deposited in the Tax Account;
(iii) Third, funds sufficient to pay the Monthly Common Charge Amount
shall be deposited in the Common Charge Account;
(iv) Fourth, funds sufficient to pay the Monthly Insurance Premium
Deposit shall be deposited in the Insurance Premium Account;
(v) Fifth, funds sufficient to pay the Monthly Debt Service Payment
Amount shall be deposited into the Debt Service Account to be applied (A)
first, to the payment of accrued and unpaid interest computed at the
Applicable Interest Rate; and (B) second to the Monthly Scheduled
Amortization Payment and the reduction of the principal sum;
(vi) Sixth, funds sufficient to pay any required Replacement Reserve
Deposit shall be deposited in the Replacement Reserve Account;
(vii) Seventh, funds sufficient to pay any interest accruing at the
Default Rate, and late payment charges, if any, shall be deposited in the
Debt Service Account;
(viii) Eighth, to the payment of Lockbox Bank for fees and expenses
incurred in connection with this Agreement and the accounts established
hereunder, and
(ix) Ninth, funds sufficient to pay all costs and expenses, calculated
on a cash basis, required to be paid during such month by or on behalf of
Borrower in connection with the ownership and operation of the Property in
accordance with the Approved Annual Budget, ("Approved Expenses") shall be
deposited in the Borrower Expense Account after deposits for items (i)
through (viii) above have been made (provided deposits to the Borrower
Expense Account shall not include amounts which have previously been paid
pursuant to items (i) through (viii) above);
(x) Tenth, funds sufficient to pay any Extraordinary Expenses for such
month which have been approved by Lender (and that have not been previously
paid
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pursuant to items (i) through (ix) above) shall be deposited in the
Extraordinary Expense Account after deposits for items (i) through (ix)
above have been made
(xi) Eleventh, provided no Event of Default has occurred and is
continuing and the Mezzanine Loan has not been paid off in full, funds
sufficient to pay (A) the Monthly Mezzanine Debt Service Payment Amount and
(B) any Net Liquidation Proceeds After Debt Service, shall be deposited
into the Mezzanine Loan Account to be applied in accordance with the
Mezzanine Loan Agreement;
(xii) Twelfth, following a Triggering Event and for so long as such
Triggering Event remains uncured, all amounts remaining in the Lockbox
Account after deposits for items (i) through (xi) the "Excess Cash Flow")
shall be deposited into the Excess Cash Flow Account and subject to Section
3.13 hereof, used by Lender to pay down the outstanding principal amount of
the Loan; and
(xiii) Thirteenth, provided no Triggering Event has occurred and is
continuing, all amounts remaining in the Lockbox Account after deposits for
items (i) through (xii) for the current month and all prior months shall be
disbursed (A) if Lender has received written notice from Mezzanine Lender
that a default has occurred and is continuing after expiration of all
applicable grace and cure periods under the Mezzanine Loan Documents, to an
account designated by Mezzanine Lender or (B) if the immediately preceding
clause (A) is not applicable, to Borrower in accordance with Borrower's
written instructions.
The Triggering Event shall be deemed cured (unless the cause of such Triggering
Event was the occurrence of an Event of Default) on the first monthly test date
on which the Debt Service Coverage Ratio (assuming an interest rate constant
equal to the Cure Contract Rate) for the twelve (12) full calendar months for
which Net Operating Income has been calculated based on the financial statements
required to be delivered under Section 5.1.10 immediately preceding the date of
calculation is equal to or greater than the Required Ratio and in connection
with such cure Borrower shall no longer be required to deposit Excess Cash Flow
into the Excess Cash Flow Account. The Required Ratio may be obtained by, (i)
prepaying the Loan (or a portion thereof) subject to the terms of this
Agreement, the Note or any of the other Loan Documents (the amount of such
paydown, the "Paydown Amount"), (ii) posting cash collateral or a Letter of
Credit in the Paydown Amount) or (iii) improved performance of the Properties (a
"Performance Cure"). In the event Borrower has cured the Triggering Event by
posting cash collateral or a Letter of Credit in the Paydown Amount and the
performance of the Properties improve so that the Required Ratio is maintained
without the cash collateral or Letter of Credit, as applicable, Lender shall
promptly return the applicable cash collateral or Letter of Credit to Borrower
upon Borrower's written request therefor and, subject to Section 3.13 hereof,
any sums in the Excess Cash Flow Account shall be distributed to Borrower.
Borrower's right to cure the Triggering Event shall be limited to two (2) times
in each calendar year. In the event that (i) Borrower posts cash collateral or a
Letter of Credit in the Paydown Amount and a subsequent Performance Cure occurs
and (ii) Borrower does not request the return of the cash collateral or Letter
of Credit as permitted hereunder, the occurrence of the Performance Cure (and
the continued posting of the applicable cash collateral or Letter of Credit)
shall not constitute a second cure for the purpose of the immediately preceding
sentence. After the occurrence and during the continuance of an
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Event of Default, Lender shall be permitted to draw on any cash collateral or
Letter of Credit deposited pursuant to this paragraph and apply the sums towards
the Debt in whatever order and priority Lender desires.
Section 3.8 Withdrawals From the Tax Account and the Insurance Premium
Account.
Lender shall withdraw funds from the Tax Account to pay Taxes on or before
the date Taxes are due and payable. Lender shall have the right to withdraw
funds from the Insurance Premium Account to pay Insurance Premiums on or before
the date Insurance Premiums are due and payable. Lockbox Bank shall disburse
funds from the Tax Account and the Insurance Premium Account in accordance with
Lender's written request therefor on the Business Day following Lockbox Bank's
receipt of such written request.
Section 3.9 Withdrawals from the Replacement Reserve Account.
Lender shall disburse funds on deposit in the Replacement Reserve Account
in accordance with the provisions of Section 7.3 hereof.
Section 3.10 Withdrawals from the Required Repair Account.
Lender shall disburse funds on deposit in the Required Repair Account in
accordance with the provisions of Section 7.1 hereof.
Section 3.11 Withdrawals from the Borrower Expense Account.
Provided that no Event of Default has occurred and is continuing, Borrower
shall have the right to withdraw funds from the Borrower Expense Account for the
payment of Approved Expenses. Such withdrawals shall be in accordance with the
Approved Annual Budget.
Section 3.12 Withdrawals from the Extraordinary Expense Account.
Provided that no Event of Default has occurred and is continuing, Borrower
shall have the right to withdraw funds from the Extraordinary Expense Account
for the payment of Extraordinary Expenses.
Section 3.13 Withdrawals from the Excess Cash Flow Account.
Provided no Event of Default has occurred and is continuing, on each
Payment Date all funds in the Excess Cash Flow Account shall be applied pro-rata
by Lender to pay down the outstanding principal balance of the Loan and the
Mezzanine Loan. During the continuance of an Event of Default, all Excess Cash
Flow shall be applied by Lender to pay down the Loan only. Notwithstanding the
foregoing, provided no Event of Default has occurred and is continuing and the
Triggering Event has not been continuing for three (3) consecutive months,
Borrower shall have the right to direct Lender to use the funds in the Excess
Cash Flow Account to either (i) pay down the Loan and the Mezzanine Loan
pro-rata or (ii) hold the funds in the Excess Cash Flow Account as additional
collateral for the Loan; provided, however, if the Triggering Event remains
uncured for three (3) consecutive months, all sums in the Excess Cash
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Flow Account shall thereafter be applied pro rata by Lender to pay down the Loan
and the Mezzanine Loan, provided further, if the Triggering Event is cured
pursuant to the terms of Section 3.7 hereof without taking into account the
funds in the Excess Cash Flow Account, the funds in the Excess Cash Flow Account
shall be disbursed to Borrower.
Section 3.14 Withdrawals from the Debt Service Account.
Lender shall withdraw funds from the Debt Service Account (taking into
account any disbursement of the Debt Service Reserve ) pursuant to the terms and
conditions of Section 7.5 hereof to pay the Monthly Debt Service Payment Amount
on or after the date when due, together with any late payment charges or
interest accruing at the Default Rate.
Section 3.15 Withdrawals from the Mezzanine Account.
Lender shall withdraw funds from the Mezzanine Loan Account to pay the
Monthly Mezzanine Debt Service Payment Amount by the date and time when due,
together with any late payment charges or interest accruing pursuant to the
Mezzanine Loan Documents.
Section 3.16 Withdrawals from the Ground Rent Account.
Lender shall withdraw funds from the Ground Rent Account in accordance with
Section 7.6 hereof.
Section 3.17 Withdrawals from the Common Charge Account.
Lender shall withdraw funds from the Common Charge Account in accordance
with Section 7.7 hereof.
Section 3.18 Sole Dominion and Control.
Borrower acknowledges and agrees that the Accounts are subject to the sole
dominion, control and discretion of Lender, its authorized agents or designees,
including Property Account Bank and Lockbox Bank, subject to the terms hereof;
and Borrower shall have no right of withdrawal with respect to any Account
except with the prior written consent of Lender or as otherwise provided herein.
Section 3.19 Security Interest.
Borrower hereby grants to Lender a first priority security interest in each
of the Accounts and the Account Collateral as additional security for the Debt.
Section 3.20 Rights on Default.
Notwithstanding anything to the contrary in this Article 3, upon the
occurrence and during the continuance of an Event of Default, Lender shall
promptly notify Property Account Bank and Lockbox Bank in writing of such Event
of Default and, without notice from Property Account Bank, Lockbox Bank or
Lender, (a) Borrower shall have no further right in respect of (including,
without limitation, the right to instruct Lockbox Bank or Property Account Bank
to
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transfer from) the Accounts, (b) Lender may direct Lockbox Account Bank to
liquidate and transfer any amounts then invested in Permitted Investments to the
Accounts or reinvest such amounts in other Permitted Investments as Lender may
reasonably determine is necessary to perfect or protect any security interest
granted or purported to be granted hereby or pursuant to the other Loan
Documents or to enable Lockbox Bank, as agent for Lender, or Lender to exercise
and enforce Lender's rights and remedies hereunder or under any other Loan
Document with respect to any Account or any Account Collateral, and (c) Lender
shall have all rights and remedies with respect to the Accounts and the amounts
on deposit therein and the Account Collateral as described in this Agreement and
in the Security Instruments, in addition to all of the rights and remedies
available to a secured party under the UCC, and, notwithstanding anything to the
contrary contained in this Agreement or in the Security Instruments, may apply
the amounts of such Accounts as Lender determines in its sole discretion
including, but not limited to, payment of the Debt.
Section 3.21 Financing Statement; Further Assurances.
Borrower shall (a) execute and deliver to Lender for filing a financing
statement or statements under the UCC and (b) obtain from Property Account Bank
and Lockbox Bank control agreements whereby such Property Account Bank and
Lockbox Bank, respectively, agree to comply with Lender's instructions without
further consent from Borrower in connection with any of the Accounts and the
Account Collateral with respect thereto in the form required to properly perfect
Lender's security interest therein. Borrower agrees that at any time and from
time to time, at the expense of Borrower, Borrower will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be reasonably necessary or desirable, or that Lender may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby (including, without limitation, any security interest in and to
any Permitted Investments) or to enable Lockbox Bank or Lender to exercise and
enforce its rights and remedies hereunder with respect to any Account or Account
Collateral.
Section 3.22 Borrower's Obligation Not Affected.
The insufficiency of funds on deposit in the Accounts shall not absolve
Borrower of the obligation to make any payments, as and when due pursuant to
this Agreement and the other Loan Documents, and such obligations shall be
separate and independent, and not conditioned on any event or circumstance
whatsoever.
Section 3.23 Payments Received Under this Agreement.
Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, and provided no Event of Default has occurred and is
continuing, Borrower's obligations with respect to the monthly payment of Debt
Service and amounts due for the Ground Lease Escrow Fund, Tax and Insurance
Escrow Fund, the Required Common Charge Fund, Replacement Reserve Fund and any
other payment reserves established pursuant to this Agreement or any other Loan
Document shall (provided Lender is not prohibited from withdrawing or applying
any funds in the Accounts by operation of law or otherwise) be deemed satisfied
(and no Default or Event of Default shall result therefrom) to the extent
sufficient amounts are deposited in the Lockbox Account established pursuant to
this Agreement to satisfy
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such obligations on the dates each such payment is required, regardless of
whether any of such amounts are so applied by Lender.
Section 3.24 Intentionally Omitted.
Section 3.25 Lender Reliance.
Lender shall have no duty to confirm, inquire or determine whether a
Mezzanine Event of Default has occurred. Lender may rely on any notice it
believes in good faith to be genuine and given by Mezzanine Lender.
Section 3.26 Borrower Access to Lockbox Account.
Subject to the capability of the Servicer, Borrower shall have the right to
access information regarding the Lockbox Account.
IV. REPRESENTATIONS AND WARRANTIES
Section 4.1 Borrower Representations.
Borrower and, with respect to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Property, the Fee
Owner represent and warrant as of the date hereof that:
4.1.1 Organization.
Borrower is duly organized and is validly existing and in good standing in
the jurisdiction in which it is organized, with requisite power and authority to
own its properties and to transact the businesses in which it is now engaged.
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 the
Properties, businesses and operations. Borrower possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it
to own the Properties and to transact the businesses in which it is now engaged
except where the failure to obtain any such licenses, permits or authorizations
would not reasonably be expected to have a material adverse affect on Borrower
or the applicable Individual Property. Attached hereto as Schedule IV is an
organizational chart of Borrower.
4.1.2 Proceedings.
Borrower and Fee Owner have 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 Borrower and Fee Owner
and constitute legal, valid and binding obligations of Borrower and Fee Owner
enforceable against Borrower and Fee Owner 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.
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The execution, delivery and performance of this Agreement and the other
Loan Documents by 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 Borrower pursuant
to the terms of any indenture, mortgage, deed of trust, loan agreement,
partnership agreement, management agreement, franchise agreement, or other
material agreement or instrument to which Borrower is a party or by which any of
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 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 XIII 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, to the best of Borrower's and Fee Owner's
knowledge, threatened against or affecting Borrower or any Individual Property,
which actions, suits or proceedings, if determined against Borrower or any
Individual Property, could reasonably be expected to materially adversely affect
the condition (financial or otherwise) or business of Borrower or the condition
or ownership of any Individual Property.
4.1.5 Agreements.
Borrower is not a party to any agreement or instrument or subject to any
restriction which could reasonably be expected to materially and adversely
affect Borrower or any Individual Property, or Borrower's business, properties
or assets, operations or condition, financial or otherwise. Except as disclosed
on Schedule XIV attached hereto, Borrower is not 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 Borrower or any of the Properties are bound which could
reasonably be expected to materially and adversely affect Borrower or any
Individual Property.
4.1.6 Solvency.
Borrower (a) has not entered into the transaction or executed the Note,
this Agreement or any other Loan Documents with the actual intent to hinder,
delay or defraud any creditor and (b) received reasonably equivalent value in
exchange for its obligations under such Loan Documents. Giving effect to the
Loan, the fair saleable value of Borrower's assets exceeds and will, immediately
following the making of the Loan, exceed Borrower's total liabilities,
including, without limitation, subordinated, unliquidated, disputed and
contingent liabilities. The fair saleable value of Borrower's assets is and
will, immediately following the making of the Loan, be greater than Borrower's
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Borrower's assets
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do not and, immediately following the making of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Borrower does not intend to incur debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower). Except as expressly disclosed by
Borrower to Lender in writing, no petition in bankruptcy has been filed against
Borrower or any constituent Person in the last seven (7) years, and neither
Borrower nor any constituent Person in the last seven (7) years has ever made an
assignment for the benefit of creditors or taken advantage of any insolvency act
for the benefit of debtors. Neither Borrower nor any of its constituent Persons
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 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.
4.1.7 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 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, or
could reasonably be expected to materially adversely affect, any Individual
Property or the business, operations or condition (financial or otherwise) of
Borrower, or Guarantor or Indemnitor.
4.1.8 No Plan Assets.
Borrower is not an "employee benefit plan," as defined in Section 3(3) of
ERISA, subject to Title I of ERISA, and none of the assets of 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) Borrower is not a
"governmental plan" within the meaning of Section 3(32) of ERISA and (b)
transactions by or with Borrower are not 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 Agreement.
4.1.9 Compliance.
Except as expressly disclosed in the Physical Condition Reports, the Urban
Concepts Reports, Environmental Reports or Surveys, Borrower and the Properties
and the use thereof comply in all material respects with all applicable Legal
Requirements, including, without limitation, all Environmental Laws, 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
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thereof or any monies paid in performance of Borrower's obligations under any of
the Loan Documents.
4.1.10 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 Borrower and the Properties (i) are true, complete and correct in all
material respects, (ii) accurately represent the financial condition of Borrower
and the Properties, as applicable, as of the date of such reports, and (iii)
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
hotels 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 except as previously disclosed in writing
to Lender and approved by Lender in writing.
4.1.11 Condemnation.
Except as listed on Schedule XXV attached hereto, no Condemnation or other
similar proceeding has been commenced or, to the best of Borrower's and Fee
Owner's 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.
4.1.12 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.
4.1.13 Utilities and Public Access.
Each Individual Property has rights of access to public ways and is served
by public water, sewer, sanitary sewer and storm drain facilities adequate to
service such Individual Property for its respective intended uses. All public
utilities necessary to the full use and enjoyment of each Individual Property
are located either in the public right-of-way abutting each Individual Property
(which are connected so as to serve each Individual Property without passing
over other property) or in recorded easements serving each Individual Property
and such easements are set forth in the Title Insurance Policy. All roads
necessary for the use of each Individual Property for their current respective
purposes have been completed, are physically open and are dedicated to public
use and have been accepted by all Governmental Authorities or are located in
recorded easements serving each Individual Property and such easements are set
forth in and insured by the Title Insurance Policy.
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4.1.14 Not a Foreign Person.
Borrower is not a "foreign person" within the meaning of (S)1445(f)(3) of
the Code.
4.1.15 Separate Lots.
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.
4.1.16 Assessments.
Except as disclosed on Schedule XI or in the Title Insurance Policy, there
are no material pending or, to the best of Borrower's knowledge, proposed
special or other assessments for public improvements or otherwise affecting any
Individual Property, nor, to the best of Borrower's knowledge, are there any
contemplated improvements to any Individual Property that may result in such
special or other assessments.
4.1.17 Enforceability.
The Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by Borrower, including the defense of usury, and
Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto. Each of the Security Instruments 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.
4.1.18 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.
4.1.19 Insurance.
Borrower has obtained and has delivered to Lender certified copies (or
other evidence reasonably acceptable to Lender) of all insurance policies
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. Except as disclosed on Schedule XV attached hereto, no claims
have been made under any such policy, and no Person, including Borrower, has
done, by act or omission, anything which would impair the coverage of any such
policy.
4.1.20 Use of Property.
Each Individual Property is used exclusively for hotel purposes and other
appurtenant and related uses.
4.1.21 Certificate of Occupancy; Licenses.
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Except as expressly set forth in a Physical Condition Report, Urban
Concepts Reports, Title Insurance Policy or Survey, all material certifications,
permits, licenses and approvals, including, without limitation, certificates of
completion and occupancy permits and any applicable liquor, hospitality and
gaming licenses 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 unless the failure to obtain same
would not reasonably be expected to have a material adverse affect on Borrower
or any Individual Property. Except as expressly set forth in the Physical
Condition Report, Borrower has paid in full all fees and other charges related
to the Licenses which are due and payable as of the date hereof unless the
failure to pay such fees or other charges would not reasonably be expected to
have a material adverse effect on Borrower or any Individual Property. 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 and pay any
fees in connection therewith on or prior to the date they are due, unless the
failure to pay such fees would not reasonably be expected to have a material
adverse effect on Borrower or any Individual Property. The use being made of
each Individual Property is in conformity with the certificate of occupancy
issued for such Individual Property and, in the case of a Condominium Property,
the applicable Condominium Act.
4.1.22 Flood Zone.
Except as shown on the Survey for each Individual Property, 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)(vii)
is in full force and effect with respect to each such Individual Property.
4.1.23 Physical Condition.
Except as expressly set forth in a Physical Condition Report, to the best
of Borrower's knowledge, 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 and there exists no
structural or other material defects or damages in any Individual Property,
whether latent or otherwise, that would have a material adverse affect on any
Individual Property or the operation of any Individual Property, 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. Each Individual Property is free
from damage covered by fire or other casualty. All liquid and solid waste
disposal, septic and sewer systems located on each Individual Property are in a
good and safe condition and repair and in compliance with all Legal
Requirements.
4.1.24 Boundaries.
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Except as expressly set forth in a Physical Condition Report or on the
Survey, all of the Improvements which were included in determining the appraised
value of 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 the
Title Insurance Policy.
4.1.25 Leases.
The Properties are not subject to any Leases other than the Leases
described in Schedule XVI attached hereto and made a part hereof. Borrower is
the owner and lessor of landlord's interest in the Leases. No Person has any
possessory interest in any Individual Property or right to occupy the same
except under and pursuant to the provisions of the Leases. The current Leases
are in full force and effect and, except as disclosed on Schedule XVII attached
hereto and to the best of Borrower's knowledge, there are no material defaults
thereunder by either party and there are no conditions that, with the passage of
time or the giving of notice, or both, would constitute material defaults
thereunder. Except for security deposits required under the respective Leases
and as set forth on Schedule XXVI attached hereto, no Rent has been paid more
than one (1) month in advance of its due date. There are no offsets or defenses
to the payment of any portion of the Rents. Except as set forth on Schedule
XVIII attached hereto, all work to be performed by Borrower under each 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 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. Except as set forth on Schedule XIX
attached hereto, no tenant under any Lease has assigned its Lease or sublet all
or any portion of the premises demised thereby, no such tenant holds its leased
premises under assignment or sublease, 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. Except
as otherwise disclosed in a tenant estoppel certificate delivered to Lender in
connection with the Loan, no tenant under any Lease has any right or option for
additional space in the Improvements. To the best of Borrower's knowledge, no
Hazardous Materials have been disposed, stored or treated by any tenant under
any Lease on or about the leased premises in violation of Environmental Laws nor
does Borrower have any knowledge of any tenant's intention to use its leased
premises for any activity which, directly or indirectly, involves the use,
generation, treatment, storage, disposal or transportation of any Hazardous
Materials in violation of Environmental Laws.
4.1.26 Survey.
The Survey for each Individual Property delivered to Lender in connection
with this Agreement does not fail to reflect any material matter known to
Borrower affecting such Individual Property or the title thereto.
4.1.27 Inventory.
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Borrower is the owner of all of the equipment and assets at the Properties
(other than equipment leased as permitted hereunder) and shall not lease any
equipment or assets other than as permitted hereunder.
4.1.28 Loan to Value.
As of the Closing Date, the maximum principal amount of the Loan does not
exceed one hundred twenty-five percent (125%) of the aggregate fair market value
of the Properties.
4.1.29 Filing and Recording Taxes.
All transfer taxes, deed stamps, documentary 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 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 Security Instruments, have been paid.
4.1.30 Franchise Agreement.
The Franchise Agreement is in full force and effect, all franchise fees,
reservation fees, royalties and other sums due thereunder have been paid in full
to date, and to the best of Borrower's knowledge neither Borrower nor Franchisor
is in default thereunder beyond applicable grace and cure periods.
4.1.31 Insolvency Opinion.
All of the assumptions made in the Insolvency Opinion, including, but not
limited to, any exhibits attached thereto, are true and correct in all material
respects and any assumptions made in any subsequent non-consolidation opinion
required to be 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 material respects.
4.1.32 Management Agreement.
The Management Agreement is in full force and effect, all fees and other
sums due thereunder have been paid in full to date and there is no material
default thereunder by any 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.
4.1.33 Illegal Activity.
No portion of any Individual Property has been or will be purchased with
proceeds of any illegal activity and to the best of Borrower's knowledge, there
are no illegal activities or activities relating to any controlled substances at
any Individual Property.
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4.1.34 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.
4.1.35 Investment Company Act.
Borrower is not (a) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended; (b) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or (c) subject to any other federal or State law or regulation which
purports to restrict or regulate its ability to borrow money.
4.1.36 Principal Place of Business.
Each Borrower's principal place of business as of the date hereof is the
address set forth in the introductory paragraph hereto. Each Borrower is
organized under the laws of the State set forth on Schedule I attached hereto
and each Borrower's organization identification number is set forth on Schedule
I attached hereto.
4.1.37 Single Purpose Entity.
Except as otherwise permitted pursuant to the terms of the Loan Documents,
(i) each Borrower covenants and agrees that it has not and shall not, (ii) each
Borrower agrees that its general partner(s), if such Borrower is a partnership,
or its managing member(s) if such Borrower is a limited liability company with
multiple members (in each case, "Principals") has not and shall not:
(a) with respect to Borrower engage in any business or activity other than
the acquisition, development, ownership, operation, leasing, managing and
maintenance of the applicable Properties, and entering into the Loan, and
activities incidental thereto and with respect to each Principal, engage in any
business or activity other than the ownership of its interest in Borrower and
activities incidental thereto including the management of the applicable
Properties;
(b) with respect to Borrower acquire or own any material assets other than
(i) the applicable individual Property, and (ii) such incidental Personal
Property as may be necessary for
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the operation of the applicable Individual Property and with respect to each
Principal, acquire or own any material asset other than its interest in the
applicable Borrower;
(c) merge into or consolidate with any person or entity or, to the fullest
extent that any of the following may be waived or prohibited under Applicable
Laws, dissolve, terminate or liquidate in whole or in part, transfer or
otherwise dispose of all or substantially all of its assets or change its legal
structure;
(d) (i) fail to observe its organizational formalities or preserve its
existence as an entity duly organized, validly existing and in good standing (if
applicable) under the laws of the jurisdiction of its organization or formation,
and qualification to do business in the State where the Property or Properties
is located, if applicable, or (ii) without the prior written consent of Lender,
which consent shall not be unreasonably withheld, conditioned or delayed (and
with respect to any amendment to the single purpose entity provisions of
Borrower's or Principal's organizational documents, without confirmation from
the Rating Agency that any such amendment shall not result in a withdrawal,
qualification or downgrade of the then ratings assigned to the Securities)
amend, modify, terminate or fail to comply with the provisions of each
Borrower's partnership agreement, articles or certificate of incorporation,
articles of organization or similar organizational documents, as the case may
be, or of Principal's partnership agreement, articles of organization or similar
organizational documents, as the case may be, whichever is applicable, except to
the extent that any amendment to a filed certification may be required by
Applicable Law;
(e) other than Principal's ownership interest in Borrower own any
subsidiary or make any investment in, any Person without the prior written
consent of Lender;
(f) commingle its assets with the assets of any of its members, general
partners, Affiliates, principals or of any other Person or entity, participate
in a cash management system with any other entity or Person or fail to use its
own separate stationery, invoices and checks;
(g) with respect to Borrower, incur any debt, secured or unsecured, direct
or contingent (including guaranteeing any obligation), other than the Debt,
except for (1) trade payables in the ordinary course of its business of owning
and operating the Individual Property or Properties as applicable, provided that
such debt (i) is not evidenced by a note, (ii) is paid within sixty (60) days of
the date incurred (unless the same are being contested in accordance with the
terms hereof), (iii) does not exceed, in the aggregate, four percent (4%) of the
applicable Allocated Loan Amount and (iv) is payable to trade creditors and in
amounts as are normal and reasonable under the circumstances and (2) Permitted
FF&E Financing and with respect to each Principal, incur any debt secured or
unsecured, direct or contingent (including guaranteeing any obligations);
provided, however, the limitations set forth in (1) (ii) and (iii) above shall
not apply to alterations and Restorations made in accordance with or
contemplated by the terms of this Agreement;
(h) become insolvent and fail to pay its debts and liabilities (including,
as applicable, shared personnel and overhead expenses) from its assets as the
same shall become due (except for debts and liabilities being contested by
Borrower in good faith and in accordance with the terms hereof.);
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(i) (i) fail to maintain its records (including financial statements),
books of account and bank accounts separate and apart from those of the members,
general partners, principals and affiliates of any Borrower or of any Principal,
as the case may be, the Affiliates of a member, general partner or principal of
any Borrower or of any Principal, as the case may be, and any other Person, (ii)
permit its assets or liabilities to be listed as assets or liabilities on the
financial statement of any other Person or (iii) include the assets or
liabilities of any other Person on its financial statements except as either of
(ii) or (iii) of this Subsection may be required by GAAP and specifically
permitted consolidated financial statements; 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;
(j) enter into any contract or agreement with any member, general partner,
principal or Affiliate of any Borrower or of any Principal, as the case may be,
Guarantor or Indemnitor, or any member, general partner, principal or Affiliate
thereof (other than a business management services agreement with an Affiliate
of a Borrower, provided that (i) the manager, or equivalent thereof, under such
agreement holds itself out as an agent of the Borrower, and (ii) the agreement
meets the standards set forth in this subsection (j) following this
parenthetical), except (A) upon terms and conditions that are commercially
reasonable, intrinsically fair and substantially similar to those that would be
available on an arms-length basis with third parties other than any member,
general partner, principal or Affiliate of such Borrower, or of such Principal,
as the case may be, Guarantor or Indemnitor, or any member, general partner,
principal or Affiliate thereof, and (B) in accordance with this Agreement;
(k) to the fullest extent that the following may be waived or prohibited by
Applicable Law, seek the dissolution or winding up in whole, or in part, of any
Borrower, or of any Principal, as the case may be;
(l) fail to correct any known misunderstandings regarding the separate
identity of any Borrower, or of Principal, as the case may be, or any member,
general partner, principal or Affiliate thereof or any other person;
(m) except with respect to the Loan, guarantee or become obligated for the
debts of any other entity or Person or hold itself out to be responsible for the
debts of another entity or Person;
(n) make any loans or advances to any third party, including any member,
general partner, principal or Affiliate of any Borrower or of any Principal, as
the case may be, or any member, general partner, principal or Affiliate thereof,
and shall not acquire obligations or securities of any member, general partner,
principal or Affiliate of any Borrower, or any Principal, as the case may be, or
any member, general partner, or Affiliate thereof;
(o) fail to file its own tax returns or be included on the tax returns of
any other Person except as required by Applicable Law;
(p) fail either to hold itself out to the public as a legal entity separate
and distinct from any other Person or to conduct its business solely in its own
name or a name franchised or
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licensed to it by an entity other than an Affiliate of any Borrower or of any
Principal (except for services rendered and names licensed, franchised or
furnished under business management service agreements with an Affiliate that
complies with the terms hereof, so long as the manager, or equivalent thereof,
under such business management services agreements holds itself out as an agent
of any Borrower), as the case may be, and not as a division or part of any other
entity in order not (i) to mislead others as to the identity with which such
other party is transacting business, or (ii) to suggest that any Borrower or any
Principal, as the case may be, is responsible for the debts of any third party
(including any member, general partner, principal or Affiliate of any Borrower,
or of any Principal, as the case may be, or any member, general partner,
principal or Affiliate thereof);
(q) fail to 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;
(r) share any common logo with or hold itself out as or be considered as a
department or division of (i) any general partner, principal, member or
Affiliate of any Borrower or of any Principal, as the case may be, (ii) any
Affiliate of a general partner, principal or member of any Borrower or of a
Principal, as the case may be, or (iii) any other Person or entity (except for
services rendered and names licensed, franchised or furnished under business
management service agreements with an Affiliate that complies with the terms
hereof, so long as the manager, or equivalent thereof, under such business
management services agreements holds itself out as an agent of any Borrower);
(s) fail to allocate fairly and reasonably any overhead expenses that are
shared with an Affiliate, including paying for office space and services
performed by any employee of an Affiliate;
(t) except as otherwise expressly permitted hereunder, pledge its assets
for the benefit of any other Person and with respect to Borrower, other than
with respect to the Loan;
(u) fail to maintain a sufficient number of employees in light of its
contemplated business operations;
(v) fail to provide in its (i) articles of organization, certificate of
formation and/or operating agreement, as applicable, if it is a limited
liability company, (ii) partnership agreement, if it is a partnership or (iii)
certificate of incorporation, if it is a corporation, that for so long as the
Loan is outstanding pursuant to the Note, this Agreement and the other Loan
Documents, it shall not file or consent to the filing of any petition, either
voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute, or make an assignment for the
benefit of creditors without the affirmative vote of each Independent Director
and of all other general partners/managing members/directors;
(w) fail to hold its assets in its own name;
(x) if any Borrower is a corporation, fail to consider the interests of its
creditors in connection with all corporate actions to the extent permitted by
Applicable Law;
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(y) have any of its obligations guaranteed by an Affiliate, except for (i)
each Borrower's obligations under the Loan Documents, (ii) the Guaranty given by
Wyndham, (iii) the Environmental Indemnity given by Wyndham, and (iv) Wyndham's
indemnification of the Property Account Bank;
(z) violate or cause to be violated the assumptions made with respect to
Borrower, and Principal in the Insolvency Opinion or any Additional Insolvency
Opinion, as applicable;
(aa) with respect to each Principal, or if any Borrower is a single member
limited liability company that complies with the requirements of Section
4.1.37(cc) below, fail at any time to have at least two independent directors or
independent members of its board of managers (collectively, the "Independent
Director") that each are not and have not been for at least five (5) years (a)
stockholders, directors, members of its boards of managers (with the exception
of serving as the Independent Director of any Principal or any bankruptcy remote
special purpose entity which is an Affiliate of any Principal or Borrower),
officers, employees, partners, members, attorneys or counsel of any Borrower, or
of Principal or any Affiliate of either of them; (b) customers (other than as
hotel guests), suppliers or other person who derives more than one percent (1%)
of its profits or revenues (other than any fee paid to such director as
compensation for such director to serve as an Independent Director) from its
activities with any Borrower, any Principal or any Affiliate of any of them (a
"Business Party"); (c) a Person or other entity controlling or under common
control with any such stockholder, partner, member, director, officer, attorney,
counsel or Business Party; or (d) a member of the immediate family of any such
stockholder, director, officer, employee, partner, member, attorney, counsel or
Business Party. (As used herein, 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 or entity, whether through
ownership of voting securities, by contract or otherwise); or
(bb) with respect to each Principal, or if any Borrower is a single member
limited liability company that complies with the requirements of Section
4.1.37(cc) below, permit its board of directors to take any action which, under
the terms of any certificate of incorporation, by-laws or any voting trust
agreement with respect to any common stock or other applicable organizational
documents, requires the unanimous vote of one hundred percent (100%) of the
members of the board without the vote of each unless at the time of such action
there shall be at least two members who are Independent Directors.
(cc) In the event any Borrower is a Delaware limited liability company that
does not have a managing member which complies with the requirements for a
Principal under this Section 4.1.37, the limited liability company agreement of
Borrower (the "LLC Agreement") shall provide the following: (A) in the event
that the member of Borrower ceases to be a member of Borrower other than through
a sale, assignment, transfer, exchange, mortgage, pledge, grant, hypothecation
or other transfer, whether absolute or as security or encumbrance (including
dispositions by operation of law) (each, a "Disposition") of all of its limited
liability company interests in accordance with its limited liability company
agreement and the admission of a successor member as a member of Borrower,
Borrower shall be continued without dissolution and the managers of Borrower
will, simultaneously with the member ceasing to be a member of Borrower,
automatically become, and be admitted as, members of Borrower having a zero
percent economic interest or limited liability company interest in Borrower; (B)
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notwithstanding anything to the contrary in the LLC Agreement, any Disposition
shall be subject to the provisions of the Loan Documents, and (C) in order to
implement the admission to Borrower of each of its managers as a member, each
Person serving as a manager of Borrower shall execute a counterpart to the LLC
Agreement.
Upon the occurrence of any event that causes the Member to cease to be a
member of Borrower, to the fullest extent permitted by law, the personal
representative of the Member shall, within ninety (90) days after the occurrence
of the event that terminated the continued membership of the Member in Borrower,
agree in writing (A) to continue Borrower and (B) to the admission of the
personal representative or its nominee or designee, as the case may be, as a
substitute member of the Borrower, effective as of the occurrence of the event
that terminated the continued membership of the Member of Borrower in Borrower.
Any action initiated by or brought against the Member under any Creditors Rights
Laws (defined below) shall not cause the Member to cease to be a member of
Borrower and upon the occurrence of such an event, the business of Borrower
shall continue without dissolution. The term "Creditors Rights Laws" shall mean
with respect to any Person any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to its debts or debtors.
4.1.38 Business Purposes.
The Loan is solely for the business purpose of Borrower, and is not for
personal, family, household, or agricultural purposes.
4.1.39 Taxes.
Except as set forth on Schedule XX hereto, Borrower, any Guarantor and any
Indemnitor have filed all federal, State, county, municipal, and city income and
other tax returns required to have been filed by them and have paid all taxes
and related liabilities which have become due pursuant to such returns or
pursuant to any assessments received by them (except for such Taxes if the
failure to pay such Taxes would not have a material adverse effect on Borrower
or any of the Properties). Neither Borrower, any Guarantor nor any Indemnitor
knows of any basis for any additional assessment in respect of any such taxes
and related liabilities for prior years (except such additional assessments if
the failure to pay such additional assessments would not have a material adverse
effect on Borrower or any of the Properties).
4.1.40 Forfeiture.
There has not been and shall never be committed by Borrower or, to the best
of Borrower's knowledge, any other Person in occupancy of or involved with the
operation or use any of the Properties any act or omission affording the federal
government or any State or local government the right of forfeiture as against
any of the Properties or any part thereof or any monies paid in performance of
Borrower's obligations under the Note, this Agreement or the other Loan
Documents. Borrower hereby covenants and agrees not to commit, permit or suffer
to exist any act or omission affording such right of forfeiture.
4.1.41 Environmental Representations and Warranties.
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Borrower represents and warrants, based upon an environmental site
assessment of each Individual Property and to the best of Borrower's knowledge,
that: (a) there are no Hazardous Materials or underground storage tanks in, on,
or under any of the Properties, except those that are in compliance with
Environmental Laws and with permits issued pursuant thereto (if such permits are
required) or fully disclosed to Lender in writing pursuant to the written
reports resulting from the environmental site assessments of the Properties
delivered to Lender (the "Environmental Reports"); (b) there are no past or
present Releases of Hazardous Materials in violation of any Environmental Law
and which would require remediation by a Governmental Authority in, on, under or
from any of the Properties except as described in the Environmental Reports; (c)
there is no Release of Hazardous Materials migrating to any of the Properties
except as described in the Environmental Reports; (d) there is no past or
present noncompliance with Environmental Laws, or with permits issued pursuant
thereto, in connection with any of the Properties except as described in the
Environmental Reports; (e) Borrower has not received any written notice or other
communication from any Person or entity (including but not limited to a
Governmental Entity) requiring remediation of Hazardous Materials in, on, under
or from any of the Properties; and (f) Borrower has truthfully and fully
provided to Lender, in writing, any and all information relating to
environmental conditions in, on, under or from any of the Properties known to
Borrower or contained in Borrower's current files and records, and any reports
commissioned by Borrower or any Affiliate of any Borrower or Guarantor relating
to Hazardous Materials in, on, under or migrating to or from any of the
Properties and/or to the environmental condition of the Properties.
4.1.42 Taxpayer Identification Number.
Each Borrower's United States taxpayer identification number is set forth
on Schedule I attached hereto.
4.1.43 Intentionally omitted.
4.1.44 OFAC.
Borrower represents and warrants that neither Borrower, Guarantor,
Indemnitor or any of their respective Affiliates is a Prohibited Person, and
Borrower, Guarantor, Indemnitor and their respective Affiliates are in full
compliance with all applicable orders, rules, regulations and recommendations of
The Office of Foreign Assets Control of the U.S. Department of the Treasury.
4.1.45 Ground Lease Representations.
Borrower represents and warrants that in connection with each Leasehold
Property:
(a) The Ground Lease is in full force and effect and has not been modified
or amended in any manner whatsoever, (b) there are no defaults under the Ground
Lease and no event has occurred which but for the passage of time, or notice, or
both would constitute a default under the Ground Lease, (c) all rents,
additional rents and other sums due and payable under the Ground Lease have been
paid in full, and (d) neither Borrower nor the landlord under the Ground Lease
has commenced any action or given or received any notice for the purpose of
terminating the Ground Lease;
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(b) With respect to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Property only, the Security
Instrument which is secured by Borrower's interest in the related Ground Lease
is also secured by the related fee interest in such Property, and the fee
interest is subject and subordinate of record to the Security Instrument, and
such Security Instrument does not by its terms provide that it will be
subordinated to the Lien of any other mortgage or other Lien upon such fee
interest, and upon the occurrence of an Event of Default, Lender has the right
to foreclose or otherwise exercise its rights with respect to the fee interest
within a commercially reasonable time;
(c) The Ground Lease and all amendments thereto or a memorandum thereof
have been duly recorded, the Ground Lease permits the interest of the lessee
thereunder to be encumbered by the applicable Security Instrument, and there has
not been any change in the terms of the Ground Leases since their recordation
except as provided in such amendments;
(d) Except as indicated in the related Title Insurance Policy, Borrower's
interest in the Ground Lease is not subject to any Liens superior to, or of
equal priority with, the applicable Security Instrument;
(e) Borrower's interest in the Ground Lease is assignable upon notice to,
but without the consent of, the lessor thereunder and, in the event that it is
so assigned, it is further assignable upon notice to, but without the need to
obtain the consent of, such lessor;
(f) The Ground Lease requires the lessor thereunder to give notice of any
default by Borrower to Lender and the Ground Lease further provides that notice
of termination 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;
(g) Lender is permitted a reasonable 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 lessor thereunder may
terminate such Ground Lease;
(h) Each Ground Lease has a term which extends not less than twenty (20)
years beyond the Maturity Date;
(i) The Ground Lease require the lessor to enter into a new lease upon
termination of the applicable Ground Lease for any reason, including rejection
of such Ground Lease in a bankruptcy proceeding;
(j) Under the terms of each Ground Lease and the applicable Loan Documents,
taken together, any Net Proceeds will be applied either to the Restoration of
all or part of the Properties, with Lender or a trustee appointed by Lender
having the right to hold and disburse such Net Proceeds as the Restoration
progresses, or to the payment of the outstanding principal balance of the Loan
together with any accrued interest thereon; and
(k) The Ground Lease does not impose restrictions on subletting.
4.1.46 Condominiums.
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To the best of Borrower's knowledge, in the case of each Condominium
Property:
(a) the Condominium has been validly formed and is validly existing under
the applicable Condominium Act;
(b) there are no material uncured defaults by any party under the
Condominium Documents, or conditions that, with the passage of time, or the
giving of notice, or both, would constitute a material default under the
Condominium Documents; and
(c) all Common Charges due under the Condominium Documents by Borrower, as
the owner of the Units, have been paid through the date due.
Section 4.2 Survival of Representations.
Borrower and Fee Owner agree that all of the representations and warranties
of Borrower and Fee Owner 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 and Fee Owner
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 Security Instruments encumbering the Properties (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower and, with respect to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Property,
Fee Owner hereby covenant and agree with Lender that:
5.1.1 Existence; Compliance with Legal Requirements.
Borrower shall do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence, material rights, material
licenses, material 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
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 Security Instruments. Borrower and Fee Owner (as to the
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Individual Property owned by such Fee Owner) 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. 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
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 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 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 right to contest the same in accordance with the
terms and conditions of this Section 5.1.2, Borrower shall pay all Taxes, Other
Charges and Common Charges now or hereafter levied or assessed or imposed
against the Properties or any part thereof as the same become due and payable;
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, Other Charges and Common
Charges have been so paid or are not then delinquent no later than ten (10) days
prior to the date on which the Taxes, Other Charges and/or Common Charges would
otherwise be delinquent if not paid. Borrower shall furnish to Lender receipts
for the payment of the Taxes, Other Charges and Common 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). Except for
Permitted Encumbrances, Borrower shall not suffer and shall promptly cause to be
paid and discharged any Lien or charge whatsoever which may be or became 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, Other
Charges or Common Charges or any other Lien or charge that may become a Lien or
charge against an Individual Property, provided that (i) no Event of Default has
occurred and remains uncured; (ii) such proceeding shall be permitted under and
be
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conducted in accordance with the provisions of 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, Other Charges or Common Charges or the amount
necessary to discharge any Lien or satisfy any charge that may become a Lien or
charge against an Individual Property, 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, Other Charges or Common
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, Other Charges or
Common Charges or the amount necessary to discharge any Lien or satisfy any
charge that may become a Lien or charge against an Individual Property, 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 therein) shall be in danger of being sold, forfeited, terminated,
cancelled or lost or there shall be any danger of the Lien of any Security
Instrument being primed by any related Lien that is not a Permitted Encumbrance.
5.1.3 Litigation.
Borrower shall give prompt written notice to Lender of any litigation or
governmental proceedings pending or threatened against Borrower which could
reasonably be expected to materially adversely affect 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 written notice, subject to the rights of tenants and guests 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 Award and Insurance Benefits.
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Subject to the terms hereof; Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Awards or Insurance Proceeds lawfully
or equitably payable in connection with any Individual Property, and Lender
shall be reimbursed for any reasonable out-of-pocket expenses incurred in
connection therewith (including reasonable attorneys' fees and disbursements,
and the payment by Borrower of the expense of an appraisal on behalf of Lender
in case of Casualty or Condemnation affecting any Individual Property or any
part thereof) out of such Award or Insurance Proceeds.
5.1.8 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, mortgages, mortgage expansions, mortgage notes 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/or
authorization of UCC financing statements, and the execution and delivery of all
such writings necessary to transfer any liquor Licenses into the name of Lender
or its designee after the occurrence and during the continuance of any Event of
Default; 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
may reasonably require from time to time.
5.1.9 Mortgage and Intangible Taxes.
Borrower shall pay all State, county and municipal recording, mortgage, and
intangible, and all other taxes imposed upon the execution and recordation of
the Security Instruments and/or upon the execution and delivery of the Note.
5.1.10 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
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 advance written 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
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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 and twenty
(120) days following the end of each Fiscal Year of Borrower, a complete copy of
Borrowers' combined annual financial statements audited by a "Big Four"
accounting firm or other independent certified public accountant reasonably
acceptable to Lender in accordance with principles of the Uniform System of
Accounts (or such other accounting basis acceptable to Lender) covering the
Properties on a combined basis for such Fiscal Year and containing statements of
profit and loss for Borrowers and the Properties on a combined basis and a
combined balance sheet for Borrowers. Such statements shall set forth the
financial condition and the results of operations for the Properties for such
Fiscal Year, and shall include, but not be limited to, amounts representing
annual Net Cash Flow, Net Operating Income, Gross Income from Operations and
Operating Expenses. Borrowers' annual financial statements shall be accompanied
by (i) an Officer's Certificate stating that each such annual financial
statement presents fairly the financial condition and the results of operations
of Borrowers and the Properties being reported upon and has been prepared in
accordance with principles of the Uniform System of Accounts, (ii) an
unqualified opinion of a "Big Four" accounting firm or other independent
certified public accountant reasonably acceptable to Lender, and (iii) a list of
tenants, if any, occupying more than ten percent (10%) of the total floor area
of the Improvements, (iv) a breakdown showing the year in which each Lease then
in effect expires and the percentage of total floor area of the Improvements and
the percentage of base rent with respect to which Leases shall expire in each
such year, each such percentage to be expressed on both a per year and
cumulative basis, and (v) 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 Borrowers' annual financial statements,
Borrower shall furnish to Lender (i) an Officers' 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 and (ii) a
schedule prepared by Borrower, which schedule shall allocate the components of
the combined statements to each applicable Borrower and the Individual Property
owned by such Borrower.
(c) Borrower will furnish, or cause to be furnished, to Lender on or before
thirty (30) days after the end of each calendar month the following items,
accompanied by an Officers' Certificate stating that, to the best of Borrower's
knowledge, such items are true, correct, accurate, and complete in all material
respects and fairly present the financial condition and results of the
operations of each Individual Property (subject to normal year-end adjustments)
as applicable: (i) an occupancy report for the subject month including an
average daily rate, and any and all franchise inspection reports received by
Borrower during the subject month; (ii) unaudited financial statements covering
each Individual Property and a combined statement covering all of the Properties
including, without limitation, monthly, year-to-date and trailing twelve (12)
month operating statements prepared for each calendar month, noting Net
Operating Income, Gross Income from Operations, and Operating Expenses (not
including any
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contributions to the Replacement Reserve Fund), and each line item comprising
Net Operating Income, Gross Income from Operations and Operating Expenses and
other information necessary and sufficient to fully represent the financial
position and results of operation of the Properties during such calendar month,
and during the continuance of a Triggering Event 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 and over $10,000.00
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 assuming an interest rate constant equal to the Contract
Rate; (iv) to the extent tenants occupy ten percent (10%) or more of the total
floor area of any Individual Property, an updated rent roll and (v) a report
setting forth Capital Expenditures for such calendar month. In addition, such
Officers' Certificate shall also state that the representations and warranties
of Borrower set forth in Section 4.1.37 are true and correct in all material
respects as of the date of such certificate and, except as expressly permitted
under Section 4.1.37, that there are no trade payables outstanding for more than
sixty (60) days. Following the occurrence and continuance of a Triggering Event,
Borrower will furnish, or cause to be furnished, to Lender on or before thirty
(30) days after the end of each calendar month a calculation reflecting the Debt
Service Coverage Ratio for such calendar month prepared assuming an interest
rate constant equal to the Cure Contract Rate accompanied by an Officer's
Certificate with respect thereto.
(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 for
each Individual Property not later than thirty (30) days prior to the
commencement of such period or Fiscal Year in form reasonably satisfactory to
Lender, and shall be subject to Lender's written approval (each such Annual
Budget after it has been approved in writing by Lender shall be hereinafter
referred to as an "Approved Annual Budget"). Lender's approval of a proposed
Annual Budget shall be deemed to have been given if 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 twenty (20) Business Days of Lender's receipt
thereof and after Lender's failure to respond to the initial request for
approval of such proposed Annual Budget within twenty (20) Business Days,
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 be deemed given if Lender does not respond within
twenty (20) 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 twenty (20) Business Days of Lender's
receipt of such second submission. Until such time that Lender approves or is
deemed to have approved 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, and (ii) expenditures
actually incurred which are beyond the reasonable control of Borrower such as
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taxes, utilities, and insurance ("Uncontrollable Expenses"). Notwithstanding
anything in any of the 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, and (ii)
Variable Expenses which exceed the amounts budgeted therefor by not more than
the Gross Revenues Percentage Increase. Lender acknowledges that the Annual
Budget for Fiscal Year 2003 is satisfactory to Lender for the purpose of this
Section 5.1.10(d)).
(e) Borrower shall furnish to Lender, within ten (10) Business Days after
request such further detailed information with respect to the operation of the
Properties and the financial affairs of Borrower as may be reasonably requested
by Lender.
(f) Any reports, statements or other information required to be delivered
under this Agreement shall be delivered (i) in paper form, (ii) in electronic
format, 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 a Microsoft Word for Windows or WordPerfect for Windows
files (which files may be prepared using a spreadsheet program and saved as word
processing files).
(g) Provided Lender is complying with Applicable Laws, Borrower agrees that
Lender may forward to each purchaser, transferee, assignee, servicer,
participant, Co-Lender or investor in all or any portion of the Loan or any
Securities (collectively, the "Investor") or any Rating Agency rating such
participations and/or Securities and each prospective Investor, and any
organization maintaining databases on the underwriting and performance of
commercial mortgage loans, all documents and information which Lender now has or
may hereafter acquire relating to the Debt and to Borrower, any Guarantor, any
Indemnitor and the Properties, whether furnished by Borrower, any Guarantor, any
Indemnitor or otherwise, as Lender determines necessary or desirable. Borrower
irrevocably waives any and all rights it may have under any Applicable Laws to
prohibit such disclosure, including, but not limited to, any right of privacy;
(h) Borrower will furnish, or cause to be furnished, an annual comparison
of the budgeted total income and total expenses to the actual total income and
total expenses and an annual occupancy report including an average daily room
rate, within one hundred twenty (120) days after the close of each Fiscal Year
of Borrower;
(i) Borrower shall promptly send to Lender all quality assurance reports or
other reports of inspection delivered by Manager, if any.
(j) If requested by Lender, Borrower shall provide Lender, promptly upon
request, with the following financial statements if, at the time a preliminary
or final prospectus, prospectus supplement, private placement memorandum,
offering circular or other offering document (the "Disclosure Document") is
being prepared for a Securitization, it is expected that the principal amount of
the Loan together with any Affiliated Loans at the time of Securitization may,
or if the principal amount of the Loan together with any Affiliated Loans at any
time during which the Loan and any Affiliated Loans are included in a
Securitization does, equal or exceed 20% of the aggregate principal amount of
all mortgage loans included or expected to be included, as applicable, in the
Securitization:
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(i) A balance sheet with respect to each Individual Property for the
two most recent fiscal years, meeting the requirements of Section 210.3-01
of Regulation S-X of the Securities Act and statements of income and
statements of cash flows with respect to each Individual Property for the
three most recent fiscal years, meeting the requirements of Section
210.3-02 of Regulation S-X, and, to the extent that such balance sheet is
more than 135 days old as of the date of the document in which such
financial statements are included, interim financial statements of each
Individual Property meeting the requirements of Section 210.3-01 and
210.3-02 of Regulation S-X (all of such financial statements, collectively,
the "Standard Statements"); provided, however, that with respect to each
Individual Property (other than properties that are hotels, nursing homes,
or other properties that would be deemed to constitute a business and not
real estate under Regulation S-X or other legal requirements) that has been
acquired by Borrower from an unaffiliated third party (such Property,
"Acquired Property"), as to which the other conditions set forth in Section
210.3-14 of Regulation S-X for provision of financial statements in
accordance with such Section have been met, in lieu of the Standard
Statements otherwise required by this Section, Borrower shall instead
provide the financial statements required by such Section 210.3-14 of
Regulation S-X ("Acquired Property Statements").
(ii) Not later than thirty (30) days after the end of each fiscal
quarter following the date hereof, a balance sheet of each Individual
Property as of the end of such fiscal quarter, meeting the requirements of
Section 210.3-01 of Regulation S-X, and statements of income and statements
of cash flows of each Individual Property for the period commencing
following the last day of the most recent fiscal year and ending on the
date of such balance sheet and for the corresponding period of the most
recent fiscal year, meeting the requirements of Section 210.3-02 of
Regulation S-X (provided, that if for such corresponding period of the most
recent fiscal year Acquired Property Statements were permitted to be
provided hereunder pursuant to subsection (i) above, Borrower shall instead
provide Acquired Property Statements for such corresponding period).
(iii) Not later than seventy-five (75) days after the end of each
fiscal year following the date hereof, a balance sheet of each Individual
Property as of the end of such fiscal year, meeting the requirements of
Section 210.3-01 of Regulation S-X, and statements of income and statements
of cash flows of the each Individual Property for such fiscal year, meeting
the requirements of Section 210.3-02 of Regulation S-X.
(iv) Within ten (10) Business Days after notice from the Lender in
connection with the Securitization of this Loan, such additional financial
statements, such that, as of the date (each an "Offering Document Date") of
each Disclosure Document, Borrower shall have provided Lender with all
financial statements as described in subsection (j)(i) above; provided that
the fiscal year and interim periods for which such financial statements
shall be provided shall be determined as of such Offering Document Date.
(k) If requested by Lender, Borrower shall provide Lender, promptly upon
request (but in no event later than the time periods set forth in Section
5.1.10(j) hereof), with summaries
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of the financial statements referred to in Section 5.1.10(j) hereof if, at the
time a Disclosure Document is being prepared for a Securitization, it is
expected that the principal amount of the Loan and any Affiliated Loans at the
time of Securitization may, or if the principal amount of the Loan and any
Affiliated Loans at any time during which the Loan and any Affiliated Loans are
included in a Securitization does, equal or exceed 10% (but is less than 20%) of
the aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in a Securitization. Such summaries shall meet the
requirements for "summarized financial information," as defined in Section 210.1
02(bb) of Regulation S-X, or such other requirements as may be determined to be
necessary or appropriate by Lender.
(l) All financial statements provided by Borrower hereunder pursuant to
Section 5.1.10(j)(i) and (k) hereof shall be prepared in accordance with GAAP,
and shall meet the requirements of Regulation S-X and other applicable legal
requirements. All financial statements referred to in Subsections 5.1.10(j)(i)
and 5.1.10(j)(iii) above shall be audited by independent accountants of Borrower
acceptable to Lender in accordance with Regulation S-X and all other applicable
legal requirements, shall be accompanied by the manually executed report of the
independent accountants thereon, which report shall meet the requirements of
Regulation S-X and all other applicable legal requirements, and shall be further
accompanied by a manually executed written consent of the independent
accountants, in form and substance acceptable to Lender, to the inclusion of
such financial statements in any Disclosure Document and any Exchange Act Filing
and to the use of the name of such independent accountants and the reference to
such independent accountants as "experts" in any Disclosure Document and
Exchange Act Filing, all of which shall be provided at the same time as the
related financial statements are required to be provided. All financial
statements (audited or unaudited) provided by Borrower under this Section 5.1.10
shall be certified by the chief financial officer or administrative member of
Borrower, which certification shall state that such financial statements meet
the requirements set forth in the first sentence of this Section 5.1.10(l).
(m) If requested by Lender, Borrower shall provide Lender, promptly upon
request, with any other or additional financial statements, or financial,
statistical or operating information, as Lender shall determine to be required
pursuant to Regulation S-X or any amendment, modification or replacement thereto
or other legal requirements in connection with any Disclosure Document or any
Exchange Act filing in connection with or relating to a Securitization or as
shall otherwise be reasonably requested by the Lender.
(n) In the event Lender determines, in connection with a Securitization,
that the financial statements required in order to comply with Regulation S-X or
other legal requirements are other than as provided herein, then notwithstanding
the provisions of Sections 5.1.10(j), (k) and (l) hereof, Lender may request,
and Borrower shall promptly provide, such combination of Acquired Property
Statement and/or Standard Statements or such other financial statements as
Lender determines to be necessary or appropriate for such compliance.
(o) The term "Affiliated Loans" shall mean a loan made by Lender to a
parent, subsidiary or such other entity affiliated with Borrower, any Indemnitor
or any Guarantor.
(p) Borrower agrees that Lender may forward to each purchaser, transferee,
assignee, servicer, participant, or investor in all or any portion of the Loan
or any Securities (collectively,
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the "Investor") or any Rating Agency rating such participations and/or
Securities and each prospective Investor, and any organization maintaining
databases on the underwriting and performance of commercial mortgage loans, all
documents and information which Lender now has or may hereafter acquire relating
to the Debt and to Borrower, any Guarantor, any Indemnitor and the Properties,
whether furnished by Borrower, any Guarantor, any Indemnitor(s) or otherwise, as
Lender determines necessary or desirable. Borrower irrevocably waives any and
all rights it may have under any Applicable Laws to prohibit such disclosure,
including but not limited to any right of privacy.
5.1.11 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 remain in good
standing under the laws of each jurisdiction the extent required for the
ownership, maintenance, management and operation of the Properties.
5.1.12 Costs of Enforcement.
In the event (a) that any Security Instrument encumbering any Individual
Property is foreclosed in whole or in part or that any such Security Instrument
is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to
any Security Instrument 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.
5.1.13 Estoppel Statement.
(a) After written request by Lender, Borrower shall within fifteen (15)
days furnish Lender with a statement, duly acknowledged and certified, setting
forth (i) the amount of the original principal amount of the Note, (ii) the
unpaid principal amount of the Note, (iii) the Applicable Interest Rate of the
Note, (iv) the date installments of interest and/or principal 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 Security Instruments 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) Borrower shall use its best 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.
(c) After written request by Borrower, Lender shall furnish to Borrower
within fifteen (15) days, a statement setting forth (i) the amount of the
original principal amount of the Note, (ii) the unpaid principal amount of the
Note, (iii) the Applicable Interest Rate, (iv) the amount of
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Reserve Funds held by Lender, if any, (iv) that the Loan Documents have not been
modified (or, listing such modifications, if applicable), (v) that there are no
currently outstanding notices of Default sent to Borrower (or listing such
notices, if applicable) and (vi) the date the last installment of principal and
interest has been paid.
(d) Borrower shall use its commercially reasonable efforts to promptly upon
request of Lender, deliver an estoppel certificate from each Franchisor stating
that (i) the Franchise Agreement is in full force and effect and has not been
modified, amended or assigned, (ii) neither Franchisor nor Borrower is in
default under any of the terms, covenants or provisions of the Franchise
Agreement and Franchisor knows of no event which, but for the passage of time or
the giving of notice or both, would constitute an event of default under the
Franchise Agreement, (iii) neither Franchisor nor Borrower has commenced any
action or given or received any notice for the purpose of terminating the
Franchise Agreement and (iv) all sums due and payable to Franchisor under the
Franchise Agreement have been paid in full.
5.1.14 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 2.1.4.
5.1.15 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.
5.1.16 Confirmation of Representations.
Borrower shall deliver, in connection with any Securitization, (a) one or
more Officer's Certificates certifying as to the accuracy of all representations
made by Borrower in the Loan Documents as of the date of the closing of such
Securitization in all relevant jurisdictions (or if any such representations are
no longer true, providing an explanation as to the reason for such untruth), and
(b) certificates of the relevant Governmental Authorities in all relevant
jurisdictions indicating the good standing and qualification of Borrower and
Principal as of the date of the Securitization.
5.1.17 Leasing Matters.
(a) With respect to any Individual Property, Borrower shall not, without
the prior written consent of Lender, which consent shall not be unreasonably
withheld, conditioned or delayed, enter into and, except to the extent required
pursuant to the terms of an existing Material Lease, renew, extend, amend,
modify, waive any provisions of, terminate, reduce rents under, accept a
surrender of space thereunder, or shorten the term of, any Material Lease or any
instrument guaranteeing or providing credit support for a Material Lease.
Notwithstanding the foregoing, Borrower shall be permitted to enter into a lease
for the restaurant space at the Bel Age Hotel without Lender's prior written
consent provided (i) Borrower provides Lender with
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written notice of its intent to enter into a lease for the restaurant space at
least thirty (30) days prior to the execution of any such lease, (ii) no Event
of Default has occurred and is continuing, (iii) the proposed lease is an arms
length transaction with the bona-fide independent third party, (iv) the proposed
lease will not have a material adverse affect on the Bel Age Hotel, (v) the
lease taken as a whole provides for rental rates and terms comparable to
existing local rates and terms provided, however, Lender acknowledges that the
applicable Borrower may enter into a rental structure with the proposed tenant
providing for no base rent and a stepped up percentage rent calculated as a
percentage of gross income, net profit or net cash flow provided, further, the
total rent due under such proposed lease when taken as a whole will be on market
terms and (vi) Borrower provides Lender with a copy of the fully executed Lease
promptly upon execution of same.
(b) Borrower (i) shall observe and perform all the obligations imposed upon
the lessor under the Material Leases and shall not do or permit to be done
anything to impair the value of any of the Material Leases as security for the
Debt; (ii) shall promptly send copies to Lender of all notices of default or
other material matters which Borrower shall send or receive thereunder, (iii)
shall enforce all of the material terms, covenants and conditions contained in
the Material Leases upon the part of the tenant thereunder to be observed or
performed in a commercially reasonable manner (except for termination of a Lease
which shall require Lender's prior approval, which approval shall not be
unreasonably withheld, conditioned or delayed); (iv) except as set forth on
Schedule XXVI attached hereto and made a part hereof, shall not collect any of
the Rents more than one (l) month in advance (except security deposits shall not
be deemed Rents collected in advance); (v) shall not execute any other
assignment of the lessor's interest in any of the Leases or the Rents; and (vi)
shall not consent to any assignment of or subletting under any Material Leases
not in accordance with their terms, without the prior written consent of Lender,
which consent shall not be unreasonably withheld, conditioned or delayed. Lender
shall not unreasonably withhold, condition or delay approval of the execution of
any subordination and non-disturbance or similar recognition agreement requested
by any tenant under a Lease provided (i) Lender has approved such Lease, which
approval shall not be unreasonably withheld, conditioned or delayed and (ii)
such agreement is in form, scope and substance reasonably acceptable to Lender.
To the extent Lender's prior written approval is required pursuant to this
Section 5.1.17, Lender shall have fifteen (15) calendar days from receipt of
written request and any and all reasonably required information and
documentation relating thereto in which to approve or disapprove such request,
provided, such request to Lender is marked in bold lettering with the following
language: "LENDER'S RESPONSE IS REQUIRED WITHIN FIFTEEN (15) CALENDAR DAYS OF
RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE
UNDERSIGNED AND LENDER" and the envelope containing the request must be marked
"PRIORITY". In the event Lender fails to respond to the information and proposed
documentation within such time, Lender's approval shall be deemed given.
Borrower shall be required to provide Lender with such information and
documentation as may be reasonably required by Lender, including without
limitation, lease comparables and other market information. Should Lender fail
to approve any such request, Lender shall give Borrower written notice setting
forth in reasonable detail the basis for such disapproval.
(c) Borrower may, without the consent of Lender, amend, modify or waive the
provisions of any Lease or terminate, reduce rents under, accept a surrender of
space under, or
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shorten the term of, any Lease (including any guaranty, letter of credit or
other credit support with respect thereto) provided that such Lease is not a
Material Lease and that such action (taking into account, in the case of a
termination, reduction in rent, surrender of space or shortening of term, the
planned alternative use of the affected space) does not have a material adverse
effect on the value of the applicable Individual Property taken as a whole, and
provided that such Lease, as amended, modified or waived, is otherwise in
compliance with the requirements of this Agreement, the Condominium Documents
and any lease subordination agreement binding upon Lender with respect to such
Lease. A termination of a Lease (other than a Material Lease) with a tenant who
is in default beyond applicable notice and grace periods shall not be considered
an action which has a material adverse effect on the value of the applicable
Individual Property taken as a whole. Any amendment, modification, waiver,
termination, rent reduction, space surrender or term shortening which does not
satisfy the requirements set forth in this Subsection shall be subject to the
prior written approval of Lender, which shall not be unreasonably withheld,
conditioned or delayed and at Borrower's expense. At Lender's request, Borrower
shall promptly deliver to Lender copies of all Leases, amendments, modifications
and waivers which are entered into pursuant to this Section 5.1.17(c) together
with Borrower's certification that it has satisfied all of the conditions of
this Section 5.1.17(c).
(d) Intentionally deleted.
(e) Upon the occurrence and during the continuance of an Event of Default,
to the extent permitted by law, Borrower shall promptly deposit with Lender any
and all monies representing security deposits under the Leases, whether or not
Borrower actually received such monies (the "Security Deposits"). Lender shall
hold the Security Deposits in accordance with the terms of the respective Lease,
and shall only release the Security Deposits in order to return a tenant's
Security Deposit to such tenant if such tenant is entitled to the return of the
Security Deposit under the terms of the Lease and is not otherwise in default
under the Lease. To the extent required by Legal Requirements, Lender shall hold
the Security Deposits in an interest bearing account selected by Lender in its
sole discretion. In the event Lender is not permitted by law to hold the
Security Deposits, Borrower shall deposit the Security Deposits into an Eligible
Account.
5.1.18 Management Agreement.
(a) The Improvements on the Properties are operated under the terms and
conditions of the Management Agreement. Borrower shall (i) diligently perform
and observe in all material respects all of the terms, covenants and conditions
of the Management Agreement or Replacement Management Agreement, if applicable,
on the part of Borrower to be performed and observed to the end that all things
shall be done which are necessary to keep unimpaired the material rights of
Borrower under the Management Agreement or Replacement Management Agreement, if
applicable and (ii) promptly notify Lender of the giving of any notice to
Borrower of any material default by Borrower in the performance or observance of
any of the terms, covenants or conditions of the Management Agreement or
Replacement Management Agreement, if applicable on the part of Borrower to be
performed and observed and deliver to Lender a true copy of each such notice.
Borrower shall not surrender the Management Agreement or Replacement Management
Agreement, if applicable, consent to the assignment by the Manager of its
interest under the Management Agreement (except as provided herein) or
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Replacement Management Agreement, if applicable, or terminate or cancel the
Management Agreement or Replacement Management Agreement, if applicable, or
modify, change, supplement, alter or amend the Management Agreement or
Replacement Management Agreement, if applicable, in any material respect, either
orally or in writing, without the prior written consent of Lender, which consent
shall not be unreasonably withheld, conditioned or delayed. Borrower hereby
assigns to Lender as further security for the payment of the Debt and for the
performance and observance of the terms, covenants and conditions of this
Agreement, all the rights, privileges and prerogatives of Borrower to surrender
the Management Agreement or Replacement Management Agreement, if applicable, or
to terminate, cancel, modify, change, supplement, alter or amend the Management
Agreement or Replacement Management Agreement, if applicable, in any respect,
and any such surrender of the Management Agreement or Replacement Management
Agreement, if applicable, or termination, cancellation, modification, change,
supplement, alteration or amendment of the Management Agreement or Replacement
Management Agreement, if applicable, without the prior consent of Lender, which
consent shall not be unreasonably withheld, conditioned or delayed, shall be
void and of no force and effect. If Borrower shall default in the performance or
observance of any material term, covenant or condition of the Management
Agreement or Replacement Management Agreement, if applicable, on the part of
Borrower to be performed or observed, then, without limiting the generality of
the other provisions of this Agreement, and without waiving or releasing
Borrower from any of its obligations hereunder, Lenders shall have the right,
but shall be under no obligation, to pay any sums and to perform any act or take
any action as may be appropriate to cause all the terms, covenants and
conditions of the Management Agreement or Replacement Management Agreement, if
applicable, on the part of Borrower to be performed or observed to be promptly
performed or observed on behalf of Borrower, to the end that the rights of
Borrower in, to and under the Management Agreement or Replacement Management
Agreement, if applicable, shall be kept unimpaired and free from default. Lender
and any person designated by Lender shall have, and are hereby granted, the
right upon reasonable advance written notice to Borrower to enter upon the
applicable Individual Property at any time and from time to time for the purpose
of taking any such action. If the Manager shall deliver to Lender a copy of any
notice sent to Borrower of material default under the Management Agreement or
Replacement Management Agreement, if applicable, such notice shall constitute
full protection to Lender for any action taken or omitted to be taken by Lender
in good faith, in reliance thereon unless such action constitutes the willful
misconduct or gross negligence of Lender or Lender's agent. Borrower shall
notify Lender if the Manager sub-contracts to a third party any or all of its
management responsibilities under the Management Agreement or Replacement
Management Agreement, if applicable. Borrower shall, from time to time, obtain
from the Manager such certificates of estoppel with respect to compliance by
Borrower with the terms of the Management Agreement or Replacement Management
Agreement, if applicable, as may be reasonably requested by Lender to the extent
provided for in the Management Agreement or Replacement Management Agreement if
the Manager is not an Affiliate of Borrower. Borrower shall exercise each
individual option, if any, to extend or renew the term of the Management
Agreement or Replacement Management Agreement, if applicable upon demand by
Lender made at any time within one (1) year of the last day upon which any such
option may be exercised, and Borrower hereby expressly authorizes and appoints
Lender its attorney-in-fact to exercise any such option in the name of and upon
behalf of Borrower, which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest. Any sums expended by
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Lender pursuant to this paragraph shall bear interest at the Default Rate from
the date such cost is incurred to the date of payment to Lender, shall be deemed
to constitute a portion of the Debt, shall be secured by the lien of the
Security Instruments and the other Loan Documents and shall be immediately due
and payable upon demand by Lender therefor.
(b) Without limitation of the foregoing, Borrower, upon the request of
Lender, shall terminate the Management Agreement or Replacement Management
Agreement, if applicable and replace the Manager, without penalty or fee, if at
any time during the Loan: (a) the Manager shall become insolvent or a debtor in
any bankruptcy or insolvency proceeding, (b) provided, the Manager is an
Affiliated Manager, (1) there exists a non-monetary Event of Default which
remains uncured for at least thirty (30) days following written notice from
Lender to Borrower of such non-monetary Event of Default (provided, however,
such thirty day notice and cure period is solely for the purpose of terminating
the Management Agreement and Lender reserves all rights it has upon an Event of
Default pursuant to Article 8 of this Agreement including, without limitation, a
foreclosure of the Security Instruments), or (2) there exists a monetary Event
of Default, (c) there exists a default beyond all applicable notice and grace
periods by Manager under the Management Agreement or Replacement Management
Agreement, if applicable. At such time as the Manager may be removed, a
Qualified Manager shall assume management of the applicable Individual Property
pursuant to a Replacement Management Agreement.
(c) In the case of a Condominium Property, the Condominium is managed and
operated under the terms and conditions of the Condominium Management Agreement.
If at any time during the term of the Loan, (i) the Condominium Manager shall
become insolvent or a debtor in any bankruptcy or insolvency proceeding, or (ii)
a material default by the Condominium Manager under the Condominium Management
Agreement occurs and continues beyond the expiration of any applicable cure
period, Borrower, at the request of Lender to the extent Borrower has the
authority to do so under the Condominium Documents and/or the Condominium
Management Agreement, shall direct the Condominium Board to terminate the
Condominium Management Agreement and retain a Qualified Manager to manage the
Condominium.
5.1.19 Environmental Covenants.
Except for conditions that exist on the date hereof and are expressly
disclosed in an Environmental Report, (a) Borrower covenants and agrees that so
long as Borrower owns, manages, is in possession of, or otherwise controls the
operation of the Properties: (i) all uses and operations on or of the
Properties, whether by Borrower or any other Person or entity, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto; (ii)
there shall be no Releases of Hazardous Materials by Borrower or any Affiliate
of Borrower in, on, under or from any of the Properties and Borrower shall use
its commercially reasonable efforts to insure that there shall be no Releases of
Hazardous Materials by any Person other than Borrower or any Affiliate of
Borrower in, on, under or from any of the Properties; (iii) there shall be no
Hazardous Materials in, on, or under any of the Properties, except those that
are in compliance in all material respects with all Environmental Laws and with
permits issued pursuant thereto, if and to the extent required; (iv) Borrower
shall keep the Properties free and clear of all liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission of
Borrower or any other person or entity (the "Environmental Liens"); (v) Borrower
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shall, at its sole cost and expense, fully and expeditiously cooperate in all
activities pursuant to paragraph (b) below, including but not limited to
providing all relevant information and making knowledgeable persons available
for interviews; (vi) Borrower shall, at its sole cost and expense, perform any
environmental site assessment or other investigation of environmental conditions
in connection with any of the properties, pursuant to any reasonable written
request of Lender, upon Lenders reasonable belief that an Individual Property is
not in full compliance with all Environmental Laws, and share with Lender the
reports and other results thereof, and Lender and other Indemnified Parties
shall be entitled to rely on such reports and other results thereof; (vii)
Borrower shall, at its sole cost and expense, comply with all reasonable written
requests of Lender to reasonably effectuate remediation of any Hazardous
Materials in, on, under or from any individual Property in order to comply with
any Environmental Law; (viii) Borrower shall use its best efforts to not allow
any tenant or other user of any of the Properties to violate any Environmental
Law; and (ix) Borrower shall immediately notify Lender in writing after receipt
of written notice of (A) any material presence or Release or threatened Releases
of Hazardous Materials in, on, under, from or migrating towards any of the
Properties; (B) any material non-compliance with any Environmental Laws related
in any way to any of the Properties; (C) any actual or potential Environmental
Lien; (D) any required or proposed remediation of environmental conditions
relating to any of the Properties; and (E) any written notice or other
communication of which Borrower becomes aware from any source whatsoever
(including but not limited to a governmental entity) relating in any way to the
non-compliance of any Hazardous Materials with all applicable Environmental
Laws.
(b) In the event Lender has a reasonable belief that an Individual Property
is not in material compliance with all Environmental Laws, Lender and any other
person or entity designated by Lender, including but not limited to any
representative of a governmental entity, and any environmental consultant, and
any receiver appointed by any court of competent jurisdiction, shall have the
right (subject to the rights of tenants and hotel guests), but not the
obligation, to enter upon any Individual Property at all reasonable times upon
reasonable prior written notice to Borrower to assess any and all aspects of the
environmental condition of any Individual Property and its use, including but
not limited to, conducting any reasonably necessary environmental assessment or
audit (the scope of which shall be determined in Lender's sole and absolute
discretion) and taking samples of soil, groundwater or other water, air, or
building materials, and conducting other invasive testing. Borrower shall
cooperate with and provide reasonable access to Lender and any such person or
entity designated by Lender.
5.1.20 Alterations.
Borrower shall obtain Lender's prior written consent to any material
alterations to any Improvements, which consent shall not be unreasonably
withheld, conditioned or delayed except with respect to alterations that could
reasonably be expected to have a material adverse effect on Borrower's financial
condition, the value of the applicable Individual Property or the annual Net
Operating Income. Notwithstanding the foregoing, provided no Event of Default
has occurred and is continuing, Lender's consent shall not be required in
connection with any alterations 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 of such Individual Property, provided that such
alterations (a) are made in connection with tenant improvement work performed
pursuant to the terms of any Lease executed on or before the date hereof or any
Lease
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executed after the date hereof which is in compliance with the terms of this
Agreement, (b) are made in connection with tenant improvement work performed
pursuant to the terms and provisions of a Lease and not adversely affecting any
structural component of any Improvements, any utility or HVAC system contained
in any Improvements or the exterior of any building constituting a part of any
Improvements, (c) relate solely to Equipment, or (d) together with the related
costs thereof have been provided for in the Annual Budget which has been
approved by Lender pursuant to the terms hereof and (i) are non-structural in
nature and (ii) are budgeted to cost (including all labor and materials) less
than $500,000.00. Notwithstanding anything to the contrary contained in this
Section 5.1.20, any alteration, the cost of which is equal to, or greater than,
$5,000,000.00 shall be subject to receipt of confirmation from the Rating
Agencies that any such alteration will not result in a withdrawal, qualification
or downgrade of the then ratings assigned to the Securities.
5.1.21 Intentionally Deleted.
5.1.22 Franchise Agreement.
The Improvements on the Properties shall be operated under the terms and
conditions of the Franchise Agreement. Borrower shall (i) pay all sums required
to be paid by Borrower under the Franchise Agreement, (ii) diligently perform
and observe in all material respects all of the terms, covenants and conditions
of the Franchise Agreement on the part of Borrower to be performed and observed
to the end that all things shall be done which are necessary to keep unimpaired
the rights of Borrower under the Franchise Agreement, (iii) promptly notify
Lender of the giving of any notice to Borrower of any default by Borrower in the
performance or observance of any of the terms, covenants or conditions of the
Franchise Agreement on the part of Borrower to be performed and observed and
deliver to Lender a true copy of each such notice, and (iv) promptly deliver to
Lender a copy of each financial statement, business plan, capital expenditure
plan, notice, report and estimate received by it under the Franchise Agreement.
Borrower shall not, without the prior consent of Lender, not to be unreasonably
withheld, conditioned or delayed and confirmation from the Rating Agencies that
any such action will not result in a qualification, withdrawal or downgrade of
the then ratings assigned to the Securities, surrender the Franchise Agreement
or terminate or cancel the Franchise Agreement or modify, change, supplement,
alter or amend the Franchise Agreement, in any respect, either orally or in
writing, and Borrower hereby assigns to Lender as further security for the
payment of the Debt and for the performance and observance of the terms,
covenants and conditions of this Agreement to the extent assignable under the
Franchise Agreement, all the rights, privileges and prerogatives of Borrower to
surrender the Franchise Agreement or to terminate, cancel, modify, change,
supplement, alter or amend the Franchise Agreement in any respect, and any such
surrender of the Franchise Agreement or termination, cancellation, modification,
change, supplement, alteration or amendment of the Franchise Agreement without
the prior consent of Lender, which consent shall not be unreasonably withheld,
conditioned or delayed, shall be void and of no force and effect. If Borrower
shall default in the performance or observance of any material term, covenant or
condition of the Franchise Agreement on the part of Borrower to be performed or
observed, then, without limiting the generality of the other provisions of this
Agreement, and without waiving or releasing Borrower from any of its obligations
hereunder, Lender shall have the right, but shall be under no obligation, to pay
any sums and to perform any act or take any action as may be appropriate to
cause all the terms, covenants and conditions of
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the Franchise Agreement on the part of Borrower to be performed or observed to
be promptly performed or observed on behalf of Borrower, to the end that the
rights of Borrower in, to and under the Franchise Agreement shall be kept
unimpaired and free from default. Lender and any Person designated by Lender
shall have, and are hereby granted, the right to enter upon the applicable
Individual Property at any time and from time to time for the purpose of taking
any such action. If Franchisor shall deliver to Lender a copy of any notice sent
to Borrower of default under the Franchise Agreement, such notice shall
constitute full protection to Lender for any action taken or omitted to be taken
by Lender in good faith, in reliance thereon unless such action constitutes the
willful misconduct or gross negligence of Lender or Lender's agent. Borrower
shall, from time to time, use commercially reasonable efforts to obtain from
Franchisor such certificates of estoppel with respect to compliance by Borrower
with the terms of the Franchise Agreement as may be requested by Lender.
Borrower shall exercise each individual option, if any, to extend or renew the
term of the Franchise Agreement upon demand by Lender made at any time within
one (1) year of the last day upon which any such option may be exercised, and
Borrower hereby expressly authorizes and appoints Lender as its attorney-in-fact
to exercise any such option in the name of and upon behalf of Borrower, which
power of attorney shall be irrevocable and shall be deemed to be coupled with an
interest. Any sums expended by Lender pursuant to this paragraph shall bear
interest at the Default Rate from the date such cost is incurred to the date of
payment to Lender, shall be deemed to constitute a portion of the Debt, shall be
secured by the lien of the Security Instruments and the other Loan Documents and
shall be immediately due and payable upon demand by Lender therefor.
Notwithstanding anything to the contrary contained in this Section 5.1.22, upon
the expiration of the term of any Franchise Agreement relating to a Non-Wyndham
Property, Borrower shall have the option to either (1) enter into a new
Franchise Agreement with the applicable Franchisor on terms substantially
similar to those of the expired Franchise Agreement or (2) convert such
Non-Wyndham Property into an Individual Property operated under the flag of
Wyndham or an Affiliate of Wyndham upon satisfaction of the following
conditions: (a) no Event of Default shall exist, (b) Borrower shall provide
Lender with at least sixty (60) days prior written notice, (c) Borrower shall
enter into a management agreement with Wyndham or an Affiliate which is either
(A) substantially similar in form or substance to the form of management
agreement attached hereto and made a part hereof as Exhibit G or (2) is
reasonably acceptable to Lender in all respects, (d) Borrower and Wyndham or the
applicable affiliate shall enter into an assignment of management agreement with
Lender substantially similar to the Assignment of Management Agreement entered
into by Borrower, Wyndham Management Corporation and Lender on the date hereof,
(e) Wyndham and any such Affiliate is not bankrupt, insolvent or the subject of
(i) any petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law of any similar federal or State law or (ii) any
proceeding for the dissolution or liquidation of Wyndham and any such Affiliate,
(f) if a new Franchise Agreement is entered into with the applicable Franchisor,
Franchisor delivers to Lender a comfort letter substantially similar to the
comfort letter delivered by such Franchisor to Lender in connection with the
closing of the Loan, and (g) Borrower pays for all costs and expenses incurred
in connection with any such conversion including, without limitation, all
reasonable costs and expenses (including, without limitations, reasonable legal
fees and expenses) incurred by Lender in connection with any such conversion.
5.1.23 OFAC.
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At all times throughout the term of the Loan, Borrower, Guarantor,
Indemnitor and their respective Affiliates shall be in full compliance with all
applicable orders, rules, regulations and recommendations of The Office of
Foreign Assets Control of the U.S. Department of the Treasury.
5.1.24 O&M Program.
With respect to each Individual Property listed on Schedule VII hereof,
Borrower shall enter into a contract with a licensed industrial hygienist to
develop a fully documented O&M Program which Borrower shall submit within one
hundred and eighty (180) days of the date hereof to Lender for its reasonable
approval. Borrower further covenants and agrees to implement and follow in all
material respects the terms and conditions of such O&M Program during the term
of the Loan, including any extension or renewal thereof. Lender's requirement
that Borrower develop and comply with the O&M Program shall not be deemed to
constitute a waiver or modification of any of Borrower's covenants and
agreements with respect to Hazardous Materials or Environmental Laws.
5.1.25 The Ground Lease.
(a) Borrower shall (i) pay all rents, additional rents and other sums
required to be paid by Borrower, as tenant under and pursuant to the provisions
of the Ground Lease, provided, however, that Borrower's obligation to directly
pay Ground Rents shall be suspended for so long as Borrower complies with the
terms and provisions of Section 7.6 hereof, (ii) diligently perform and observe
all of the terms, covenants and conditions of the Ground Lease on the part of
Borrower, as tenant thereunder, (iii) promptly notify Lender of the giving of
any notice by the landlord under the Ground Lease to Borrower of any default by
Borrower, as tenant thereunder, and deliver to Lender a true copy of each such
notice within five (5) Business Days of receipt and (iv) promptly notify Lender
upon learning of any bankruptcy, reorganization or insolvency of the landlord
under the Ground Lease or of any notice thereof, and deliver to Lender a true
copy of such notice within five (5) Business Days of Borrower's receipt.
Borrower shall not, without the prior consent of Lender, surrender the leasehold
estate created by the Ground Lease or terminate or cancel the Ground Lease or
modify, change, supplement, alter or amend the Ground Lease, in any material
respect, either orally or in writing, and if Borrower shall default in the
performance or observance of any material term, covenant or condition of the
Ground Lease on the part of Borrower, as tenant thereunder, Lender shall have
the right, but shall be under no obligation, to pay any sums and to perform any
act or take any action as may be appropriate to cause all of the terms,
covenants and conditions of the Ground Lease on the part of Borrower to be
performed or observed on behalf of Borrower, to the end that the rights of
Borrower in, to and under the Ground Lease shall be kept unimpaired and free
from default. If the landlord under the Ground Lease shall deliver to Lender a
copy of any notice of default under the Ground Lease, such notice shall
constitute full protection to Lender for any action taken or omitted to be taken
by Lender, in good faith, in reliance thereon, unless Lender's action
constitutes gross negligence or willful misconduct. Borrower shall exercise each
individual option, if any, to extend or renew the term of the Ground Lease upon
demand by Lender made at any time within six (6) months prior to the last day
upon which any such option may be exercised, and Borrower hereby expressly
authorizes and appoints Lender its attorney-in-fact to exercise any such option
in the
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name of and upon behalf of Borrower, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest.
(b) Subleases. Notwithstanding anything contained in the Ground Lease to
the contrary, Borrower shall not further sublet any portion of the related
Individual Property (other than as permitted pursuant to Section 5.1.17 hereof)
without prior written consent of Lender. Each sublease hereafter made shall
provide that, (a) in the event of the termination of the Ground Lease, the lease
shall not terminate or be terminable by the lessee; (b) in the event of any
action for the foreclosure of the Security Instrument with respect to the
related Individual Property, the lease shall not terminate or be terminable by
the subtenant by reason of the termination of the Ground Lease unless the lessee
is specifically named and joined in any such action and unless a judgment is
obtained therein against the lessee; and (c) in the event that the Ground Lease
is terminated as aforesaid, the lessee shall attorn to the lessor under the
Ground Lease or to the purchaser at the sale of the related Individual Property
on such foreclosure, as the case may be. In the event that any portion of such
Individual Property shall be sublet pursuant to the terms of this subsection,
such sublease shall be deemed to be included in the Individual Property.
5.1.26 Condominium Documents.
In the case of each Condominium Property,
(a) Borrower shall observe and perform in all material respects each and
every material term to be observed or performed by Borrower pursuant to the
Condominium Documents.
(b) Borrower shall promptly deliver to Lender a true and full copy of all
written notices of default received by the Borrower with respect to any
obligation or duty of the Borrower under the Condominium Documents.
(c) To the extent that any approval rights, consent rights or other rights
or privileges granted to a mortgagee in the Declaration are conditioned upon
such approval rights, consent rights or other rights or privileges being
required or contained in any such mortgage, then such approval rights, consent
rights or other rights or privileges shall be deemed to be required by this
Agreement and the Loan Documents.
(d) At Lender's request, Borrower shall deliver any notice to the
Condominium Board required or permitted pursuant to Condominium Documents with
respect to any material failure of the Condominium Board to comply with the
terms and provisions of the Condominium Documents. Borrower shall use its
commercially reasonable good faith efforts to cause the Condominium Board to
comply in all material respects with all of the terms and provisions of the
Condominium Documents.
(e) As of the Closing Date, Borrower has delivered to Lender a fully
executed Condominium Proxy. Lender shall not be entitled to exercise the
Condominium Proxy unless (i) an Event of Default has occurred and is continuing
and/or (ii) subject to the provisions of Section 6.4 hereof, a casualty or
condemnation affecting the Condominium Property has occurred and the Net
Proceeds are not required to be made available for Restoration pursuant to the
terms and provisions of Section 6.4 hereof.
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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 Security Instruments encumbering the Properties in accordance with
the terms of this Agreement and the other Loan Documents, Borrower and, with
respect to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Property, Fee Owner covenant and agree
with Lender that they will not do, directly or indirectly, any of the following:
5.2.1 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 due or delinquent.
5.2.2 Dissolution.
Except as otherwise expressly permitted hereunder, Borrower shall not (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 Borrower except to the extent
permitted by the Loan Documents, (d) modify, amend, waive or terminate any
material provision of its organizational documents or its qualification and good
standing in any jurisdiction or (e) cause the Principal to (i) dissolve, wind up
or liquidate or take any action, or omit to take an action, as a result of which
the Principal 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 the Principal, in each case, without obtaining the prior written
consent of Lender, which consent shall not be unreasonably withheld, conditioned
or delayed and, if any such amendment relates to the single purpose entity
provisions, confirmation from the Rating Agencies that such amendment will not
result in a withdrawal, qualification or downgrade of the then ratings assigned
to the Securities.
5.2.3 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.
5.2.4 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
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adequate consideration and in the ordinary course of Borrower's business or
otherwise if such cancellation, release or forgiveness is prudent and
commercially reasonable.
5.2.5 Zoning.
Borrower and Fee Owner 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.
5.2.6 No Joint Assessment.
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.
5.2.7 Principal Place of Business.
Borrower shall not change its principal place of business set forth in
Schedule I without first giving Lender thirty (30) days prior written notice.
Borrower shall not change the place of its organization as set forth in Section
4.1.36 without the consent of Lender, which consent shall not be unreasonably
withheld, conditioned or delayed. Upon Lender's request, Borrower shall execute,
deliver and/or authorize additional financing statements, security agreements
and other instruments which may be reasonably necessary to effectively evidence
or perfect Lender's security interest in the Property as a result of such change
of place of business or place of organization.
5.2.8 ERISA.
During the term of the Loan or of any obligation or right hereunder,
Borrower shall not be a Plan and none of the assets of Borrower shall constitute
Plan Assets.
(a) 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, and represents and
covenants that (A) Borrower is not and does not maintain an "employee benefit
plan" as defined in Section 3(32) 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. (S) 2510.3-101(b)(2);
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(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. (S) 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. (S) 2510.3-101 (c) or
(e).
5.2.9 Affiliate Transactions.
Except as expressly provided in Section 4.1.37 and 5.1.22 hereof and
Management Agreements entered into prior to the Closing Date which have been
disclosed and approved by Lender, Borrower shall not enter into, or be a party
to, any transaction with an Affiliate of Borrower, Principal or any of the
partners of Borrower or Principal 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.
5.2.10 Assets.
Borrower shall not purchase or own any property other than the Properties.
5.2.11 Debt.
Borrower shall not create, incur or assume any Indebtedness other than the
Debt except to the extent permitted hereby.
5.2.12 Transfers.
(a) Except for the transfer of a Release Property as provided herein,
Borrower shall not sell, convey, mortgage, grant, bargain, encumber, pledge,
assign, grant options with respect to, or otherwise transfer or dispose of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) any Individual
Property or any part thereof or any legal or beneficial interest therein or
permit a Sale or Pledge of an interest in any Restricted Party (collectively, a
"Transfer"), other than pursuant to Leases of space in the Improvements to
tenants in accordance with the provisions of Section 5.1.17 hereof, without (i)
the prior written consent of Lender and (ii) if a Securitization has occurred or
is pending within thirty (30) days, delivery to Lender of written confirmation
from the Rating Agencies that the Transfer will not result in the downgrade,
withdrawal or qualification of the then current ratings assigned to any
Securities or the proposed rating of any Securities.
(b) A Transfer shall include, but not be limited to: (i) an installment
sales agreement wherein Borrower agrees to sell one or more Individual
Properties or any part thereof for a price to be paid in installments; (ii) an
agreement by Borrower leasing all or a substantial part of any Individual
Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rents; (iii) if
a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge
of such corporation's stock or the creation or issuance of new stock; (iv) if a
Restricted Party is a limited or general partnership or joint venture, any
merger or
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consolidation or the change, removal, resignation or addition of a general
partner or the Sale or Pledge of the partnership interest of any general partner
or any profits or proceeds relating to such partnership interest, or the Sale or
Pledge of limited partnership interests or any profits or proceeds relating to
such limited partnership interests or the creation or issuance of new limited
partnership interests; (v) if a Restricted Party is a limited liability company,
any merger or consolidation or the change, removal, resignation or addition of a
managing member or non-member manager (or if no managing member, any member) or
the Sale or Pledge of the membership interest of a managing member (or if non
managing member, any member) or any profits or proceeds relating to such
membership interest, or the Sale or Pledge of non-managing membership interests
or the creation or issuance of new non-managing membership interests; or (vi) if
a Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests.
(c) Notwithstanding the provisions of Section 5.2.12(a) and (b) hereof, the
following transfers shall not be deemed a Transfer (i) a transfer by devise or
descent or by operation of law upon the death of a member, partner or
shareholder of a Restricted Party; (ii) the Sale or Pledge, in one or a series
of transactions, of not more than forty-nine percent (49%) of the stock in a
Restricted Party; provided, however, no such transfers shall result in the
change of voting control in the Restricted Party, and as a condition to each
such transfer, Lender shall receive not less than thirty (30) days prior written
notice of such proposed transfer, (iii) the Sale or Pledge, in one or a series
of transactions, of not more than forty-nine percent (49%) of the limited
partnership interests or non-managing membership interests (as the case may be)
in a Restricted Party; provided, however, as a condition to each such transfer,
Lender shall receive not less than thirty (30) days prior written notice of such
proposed transfer, (iv) transfers, issuances, pledges and redemptions of stock
in Wyndham (and its successors), so long as (A) Wyndham (or any such successor)
is (or is controlled by) a Public Company and (B) the surviving entity is
primarily involved in, or has a significant business line involving, the
ownership and operation of real estate similar to the Properties, (v) the merger
or consolidation of Wyndham (or its successors), provided that the surviving
entity of such merger or consolidation is (or is controlled by) (A) a Public
Company (B) primarily involved in, or has a significant business line involving,
the ownership or operation of real estate similar to the Properties, and (C) the
surviving entity complies with the terms and conditions of the Settlement
Agreement and establishes a reserve with Lender in an amount equal to the
estimated cost of preparing, implementing and completing the property
improvement plan that would be required pursuant to the Settlement Agreement as
a result of such merger or consolidation, (vi) the granting of easements,
cross-easements, agreements, restrictions, reservations and rights in the
ordinary course of business for use, access, water and sewer lines, telephone
and telegraph lines, electric lines or other utilities or for other similar
purposes, provided that no such easements, agreements, restrictions or rights
shall materially impair the utility and/or operation of an Individual Property
or any Borrower's ability to repay the Debt as it becomes due, (vii) transfers
of direct or indirect interests in any Borrower or Principal to Affiliates of
Wyndham (or its successors) provided that after such transfers such Borrower and
Principal are controlled, directly or indirectly, by Wyndham (or its successors)
and (viii) pledges of direct and indirect interests in Borrower and Mezzanine
Borrower to Mezzanine Lender as collateral for the Mezzanine Loan and the
exercise by Mezzanine Lender of its remedies under the Mezzanine Loan Documents.
In addition, on a one time basis, Wyndham may merge or consolidate with a public
or private entity in which the surviving entity is not and
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is not controlled by a Public Company provided that (a) after such merger, each
Borrower and Principal shall continue to comply with the terms of Section 4.1.37
hereof, (b) such merger or consolidation is to a Qualified Transferee, (c) the
surviving entity is primarily involved in, or has a significant business line
involving, the ownership and operation of real estate similar to the Properties
and (d) the surviving entity complies with the terms and conditions of the
Settlement Agreement and establishes a reserve with Lender in an amount equal to
the estimated cost of preparing, implementing and completing the property
improvement plan that would be required pursuant to the Settlement Agreement as
a result of such merger or consolidation. In connection with any transfer or
merger permitted under this Section 5.2.12, Borrower shall deliver an Additional
Insolvency Opinion if, after such transfer or merger, more than 49% of any
direct legal or beneficial interest in Borrower (or in any constituent entity of
Borrower that is required to comply with the terms of Section 4.1.37 hereof) is
owned by a new or successor entity. Such Additional Insolvency Opinion shall be
reasonably acceptable to (a) Lender, prior to a Securitization or (b) the Rating
Agencies, if a Securitization has occurred. Notwithstanding anything to the
contrary contained herein, pledges and hypothecations of indirect equity
interests in Borrower shall be permitted provided (i) Wyndham (or its successor)
maintains control of, and holds beneficial direct or indirect ownership
interests of not less than fifty-one percent (51%) of the membership interests
or partnership interests, as applicable, in, each entity comprising Borrower and
(ii) any such pledges or hypothecations are in connection with that certain
Credit Agreement and that certain Increasing Rate Note Purchase and Loan
Agreement each between Wyndham (or its successors) and The Chase Manhattan Bank,
each dated June 30, 1999, as amended or another credit agreement with an
Institutional Lender or a public bond offering to prepay or refinance in full or
in part any such credit facility which Institutional Lender or bondholders (or
the trustee on their behalf), as applicable shall be making or holding a loan to
Wyndham or its successor or its Affiliates (other than Borrower or Principal). A
foreclosure sale (or transfer in lieu thereof) of any such pledge or
hypothecation to The Chase Manhattan Bank, or another Institutional Lender as
collateral agent for syndicate lenders or another Institutional Lender, or the
bond trustee, shall be permitted provided (i) Lender is given at least sixty
(60) days prior written notice of the proposed foreclosure sale or transfer in
lieu thereof; (ii) the transferee is a reputable entity or person, creditworthy,
with sufficient financial worth considering any obligations assumed and
undertaken with respect to the Loan, as evidenced by financial statements and
other information reasonably requested by Lender; (iii) the Properties at all
times shall continue to be managed by a Qualified Manager, and (iv) and any and
all such entities will comply with all of the requirements set forth in the
Note, this Agreement, the Security Instruments and the other Loan Documents.
(d) 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 a Transfer without Lender's consent to the
extent required hereunder. This provision shall apply to every Transfer
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer. Notwithstanding anything to the contrary contained in
this Section 5.2.12, (a) no transfer (whether or not such transfer shall
constitute a Transfer) shall be made to any Prohibited Person and (b) in the
event any transfer (whether or not such transfer shall constitute a Transfer)
results in any Person owning in excess of forty-nine percent (49%) of the
ownership interest in a Restricted Party, Borrower shall, prior to such
transfer, deliver an updated Insolvency Opinion to Lender, which opinion shall
be in form, scope and substance reasonably acceptable in all respects to Lender
and the Rating Agencies.
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(e) Notwithstanding anything to the contrary contained in this Section
5.2.12, Lender shall not withhold its consent to a one-time sale, assignment, or
other transfer of all of the Properties provided that (i) Lender receives sixty
(60) days prior written notice of such transfer, (ii) no Event of Default has
occurred and is continuing and (iii) upon the satisfaction (in the reasonable
determination of Lender) of the following matters:
(A) Borrower or Transferee (defined below) shall pay any and all
reasonable out-of-pocket costs incurred in connection with
the transfer (including, without limitation, Lender's
reasonable counsel fees and disbursements and all recording
fees, title insurance premiums and mortgage and intangible
taxes);
(B) The proposed transferee (the "Transferee") (i) shall be a
special purpose bankruptcy remote entity that complies with
all of the requirements of Section 4.1.37 and whose
organizational documents are substantially similar to
Borrower's organizational documents, or if not substantially
similar, acceptable to the Rating Agencies and (ii) is
controlled by a Qualified Transferee;
(C) Transferee shall assume all of the obligations of Borrower
under the Note, this Agreement, the Security Instruments and
the other Loan Documents in a manner reasonably satisfactory
to Lender in all respects, including, without limitation, by
entering into an assumption agreement in form and substance
reasonably satisfactory to Lender and delivering such legal
opinions as Lender may reasonably require;
(D) The Properties shall be managed by a Qualified Manager
following such transfer;
(E) The Transferee complies with the terms and conditions of the
Settlement Agreement;
(F) Transferee establishes a reserve with Lender in an amount
equal to the estimated cost of preparing, implementing and
completing the property improvement plan that would be
required pursuant to the Settlement Agreement as a result of
the prepared transfer;
(G) The proposed transfer is permitted pursuant to the Franchise
Agreement or the Franchisor consents to such proposed
transfer if Franchisor has the right to consent to such
proposed transfer;
(H) To the extent available in the applicable jurisdiction,
Transferee shall deliver an endorsement to the existing
title policy insuring the Security Instruments as modified
by the assumption agreement, as a valid first lien on each
Individual Property and naming the Transferee as owner of
the fee or leasehold estate, as applicable, of each
Individual Property, which endorsement shall insure that as
of
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the recording of the assumption agreement, each Individual
Property shall not be subject to any additional exceptions
or Liens other than Permitted Encumbrances;
(I) Transferee shall deliver to Lender an opinion of counsel
from an independent law firm with respect to the substantive
nonconsolidation of Transferee and its constituent entities
(partners, members or shareholders), which law firm and
which opinion shall be reasonably satisfactory in all
respects to (i) Lender, if a Securitization has not
occurred, or (ii) Lender and the Rating Agencies, if a
Securitization has occurred; and
(J) Mezzanine Borrower shall simultaneously prepay the entire
Mezzanine Loan in accordance with the Mezzanine Loan
Agreement.
(f) Notwithstanding anything to the contrary contained in this Section
5.2.12, following the Lockout Period, Lender's consent shall not be required for
the financing of personal property, including, without limitation, furniture,
fixtures and equipment owned or to be purchased by the applicable Borrower that
is used in connection with the operation of the Properties ("Equipment"),
provided Lender has received prior written notification of such Borrower's
intent to finance such Equipment, and provided, further, that (i) any such
financing is subject to commercially prudent terms and conditions and at a
market rate of interest, (ii) the Equipment financed is readily replaceable
without material interference or interruption to the operation of the Properties
as required pursuant to the provisions of this Agreement and the Security
Instruments and the other Loan Documents, (iii) the aggregate principal amount
of such financing for Equipment located on or used in connection with each
Individual Property is at all times less than the amount set forth on Schedule
XXI attached hereto and made a part hereof for each such Individual Property
("Permitted FF&E Financing"), (iv) the documentation for such financing shall,
among other things, provide that Lender shall be given written notice of a
default thereunder and Lender shall be provided with a reasonable opportunity to
cure such defaults and (v) the financing does not create a lien on any
Properties other than the Equipment financed.
5.2.13 Condominium Restrictions.
With respect to each Condominium Property, Borrower shall not, except with
the prior written consent of the Lender, (a) institute any action or proceeding
for partition of the Condominium Property; (b) vote for or consent to any
material modification of, or material amendment to or material relaxation in the
enforcement of the Condominium Documents or the termination of the Condominium;
and (c) in the event of damage to or destruction of the Condominium Property,
vote not to repair, restore or rebuild the same if Borrower shall have such a
voting right, subject to Lender's rights exercisable pursuant to the Proxy.
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VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS
Section 6.1 Insurance.
(a) Borrower and, in the case of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Property, Fee
Owner shall obtain and maintain, or cause to be maintained, Policies for each
Borrower and the Properties providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and the
Personal Property, in each case (ii) in an amount equal to 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 Allocated Loan Amount for the applicable Individual Property; (iii)
containing an agreed amount endorsement with respect to the Improvements
and Personal Property waiving all co-insurance provisions; (iv) providing
for no deductible in excess of $100,000; and (v) providing coverage for
contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements together with an "Ordinance or
Law Coverage" or "Enforcement" endorsement if any of the Improvements or
the use of each Individual Property shall at any time constitute legal
nonconforming structures or uses. The Full Replacement Cost shall be
redetermined from time to time (but not more frequently than once in any
twenty (24) calendar months) at the request of Lender by an appraiser or
contractor designated and paid by Borrower and approved by Lender, or by an
engineer or appraiser in the regular employ of the insurer. After the first
appraisal, additional appraisals may be based on construction cost indices
customarily employed in the trade. No omission on the part of Lender to
request any such ascertainment shall relieve Borrower of any of its
obligations under this Subsection. Notwithstanding clause (iv) of this
Section 6.1(a)(i) to the contrary, (1) with respect to comprehensive all
risk insurance required by this Section 6.1(a)(i), Borrower shall be
permitted to maintain a deductible of no more than $500,000.00 (the
"Maximum Deductible") provided Borrower delivers to Lender a Letter of
Credit in an amount equal to the difference between the Maximum Deductible
and $100,000.00, which Letter of Credit shall be held by Lender as
additional collateral for the Loan and Borrower shall have no right to
request that Lender draw on the Letter of Credit, (2) with respect to
windstorm coverage, Borrower shall be permitted to maintain a deductible
equal to 2% of the coverage provided by the Policy for the applicable
Individual Property and (3) with respect to earthquake coverage Borrower
shall be permitted to maintain a deductible equal to (a) 5% of the coverage
provided by the Policy for any Individual Property located in California
and (b) 2% of the coverage provided by the Policy for all other Individual
Properties.
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in
or about each Individual Property, including "Dram Shop" or other liquor
liability coverage if alcoholic beverages are sold from or may be consumed
at an Individual Property, such insurance (A) to be on the so-called
"occurrence" form with a combined single limit of
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not less than $15,000,000 (and if in 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 10
of the Security Instruments to the extent the same is available;
(iii) business interruption/loss of rents insurance (A) with loss
payable to Lender; (B) covering all risks required to be covered by the
insurance provided for in Section 6.1(a)(i); (C) in an amount equal to 100%
of the projected gross income from each Individual Property (on an actual
loss sustained basis) for a period of eighteen (18) months. The amount of
such loss of rents insurance shall be determined prior to the date hereof
and at least once each year thereafter based on the greatest of: (x)
Borrower's reasonable estimate of the gross income from each Individual
Property (y) the estimate of gross income set forth in the Annual Budget;
and (z) the highest gross income received during the term of the Note for
any full calendar year prior to the date the amount of such insurance is
being determined, for the succeeding twenty-four month period and (D)
containing an extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and the 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 eighteen (18) 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. All insurance proceeds payable to Lender
pursuant to this Section 6.1(a)(iii) shall be held by Lender and shall be
applied to the obligations secured hereunder from time to time due and
payable hereunder and under the Note and of this Agreement; provided,
however, that nothing herein contained shall be deemed to relieve Borrower
of its obligations to pay the obligations secured hereunder on the
respective dates of payment provided for in this Agreement except to the
extent such amounts are actually paid out of the proceeds of such loss of
rents insurance provided, however, any sums not applied by Lender pursuant
to this Section 6.1(a)(iii) shall be returned to Borrower and (E)
containing an extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and the Personal Property has
been repaired, the continued loss of income will be insured until such
income returns to the same level it was prior to the loss, or the
expiration of eighteen (18) months from the date of the loss, whichever
first occurs, and notwithstanding that the policy may expire prior to the
end of such period. Notwithstanding the foregoing, following the payment of
all sums that are then due and payable under the Note, this Agreement and
the other Loan Documents, Lender shall disburse to Borrower any remaining
proceeds from business interruption insurance obtained under this Section
6.1(a)(iii);
(iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements (A) owner's
contingent or protective liability insurance covering claims not covered by
or under the terms or
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provisions of the above mentioned commercial general liability insurance
policy; and (B) the insurance provided for in Section 6.1(a)(i) 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 Section 6.l(a)(i),
(3) including permission to occupy each Individual Property, and (4) with
an agreed amount endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of the
State in which each Individual Property is located, and employer's
liability insurance with a limit of at least $1,000,000 per accident and
per disease per employee, and $1,000,000 for disease aggregate in respect
of any work or operations on or about each Individual Property, or in
connection with such 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 insurance required under Section 6.1(a)(i) hereof;
(vii) if any portion of the Improvements is at any time located in an
area identified by the Secretary of Housing and Urban Development or any
successor thereto as an area having special flood hazards pursuant to 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 any successor law (the "Flood Insurance Acts"), flood hazard
insurance in an amount equal to the lesser of (A) the principal balance of
the Allocated Loan Amount for the applicable Individual Property, and (B)
the maximum limit of coverage available for the Property under the Flood
Insurance Acts;
(viii) earthquake, sinkhole and mine subsidence insurance, if required
by Lender in amounts equal to one time (1x) the probable maximum loss of
each Individual Property as determined by Lender in its sole discretion and
in form and substance satisfactory to Lender, provided that the insurance
pursuant to this Section 6.1(a)(viii) hereof shall be on terms consistent
with the all risk insurance policy required under Section 6.1(a)(i) hereof;
(ix) umbrella liability insurance in an amount not less than ONE
HUNDRED MILLION AND 00/100 DOLLARS ($100,000,000.00) per occurrence on
terms consistent with the commercial general liability insurance policy
required under Section (ii) above;
(x) a blanket fidelity bond and errors and omissions insurance
coverage insuring against losses resulting from dishonest or fraudulent
acts committed by (A) Borrower's personnel; (B) any employees of outside
firms that provide appraisal, legal, data processing or other services for
Borrower or (C) temporary contract employees or student interns;
(xi) terrorism insurance covering loss or damage incurred as a result
of an act of terrorism (including bio-terrorism, if commercially
available) or similar acts
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of sabotage, in an amount of not less than an amount equal to the full
insurable value of the Improvements and the Personal Property; and
(xii) upon sixty (60) days prior 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 each Individual
Property located in or around the region in which each Individual Property
is located.
Notwithstanding the foregoing provisions, in connection with any Condominium
Property, to the extent that the Condominium Board maintains a "master" or
"blanket" policy (the "Condominium Board Policy") on the Condominium Property
which provides insurance coverage in the amounts, for the periods, by companies
and against the hazards described in this 6.1, including fire and hazards
included within the term "extended coverage", and is otherwise in form and
substance reasonably satisfactory to Lender, then Borrower's obligation under
this Section 6.1 to maintain hazard insurance coverage on the Condominium
Property shall be deemed satisfied to the extent that the required coverage is
provided by the Condominium Board Policy. To the extent that the Condominium
Board Policy does not provide the coverage required under this Section 6.1, or
the coverage is not issued by a Qualified Insurer, Borrower shall cause the
Condominium Board to provide such coverage, or Borrower shall provide additional
insurance coverage from a Qualified Insurer necessary to provide the coverage
required under this Section 6.1 by means of an umbrella policy, a "wrap" policy,
reinsurance with cut-through endorsements or other insurance reasonably
satisfactory to Lender (such insurance coverage, collectively, the "Borrower
Policy").
All insurance provided for in Section 6.1 (a) hereof shall be obtained
under valid and enforceable policies (including, if applicable, the Condominium
Board Policy) (the "Policies" or in the singular, the "Policy"), in such forms
and, from time to time after the date hereof, in such amounts as may be
reasonably satisfactory to Lender, issued by financially sound and responsible
insurance companies authorized to do business in the State in which each
Individual Property is located and approved by Lender. The insurance companies
must have a claims paying ability/financial strength rating of "A-" or better by
S&P and "A3" or better by ▇▇▇▇▇'▇. Notwithstanding the foregoing, the insurance
required pursuant to Section 6.1(a) above may be with a syndicate of no less
than five (5) insurers through which at least (A)(i) 40% of the coverage is
provided by carriers having a claims paying ability rating by S&P not lower than
AA-, (ii) 85% of the coverage is provided by carriers having a claims paying
ability rating by S&P not lower than A- and (iii) 100% of the coverage is
provided by carriers having a claims paying ability rating by S&P not lower than
BBB- and (B)(i) 60% of the coverage is provided by carriers having a claims
paying ability rating by ▇▇▇▇▇'▇ not lower than A2 and (ii) 100% of the coverage
is provided by carriers having a claims paying ability rating by ▇▇▇▇▇'▇ not
lower than Baa3 (each such insurer shall be referred to below as a "Qualified
Insurer"). Not less than thirty (30) days prior to the expiration dates of the
Policies theretofore furnished to Lender pursuant to Section 6.1(a), Borrower
shall deliver certified copies of the Policies marked "premium paid" or
accompanied by evidence satisfactory to Lender of payment of the premiums due
thereunder (the "Insurance Premiums"), provided, however, that in the case of
renewal Policies, Borrower may furnish Lender with binders therefor to be
followed by certificates of insurance. If Borrower's insurers or reinsurance
carriers fail to provide or maintain such ratings, Borrower may satisfy the
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ratings requirement of this Section by providing to Lender a "cut-through"
endorsement in form and substance approved by Lender, which approval shall not
be unreasonably withheld, conditioned or delayed, issued by an insurer with at
least an "A+" rating by S&P.
(b) Except to the extent required pursuant to Section 6.1(a) hereof,
Borrower shall not obtain any umbrella or blanket liability or casualty Policy,
unless such Policy shall specifically allocate to each Individual Property the
amount of coverage required thereunder and shall otherwise provide the same
protection as would a separate Policy insuring only such Individual Property in
compliance with the terms of Section 6.1(a) hereof.
(c) All Policies provided for or contemplated by Section 6.1(a) hereof,
including, without limitation, the Condominium Board Policy (to the extent not
prohibited by the Condominium Policy), except for the Policy referenced in
Section 6.1(a)(v), shall name Borrower as the insured and Lender as additional
insured, as their respective interests may appear, and in the case of property
damage, boiler and machinery, and flood 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.
(d) All Policies provided for in Section 6.1(a) hereof, including, without
limitation, the Condominium Board Policy (to the extent not prohibited by the
Condominium Documents), 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 under any Lease 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 cancelled without at least 30
days' written notice to Lender and any other party named therein as an
additional insured; and
(iii) each Policy shall provide that the issuers thereof shall give
written notice to Lender if the Policy has not been renewed thirty (30)
days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder.
(e) Upon written request by Lender, Borrower shall furnish to Lender, on or
before thirty (30) days after the close of each of Borrower's fiscal years, an
Officer's Certificate certifying of the amounts of insurance maintained in
compliance herewith, of the risks covered by such insurance and of the insurance
company or companies which carry such insurance and, if requested by Lender,
verification of the adequacy of such insurance by an independent insurance
broker or appraiser acceptable to Lender.
(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
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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' written 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 written notice to Borrower)
to avoid a lapse of such coverage. All expenses 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
Security Instruments and shall bear interest at the Default Rate.
(g) In the event of a foreclosure of any of the Security Instruments, or
other transfer of title to any Individual Property in extinguishment in whole or
in part of the Debt all right, title and interest of Borrower in and to such
policies then in force concerning the Properties (unless such policies are
blanket policies insuring real property in addition to the Properties) and all
proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other transfer of
title and such party shall notify the insurer thereof.
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 Restoration of the Individual Property in
accordance with Section 6.4. 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.
Section 6.3 Condemnation.
Borrower shall promptly give Lender notice of the actual or threatened
commencement of any proceeding for the Condemnation of all or any part 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 takings), 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 in accordance with the terms of this
Agreement. 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
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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. Notwithstanding the foregoing, or
any other provision herein to the contrary, Borrower's obligation to commence
and pursue Restoration of an Individual Property shall not be deemed to obligate
Borrower to acquire any additional land to substitute for any portion of any
Individual Property which may be taken by Condemnation.
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 the Threshold Amount, 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 Subsections (A), (D), (F), (G), (I) and
(J) of Section 6.4(b)(i) hereof 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 the Restoration in accordance with the terms of this
Agreement.
(b) In the event that either the projected Net Proceeds or the costs of
completing the Restoration are either equal to or exceed the Threshold Amount
Borrower may settle and adjust any claim with the prior consent of Lender, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, that (A) if Borrower has not commenced or diligently pursued the claims
process with the applicable insurance company or companies and as a result
thereof, Lender takes over the claims process as provided in Section 6.2, then
Lender may settle and adjust such claims in a reasonable and expeditious manner
and (B) 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 Lender, as the case may be, may agree with the insurance
company or companies on the amount to be paid on the loss. All reasonable
efforts will be made to ensure that the proceeds of any such policy shall be
paid solely to Lender but, if for any reason Borrower or Wyndham shall also be a
dual payee, then Borrower and/or Wyndham, as applicable, shall endorse and/or
deliver to Lender all such proceeds within three (3) Business Days following
Borrower's and/or Wyndham's, as applicable, receipt thereof, 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" for purposes of this Section 6.4 shall mean: (i) the net
amount of all insurance proceeds received pursuant to Section 6.1 (a)(i), (iv),
(vi), (vii) and (viii) as a result of such damage or destruction, after
deduction of its reasonable costs and expenses (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 reasonable costs and
expenses (including, but not limited to, reasonable counsel fees), if any, in
collecting same ("Condemnation Proceeds"), whichever the case may be, plus (in
the case of (i) and (ii) above) any interest or other income
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earned on the investment of the Insurance Proceeds or Condemnation Proceeds
pursuant to the terms hereof.
(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,
less than forty percent (40%) of the total floor area of the
Improvements on the Individual Property has been materially
damaged, destroyed and rendered unusable for a period of at
least thirty (30) calendar days as a result of such fire or
other casualty or (2) in the event the Net Proceeds are
Condemnation Proceeds, less than ten percent (10%) of the
land constituting the Individual Property is taken, and such
land is located along the perimeter or periphery of the
Individual Property, and no portion of the Improvements is
located on such land;
(C) Intentionally Omitted;
(D) Borrower shall commence the Restoration as soon as
reasonably practicable (but, subject to Force Majeure, in no
event later than thirty (30) days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion
(Restoration shall be deemed commenced upon Borrower's
engagement of an architect if Borrower elects to do so or,
if, in the commercially reasonable judgment of Lender, an
architect is necessary and the commencing of cleaning of the
applicable Individual Property to effectuate Restoration)
and in accordance with the terms of the applicable Franchise
Agreement;
(E) Lender shall be reasonably 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 Casualty or Condemnation, 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 including
funds reasonably anticipated by Lender to be generated from
the operation of the Properties during the Restoration;
(F) Lender shall be satisfied that the Restoration will be
substantially completed on or before the earliest to occur
of (1) six (6) months prior to the Maturity Date, or (2)
twelve (12) months after the occurrence of such fire or
other casualty, or (3) the earliest date required for such
completion under the terms of the Management
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Agreement or (4) the date required for such completion
pursuant to the applicable Franchise Agreement, or (5) in
the case of a Condominium Property, the date required for
such completion pursuant to the applicable Condominium
Documents, or (6) 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 Casualty or Condemnation or (7) the expiration of the
insurance coverage referred to in Section 6.1(a)(iii) unless
Borrower has provided Lender with evidence reasonably
acceptable to Lender that Borrower has sufficient funds
after the expiration of such insurance to (x) operate the
Properties in a manner consistent with the manner in which
the Properties were operated immediately prior to such
Casualty or Condemnation and (y) pay all sums as they become
due under the Loan Documents in a timely manner;
(G) the Individual Property and the use thereof after the
Restoration will be in compliance in all material respects
with and permitted under all applicable zoning laws,
ordinances, rules and regulations;
(H) 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) and the terms and condition of the Management
Agreement;
(I) such Casualty or Condemnation, as applicable, does not
result in the permanent loss of access to any material
portion of the Individual Property or the related
Improvements;
(J) Lender shall be reasonably satisfied that the projected Debt
Service Coverage Ratio for the affected Individual Property
for the twelve (12) month period beginning three (3) months
after the completion of the Restoration, shall be equal to
or greater than the Debt Service Coverage Ratio for such
Individual Property for the twelve (12) full calendar months
immediately prior to the Closing Date;
(K) If the Net Proceeds or the cost of Restoration is reasonably
anticipated by Lender to exceed the Threshold Amount,
Borrower shall deliver, or cause to be delivered, to Lender
a signed reasonably detailed initial budget containing
Borrower's reasonable estimates of the cost of completing
the Restoration and shall furnish to Lender no less
frequently than one time each calendar month an updated
budget prepared by Borrower containing all revisions and
refinements to such budget and the amounts incurred through
the date of such budget. Such initial
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budget and all subsequent budgets shall be reasonably
acceptable to Lender;
(L) the Net Proceeds received and reasonably estimated to be
received together with any cash or cash equivalent
(including any Letter of Credit received by Lender)
deposited by Borrower with Lender are sufficient in Lender's
reasonable discretion to cover the cost of the Restoration
and uncompleted Replacements (to the extent provided in the
next sentence). If and to the extent that the Restoration
includes Replacements which were included in the Annual
Budget for the year in which the Casualty occurred or which
were or would reasonably be expected to be included in the
Annual Budget for the immediately following year in which
the Casualty occurred, then Borrower shall be given a credit
for having made the actual expenditures for such
Replacements as and when such expenditures are made during
the course of Restoration;
(M) the Management Agreement in effect as of the date of the
occurrence of such fire or other casualty or taking,
whichever the case may be, shall (1) remain in full force
and effect during the Restoration and shall not otherwise
terminate as a result of the fire, other casualty or the
Restoration or (2) if terminated, shall have been replaced
with a Replacement Management Agreement with a Qualified
Manager, prior to the opening or reopening of the applicable
Individual Property or any portion thereof for business with
the public,
(N) In the case of a Condominium Property, the Condominium is
not terminated as a result of such casualty; and
(O) The Franchise Agreement remains in full force and effect
during the Restoration and following the completion of the
Restoration.
(ii) The Net Proceeds shall be held by Lender in an interest-bearing
Eligible Account (provided, however, Borrower may instruct Lender to invest
the Net Proceeds in Permitted Investments, provided, that all risks
relating thereto shall be borne solely by Borrower) 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 evidence 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) in connection with the Restoration
have been paid for in full, and (B) there exist no notices of pendency,
stop orders, mechanic's or materialmen's liens or notices of intention to
file same, or any other liens or encumbrances of any nature whatsoever
(except for Liens being contested in good faith in accordance with the
terms hereof) on the Individual Property which have not either been fully
bonded to the
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satisfaction of Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the
Title Insurance Policy.
(iii) All plans and specifications (to the extent reasonably required
by Borrower) required in connection with a Restoration reasonably
anticipated by Lender to cost in excess of $1,000,000.00 shall be subject
to prior review and acceptance in all respects by Lender (which acceptance
shall not be unreasonably withheld, conditioned or delayed) and by an
independent consulting engineer selected by Lender and reasonably
acceptable to Borrower (the "Casualty Consultant"). Borrower may require
the Casualty Consultant to execute reasonably requested confidentiality
agreements with respect to Borrower's confidential non-public information
provided such agreements are customarily given for similarly situated
properties. Lender shall have the use of the plans and specifications and
all permits, licenses and approvals required or obtained in connection with
the Restoration. The identity of the contractors, subcontractors and
materialmen providing work and/or materials in excess of $500,000.00 in
connection with a Restoration, 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 reasonable out-of-pocket 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.
(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; provided, however, to the extent that retainer fees and
other advances paid or payable to contractors, consultants and/or engineers
constitute an approved loss by the applicable insurance company or
companies and Insurance Proceeds have been received with respect to such
fees, provided no Event of Default shall have occurred and be continuing,
Lender will permit such amounts to be paid or reimbursed to Borrower from
the Net Proceeds to the extent such Insurance Proceeds have actually been
received by Lender, without any such Casualty Retainage. 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 materialmen
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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 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 for
the related individual Property, and Lender, upon its reasonable request,
receives an endorsement to such Title Insurance Policy insuring the
continued priority of the Lien of the related Security Instrument 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 (a) once every seven (7) calendar days during
the first (30) calendar days following a Casualty, (b) once every fourteen
(14) calendar days during the next one hundred eighty (180) calendar days
and (c) once every thirty (30) calendar days thereafter.
(vi) If at any time the Net Proceeds (including a reasonable estimate
of the amount to be received as Restoration progresses) or the undisbursed
balance thereof shall not, in the reasonable 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 based upon
the then current budget for the Restoration, Borrower shall deposit the
amount of the deficiency (the "Net Proceeds Deficiency") with Lender (which
deposit may be made in the form of a Letter of Credit) 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
substantially completed in accordance with the provisions of this Section
6.4(b), and the receipt by Lender of evidence reasonably 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.
(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 either (or both) (1) any then outstanding portion of
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the Debt or (2) the principal balance of the Debt whether or not then due and
payable, in either case 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 approve, in its discretion. If Lender shall receive and retain Net
Proceeds, the Lien of the Security Instruments shall be reduced only by the
amount thereof received and retained by Lender and actually applied by Lender in
reduction of the Debt.
(d) Notwithstanding the provisions of this Section 6.4 to the contrary, a
portion of the Net Proceeds applicable to the Bel Age Hotel, the Doubletree Club
Hotel or the Doubletree Tallahassee Hotel, as applicable, not to exceed
$1,000,000.00 shall be made available to the applicable Borrower after receipt
thereof by Lender or Borrower, as applicable, to pay or reimburse Borrower for
any immediate and necessary repairs or other work required to be made to the Bel
Age Hotel, the Doubletree Club Hotel and the Doubletree Tallahassee Hotel, as
applicable (i) to protect the health or safety of any hotel guest or any of
Borrower's employees or agents or (ii) to allow the applicable Individual
Property to operate as a hotel (collectively, the "Emergency Repairs") provided
(A) Lender has approved such Emergency Repairs in writing, which approval shall
not be unreasonably withheld, conditioned or delayed and (B) the Emergency
Repairs are (1) substantially completed and paid for within ten (10) calendar
days after the occurrence of the Casualty and (2) completed in a good and
▇▇▇▇▇▇▇ like manner and in compliance with all Applicable Laws.
VII. RESERVE FUNDS
Section 7.1 Required Repair Funds.
7.1.1 Deposits.
On the Closing Date, Borrower shall deposit with Lender the amount for each
Individual Property set forth on such Schedule III hereto (collectively, the
"Required Repair Deposit") to perform the Required Repairs for such Individual
Property. Amounts so deposited with Lender shall be held by Lender in the
Required Repair Account and in accordance with Section 7.8 hereof. Amounts so
deposited shall hereinafter be referred to as Borrower's "Required Repair Fund."
Subject to Force Majeure, Borrower shall perform the repairs at the Properties,
as more particularly set forth on Schedule III hereto (such repairs hereinafter
referred to as "Required Repairs"). Borrower shall complete the Required Repairs
on or before the required deadline for each repair as set forth on Schedule III,
subject to such extensions as required due to Force Majeure. It shall be an
Event of Default under this Agreement if (a) subject to Force Majeure, Borrower
does not complete the Required Repairs at each Individual Property by the
required deadline for each repair as set forth on Schedule III, or (b) Borrower
does not satisfy each condition contained in Section 7.1.2 hereof in all
material respects. 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. Notwithstanding the foregoing, in lieu of depositing the
Required Repair Deposit in the Required Repair Fund, Borrower shall have the
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option of delivering to Lender a Letter of Credit in an amount equal to the
Required Repair Deposit.
7.1.2 Release of Required Repair Funds.
Provided Borrower has deposited funds in the Required Repair Account,
Lender shall disburse to Borrower the Required Repair Funds from the Required
Repair Account from time to time upon satisfaction by Borrower of each of the
following conditions: (a) 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 specifies the Required Repairs to be paid, (b) 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, (c) Lender shall have
received an Officers' Certificate (i) stating that all Required Repairs at the
applicable Individual Property to be funded by the requested disbursement have
been completed in good and workmanlike manner (or any materials to be reimbursed
by the requested disbursement are on site at the Individual Property or in a
bonded warehouse reasonably acceptable to Lender and are properly secured or
have been installed in the Individual Property) and in accordance with all Legal
Requirements and Environmental Laws, 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 such Required Repairs, (ii) identifying
each Person that supplied materials or labor in connection with the Required
Repairs performed at such Individual Property with respect to the reimbursement
to be funded by the requested disbursement, and (iii) stating that each such
Person has been paid in full all sums then due upon such disbursement, such
Officers' Certificate to be accompanied by lien waivers from each Person
receiving $50,000 or more in payment or other evidence of payment reasonably
satisfactory to Lender, (d) 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 previously approved by Lender, and (e)
Lender shall have received such other evidence as Lender shall reasonably
request that the Required Repairs at such Individual Property to be funded by
the requested disbursement (or any materials to be reimbursed by the requested
disbursement are on site at the Individual Property or in a bonded warehouse
reasonably acceptable to Lender and are properly secured or have been installed
in the Individual Property) have been completed and are paid for 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 $25,000 (or a lesser
amount if the total amount in the Required Repair Account is less than $25,000,
in which case only one disbursement of the amount remaining in the account shall
be made). Provided no Event of Default has occurred and is continuing, any funds
remaining in the Required Repairs Account after completion of all Required
Repairs and the delivery of evidence thereof in accordance with the terms and
conditions of this Agreement will be disbursed to Borrower. In the event
Borrower delivers a Letter of Credit to Lender in lieu of depositing cash into
the Required Repair Account, provided Borrower delivers evidence reasonably
acceptable to Lender that the applicable Required Repairs are completed in a
good and workmanlike manner and such Required Repairs have been paid for in
full, Borrower shall be permitted to deliver a replacement Letter of Credit to
Lender in an amount equal to 125% of the then remaining outstanding Required
Repairs.
Section 7.2 Tax and Insurance Escrow Fund.
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Borrower shall pay to Lender on each Payment Date (a) one-twelfth of the
Taxes (the "Monthly Tax Deposit") 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 at least thirty (30) days prior to their
respective due dates, and (b) at the option of Lender, if the liability or
casualty Policy maintained by Borrower covering the Properties shall not
constitute an approved blanket or umbrella Policy pursuant to Section 6.1(b)
hereof, or Lender shall require Borrower to obtain a separate Policy pursuant to
Section 6.1(a) hereof, one-twelfth of the Insurance Premiums (the "Monthly
Insurance Premium Deposit") that Lender estimates will be payable for the
renewal of the coverage afforded by the Policies, with respect to, and allocable
to the Properties upon the expiration thereof in order to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies (said amounts in (a) and (b) above
hereinafter called 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 and this Agreement, 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 and Insurance Premiums required to be made by
Borrower pursuant to Section 5.1.2 and 6.1 hereof. 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) 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, provided, however, Borrower shall have the right to contest the
same in good faith and in accordance with the terms hereof. If the amount of the
Tax and Insurance Escrow Fund shall exceed the amounts due for Taxes and
Insurance Premiums pursuant to Section 5.1.2 and 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. 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 and
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
and/or thirty (30) days prior to expiration of the Policies, as the case may be.
Notwithstanding the foregoing, in lieu of making the Monthly Insurance Premium
Deposit, Borrower shall have the option of (i) delivering to Lender a Letter of
Credit in an amount equal to the estimated annual Insurance Premium, as the same
is calculated each year during the term of the Loan or (ii) providing evidence
reasonably satisfactory to Lender that the liability or casualty Policy
maintained) by Borrower covering the Properties shall constitute an approved
blanket or umbrella Policy pursuant to terms hereof along with evidence
reasonably acceptable to Lender that the Insurance Premiums for such approved
blanket Policy or umbrella Policy for the immediately succeeding year has been
paid in full. Amounts deposited with Lender in the Tax and Insurance Escrow Fund
shall be held by Lender in accordance with the terms of Section 7.8 hereof.
Section 7.3 Replacements and Replacement Reserve.
7.3.1 Replacement Reserve Fund.
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With respect to each Individual Property, on the date hereof, Borrower
shall deposit the amounts set forth on Schedule XXVII and Borrower shall pay to
Lender on each Payment Date during the term of the Loan Borrower shall pay to
Lender the Replacement Reserve Deposit for furnishings, fixtures and equipment
in the guest rooms, hallways, lobbies, restaurants, lounges, meeting and banquet
rooms, parking facilities and other public areas to be made to each Individual
Property (collectively the "Replacements"). Amounts so deposited shall
hereinafter be referred to as Borrower's "Replacement Reserve Fund" and shall be
deposited into the Replacement Reserve Account. In the event that any Individual
Property is released from the Lien of its related Security Instrument in
accordance with Section 2.5 or 2.6 hereof, any amount held in the Replacement
Reserve Account and allocated to the such Individual Property shall be released
to the applicable Borrower. Borrower covenants and agrees to provide Lender
evidence reasonably acceptable to Lender, within thirty (30) days after the
start of each calendar month, of the Actual Amount for each Individual Property
for the immediately preceding calendar month period. (For example, with respect
to the Replacement Reserve Deposit payable on the Payment Date in June, Borrower
shall provide Lender evidence of the Actual Amount for the month of April (the
Subject Month) by May 30). Notwithstanding the foregoing, in lieu of depositing
the Replacement Reserve Deposit, Borrower may deliver to Lender one (1) or more
Letters of Credit each in the amount of the required Replacement Reserve
Deposit. In the event the Actual Amount spent by Borrower for Replacements to an
Individual Property in any given Subject Month exceeds the product of (a) Gross
Income From Operations for such Subject Month and (b) the FF&E Factor (such
amount, the "Excess"), the Borrower may request payment or reimbursement from
the Replacement Reserve Account (or may request a reduction in the amount of any
Letter of Credit delivered to Lender in lieu of a cash deposit to the
Replacement Reserve Account) for the Excess, up to the amount of funds or
Letters of Credit on deposit in the Replacement Reserve Account, in accordance
with Section 7.3.2 provided, however, at no time shall Borrower be entitled to
receive funds (or reduce Letters of Credit) in excess of the Actual Amount for
the applicable Subject Month. To the extent the Replacement Reserve Account has
no funds or Letters of Credit on deposit or is less than the amount of the
Excess, the Borrower will be permitted to carry forward the amount of the Excess
that was not paid or reimbursed from the Replacement Reserve Account (such
amount, the "Shortfall") as a reduction in subsequent month(s) calculation of
the Replacement Reserve Deposit for the applicable Individual Property until the
Shortfall has been exhausted. In other words, Borrower shall be reimbursed for
its Replacements to any Individual Property expenditures first by reduction of
the current month's Replacement Reserve Deposit, second from any funds (and by
reductions in the amount of Letters of Credit delivered to Lender in lieu of
cash deposits) on deposit in the Replacement Reserve Account (using first the
funds and then reductions in the Letters of Credit), and third as an ongoing
credit toward future months' required Replacement Reserve Deposits until
Borrower has been fully reimbursed for all expenditures for Replacements from
the beginning of the first Subject Month to date."
7.3.2 Disbursements from Replacement Reserve Account.
(a) Provided that (i) the Replacement Reserve contains funds or a Letter of
Credit and (ii) no Default or Event of Default shall have occurred and be
continuing, Lender shall make disbursements from the Replacement Reserve Account
(or reduce the amount of Letters of Credit delivered to Lender in lieu of cash
deposits to the Replacement Reserve Account) to pay or reimburse Borrower only
for the costs of the Replacements made to an Individual Property (with
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any funds on deposit being utilized prior to the reduction of any Letters of
Credit). Lender shall not be obligated to make disbursements from the
Replacement Reserve Account to pay or reimburse Borrower for the costs of
routine maintenance to an Individual Property, for replacement of inventory or
for costs which are to be reimbursed from the Required Repair Fund or in excess
of the funds deposited in the Replacement Reserve Account allocable to the
applicable Individual Property.
(b) Lender shall, upon written request from Borrower and satisfaction of
the requirements set forth in this Section 7.3.2, disburse to Borrower within
fifteen (15) Business Days of request amounts from the Replacement Reserve
Account necessary to pay or reimburse Borrower for the actual approved costs and
Replacements upon completion of such Replacements (or, upon partial completion
in the case of Replacements made pursuant to Section 7.3.2(e)) as reasonably
determined by Lender. In no event shall Lender be obligated to disburse funds
from the Replacement Reserve Account if a Default or an Event of Default has
occurred and is continuing.
(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 purchased or 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) 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 the
disbursement is requested. With each request Borrower shall deliver an Officer's
Certificate certifying that all Replacements subject to prior requests, have
been made in accordance with all applicable Legal Requirements of any
Governmental Authority having jurisdiction over the applicable Individual
Property to which the Replacements are being provided. Each request for
disbursement shall include copies of invoices for all items or materials
purchased or to be purchased and all contracted labor or services provided or to
be provided and each request shall include waivers of lien and evidence of
payment from each contractor, as applicable, previously receiving payment out of
any prior such request provided, however, lien waivers shall only be required if
the payments to such contractor is equal to or exceeds $50,000.00. Except as
provided in Section 7.3.2(e), each request for disbursement from the Replacement
Reserve Account shall be made only after completion of the Replacement for which
disbursement is requested. Borrower shall provide Lender evidence of completion
or partial completion, as applicable, satisfactory to Lender in its reasonable
judgment.
(d) Borrower shall pay all invoices in connection with the Replacements
with respect to each request for disbursement (i) prior to submitting such
request for disbursement from the Replacement Reserve Account, (ii) with the
funds received from the applicable disbursement from the Replacement Reserve
Account or, (iii) at the request of Borrower, Lender will issue joint checks,
payable to Borrower and the contractor, supplier, materialman, mechanic,
subcontractor or other party to whom payment is due in connection with a
Replacement. In the case of payments made by joint check, Lender may require a
waiver of lien from each Person receiving payment equal to or in excess of
$50,000.00 prior to Lender's disbursement from the Replacement Reserve Account.
In addition, as a condition to any disbursement, Lender may require Borrower to
obtain lien waivers from each contractor, supplier, materialman, mechanic
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or subcontractor who receives payment in an amount equal to or greater than
$50,000 for completion of its work or delivery of its materials. 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) for the applicable Individual Property by that contractor, supplier,
subcontractor, mechanic or materialman through the date covered by the current
payment or reimbursement request (or, in the event that payment to such
contractor, supplier, subcontractor, mechanic or materialmen is to be made by a
joint check, the release of lien shall be effective through the date covered by
the previous release of funds request).
(e) If (i) the cost of a Replacement exceeds $50,000, and (ii) the
contractor performing such Replacement requires periodic payments pursuant to
terms of a written contract, a request for payment or reimbursement from the
Replacement Reserve Account may be made after completion of a portion of the
work under such contract, provided (A) such contract requires payment upon
completion of such portion of the work, (B) the materials for which the request
is made are on site at the applicable Individual Property and are properly
secured or have been installed in such Individual Property (or if stored at a
place other than the applicable Individual Property, are secured in a manner
reasonably acceptable to Lender), (C) all other conditions in this Agreement for
disbursement have been satisfied, (D) funds remaining in the Replacement Reserve
Account together with other funds or assurances reasonably satisfactory to
Lender deposited with Lender and available for such Replacements are, in
Lender's reasonable judgment, sufficient to complete such Replacement and other
Replacements when required, and (E) if required by Lender, each contractor or
subcontractor receiving payments equal to or in excess of $50,000 under such
contract shall provide a waiver of lien with respect to amounts which have been
paid to that contractor or subcontractor.
(f) Borrower shall not make a request for disbursement from the Replacement
Reserve Account more frequently than once 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 $25,000.00.
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 comparable
hotels in the same market segment in the metropolitan area in which the
respective Individual Property is located, 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) In connection with Replacements for which payments or reimbursements
are requested from the Replacement Reserve Account, 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 in the event amounts
payable under such contract or work order exceed $250,000.00 which consent shall
not be unreasonably withheld, conditioned or delayed. Upon Lender's request,
Borrower shall assign such contract or subcontract to Lender.
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(c) Upon the occurrence and during the continuance of an Event of Default,
Lender shall have the option to withhold disbursement from the Replacement
Reserve Account for any 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 to enter onto any Individual Property upon prior written notice to
Borrower and subject to the rights of tenants and hotel guests 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
Security Instruments. 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, however, Lender shall not exercise such power of attorney until the
earlier of (i) the occurrence and continuance of an Event of Default or (ii) ten
(10) days after Lender notifies Borrower of its intention to 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 additions, changes and corrections to the
Replacements as shall be reasonably necessary or desirable to complete the
Replacements; (iii) to employ such contractors, subcontractors, agents,
architects and inspectors as shall be reasonably 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 and upon prior written
notice (subject to the rights of tenants under their Leases) 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 to complete any
Replacements made pursuant to this Section
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7.33. 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 an Individual Property at
Borrower's expense prior to making a monthly disbursement in excess of $250,000
per Individual Property from the Replacement Reserve Account in order to verify
completion of the Replacements for which payment or 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 completion 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, materialmen's or
other liens (except for Permitted Encumbrances).
(i) Before each disbursement from the Replacement Reserve Account in excess
of $250,000.00 per Individual Property, Lender may require Borrower to provide
Lender with a search of title to the applicable Individual Property effective to
the date of the disbursement, which search shows that no mechanic's or
materialmen's liens or other liens of any nature (other than Liens being
contested in good faith in accordance with the terms hereof) have been placed
against the applicable Individual Property since the date of recordation of the
related Security Instrument and that title to such Individual Property is free
and clear of all Liens (other than the lien of the related Security Instrument
and any other Liens previously approved in writing by Lender, if any, or
Permitted Encumbrances).
(j) 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.
(k) 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 to the
extent not already 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 loss
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.
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(a) It shall be an Event of Default under this Agreement if Borrower fails
to comply with any provision of this Section 7.3 and such failure is not cured
within thirty (30) days after notice from Lender. Upon the occurrence and during
the continuance of such 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 Sections 7.3.3(c) and (d), 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.
Section 7.4 Intentionally Omitted.
Section 7.5 Debt Service Reserve.
7.5.1 Debt Service Reserve Deposit.
On the date hereof, Borrower shall deposit with Lender an amount equal to
the Debt Service Reserve Deposit. Amounts so deposited shall be referred to as
the "Debt Service Reserve". Notwithstanding the foregoing, in lieu of depositing
the Debt Service Reserve Deposit with Lender, Borrower shall have the option of
delivery to Lender a Letter of Credit equal to the Debt Service Reserve Deposit.
7.5.2 Release of Debt Service Reserve.
Following the date which is twelve (12) months after the date that Borrower
actually deposits funds in the Debt Service Reserve Deposit or delivers the
Letter of Credit, upon written request from Borrower, Lender shall, on each
Payment Date (until all funds in the Debt Service Reserve have been applied),
apply a portion of the Debt Service Reserve or reduce the Letter of Credit by an
amount equal to the Monthly Debt Service Payment Amount due for such Payment
Date provided that (i) no Event of Default has occurred and is continuing, (ii)
the Debt Service Coverage Ratio for the twelve (12) full calendar month period
immediately preceding the date of the applicable Payment Date (assuming an
interest rate constant equal to the Cure Contract Rate) is at least equal to
1.65:1.00 (the "Required Application Ratio"). Notwithstanding the foregoing, in
the event that Lender commences applying the funds in the Debt Service Reserve
pursuant to Section 7.5 hereof (such period the "Application Period") and the
Required Application Ratio is not maintained during the Application Period,
Lender shall suspend applying the Debt Service
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Reserve until the later of (i) the Payment Date that is three months from the
date of such suspension and (ii) the Payment Date upon which the Required
Application Ratio is achieved.
Section 7.6 Ground Lease Escrow Fund.
Borrower shall pay to Lender on each Payment Date, together with the
scheduled payment of interest under the Loan each month, 1/12 of the annual
amount (the "Monthly Ground Rent Deposit") that is estimated by Lender to be due
and payable by Borrower under the Ground Lease for all rent and any and all
other charges (the "Ground Rent") which may be due by Borrower under the Ground
Lease in order to accumulate with Lender sufficient funds to pay all sums
payable under the Ground Lease at least ten (10) Business Days prior to the
dates due (said amounts, hereinafter called the "Ground Lease Escrow Fund'). The
Ground Lease Escrow Fund is for the purpose of paying all sums due under the
Ground Lease. Provided Borrower is making Monthly Ground Rent Deposits and there
are sufficient sums in the Ground Lease Escrow Fund or, if there are
insufficient sums in the Ground Lease Escrow Fund, Borrower simultaneously pays
any such deficiency to the ground lessor under the applicable Ground Lease,
Lender will apply any amounts held in the Ground Lease Escrow Fund to the
payment of Ground Rent or other charges required to be made by Borrower pursuant
to Section 5.1.25 hereof. Notwithstanding the foregoing, in lieu of depositing
the Monthly Ground Rent Deposit, Borrower shall have the option of delivering to
Lender a Letter of Credit equal to the annual Ground Rent due under each Ground
Lease, as calculated each year during the term of the Loan. 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 the Ground Lease.
Borrower shall not be permitted to request a draw under the Letter of Credit.
Notwithstanding anything to the contrary contained in this Section 7.6, this
Section 7.6 shall only be applicable to the Leasehold Property known as Wyndham
Buttes Resort.
Section 7.7 Required Common Charge Fund.
7.7.1 Deposits.
On each Payment Date, Borrower shall deposit with Lender an amount equal to
one-twelfth of the Common Charges that Lender estimates will be payable during
the next ensuing twelve (12) months for each Condominium Property (the "Monthly
Common Charge Amounts"). Amounts so deposited shall hereinafter be referred to
as the "Required Common Charge Fund".
7.7.2 Disbursements from the Common Charge Account
Borrower shall have no right to withdraw any sums from the Common Charge
Account. Lender will apply the Required Common Charge Fund to payments of Common
Charges required to be made by Borrower pursuant to Section 5.1.2 hereof. In
making any payment relating to the Required Common Charge Fund, Lender may do so
according to any ▇▇▇▇, statement or estimate procured from the applicable
Condominium Board 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 Required Common Charge Fund
shall exceed the amounts due for Common Charges pursuant to Section 5.1.2
hereof, Lender shall, at Borrower's direction, return any excess to Borrower or
credit such excess against future
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payments to be made to the Required Common Charge Fund. Any amount remaining in
the Required Common Charge Fund after the Debt has been paid in full shall be
returned to Borrower. If at any time Lender reasonably determines that the
Required Common Charge Fund is not or will not be sufficient to pay Common
Charges by the date such Common Charges are due, 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 the date the Common Charges are due.
Section 7.8 Reserve Funds, Generally.
(a) Borrower grants to Lender a first-priority perfected security interest
in each of the Reserve Funds and the related Accounts and any and all monies now
or hereafter deposited in each Reserve Fund and related Account as additional
security for payment of the Debt. Until expended or applied in accordance
herewith, the Reserve Funds and the related Accounts 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, shall be held in a
segregated account and shall be held at the Lockbox Bank.
(d) The Reserve Funds shall be held in interest bearing accounts and all
earnings or interest on a Reserve Fund shall be added to and become a part of
such Reserve Fund and shall be disbursed in the same manner as other monies
deposited in such Reserve Fund.
(e) Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in any Reserve
Fund or related Account 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.
(f) Borrower shall indemnify Lender and hold Lender harmless from and
against any and all actions, suits, claims, demands, liabilities, losses, actual
direct damages, obligations and costs and expenses (including litigation costs
and reasonable attorneys' fees and expenses) arising from or in any way
connected with the Reserve Funds or the related Accounts or the performance of
the obligations for which the Reserve Funds or the related Accounts were
established, except to the extent caused by Lender's or its agent's or
employee's gross negligence or willful misconduct. Borrower shall assign to
Lender all rights and claims Borrower may have against all persons or entities
supplying labor, materials or other services which are to be paid from or
secured by the Reserve Funds or the related Accounts; provided, however, that
Lender may not pursue any such right or claim unless an Event of Default has
occurred and remains uncured.
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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"):
(i) if any portion of the Debt (other than the payments due on the
Maturity Date) is not paid within two (2) Business Days of the date the
same is due and payable or if the amounts due on the Maturity Date are not
paid on or prior to the Maturity Date;
(ii) if any of the Taxes, Other Charges or Common Charges are not paid
on or before the date 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
if required pursuant to the terms hereof;
(iv) except as expressly permitted hereunder, if any Borrower
transfers or encumbers any portion of the Properties without Lender's prior
written consent or otherwise violates the provisions of Section 5.2.12
hereof or Article 7 of the Security Instruments;
(v) if any representation or warranty made by any Borrower, Principal,
Indemnitor or Guarantor 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;
(vi) if any Borrower, Principal, 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
Borrower, Principal, Indemnitor or any guarantor under any guarantee issued
in connection with the Loan, or if any Borrower, Principal, Indemnitor or
such guarantor 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, any Borrower, Principal,
Indemnitor or such guarantor, or if any proceeding for the dissolution or
liquidation of any Borrower, Principal, Indemnitor or such guarantor shall
be instituted; provided, however, if such appointment, adjudication,
petition or proceeding was involuntary and not consented to by any
Borrower, Principal, Indemnitor or such guarantor, upon the same not being
discharged, stayed or dismissed within ninety (90) days;
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(viii) if any 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 any Borrower breaches any of its respective negative covenants
contained in Section 5.2 in any material respect or any covenant contained
in Section 5.1.10 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 any Borrower 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 the Additional Insolvency Opinion 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) if a material default has occurred and continues beyond any
applicable cure period under the Management Agreement (or any Replacement
Management Agreement) if such default permits the Manager thereunder to
terminate or cancel the Management Agreement (or any Replacement Management
Agreement);
(xiii) if any Borrower or any Principal violates or does not comply
with any of the material provisions of Section 4.1.37 hereof, including,
but not limited to, if any Borrower or any Principal shall fail to comply
with the provisions of its operating agreement, articles or certificate of
incorporation, partnership agreement or any other governing documents;
(xiv) subject to Borrower's right to contest the same in accordance
with the terms hereof, if any Individual Property becomes subject to any
mechanic's, materialman's or other lien other than a Permitted Encumbrance
or a lien for local real estate taxes and assessments not then due and
payable and the lien shall remain undischarged of record (by payment,
bonding or otherwise) for a period of thirty (30) days;
(xv) subject to Borrower's right to contest the same in accordance
with the terms hereof, if any federal tax lien or State or local income tax
lien is filed against any Borrower, any member or general partner of
Borrower, any Guarantor, any Indemnitor or any Individual Property and same
is not discharged of record within forty-five (45) days after same is
filed;
(xvi) (A) any Borrower fails to timely provide Lender with the written
certification and evidence referred to in Section 5.2.8 hereof, or (B)
Borrower is a Plan or its assets constitute Plan Asset; or (C) any Borrower
consummates a transaction which would cause the Security Instruments or
Lender's exercise of its rights under the Security Instruments, the Note,
this Agreement or the other Loan Documents
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to constitute a nonexempt prohibited transaction under ERISA or result in a
violation of a State statute regulating governmental plans, subjecting
Lender to liability for a violation of ERISA, the Code, or a State statute
or other similar law;
(xvii) if any Borrower shall fail to deliver to Lender, within fifteen
(15) days after request by Lender, the estoppel certificates required
pursuant to the terms of Section 5.1.13 hereof;
(xviii) if any default occurs under any guaranty or indemnity executed
in connection herewith (including, without limitation, the Guaranty and the
Environmental Indemnity) and such default continues after the expiration of
applicable grace periods, if any;
(xix) if any Borrower shall be in default beyond applicable notice and
grace periods under any other mortgage, deed of trust, deed to secure debt
or other security agreement covering any part of any Individual Property
whether it be superior or junior in lien to the related Security
Instrument;
(xx) if (i) the Interest Rate Cap Agreement is terminated for any
reason by Borrower or the Counterparty, or (ii) the Counterparty defaults
in the performance of its monetary obligations under the Interest Rate Cap
Agreement or (iii) the rating of the Counterparty is subject to any
downgrade, withdrawal or qualification by a Rating Agency, and Borrower
does not within fifteen (15) days (A) replace the terminated Interest Rate
Cap Agreement with a Replacement Interest Rate Cap Agreement in accordance
with Section 2.4 hereof, and (B) deliver to Lender, in form and substance
reasonably satisfactory to Lender (y) an Assignment of Interest Rate Cap
and (z) a recognition letter from the Counterparty thereto acknowledging
the assignment of the Replacement Interest Rate Cap Agreement;
(xxi) with respect to any term, covenant or provision set forth herein
which specifically contains a notice requirement or grace period, if
Borrower shall be in default under such term, covenant or condition after
the giving of such notice or the expiration of such grace period;
(xxii) Subject to Section 7.6 hereof, if any Borrower shall fail to
pay the Ground Rent or any additional rent or other charge mentioned in or
made payable by the Ground Lease when said rent or other charge is due and
payable (after the expiration of any applicable notice and cure period
provided therein);
(xxiii) if the leasehold estate created by the Ground Lease shall be
surrendered or if the Ground Lease shall cease to be in full force and
effect or the Ground Lease shall be terminated or cancelled for any reason
or under any circumstances whatsoever, or if any of the terms, covenants or
conditions of the Ground Lease shall in any manner be modified, changed,
supplemented, altered, or amended without the consent of Lender;
(xxiv) subject to Section 7.6 hereof, if there shall occur any default
by any Borrower, as tenant under the Ground Lease, in the observance or
performance of any
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term, covenant or condition of the Ground Lease on the part of Borrower to
be observed or performed and said default is not cured prior to the
expiration of any applicable grace and notice periods therein provided;
(xxv) if a default has occurred and continues beyond any applicable
cure period under the Franchise Agreement, and such default permits the
franchisor thereunder to terminate or cancel the Franchise Agreement;
(xxvi) if any Borrower ceases to operate a hotel on the Property or
terminates such business for any reason whatsoever (other than temporary
cessation in connection with Force Majeure or any renovations to the
Property or restoration of the Property after Casualty or Condemnation);
(xxvii) if any Borrower operates an Individual Property which is
currently operated under the name of Wyndham, Hilton, Radisson or Crown
Plaza, as applicable, under the name of any hotel chain or system other
than Wyndham, Hilton, Radisson or Crown Plaza, as applicable, or the name
of the hotel chain, or system of a public or private entity into which
Wyndham merged or consolidated or by which Wyndham is acquired in a
transfer permitted under Section 5.2.12 hereof, without Lender's prior
written consent;
(xxviii) in connection with a Condominium Property,
A. if the Condominium Board or Borrower fails after receipt of
notice and expiration of the applicable cure periods set forth in the
Declaration (a) to promptly comply in all material respects with all
laws, orders, and ordinances affecting the Condominium Property or the
use thereof, or (b) to substantially complete and pay for, within a
reasonable time, any structure at any time in the process of
construction or repair on the Condominium Property, all to the extent
that the Condominium Board is authorized to so maintain, repair,
replace, rebuild and complete the Condominium Property by the
Declaration and the By laws, and such defaults set forth in clause (a)
and (b) above, shall continue for a period of sixty (60) days after
written notice thereof to Borrower and the Condominium Board
specifying such default and requiring the same to be remedied shall
have been given to the person designated from time to time on behalf
of the Condominium Board in accordance with the Declaration to receive
service of process; provided, however, that such sixty (60) day period
shall be extended for successive sixty (60) day periods so long as
there is no material adverse effect on the value of the Condominium
Property as a result of such failure;
B. if, the Condominium Board fails in accordance with the terms
of the Condominium Documents, (a) to keep the Common Elements and/or
the Condominium Property, as applicable, insured (i) against the
hazards specified in the Condominium Documents in the amounts and
pursuant to policies in the form specified therein, or (ii) if Section
6.1
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hereof imposes less stringent requirements than the Condominium
Documents, in compliance with all of the requirements of Section 6.1
hereof, provided that the failure to comply with the requirements of
Condominium Documents will not cause a default under the Condominium
Documents, and (b) to pay, as and when the same becomes due and
payable, any charge or encumbrance which, if unpaid, would become a
valid lien against the Condominium Property or any part thereof prior
to or on a parity with the lien of the Security Instrument and, if
such failure shall result in the imposition of a lien against the
Condominium Property and such lien shall not be discharged, dismissed
or bonded by the Condominium Board or Borrower within sixty (60) days
of such imposition and, in either case, the default shall continue for
an additional twenty (20) days after written notice thereof to
Borrower and in either case such failure has a material adverse effect
on the value of the Condominium Property and/or the Loan;
C. if, without the prior written consent of Lender, Borrower
votes for, or permits the Condominium Board to effectuate, any
modification or amendment to any of the material terms or provisions
of the Condominium Documents so as to decrease the value of the
Property in any material respect;
D. if, without the prior written consent of Lender, Borrower
fails to comply with any material terms of the material Condominium
Documents and the applicable Condominium Act which Borrower is
obligated to comply with and such default continues for thirty (30)
days after written notice and such failure will have a material
adverse effect on the Property;
E. if the Condominium is partitioned pursuant to any action for
partition by any Unit owner which results in a material adverse effect
on the value of the Condominium Property and/or the Loan;
F. if Borrower votes for or permits the Condominium Board, such
other party as may in writing be designated by the Condominium Board,
or any other party, as the case may be, to effectuate, any expansion
of the Condominium and annexes to the land covered by the Condominium
additional land and improvements thereon;
G. if the Property is withdrawn from the Condominium regime
established by the applicable Condominium Act in connection with any
condemnation, any casualty or otherwise, in accordance with the
applicable Condominium Act without Lender's written consent, which
consent shall not be unreasonably withheld, delayed or conditioned and
such withdrawal has a material adverse effect on the value of the
Condominium Property and/or the Loan;
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H. if the Condominium is terminated without Lender's written
consent and such termination has a material adverse effect on the
Condominium and/or the Loan;
(xxix) if a default occurs under that certain parking lease dated
September 18, 1986, between Atlanta Midtown Associates ("Atlanta Midtown")
and 999 Peachtree Associates, Ltd (predecessor in interest to Borrower)
(the "Parking Lease") which would permit Atlanta Midtown to terminate the
Parking Lease and another parking lease with substantially similar terms is
not entered into by Borrower prior to the termination of the Parking Lease;
(xxx) if any Borrower shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement not specified in
subsections (i) to (xxvi) 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 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; or
(xxxi) if there shall be default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents, whether as
to any Borrower or any Individual Property, or if any other such event
shall occur or condition shall exist, if the effect of such event or
condition is to accelerate the maturity of any portion of the Debt or to
permit Lender to accelerate the maturity of all or any portion of the Debt.
(b) Upon the occurrence and during the continuance of an Event of Default
(other than an Event of Default described in clauses (vi), (vii) or (viii)
above) and at any time thereafter, 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), (vii) or (viii) 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.
(c) Lender shall have the right, from time to time, to sever the Note and
the other Loan Documents into one or more separate notes, Security Instruments
and other security
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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; provided that (i) the aggregate principal
amount of the Loan immediately following such severance shall equal the
outstanding principal balance of the Loan immediately prior to such
reallocation, (ii) the aggregate Monthly Scheduled Amortization Payments
immediately following such severance shall not exceed the aggregate Monthly
Scheduled Amortization Payments immediately prior to the severance, (iii) the
weighted average interest rate of the Note and the Mezzanine Note immediately
following such severance shall equal the weighted average interest rate which
was applicable to the Note and the Mezzanine Note immediately prior to such
severance and (iv) except as provided in clauses (i) through and including (iii)
above, Borrower's and Guarantor's obligations under the Loan Documents shall not
be increased nor shall any of Borrower's and Guarantor's rights pursuant to the
Loan Documents be diminished. 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 ten (10) days after notice has been
given to Borrower by Lender of Lender's intent to exercise its rights under such
power. 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 8.2 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 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 or any Individual Property or any other
Collateral. 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 the other Collateral and each Security Instrument has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or
the Debt has been paid in full.
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(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 or Collateral for the satisfaction of any of the Debt
in preference or priority to any other Individual Property or Collateral, and
Lender may seek satisfaction out of all of the Properties or all of the
Collateral or any part thereof, in its absolute discretion in respect 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 Security Instruments in
any manner and for any amounts secured by the Security Instruments 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
Security Instruments 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 Security Instruments 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 Security Instruments as Lender
may elect. Notwithstanding one or more partial foreclosures, the Properties
shall remain subject to the Security Instruments to secure payment of sums
secured by the Security Instruments and not previously recovered.
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 singularly, 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 or more
Defaults or Events 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.
Lender may, at any time, sell, transfer or assign the Note, this Agreement,
the Security Instruments and the other Loan Documents, and any or all servicing
rights with respect thereto, or grant participations therein or issue mortgage
pass-through certificates or other securities (the "Securities") evidencing a
beneficial interest in a rated or unrated public offering or private placement
(a "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, at Borrower's expense (subject to the limitations set forth
below), 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 a
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Securitization or the sale of the Note or the participations or Securities,
including, without limitation, to:
(a) (i) provide such financial and other information with respect to
the Properties, Borrower and the Manager, (ii) provide budgets
relating to the Properties and (iii) to perform or permit or
cause to be performed or permitted, at Lender's expense, such
site inspection, appraisals, market studies, environmental
reviews and reports (Phase I's and, if appropriate, Phase II's),
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 Phase II reports and other
invasive testing may not be performed at any Individual Property
unless Borrower has received evidence of insurance for any Person
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 required by the Rating Agencies, deliver (i) revised opinions
of counsel as to non-consolidation, due execution and
enforceability with respect to the Properties, Borrower,
Guarantor, Indemnitor, Principal and their respective Affiliates
and the Loan Documents, and (ii) revised organizational documents
as they relate to the single purpose bankruptcy remoteness of
Borrower and/or Principal and if Borrower is a single member
limited liability company organized in the State of Delaware,
dissolution and authority to file bankruptcy (provided, however,
no such revisions to Borrower's or Principal's organizational
documents shall have a material adverse effect on Borrower and/or
Principal, as applicable) which counsel, opinions and
organizational documents shall be satisfactory to Lender and the
Rating Agencies;
(c) if required by the Rating Agencies, use commercially reasonably
efforts to deliver such additional tenant estoppel letters,
subordination agreements or other agreements from parties to
agreements that affect the Properties, which estoppel letters,
subordination agreements or other agreements shall be
satisfactory to Lender and the Rating Agencies.
(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;
provided, however, that Borrower shall not be required to modify
or amend any organizational document or Loan Document if such
modification or amendment would (except for modifications and
amendments required to be made pursuant to Section (e) below,)
(i) change the interest rate, the stated maturity or the
amortization of principal set forth in the Note, or (ii) modify
or amend any
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other material economic or material non-economic term of the
organizational documents or Loan Documents.
(e) if Lender elects, in its sole discretion, prior to or upon a
Securitization, to split the Loan into two or more parts, or the
Note into multiple component notes or tranches which may have
different interest rates, amortization payments, principal
amounts and maturities. Borrower agrees to cooperate with Lender
in connection with the foregoing and to execute the required
modifications and amendments to the Note, this Agreement and the
Loan Documents and to provide opinions necessary to effectuate
the same; provided, however Borrower shall not be required to
modify or amend any Loan Documents if (i) the initial weighted
average interest rate of such split notes would be greater than
the Applicable Interest Rate immediately preceding such loan
split or (ii) such modification or amendment would change the
Maturity Date or Monthly Scheduled Amortization payment or (iii)
the aggregate scheduled amortization payments exceed the Monthly
Scheduled Amortization Payments, provided, that, notwithstanding
the provisions below, Borrower shall not be responsible for the
payment of any title insurance premiums required by Lender in
connection with the foregoing, but Borrower shall be responsible
for all other cost and expenses (subject to the limitations set
forth below) in complying with this Section 9.1(e).
(f) execute modifications to the Loan Documents changing the interest
rate and/or the amortization payments for the Loan and the
Mezzanine Loan, provided that the initial weighted average of the
interest rate spreads for the Loan and the Mezzanine Loan after
such modification shall not exceed the weighted average of the
interest rate spreads for the Loan and the Mezzanine Loan
immediately prior to such modification and the scheduled
amortization payments after such modification will not exceed the
Monthly Scheduled Amortization Payments, if any, due under the
Loan Agreement and the Mezzanine Loan Agreement immediately prior
to such modification. The Borrower shall also provide opinions
and title insurance reasonably necessary to effectuate the same;
(g) make such representations and warranties as of the closing date
of the Securitization with respect to the Properties, Borrower,
and the Loan Documents as are customarily provided in
securitization transactions and 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, including the representations and
warranties made in the Loan Documents; and
(h) supply to Lender such documentation, financial statements and
reports in form and substance required for Lender to comply with
Regulation S-X of the federal securities law, if and to the
extent applicable to the Securitization.
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Lender shall pay all costs in connection with complying with this Section
9.1 except that Borrower shall pay for the fees of legal counsel employed by
Borrower, Principal, Wyndham and/or any Affiliate of any of the foregoing, in
connection with any modifications to the Loan Documents or review of opinions,
documents, agreements or similar items which are delivered by Borrower,
Principal, Wyndham, or any Affiliate of the foregoing in connection with
complying with Section 9.1 hereof. The limitation on costs and expenses set
forth in the foregoing sentence shall in no way affect Borrower's obligation to
comply with this Section 9.1.
Section 9.2 Securitization Indemnification.
(a) Borrower and Guarantor 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 (the "Exchange Act Filing") 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 Guarantor 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 Guarantor agree to provide in connection with each of (i)
a preliminary and a final private placement memorandum or offering circular or
(ii) a preliminary and final prospectus or prospectus supplement, as applicable
(collectively, the "Offering Materials"), an indemnification certificate (A)
certifying that Borrower has carefully examined such memorandum or prospectus,
as applicable, including without limitation, the sections entitled "Special
Considerations," "Description of the Mortgages," "Description of the Mortgage
Loan and Mortgaged Properties," "The Manager," "The Borrower", "The Franchise
Agreements" and "Certain Legal Aspects of the Mortgage Loan," and such sections
(and any other sections reasonably requested to the extent the same relate to
the Loan, the Loan Documents, Borrower, Guarantor, Indemnitor, Principal or an
Affiliate of any of the foregoing) do not (and with respect to any portion of
the Offering Materials prepared in reliance on the reports of third-parties, to
the best of Borrower's knowledge, do not) contain any untrue statement of a
materiel 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 (and for purposes of this Section 9.2,
Lender hereunder shall include its officers and directors), the Affiliate of
▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇") that has filed the registration statement, if
any, 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 (collectively, the
"▇▇▇▇▇▇ Group"), and ▇▇▇▇▇▇, each of its directors and each Person who controls
▇▇▇▇▇▇ 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
▇▇▇▇▇▇ Group or the Underwriter Group may become subject insofar as the
Liabilities arise out
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of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such sections (other than such statement or
misstatement made in Borrower's good faith reliance upon the reports of third
parties that do not to the best of Borrower's knowledge, contain any untrue
statement or misstatement or 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 required to be stated in such sections or
necessary in order to make the statements in such sections or in light of the
circumstances under which they were made, not misleading and (C) agreeing to
reimburse Lender, the ▇▇▇▇▇▇ Group and the Underwriter Group for any legal or
other out-of-pocket expenses reasonably incurred by Lender and ▇▇▇▇▇▇ in
connection with investigating or defending the Liabilities; provided, however,
that Borrower will be liable in any such case under clauses (B) or (C) above
only to the extent that any such loss claim, damage or liability arises out of
or is based upon any such untrue statement or omission made therein in reliance
upon and in conformity with information furnished to Lender by or on behalf of
Borrower in connection with the preparation of the memorandum or prospectus or
in connection with the underwriting of the debt, including, without limitation,
financial statements of 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
Borrower; and provided that this Section 9.2 shall not apply to any loss, claim,
damage or liability 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 connection with written information furnished to
Borrower by Lender, any member of the ▇▇▇▇▇▇ Group or any member of the
Underwriter Group expressly for use in the Offering Materials unless Borrower,
Principal or Guarantor fails to correct any such untrue statement, misstatement
or omission with respect to Borrower, Principal or Indemnitor that is known to
Borrower, Principal or Guarantor or that, with the exercise of customary
reasonable efforts, should be known to Borrower, Principal or Guarantor. 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 ▇▇▇▇▇▇ Group or the Underwriting Group (or
any person controlling such ▇▇▇▇▇▇ Group or 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 Borrower 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, the preliminary Offering Materials that was corrected in the final
Offering Materials. This indemnity agreement will be in addition to any
liability which Borrower may otherwise have. Moreover, the indemnification
provided for in Clauses (B) and (C) above shall be effective whether or not an
indemnification certificate described in (A) above is provided and shall be
applicable based on information previously provided by Borrower or its
Affiliates if Borrower does not provide the indemnification certificate.
(c) In connection with filings under the Exchange Act, Borrower and
Guarantor agree to indemnify (i) Lender, the ▇▇▇▇▇▇ Group and the Underwriter
Group for Liabilities to which Lender, the ▇▇▇▇▇▇ Group or the Underwriter Group
may become subject insofar as the Liabilities arise out of or are based upon the
omission or alleged omission to state in the
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Provided Information a material fact 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 of Borrower's knowledge, 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
Lender, the ▇▇▇▇▇▇ Group or the Underwriter Group for any legal or other
expenses reasonably incurred by Lender, the ▇▇▇▇▇▇ Group or the Underwriter
Group in connection with defending or investigating the Liabilities. 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 materially misleading, if such untrue statement, misstatement or
omission or alleged untrue statement, misstatement or omission related to
statements of 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,
Principal 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 under this Section 9.2 apply to any
filings made under the Exchange Act after the initial filings, if any, are made.
(d) Promptly after receipt by an indemnified party under this Section 9.2
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9.2, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party hereunder except to the extent that failure to notify
causes prejudice to the indemnifying party. In the event that any action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent that it
(or they) may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party.
After notice from the indemnifying party to such indemnified party under this
Section 9.2 the indemnifying party shall not be responsible for any legal or
other expenses subsequently incurred by such indemnified ▇▇▇▇▇ in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there are any legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party to
parties. 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
in writing; or (ii) in such
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claims or action there is, in the reasonable opinion of independent counsel, a
conflict concerning any material issue between the position of Borrower and such
Indemnified Person, in which case if such Indemnified Person notifies Borrower
in writing that it elects to employ separate counsel at the expense of Borrower,
then such counsel shall 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 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.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnifications provided for in Section 9.2(b) or
(c) is or are for any reason held to be unenforceable by an indemnified party in
respect of any Liabilities (or action in respect thereof) referred to therein
which would otherwise be indemnifiable under Section 9.2(b) or (c), the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such Liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) ▇▇▇▇▇▇'▇ and Borrower's relative knowledge and access to information
concerning the matter with respect to which claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances. Lender and
Borrower hereby agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
(f) The liabilities and obligations of both Borrower, Guarantor 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 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.
Section 9.4 Exculpation.
(a) Except as otherwise provided herein, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the representations
warranties and obligations contained in the Note, this Agreement, the Security
Instruments 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, action for specific performance or other appropriate action
or proceeding to enable Lender to enforce and realize upon its interest in the
Note, this Agreement, the Security Instruments, the other Loan Documents, and
the interest in the Properties, the Rents, the Collateral and any other
collateral given to Lender pursuant to the
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Note, this Agreement, the Security Instruments or the other Loan Documents;
provided, however, that 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 Rent, the Collateral and in any other collateral given to
Lender. In no event shall any Related Party have any personal liability for the
payment of the indebtedness or any other sums due hereunder, under the Note, the
Security Instruments or the other Loan Documents, or for the performance or
observance of any other obligation of Borrower other than pursuant to a written
instrument executed by such Related Party specifically providing for such
liability. Lender, by accepting the Note, this Agreement and the Security
Instruments, agrees that it shall not, except as otherwise provided herein ▇▇▇
for, seek or demand any deficiency judgment against Borrower and/or any Related
Party in any such action or proceeding, under or by reason of or under or in
connection with the Note, this Agreement, the other Loan Documents or the
Security Instruments. The provisions of this Section shall not, however, (i)
constitute a waiver, release or impairment of any obligation evidenced or
secured by the Note, this Agreement, the other Loan Documents or the Security
Instruments; (ii) impair the right of Lender to name Borrower as a party
defendant in any action or suit for judicial foreclosure and sale under the
Security Instruments; (iii) affect the validity or enforceability of any
indemnity (including, without limitation, the Environmental Indemnity),
guaranty, master lease or similar instrument made in connection with the Note,
this Agreement, the Security Instruments, or the other Loan Documents, (iv)
impair the right of Lender to obtain the appointment of a receiver; (v) impair
the enforcement of the Assignment of Leases; (vi) impair the right of Lender to
enforce the provisions of Sections 4.1.8, 4.1.29, 5.1.9 and 5.2.8 of this
Agreement; or (vii) impair the right of Lender to obtain a deficiency judgment
or other judgment on the Note against Borrower if necessary to preserve or
enforce its rights and remedies against any Collateral, including any insurance
proceeds or condemnation awards to which Lender would otherwise be entitled
under this Agreement or the Security Instruments; provided however, Lender shall
only enforce such judgment against such Collateral, including the insurance
proceeds and/or condemnation awards, as applicable.
(b) Notwithstanding the provisions of this Section 9.4 to the contrary,
Borrower shall be personally liable to Lender for the direct, actual Losses it
incurs due to: (i) fraud or intentional misrepresentation by any Borrower or any
other person or entity in connection with the execution and the delivery of the
Note, this Agreement, the Security Instruments or the other Loan Documents; (ii)
any Borrower's intentional misapplication or misappropriation of Rents received
by Borrower after the occurrence of an Event of Default; (iii) any Borrower's
intentional misapplication or misappropriation of tenant security deposits or
Rents collected more than one month in advance; (iv) the intentional
misapplication or the misappropriation of Insurance Proceeds or Awards; (v) any
Borrower's failure to pay Taxes, Other Charges, Ground Rent, charges for labor
or materials or other charges that can create liens on any of the Properties
(except to the extent that sums sufficient to pay such amounts have been
deposited in the Lockbox Account or are otherwise in escrow with Lender pursuant
to the terms of this Agreement) but only to the extent that the Properties Net
Operating Income available to Borrower was sufficient to permit Borrower to pay
the same when due; (vi) any Borrower's failure to return or to reimburse Lender
for all Personal Property taken from any of the Properties by or on behalf of
Borrower after the occurrence of an Event of Default and in violation of the
terms of this Agreement and the Security Instruments and not replaced with
Personal Property of the same utility and of the same or greater value; (vii)
any act of actual intentional waste or arson by any Borrower, any principal,
affiliate or general partner thereof or by any Indemnitor or
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Guarantor which is not attributable to a lack of sufficient Net Operating Income
available to Borrower from the Properties to perform all of Borrower's or such
affiliate's obligations under the Note, this Agreement, the Security Instruments
or the other Loan Documents; (viii) any fees or commissions paid by any Borrower
to any principal, affiliate or general partner of Borrower, Indemnitor or
Guarantor in violation of the terms of the Note, this Agreement, the Security
Instruments or the other Loan Documents; (ix) any Borrower's failure to comply
with the provisions of Sections 4.1.41 and 5.1.19 hereof; or (x) if any
Individual Property or any part thereof shall become an asset in an involuntary
bankruptcy or insolvency proceeding commenced by any Person (other than Lender)
and Borrower fails to use its commercially reasonable efforts to obtain a
dismissal of such proceedings.
(c) Notwithstanding the foregoing, the agreement of Lender not to pursue
recourse liability as set forth in Subsection (a) above SHALL BECOME NULL AND
VOID and shall be of no further force and effect as to Borrower (but not to any
Related Party other than pursuant to a written instrument executed by such
Related Party specifically providing for such liability) (i) in the event of any
Borrower's willful default to provide a report or information under Section
5.1.10(b), (c), (f), (h), (i), (j), (k) and (l) hereof, but a failure to provide
such reports and information shall not be deemed willful if such failure is the
result of good faith error and is cured within ten (10) Business Days after
notice is delivered to Borrower, provided, however, that if (x) Borrower is
prevented by an unaffiliated third party from delivering such information, and
(y) Borrower uses reasonable efforts (including the reasonable expenditure of
money) to obtain such information, then such failure shall not be deemed willful
so long as Borrower continuously endeavors in good faith to obtain the required
financial reports and information and delivers same to Lender as soon as it
becomes available to Borrower, (ii) in the event of a default under Section
4.1.37 of this Agreement such that either (A) such failure was considered by a
court as a factor in the court's finding for a consolidation of the assets of
Borrower with the assets of another person or entity or (B) as a result thereof,
Lender suffers any material damage, cost, liability, or expense (including
reasonable attorneys' fees and disbursements, whether or not litigation has
commenced); provided, however, that in the absence of an actual consolidation,
recourse may be had against Borrower only to the extent of Losses for its
failure to comply with the provisions of Section 4.1.37 or, (iii) in the event
of a default under Section 5.2.12 of this Agreement or Article 7 of the Security
Instruments; provided, however, if an agent or employee of Borrower or the
manager of the Property enters into an Equipment lease or Equipment financing in
violation of the Security Instrument and without express authorization from an
executive officer of Borrower, Indemnitor or Guarantor then such violation for
purposes of this subsection (iii) shall not result in a nullification of
subsection 9.4(a) hereof (but Borrower shall be liable for all Losses related to
such violation) so long as such Equipment lease or Equipment financing is
terminated and released to Lender's reasonable satisfaction within ten (10)
Business Days of the earlier of (x) Lender's notice to Borrower of such
violation or (y) the date that any executive officer of Borrower or of
Indemnitor or Guarantor actually becomes aware of such violation; or (iv) if any
Individual Property or any part thereof shall become an asset in a voluntary
bankruptcy or insolvency proceeding; or (v) if the first full Monthly Debt
Service Payment Amount is not paid when due.
(d) Nothing herein shall be deemed to be a waiver of any right which Lender
may have under Section 506(a), 506(6), 1111(b) or any other provision of the
Bankruptcy Code to file a claim for the full amount of the indebtedness secured
by the Security Instruments or to require
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that all collateral shall continue to secure all of the indebtedness owing to
Lender in accordance with the Note, this Agreement, the Security Instruments and
the other Loan Documents.
Section 9.5 Contributions and Waivers.
(a) As a result of the transactions contemplated by this Agreement, each
Borrower will benefit, directly and indirectly, from each Borrower's obligation
to pay the Debt and perform its obligations under the Note, this Agreement and
the other Loan Documents (the "Obligations") and in consideration therefor
desire to enter into an allocation and contribution agreement among themselves
as set forth in this Section 9.5 to allocate such benefits among themselves and
to provide a fair and equitable agreement to make contributions among each of
the Borrowers in the event any payment is made by any individual Borrower
hereunder to the Lender (such payment being referred to herein as a
"Contribution," and for purposes of this Section 9.5, includes any exercise of
recourse by the Lender against any Collateral of a Borrower and application of
proceeds of such Collateral in satisfaction of such Borrower's obligations, to
the Lender under the Loan Documents).
(b) Each Borrower shall be liable hereunder with respect to the Obligations
only for such total maximum amount (if any) that would not render its
Obligations hereunder or under any of the Loan Documents subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
State law.
(c) In order to provide for a fair and equitable contribution among the
Borrowers in the event that any Contribution is made by an individual Borrower
(a "Funding Borrower"), such Funding Borrower shall be entitled to a
reimbursement Contribution ("Reimbursement Contribution") from all other
Borrowers for all payments, damages and expenses incurred by that Funding
Borrower in discharging any of the Obligations, in the manner and to the extent
set forth in this Section 9.5. The amount of any Reimbursement Contribution
hereunder shall be equal to the payment made by the Funding Borrower to the
Lender or any other beneficiary pursuant to this Agreement and shall be
determined as of the date on which such payment is made.
(d) For purposes hereof, the "Benefit Amount" of any individual Borrower as
of any date of determination shall be the net value of the benefits to such
Borrower and its affiliates from extensions of credit made by the Lender to (a)
such Borrower and (b) to the other Borrowers hereunder and the Loan Documents to
the extent such other Borrowers have guaranteed or mortgaged their Properties to
secure the Obligations of such Borrower to the Lender.
(e) Each Borrower shall be liable to a Funding Borrower in an amount equal
to the greater of (A) the (i) ratio of the Benefit Amount of such Borrower to
the total amount of Obligations, multiplied by (ii) the amount of Obligations
paid by such Funding Borrower, or (B) 95% of the excess of the fair saleable
value of the property of such Borrower over the total liabilities of such
Borrower (including the maximum amount reasonably expected to become due in
respect of contingent liabilities) determined as of the date on which the
payment made by a Funding Borrower is deemed made for purposes hereof (giving
effect to all payments made by other Funding Borrowers as of such date in a
manner to maximize the amount of such Contributions).
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(f) In the event that at any time there exists more than one Funding
Borrower with respect to any Contribution (in any such case, the "Applicable
Contribution"), then Reimbursement Contributions from other Borrowers pursuant
hereto shall be allocated among such Funding Borrowers in proportion to the
total amount of the Contribution made for or on account of the other Borrowers
by each such Funding Borrower pursuant to the Applicable Contribution. In the
event that at any time any Borrower pays an amount hereunder in excess of the
amount calculated pursuant to this Section 9.5 above, that Borrower shall be
deemed to be a Funding Borrower to the extent of such excess and shall be
entitled to a Reimbursement Contribution from the other Borrowers in accordance
with the provisions of this Section.
(g) The Borrowers acknowledge that the right to Reimbursement Contribution
hereunder shall constitute an asset in favor of the Borrower to which such
Reimbursement Contribution is owing.
(h) No Reimbursement Contribution payments payable by a Borrower pursuant
to the terms of this Section 9.5 shall be paid until all amounts then due and
payable by all of the Borrowers to the Lender, pursuant to the terms of the Loan
Documents, are paid in full in cash. Nothing contained in this Section 9.5 shall
limit or affect in any way the Obligations of any Borrower to Lender under this
Note or any other Loan Documents.
(i) Each Borrower waives:
(1) any right to require Lender to proceed against any other Borrower
or any other person or to proceed against or exhaust any security held by
Lender at any time or to pursue any other remedy in Lender's power before
proceeding against Borrower;
(2) the defense of the statute of limitations in any action against
any other Borrower or for the collection of any indebtedness or the
performance of any obligation under the Loan;
(3) any defense based upon any legal disability or other defense of
any other Borrower, any guarantor or any other person or by reason of the
cessation or limitation of the liability of any other Borrower or any
guarantor from any cause other than full payment of all sums payable under
the Note, this Agreement and any of the other Loan Documents;
(4) any defense based upon any lack of authority of the officers,
directors, partners or agents acting or purporting to act on behalf of any
other Borrower or any principal of any other Borrower or any defect in the
formation of any other Borrower or any principal of any other Borrower;
(5) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in any
other respects more burdensome than that of a principal;
(6) any defense based upon any failure by Lender to obtain collateral
for the indebtedness or failure by the Lender to perfect a lien on any
collateral;
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(7) presentment, demand, protest and notice of any kind;
(8) any defense based upon any failure of Lender to give notice of
sale or other disposition of any collateral to any other Borrower or to any
other person or entity or any defect in any notice that may be given in
connection with any sale or disposition of any collateral;
(9) any defense based upon any failure of Lender to comply with
Applicable Laws in on with the sale or other disposition of any collateral,
including, without limitation, any failure of Lender to conduct a
commercially reasonable sale or other disposition of any collateral;
(10) any defense based upon any election by Lender, in any bankruptcy
proceeding, of the application or non-application of Section 1111(b)(2) of
the Bankruptcy Code or any successor statute;
(11) any defense based upon any use of cash collateral under Section
363 of the Bankruptcy Code;
(12) any defense based upon any agreement or stipulation entered into
by Lender with respect to the provision of adequate protection in any
bankruptcy proceeding;
(13) any defense based upon any borrowing or any grant of a security
interest under Section 364 of the Bankruptcy Code;
(14) any defense based upon the avoidance of any security interest in
favor of Lender for any reason;
(15) any defense based upon any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding, including any discharge of, or bar or stay against
collecting, all or any of the obligations evidenced by the Note or owing
under any of the Loan Documents; and
(16) any defense or benefit based upon the Borrower's, or any other
party's, designation of the portion of any obligation secured by the
applicable Security Instruments to be satisfied by any payment from any
other Borrower or any such party.
(j) Each Borrower waives:
(1) all rights and defenses arising out of an election of remedies by
Lender even though the election of remedies, such as nonjudicial
foreclosure with respect to security for the Loan or any other amounts
owing under the Loan Documents, has destroyed the Borrower's rights of
subrogation and reimbursement against any other Borrower;
(2) all rights and defenses that Borrower may have because any of Debt
is secured by real property. This means, among other things: (A) Lender may
collect from
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Borrower without first foreclosing on any real or personal property
collateral pledged by any other Borrower; (B) If Lender forecloses on any
real property collateral pledged by any other Borrower, (i) the amount of
the Debt may be reduced only by the price for which that collateral is sold
at the foreclosure sale, even if the collateral is worth more than the sale
price, (ii) Lender may collect from Borrower even if any other Borrower, by
foreclosing on the real property collateral, has destroyed any right
Borrower may have to collect from any other Borrower. This is an
unconditional and irrevocable waiver of any rights and defenses Borrower
may have because any of the Debt is secured by real property; and
(3) any claim or other right which Borrower might now have or
hereafter acquire against any other Borrower or any other person that
arises from the existence or performance of any obligations under the Note,
this Agreement, the Security instruments or the other Loan Documents,
including, without limitation, any of the following: (a) any right of
subrogation, reimbursement, exoneration, contribution, or indemnification;
or (b) any right to participate in any claim or remedy of Lender against
any other Borrower or any collateral security therefor, whether or not such
claim, remedy or right arises in equity or under contract, statute or
common law.
(4) Any rights of Borrowers of subrogation, reimbursement,
indemnification, and/or contribution against any other Borrower or any
other person or entity, and any other rights and defenses that are or may
become available to any Borrower or any other person or entity by reasons
of Sections 2787-2855, inclusive of the California Civil Code;
(5) Any rights or defenses that may be available by reason of any
election of remedies by any Borrower (including, without limitation, any
such election which in any manner impairs, effects, reduces, releases,
destroys or extinguishes any Borrower's subrogation rights, rights to
proceed against any other Borrower for reimbursement, or any other rights
of Borrowers to proceed against any other person, entity or security,
including but not limited to any defense based upon an election of remedies
by any Borrower under the provisions of Section 580(d) of the California
Code of Civil Procedure or any similar law of California or of any other
State or of the United Sates);
(6) Any rights or defenses any Borrower may have because the
Obligations are secured by real property or any estate for years. These
rights or defenses include, but are not limited to, any rights or defenses
that are based upon, directly or indirectly, the application of Section
580(a), Section 580(b), Section 580(d) or Section 726 of the California
Code of Civil Procedure to the Obligations.
(7) Any rights or defenses any Borrower may have because the
Obligations are secured by real property or any estate for years. These
rights or defenses include, but are not limited to, any rights or defenses
that are based upon, directly or indirectly, the application of Section
580(a), Section 580(b), Section 580(d) or Section 726 of the California
Code of Civil Procedure to the Obligations;
(8) Any rights of any Borrower of subrogation, reimbursement,
indemnification, and/or contribution against any other Borrower or any
other person or
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entity, and any other rights and defenses that are or may become available
to any Borrower or any other person or entity by reasons of Sections 2787
to 2855, inclusive of the California Civil Code;
(9) Any rights or defenses arising out an election of remedies by the
Lender, even though that election of remedies as a nonjudicial foreclosure
with respect to security for a guaranteed obligation, has destroyed
Borrower's rights of subrogation and reimbursement, against the principal
by the operation of Section 580(d) of the Code of Civil Procedure or any
similar law of California or of any State or of the United States; and
The provisions of clause (9) above mean, among other things:
(A) Lender may collect from each Borrower without first
foreclosing on any real or personal property collateral pledged by
Borrower for the Debt; and
(B) If Lender forecloses on a real property pledged by any
Borrower:
(1) The Obligations shall be reduced only by the price for
which the collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price at time of the sale.
(2) Lender may collect from each Borrower even if Lender, by
foreclosing on the real property collateral, has destroyed any
right of any Borrower to collect from another Borrower.
(3) This is an unconditional and irrevocable waiver of any
rights and defenses any Borrower may have because any other
Borrower's obligations are secured by real property. These rights
and defenses, include, but are not limited to, any rights or
defenses based upon Section 580(a), Section 580(b), Section
580(d) or Section 726 of the California Code of Civil Procedure.
Section 9.6 Reallocation of Loan Amounts.
Lender, without in any way limiting its other rights hereunder, in its sole
and absolute discretion, shall have the right, at any time prior to a
Securitization, to reallocate the amount of the Loan and the Mezzanine Loan
and/or adjust the interest rate rates thereon provided that (i) the aggregate
principal amount of the Loan and the Mezzanine Loan immediately following such
reallocation shall equal the outstanding principal balance of the Loan and the
Mezzanine Loan immediately prior to such reallocation, (ii) the aggregate
Monthly Scheduled Amortization Payments immediately following such reallocation
shall not exceed the aggregate Monthly Scheduled Amortization Payments
immediately prior to the reallocation, and (iii) the weighted average interest
rate of the Note and the Mezzanine Note immediately following such reallocation
shall equal the weighted average interest rate which was applicable to the Note
and the Mezzanine Note immediately prior to such reallocation. Borrower shall
cooperate with all reasonable requests of Lender in order to reallocate the
amount of the Loan and the Mezzanine Loan and shall execute and deliver such
documents as shall reasonably be required by Lender in
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connection therewith, all in form and substance reasonably satisfactory to
Lender. All costs in connection with this Section 9.6 shall be paid for by
Lender except that Borrower shall pay for the fees and expenses of legal counsel
employed by Borrower, Principal, Wyndham and/or any Affiliate of any of the
foregoing, in connection with any modifications to Loan Documents or any other
items required by this Section 9.6.
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
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.
Whenever pursuant to this Agreement, Lender exercises any right given to it
to approve or disapprove, or any arrangement or term is to be satisfactory to
Lender, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein provided) be in the sole, but good faith
discretion of Lender and shall be final and conclusive if made in good faith.
When it is expressly provided herein that Lender act reasonably, Lender shall
apply the standards of a reasonably prudent institutional mortgage lender.
Section 10.3 Governing Law.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT
TO THE LAWS OF THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED,
CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS), PROVIDED HOWEVER, THAT
WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIENS
AND SECURITY INTERESTS CREATED BY THIS AGREEMENT, THE SECURITY INSTRUMENTS AND
THE OTHER LOAN DOCUMENTS, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE
LAWS OF THE STATE WHERE EACH INDIVIDUAL PROPERTY IS LOCATED SHALL APPLY.
(b) WITH RESPECT TO ANY CLAIM OR ACTION ARISING HEREUNDER OR UNDER THIS
AGREEMENT, THE NOTE, OR THE OTHER LOAN DOCUMENTS, BORROWER (A) IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW
YORK,
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NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, AND (B) IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING ON VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE OR
THE OTHER LOAN DOCUMENTS BROUGHT IN ANY SUCH COURT, IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS AGREEMENT, THE NOTE OR THE
OTHER LOAN DOCUMENTS INSTRUMENT WILL BE DEEMED TO PRECLUDE LENDER FROM BRINGING
AN ACTION OR PROCEEDING WITH RESPECT HERETO IN ANY OTHER JURISDICTION.
Section 10.4 Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination or waiver of
any provision of this Agreement, 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.
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 or other written communications hereunder shall be deemed to
have been properly given (i) upon delivery, if delivered in person or by
facsimile transmission with receipt acknowledged by the recipient thereof and
confirmed by telephone by sender, (ii) one (1) Business Day (defined below)
after having been deposited for overnight delivery with any reputable overnight
courier service, or (iii) three (3) Business Days after having been deposited in
any post office or mail depository regularly maintained by the U.S. Postal
Service and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to Borrower:
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The Borrower's listed on Schedule I
c/o Wyndham International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Wyndham International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇, P.C.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: ▇▇▇▇▇▇ ▇▇▇ Inc.
c/▇ ▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a ▇▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional or different
addresses for subsequent notices or communications.
Section 10.7 Trial by Jury.
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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.
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. 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.
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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.
Section 10.13 Expenses; Indemnity.
(a) Except as otherwise expressly provided herein or in any of 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 out-of-pocket 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 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) Lender's ongoing performance and
compliance with all agreements and conditions contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (iv) 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 Lender; (v) securing Borrower's compliance with any requests made
pursuant to the provisions of this Agreement; (vi) 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; (vii) 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; 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. Any
cost and expenses due and payable to Lender may be paid from any amounts in the
Lockbox Account.
- 148 -
(b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all 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 imposed
on, incurred by, or asserted against Lender in any manner relating to or 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 employees or agents. 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.
(c) Borrower shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Lender and the Indemnified Parties from
and against any and all losses (including, without limitation, attorneys' fees
and costs incurred in the investigation, defense, and settlement of losses
incurred in correcting any prohibited transaction or in the sale of a prohibited
loan, and in obtaining any individual prohibited transaction exemption under
ERISA, the Code, any State statute or other similar law that may be required, in
Lender's sole discretion) that Lender may incur, directly or indirectly, as a
result of a default under Sections 4.1.8 or 5.2.8 hereof.
(d) Borrower covenants and agrees to pay for or, if Borrower fails to pay,
to reimburse Lender for, (i) any fees and expenses incurred by any Rating Agency
in connection with any Rating Agency review of the Loan, the Loan Documents or
any transaction contemplated thereby as a result of the initial successful
Securitization of the Loan and any Rating Agency confirmations that may be
required by this Agreement and the other Loan Documents or (ii) any consent,
approval, waiver or confirmation obtained from such Rating Agency pursuant to
the terms and conditions of this Agreement or any other Loan Document and Lender
shall be entitled to require payment of such fees and expenses as a condition
precedent to the obtaining of any such consent, approval, waiver or
confirmation.
Section 10.14 Schedules and Exhibits Incorporated.
The Schedules and Exhibits 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
- 149 -
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
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.
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, ▇▇▇▇▇▇,
or any of their Affiliates shall be subject to the prior written approval of
Lender.
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 Security Instruments are and will be
cross-collateralized and cross-defaulted with each other so that (i) an Event of
Default under any of the Security Instruments shall constitute an Event of
Default under each of the other Security Instruments which secure the Note; (ii)
an Event of Default under the Note or this Agreement shall constitute an Event
of Default under each Security Instrument; (iii) each Security Instrument shall
constitute security for the Note as if a single blanket lien were placed on all
of the Properties as security for the Note, except to the extent otherwise
expressly permitted in each Security Instrument; and (iv) such
cross-collateralization shall in no event be deemed to constitute a fraudulent
conveyance.
- 150 -
(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 Security Instruments, 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,
Borrower, for itself and its successors and assigns, waives in the event of
foreclosure of any or all of the Security Instruments, 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 consent to and authorize, at
the option of Lender, the foreclosure and sale either separately or together of
any combination of the Properties.
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 Agreement and
any of the other Loan Documents, the provisions of this 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 Advice.
- 151 -
Borrower hereby represents that it has dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including Lender's attorneys' fees
and expenses) in any way relating to or arising from a claim by any Person that
such Person acted on behalf of Borrower or Lender in connection with the
transactions contemplated herein. The provisions of this Section 10.21 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.
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, between Borrower and/or its Affiliates and Lender are
superseded by the terms of this Agreement and the other Loan Documents.
[NO FURTHER TEXT ON THIS PAGE]
- 152 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
BORROWER
, a
-------------------------- ----------
By: , a
-------------------- ----------
, its
---------- ---------------
By:
--------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇ INC., a Delaware corporation
By:
------------------------------------
Name:
Title:
WITH RESPECT TO SECTION 9.1 and 9.2
ONLY,
SPONSOR:
WYNDHAM INTERNATIONAL INC.
By:
------------------------------------
Name:
Title:
SCHEDULE I
Borrowers
Borrower
Organizational Taxpayer Number
Borrower Type of Entity Number Borrower US
--------------------- ----------------- -------------- ---------------
DT-DES PLAINES, LLC Delaware limited 3061484 ▇▇-▇▇▇▇▇▇▇
liability company
R-LISLE, LLC Delaware limited 3060099 ▇▇-▇▇▇▇▇▇▇
liability company
DT GLENVIEW, LLC Delaware limited 3060093 ▇▇-▇▇▇▇▇▇▇
liability company
WCHNW, LLC Delaware limited 3060127 ▇▇-▇▇▇▇▇▇▇
liability company
R-HOUSTON, L.P. Delaware limited 3061513 ▇▇-▇▇▇▇▇▇▇
partnership
W-COLINAS, L.P. Delaware limited 3061507 ▇▇-▇▇▇▇▇▇▇
partnership
RAD-▇▇▇▇, LLC Delaware limited 3052120 ▇▇-▇▇▇▇▇▇▇
liability company
W-▇▇▇▇▇▇▇▇, ▇.▇. Delaware limited 3061460 ▇▇-▇▇▇▇▇▇▇
partnership
W-BUTTES, LLC Delaware limited 3061480 ▇▇-▇▇▇▇▇▇▇
liability company
W-EMERALD, LLC Delaware limited 3061471 ▇▇-▇▇▇▇▇▇▇
liability company
W-BEL AGE, LLC Delaware limited 3061534 ▇▇-▇▇▇▇▇▇▇
liability company
DT-MIAMI, L.P. Delaware limited 3061463 ▇▇-▇▇▇▇▇▇▇
partnership
DT-TALLAHASSEE, L.P. Delaware limited 3061518 ▇▇-▇▇▇▇▇▇▇
partnership
W-INDIANA, LLC Delaware limited 3061498 ▇▇-▇▇▇▇▇▇▇
liability company
PARSIPPANY, LLC Delaware limited 3060119 ▇▇-▇▇▇▇▇▇▇
liability company
H-GATEWAY, LLC Delaware limited 3061490 ▇▇-▇▇▇▇▇▇▇
liability company
H-CLEVELAND, LLC Delaware limited 3061491 ▇▇-▇▇▇▇▇▇▇
liability company
W-GARDEN ATLANTA, LLC Delaware limited 3060129 ▇▇-▇▇▇▇▇▇▇
liability company
RAVINIA, LLC Delaware limited 3061482 ▇▇-▇▇▇▇▇▇▇
liability company
SCHEDULE II
Properties - Allocated Loan Amounts/Release Prices
--------------------------------------------------------------------------------------------------
Allocated Loan
Property Address Amount Release Price
--------------------------------------------------------------------------------------------------
Wyndham Hotel Midtown Atlanta, GA $11,773,000.00 For Releases occurring
prior to a date that is
------------------------------------------------------------------ 30 days prior to a
Securitization, 100%
Doubletree Club Hotel Miami, FL $ 1,835,000.00 of the Allocated
Loan Amount
------------------------------------------------------------------
Doubletree Hotel Glenview, IL $ 5,508,000.00
For Releases occurring
------------------------------------------------------------------ prior to October 8, ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ $ 8,239,000.00 110% of Allocated Loan
Amount
------------------------------------------------------------------
Radisson Inn Towne & Country Houston, TX $ 5,313,000.00 For Releases occurring
on or after October 8, 2004
------------------------------------------------------------------ and prior to July 8, ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ $ 2,950,000.00 115% of Allocated Loan Amount
For Releases occurring on
or after July 8, 2005, 125%
of Allocated Loan Amount
--------------------------------------------------------------------------------------------------
Doubletree Hotel Tallahassee, FL $11,522,000.00 For Releases occurring
prior to October 8, 2004,
------------------------------------------------------------------ 110% of Allocated Loan
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ $11,316,000.00 Amount
------------------------------------------------------------------ For Releases occurring
Hilton Hotel Parsippany, NJ $36,261,000.00 on or after October 8, 2004
and prior to July 8, 2005,
------------------------------------------------------------------ 115% of Allocated Loan Amount
Radisson Inn Burlington, VT $20,288,000.00
------------------------------------------------------------------ For Releases occurring
Crowne Plaza Ravinia Atlanta, GA $29,311,000.00 on or after July 8, 2005,
125% of Allocated Loan
------------------------------------------------------------------ Amount
Wyndham Los Colinas Dallas, Texas $ 5,904,000.00
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Wyndham Bel Age West Hollywood, CA $ 6,400,000.00 135% of Allocated Loan
Amount
--------------------------------------------------------------------------------------------------
Wyndham Emerald Plaza San Diego, CA $26,785,000.00 135% of Allocated Loan
Amount
--------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ $44,252,000.00 135% of Allocated Loan
Amount
--------------------------------------------------------------------------------------------------
Wyndham Buttes Resort Tempe, AZ $25,675,000.00 135% of Allocated Loan
Amount
--------------------------------------------------------------------------------------------------
Wyndham Hotel Lisle, IL $ 6,332,000.00 130% of Allocated Loan
Amount
--------------------------------------------------------------------------------------------------
Wyndham NW Chicago Itasca, IL $16,813,000.00 130% of Allocated Loan
Amount
--------------------------------------------------------------------------------------------------
Wyndham Hotel Indianapolis, IN $ 3,523,000.00 135% of Allocated Loan
Amount
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
A-156
SCHEDULE III
Required Repairs - Deadlines For Completion
WYNDHAM PORTFOLIO
REQUIRED REPAIRS
DEFERRED MAINTENANCE
To be required within 12 months from date of closing or an earlier date if
required by code or statute.
Property Description Reserve
------------------------------------------------------------------------------------------------------
Crowne Plaza Ravinia Paint rusted metal in pool room ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ canopy leaks ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Ravinia Pressure wash pool deck 6,250
Crowne Plaza Ravinia Elevator Repairs ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Ravinia Repair concrete paving at loading dock 6,250
Crowne Plaza Ravinia Repair water damage 250,000
Crowne Plaza Ravinia Exterior repairs 125,000
Crowne Plaza Ravinia Infrared scan of electrical panels 1,875
Crowne Plaza Ravinia Parking deck repairs 3,125
Crowne Plaza Ravinia Concrete Repairs 9,000
Crowne Plaza Ravinia Roof, flashing, & sealants 900,000
---------
Total $ 1,303,125
Doubletree Club Des Plaines Code violations - material storage 1,250
Doubletree Club Des Plaines Repair exposed wiring ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Reset transformer 6,250
Doubletree Club Des Plaines Remove paint from fire doors ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Front Lobby elevator ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Repair asphalt shingle roof 1,688
---------
Total $ 11,563
Doubletree Club Hotel - Miami,
FL Repair water damage in guestrooms 12,500
Doubletree Club Hotel - Miami, Roof repairs on single story portion of
FL building 2,188
Doubletree Club Hotel - Miami,
FL Clean roof HVAC ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇,
▇▇ Lawn irrigation repairs 12,500
Doubletree Club Hotel - Miami,
FL Repair heaved asphalt 3,125
Doubletree Club Hotel - Miami,
FL Repair spalled concrete curbs 1,313
Doubletree Club Hotel - Miami,
FL Pressurewash & paint exterior sidewalls 36,563
Doubletree Club Hotel - Miami,
FL Apply masonry sealer 20,188
Doubletree Club Hotel - Miami,
FL Re-roof upper roof 35,719
---------
Total $ 124,719
Doubletree Glenview Replace flashing 2,700
Doubletree Glenview Remove debris in electrical rooms 250
Doubletree Glenview Restore fire enclosure stairwell 750
Doubletree Glenview Resurface asphalt 42,969
Doubletree Glenview Repair spalled concrete curbs 3,750
Doubletree Glenview PIP 3,100,000
---------
Total $ 3,150,419
Doubletree Hotel Tallahassee Repair electrical panels 438
Doubletree Hotel Tallahassee Clear fire rating labels on doors 625
Doubletree Hotel Tallahassee Repair fire alarm system 3,125
Doubletree Hotel Tallahassee Repair fire sprinkler system 4,375
Doubletree Hotel Tallahassee Asphalt repairs 4,500
Doubletree Hotel Tallahassee Exterior cleaning 17,438
Doubletree Hotel Tallahassee Remove and replace Rooftop HVAC 13,750
Doubletree Hotel Tallahassee Redirect Through-wall AC discharge 4,688
---------
Total $ 48,938
Radisson Burlington VT Repair plumbing leaks in hotel lobby 3,375
Radisson Burlington VT Remove debris in switchgear room 1,000
Radisson Burlington VT Concrete repairs to flatwork & stairs 4,188
Radisson Burlington VT Repair spalling at connector bridge 2,813
Radisson Burlington VT Seal sidewall joints 2,188
Radisson Burlington VT Repair BoH areas behind pool 12,500
Radisson Burlington VT Repair lobby ceiling 12,500
Radisson Burlington VT Correct leak at domestic hot water pump 1,688
Radisson Burlington VT Thermostats 62,500
---------
Total $ 102,750
Radisson Inn Town & Country Painting exterior walls 7,000
Radisson Inn Town & Country Repair acoustical ceilings 438
---------
Total $ 7,438
Wyndham Buttes Resort Repair cracked pavement 8,750
Wyndham Buttes Resort Seal pavement 36,978
Wyndham Buttes Resort Repair tennis courts 13,500
Wyndham Buttes Resort Roof repairs 4,375
Wyndham Buttes Resort Outside lighting 625
Wyndham Buttes Resort Cooling tower overhaul & water pump 22,875
---------
Total $ 87,103
A-158
Wyndham Hotel Indianapolis Repair pitched roof 4,375
Wyndham Hotel Indianapolis Repair water damage - room 619 4,375
Wyndham Hotel Indianapolis Repair pavement 24,063
Wyndham Hotel Indianapolis Moisture remediation - remaining 2003 costs 1,306,619
Wyndham Hotel Indianapolis Pool plumbing repairs 6,125
Wyndham Hotel Indianapolis Cover French drains 1,313
---------
Total $ 1,346,869
Wyndham Las Colinas Repair exhaust fans ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Repair electrical switchboard ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Moisture remediation 381,225
Wyndham Las Colinas Replace catchbasin 2,250
Wyndham Las Colinas Resurface swimming pool 3,500
---------
Total $ 387,850
Wyndham Lisle Seal pavement 11,375
Wyndham Lisle Replace exterior doors 1,250
Wyndham Lisle Replace insulated glass with broken seals 4,000
Wyndham Lisle Replace heat pumps 35,293
---------
Total $ 51,918
Atlanta Midtown Resurface whirlpool spa 2,250
Atlanta Midtown Paint rusted surfaces in pool room 1,875
Atlanta Midtown Replace 2 skylights in pool room 1,500
Replace acoustic tiled ceilings in ▇▇▇▇▇▇▇
Atlanta Midtown Room 5,513
Atlanta Midtown Cooling tower overhaul 11,250
Atlanta Midtown Repair water damage 712,000
Atlanta Midtown Elevator door opener 4,500
Atlanta Midtown Tuck point facades/exterior sealing 112,500
Atlanta Midtown Insulate central plant room 1,125
Atlanta Midtown Overhaul cooling tower 11,250
Atlanta Midtown Supplemental AC in elevator room 1,875
---------
Total $ 865,638
Hilton Hotel Cleveland South Repair asphalt paving 3,500
Hilton Hotel Cleveland South Asphalt paving 3,500
---------
Total $ 7,000
Hilton Hotel Parsippany Pruning 2,625
Hilton Hotel Parsippany Repair/replace pool windows 2,500
Hilton Hotel Parsippany Overhaul domestic hot water heat exchangers 23,750
Hilton Hotel Parsippany Emergency backup generator 62,500
---------
Total $ 91,375
A-159
Wyndham Bel Age Roof Repairs 3,125
Total $ 3,125
Repair spalled concrete for perimeter roof
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza beam 31,250
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Water damage investigation 33,869
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Replace windows and skylights in pool area 43,750
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Tub replacement/water damage repairs 649,784
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Deck Waterproofing 233,465
---------
Total $ 992,119
Wyndham Emerald Plaza Repair water damage 79,076
---------
Total $ 79,076
Hilton Gateway Plaza Hilton PIP 2,100,000
---------
Total $ 2,100,000
------------------------------------------------------------------------------------------------------
TOTAL 10,761,022
======================================================================================================
A-160
SCHEDULE IV
Organizational Chart of Borrower
(Begins on Next Page)
SCHEDULE V
Monthly Scheduled Amortization Payments
Wyndham Portfolio - Lehman IV
Amortization Table
-------------------------------------------------------------------------
Senior Loan
-------------------------------------------------------------------------
Principal 280,000,000
Am Term 25 Yr.
First Period 4.50%
Coupon
Estimated 6/11/2003
Close Date
-------------------------------------------------------------------------
* Loan pays on 9th or preceding business day
Period Date* Principal
--------------------------------
1 7/9/2003 --
2 8/9/2003 319,175
3 9/9/2003 321,170
4 10/9/2003 323,177
5 11/9/2003 325,197
6 12/9/2003 327,230
7 1/9/2004 329,275
8 2/9/2004 331,333
9 3/9/2004 333,404
10 4/9/2004 335,488
11 5/9/2004 337,584
12 6/9/2004 339,694
13 7/9/2004 341,817
14 8/9/2004 343,954
15 9/9/2004 346,103
16 10/9/2004 348,267
17 11/9/2004 350,443
18 12/9/2004 352,633
19 1/9/2005 354,837
20 2/9/2005 357,055
21 3/9/2005 359,287
22 4/9/2005 361,532
23 5/9/2005 363,792
24 6/9/2005 366,066
25 7/9/2005 368,354
26 8/9/2005 370,656
27 9/9/2005 372,972
28 10/9/2005 375,303
29 11/9/2005 377,649
30 12/9/2005 380,009
31 1/9/2006 382,384
32 2/9/2006 384,774
33 3/9/2006 387,179
34 4/9/2006 389,599
35 5/9/2006 392,034
36 6/9/2006 394,484
37 7/9/2006 396,950
38 8/9/2006 399,431
39 9/9/2006 401,927
40 10/9/2006 404,439
41 11/9/2006 406,967
42 12/9/2006 409,510
43 1/9/2007 412,070
44 2/9/2007 414,645
45 3/9/2007 417,237
46 4/9/2007 419,845
47 5/9/2007 422,469
48 6/9/2007 425,109
49 7/9/2007 427,766
50 8/9/2007 430,440
51 9/9/2007 433,130
52 10/9/2007 435,837
53 11/9/2007 438,561
54 12/9/2007 441,302
55 1/9/2008 444,060
56 2/9/2008 446,835
57 3/9/2008 449,628
58 4/9/2008 452,438
59 5/9/2008 455,266
60 6/9/2008 458,111
61 7/9/2008 460,975
62 8/9/2008 463,856
63 9/9/2008 466,755
64 10/9/2008 469,672
65 11/9/2008 472,607
66 12/9/2008 475,561
67 1/9/2009 478,533
68 2/9/2009 481,524
69 3/9/2009 484,534
70 4/9/2009 487,562
71 5/9/2009 490,609
72 6/9/2009 493,676
73 7/9/2009 496,761
74 8/9/2009 499,866
75 9/9/2009 502,990
76 10/9/2009 506,134
77 11/9/2009 509,297
78 12/9/2009 512,480
79 1/9/2010 515,683
80 2/9/2010 518,906
81 3/9/2010 522,149
82 4/9/2010 525,413
83 5/9/2010 528,697
84 6/9/2010 532,001
85 7/9/2010 535,326
86 8/9/2010 538,672
A-163
87 9/9/2010 542,039
88 10/9/2010 545,426
89 11/9/2010 548,835
90 12/9/2010 552,265
91 1/9/2011 555,717
92 2/9/2011 559,190
93 3/9/2011 562,685
94 4/9/2011 566,202
95 5/9/2011 569,741
96 6/9/2011 573,302
97 7/9/2011 576,885
98 8/9/2011 580,490
99 9/9/2011 584,118
100 10/9/2011 587,769
101 11/9/2011 591,443
102 12/9/2011 595,139
103 1/9/2012 598,859
104 2/9/2012 602,602
105 3/9/2012 606,368
106 4/9/2012 610,158
107 5/9/2012 613,971
108 6/9/2012 617,809
109 7/9/2012 621,670
110 8/9/2012 625,555
111 9/9/2012 629,465
112 10/9/2012 633,399
113 11/9/2012 637,358
114 12/9/2012 641,341
115 1/9/2013 645,350
116 2/9/2013 649,383
117 3/9/2013 653,442
118 4/9/2013 657,526
119 5/9/2013 661,635
120 6/9/2013 665,771
121 7/9/2013 669,932
122 8/9/2013 674,119
123 9/9/2013 678,332
124 10/9/2013 682,572
125 11/9/2013 686,838
126 12/9/2013 691,130
127 1/9/2014 695,450
128 2/9/2014 699,797
129 3/9/2014 704,170
130 4/9/2014 708,571
131 5/9/2014 713,000
132 6/9/2014 717,456
133 7/9/2014 721,940
134 8/9/2014 726,452
135 9/9/2014 730,993
136 10/9/2014 735,561
137 11/9/2014 740,159
138 12/9/2014 744,785
A-164
139 1/9/2015 749,440
140 2/9/2015 754,124
141 3/9/2015 758,837
142 4/9/2015 763,580
143 5/9/2015 768,352
144 6/9/2015 773,154
145 7/9/2015 777,986
146 8/9/2015 782,849
147 9/9/2015 787,742
148 10/9/2015 792,665
149 11/9/2015 797,619
150 12/9/2015 802,604
151 1/9/2016 807,621
152 2/9/2016 812,668
153 3/9/2016 817,747
154 4/9/2016 822,858
155 5/9/2016 828,001
156 6/9/2016 833,176
157 7/9/2016 838,384
158 8/9/2016 843,623
159 9/9/2016 848,896
160 10/9/2016 854,202
161 11/9/2016 859,540
162 12/9/2016 864,913
163 1/9/2017 870,318
164 2/9/2017 875,758
165 3/9/2017 881,231
166 4/9/2017 886,739
167 5/9/2017 892,281
168 6/9/2017 897,858
169 7/9/2017 903,469
170 8/9/2017 909,116
171 9/9/2017 914,798
172 10/9/2017 920,516
173 11/9/2017 926,269
174 12/9/2017 932,058
175 1/9/2018 937,883
176 2/9/2018 943,745
177 3/9/2018 949,644
178 4/9/2018 955,579
179 5/9/2018 961,551
180 6/9/2018 967,561
181 7/9/2018 973,608
182 8/9/2018 979,693
183 9/9/2018 985,816
184 10/9/2018 991,978
185 11/9/2018 998,177
186 12/9/2018 1,004,416
187 1/9/2019 1,010,694
188 2/9/2019 1,017,011
189 3/9/2019 1,023,367
190 4/9/2019 1,029,763
A-165
191 5/9/2019 1,036,199
192 6/9/2019 1,042,675
193 7/9/2019 1,049,192
194 8/9/2019 1,055,749
195 9/9/2019 1,062,348
196 10/9/2019 1,068,987
197 11/9/2019 1,075,669
198 12/9/2019 1,082,392
199 1/9/2020 1,089,156
200 2/9/2020 1,095,964
201 3/9/2020 1,102,813
202 4/9/2020 1,109,706
203 5/9/2020 1,116,642
204 6/9/2020 1,123,621
205 7/9/2020 1,130,643
206 8/9/2020 1,137,710
207 9/9/2020 1,144,821
208 10/9/2020 1,151,976
209 11/9/2020 1,159,176
210 12/9/2020 1,166,420
211 1/9/2021 1,173,710
212 2/9/2021 1,181,046
213 3/9/2021 1,188,428
214 4/9/2021 1,195,855
215 5/9/2021 1,203,329
216 6/9/2021 1,210,850
217 7/9/2021 1,218,418
218 8/9/2021 1,226,033
219 9/9/2021 1,233,696
220 10/9/2021 1,241,407
221 11/9/2021 1,249,165
222 12/9/2021 1,256,973
223 1/9/2022 1,264,829
224 2/9/2022 1,272,734
225 3/9/2022 1,280,688
226 4/9/2022 1,288,693
227 5/9/2022 1,296,747
228 6/9/2022 1,304,852
229 7/9/2022 1,313,007
230 8/9/2022 1,321,213
231 9/9/2022 1,329,471
232 10/9/2022 1,337,780
233 11/9/2022 1,346,141
234 12/9/2022 1,354,555
235 1/9/2023 1,363,021
236 2/9/2023 1,371,540
237 3/9/2023 1,380,112
238 4/9/2023 1,388,737
239 5/9/2023 1,397,417
240 6/9/2023 1,406,151
241 7/9/2023 1,414,939
242 8/9/2023 1,423,783
A-166
243 9/9/2023 1,432,681
244 10/9/2023 1,441,636
245 11/9/2023 1,450,646
246 12/9/2023 1,459,712
247 1/9/2024 1,468,835
248 2/9/2024 1,478,016
249 3/9/2024 1,487,253
250 4/9/2024 1,496,549
251 5/9/2024 1,505,902
252 6/9/2024 1,515,314
253 7/9/2024 1,524,785
254 8/9/2024 1,534,315
255 9/9/2024 1,543,904
256 10/9/2024 1,553,553
257 11/9/2024 1,563,263
258 12/9/2024 1,573,034
259 1/9/2025 1,582,865
260 2/9/2025 1,592,758
261 3/9/2025 1,602,713
262 4/9/2025 1,612,730
263 5/9/2025 1,622,809
264 6/9/2025 1,632,952
265 7/9/2025 1,643,158
266 8/9/2025 1,653,427
267 9/9/2025 1,663,761
268 10/9/2025 1,674,160
269 11/9/2025 1,684,623
270 12/9/2025 1,695,152
271 1/9/2026 1,705,747
272 2/9/2026 1,716,408
273 3/9/2026 1,727,135
274 4/9/2026 1,737,930
275 5/9/2026 1,748,792
276 6/9/2026 1,759,722
277 7/9/2026 1,770,720
278 8/9/2026 1,781,787
279 9/9/2026 1,792,923
280 10/9/2026 1,804,129
281 11/9/2026 1,815,405
282 12/9/2026 1,826,751
283 1/9/2027 1,838,168
284 2/9/2027 1,849,657
285 3/9/2027 1,861,217
286 4/9/2027 1,872,850
287 5/9/2027 1,884,555
288 6/9/2027 1,896,334
289 7/9/2027 1,908,186
290 8/9/2027 1,920,112
291 9/9/2027 1,932,113
292 10/9/2027 1,944,188
293 11/9/2027 1,956,340
294 12/9/2027 1,968,567
A-167
295 1/9/2028 1,980,870
296 2/9/2028 1,993,251
297 3/9/2028 2,005,709
298 4/9/2028 2,018,244
299 5/9/2028 2,030,858
300 6/9/2028 2,043,551
301 7/9/2028 2,056,323
302 8/9/2028 --
A-168
SCHEDULE VI
Ground Leases
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza, Philadelphia, Pennsylvania
1. That certain Ground Lease (the "Lease") dated June 28, 1999 between
W-▇▇▇▇▇▇▇▇, ▇.▇., a Delaware limited partnership, as lessee and Patriot
American Hospitality Partnership, L.P., a Virginia limited partnership, as
lessor, a Memorandum of Ground Lease of which was recorded in Deed Book JTD
1093, Page 491 of the Recorder's Office of the County of Philadelphia,
regarding certain real property located in the City of Philadelphia.
2. That certain Lease Modification Agreement dated as of June , 2003 between
--
W-▇▇▇▇▇▇▇▇, ▇.▇., a Delaware limited liability partnership, as lessee, and
Patriot American Hospitality Partnership, L.P., a Virginia limited
partnership, as lessor.
Wyndham Buttes Resort, Tempe, Arizona
1. That certain Ground Lease dated November 20, 1984 between Westcox Hotel
Company, predecessor-in-interest to W-Buttes, LLC, as lessee, and City of
Tempe, a municipal corporation of the State of Arizona, as lessor, as
amended by that certain Addendum No. 1 dated May 30, 1986, as amended by
that certain Addendum No. 2 dated February 20, 1987, and as amended by that
certain Addendum No. 3 dated May 22, 1989). A Memorandum of Ground Lease
and Addendum No. 1 was recorded on October 15, 1986 in the Official Records
of Maricopa County (the "Recording Office") as Instrument No. 86-565646, as
corrected by that certain Memorandum of Lease recorded on February 3, 1987
in the Recording Office as Instrument No. 87-068485. A Memorandum of
▇▇▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇ was recorded on August 13, 1990 in the
Recording Office as Instrument No. 90-365694.
SCHEDULE VII
O&M Program Properties
Property Location
-------- --------
Wyndham Buttes Resort Tempe, AZ
Wyndham Bel Age West Hollywood
Doubletree Miami Miami, FL
Doubletree Tallahassee Tallahassee, FL
Crowne Plaza Ravinia Atlanta, GA
Wyndham Hotel Midtown Atlanta, GA
Doubletree Des Plaines Des Plaines, IL
Doubletree Hotel Glenview, IL
Wyndham Hotel NW Chicago Chicago, IL
Hilton Gateway Newark, NJ
Hilton Cleveland ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
Radisson Towne & Country Houston, TX
Radisson Hotel Burlington, VT
Wyndham Hotel Las Colinas Irving, TX
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Philadelphia, PA
Hilton Hotel Parsippany Parsippany, NJ
A-170
SCHEDULE VIII
None
SCHEDULE IX
None
SCHEDULE X
Franchise Agreement / Franchisor
--------------------------------------------------------------------------------
Hotel Name Franchisor Franchise Agreement
--------------------------------------------------------------------------------
Doubletree Hotel Hilton Hotels License Agreement dated June 4,
(Glenview, IL) Corporation./ Hilton 1999 between Doubletree Hotel
Inns, Inc. Systems, Inc., an Arizona
corporation, as Licensor, and DT
Glenview, LLC, a Delaware limited
liability company, as Licensee
--------------------------------------------------------------------------------
Hilton Hotel Hilton Hotels License Agreement dated October
Cleveland South Corporation./ Hilton 1995 between Hilton Inns, Inc., a
(Independence, OH) Inns, Inc. Delaware corporation, as Licensor,
and CHC Lease Partners, a Delaware
general partnership, as Licensee,
as assigned by that certain
Assignment and Assumption of
License Agreement dated June 28,
1999 between CHC Lease Partners,
as Assignor, and H-Cleveland, LLC,
a Delaware limited liability
company, as Assignee
--------------------------------------------------------------------------------
Radisson Inn Towne & Radisson Hotels License Agreement dated October 2,
Country (Houston, International, Inc. 1995 between Radisson Hotels
TX) International, Inc., a Delaware
corporation, as Licensor and CHC
Lease Partners, a Delaware general
partnership, as Licensee, as
assigned by that certain
Assignment and Assumption of
License Agreement dated June 28,
1999 between CHC Lease Partners,
as Assignor, and R-Houston, L.P.,
a Delaware limited partnership, as
Assignee
--------------------------------------------------------------------------------
Hilton Gateway Plaza Hilton Hotels Amended and Restated License
(Newark, NJ) Corporation./ Hilton Agreement dated August 20, 1997
Inns, Inc. between Hilton Inns, Inc., a
Delaware corporation, as Licensor,
and IHC Realty Partnership, L.P.,
a Delaware limited partnership, as
Licensee, as assigned by that
certain Assignment and Assumption
of License Agreement dated June 2,
1998 between IHC Realty
Partnership, L.P., as Assignor and
Wyndham International Operating
Partnership, L.P., a Delaware
limited partnership, as Assignee,
as further assigned by that
certain Assignment and Assumption
of License Agreement
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
dated June 28, 1999 between
Wyndham International Operating
Partnership, L.P., as Assignor,
and H-Gateway, LLC, a Delaware
limited liability company, as
Assignee
--------------------------------------------------------------------------------
Hilton Hotel Hilton Hotels Amended and Restated License
(Parsippany, NJ) Corporation./ Hilton Agreement dated August 15, 1997
Inns, Inc. between Hilton Inns, Inc., a
Delaware corporation, as Licensor,
and IHC Realty Partnership, L.P.,
a Delaware limited partnership, as
Licensee, as assigned by that
certain Assignment and Assumption
of License Agreement dated June 2,
1998 between IHC Realty
Partnership, L.P., as Assignor and
Wyndham International Operating
Partnership, L.P., a Delaware
limited partnership, as Assignee,
as further assigned by that
certain Assignment and Assumption
of License Agreement dated June
28, 1999 between Wyndham
International Operating
Partnership, L.P., as Assignor and
Parsippany, LLC, a Delaware
limited liability company, as
Assignee
--------------------------------------------------------------------------------
Radisson Inn Radisson Hotels License Agreement dated December
(Burlington, VT) International, Inc. 20, 1996 between Radisson Hotels
International, Inc., a Delaware
corporation, as Licensor and
Interstone Partners I, L.P., a
Delaware limited partnership, as
Licensee, as assigned by that
certain Assignment and Assumption
of License Agreement dated June
28, 1999 between IHC Realty
Partnership, L.P., a Delaware
limited liability company and the
successor-in-interest of
Interstone Partners I, L.P., as
Assignor and Rad-▇▇▇▇, LLC, a
Delaware limited liability
company, as Assignee
--------------------------------------------------------------------------------
Crowne Plaza Ravinia Holiday Hospitality License Agreement dated December
(Atlanta, GA) Franchising, Inc. 1, 1995 between Holiday Inns
Franchising, Inc., a Delaware
corporation, as Licensor, and PAH
Ravinia, Inc., a Virginia
corporation, as Licensee, as
assigned by that certain
Assignment and Assumption
Agreement dated June, 1999 between
PAH Ravinia, Inc., as Assignor and
Ravinia, LLC, a Delaware limited
liability company, as Assignee
--------------------------------------------------------------------------------
SCHEDULE XI
Special Assessments
Hotel Special Assessment Referred to As
----- ---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza Center City District Assessment
Wyndham Buttes Resort Lease Excise Tax or "in lieu of" property tax
Hilton Gateway Plaza, Newark Downtown Special Improvement District
Hotel Occupancy Tax offset (pay
real estate tax and take credit
against Hotel Occ Tax)
Wyndham Las Colinas Las Colinas Association Assessment
Radisson Inn, Burlington VT Downtown District
SCHEDULE XII
Sale Properties
Property Address
-------- -------
Wyndham Hotel Midtown Atlanta, GA
Doubletree Club Hotel Miami, FL
Doubletree Hotel Glenview, IL
Hilton Hotel Cleveland South Independence, OH
Radisson Inn Towne & Country Houston, TX
Doubletree Club Hotel Des Plaines, IL
Doubletree Hotel Tallahassee, FL
Hilton Gateway Plaza Newark, NJ
Hilton Hotel Parsippany, NJ
Radisson Inn Burlington, VT
Crowne Plaza Ravinia Atlanta, GA
▇▇▇▇▇▇▇ Los Colinas Dallas, TX
SCHEDULE XIII
Litigation Schedule
(begins on following page)
SCHEDULE XIV
Borrower Defaults
NONE
SCHEDULE XV
Insurance Claims
(begins on following page)
SCHEDULE XVI
Rent Roll / Leases
(begins on following page)
SCHEDULE XVII
Lease Defaults
NONE
SCHEDULE XVIII
Required Lease Work
NONE
SCHEDULE XIX
Lease Assignments
NONE
SCHEDULE XX
Taxes
NONE
SCHEDULE XXI
Permitted FF&E Financing
With respect to each Individual Property, two percent (2.0%) of Gross Income
from Operations for the full calendar month preceding the date of the
calculation
SCHEDULE XXII
Property Manager
Property Address Property Manager
-------- ------- ----------------
Wyndham Hotel ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Wyndham Management Corporation
Doubletree Club Hotel Miami, FL DT Management, Inc.
Doubletree Hotel Glenview, IL PAH Management Corporation
Hilton Hotel Cleveland South Independence, OH PAH Management Corporation
Radisson Inn Towne & Country Houston, TX PAH Management Corporation
Doubletree Club Hotel Des Plaines, IL DT Management, Inc.
Doubletree Hotel Tallahassee, FL DT Management, Inc.
Hilton Gateway Plaza Newark, NJ PAH Management Corporation
Hilton Hotel Parsippany, NJ PAH Management Corporation
Radisson Inn Burlington, VT PAH Management Corporation
Crowne Plaza Ravinia Atlanta, GA PAH Management Corporation
Wyndham Bel Age West Hollywood, CA Wyndham Management Corporation
Wyndham Emerald Plaza San Diego, CA Wyndham Management Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ Wyndham Management Corporation
Wyndham Buttes Resort Tempe, AZ Wyndham Management Corporation
Wyndham Hotel Lisle, IL Wyndham Management Corporation
Wyndham NW Chicago Itasca, IL Wyndham Management Corporation
Wyndham Hotel Indianapolis, IN Wyndham Management Corporation
Wyndham Garden Los Colinas Dallas, Texas Wyndham Management Corporation
SCHEDULE XXIII
Non-Wyndham Properties
--------------------------------------------------------------------------------
Doubletree Hotel (Glenview, IL)
--------------------------------------------------------------------------------
Hilton Hotel Cleveland South (Independence, OH)
--------------------------------------------------------------------------------
Radisson Inn Towne & Country (Houston, TX)
--------------------------------------------------------------------------------
Hilton Gateview Plaza (Newark, NJ)
--------------------------------------------------------------------------------
Hilton Hotel (Parsippany, NJ)
--------------------------------------------------------------------------------
Radisson Inn (Burlington, VT)
--------------------------------------------------------------------------------
Crowne Plaza Ravinia (Atlanta, GA)
--------------------------------------------------------------------------------
Doubletree Club Hotel (Miami, FL)
--------------------------------------------------------------------------------
Doubletree Club Hotel (Des Plaines, IL)
--------------------------------------------------------------------------------
Doubletree Hotel (Tallahassee, FL)
--------------------------------------------------------------------------------
SCHEDULE XXIV
Mezzanine Borrowers
SCHEDULE XXV
Condemnations
A-189
SCHEDULE XXVI
Lease Exceptions
1. Rent under that certain lease dated as of January 1, 2002 between
Doubletree Club Hotel, as landlord, and Societe International De
Telecommunications Aeronautiques, as tenant, (the "Societe
International Lease") is required to be paid on a semi annual basis
pursuant to the terms of the Societe International Lease.
2. Rent under that certain lease dated August 7, 1995 between Parsippany
Hotel Joint Venture, as landlord and The Prudential Insurance Company
of American, as tenant, (the "Prudential Lease") is required to be
paid on an annual basis pursuant to the terms of the Prudential Lease.
A-190
SCHEDULE XXVII
FF&E Deposits
WYNDHAM PORTFOLIO
INITIAL FF&E RESERVES
To be required within 12 months from date of closing or an earlier date
if required by code, statute, or franchise agreements.
Property Description Reserve
----------------------------------------------------------
Doubletree Club Des Plaines FF&E Reserves 206,265
----------
Total $ 206,265
Doubletree Club Hotel - Miami FF&E Reserves 126,525
----------
Total $ 126,525
Doubletree Hotel Tallahassee FF&E Reserves 718,958
----------
Total $ 718,958
Wyndham Buttes Resort FF&E Reserves 141,509
----------
Total $ 141,509
----------------------------------------------------------
TOTAL 1,193,257
==========================================================
A-191
EXHIBIT A
[TO BE ADDED]
Property Account Bank
Property Account Agreement
EXHIBIT B
Tenant Notice Letter
TENANT DIRECTION LETTER
, 200
--------------- ---
[Addressee]
Re: Payment Direction Letter for
-------------------
(the "Property")
-----------------------------------
Dear [______]:
, a ("Borrower"),
------------------------------- --------------------------
the owner of the Property, has mortgaged the Property to ▇▇▇▇▇▇ ▇▇▇, Inc.
(together with its successors and assigns, "Lender") and has agreed that all
rents due for the Property will be paid directly to a bank selected by Borrower
and approved by Lender. Therefore, from and after the date hereof, all rent to
be paid by you under the Lease between Borrower and you (the "Lease") should be
sent directly to the following address:
[BANK'S ADDRESS]
-----------------------------
-----------------------------
or by wire transfer to:
Bank:
ABA No.:
Account No.:
Account Name: Clearing Account, ▇▇▇▇▇▇ ▇▇▇, Inc.
-----------
All checks should be made out to " ".
---------------------------------
These payment instructions cannot be withdrawn or modified without the
prior written consent of Lender or its agent ("Servicer"), or pursuant to a
joint written instruction from Borrower and Lender or Servicer. Until you
receive written instructions from Lender or Servicer, continue to send all rent
payments due under the Lease to . All rent payments must be
-----------------
delivered to no later than the day on which such amounts are
-----------------
due under the Lease.
If you have any questions concerning this letter, please contact
of Borrower at or of
------------------ ---------------- ----------------------
Lender at or of Servicer at
---------------- ---------------- ----------------
We appreciate your cooperation in this matter.
BORROWER
, a
-------------------------- ---------
By: , a ,
-------------------- ----- ----------
its
---------------
By:
--------------------------------------
Name:
Title:
EXHIBIT C
Form of Assignment of Interest Rate Cap
ASSIGNMENT OF INTEREST RATE CAP AGREEMENT
AND SECURITY AGREEMENT
THIS ASSIGNMENT OF INTEREST RATE CAP AGREEMENT AND SECURITY AGREEMENT
("Assignment") is made as of the day of June, 2003, by the parties listed on
---
Schedule A attached hereto, each having an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Borrower") to ▇▇▇▇▇▇ ▇▇▇ INC., a Delaware
corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, individually and as Agent for one or more Co-Lenders ("Lender").
RECITALS:
A. Lender has advanced a loan to Borrower in the principal sum of
DOLLARS ($_________________) (the "Loan") advanced pursuant to
-----------------
that certain Loan Agreement of even date herewith between Borrower and Lender
(together with all extensions, renewals, modifications, substitutions and
amendments thereof, the "Loan Agreement").
B. The Loan is secured by, among other things the "Security
Instruments" (as defined in the Loan Agreement) which grants Lender a first lien
on the properties encumbered thereby (collectively, the "Property") and is
further evidenced by the Note (as defined in the Loan Agreement). The Note, the
Loan Agreement, the Security Instruments, this Assignment and any of the other
documents evidencing or securing the Loan or executed or delivered in connection
therewith are collectively referred to as the "Loan Documents."
C. Lender requires that Borrower assign to Lender as additional
security for the payment of the Loan and the observance and performance by
Borrower of the terms, covenants and conditions of the Loan Agreement, the Note,
the Security Instruments and the other Loan Documents on the part of Borrower to
be observed and performed, all of Borrower's right, title and interest in and to
all payments to be made to Borrower pursuant to that certain [Rate Cap
Transaction Agreement/Confirmation] in the notional amount of $ dated
---------
June , 2003 (the "Cap Agreement") between [_________________] (the "Cap
----
Seller") and Borrower.
AGREEMENT:
For good and valuable consideration the parties hereto agree as
follows:
1. Assignment of the Cap Agreement.
(a) As additional collateral security for the Loan and the
observance and performance by Borrower of the terms, covenants and conditions of
the Loan Agreement, the
Note, the Security Instruments and the other Loan Documents on the part of
Borrower to be observed or performed, Borrower hereby transfers, sets over and
assigns to Lender all of Borrower's right, title and interest in and to all
payments to be made to Borrower from the Cap Seller pursuant to the Cap
Agreement ("Cap Agreement Payments"). Subject to the provisions of the Loan
Agreement, Lender, in its sole and absolute discretion, may use such Cap
Agreement Payments for any purpose, including but not limited to (i) payment of
monthly interest payments due under the Note, (ii) if an Event of Default
exists, repayment of any indebtedness secured by the Security Instruments,
including but not limited to principal prepayments and the prepayment
consideration due upon a full or partial prepayment (as applicable); provided,
however, that such application of funds shall not cure or be deemed to cure any
Event of Default or default thereunder; (iii) reimbursement of Lender for all
losses or expenses (including, without limitation, reasonable legal fees)
suffered or incurred by Lender as a result of such Event of Default or default
hereunder payable by Borrower pursuant to the terms of the Loan Documents; or
(iv) payment of any amount expended in exercising any and all rights and
remedies with respect to the Loan Documents, available to Lender at law or in
equity or under this Agreement or under the Loan Agreement, the Note, the
Security Instruments or any of the other Loan Documents.
(b) The Cap Seller shall be entitled to conclusively, without
liability, rely, without investigation, on any notice or instructions
(including, without limitation, with respect to the Cap Agreement Payments)
received by the Cap Seller from Lender, or Lender's successors and/or assigns.
2. Borrower's Covenants. Borrower hereby covenants with Lender that
during the term of this Assignment: (a) Borrower shall fulfill and perform each
and every term, covenant and provision of the Cap Agreement to be fulfilled or
performed by Borrower thereunder, if any, (b) Borrower shall, in the manner
provided for in this Assignment, give prompt notice to Lender of any notice
received by Borrower under the Cap Agreement, together with a complete copy of
any such notice, and (c) Borrower shall not terminate or amend any of the terms
or provisions of the Cap Agreement, except as may be expressly permitted
pursuant to the terms of the Cap Agreement, without the prior written consent of
Lender, which consent may be withheld by Lender in Lender's sole discretion.
3. Governing Law. This Assignment shall be deemed to be governed,
construed, applied and enforced in accordance with the laws of the State of New
York and the applicable laws of the United States of America.
4. Notices. All notices or other written communications hereunder
shall be deemed to have been properly given and become effective as provided in
the Loan Agreement.
Notices to the Cap Seller shall be sent as follows:
----------------------
----------------------
----------------------
Attention:
----------
Facsimile No.:
----------
5. No Oral Change. This Assignment, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Borrower or Lender, but only by
an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
6. Liability. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Assignment shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.
7. Inapplicable Provisions. If any term, covenant or condition of this
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.
8. Headings, etc. The headings and captions of various paragraphs of
this Assignment are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
9. Duplicate Originals; Counterparts. This Assignment may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Assignment may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Assignment. The failure of any party hereto
to execute this Assignment, or any counterpart hereof, shall not relieve the
other signatories from their obligations hereunder.
10. Number and Gender. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
11. Secondary Market. Lender may sell, transfer and deliver the Note
and assign the Security Instrument, this Assignment and the other Loan Documents
in the secondary mortgage market whether or not in connection with such sale,
Lender may retain or assign responsibility for servicing the Loan, including the
Note, the Security Instrument, this Assignment and the other Loan Documents, or
may delegate some or all of such responsibility and/or obligations to a servicer
including, but not limited to, any subservicer or master servicer, on behalf of
the Investors. All references to Lender herein shall refer to and include any
such servicer to the extent applicable.
12. Miscellaneous.
(a) Wherever pursuant to this Assignment (i) Lender exercises any
right given to it to approve or disapprove, (ii) any arrangement or term is to
be satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, 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
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.
(b) Wherever pursuant to this Assignment it is provided that Borrower
pay any costs and expenses, such costs and expenses shall include, but not be
limited to, reasonable legal fees and disbursements of Lender, in connection
with retained firms.
(c) Nothing herein is intended, and nothing herein shall be construed,
to impose upon Lender any liability or obligation of Borrower under the Cap
Agreement.
13. Right to Cure Defaults. In addition to, and in no way limiting
other remedies available to Lender under this Assignment, the Loan Agreement,
the Note, the Security Instruments, or the other Loan Documents, if Borrower
shall default in the performance or observance of any term, covenant or
condition of the Cap Agreement on the part of Borrower to be performed or
observed, then, without limiting the generality of the other provisions of this
Assignment or the Loan Agreement, and without waiving or releasing Borrower from
any of its obligations hereunder, Lender shall have the right, but shall be
under no obligation, to pay any sums and to perform any act or take any action
as may be appropriate to cause all of the terms, covenants and conditions of the
Cap Agreement on the part of Borrower to be performed or observed or to be
promptly performed or observed on behalf of Borrower, to the end that the rights
of Borrower in, to and under the Cap Agreement shall be kept unimpaired and free
from default. If Lender shall make any payment or perform any act or take action
in accordance with the preceding sentence, Lender will notify Borrower of the
making of any such payment, the performance of any such act, or the taking of
any such action and Borrower shall within ten (10) days after request by Lender,
reimburse Lender for same. Any such payment made or sums expended by Lender on
behalf of Borrower shall be added to the Debt.
14. Remedies Cumulative. None of the rights and remedies herein
conferred upon or reserved to Lender under this Assignment are intended to be
exclusive of any other rights, and each and every right shall be cumulative and
concurrent, and may be enforced separately, successively or together, and may be
exercised from time to time as often as may be deemed necessary by Lender. In
addition, Lender may exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code.
15. Further Assurances. Borrower shall, at its sole expense, give,
execute, deliver, file and/or record any financing statement, continuation
statement, notice, instrument, document, agreement or other papers that may be
necessary or desirable to create, preserve, perfect or validate the security
interest granted pursuant hereto or to enable Lender to exercise and enforce its
rights hereunder with respect to such security interest.
16. Security Agreement. This Assignment is a "security agreement"
within the meaning of the Uniform Commercial Code.
17. Cap Seller Notification Letter. Borrower represents, warrants and
covenants that concurrently with the execution of this Assignment, Borrower
shall send a notice, in the form of Exhibit A attached hereto, to Cap Seller.
18. Borrower Representations and Warranties.
(a) Borrower represents and warrants to Lender that (i) a true and
correct copy of the Cap Agreement has been delivered to Lender and the Cap
Agreement has not been
amended or modified in any respect, (ii) Borrower has all necessary right, power
and authority to enter into the Cap Agreement and perform its obligations
thereunder, (iii) Borrower is in compliance with all of the terms and conditions
of the Cap Agreement and has performed all of its obligations thereunder, (iv)
Borrower has all necessary right, power and authority to make the assignment and
grant the security interest herein provided for, (v) Borrower's interest in the
Cap Agreement and Cap Agreement Payments is free and clear of any liens or
claims in favor of any other person, firm or corporation and (vi) Borrower's
only place of business and the only location where Borrower maintains records
relating to accounts or the Cap Agreement is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
(b) Borrower represents and warrants to Lender that (i) it will not
without Lender's prior written consent, request or direct the Cap Seller to pay
any Cap Agreement Payments to an account other than the Lockbox Account and (ii)
it will not assign, transfer or grant any lien on the Cap Agreement or Cap
Agreement Payments.
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF the undersigned have executed this Assignment as of
the date first written above.
BORROWER
, a
-------------------------- ----------
By: , a
-------------------- -----
, its
---------- ---------------
By:
--------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇ INC., a Delaware corporation
By:
------------------------------------
Name:
Title:
Exhibit A
[CAP SELLER]
Re: Rate Cap Transaction Agreement/Confirmation in the notional amount
of $ dated as of June , 2003 (the "Cap Agreement") between
---------- --
[______________], as cap seller ("Cap Seller") and
-----------------
("Borrower").
Gentlemen:
On June , 2003, ▇▇▇▇▇▇ ▇▇▇, Inc. as lender ("Lender") funded a first
--
mortgage loan (the "Loan") to Borrower, as borrower, encumbering
. This letter shall constitute notice to Cap Seller that (a)
-----------------
Borrower has granted a security interest in the Cap Agreement in favor of
Lender, to secure certain of Borrower's obligations under the Loan and (b)
Borrower has agreed not to terminate or amend any of the terms or provisions of
the Cap Agreement, except as may be expressly permitted pursuant to the terms of
the Cap Agreement, without the prior written consent of Lender.
Borrower hereby authorizes and directs Cap Seller as of the date
hereof to make all payments due Borrower under the Cap Agreement by wire
transfer to the following account:
[Bank's Address]
Account No.
----------------
Attention:
----------------
ABA No.:
----------------
The instructions set forth herein are not subject to modification or
amendment except by written notice executed by Lender only.
Sincerely,
BORROWER
, a
-------------------------- ----------
By: , a
-------------------- -----
, its
---------- ---------------
By:
--------------------------------
Name:
Title:
ACKNOWLEDGMENT AND AGREEMENT
Cap Seller acknowledges notice of the security interest of Lender and hereby
confirms that it will honor the above instructions. Furthermore, the Cap Seller
hereby agrees that it shall not amend, modify, or terminate the Cap Agreement,
except as may be expressly permitted pursuant to the terms of the Cap Agreement,
without the prior written consent of Lender.
[CAP SELLER]
By:
------------------------------------
Name:
Title:
Dated as of: June , 2003
--
EXHIBIT D
, 200
----------------- -
[ADDRESSEE]
Re: Payment Direction Letter for (describe property) (the "Property")
[VISA/MASTERCARD/AMERICAN EXPRESS/
DISCOVER Account No: _________________]
To Whom it May Concern:
A new cash management system has been adopted in connection with our
loan from ▇▇▇▇▇▇ ▇▇▇, Inc., its successors and/or assigns ("Lender").
Consequently, from and after the date of this letter, all payments due the
undersigned should be delivered as follows:
(a) If by check, money order, or its equivalent, please mail such items to:
-------------------------
-------------------------
-------------------------
Attention:
--------------
(b) If by wire transfer to:
Payee:
-----------------
ABA Routing #:
-----------------
For Account: Account #:
-----------------
Bank Contact:
-----------------
This payment direction may not be rescinded or altered, except by a
written direction signed by Lender or its agent.
We appreciate your cooperation.
Very truly yours,
BORROWER
, a
-------------------------- ---------
By: , a
-------------------- ------
, its
---------- ---------------
By:
--------------------------------
Name:
Title:
EXHIBIT E
STATE OF
------------------
COUNTY OF
-----------------
IRREVOCABLE PROXY
This Irrevocable Proxy (this "Proxy") given this day of June , 2003
--- --
by and between , having its
---------------------- ----------------------
principal place of business at
(hereinafter referred to as
-------------------------------------------
"Borrower") and ▇▇▇▇▇▇ ▇▇▇ INC., a Delaware corporation, having an address at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (hereafter referred to as
the "Lender").
WHEREAS Lender intends to make a loan (the "Loan") to Borrower and its
affiliates in the principal amount of [$_____________], or so much thereof as
has been advanced pursuant to the terms of that certain Loan Agreement dated the
date hereof between Borrower and its affiliates and Lender (said agreement, as
the same may be extended, renewed, modified, substituted or amended, the "Loan
Agreement"), which Loan is evidenced by that certain Promissory Note dated as of
the date hereof by Borrower and its affiliates in favor of Lender in the
principal sum of [$_____________] (said note, as the same may be extended,
renewed, modified, substituted or amended, collectively, the "Note"). The Note
is to be secured by a first mortgage on the units owned by Borrower in the
Condominium (the "Condominium") and more particularly described on
-------------
Exhibit A attached hereto (the "Units"); and
WHEREAS Lender is willing to make the Loan to Borrower only if Borrower
grants to Lender an irrevocable proxy to vote and otherwise act as a unit owner
with respect to Borrower's ownership of the Unit upon (1) the occurrence and
during the continuance of an "Event of Default" as defined in the Loan Agreement
and/or (2) subject to the provisions of Section 6.4 of the Loan Agreement, the
occurrence of a casualty or condemnation affecting the Unit;
NOW, THEREFORE, Borrower and Lender agree as follows:
Section 1. Irrevocable Proxy.
a. The Borrower irrevocably appoints the Lender, its successors and assigns
as its true and lawful attorney and proxy with full power of substitution for
and in its name, to vote and otherwise act with respect to the Units at all
annual, special, and other meetings of the unit owners of the Condominium (or by
written consent in lieu thereof) and at any other time Borrower is required to
vote or act as a unit owner.
b. The Borrower understands and agrees that the appointment and proxy
granted to the Lender by Section 1(a) of this Proxy is irrevocable and coupled
with an interest and, except as otherwise provided in Section 2 of this Proxy,
shall not terminate by operation of law, whether by dissolution, bankruptcy, or
the occurrence of any other event.
c. Borrower and Lender further understand and agree that this Proxy relates
to all voting rights whether limited, fixed, or contingent with respect to the
ownership of the Unit.
Section 2. Term. This Proxy shall terminate upon repayment in full of the
Loan, all interest due thereon and all other amounts owed by Borrower to Lender
under the Note, the Loan Agreement, the Security Instrument and other Loan
Documents (as defined in the Loan Agreement) at the time of such repaying of the
Loan. Lender shall execute any document reasonably requested by Borrower showing
such termination.
Section 3. Lender's Obligation. Lender agrees to exercise its rights under
this Proxy only upon (1) the occurrence and during the continuance of an Event
of Default and/or (2) subject to the provisions of the Section 6.4 of the Loan
Agreement, the occurrence of a casualty of a condemnation affecting the Unit.
Section 4. Benefit and Burden. This Proxy shall inure to the benefit of,
and shall be binding upon, the Borrower and the Lender and their respective
successors and assigns.
Section 5. Modifications. This Proxy or any of its provisions may be
modified, waived, discharged, or terminated only by an instrument in writing
executed by the Borrower and the Lender.
Section 6. Waiver. The failure of the Borrower or the Lender, or both, to
comply, or insist upon compliance, with any provision of this Proxy at any time
shall not be deemed (i) to affect the validity or enforceability of this Proxy,
(ii) to be a waiver of any other provisions of this Proxy at that time, or (iii)
to be a waiver of that provision or any other provisions of this Proxy at any
other time.
Section 7. Liability of the Lender. The Lender shall not be liable by
reason of any act or omission to act performed or omitted by it in connection
with any of the rights specified in Section 1(a) of this Proxy, except for
actual fraud, gross negligence, or criminal conduct.
Section 8. Proxy Binding upon Transferees. If, at any time or from time to
time, title to some or all of the Units are transferred by Borrower with
Lender's consent, the transferee shall take title thereto pursuant to all
provisions, conditions, and covenants of this Proxy, and, as a condition
precedent to such transfer, the transferee shall agree (for, and on behalf of,
himself,
herself, or itself; his, her, or its legal and personal representatives; and
his, her or its transferees and assigns) in writing to be bound by all
provisions of this Proxy as a party to this Proxy.
Section 9. Governing Law. This Proxy shall be deemed to be governed,
construed, applied and enforced in accordance with the laws of the State of New
York and the applicable laws of the United States of America.
Section 10. Additional Advance. Borrower acknowledges that this Proxy shall
remain in full force and effect in the event that Lender advances Borrower
additional funds pursuant to the terms of the Loan Agreement or the other Loan
Documents.
IN WITNESS WHEREOF, the Borrower and Lender have executed this Proxy under
on the day and year first above written.
BORROWER:
LENDER:
▇▇▇▇▇▇ ▇▇▇, INC.
By:
------------------------------------
Name:
Title:
EXHIBIT F
Excluded Group
EXHIBIT G
Form of Management Agreement
Addendum to Management Agreement (the "Agreement")
dated , 20
-------- --- --
between Wyndham Management Corporation,
a Delaware corporation ("Manager") and
----------
a ("Owner")
----------------------------
1. Project Name, Location and Term Expiration Date.
Project Name:
Project Location:
State:
County:
City:
2. Definitions. Each of the following terms shall have the meaning
indicated:
Base Fee in respect of any period shall mean an amount equal to two percent
(2.0%) of Gross Revenues for such period.
Executive Personnel shall mean all or any one of the following: general
manager, hotel manager, guest services manager, food and beverage manager,
housekeeping manager, food production manager, director of sales, property
accountant and any other key executive of the Project designated by Manager.
Management Fee in respect of any period shall mean the sum of the Base Fee
and the Trade Name Fee payable for such period.
Term shall mean that period commencing on the Effective Date and ending on
fifth (5th) anniversary of the last day of the month in which the Effective Date
occurs], unless the Agreement shall be sooner terminated or extended as therein
provided, in which case the word "Term" shall mean such lesser or extended
period of time.
Trade Name Fee in respect of any period shall mean an amount equal to one
half of one percent (0.5%) of Gross Room Revenues for such period. Trade Name
Fee is payable in
consideration of the benefits to be derived by the Project from Manager's use of
the "Wyndham" trade name in connection with Manager's operation of the Project
pursuant to the Agreement, and such Fee is in no way intended to confer upon
Owner any right in or right to use such trade name or to otherwise detract from
the provisions of Section 13.1.
3. Payment of Management Fee. On or before the tenth (10th) day of each
calendar month during the Term, and at the expiration or sooner termination of
the Term, Owner shall pay to Manager an amount equal to the Management Fee for
the period from the commencement of the then current Operating Year to the end
of the immediately preceding calendar month or the date of such expiration or
sooner termination of the Term, as the case may be, less the aggregate amount of
monthly payments theretofore paid in respect of the Management Fees for such
Operating Year.
4. Year-End Adjustment to Management Fees. If for any Operating Year, the
aggregate amount of the monthly payments of the Management Fee theretofore paid
by Owner to Manager shall be more or less than the Management Fee payable for
such Operating Year based upon the final determination of such Management Fee as
reflected in the annual financial statements prepared and delivered in
accordance with Section 6.3, then, by way of year-end adjustment, within fifteen
(15) days after the delivery of such annual financial statements to Owner,
Manager shall pay into the Operating Accounts the amount of any overpayment or,
subject to the terms of the Operating Lease and any applicable Mortgage,
withdraw from the Operating Accounts the amount of any underpayment; provided,
however, that in the event that funds in the Operating Accounts are not
sufficient or are not available to pay fully the Management Fee payable to
Manager hereunder, Owner shall promptly pay to Manager on demand the amount of
such deficiency.
5. Marketing, National Sales Office, Centralized Reservations Services and
Brand Programs.
(a) To the extent provided generally by Manager for the benefit of the
Project and other Wyndham hotels in the same division as the Hotel, Manager will
provide for the Project during the Term marketing services (the "Marketing
Services") consisting of chain-wide and/or division level marketing programs,
marketing collateral, research services, advertising and public relations
efforts.
(b) On or before the tenth (10th) day of each calendar month during the
Term, Owner shall pay or reimburse Manager, for the provision of the Marketing
Services, an amount to be provided for in the Annual Plan (the "Marketing
Contribution") that is one and one-half percent (1.5%) of Gross Room Revenues of
the Project (or such other amount as may be provided for in the Annual Plan) for
the period from the commencement of the then current Operating Year to the end
of the immediately preceding calendar month or the date of the expiration or
sooner termination of the Term, as the case may be, less the aggregate amount of
monthly payments theretofore paid in respect of the Marketing Contribution for
such Operating Year. Manager in its discretion may collect less than the amount
provided for in the preceding sentence. The Marketing Contribution will be
collected and applied to pay actual costs incurred and allocated in respect of
the provision of the Marketing Services. A marketing budget setting forth the
estimated costs and expenses of the Marketing Services for each Operating Year
shall be set forth in each Annual Plan
delivered under this Agreement. The Marketing Contribution shall not include,
and Owner shall pay separately, the costs of any local, regional or
property-specific advertising and the costs of any third party marketing partner
programs (such as frequent flyer and similar programs) in which the Project
participates that are direct-billed to participating hotels, such as costs of
airline mileage or other direct operating costs to marketing partners.
(c) Manager will collect the Marketing Contribution payable hereunder and
shall expend the same at such time and in such manner as it reasonably deems
appropriate for the provision of the Marketing Services. Prior to the
expenditure thereof, the collected Marketing Contributions may be held or
maintained in one or more accounts, any of which also may include funds other
than Marketing Contributions, but Manager in any event shall account to Owner
for the Marketing Contribution collected hereunder. Manager will permit Owner
access to Manager's records concerning the holding and expenditure of such
Marketing Contribution at any reasonable time or times during Manager's regular
business hours.
(d) Notwithstanding the foregoing provisions of this Section 5 of this
Addendum, any service that otherwise would constitute a marketing service
covered by the marketing contribution hereunder instead may be provided on a
cost allocation basis administered in a reasonable and non-discriminatory manner
(and, in such event, an appropriate adjustment will be made to the amount of the
Marketing Contribution). In either case, the amount thereof shall be provided
for in the Annual Plan.
(e) Owner shall pay the Project's allocable share of the cost of Manager's
national sales office efforts that relate to transient sales services. The
Project's allocable share of Manager's cost of providing transient sales
services shall be one-half percent (0.5%) of Gross Room Revenues of the Project.
(f) Manager shall provide Owner with the benefits of the centralized
reservations system in use for other Wyndham hotels generally. Centralized
reservation costs incurred in respect of the Project shall be paid or reimbursed
on the basis the cost of handling reservations made and actually consumed at the
Project.
(g) The Hotel also shall participate in all programs that from time to time
are generally applicable to Wyndham hotels in the same division as the Hotel,
including, but not limited to, any "frequent guest" or similar program. The
costs related thereto shall be provided for in the Annual Plan.
6. Accounting and Related Services. To cover the costs and expenses
incurred by Manager or any of its Affiliates in providing property accounting,
management information and internal audit services to be provided by Manager
hereunder, Owner shall pay Manager, on a monthly basis, an amount equal to
$5,576.00 per month, subject to adjustment based on the amount charged to other
Wyndham Garden hotels managed by Manager. To the extent the Term of this
Agreement commences or ends on a day other than the first day of a month, the
fee to be paid under this provision shall be pro rated to cover the actual
number of days included in the Term.
7. Special Provisions in Favor of ▇▇▇▇▇▇ Brothers Holdings Inc.. In the
event and so long as there exists a lien on the Hotel in favor of ▇▇▇▇▇▇ ▇▇▇
Inc., or any of its affiliates, its successors, and/or assigns to secure the
repayment of that certain mortgage loan in the original principal amount of
$ (the "Loan") made on or about the date of the Agreement by
----------------
▇▇▇▇▇▇ ▇▇▇ Inc. to Owner and eighteen (18) other entities under direct or
indirect common ownership with Owner, the Agreement shall be modified as
follows:
(i) Section 3.1(a) shall be amended to add the following proviso at
the end of such subsection"; provided, however, that Manager shall not enter
into any contracts on behalf of Owner that Owner would be prohibited from
entering into pursuant to the loan documents executed in connection with the
Loan."
(ii) Section 8.3 shall be amended to add the following proviso to the
beginning of the third sentence thereof: Subject to the terms of the loan
documents executed in connection with the Loan,".
(iii) Section 10.2 shall be deleted, it being understood that Owner
cannot assign or transfer Owner's interests under the Agreement except with
Manager's prior written consent.
(iv) Section 10.3 shall be of no force or effect.
(v) Section 11.1 shall be amended to replace with entire introductory
paragraph(through the first colon in such paragraph) with the following:
"Manager and Owner acknowledge that the obligations of Owner under this
Agreement shall be subject and subordinate to Owner's obligations or
restrictions under the loan documents executed in connection with the Loan as
provided hereunder and in the Consent, Subordination and Recognition Agreement
between Lender, Owner and Manager executed with the Loan. To the extent of any
inconsistencies between this Agreement and the loan documents executed in
connection with the Loan, with respect to approval periods for actions or
consents by Owner, the terms of this Agreement shall be subject to the terms of
such loan documents.
(vi) Section 12.2(a) shall provide in its entirety as follows:
(a) If Owner shall fail to make any payment or to perform any act
to be made or performed by Owner pursuant to this Agreement and such
failure shall continue for a period of ten (10) days after notice
thereof is given to Owner by Manager, then Manager may (but shall not
be obligated to) without further notice to, or demand upon, Owner, and
without waiving or releasing Owner from any obligations under this
Agreement, make such payment (either with its own funds or with funds
withdrawn for such purpose from the Operating Accounts) or perform
such act. All sums so paid by Manager and all necessary incidental
costs and expenses incurred by Manager in connection with the
performance of any such act, together with interest thereon at the
Default Rate from the date of making such expenditure or expenditures
by Manager, shall be payable to Manager upon demand.
(vii) Section 12.4(2) shall be of no force or effect.
(viii) The last sentence of Section 12.5 shall read in its entirety as
follows:
Owner shall bear the severance and related costs of terminating such
employees and of any applicable federal or state plant closing or
similar laws in connection with any termination of this Agreement;
provided, however, that Manager shall obtain Owner's prior written
approval before making severance payments to any employee in an amount
which exceeds that to which such employee is entitled pursuant to
Manager's then-current company-wide policy.
(ix) Section 13.2 shall be amended and restated to read in its
entirety as follows:
Notwithstanding any other provision in this Agreement to the contrary,
Manager shall be excused from the performance of its obligations under
this Agreement other than the obligation to provide use of any and all
names, trade names, trademarks and service marks owned in whole or in
part by Manager or an Affiliate of Manager, (the obligation to provide
the foregoing being hereby affirmed and acknowledged): (i) to the
extent and whenever Manager shall be prevented from such compliance by
Force Majeure, (ii) to the extent of any breach by Owner of any
provision of this Agreement, including but not limited to a breach by
Owner of any of its obligations under Sections 3.3 and 3.4 of this
Agreement, and (iii) to the extent and whenever there is provided in
this Agreement a limitation upon the ability of Manager to expend
funds in respect of the Project. At any time after the occurrence and
during the continuation of an event of default hereunder on the part
of Owner and after the expiration of all applicable cure or grace
periods, then, in addition to any other right or remedy available to
Manager by reason thereof, Manager may, in its sole and absolute
discretion, and for so long as Manager shall be so excused, exclude
the use of any and all names, trade names,
trademarks and service marks owned in whole or in part by Manager or
an Affiliate or Manager, whether alone or in conjunction with any
other design, emblem, slogan, word or words, in connection with the
Project. The provisions of this Section shall operate without
prejudice to any other remedy which Manager may have under the terms
of this Agreement.
(x) Section 13.8 shall be amended to add the following after the word
communication in the second to last line thereof: "(which approval shall not be
unreasonably withheld or delayed)".
(xi) Section 13.20 shall be amended to replace the last sentence
thereof with the following: "Permitted Persons shall be informed of the
confidential nature of the information disclosed to them."
(xii) The words "five (5) business days" in the first sentence of
Section 13.21 are replaced with the words "ten (10) days."
For purposes of Section 13.8, Owner and Manager acknowledge that, as of the date
of the Agreement, they are Affiliates. Owner and Manager also acknowledge their
obligations under that certain Consent, Subordination and Recognition Agreement,
dated of even date with the Agreement, by and among Owner, Manager and ▇▇▇▇▇▇
Brothers Holdings, Inc.
8. Section References; Capitalized Terms. References in the preceding
paragraphs to any "Sections" which are not set forth in this Addendum are
references to the specified Sections of the Agreement. Terms with initial
capital letters that are not defined in this Addendum but are defined in Section
1.2 of the Agreement are used in this Addendum as so defined (subject to the
modification of any such definitions in accordance with the terms hereof).
EXHIBIT G
----------
MANAGEMENT AGREEMENT
BY AND BETWEEN
----------
"Owner"
and
WYNDHAM MANAGEMENT CORPORATION
"Manager"
dated
,
--------------- ---------
TABLE OF CONTENTS
Page
----
-i-
ARTICLE I DEFINITIONS..........................................................................1
Section 1.1 Defined Terms........................................................................1
Section 1.2 Definitions..........................................................................1
ARTICLE II APPOINTMENT OF MANAGER AND RENEWAL RIGHTS............................................8
Section 2.1 Appointment of Manager...............................................................8
Section 2.2 Renewal of Term......................................................................8
ARTICLE III OPERATION OF THE PROJECT.............................................................8
Section 3.1 Duties and Authority of Manager......................................................8
Section 3.2 Leases and Concessions...............................................................9
Section 3.3 Working Capital......................................................................9
Section 3.4 Owner to Bear All Expenses...........................................................9
Section 3.5 Transactions with Affiliates.........................................................9
Section 3.6 Centralized or Pooled Purchasing....................................................10
ARTICLE IV PERSONNEL...........................................................................10
Section 4.1 Employment of Personnel.............................................................10
Section 4.2 Union Negotiations..................................................................10
Section 4.3 Payment of Employees................................................................10
Section 4.4 Personnel Accommodations............................................................10
Section 4.5 Employee Health Insurance...........................................................11
ARTICLE V REPAIRS, MAINTENANCE AND CAPITAL IMPROVEMENTS.......................................11
Section 5.1 Repairs and Maintenance.............................................................11
Section 5.2 Repairs and Replacements............................................................11
Section 5.3 Capital Improvements................................................................12
Section 5.4 Enforcement of Guaranties and Warranties............................................12
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Section 5.5 Ownership of Replacements...........................................................13
ARTICLE VI ANNUAL PLAN, BOOKS, RECORDS AND REPORTS.............................................13
Section 6.1 Annual Plan.........................................................................13
Section 6.2 Books and Records; Operating Accounts...............................................14
Section 6.3 Reports.............................................................................15
ARTICLE VII MANAGEMENT FEE, EXPENSE REIMBURSEMENT AND REMITTANCES TO OWNER......................15
Section 7.1 Management Fee......................................................................15
Section 7.2 Expense Reimbursement...............................................................15
Section 7.3 Purchasing and Technical Services Fees..............................................15
Section 7.4 Remittances to Owner................................................................15
ARTICLE VIII INSURANCE AND INDEMNITIES...........................................................16
Section 8.1 Insurance...........................................................................16
Section 8.2 Evidence of Insurance...............................................................16
Section 8.3 Investigation of Claims and Reports.................................................16
Section 8.4 Indemnities.........................................................................16
ARTICLE IX DAMAGE AND CONDEMNATION.............................................................18
Section 9.1 Damage or Destruction...............................................................18
Section 9.2 Condemnation........................................................................19
ARTICLE X ASSIGNMENT..........................................................................20
Section 10.1 Assignment by Manager...............................................................20
Section 10.2 Assignment by Owner.................................................................20
Section 10.3 Right of First Refusal..............................................................21
Section 10.4 Binding Effect......................................................................21
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ARTICLE XI OWNER'S COVENANTS, TITLE AND ENCUMBRANCES...........................................22
Section 11.1 Covenants and Warranties............................................................22
Section 11.2 Estoppel Certificates...............................................................23
ARTICLE XII DEFAULT AND TERMINATION.............................................................23
Section 12.1 Events of Default...................................................................23
Section 12.2 Manager's Right to Perform Owner's Obligations......................................24
Section 12.3 Default Interest....................................................................25
Section 12.4 Special Right of Manager to Terminate...............................................25
Section 12.5 Termination of Employees............................................................25
ARTICLE XIII MISCELLANEOUS.......................................................................26
Section 13.1 Use of Names........................................................................26
Section 13.2 Limitations on Manager's Ability to Perform.........................................26
Section 13.3 Negation of Partnership or Joint Venture............................................27
Section 13.4 Right to Make Agreement.............................................................27
Section 13.5 Further Assurances..................................................................27
Section 13.6 Form of Documents and Evidence......................................................27
Section 13.7 Approvals by Manager................................................................28
Section 13.8 Sale of Securities..................................................................28
Section 13.9 Third Party Beneficiaries...........................................................28
Section 13.10 Notices.............................................................................28
Section 13.11 Waiver..............................................................................29
Section 13.12 Counterparts........................................................................29
Section 13.13 Captions............................................................................29
Section 13.14 Gender..............................................................................29
-iv-
Section 13.15 Unenforceable Provisions............................................................29
Section 13.16 Cumulative Remedies.................................................................29
Section 13.17 Entire Agreement....................................................................30
Section 13.18 GOVERNING LAW.......................................................................30
Section 13.19 Exhibits............................................................................30
Section 13.20 Confidentiality.....................................................................30
Section 13.21 Owner Approvals.....................................................................30
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WYNDHAM GARDEN MIDTOWN
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made and entered into as of
, (the "Effective Date") by and between
------------- ----
, whose address is 1950 Stemmons
--------------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Owner") and Wyndham Management
Corporation, a Delaware corporation, whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Manager").
RECITALS:
Owner owns fee simple title to the Site (hereinafter defined) and all
improvements now situated thereon.
Owner desires to retain Manager's services in managing and operating the
hotel situated on the Site and Manager is willing to provide such services, all
upon the terms and conditions set forth in this Agreement. For and in
consideration of the premises and of the mutual covenants and agreements set
forth herein, Owner and Manager agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. Certain terms in this Agreement have been given
specially defined meanings. The defined terms may be used in the singular or
plural or in varying tenses or forms, but such variations shall not affect their
defined meaning so long as they are written with initial capital letters.
Section 1.2 Definitions. As used herein, the following terms shall have the
respective meanings indicated (reference also is made to the Addendum for
certain other defined terms used in this Agreement):
Addendum shall mean the Addendum to Management Agreement attached to this
Agreement. The Addendum supplements and, in certain instances, modifies the
provisions set forth in Articles I through XIII of this Agreement. The Addendum
is incorporated by reference in this Agreement as if set forth in full herein.
To the extent of any conflict between the provisions of such Articles and the
provisions of the Addendum, the provisions of the Addendum shall control.
Affiliate shall mean any person or entity that directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with another person or entity. The term "control" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and shall in any event include the
ownership or power to vote
Management Agreement
fifty percent (50%) or more of the outstanding equity or voting interests,
respectively, of such other person. Without limiting the foregoing, an Affiliate
of Manager or Owner shall include each of Patriot American Hospitality, Inc.,
Wyndham International, Inc. and their respective Affiliates.
Annual Plan shall mean an annual plan for the operation of the Project
prepared by the Manager and approved by Owner in accordance with Section 6.1,
consisting of the Operating Budget, Capital Improvements Budget and FF&E Budget
and a description or narrative which shall reasonably describe the methods to be
employed and the strategies to be adopted in order to achieve the results set
forth in such Budgets.
Average Monthly Management Fee shall mean (a) after this Agreement has been
in effect for a period of at least twelve (12) calendar months, one-twelfth
(1/12) of the total Management Fees for the twelve (12) full calendar months
immediately preceding the event requiring a determination of the Average Monthly
Management Fee or (b) prior to such time as this Agreement has been in effect
for twelve (12) calendar months, the monthly average of the Management Fees for
the number of full calendar months during which this Agreement has been in
effect.
Base Fee shall have the meaning provided therefor in the Addendum.
Base Rate shall mean the prime rate (or base rate) reported in the Money
Rates column or comparable section of The Wall Street Journal as the rate then
in effect for corporate loans at large U.S. money center commercial banks,
whether or not such rate has actually been charged by any such bank. If no such
rate is reported in The Wall Street Journal or if such rate is discontinued,
then Base Rate shall mean such other successor comparable rate as Owner and
Manager may agree.
Capital Improvements shall mean any and all major alterations and
improvements to the Hotel and all major repairs and replacements to the
structural, mechanical, electrical, HVAC, plumbing or vertical transportation
elements of the Hotel other than certain non-routine repairs and maintenance to
the Project which are normally capitalized under generally accepted accounting
principles.
Capital Improvements Budget shall mean each annual budget prepared by the
Manager and approved by Owner as part of the Annual Plan, reflecting the
estimated costs for all Capital Improvements which in the reasonable opinion of
Manager are necessary to keep and maintain the Project during the applicable
Operating Year in good condition and in keeping with the Operating Standards.
Condemnation shall mean the acquisition of all or any portion of the
Project by any Governmental Authority having the power of condemnation or
eminent domain, by compulsory acquisition, conveyance in lieu of or under threat
of condemnation or like procedure.
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Management Agreement
Default Rate shall mean the lesser of (i) the Base Rate plus four percent
(4%) or (ii) the highest lawful rate permitted by applicable Legal Requirements.
Executive Personnel shall have the meaning provided therefor in the
Addendum.
Force Majeure shall mean acts of God, war, insurrection, civil commotion,
riots, strikes, lockouts, labor unrest, embargoes, shortages of labor or
materials specified or reasonably necessary in connection with the construction,
refurbishment, equipping, ownership or management of the Project, power failure,
fire, unavoidable casualties, Condemnation, failure of any applicable
Governmental Authority to issue required Governmental Permits and any other
occurrence, event or condition beyond the reasonable control of Owner or
Manager, whichever shall be applicable, provided that it is an extraordinary (as
opposed to a routine or cyclical) material event, and provided further, that
lack of funds shall not be deemed a cause beyond the reasonable control of
either party hereto unless such lack of funds is caused by the breach of the
other party's obligation to perform any obligations of such other party under
this Agreement.
FF&E shall mean all furniture, fixtures, furnishings and specialized
equipment and systems (exclusive of Operating Equipment) necessary or customary
(now or in the future) in the reasonable opinion of Manager in order to operate
the Project in accordance with the terms of this Agreement and the Operating
Standards, including but not limited to all equipment required for the operation
of kitchens, laundries, dry cleaning facilities and bars, special lighting and
other equipment, signs, carpets, drapes, shades, tapestries, pictures,
paintings, beds, mattresses, chairs, desks, tables, sofas, wall coverings,
televisions, radios, intercoms, telephones and office equipment and machinery.
FF&E Budget shall mean each annual budget prepared by the Manager and
approved by Owner as part of the Annual Plan, reflecting the estimated costs and
expenses for all FF&E which in the reasonable opinion of Manager are necessary
or customary in order to operate the Project during the applicable Operating
Year in accordance with the terms of this Agreement and the Operating Standards.
Governmental Authority shall mean the United States of America, any foreign
nation, any city, county, state, province, dominion, district, department,
territory or other political division thereof, or any political subdivision of
any of the foregoing, and any agency, department, commission, board, bureau,
court or instrumentality of any of them which now or hereafter has jurisdiction
over the Owner, the Manager, any part of the Project or operation or management
of the Project.
Governmental Permits shall mean all certificates, licenses and permits from
any Governmental Authority required to evidence full compliance by Owner or
Manager with all Legal Requirements or required to evidence conformance of the
Project with all Legal Requirements.
Gross Revenues in respect of any period shall mean all revenues, receipts
and income of every kind derived directly or indirectly during such period from
all or any part of the Project, as
-3-
Management Agreement
finally determined on an accrual basis in accordance with the Uniform System of
Accounts and generally accepted accounting principles consistently applied,
including but not limited to (i) all rentals and charges for guest rooms,
suites, meeting rooms, conference rooms, ballrooms and other public rooms,
including but not limited to all charges for room reservations and deposits not
refunded to guests; (ii) all sales of food and beverages, whether served on or
off the premises, including but not limited to all charges for room service,
banquets and catering fees; (iii) all sales or leases of miscellaneous and
sundry merchandise and services including but not limited to laundry, valet,
garage, parking, telephone, telex, check room, vault and other miscellaneous
services, cover and minimum charges for guest entertainment, fees charged for
the temporary use of facilities at the Project, all sales through vending
machines and all other receipts from business conducted by, through or under
Manager at, in, on, about or from the Project; (iv) all business interruption
insurance awards received in respect of the Project; (v) Condemnation awards for
temporary use of the Project; and (vi) all rentals, fees, commissions,
concessions and other payments derived from lessees, licensees and
concessionaires. Gross Revenues for any such period shall not include:
(1) Excise, sales and use taxes or similar impositions collected directly
from patrons or guests or included as part of the sales price of any goods or
services and paid to any Governmental Authority, such as gross receipts,
admission or similar equivalent taxes;
(2) Sales and other receipts of tenants, licensees and concessionaires,
except to the extent payable as rent under a lease or occupancy agreement;
(3) Insurance proceeds (subject, however, to the inclusion of business
interruption insurance awards as provided in clause (iv) above);
(4) Condemnation awards, except as provided in clause (v) above;
(5) Proceeds from financings or refinancings of the Project or any part
thereof; and
(6) Proceeds from sale of the Project.
Gross Room Revenues in respect of any period shall mean all revenues
derived during such period, as finally determined on an accrual basis in
accordance with the Uniform System of Accounts and generally accepted accounting
principles consistently applied, from (i) rentals and charges for guest rooms
and suites ("Rooms"); (ii) all business interruption insurance awards in respect
of the Rooms; and (iii) Condemnation awards for temporary use of the Rooms.
Hazardous Materials shall mean (i) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.),
as amended from time to time, and regulations promulgated thereunder; (ii) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as
amended from time to time, and regulations promulgated thereunder (including
petroleum-based products as described therein); (iii) asbestos in any quantity
or form
-4-
Management Agreement
which would subject it to regulation under any applicable environmental law;
(iv) polychlorinated biphenyls; (v) any substance, the presence of which on the
Project is prohibited by any Legal Requirements; (vi) underground storage tanks;
and (vii) any other substance which by any Legal Requirements requires special
handling in its collection, storage, treatment or disposal. In no event,
however, shall the term "Hazardous Materials" include (1) chemicals routinely
used in office areas or (2) janitorial supplies, cleaning fluids or chemicals
necessary for the day-to-day operation or other maintenance of the Project if
the disposition, handling, storage or quantity of the items described in (1) and
(2) herein are at all times in compliance with all applicable Legal
Requirements.
Hazardous Materials Contamination shall mean the contamination (whether
presently existing or hereafter occurring) of the improvements, facilities,
soil, groundwater, air or other elements on or of the Project by Hazardous
Materials, or the contamination of the buildings, facilities, soil, groundwater,
air or other elements on or of any other property as a result of Hazardous
Materials at any time (whether before or after the date of this Agreement)
emanating from the Project.
Hotel shall mean and include (i) the hotel situated on the Site, all
restaurants and other facilities therein and all related improvements, equipment
and facilities and (ii) all FF&E, Inventories and Operating Equipment now or
hereafter placed or installed therein.
Impositions shall mean all real estate, personal property, utility,
business or occupation taxes that cannot be passed along to customers of the
Project and other taxes (other than income, payroll and casino), imposed by any
Governmental Authority which at any time may be assessed, levied or imposed on
or with respect to the Project.
Inventories shall mean all food and beverages, fuel, soap, light bulbs,
mechanical supplies, cleaning supplies, stationery, paper supplies and other
similar consumable and expendable items necessary or customary (now or in the
future) in the reasonable opinion of Manager in order to operate the Project in
accordance with the terms of this Agreement and the Operating Standards.
Legal Requirements shall mean any statute, law, ordinance, order, rule,
regulation or judgment of any Governmental Authority and any requirement, term
or condition contained in any restriction or restrictive covenant affecting
Owner, Manager, the Project or the construction or operation of the Project.
Management Fee shall have the meaning provided therefor in the Addendum.
Mortgage shall mean any mortgage, deed of trust, deed to secure debt or
other similar instrument encumbering all or any portion of the Project, whether
now in existence or hereafter created.
Mortgagee shall mean the mortgagee or beneficiary (whether one or more)
under any Mortgage.
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Management Agreement
Operating Accounts shall mean, subject to the requirements of any Mortgage,
one or more accounts with a bank or banks designated by Owner and approved by
Manager, such approval not to be unreasonably withheld or delayed, bearing a
name identifying the Project and styled Operating Account, into which all funds
advanced to the Project by Owner as working capital or otherwise derived from
the operation of the Project shall be deposited and from which sums shall be
withdrawn in accordance with this Agreement.
Operating Budget shall mean an annual budget prepared by the Manager and
approved by Owner as part of the Annual Plan, reflecting in reasonable detail
the projected or estimated revenues and expenses in respect of the Project for
the applicable Operating Year.
Operating Equipment shall mean all blankets, linens, uniforms, silver,
china, glassware, crockery, kitchen utensils, cleaning equipment or any other
similar items necessary or customary (now or in the future) in the reasonable
opinion of Manager in order to operate the Project in accordance with the terms
of this Agreement and the Operating Standards.
Operating Standards shall mean the operation of the Project in a manner
consistent with (i) the condition of the Project as of the Effective Date (or,
after the completion of any renovation specifically contemplated by this
Agreement, the condition of the Project as of the date of completion of such
renovation) and the condition and level of operation of hotels of comparable
class and standing to the Project, (ii) then current market conditions regarding
rental rates and lease terms and conditions with respect to hotels of comparable
class and standing to the Project, and (iii) then current prudent business and
management practices applicable to the leasing, operation, repair, maintenance
and management of a hotel comparable in size, character and location to the
Project, including those concerning compliance with applicable Legal
Requirements.
Operating Year shall mean each twelve (12) month period during the Term
commencing on January 1 and ending on December 31, except that the first
Operating Year shall be that period commencing on the Effective Date and ending
on the next succeeding December 31. In the event that this Agreement shall
terminate on a date other than December 31, the last Operating Year hereunder
shall end on the date of termination.
Project shall mean the Hotel and the Site.
Reimbursable Expenses shall mean all travel, lodging, entertainment,
telephone, telecopy, postage, courier, delivery, employee training and other
expenses incurred by Manager which are directly related to its performance of
this Agreement, other than those incurred in connection with the performance of
Marketing Services, national sales office services and centralized reservation
services provided by Manager.
Reserve shall mean the reserve established pursuant to Section 5.2(b) of
this Agreement, which, subject to the requirements of any Mortgage, shall be
deposited in one or more accounts with a bank or banks designated by Owner and
approved by Manager, such approval not to be
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Management Agreement
unreasonably withheld or delayed, bearing the name of the Project and styled
Repairs and Replacement Account.
Restoration shall mean the repairing, rebuilding and replacing of the Hotel
upon the destruction or damage of the Project or any part thereof or upon the
taking of the Project or any part thereof by Condemnation to a value, condition
and character substantially the same as (in the case of damage or destruction)
or as near as possible to (in the event of Condemnation) the value, condition
and character of the Project immediately prior to such damage, destruction or
Condemnation.
Site shall mean that certain tract of land located in the country, city,
county and state, province, dominion, district or territory set forth in the
Addendum, and being more particularly described on Exhibit A to this Agreement.
Term shall have the meaning provided therefor in the Addendum.
Termination Fee, in respect of any termination of this Agreement pursuant
to which a Termination Fee is payable, shall mean the present value, as of the
date of such termination, of the profit portion of the Management Fees projected
to be paid to Manager for the period from and after such date through the stated
expiration date of the Term. The discount rate to be utilized for purposes of
determining such present value shall be, for each projected Management Fee
payment, the Treasury constant maturity yield value displayed for the
termination date in "Statistical Release H.15(519), Selected Interest Rates" of
the Board of Governors of the Federal Reserve System, or any comparable
successor publication, for actively traded U.S. Treasury securities having a
constant maturity equal to the period of time that will elapse between the
termination date and the projected payment dated for such Management Fee
payment. Such implied yield will be determined, if necessary, by (x) converting
U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance with
accepted financial practice and (y) interpolating linearly between reported
yields.
Total Income Before Fixed Charges for any period shall mean an amount equal
to total income before fixed charges for such period as calculated pursuant to
the Uniform System of Accounts.
Uniform System of Accounts shall mean the Uniform System of Accounts for
the Lodging Industry, Ninth Revised Edition, 1996, as adopted by the American
Hotel and Motel Association and all future amendments and supplements thereto
approved by Manager and Owner (such approval not to be unreasonably withheld or
delayed).
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Management Agreement
ARTICLE II
APPOINTMENT OF MANAGER AND RENEWAL RIGHTS
Section 2.1 Appointment of Manager. Owner hereby appoints Manager as its
sole and exclusive agent to manage and operate the Project during the Term in
accordance with the Operating Standards and the terms and conditions set forth
in this Agreement. Manager agrees to manage the Project during the Term as the
agent of Owner in accordance with the Operating Standards and the terms and
conditions of this Agreement. Owner and Manager agree that the agency created by
this Agreement is coupled with an interest and is terminable only in accordance
with the express provisions of this Agreement.
Section 2.2 Renewal of Term. Upon expiration of the original Term of this
Agreement, it shall be automatically renewed from year to year thereafter unless
terminated by Owner or Manager effective at the end of any such year by notice
in writing to the other given not later than ninety (90) days prior to the end
of such year. Unless otherwise agreed, upon the effective date of any renewal,
the Term of this Agreement and all other terms, covenants and conditions set
forth in this Agreement shall be automatically extended to the expiration of the
applicable renewal term.
ARTICLE III
OPERATION OF THE PROJECT
Section 3.1 Duties and Authority of Manager. Subject to and consistent with
the Operating Standards, Manager shall have exclusive supervision, control and
discretion in the management, maintenance and operation of the Project,
including, but not limited to, the right, power and authority to (a) enter into
such contracts and agreements in the name and at the expense of Owner as Manager
may deem to be reasonably necessary or advisable in connection with the
management, maintenance and operation of the Project; (b) determine and
implement terms of admittance, charges for rooms and commercial space, charges
for entertainment and food and beverages, which right shall specifically allow
Manager to charge varying rates to different customers or groups of customers
and allow Manager, in the exercise of reasonable and sound business judgment
consistent with the Operating Standards, to permit persons to occupy rooms or
suites at the Project at rates lower than published rates or free of charge or
permit persons to dine at the restaurants or lounges located at the Project free
of charge; (c) determine and implement all phases of advertising, promotion and
publicity relating to the Project; (d) determine and implement all employment
policies (including salaries, wages, fringe benefits and other compensation, the
hiring and discharge of employees and the establishment of employee retirement,
severance and other benefit plans); (e) determine and implement credit policies
(including arrangements with credit card organizations); (f) subject to the
requirements of any Mortgage, receive, hold and disburse funds, maintain bank
accounts, procure Inventories, Operating Equipment, supplies and services; (g)
engage independent contractors to provide legal, accounting or other
professional or technical services in connection with the operation of the
Project; (h) initiate, settle or otherwise dispose of litigation or claims which
might give rise to litigation, including the adjustment of
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Management Agreement
insurance claims; and (i) manage and direct generally all activities incidental
to the operation of the Project in the ordinary course of business. Manager
shall operate the Project in a businesslike and efficient manner and shall
operate the Project solely for the operation of a hotel business and for such
other activities which are customary and usual in connection therewith.
Section 3.2 Leases and Concessions. Neither party hereto, without the
approval of the other party hereto, which shall not be unreasonably withheld or
delayed, shall arrange leases or concessions for any restaurant, food service
operation or any other commercial or other operation in or about the Project.
Any such lease or concession so approved shall be entered into in Owner's name
and shall be executed by Owner. As agent for Owner, Manager shall use all
reasonable efforts to perform or cause to be performed all of Owner's
obligations under all present and future leases and concessions made or granted
with respect to the Project. Manager shall use reasonable efforts to collect all
rents and other sums falling due during the Term under any such leases and
concessions and shall deposit the same in the Operating Accounts.
Section 3.3 Working Capital. Owner shall at all times cause sufficient
funds to be on hand in the Operating Accounts to assure the timely payment of
all current liabilities of the Project, including but not limited to all items
entering into the calculation of Total Income Before Fixed Charges, all other
costs and expenses incurred in connection with the Project pursuant to this
Agreement and the performance by Manager of its obligations under this
Agreement, all fees, charges and reimbursements payable to Manager hereunder and
all amounts required hereunder to be transferred into the Reserve. In no event
shall Owner permit the balance in the Operating Accounts to be less than an
amount equal to the estimated average monthly operating expenses of the Project
as reflected in the then current Operating Budget. From time to time, upon five
(5) days prior written notice from Manager that such funds are required, Owner
shall furnish to Manager funds which Manager deems reasonably necessary to
assure that the Project shall have adequate working capital as herein provided.
Section 3.4 Owner to Bear All Expenses. In performing its duties under any
provision of this Agreement and in managing and operating the Project, Manager
shall act solely for the account of and as the agent of Owner. All expenses
incurred by Manager in performing its duties hereunder and in managing and
operating the Project shall be borne exclusively by Owner. To the extent that
the funds necessary therefor are not generated by the operation of the Project,
they shall be promptly supplied by Owner in the manner provided in Section 3.3
above. Manager shall in no event be required to advance any of its funds or
utilize Manager's credit for the operation of the Project, nor shall Manager be
required to incur any liability in connection therewith, unless Owner shall have
furnished Manager with funds necessary for the discharge thereof.
Section 3.5 Transactions with Affiliates. Manager may engage one or more of
its Affiliates or other related parties to furnish goods or services to the
Project in accordance with the Annual Plan, provided, however, that the terms of
any such arrangement shall be no less favorable in any material respect to the
Project than those reasonably obtainable from an unrelated party. Manager will
promptly notify Owner of any such engagement of Manager's Affiliates. Amounts
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payable pursuant to the arrangements described in this Section 3.5 shall be in
addition to the Management Fee and other amounts payable to Manager under this
Agreement.
Section 3.6 Centralized or Pooled Purchasing. Manager may cause the Project
to participate, along with other hotels owned, managed or franchised by Manager
or one of its Affiliates, in one or more centralized or pooled purchasing
programs or arrangements for the procurement of goods or services used in
connection with the operation of the Project, provided, however, that the terms
of any such program or arrangement shall be no less favorable to the Project in
any material respect than those reasonably obtainable from an unrelated party.
ARTICLE IV
PERSONNEL
Section 4.1 Employment of Personnel. Manager shall be responsible for and
shall have the sole and exclusive right to hire, promote, discharge, supervise,
train, transfer and determine the terms of employment of the Executive Personnel
and, through the Executive Personnel, all other administrative, service and
operating employees of the Project. All such employees of the Project shall be
employees of Manager or one of Manager's Affiliates. In addition, Manager may,
from time to time, assign one or more of its employees to the staff of the
Project on a full-time, part-time or temporary basis. Notwithstanding the
provisions of this Section 4.1 or any other provision of this Agreement, all
costs, expenses and liabilities relating to Project employees (other than those
arising from the gross negligence or willful misconduct of the Executive
Personnel) shall be expenses of operating the Project and the responsibility of
Manager for acts or omissions of Project employees shall not extend beyond
responsibility for the gross negligence or willful misconduct of the Executive
Personnel. Manager acknowledges, however, that such Executive Personnel have the
duties specified in the first sentence of this Section 4.1 with respect to other
Project employees.
Section 4.2 Union Negotiations. Manager will negotiate, subject to Owner's
right to have a representative present at any time, with any labor union
lawfully entitled to represent employees of the Project. Manager shall not enter
into any collective bargaining agreements or labor contracts with respect to
employees of the Project without the prior written consent of Owner, which
consent shall not be unreasonably withheld or delayed.
Section 4.3 Payment of Employees. Manager shall be entitled to withdraw
from the Operating Accounts all wages, salaries, fringe benefits and other
compensation paid or payable with respect to all Project employees and Manager
shall pay such compensation directly to such employees.
Section 4.4 Personnel Accommodations. Manager shall decide which, if any,
of the Executive Personnel shall reside at the Project. Manager shall be
permitted to provide free room and board to one member of the Executive
Personnel and his or her family. In addition, Manager shall be permitted to
provide free accommodations and amenities to Manager's employees and
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representatives visiting the Project on a temporary basis in connection with the
management and operation of the Project.
Section 4.5 Employee Health Insurance. Subject to reasonable availability,
Manager shall, at no cost to Manager, be responsible for arranging health
insurance coverage for employees of the Project. Subject to the prior agreement
of Owner and Manager and subject to reimbursement of Manager of all applicable
costs and expenses (including, but not limited to, those associated with
compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985 and
an exit premium in connection with the termination of such coverage), Manager
may permit the enrollment of some or all of such employees under health
insurance plans maintained by Manager.
ARTICLE V
REPAIRS, MAINTENANCE AND CAPITAL IMPROVEMENTS
Section 5.1 Repairs and Maintenance. During the Term, Manager, at the
expense of Owner, shall take good care of the Project (other than such portions
thereof as are leased to tenants who undertake a duty of repair and maintenance)
and maintain the same in good order and condition and make all repairs thereto
as may be necessary to maintain and operate the Project in accordance with the
Operating Standards; provided, however, that in no event shall the
responsibilities of Manager include the obligation to repair or otherwise
maintain the structural integrity of the Hotel or other matter relating to
defects in design, materials or workmanship in the construction of the Hotel,
all of which shall be the responsibility of Owner.
Section 5.2 Repairs and Replacements.
(a) Subject to the requirements of any Mortgage, Manager shall, from funds
derived from the operation of the Project or funds contributed by Owner,
establish the Reserve to cover the cost of Capital Improvements, including, but
not limited to, (i) additions to and substitutions, replacements and renewals of
FF&E and (ii) certain non-routine repairs and maintenance to the Project which
are normally capitalized under generally accepted accounting principles such as
exterior and interior repainting, resurfacing building walls, floors, roof and
parking areas, replacing folding walls and similar items. Subject to the
requirements of any Mortgage, the Reserve shall be maintained in an
interest-bearing account or, if directed by Owner, shall be invested in
short-term obligations approved by Owner and Manager. Subject to the
requirements of any Mortgage, all amounts in the Reserve shall be the property
of Owner, and any interest on amounts in the Reserve shall remain a part of the
Reserve. To the extent that Manager shall be required to pay any income taxes on
any interest paid on amounts in the Reserve, the same shall be payable out of
the Reserve.
(b) Subject to the requirements of any Mortgage, once each calendar month
Manager shall transfer from the Operating Accounts into the Reserve an amount
equal to four percent (4%) of the Gross Revenues for each such month during the
Term. The amount to be contributed to the Reserve is an estimate of amounts
required for the purposes set forth in Section 5.2(a). The parties
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recognize that the passage of time or unforeseen events or conditions may render
such amount insufficient to keep the Reserve at the level required to maintain
the Project in good repair and condition in keeping with the Operating Standards
and this Agreement.
(c) To the extent funds are available in the Reserve or are otherwise
supplied by Owner, Manager shall from time to time make such additions to and
substitutions, replacements and renewals of FF&E and all such non-routine
repairs to the Hotel (as described in Section 5.2(a)(ii) above) as Manager shall
reasonably deem necessary or desirable and Manager shall be entitled to withdraw
funds from the Reserve for such purpose. Proceeds from the sale of FF&E no
longer necessary to the operation of the Project shall be deposited in the
Reserve in addition to the amounts otherwise required to be deposited into the
Reserve under Section 5.2(b). At the end of each Operating Year, any amounts
remaining in the Reserve shall be carried forward to the next Operating Year.
Any amount remaining in the Reserve upon termination of this Agreement shall be
transferred to Owner.
Section 5.3 Capital Improvements.
(a) With respect to Capital Improvements other than additions to and
substitutions, replacements and renewals of FF&E, Manager shall promptly notify
Owner of the need for all Capital Improvements provided for in the Annual Plan
then in effect, whereupon work in respect of such Capital Improvements will be
promptly commenced and completed by Owner in accordance with plans, schedules
and specifications therefor approved by Manager. Except as otherwise provided
herein or in the Annual Plan then in effect, Manager shall make no Capital
Improvements in or to the Project without the express written approval of Owner.
Owner shall not unreasonably withhold its approval with respect to such Capital
Improvements as are required in Manager's reasonable opinion to keep the Project
in a competitive, efficient and economical operating condition in accordance
with the Operating Standards. Notwithstanding the foregoing, if Manager shall,
at any time, believe that (i) a dangerous condition exists at the Project, (ii)
repairs or Capital Improvements are required to comply with any applicable Legal
Requirement or (iii) expenditures are required to remedy any condition caused by
fire, Act of God, flood, earthquake or other like casualty or other emergency,
Manager shall (except in the case of an emergency) notify Owner and Manager
shall as promptly as possible take all steps and make all expenditures necessary
to remedy or cure any such condition or to comply with any applicable Legal
Requirement. Manager shall be entitled to terminate this Agreement upon sixty
(60) days' prior written notice to Owner if Owner fails to approve any Capital
Improvements necessary to allow the Project to be operated in accordance with
the Operating Standards and this Agreement.
(b) The cost of all Capital Improvements made under this Section (except as
otherwise expressly provided in (a) above) shall be borne and paid for directly
by Owner.
Section 5.4 Enforcement of Guaranties and Warranties. Owner shall furnish
to Manager copies of all guaranties and warranties relating to the Project.
Manager shall use all reasonable efforts to enforce all such guaranties or
warranties and Owner shall cooperate with Manager in such efforts.
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Section 5.5 Ownership of Replacements. All changes, repairs, alterations,
improvements, renewals or replacements of FF&E and Capital Improvements to the
Project shall be the property of Owner.
ARTICLE VI
ANNUAL PLAN, BOOKS, RECORDS AND REPORTS
Section 6.1 Annual Plan.
(a) At least sixty (60) days prior to the commencement of each Operating
Year (except the first Operating Year), Manager shall submit to Owner for
Owner's written approval the Annual Plan for the following Operating Year.
Manager shall submit the Annual Plan for the first Operating Year within sixty
(60) days after the Effective Date.
(b) Owner shall give its written approval or disapproval of the Annual Plan
not later than thirty (30) days after its submission to Owner by Manager.
Owner's approval of the Annual Plan shall not be unreasonably withheld or
delayed.
(c) If Owner does not approve or disapprove such Annual Plan within such
thirty (30) day period, then Owner shall be deemed to have approved the Annual
Plan as submitted by Manager. If Owner objects to all or any portion of such
Annual Plan, then Owner shall notify Manager of the reasons for its objections,
and Owner and Manager shall use their best efforts to agree in respect of the
items to which Owner objects. Should Owner and Manager not reach agreement on
all or any portion of the Annual Plan, pending agreement being reached, and in
the case of the first Operating Year, during the period prior to submission of
the Annual Plan, Manager shall operate the Project in accordance with the
Operating Standards and this Agreement and, if such disagreement relates to an
Operating Year after the first Operating Year, at rates or levels of
expenditures comparable to those of the preceding Operating Year with suitable
adjustments of rates and expenses for such items or portions thereof as dictated
by inflationary factors, seasonality and the necessity of operating the Project
in accordance with the Operating Standards and this Agreement. The foregoing
procedure shall also apply to approval of proposed revisions to the Annual Plan
pursuant to Section 6.1(d).
(d) Manager shall monitor the Annual Plan throughout the Operating Year.
Should Manager consider it necessary to revise the Annual Plan during the course
of the Operating Year, whether due to changed trading climate, unforeseen
capital requirements or for any other reason, Manager shall submit such
revisions to Owner for Owner's approval (which shall not be unreasonably
withheld or delayed), setting forth the reasons for the revisions.
(e) The Operating Budget is intended as, and will represent only, an
estimate of the anticipated results for the Operating Year in question, based
upon assumptions believed by Manager to be reasonable at the time of the
preparation of such Operating Budget, and the same
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shall not be construed as a guarantee of actual results which may be experienced
during and for such Operating Year.
Section 6.2 Books and Records; Operating Accounts.
(a) Manager shall keep full and adequate books of account and such other
records as are necessary to reflect the results of operation of the Project.
Such books of account shall be kept in all material respects in accordance with
generally accepted accounting principles and the Uniform System of Accounts. The
books of account and all other records relating to, or reflecting the operation
of, the Project shall be kept at the Project or at the corporate office of
Manager and shall be available to Owner and its representatives at all
reasonable times for examination, inspection and copying. Upon any termination
of this Agreement, all of such books and records (or copies thereof) shall be
turned over to Owner forthwith so as to insure the orderly continuance of the
operation of the Project, but the books and records through such date of
termination shall thereafter be available to Manager at all reasonable times for
inspection, examination and copying.
(b) It is acknowledged that Manager has no knowledge and cannot represent
the accuracy of historical financial information concerning the Project prior to
the Effective Date of this Agreement and that Manager is not responsible for
reconstruction or correction of accounting records prior to such date. Owner
will furnish Manager with opening balance sheet entries within thirty (30) days
after the Effective Date, and notwithstanding any provision in this Agreement to
the contrary, Manager shall not be required to deliver to Owner any financial
statements for the Project until at least thirty (30) days following receipt of
such entries by Manager.
(c) Subject to the requirements of any Mortgage, Manager shall cause all
funds advanced to the Project by Owner as working capital and all funds derived
from the operation of the Project to be deposited in the Operating Accounts.
Manager shall have sole control of the Operating Accounts (subject to the
requirements of any Mortgage) and Manager shall be entitled to pay out of the
Operating Accounts all costs and expenses incurred in connection with the
operation of the Project, including without limitation all wages, salaries,
fringe benefits and other compensation and expenses relating to Project
employees, all costs and expenditures which Manager is permitted or required to
make pursuant to this Agreement, all fees, charges, reimbursements and other
amounts due Manager under this Agreement and all other amounts required to
perform Manager's obligations hereunder. Checks or other documents of withdrawal
drawn upon the Operating Accounts shall be signed by representatives of Manager
or Project employees designated by Manager. Owner shall be responsible for and
shall pay directly from funds outside the Operating Accounts all costs of
Capital Improvements, as well as the payments and related costs and expenses for
which Owner is responsible pursuant to Section 11.1 hereof. In addition to the
Operating Accounts, Manager shall be entitled to maintain such funds as it deems
necessary in house banks or in ▇▇▇▇▇ cash funds at the Project.
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Section 6.3 Reports.
(a) On or before the fifteenth (15th) day of each calendar month during the
Term, Manager shall deliver to Owner monthly unaudited financial statements
prepared from the books of account maintained by Manager, consisting of a
balance sheet and a profit and loss statement for the Project for the preceding
calendar month and the Operating Year to date. The monthly financial statements
shall also contain or be accompanied by statements and calculations of the
Management Fee for the preceding calendar month.
(b) Within forty-five (45) days after the end of each Operating Year,
Manager shall cause to be delivered to Owner financial statements for such
Operating Year consisting of at least a balance sheet and related statement of
profit and loss, together with a source and application of funds analysis for
such Operating Year. The annual financial statements shall also include or be
accompanied by a statement showing the calculation of the Management Fee for
such Operating Year. If audited financial statements are prepared for the
Project for any Operating Year, such audited financial statements shall include
such statement. Unless Owner and Manager agree otherwise, such financial
statements shall be conclusive upon the parties and shall be deemed to be a
final determination of the Management Fee for such Operating Year (and, for such
purposes, if audited financial statements are prepared, such audited financial
statements shall control over any previously delivered unaudited financial
statements).
ARTICLE VII
MANAGEMENT FEE, EXPENSE REIMBURSEMENT AND REMITTANCES TO OWNER
Section 7.1 Management Fee. The Management Fee shall be calculated and paid
as set forth in the Addendum.
Section 7.2 Expense Reimbursement. Owner shall be obligated to reimburse
Manager for all Reimbursable Expenses incurred by it in connection with the
performance of this Agreement. Manager shall submit a monthly invoice for its
Reimbursable Expenses showing in reasonable detail the nature and amount of such
expenses, and such invoices shall be payable within five (5) days after
submission.
Section 7.3 Purchasing and Technical Services Fees. To the extent provided
for in the Annual Plan or otherwise approved by Owner, Manager or one of its
Affiliates shall be entitled to the payment of purchasing and technical services
fees with respect to the acquisition, or supervision of installation or
construction, of Capital Improvements, FF&E, Operating Equipment and Inventories
at the Project.
Section 7.4 Remittances to Owner. On or before the fifteenth (15th) day of
each calendar quarter of each Operating Year, Manager shall remit to Owner all
sums in the Operating Accounts in excess of the then working capital
requirements of the Project determined in accordance with Section 3.3 of this
Agreement.
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ARTICLE VIII
INSURANCE AND INDEMNITIES
Section 8.1 Insurance. Subject to reasonable availability, Manager shall,
at no cost to Manager, procure and maintain with responsible and properly
licensed companies reasonably acceptable to Owner insurance in such amounts,
written on such forms and covering such risks as shall be required by any
Mortgagee, under any franchise agreement (if applicable) or as shall otherwise
be reasonably required by Owner or Manager, including but not limited to the
insurance in respect of the Project described in Exhibit B to this Agreement.
Section 8.2 Evidence of Insurance. Upon written request of Owner, Manager
agrees to deliver to Owner and/or any Mortgagee evidence reasonably satisfactory
to Owner that all insurance required to be maintained under this Agreement is in
full force and effect. In addition, prior to the date on which any such
insurance premiums must be paid to prevent delinquency thereof, Manager will,
upon request of Owner, deliver to Owner and/or any Mortgagee a statement or
statements showing the amount of the premiums required to be paid, the name and
mailing address of the party to whom the same is payable and receipts reflecting
that all such amounts have been fully paid.
Section 8.3 Investigation of Claims and Reports. Manager shall promptly
investigate and, as soon as reasonably practicable, make a full written report
to Owner as to all material accidents, claims for damage relating to the
ownership, operation and maintenance of the Project and the estimated cost of
repair thereof, and shall prepare at the expense of and for the approval of
Owner, any and all reports required by any insurance company in connection
therewith. All such reports shall be promptly filed with the applicable
insurance company. All policies of insurance required under this Agreement shall
provide for adjustment of losses of less than Fifty Thousand Dollars ($50,000)
by Manager alone and of greater losses by Owner and Manager jointly.
Section 8.4 Indemnities.
(a) Manager shall indemnify and hold harmless Owner and its shareholders
and Affiliates and their respective partners, shareholders, directors, officers,
employees and agents from and against any and all liability, loss, damages,
costs and expenses ("Liabilities") incurred by reason of the management and
operation of the Project by Manager during the Term insofar and only insofar as
such Liabilities are caused by the gross negligence or willful misconduct of the
Executive Personnel. Project employees other than the Executive Personnel shall
not be deemed to be employees or agents of, or otherwise acting on behalf of,
Manager.
(b) Owner shall indemnify and hold harmless Manager and its shareholders
and Affiliates and their respective partners, shareholders, directors, officers,
employees and agents from and against any and all Liabilities (including those
caused by the simple negligence of the indemnitee and those as to which the
indemnitee may be strictly liable) (i) arising out of or
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incurred in connection with the construction, renovation, management or
operation of the Project or (ii) which may be asserted or arise as a direct or
indirect result of the presence on or under, or escape, seepage, leakage,
spillage, discharge, emission or release from the Project of any Hazardous
Materials or any Hazardous Materials Contamination or arise out of or result
from the environmental condition of the Project or the applicability of any
Legal Requirements relating to Hazardous Materials, except, in the case of both
(i) and (ii) above, to the extent those Liabilities are caused by the gross
negligence or willful misconduct of the Executive Personnel during the Term.
OWNER ACKNOWLEDGES THAT THE FOREGOING INDEMNITY INCLUDES, BUT IS NOT LIMITED TO,
AN AGREEMENT BY OWNER TO INDEMNIFY THE INDEMNITEE AGAINST LIABILITIES CAUSED BY
THE SIMPLE NEGLIGENCE OF THE INDEMNITEE AND THOSE AS TO WHICH THE INDEMNITEE MAY
BE STRICTLY LIABLE.
(c) In case an action covered by this Section 8.4 is brought against any
indemnified party, the indemnifying party will be entitled to assume the defense
thereof, subject to the provisions herein stated, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof. 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 not be at the expense
of the indemnifying party if the indemnifying party has assumed the defense of
the action with counsel reasonably satisfactory to the indemnified party;
provided that the fees and expenses of the indemnified party's counsel shall be
at the expense of the indemnifying party if (i) the employment of such counsel
has been specifically authorized in writing by the indemnifying party or (ii)
such indemnified party shall have been advised by counsel that there is a
conflict of interest or issue conflict involved in the representation by counsel
employed by the indemnifying party in the defense of such action on behalf of
the indemnified party or that there may be one or more legal defenses available
to such indemnified party which are not available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for the indemnified party, which firm shall be designated in writing
by the indemnified party).
(d) The provisions of this Section shall survive any termination or
expiration of this Agreement, whether by lapse of time or otherwise, and shall
be binding upon the parties hereto and their respective successors and assigns.
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ARTICLE IX
DAMAGE AND CONDEMNATION
Section 9.1 Damage or Destruction.
(a) If the Hotel shall be totally destroyed or substantially damaged by
fire or other casualty, either party may, within sixty (60) days after the
occurrence of such event, give written notice to the other terminating this
Agreement. For purposes of this Section, the Hotel shall be deemed to have been
substantially damaged if the estimated cost of Restoration shall exceed twenty
percent (20%) of the cost of replacing the Hotel by constructing, furnishing and
equipping a new hotel on the site substantially the same as the Hotel prior to
such casualty. In the event Owner terminates this Agreement by reason of such
damage or destruction, Owner shall, contemporaneously with the giving of notice
of such termination and as a condition (which may be waived by Manager) to the
effectiveness of such termination, pay to Manager the applicable Termination
Fee. Such obligation to pay such Termination Fee shall survive any termination
of this Agreement.
(b) Subject to the requirements of any Mortgage, in the event of (i) any
damage to the Hotel by fire or other casualty which does not amount to
"substantial damage" as described in subsection (a) above, or (ii) the total
destruction of or substantial damage to the Project and the failure of either
party to terminate this Agreement pursuant to subsection (a) above, then this
Agreement shall not terminate, and Owner shall, at its own expense and in
accordance with plans and specifications therefor developed by Owner and
approved by Manager (which approval shall not be unreasonably withheld or
delayed), promptly commence and expeditiously complete the Restoration and all
proceeds of property and casualty insurance shall be made available for this
purpose. Subject to the requirements of any Mortgage, Owner shall promptly
commence and diligently pursue the Restoration to completion; provided, however,
that if Owner shall not fully complete the Restoration within a reasonable
period of time after the date of such casualty or one hundred eighty (180) days,
whichever is earlier (or such longer period as Manager may approve), then
Manager shall have the right to terminate this Agreement upon thirty (30) days'
prior written notice to Owner, whereupon Owner shall, within ten (10) days
following such notice of termination and as a condition (which may be waived by
Manager) to the effectiveness of such termination, pay to Manager the applicable
Termination Fee.
(c) Manager's monthly compensation following damage to the Project until
the Restoration with respect to such damage is completed shall in no event be
less than fifty percent (50%) of the Average Monthly Management Fee at the time
the damage occurs.
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Section 9.2 Condemnation.
(a) If all or a substantial portion of the Project shall be taken by
Condemnation (other than for temporary use), this Agreement shall terminate as
of the date of such taking. A substantial portion of the Project shall be deemed
taken if in the reasonable opinion of Manager or Owner the part not taken may
not be repaired, restored, replaced, rebuilt or utilized so as to constitute a
hotel facility in keeping with this Agreement. If this Agreement shall terminate
pursuant to the foregoing provisions of this Section, (i) the Condemnation
award, after payment of all sums due and payable to any Mortgagee, shall be paid
to Owner as its property, provided, however, that Manager may make a separate
and distinct claim against the condemning authority for the value of the loss of
its interest in this Agreement, and (ii) Owner shall, within ten (10) days
following such termination and as a condition (which may be waived by Manager)
to the effectiveness thereof, pay to Manager the applicable Termination Fee.
Provided Owner pays the applicable Termination Fee, Manager shall remit to Owner
any amount received by it pursuant to any claim it pursues in accordance with
clause (i) above.
(b) Subject to the requirements of any Mortgage, if a portion of the
Project shall be taken by Condemnation and this Agreement is not terminated
pursuant to subsection (a) above, the Condemnation award relating to damage to
or the taking of the Project, including any interest thereon, shall be made
available to Owner for application to the Restoration of the Project made
necessary by such taking. Such Restoration shall be promptly commenced and
expeditiously completed by, and at the expense of, Owner in accordance with
plans and specifications therefor developed by Owner and approved by Manager
(which approval shall not be unreasonably withheld or delayed) so as to restore
the Project as nearly as possible to its value, condition and character
immediately prior to the Condemnation.
(c) Subject to the requirements of any Mortgage, in the event of a
Condemnation of all or part of the Project for temporary use, this Agreement
shall remain in full force and effect, and the following shall be applicable:
(i) If the Condemnation is for a period not extending beyond the Term,
the Condemnation award in excess of the cost of Restoration, including any
interest, shall be included in Gross Revenues for the Operating Year or
Years in which received. When and if during the Term the period of
temporary use shall terminate, Owner shall, out of the Condemnation award,
at its own expense, after the approval of plans and specifications by
Manager (which approval shall not be unreasonably withheld or delayed),
promptly commence and expeditiously complete the Restoration necessary to
restore the Project to its condition prior to the Condemnation for
temporary use; or
(ii) If the Condemnation is for a period extending beyond the Term,
that portion of the Condemnation award which is attributable to the period
up to the expiration of the Term and is in excess of the cost of
Restoration shall be included in Gross Revenues for the Operating Year or
Years in which received. The remainder of the Condemnation award shall be
paid to Owner as its property.
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(d) Manager's monthly compensation following a Condemnation until the
Restoration with respect to such Condemnation is completed or during any period
of Condemnation for temporary use shall in no event be less than fifty percent
(50%) of the Average Monthly Management Fee at the time the Condemnation occurs.
ARTICLE X
ASSIGNMENT
Section 10.1 Assignment by Manager. Except as herein provided, Manager
shall not assign its rights and obligations under this Agreement without the
prior written approval of Owner. Manager shall have the right, without the
consent of Owner, to delegate its responsibilities and/or assign its interest in
this Agreement to (i) any Affiliate of Manager having full right, power and
authority to provide to Owner all services and organizational expertise
(including applicable trademarks, service marks and Marketing Services) which
Manager is required to provide hereunder, or (ii) any assignee who also acquires
all, or substantially all, of the assets of Manager and assumes its obligations,
provided such assignee is financially responsible and capable of performing the
duties of Manager hereunder and has the right to use any brand or trade name
under which the Project is being managed at the time of such assignment.
Manager's liability hereunder shall terminate upon any such assignment. Manager
shall also have the right to assign its rights to receive payments hereunder as
security for indebtedness or any other obligation; provided, the holder of such
security shall not have the right to perform the duties of Manager hereunder or
to delegate or assign such duties to any person.
Section 10.2 Assignment by Owner. Except as otherwise expressly provided
for herein, Owner may not sell, transfer or otherwise convey all or any part of
the Project or Owner's interest therein or assign this Agreement or any interest
herein without the express prior written consent of Manager. Manager agrees that
it will not use its right to grant or withhold consent as a means to extract
economic concessions from Owner. Instead, Manager agrees to make its decision
based on its evaluation of whether the proposed transferee or assignee has
adequate net worth to timely discharge all of the obligations of Owner under
this Agreement and whether the persons identified with the proposed transferee
or assignee will be persons of high character and with a favorable reputation
for integrity, honesty and veracity and whether a proposed transfer or
assignment will adversely affect the ownership, operation and management of the
Project subject to and in accordance with the provisions of this Agreement. In
addition, Manager may consider whether the proposed transferee is, or is
affiliated with, another hotel manager or franchisor. Accordingly, Manager shall
grant or withhold consent to any proposed transfer or assignment on the basis of
Manager's evaluations and determinations of the factors enumerated in the
preceding sentences. Any transferee or assignee by reason of any such transfer
or assignment shall assume and agree to perform all of Owner's duties,
obligations and liabilities herein contained pursuant to a written instrument in
form and substance satisfactory to Manager and reflecting any amendments to this
Agreement reasonably necessary in order to preserve and protect Manager's rights
hereunder in light of the change in ownership. The sale or other disposition of
fifty percent (50%) or more of
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the beneficial interests in Owner (whether partnership interests, shares of
stock or other beneficial interests), whether in a single transaction or in a
series of transactions, shall be deemed to constitute the sale or disposition of
an interest in the Project for purposes of this Article. Notwithstanding any
other provision of this Section 10.2, in the event and so long as Owner and
Manager are Affiliates, Owner may transfer or convey its interest in the Project
and this Agreement without the consent of Manager; provided that the transferee
or assignee by reason of any such transfer or assignment shall assume and agree
to perform all of Owner's duties, obligations and liabilities herein contained
pursuant to a written instrument in form and substance reasonably satisfactory
to Manager and reflecting any amendments to this Agreement reasonably necessary
in order to preserve and protect Manager's rights hereunder in light of the
change in ownership.
Section 10.3 Right of First Refusal. If Owner shall have received a bona
fide offer from a non-affiliated person or entity to sell, transfer or otherwise
convey all or any part of the Project or Owner's interest therein which Owner
desires to accept, Owner shall first give written notice (the "Offering Notice")
to Manager of the financial and other terms and conditions (the "Terms and
Conditions") of such offer. Manager shall have the right and a first opportunity
to purchase, lease or otherwise acquire, as the case may be, all or the
applicable portion of the Project or Owner's interest therein (as specified in
the applicable Offering Notice) on the Terms and Conditions set forth in the
Offering Notice, such right to be exercised by notice in writing to Owner within
sixty (60) days after the giving of the Offering Notice. If Manager shall have
exercised such right, the closing shall be held at the Project on the closing
date specified in the Offering Notice or the date ninety (90) days after the
date of Manager's notice of its exercise of such right, whichever is later. If
either party shall default under this Section, the other party shall be entitled
to specific performance. If Manager shall fail to give notice of the exercise of
its right of first refusal under this Section within such sixty (60) day period,
or if Manager shall notify Owner within such sixty (60) day period that Manager
has waived such right, then Owner shall have the right to sell, transfer or
convey all or the applicable portion of the Project or Owner's interest therein
(as specified in the applicable Offering Notice) pursuant to the terms of the
specific offer described in the applicable Offering Notice, but not otherwise.
If such sale, transfer or conveyance is not consummated in accordance with the
offer and the Terms and Conditions specified in the applicable Offering Notice,
the rights of Manager to an Offering Notice shall be reinstated. No exercise or
waiver by Manager of any of its rights hereunder shall modify, abridge, impair
or affect any of Manager's rights under any of the other terms or provisions of
this Agreement. Any sale, transfer or other conveyance of all or any part of the
Project or Owner's interest therein in violation of this Section shall be null
and void. The terms and provisions of this Section shall be in addition to and
cumulative of all of the other terms and provisions of this Agreement,
including, without limitation, the terms and provisions of Section 10.2.
Section 10.4 Binding Effect. Subject to the terms of this Article, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
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ARTICLE XI
OWNER'S COVENANTS, TITLE AND ENCUMBRANCES
Section 11.1 Covenants and Warranties. With respect to any ground or
underlying leases, mortgages, deeds of trust, security agreements or other
encumbrances affecting the Project, Owner agrees to use its best efforts to
secure for Manager's benefit a non-disturbance agreement (in form and substance
satisfactory to Manager) to the effect that this Agreement shall not be subject
to forfeiture or termination except in accordance with the provisions hereof,
notwithstanding a default, termination, foreclosure or exercise of a power of
sale with respect to any such lease or encumbrance. Owner warrants that the
interest of Manager under this Agreement shall not be subject or subordinate to
any other matters affecting title to the Project, except for Impositions not yet
due and payable and such other matters as shall not materially and adversely
affect the operation of the Project by Manager. Owner further warrants that, so
long as Manager shall not be in default hereunder, Manager shall be entitled to
operate the Project for the Term, and Owner shall, at no expense to Manager,
undertake and prosecute all appropriate actions, judicial or otherwise, required
to assure such right of operation to Manager. Owner further agrees that it
shall:
(a) Keep and maintain, or cause to be kept and maintained, any leases
covering real or personal property or other agreements necessary to the
ownership or control of the Project, or any part thereof, in full force and
effect and free from default, and in this connection Owner shall pay and
discharge, or cause to be paid and discharged, any ground rents or other rental
payments or other charges payable by Owner in respect of the Project;
(b) Observe, or cause to be observed, and comply with or cause to be
complied with, any and all other liens, encumbrances, covenants, charges,
burdens or restrictions pertaining to the Project or any part thereof;
(c) Fully comply with the terms and provisions of all documents and
instruments evidencing or securing any Mortgages or other loans secured by an
interest in or otherwise related to the ownership or operation of the Project
and all other agreements (whether written or oral) to which Owner is a party;
(d) Pay all Impositions prior to delinquency, and upon request of Manager,
furnish Manager with evidence that all such Impositions have been so paid;
provided, however, that Owner shall have the right to contest in good faith the
validity or amount of any Impositions by appropriate proceedings, so long as
such proceedings do not interfere with the operation of the Hotel or result in a
default under any Mortgage or any loans secured by an interest in or otherwise
related to the ownership or operation of the Project or any ground lease
affecting the Project and provided, further, that during the time any such
contest is pending, Owner shall pay all Impositions being contested unless
collecting or enforcement of any lien securing payment thereof is effectively
stayed during such pendency; and
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Management Agreement
(e) Obtain and maintain in good standing all Governmental Permits, except
those which under applicable Legal Requirements are required to be obtained and
maintained by Manager.
Section 11.2 Estoppel Certificates. Manager agrees, at any time and from
time to time, upon not less than fifteen (15) days' prior notice by Owner or any
Mortgagee, to execute, acknowledge and deliver to Owner or such Mortgagee a
statement in writing certifying that this Agreement has not been modified and is
in full force and effect (or, if there have been modifications, that the same is
in full force and effect as modified and specifying the modifications) and
stating whether or not to the best knowledge of the party providing such
certificate there exists any default of which such party may have knowledge.
Upon similar notice, Manager shall be entitled to a similar certificate from
Owner.
ARTICLE XII
DEFAULT AND TERMINATION
Section 12.1 Events of Default.
(a) The following shall constitute events of default:
(i) The filing of a voluntary petition in bankruptcy or insolvency or
a petition for reorganization under any bankruptcy law by either
party;
(ii) The consent to an involuntary petition in bankruptcy or the
failure to vacate within thirty (30) days from the date of entry
thereof any order approving an involuntary petition by either
party;
(iii) The entering of an order, judgment or decree by any court of
competent jurisdiction, on the application of a creditor,
adjudicating either party as bankrupt or insolvent or approving a
petition seeking reorganization or appointing a receiver, trustee
or liquidator of all or a substantial part of such party's
assets, and such order, judgment or decree shall continue
unstayed and in effect for thirty (30) days after its entry;
(iv) The appointment of a receiver or trustee for all or any
substantial portion of the property of either party and the
order, judgment or decree appointing any such receiver or trustee
shall continue unstayed and in effect for thirty (30) days after
its entry;
(v) The death, legal incapacity, liquidation, termination or
dissolution of either party;
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Management Agreement
(vi) Any representation or warranty made in this Agreement by either
party shall be false or misleading in any material respect on the
date as of which it is made or deemed made;
(vii) The failure of either party to make any payment or provide funds
to or on behalf of the other party in accordance with the terms
hereof and the continuation of such failure for five (5) days
after the date such payment was to be made or such funds were to
be provided; or
(viii) The failure of either party to perform, keep or fulfill any of
the other covenants, undertakings, obligations or conditions set
forth in this Agreement, and the continuance of such default for
a period of thirty (30) days after written notice is given by the
other party specifying said failure; provided that in the event
such failure is of the nature that it cannot, with due diligence,
be cured within thirty (30) days, it shall not constitute an
event of default unless the defaulting party fails to proceed
promptly and with due diligence to cure the same, it being the
intention of the parties that with respect to a failure not
susceptible of being cured within thirty (30) days, the time of
such defaulting party within which to cure the same shall be
extended for such period as may be necessary for the curing
thereof with the exercise of due diligence.
(b) Upon the occurrence of any event of default, in addition to and
cumulative of any and all rights and remedies available to the non-defaulting
party under this Agreement, at law or in equity, the non-defaulting party may
give to the defaulting party notice of intention to terminate this Agreement,
whereupon this Agreement shall terminate upon the expiration of thirty (30) days
after the giving of such notice. In addition to and cumulative of the foregoing,
upon the occurrence of any event of default on the part of Owner, all earned
Management Fees and all other sums payable to Manager under this Agreement shall
be immediately due and payable without notice. In no event shall the provisions
of this Agreement with respect to the payment of a Termination Fee upon
termination of this Agreement under certain circumstances be construed as
defining or limiting the amount recoverable by Manager from Owner by reason of
any event of default on the part of Owner.
Section 12.2 Manager's Right to Perform Owner's Obligations.
(a) If Owner shall fail to make any payment or to perform any act to be
made or performed by Owner pursuant to this Agreement, then Manager may (but
shall not be obligated to) without further notice to, or demand upon, Owner, and
without waiving or releasing Owner from any obligations under this Agreement,
make such payment (either with its own funds or with funds withdrawn for such
purpose from the Operating Accounts) or perform such act. All sums so paid by
Manager and all necessary incidental costs and expenses incurred by Manager in
connection with the performance of any such act, together with interest thereon
at the Default Rate from the
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Management Agreement
date of making such expenditure or expenditures by Manager, shall be payable to
Manager upon demand.
(b) Manager shall have the right to set-off against any payments to be made
to Owner by Manager under any provision of this Agreement and against all funds
from time to time in the Operating Accounts, any and all liabilities of Owner to
Manager. Manager may withdraw from the Operating Accounts from time to time such
amounts as Manager deems desirable in partial or full payment of all or any
portion of said liabilities, the amount of such withdrawals to be paid by Owner
to Manager on demand and to be replaced in the respective account and fund.
Section 12.3 Default Interest. If either party hereto shall fail to pay to
the other party hereto any sum payable when due hereunder, then such defaulting
party shall, without notice or demand, be liable to the non-defaulting party for
the payment of all such sums together with interest thereon at the Default Rate.
The terms and provisions of this Section shall survive any termination of this
Agreement for any reason whatsoever (including the expiration of the Term) and
shall continue until all such amounts, together with interest thereon, are paid
in full.
Section 12.4 Special Right of Manager to Terminate. In addition and without
prejudice to any other right Manager may have to terminate this Agreement under
any other provision of this Agreement, Manager shall have the right to terminate
this Agreement upon the occurrence of any of the following events:
(1) Any Governmental Permit required to be maintained by Owner for the
operation of the Project, including without limitation any certificate of
occupancy or restaurant or liquor license, shall at any time be suspended,
terminated or revoked and such suspension, termination or revocation is not
due to the fault of Manager and shall continue for a period of thirty (30)
days, unless such suspension, termination or revocation is subject to cure
within such period by reasonable efforts on the part of Manager and Manager
fails to take such action; or
(2) Due to Force Majeure or any Legal Requirement, the operation of
the Project in accordance with this Agreement is not economical, feasible
or reasonably practical, as determined in the reasonable, good faith
opinion of Manager.
In the event that Manager elects to terminate this Agreement pursuant to this
Section, Manager shall give Owner written notice of such election whereupon this
Agreement shall terminate as of the date set forth in any such notice of
termination, which date shall be not less than thirty (30) days after the date
such notice is given.
Section 12.5 Termination of Employees. In connection with any termination
of this Agreement, Manager shall, unless otherwise requested in writing by
Owner, give notice of termination of employment to all Project employees
containing such information as is required by any severance policy applicable to
such employees and the provisions of any applicable federal or state plant
closing or similar laws. The notice to employees shall be given within ten (10)
days
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Management Agreement
after notice of termination is given. Owner shall bear the severance and related
costs of terminating such employees and of any applicable federal or state plant
closing or similar laws in connection with any termination of this Agreement.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Use of Names. During the Term of this Agreement, the Project
shall at all times be known and designated under such name as Owner and Manager
may agree. Initially, the Project shall be known by the name set forth in the
Addendum. Upon the termination of this Agreement, such portion of the Project
name which does not contain any name, trade name, trademark or service ▇▇▇▇
owned by Manager or an Affiliate of Manager shall continue to be the property of
Manager or such Affiliate. Owner further agrees that any and all names, trade
names, trademarks and service marks owned in whole or in part by Manager or an
Affiliate of Manager, when used alone or in conjunction with some other emblem,
design, slogan, word or words, are the exclusive property of Manager or such
Affiliate, as the case may be, and shall not be used by Owner in any manner.
Accordingly, Owner agrees that no right or remedy of Owner for any default of
Manager or delivery or possession of the Project to Owner upon the expiration or
sooner termination of this Agreement, shall confer, nor shall any provisions of
this Agreement confer, upon the Owner or any person acquiring an interest in
Owner or the Project, the right to use any name, trade name, trademark or
service ▇▇▇▇ owned in whole or in part by Manager or any of its Affiliates,
either alone or in conjunction with some other design, emblem, slogan, words or
words, in the use and operation of the Project or any other property. In the
event of any breach of this covenant by Owner, then Manager shall be entitled to
damages, relief by injunction and to any other right or remedy at law or equity.
Upon the expiration or sooner termination of this Agreement, (i) Manager may, at
its option, purchase from Owner any Operating Equipment, Inventories and other
supplies bearing any name, trade name, trademark, service ▇▇▇▇, design, emblem
or slogan owned by Manager or an Affiliate of Manager which is the subject of
this Section at a cash purchase price equal to the cost thereof as reflected on
the books and records of the Project or (ii) Manager may, at its option, permit
Owner to continue to use (but not replace) any such Operating Equipment,
Inventories or supplies until the same shall have been used up (provided,
however, that in such event, Manager may require Owner to execute any and all
documents and instruments, including without limitation a licensing agreement,
as Manager may reasonably require to effectuate the purposes of this Section).
The provisions of this Section shall survive the expiration or sooner
termination of this Agreement and shall be binding upon Owner, its successors
and assigns.
Section 13.2 Limitations on Manager's Ability to Perform. Notwithstanding
any other provision in this Agreement to the contrary, Manager shall be excused
from the performance of its obligations under this Agreement (i) to the extent
and whenever Manager shall be prevented from such compliance by Force Majeure,
(ii) to the extent of any breach by Owner of any provision of this Agreement,
including but not limited to a breach by Owner of any of its obligations under
Sections 3.3 and 3.4 of this Agreement, and (iii) to the extent and whenever
there is provided in
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Management Agreement
this Agreement a limitation upon the ability of Manager to expend funds in
respect of the Project. If at any time Manager shall be excused, in whole or in
part, from the performance of its obligations under this Agreement pursuant to
the terms and provisions of this Section or otherwise, then, in addition to any
other right or remedy available to Manager by reason thereof, Manager may, in
its sole and absolute discretion, and for so long as Manager shall be so
excused, exclude the use of any and all names, trade names, trademarks and
service marks owned in whole or in part by Manager or an Affiliate or Manager,
whether alone or in conjunction with any other design, emblem, slogan, word or
words, in connection with the Project. The provisions of this Section shall
operate without prejudice to any other remedy which Manager may have under the
terms of this Agreement.
Section 13.3 Negation of Partnership or Joint Venture. Nothing in this
Agreement shall constitute or be construed to constitute or create a
partnership, joint venture or lease between Owner and Manager with respect to
the Project.
Section 13.4 Right to Make Agreement. Each party warrants and represents,
with respect to itself, that the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate, partnership, or
limited liability company action (as the case may be) and are legal, valid and
binding obligations of such party, enforceable in accordance with the terms
hereof; that neither the execution of this Agreement nor performance of the
obligations contemplated hereby shall violate any Legal Requirement, result in
or constitute a breach or default under any material indenture, contract or
other commitment or restriction to which it is a party or by which it is bound,
or require any consent, vote or approval which has not been obtained, or at the
appropriate time shall not have been given or obtained. Each party covenants
that it has and will continue to have throughout the Term full right and
authority to enter into this Agreement and to perform its obligations hereunder
and each party agrees to supply to the other party upon request evidence of such
right and authority.
Section 13.5 Further Assurances. Each party hereto will execute and
acknowledge any and all agreements, contracts, leases, licenses, applications,
verifications and such other additional instruments and documents in recordable
form as may be requested by the other party hereto in order to carry out the
intent of this Agreement and to perfect or give further assurances of any of the
rights granted or provided for herein.
Section 13.6 Form of Documents and Evidence. Each written instrument or
other document required by this Agreement to be furnished to the Manager shall
be duly executed by the person or persons specified (or where no particular
person is specified, by such person as the Manager will require), duly
acknowledged where required by the Manager and, in the case of affidavits,
waivers and similar sworn instruments, duly sworn to and subscribed before a
notary public or similar public official authorized to act in the premises by
Governmental Authority and shall be furnished to Manager in one or more copies
as required by Manager and shall in all respects be in form and substance
reasonably satisfactory to Manager. Where evidence of the existence or
non-existence of any circumstance or condition is required by this Agreement to
be
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Management Agreement
furnished to Manager, such evidence shall in all respects be in form and
substance reasonably satisfactory to Manager.
Section 13.7 Approvals by Manager. Owner and Manager agree that whenever
Manager is required to give its approval of plans, specifications, budgets,
drawings, schedules or financing, pursuant to this Agreement or otherwise, such
approval shall not imply or be deemed to constitute an opinion by Manager nor
impose upon Manager any responsibility for the design or construction of the
Hotel or any part thereof, including but not limited to its structural integrity
and/or life safety requirements, compliance with Legal Requirements, or the
adequacy of any such budgets or financing. All reviews and approvals by Manager
under the terms of this Agreement or otherwise are for the sole and exclusive
benefit of Manager and no other person or party shall have the right to rely on
any such reviews or approvals. Manager shall have absolute right, in its sole
discretion, to waive any such reviews or approvals required under this
Agreement.
Section 13.8 Sale of Securities. This Section shall apply at any time that
Owner is not an Affiliate of Manager. In the event Owner, or any Affiliate of
Owner, shall at any time, sell or offer to sell any securities in any way
relating to the Project, through the medium of any prospectus or otherwise, it
shall do so only in compliance with all applicable Legal Requirements and shall
clearly disclose to all purchasers and offerees that (i) neither Manager nor any
of its shareholders or partners nor any of their respective officers, directors,
agents or employees shall in any way be deemed an issuer or underwriter of said
securities, and (ii) Manager and said shareholders, partners, officers,
directors, agents and employees have not assumed and shall not have any
liability arising out of or relating to the sale or offer of said securities,
including but not limited to any liability or responsibility for any financial
statements, projections or other financial information contained in the
prospectus or similar written or oral communication. Manager shall have the
right to approve any description of Manager, or any description of this
Agreement or of the Owner's relationship with Manager hereunder, which may be
contained in any prospectus or other communication, and Owner further agrees to
furnish copies of all such materials to Manager for such purpose not less than
thirty (30) days prior to delivery thereof to any prospective purchaser.
Section 13.9 Third Party Beneficiaries. This Agreement has been made and
entered into for the sole protection and benefit of the Manager and Owner and
their respective successors and assigns (but in the case of assigns, so long as
any such assignment has been made in accordance with this Agreement), and no
other person or entity shall have any right or action under this Agreement,
except as otherwise expressly provided in Section 8.4.
Section 13.10 Notices. All notices to be given hereunder shall be in
writing, and all payments to be made hereunder shall be by check, and may be
given, served or made by depositing the same in the United States mail addressed
to the party to be notified, postpaid and registered or certified with return
receipt requested, or by delivering the same in person or by reputable overnight
courier to such party. Notice deposited in the mail in accordance with the
provisions hereof shall be deemed to have been given on the fourth day next
following the date postmarked on the envelope containing such notice, or when
actually received, whichever is earlier, and notice
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Management Agreement
delivered by overnight courier shall be deemed to have been given on the second
day next following the date on which it is entrusted to the courier, or when
actually received, whichever is earlier. Notice given in any other manner shall
be effective only if and when received by the party to be notified. Copies of
all notices hereunder shall be delivered in the manner provided above addressed
to the attention of the General Counsel of the party to be notified. All notices
to be given to the parties hereto, and the copies thereof, shall be sent to or
delivered at the addresses set forth at the beginning of this Agreement. By
giving the other party at least fifteen (15) days written notice thereof, each
party hereto shall have the right to change its address and specify as its new
address for the purposes hereof any other address in the United States of
America.
Section 13.11 Waiver. No consent or waiver, express or implied, by either
party to this Agreement to or of any breach or default by the other in the
performance of any obligations hereunder shall be deemed or construed to be
consent or waiver to or of any other breach or default by such party hereunder.
Except as otherwise provided herein, failure on the part of any party hereto to
complain of any act or failure to act by the other party or to declare the other
party in default hereunder, irrespective of how long such failure continues,
shall not constitute a waiver of the rights of such party hereunder.
Section 13.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which, taken
together, shall be construed as a single instrument.
Section 13.13 Captions. The captions used for the Articles and Sections in
this Agreement are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope or the intent of this
Agreement or any Article or Section hereof.
Section 13.14 Gender. Unless the context clearly indicates to the contrary,
words singular or plural in number shall be deemed to include the other and
pronouns having a neuter, masculine or feminine gender shall be deemed to
include the others. The term "person" shall be deemed to include an individual,
corporation, partnership, trust, unincorporated organization, government and
governmental agency or subdivision, as the context shall require.
Section 13.15 Unenforceable Provisions. In the event any provision of this
Agreement is declared or adjudged to be unenforceable or unlawful by any
Governmental Authority, then such unenforceable or unlawful provision shall be
excised herefrom, and the remainder of this Agreement, together with all rights
and remedies granted thereby, shall continue and remain in full force and
effect.
Section 13.16 Cumulative Remedies. All rights, powers, remedies, benefits
and privileges available under any provision of this Agreement to any party
hereunder are in addition to and cumulative of any and all rights, powers,
remedies, benefits and privileges available to such party under all other
provisions of this Agreement, at law or in equity.
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Management Agreement
Section 13.17 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby.
All prior negotiations, representations and agreements with respect thereto not
incorporated in this Agreement are hereby canceled. This Agreement can be
modified or amended only by a written document duly executed by the parties
hereto or their duly appointed representatives.
Section 13.18 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA.
Section 13.19 Exhibits. Exhibits and the Addendum referred to in this
Agreement and attached hereto are incorporated herein in full by this reference
as if each of such exhibits and the Addendum were set forth in the body of this
Agreement and duly executed by the parties hereto.
Section 13.20 Confidentiality. Owner agrees not to disclose the terms or
conditions of this Agreement to any person other than a Permitted Person (as
hereinafter defined), provided, however, that the restrictions of this Section
13.20 shall not apply to any information required to be disclosed by applicable
law or to information that becomes public other than by virtue of a breach of
this Section. For purposes of this Section, the term "Permitted Person" shall
mean (i) the partners, shareholders, directors, officers and employees of Owner,
(ii) accountants, attorneys, consultants and other professionals engaged to
render services in connection with the Project or in connection with the
ownership or operation of Owner or its Affiliates and (iii) lenders and
investors and potential lenders and investors to or in Owner or its Affiliates
and (iv) potential purchasers of the Project. Without limiting the foregoing,
the term "Permitted Persons" also shall include the successors and assigns to
and from lenders to Owner or its Affiliates, purchasers and prospective
purchasers of participations in any loan made by such lenders or of one or more
classes of mortgage backed, pass-through certificates or other securities
evidencing a beneficial interest in a rated or unrated public offering or
private placement ("Securities"), any rating agency that assigns a rating to
some or all of the Securities and their respective counsel. Permitted Persons
shall be informed of the confidential nature of the information disclosed to
them and shall be required to agree to act in accordance with the provisions of
this Section 13.20 with respect to such information.
Section 13.21 Owner Approvals. Except as otherwise expressly provided in
this Agreement, to the extent that Owner's approval is required for any matter
in connection with any matter in connection with this Agreement, Owner shall
approve or disapprove such matter within ten (10) days after being notified
thereof by Manager; provided, however, that Owner shall approve or disapprove
any such matter involving pending litigation concerning the Project within five
(5) business days after being notified thereof by Manager. If Owner does not
approve or disapprove any such matter within the specified time period, Owner
shall be deemed to have approved such matter.
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Management Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
---------------------------
("Owner")
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
WYNDHAM MANAGEMENT CORPORATION,
a Delaware corporation
("Manager")
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
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EXHIBIT B
INSURANCE
A. Pursuant to Section 8.1 of the Management Agreement ("Agreement") made
and entered into as of , by and between
-------- ---- --------------------------
(the "Owner") and Wyndham Management Corporation (the "Manager"), subject to
reasonable availability, Manager shall procure and maintain insurance in respect
of the Project (as that term is defined in the Agreement), at Owner's expense,
as follows:
1. Property damage insurance in an amount not less than that
stipulated by Owner covering all real and personal property, which
insurance shall be written on an "all risks" and replacement cost form;
2. Boiler and machinery coverage insuring against damage to, and
against loss or damage caused by an accident or occurrence arising from or
related to, boilers, heating apparatus, pressure vessels and pipes, air
conditioning apparatus and electrical equipment, which insurance coverage
shall be written on a standard, broad form boiler and machinery policy (on
a blanket or comprehensive basis) and shall include "repair and
replacement" coverage;
3. Commercial general liability insurance in an amount not less than
$1,000,000.00 per occurrence/$2,000,000.00 aggregate, insuring against
liability for bodily injury and property damage and, including without
limitation, the following coverage:
a) premises and operations liability;
b) independent contractors liability;
c) product/completed operations liability;
d) broad form property damage liability;
e) blanket contractual liability with respect to all contracts,
written and oral;
f) personal injury liability;
g) liquor liability;
h) incidental malpractice liability; and
i) garagekeepers legal liability.
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4. Comprehensive automobile liability insurance in an amount not less
than $1,000,000.00 per occurrence covering liability for bodily injury and
property damage arising out of the ownership, maintenance or use of all
private passenger and commercial vehicles and other equipment required to
be licensed for road use;
5. Innkeeper's legal liability insurance covering the property of
premises guests in an amount not less than $10,000.00 per guest and
$250,000.00 per occurrence;
6. Safe depository insurance in an amount not less than $250,000.00
per occurrence;
7. Business interruption insurance written on an "all risks" form
either as endorsements to the policies satisfying (1) and (2) above or on a
separate policy, such insurance to include specific coverage for Manager's
Management Fee calculated based on the Gross Revenues used as the basis for
calculation of the business interruption insurance award; and
8. Broad form umbrella/excess liability insurance, which shall cover
defense costs on a "first dollar" basis and shall provide coverage not less
than "following form" in respect of all underlying coverages, in an amount
not less than $50,000,000.00 covering against excess liability over
coverages provided by all primary general liability, automobile liability
and employers' liability insurance policies.
B. In addition, Owner and Manager agree that, subject to reasonable
availability, Manager shall maintain the following insurance with respect to
Project employees, agents and servants, at Owner's expense:
1. Workers' compensation insurance complying with the statutory
workers' compensation law for the state in which the Project is located;
2. Employer's liability insurance in an amount not less than
$500,000.00 covering against liability in respect of employees, agents and
servants not covered by workers' compensation insurance and against
occupational disease benefits;
3. Employee fidelity insurance in an amount not less than
$1,000,000.00; and
4. Employment practices coverage in an amount not less than $1,000,000
per claim/aggregate.
Manager shall also maintain such other insurance as Manager shall deem necessary
for operation of the Project, with the prior approval of Owner.
C. All insurance procured and maintained pursuant to the Agreement shall
have such deductibles, limits and coverages, and shall otherwise be in such
form, as Manager shall from time to time specify. However, Owner assumes all
responsibility and risks with respect to the adequacy of insurance in respect of
the Hotel.
-33-
D. All insurance policies procured and maintained pursuant to the Agreement
shall have attached thereto an endorsement that such policy shall not be
cancelled or materially changed without at least thirty (30) days prior written
notice (ten (10) days prior written notice in the case of any such cancellation
or material change arising from any failure to pay any insurance premium) to
Owner and Manager.
E. All property damage insurance procured and maintained pursuant to the
Agreement, including, without limitation, insurance procured and maintained
pursuant to A(1), A(2) and A(7) above, shall name Owner and Manager as insureds
and shall provide for the payment of losses thereunder to Owner and Manager as
their respective interests shall appear thereon. All liability insurance
procured and maintained pursuant to the Agreement, including without limitation,
the policies procured and maintained pursuant to A(3), (4), (5), (6) and (8),
shall name Owner, Manager, their Affiliates and their and their Affiliates'
respective shareholders, partners, directors, officers, agents and employees as
insureds. All policies of Workers Compensation and Employers Liability pursuant
to B (1) and (2) shall include a waiver of subrogation in favor of Owner.
F. Any insurance procured and maintained pursuant to the Agreement by
either party may be effected under policies of blanket insurance which may cover
other properties managed or owned by such party.
-34-
Exhibit 99.2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
DT-DES PLAINES, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
R-LISLE, LLC, a Delware limited liability
company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
DT GLENVIEW, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
WCHNW, LLC, a Delware limited liability
company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
R-HOUSTON, L.P., a Delware limited
Partnership
By: R-HOUSTON, GP, LLC, a Delware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
W-COLINAS, L.P., a Delware limited
partnership
By: W-Colinas GP, LLC, a Delware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
RAD-▇▇▇▇, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
W-▇▇▇▇▇▇▇▇, ▇.▇., a Delware limited
partnership
By: W-▇▇▇▇▇▇▇▇ ▇▇, LLC, a Delware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
W-BUTTES, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
W-EMERALD, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
W-BEL, AGE, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
DT-MIAMI, L.P., a Delware limited
partnership
By: DT-Miami GP, LLC, a Delware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
DT-TALLAHASSEE, L.P., a Delware limited
partnership
By: DT-Tallahassee GP, LLC, a Delware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
W-INDIANA, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
PARSIPPANY, LLC, a Delware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
H-GATEWAY, LLC, a Delaware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
H-CLEVELAND, LLC, a Delaware limited
liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
W-GARDEN ATLANTA, LLC, a Delaware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
▇▇▇▇▇▇, LLC, a Delaware limited liability
company
By: /s/ ▇▇▇▇▇▇ Gosh
----------------------------------------
▇▇▇▇▇▇ Gosh
Vice President
WITH RESPECT TO SECTION 9.1 AND 9.2
ONLY,
WYNDHAM INTERNATIONAL, INC., a
Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇ INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory