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EXHIBIT 10.18
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AMENDED AND RESTATED LINE OF CREDIT AGREEMENT
between
SLT REALTY LIMITED PARTNERSHIP
and
STARWOOD LODGING TRUST
and
BANKERS TRUST COMPANY, AS COLLATERAL AGENT
FOR THE BENEFIT OF THE SENIOR LENDERS,
and
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
D/B/A ▇▇▇▇▇▇ CAPITAL, A DIVISION
OF ▇▇▇▇▇▇ BROTHERS HOLDINGS INC.,
INDIVIDUALLY AND AS AGENT FOR ONE OR MORE CO-LENDERS
Dated as of October __, 1995
Initial Facility Amount of $75,000,000.00
Maximum Facility Amount of $135,000,000.00
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS.......................................................... 2
Section 1.1 Definitions...................................................... 2
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY........................ 26
Section 2.1 Advances....................................................... 26
Section 2.2 Notice of Borrowing............................................ 27
Section 2.3 Disbursement of Funds.......................................... 28
Section 2.4 The Note....................................................... 29
Section 2.5 Interest....................................................... 30
Section 2.6 Interest Periods............................................... 31
Section 2.7 Minimum Amount of Eurodollar Portions.......................... 32
Section 2.8 Conversion or Continuation..................................... 32
Section 2.9 Voluntary Reduction of Maximum Facility Amount; Termination
of Maximum Facility Amount..................................... 33
Section 2.10 Swing Line Advances............................................ 34
Section 2.11 Voluntary Prepayments.......................................... 35
Section 2.12 Mandatory Prepayments.......................................... 36
Section 2.13 Application of Payments and Prepayments........................ 36
Section 2.14 Method and Place of Payment.................................... 36
Section 2.15 Fees........................................................... 37
Section 2.16 Interest Rate Unascertainable, Increased Costs, Illegality..... 37
Section 2.17 Funding Losses................................................. 39
Section 2.18 Increased Capital.............................................. 40
Section 2.19 Taxes.......................................................... 40
Section 2.20 Use of Proceeds................................................ 42
Section 2.21 Release and Substitution of Collateral......................... 42
Section 2.22 Increasing Available Facility Amount........................... 50
Section 2.23 Breach of Available Borrowing Base Covenant or Loan to Value
Ratio Covenant................................................. 51
Section 2.24 Adjustment of Allocated Loan Amounts upon Addition of New
Property....................................................... 52
Section 2.25 Maximum Number of Transactions................................. 52
Section 2.26 Increasing Allocable Loan Amounts.............................. 52
SECTION 3. CONDITIONS PRECEDENT................................................. 53
Section 3.1 Conditions Precedent to the Initial Advance.................... 53
Section 3.2 Conditions Precedent to All Advances of the Loan............... 61
Section 3.3 Acceptance of Borrowings....................................... 63
Section 3.4 Sufficient Counterparts........................................ 63
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SECTION 4. REPRESENTATIONS AND WARRANTIES....................................... 64
Section 4.1 Corporate/Partnership Status................................... 64
Section 4.2 Corporate/Partnership Power and Authority...................... 64
Section 4.3 No Violation................................................... 64
Section 4.4 Litigation..................................................... 65
Section 4.5 Financial Statements: Financial Condition; etc................. 65
Section 4.6 Solvency....................................................... 65
Section 4.7 Material Adverse Change........................................ 65
Section 4.8 Use of Proceeds; Margin Regulations............................ 66
Section 4.9 Governmental Approvals......................................... 66
Section 4.10 Security Interests and Liens................................... 66
Section 4.11 Tax Returns and Payments....................................... 66
Section 4.12 ERISA.......................................................... 66
Section 4.13 Intentionally Omitted.......................................... 67
Section 4.14 Representations and Warranties in Loan Documents............... 68
Section 4.15 True and Complete Disclosure................................... 68
Section 4.16 Ownership of Real Property; Existing Security Instruments...... 68
Section 4.17 No Default..................................................... 68
Section 4.18 Licenses, etc.................................................. 68
Section 4.19 Compliance With Law............................................ 69
Section 4.20 Brokers........................................................ 69
Section 4.21 Judgments...................................................... 69
Section 4.22 Property Manager............................................... 69
Section 4.23 Assets of the REIT............................................. 70
Section 4.24 REIT Status.................................................... 70
Section 4.25 The Partnership................................................ 70
Section 4.26 HIC............................................................ 70
Section 4.27 Intercompany Debt.............................................. 70
Section 4.28 Personal Property.............................................. 70
Section 4.29 Operations..................................................... 70
Section 4.30 Stock.......................................................... 70
Section 4.31 Ground Leases.................................................. 70
Section 4.32 Survival....................................................... 71
SECTION 5. AFFIRMATIVE COVENANTS................................................ 71
Section 5.1 Financial Reports.............................................. 71
Section 5.2 Books, Records and Inspections................................. 74
Section 5.3 Maintenance of Insurance....................................... 74
Section 5.4 Taxes.......................................................... 74
Section 5.5 Corporate Franchises; Conduct of Business...................... 75
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Section 5.6 Compliance with Law............................................ 75
Section 5.7 Performance of Obligations..................................... 75
Section 5.8 Stock.......................................................... 76
Section 5.9 Maintenance of Personal Property............................... 76
Section 5.10 Maintenance of Properties...................................... 76
Section 5.11 Compliance with ERISA.......................................... 76
Section 5.12 Settlement/Judgment Notice..................................... 77
Section 5.13 Acceleration Notice............................................ 78
Section 5.14 Lien Searches; Title Searches.................................. 78
Section 5.15 Available Borrowing Base Covenant.............................. 78
Section 5.16 Minimum Net Worth.............................................. 79
Section 5.17 Total Indebtedness............................................. 80
Section 5.18 Coverage Ratios................................................ 80
Section 5.19 Replacement Reserve and Deferred Maintenance Reserve........... 80
Section 5.20 Loan to Value Ratio............................................ 82
Section 5.21 Manager........................................................ 84
Section 5.22 Further Assurances............................................. 84
Section 5.23 REIT Status.................................................... 85
Section 5.24 Mortgage Covenants............................................. 85
Section 5.25 Appraisals..................................................... 85
Section 5.26 Maintenance of Control......................................... 86
Section 5.27 Maintenance of Intercompany Debt............................... 86
Section 5.28 Transfer of Licenses........................................... 86
SECTION 6. NEGATIVE COVENANTS................................................... 87
Section 6.1 INTENTIONALLY DELETED.......................................... 87
Section 6.2 INTENTIONALLY DELETED.......................................... 87
Section 6.3 Liens.......................................................... 87
Section 6.4 Restriction on Fundamental Changes............................. 88
Section 6.5 Transactions with Affiliates................................... 88
Section 6.6 Plans.......................................................... 88
Section 6.7 Payout Ratios.................................................. 88
Section 6.8 Operating Leases............................................... 89
Section 6.9 Borrower's Partnership Agreement............................... 89
SECTION 7. EVENTS OF DEFAULT.................................................... 89
Section 7.1 Events of Default.............................................. 89
Section 7.2 Rights and Remedies............................................ 93
SECTION 8. INTENTIONALLY DELETED................................................ 94
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SECTION 9. MISCELLANEOUS........................................................ 94
Section 9.1 Payment of Lender's, Collateral Agent's and Co-Lender's
Expenses, Indemnity, etc....................................... 94
Section 9.2 Notices........................................................ 96
Section 9.3 Successors and Assigns; Participations; Assignments............ 98
Section 9.4 Amendments and Waivers......................................... 98
Section 9.5 No Waiver; Remedies Cumulative................................. 99
Section 9.6 Governing Law; Submission to Jurisdiction...................... 99
Section 9.7 Confidentiality; Disclosure of Information..................... 99
Section 9.8 Recourse....................................................... 100
Section 9.9 Sale of Loan, Co-Lenders, Participations and Servicing......... 101
Section 9.10 Borrower's and REIT's Assignment............................... 105
Section 9.11 Counterparts................................................... 105
Section 9.12 Effectiveness.................................................. 106
Section 9.13 Headings Descriptive........................................... 106
Section 9.14 Marshaling; Recapture.......................................... 106
Section 9.15 Severability................................................... 106
Section 9.16 Survival....................................................... 106
Section 9.17 Domicile of Loan Portions...................................... 106
Section 9.18 Intentionally Omitted.......................................... 106
Section 9.19 Calculations; Computations..................................... 106
Section 9.20 WAIVER OF TRIAL BY JURY........................................ 107
Section 9.21 No Joint Venture............................................... 107
Section 9.22 Estoppel Certificates.......................................... 107
Section 9.23 No Other Agreements............................................ 107
Section 9.24 Controlling Document........................................... 108
Section 9.25 No Benefit to Third Parties.................................... 108
Section 9.26 Joint and Several.............................................. 108
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SCHEDULES
Schedule 1 Allocated Loan Amounts
Schedule 2 Real Property Assets
Schedule 2A Pool 1 Real Property Assets
Schedule 2B Pool 2 Real Property Assets (California)
Schedule 2C Pool 3 Real Property Assets (Washington)
Schedule 2D Pool 4 Real Property Assets (Nevada)
Schedule 3 Franchise Agreements
Schedule 4 Required Estoppel Certificates
Schedule 5 Litigation
Schedule 6 Employee Benefit Plans
Schedule 7 Liens
Schedule 8 Ground Leases
Schedule 9 Intercompany Debt
Schedule 10 Operating Leases (including Vagabond Leases)
Schedule 11 Permitted Financing per Real Property Asset
Schedule 11A Lodge Net licensing agreements
Schedule 12 Management Agreements
Schedule 13 REIT Business Operations
Schedule 13A Corporation Business Operations
Schedule 14 Management Fees and Franchise Fees
Schedule 15 Certified Copies of Leases
Schedule 16 Initial Minimum Spending Requirement and Minimum Spending
Requirement
Schedule 17 Deferred Maintenance Spending Requirement and Deferred
Maintenance Reserve
Schedule 18 Liquor Licenses
EXHIBITS
Exhibit A-1 Notice of Borrowing
Exhibit A-2 Notice of Swing Line Advance
Exhibit B-1 Form of Note
Exhibit B-2 Form of Florida Note
Exhibit B-3 Form of Swing Line Note
Exhibit C-1 Notice Requesting Short Interest Period
Exhibit C-2 Notice of Conversion or Continuation
Exhibit D Notice of Voluntary Reduction of Maximum Facility
Amount
Exhibit E Notice of Voluntary Prepayment
Exhibit F Request For Additional Collateral
Exhibit G Form of Security Instrument
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Exhibit H Form of Assignment of Leases and Rents
Exhibit I Form of Environmental Indemnity
Exhibit J Form of Swing Line Participation Certificate
Exhibit K Form of Ground Lease Estoppel
Exhibit L Form of Assignment of Franchise Agreement,
Agreements, Permits and Contracts
Exhibit M Form of Franchisor Estoppel and Recognition Letter
Exhibit N Form of Security Agreement
Exhibit O Form of Tenant Estoppel Certificate
Exhibit P Form of Subordination, Attornment and Non-Disturbance
Agreement
Exhibit Q Form of Intercompany Debt Subordination Agreement
Exhibit R Form of Partnership [HIC] Guaranty
Exhibit S Form of Partnership [HIC] Mortgage
Exhibit T Form of Partnership [HIC] Guaranty Security Agreement
Exhibit U Form of Partnership [HIC] Assignment of Leases and Rents
Exhibit V Form of Consent to Assignment, Subordination and Attornment
Agreement
Exhibit W Form of Vagabond Subordination and Non-Disturbance Agreement
Exhibit X Form of HIC Guaranty
Exhibit Y Form of Assignment and Assumption
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THIS AMENDED AND RESTATED LINE OF CREDIT AGREEMENT, dated as
of _______________, 1995, is made among SLT REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership ("Borrower"), STARWOOD LODGING TRUST, a Maryland
real estate investment trust (the "REIT"), BANKERS TRUST COMPANY, a New York
banking organization, having an address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as collateral agent (the "Collateral Agent") and
▇▇▇▇▇▇ BROTHERS HOLDINGS INC., D/B/A ▇▇▇▇▇▇ CAPITAL, A DIVISION OF ▇▇▇▇▇▇
BROTHERS HOLDINGS INC., a Delaware corporation, individually and as Agent for
one or more Co-Lenders and successors ("Lender").
PRELIMINARY STATEMENT
The REIT, Merrill Lynch Mortgage Capital Inc. ("▇▇▇▇▇▇▇") and
the Collateral Agent (each by way of its predecessor in interest) entered into
a certain Credit Agreement dated as of January 28, 1993 (the "Prior Credit
Agreement") pursuant to which certain loans were made to the REIT (the "▇▇▇▇▇▇▇
Facility").
On January 1, 1995, the REIT, the Corporation and Starwood
Capital Group, L.P. ("Group") consummated a transaction pursuant to which
substantially all of the assets and liabilities of the REIT and Corporation,
and certain assets and liabilities of the Group, were transferred to Borrower
and Partnership in exchange for ownership interests in the Borrower and
Partnership.
Borrower, the REIT, ▇▇▇▇▇▇▇ and Collateral Agent entered into
a certain Amended and Restated Credit Agreement dated as of March 24, 1995 (the
"Amended Credit Agreement") which amended and restated the Prior Credit
Agreement in its entirety to provide for, among other things, an additional
advance to the Borrower, the pledge of additional assets as additional security
for the ▇▇▇▇▇▇▇ Facility, and an additional acquisition credit facility.
Lender is the current owner and holder of the Amended Credit
Agreement and the ▇▇▇▇▇▇▇ Facility, as amended by that certain First Amendment
to the Amended and Restated Credit Agreement dated September 27, 1995 between
Lender, Borrower, the REIT and the Collateral Agent (the Amended Credit
Agreement, as amended, the "Credit Agreement").
Borrower, the REIT, the Collateral Agent and Lender hereby
desire to amend and restate in its entirety the Credit Agreement pursuant to
which the Borrower, the REIT, the Collateral Agent and Lender agree to
restructure the terms of the Credit Agreement and the ▇▇▇▇▇▇▇ Facility and the
obligations of Borrower and the REIT under the Credit Agreement and Lender
agrees to extend additional credit facilities to Borrower, all subject to and
upon the terms and conditions of this Agreement.
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and in and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto covenant and agree as follows:
A. Neither this Agreement nor anything contained herein
shall be construed as a substitution or novation of the indebtedness evidenced
hereby or of the Credit Agreement, which shall remain in full force and effect,
as supplemented, increased, amended and restated, as provided herein.
B. All of the terms, provisions and obligations
contained in the Credit Agreement are hereby supplemented, amended and restated
in their entirety to read as follows:
SECTION 1. DEFINITIONS.
Section 1.1 Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural number the singular.
"Accounts Receivable" shall mean all income and revenues or
rights to receive all income and revenues arising from the operation of the
Real Property Assets and all payments for goods or property sold or leased or
for services rendered, whether or not yet earned by performance, and not
evidenced by an instrument or chattel paper, including, without limiting the
generality of the foregoing, (i) all accounts, contract rights, book debts, and
notes arising from the operation of a hotel on the Real Property Assets or
arising from the sale, lease or exchange of goods or other property and/or the
performance of services, (ii) Borrower's rights to payment from any consumer
credit/charge card organization or entity (such as, or similar to, the
organizations or entities which sponsor and administer the American Express
Card, the Visa Card, the Bankamericard, the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Card, or the
Mastercard) arising with respect to the Real Property Assets, (iii) Borrower's
rights in, to and under all purchase orders for goods, services or other
property arising with respect to the Real Property Assets, (iv) Borrower's
rights to any goods, services or other property represented by any of the
foregoing, (v) monies due to or to become due to Borrower under all contracts
for the sale, lease or exchange of goods or other property and/or the
performance of services including the right to payment of any interest or
finance charges in respect thereto (whether or not yet earned by performance on
the part of Borrower) arising with respect to the Real Property Assets and (vi)
all collateral security and guaranties of any kind given by any person or
entity with respect to any of the foregoing. Accounts Receivable shall include
those now existing or hereafter created, substitutions therefor, proceeds
(whether cash or non-cash, movable or immovable, tangible or intangible)
received upon the sale, exchange, transfer, collection or other disposition or
substitution thereof and any and all of the foregoing and proceeds therefrom.
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"Adjusted Operating Lease Payments" shall mean, with respect
to all Operating Leases other than the Vagabond Leases, the sum of Base Rent
(as defined in the related Operating Lease) and Percentage Rent (as defined in
the related Operating Lease) that would be due and payable under the Operating
Leases if Gross Receipts and Gross Sales (as each term is defined in the
Operating Leases) were each reduced by 50% and calculated in accordance with
the provisions of this Agreement relating to Property Net Cash Flow.
"Advance" shall mean each advance and readvance of the
principal balance of the Loan, including any Swing Line Advance.
"Affiliate" shall mean, with reference to a specified Person,
any Person that directly or indirectly through one or more intermediaries
Controls or is Controlled by or is under common Control with the specified
Person and any Subsidiaries of such specified Person.
"Agent" shall have the meaning provided in Section 9.9(e).
"Aggregate Available Facility Amount" shall mean the sum of
the Available Facility Amounts for Note A, Note B, Note C and Note D; in no
event shall the Aggregate Available Facility Amount exceed the Maximum Facility
Amount.
"Agreement" shall mean this Amended and Restated Line of
Credit Agreement as the same may from time to time hereafter be modified,
supplemented or amended.
"Allocated Loan Amount" shall mean the portions of the
Available Facility Amount allocated to each Real Property Asset as set forth on
Schedule 1, as the same may be adjusted in accordance with this Agreement.
"Annual Operating Budget" shall have the meaning provided in
Section 5.1.
"Applicable Laws" shall mean all existing and future federal,
state and local laws, statutes, orders, ordinances, rules, and regulations or
orders, writs, injunctions or decrees of any court affecting Borrower or any
Real Property Asset, or the use thereof including, but not limited to, all
zoning, fire safety and building codes, the Americans with Disabilities Act,
and all Environmental Laws (as defined in the Environmental Indemnity).
"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 Real Property
Asset is located, who meets the requirements of FIRREA and who has at least ten
(10) years real estate experience appraising properties of a similar nature and
type as the applicable Real Property Asset and who is otherwise satisfactory to
Lender.
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"Assignment and Assumption" shall have the meaning provided in
Section 9.9(a).
"Assignment of Contracts" shall have the meaning provided in
Section 3.1(a)(viii).
"Assignment of Leases and Rents" shall have meaning provided
in Section 3.1(a)(iv).
"Available Borrowing Base" shall mean, with respect to each
Note, for the period for which it is to be determined, the quotient obtained by
dividing (A) the aggregate Net Operating Income for all of the Real Property
Assets securing the related Note by (B) the product of (i) 2.0 times (ii) the
Contract Rate of interest for the related Note applicable hereunder for such
period, provided, however, that if such Contract Rate is less than the Treasury
Rate on the last day of such period, then the applicable Contract Rate shall be
deemed to be the Treasury Rate on the last day of such period, for purposes of
this calculation only.
"Available Borrowing Base Covenant" shall have the meaning
provided in Section 5.15.
"Available Facility Amount" shall mean, individually, U.S.
$70,110,000.00 with respect to Note A (of which $3,400,000.00 is with respect
to the Florida Note and $66,710,000.00 is with respect to Note A-1), U.S.
$4,890,000.00 with respect to Note B, and U.S. $0.00 with respect to Note C and
U.S. $0.00 with respect to Note D; or, if the Syndication has occurred pursuant
to Section 9.9(k) or the ▇▇▇▇▇▇ Additional Commitment has been provided
pursuant to the terms of the Syndication Letter, up to U.S. $107,354,000.00
with respect to Note A (of which $3,400,000.00 is with respect to the Florida
Note and $103,954,000.00 is with respect to Note A-1), U.S. $8,753,000.00 with
respect to Note B, U.S. $13,235,000.00 with respect to Note C and U.S.
$5,658,000.00 with respect to Note D, as each may be reduced pursuant to
Sections 2.9, 2.12, 2.21, 5.15, or 5.20, or otherwise pursuant to the terms of
this Agreement, or increased pursuant to Section 2.22.
"Bankruptcy Code" shall mean Title 11 of the United States
Code entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors' rights.
"Base Period" shall have the meaning provided in Section
5.18(a).
"Base Rate" shall mean, at any particular date, a rate per
annum equal to the rate of interest published in The Wall Street Journal as the
"prime rate", as in effect on such day,
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with any change in the prime rate resulting from a change in said prime rate to
be effective as of the date of the relevant change in said prime rate; provided,
however, that if more than one prime rate is published in The Wall Street
Journal for a day, the average of the Prime Rates shall be used; provided,
further, however, that the Prime Rate (or the average of the prime rates) will
be rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, to
the next higher 1/16 of 1%.
In the event that The Wall Street Journal should cease or
temporarily interrupt publication, then the Prime Rate shall mean the daily
average prime rate published in another business newspaper, or business section
of a newspaper, of national standing chosen by Lender. If The Wall Street
Journal resumes publication, the substitute index will immediately be replaced
by the prime rate published in The Wall Street Journal.
In the event that a prime rate is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a comparable interest rate
index which is readily available to Borrower and verifiable by Borrower but is
beyond the control of Lender. Lender shall give Borrower prompt written notice
of its choice of a substitute index and when the change became effective.
Such substitute index will also be rounded to the nearest 1/16
of 1% or, if there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
The determination of the Base Rate by Lender shall be
conclusive absent manifest error.
"Base Rate Margin" shall mean 0.625% per annum.
"Base Rate Portions" shall mean each portion of the Loan made
and/or being maintained at a rate of interest based upon the Base Rate,
including any Swing Line Advances.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement and any successor Borrower expressly permitted
hereunder.
"Borrower's Partnership Agreement" means that certain Amended
and Restated Limited Partnership Agreement of SLT Realty Limited Partnership
dated _________(sic), 1995, and an Amended and Restated Certificate of Limited
Partnership of SLT Realty Limited Partnership dated July 5, 1995.
"Borrowing" shall mean a borrowing of one Type of Advance from
Lender and any Co-Lender or Swing Line Lender on a given date (or resulting
from conversions or
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continuations on a given date), having in the case of Eurodollar Portions the
same Interest Period.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which Lender, any
Co-Lender or banking institutions are authorized or required by law or other
government actions to close, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Portions, any day which is a Business Day described in clause (i)
and which is also a day for trading by and between banks for U.S. dollar
deposits in the relevant interbank Eurodollar market.
"Capitalized Lease" as to any Person shall mean (i) any lease
of property, real or personal, the obligations under which are capitalized on
the consolidated balance sheet of such Person and its Subsidiaries, and (ii)
any other such lease to the extent that the then present value of the minimum
rental commitment thereunder should, in accordance with GAAP, be capitalized on
a balance sheet of the lessee.
"Capitalized Lease Obligations" as to any Person shall mean
all obligations of such Person and its Subsidiaries under or in respect of
Capitalized Leases.
"Change in Law" shall have the meaning provided in Section
2.19(c).
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, together with all rules
and regulations from time to time promulgated thereunder.
"Co-Lender" shall have the meaning provided in Section 9.9.
"Collateral" shall mean all property and interests in property
now owned or hereafter acquired in or upon which a Lien has been or is
purported or intended to have been granted under any of the Security
Instruments or any of the other Loan Documents, including, without limitation,
all Operating Leases (other than the Vagabond Leases), and all New Properties
and Substitute Properties but excluding Release Properties.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement and any successor thereto.
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"Collateral Agent Fees" shall mean the Custodial Fees and
Collateral Agent Fees, each as defined in the Custodial Agreement, to which the
Collateral Agent is entitled pursuant to the Custodial Agreement.
"Consent to Assignment, Subordination, Estoppel and Attornment
Agreement" shall have the meaning provided in Section 3.1(a)(xx).
"Consolidated Interest Expense" means with respect to any
Person for any period, interest accrued or payable by such Person and its
Subsidiaries during such period in respect of Total Debt determined on a
consolidated basis in accordance with GAAP.
"Contingent Obligation" as to any Person shall mean any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases (including Capitalized Leases), dividends or other
obligations ("primary obligations") of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor,(ii) to advance or supply funds (x) for the purchase or
payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth,
solvency or other financial condition of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof:
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any accrued or accruable Contingent Obligation shall
be determined in accordance with GAAP.
"Contract Rate" shall mean the rate or rates of interest
(which rate shall include the applicable margin added thereto pursuant to the
terms of this Agreement) per annum provided for in this Agreement which are
applicable to the Loan from time to time so long as no Event of Default has
occurred and in continuing. If more than one rate of interest is applicable to
the Loan, then, unless the context indicates that the Contract Rate is to be
determined for each Loan Portion, the Contract Rate shall be the average of
such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%) with
such average to be weighted according to the relative size of the Loan Portions
to which such different rates are applicable. The determination of the
Contract Rate by Lender, if made in good faith, shall be conclusive absent
manifest error.
"Control" shall mean in (a) in the case of a corporation,
ownership, directly or through ownership of other entities, of at least ten
percent (10%) of all the voting stock (exclusive of stock which is voting only
as required by applicable law or in the event of nonpayment of dividends and
pays dividends only on a nonparticipating basis at a fixed or floating rate),
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and (b) in the case of any other entity, ownership, directly or through
ownership of other entities, of at least ten percent (10%) of all of the
beneficial equity interests therein (calculated by a method that excludes from
equity interests, ownership interests that are nonvoting (except as required by
applicable law or in the event of nonpayment of dividends or distributions) and
pay dividends or distributions only on a non-participating basis at a fixed or
floating rate) or, in any case, (c) the power directly or indirectly, to direct
or control, or cause the direction of, the management policies of another
Person, whether through the ownership of voting securities, general partnership
interests, common directors, trustees, officers by contract or otherwise. The
terms "controlled" and "controlling" shall have meanings correlative to the
foregoing definition of "Control."
"Corporation" shall mean Starwood Lodging Corporation, a
Maryland corporation.
"Corrective Action Plan" shall have the meaning provided in
Section 5.19(c).
"Custodial Agreement" shall have the meaning provided in
Section 9.9(e).
"Debt Service" means with respect to any Person for any
period, the sum (without duplication) of (a) Consolidated Interest Expense of
such Person for such period plus (b) scheduled principal amortization of Total
Debt (other than the final balloon payments in connection with Indebtedness of
such Person, unless past due) of such Person for such period (whether or not
such payments are made).
"Default" shall mean any event, act or condition which, with
the giving of notice or lapse of time, or both, would constitute an Event of
Default.
"Default Rate" shall mean for each Loan Portion the lesser of
(a) the Maximum Legal Rate or (b) with respect to all then outstanding
Eurodollar Portions, (i) the rate per annum determined by adding 2% to the
Contract Rate applicable to the Loan immediately prior to an Event of Default
until the expiration of the applicable Interest Periods and thereafter the rate
per annum determined by adding 2% to the Base Rate, as from time to time is in
effect; or (c) with respect to all then outstanding Base Rate Portions, the
rate per annum determined by adding 2% to the Base Rate as from time to time in
effect.
"Deferred Maintenance Reserve" shall have the meaning provided
in Section 5.19(b).
"Deferred Maintenance Spending Requirement" shall have the
meaning provided in Section 5.19(b).
16
-9-
"Distribution" shall mean any dividends (other than dividends
payable solely in common stock),distributions, return of capital to any
stockholders, general or limited partners or members, other payments,
distributions or delivery of property or cash to stockholders, general or
limited partners or members, or any redemption, retirement, purchase or other
acquisition, directly or indirectly, of any shares of any class of capital
stock now or hereafter outstanding (or any options or warrants issued with
respect to capital stock), any general or limited partnership interest, or the
setting aside of any funds for the foregoing.
"Dollars" and the symbol "$" each mean the lawful money of the
United States of America.
"Domestic Lending Office" shall mean the office set forth in
Section 9.2 for Lender, or such other office as may be designated from time to
time by written notice to Borrower.
"Draw Period" shall mean the period commencing on the date
hereof and expiring on the Termination Date.
"EBITDA" shall mean with respect to any Person for any period,
earnings (or losses) before interest and taxes of such Person and its
Subsidiaries for such period plus, to the extent deducted in computing such
earnings (or losses) before interest and taxes, depreciation and amortization
expense, all as determined on a consolidated basis with respect to such Person
and its Subsidiaries in accordance with GAAP; provided, however, EBITDA shall
exclude earnings or losses resulting from (i) cumulative changes in accounting
practices, (ii) discontinued operations, (iii) extraordinary items, (iv) net
income of any entity acquired in a pooling of interest transaction for the
period prior to the acquisition, (v) net income of a Subsidiary that is
unavailable to the Borrower, (vi) net income not readily convertible into
Dollars or remittable to the United States, (vii) net income from corporations,
partnerships, associations, joint ventures or other entities in which the
Borrower or a Subsidiary has a minority interest and in which Borrower does not
have Control, except to the extent actually received.
"Employee Benefit Plan" shall mean an employee benefit plan
within the meaning of Section 3(3) of ERISA (i) that is maintained by Borrower
or any other Loan Party or (ii) with respect to which any such person has any
obligation or liability, whether direct or indirect; provided, however, that
"Employee Benefit Plan" shall not include any "multiemployer plan" as defined
in section 4001(a)(3) of ERISA.
"Engineering Reports" shall have the meaning provided in
Section 3.1(o).
"Environmental Indemnity" shall have the meaning provided in
Section 3.1(a)(v).
17
-10-
"Environmental Reports" shall mean the written environmental
site assessments, prepared by independent qualified environmental professionals
acceptable to Lender in its reasonable discretion, prepared in accordance with
Lender's then current guidelines, of each of the Real Property Assets, each of
which assessments shall be in form and substance reasonably satisfactory to
Lender and contain the information set forth in Section 3.1(k).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and any successor statute, together with
all rules and regulations promulgated thereunder. Section references to ERISA
are to ERISA, as in effect at the date of this Agreement and any provisions of
ERISA substituted therefor.
"ERISA Controlled Group" means any corporation or entity or
trade or business or person that is a member of any group described in Section
414(b), (c), (m) or (o) of the Code of which Borrower, the REIT, the
Partnership, the Corporation, HIC or any other Loan Party is a member.
"ERISA Indemnitee" shall have the meaning provided in Section
9.9(l).
"Estoppel Certificate" shall have the meaning provided in
3.1(e).
"Eurocurrency Reserve Requirements" shall mean, with respect
to each day during an Interest Period for Eurodollar Portions, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Federal Reserve Board or other governmental authority or agency having
jurisdiction with respect thereto for determining the maximum reserves
(including, without limitation, basic, supplemental, marginal and emergency
reserves) for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D) maintained by a member bank of the Federal
Reserve System. The parties acknowledge that the Eurocurrency Reserve
Requirements as of the Closing Date are -0-%.
"Eurodollar Base Rate" shall mean, (a) for any Interest Period
other than a Short Interest Period, the rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point)
which appears on the Telerate Page 3750 as of 11:00 a.m. (London, England time)
two (2) Business Days prior to the first day of such Interest Period for
deposits in U.S. Dollars for a period equal to such Interest Period, and (b)
for any Short Interest Period an interpolated rate per annum based on the
closest comparable Interest Periods, which appear on the Telerate Page 314 as
of 11:00 a.m. (London, England time) two (2) Business Days prior to the first
day of such Short Interest Period. The determination of the Eurodollar Base
Rate by Lender shall be conclusive absent manifest error.
18
-11-
"Eurodollar Lending Office" shall mean the office of Lender
(or any Participant or Co-Lender) designated as such by Lender from time to
time by written notice to Borrower.
"Eurodollar Portions" shall mean each portion of the Loan made
and/or being maintained at a rate of interest calculated by reference to the
Eurodollar Rate.
"Eurodollar Rate" shall mean with respect to each day during
an Interest Period for Eurodollar Portions, a rate per annum equal to the
Eurodollar Base Rate, or, if any Co-Lender is subject to Eurocurrency Reserve
Requirements, whether or not such reserves are actually incurred or maintained,
the average of the Eurodollar Base Rate and the Adjusted Eurodollar Base Rate,
with such average to be weighted according to the percentage of the Eurodollar
Portion subject to such Co-Lender's interest in the Loan and the balance of
such Eurodollar Portion. The Adjusted Eurodollar Base Rate shall mean a rate
per annum, determined for each day during an Interest Period in accordance with
the following formula (rounded upwards to the nearest whole multiple of 1/16th
of one percent):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Rate Margin" shall mean 1.625% per annum.
"Event of Default" shall have the meaning provided in Section
7.
"Expense Cap" shall have the meaning provided in the
Syndication Letter.
"Fee Letter" shall mean that certain letter dated the date
hereof from ▇▇▇▇▇▇ Brothers Holdings Inc. to Borrower and the REIT.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended from time to time.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System as constituted from time to time, or any successor
thereto in function.
"Fees" shall mean all amounts payable pursuant to Sections
2.15, 2.17 and 9.1.
"Financing Statement" shall have the meaning provided in
Section 3.1(h).
"Fixed Charges" means the amount of scheduled lease payments
with respect to leasehold interests or obligations of the respective Person.
19
-12-
"Florida Note" shall have the meaning provided in Section
2.4(a).
"Florida Real Property Asset" shall mean that Pool 1 Real
Property Asset located in the state of Florida.
"Franchise Agreements" shall mean the franchise agreements
described in Schedule 3 (as such Schedule may be amended, from time to time)
between the Partnership or HIC and the respective Franchisors pursuant to which
the Partnership or HIC has the right to operate the hotel located on the
related Real Property Asset under a name and/or hotel system controlled by such
Franchisor and any other hotel or hospitality franchise agreement with respect
to any New or Substitute Property.
"Franchisor" shall mean each of the franchisors under the
Franchise Agreements described in Schedule 3, as such Schedule may be amended
from time to time.
"Franchisor Estoppel and Recognition Letter" shall have the
meaning provided in Section 3.1(a)(ix).
"Funding Costs" shall have the meaning provided in Section
2.17.
"Funds from Operations" shall mean consolidated net income
(loss) before extraordinary items, computed in accordance with GAAP, plus, to
the extent deducted in determining net income (loss) and without duplication,
(i) gains (or losses) from debt restructuring and sales of property, (ii)
non-recurring charges, (iii) provisions for losses, (iv) real estate related
depreciation and amortization (excluding amortization of financing costs), and
(v) amortization of organizational expenses less, to the extent included in net
income (loss), (a) non-recurring income and (b) equity income (loss) from
unconsolidated partnerships and joint ventures less the proportionate share of
funds from operations of such partnerships and joint ventures, which
adjustments shall be calculated on a consistent basis.
"Furnished Information" shall have the meaning provided in
Section 4.15.
"GAAP" shall mean United States generally accepted accounting
principles on the date hereof and as in effect from time to time during the
term of this Agreement, and consistent with those utilized in the preparation
of the financial statements referred to in Section 4.5.
"Gross Revenues" shall mean, with respect to any Real Property
Asset for any period, all income, rents, room rates, additional rents,
revenues, issues and profits (including all oil and gas or other mineral
royalties and bonuses) and other items including without limitation, all
revenues and credit card receipts collected from guest rooms, restaurants,
meeting rooms,
20
-13-
bars, mini-bars, banquet rooms, recreation facilities, vending machines and
concessions derived from the customary operation of such Real Property Asset.
"Group" shall have the meaning provided in the Preliminary
Statement.
"Ground Lease" shall mean those ground leases, together with
all amendments and modifications thereto, all as more particularly set forth on
Schedule 8 with respect to the Real Property Assets identified on such
Schedule, as such Schedule may be amended from time to time.
"Ground Lease Estoppel" shall have the meaning provided in
Section 3.1(xiv).
"HIC" shall mean Hotel Investors Corporation of Nevada, a
Nevada corporation.
"HIC Assignment of Contracts" shall have the meaning provided
in Section 3.1(a)(xxvi).
"HIC Assignment of Leases and Rents" shall have the meaning
provided in Section 3.1(a)(xxv).
"HIC Event of Default" shall have the meaning provided in
Section 7.1(j).
"HIC Guaranty" shall have the meaning provided in Section
3.1(a)(xxii).
"HIC Guaranty Security Agreement" shall have the meaning
provided in Section 3.1(a)(xxiv).
"HIC Mortgage" shall have the meaning provided in Section
3.1(a)(xxiii).
"Increased Capital Costs" shall have the meaning provided in
Section 2.18.
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument, (iii) the
outstanding amount drawn and unpaid under all letters of credit issued for the
account of such Person and, without duplication, all unreimbursed amounts drawn
thereunder, (iv) all indebtedness of any other Person secured by any Lien on
any property owned by such Person, whether or not such indebtedness has been
assumed, (v) all Contingent Obligations of such Person, (vi) all Unfunded
Benefit Liabilities of such Person, (vii) all actual payment obligations of
such Person under any interest rate protection agreement (including, without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar
21
-14-
agreements, (viii) all indebtedness and liabilities secured by any Lien or
mortgage on any property of such Person, whether or not the same would be
classified as a liability on a balance sheet, (ix) the liability of such Person
in respect of banker's acceptances and the estimated liability under any
participating mortgage, convertible mortgage or similar arrangement, (x) the
aggregate amount of rentals or other consideration payable by such Person in
accordance with GAAP over the remaining unexpired term of all Capitalized
Leases, (xi) all final, non-appealable judgments or decrees by a court or courts
of competent jurisdiction entered against such Person, (xii) all indebtedness,
payment obligations, contingent obligations, etc. of any partnership in which
such Person holds a general partnership interest, and (xiii) all obligations,
liabilities, reserves and any other items which are listed as a liability on a
balance sheet of such Person determined on a consolidated basis in accordance
with GAAP, but excluding all general contingency reserves and reserves for
deferred income taxes and investment credit.
"Indemnitee" shall have the meaning provided in Section
9.1(c).
"Initial Assets" shall mean the Real Property Assets described
on Schedule 1 as of the date hereof.
"Initial Facility Amount" shall mean U.S. $75,000,000.00.
"Initial Minimum Spending Requirement" shall have the meaning
provided in Section 5.19(a).
"Initial Replacement Reserve" shall have the meaning provided
in Section 5.19(a).
"Intercompany Debt" shall mean the indebtedness owed by the
Partnership, HIC, or any other Person listed on Schedule 9, to Borrower, all as
more particularly described in Schedule 9.
"Intercompany Debt Subordination Agreement" shall have the
meaning provided in Section 3.1(a)(xiii).
"Intercompany Loan Documents" shall mean the notes, leasehold
mortgages and other security documents evidencing and/or securing the
Intercompany Debt.
"Intercreditor Agreement" shall have the meaning provided in
Section 9.4.
"Interest Period" shall have the meaning provided in Section
2.6.
"▇▇▇▇▇▇ Additional Commitment" shall have the meaning provided
in the Syndication Letter.
22
-15-
"Licenses" shall have the meaning provided in Section 4.18.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement of any kind or
nature whatsoever, including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
effect as any of the foregoing and the filing of any financing statement or
similar instrument under the Uniform Commercial Code or comparable law of any
jurisdiction, domestic or foreign.
"Loan" shall mean, in the aggregate, the Advances made to
Borrower under this Agreement and the Note and the Swing Line Note, without
duplication, pursuant to the terms hereof, the aggregate principal amount of
which shall not exceed the Available Facility Amount.
"Loan Documents" shall mean this Agreement, the Notes, the
Security Instruments, the Environmental Indemnity, the Assignment of Leases and
Rents, the Assignment of Contracts, each Financing Statement filed in
connection herewith, the Security Agreement, the Franchisor Estoppel and
Recognition Letter, the Intercompany Debt Subordination Agreement,
Subordination, Non-disturbance and Attornment Agreements, the Vagabond
Subordination and Non-Disturbance Agreement, the Partnership Guaranty, the
Partnership Guaranty Security Agreement, the Partnership Mortgage, the
Partnership Guaranty Assignment of Leases and Rents, the Partnership Assignment
of Contracts, the Consent to Assignment, Subordination, Estoppel and Attornment
Agreement, the HIC Guaranty, the HIC Guaranty Security Agreement, the HIC
Mortgage, the HIC Guaranty Assignment of Leases and Rents, the HIC Assignment
of Contracts, the Fee Letter, the Syndication Letter, and any other documents
or instruments evidencing, securing or guaranteeing the Loan or perfecting
Lender's Lien in the Collateral.
"Loan Party" shall mean, individually and collectively, as the
context requires, the REIT, the Partnership, the Corporation and HIC; provided,
however, that in the event that Lender has released its Liens against all of
the Collateral pledged by one or more of such parties, then such party or
parties, as of the effective date of such release, shall no longer be included
in the definition of Loan Party.
"Loan Portion" shall mean each Base Rate Portion and each
Eurodollar Portion of the Loan.
"Loan to Value Ratio" shall have the meaning provided in
Section 5.20.
"Loan to Value Ratio Covenant" shall have the meaning provided
in Section 5.20.
23
-16-
"Major Lease" shall have the meaning provided in Section 3.7 of
the Security Instrument.
"Margin Stock" shall have the meaning provided such term in
Regulation U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" shall mean any condition which has a
material adverse effect upon (i) the business, operations, properties, assets,
corporate structure or financial condition of Borrower, the REIT, the
Partnership, or the Corporation, individually or taken as a whole, (ii) the
ability of Borrower, the REIT, the Partnership, or the Corporation to perform
any of the Obligations, (iii) the validity or enforceability of any of the Loan
Documents, or (iv) the ability of Borrower or the REIT to meet any of the
obligations under the Whole Loan Facility.
"Maturity Date" shall mean October 1, 1998 or such earlier
date on which the principal balance of the Loan and all other sums due in
connection with the Loan shall be due as a result of the acceleration of the
Loan.
"Maximum Facility Amount" shall mean up to U.S.
$135,000,000.00, provided that the Syndication occurs pursuant to Section
9.9(k) or the ▇▇▇▇▇▇ Additional Commitment is provided pursuant to the terms of
the Syndication Letter; if the Syndication does not occur pursuant to Section
9.9(k) or the ▇▇▇▇▇▇ Additional Commitment is not provided, the Maximum
Facility Amount shall mean $75,000,000.00; in either case, as such amount shall
be reduced pursuant to Sections 2.9 or 2.21 or otherwise pursuant to the terms
and conditions of this Agreement.
"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 Security Instruments or 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.
"Minimum Net Worth" shall have the meaning provided in Section
5.16.
"Minimum Replacement Reserve" shall have the meaning provided
in Section 5.19(a).
"Minimum Spending Requirement" shall have the meaning provided
in Section 5.19(a).
"Minimum Threshold" shall have the meaning provided in Section
3.2(g).
24
-17-
"Multiemployer Plan" shall mean a "pension plan" as defined in
Section 3(2) of ERISA which is a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Net Book Value" shall mean the book value of all of a
Person's assets that is reflected on such Person's consolidated financial
statements, including adjustment or allowance for depreciation and amortization
and calculated in accordance with GAAP.
"Net Operating Income" shall mean for any period (i) with
respect to each Real Property Asset other than the Vagabond Inns, the lesser of
(a) Property Net Cash Flow or (b) 200% of Operating Lease Payments;
notwithstanding the foregoing, in the event that the Franchise Agreement with
respect to any Real Property Asset has been terminated or has expired after the
date hereof, and Borrower has not entered into a replacement Franchise
Agreement with a comparable Franchisor reasonably satisfactory to Lender, the
Net Operating Income from such Real Property Asset shall be deemed equal to the
lesser of (1) 50% of Property Net Cash Flow and (2) 200% of Adjusted Operating
Lease Payments for such Real Property Asset and (ii) with respect to the
Vagabond Inns, Operating Lease Payments.
"New Property" shall have the meaning provided in Section
2.22.
"Non-Competition Agreement" means Section 6.6 of that certain
Formation Agreement, dated as of November 11, 1994, by and among the REIT
(formerly Hotel Investors Trust), the Corporation (formerly Hotel Investors
Corporation), the Group and Berl Holdings, L.P., Starwood-Apollo Hotel Partners
VIII, L.P., Starwood-Apollo Hotel Partners IX, L.P., Starwood-Nomura Hotel
Investors, L.P., Starwood/Wichita Investors, L.P., Starwood-Huntington
Partners, L.P. and Woodstar Partners I, L.P. (collectively, the "Starwood
Partners") as amended by that certain Amendment No. 1 to Formation Agreement,
dated as of July 6, 1995, by and among the REIT, the Corporation, the Group and
the Starwood Partners.
"Non-use Fee" shall have the meaning provided in Section 2.15.
"Non-use Fee Due Date" shall mean the date which is five (5)
Business Days after the date Lender has furnished Borrower with an invoice
showing the amount of the Non-use Fee and a detailed calculation of the same.
"Note" or "Notes" shall have the meaning provided in Section
2.4(a).
"Note A" shall have the meaning provided in Section 2.4(a).
"Note B" shall have the meaning provided in Section 2.4(a).
"Note C" shall have the meaning provided in Section 2.4(a).
25
-18-
"Note D" shall have the meaning provided in Section 2.4(a).
"Notice of Borrowing" shall have the meaning provided in
Section 2.2(a).
"Notice of Conversion or Continuation" shall have the meaning
provided in Section 2.8(b).
"Notice of Swing Line Advance" shall have the meaning provided
in Section 2.2(b).
"Obligations" shall mean all payment, performance and other
obligations, liabilities and indebtedness of every nature of (i) Borrower and
the REIT, without duplication, from time to time owing to Lender or any
Co-Lender under or in connection with this Agreement or any other Loan
Document, or (ii) the other Loan Parties under or in connection with the
Security Instruments or any other Loan Document.
"Operating Expenses" shall mean, with respect to any Real
Property Asset, for any given period (and shall include the pro rata portion
for such period of all such expenses attributable to, but not paid during, such
period), all expenses paid, accrued, or payable, as determined in accordance
with GAAP and the Uniform System of Accounts by Borrower and the Partnership or
HIC, as the case may be, during that period in connection with the operation of
such Real Property Asset for which it is to be determined, including without
limitation:
(i) expenses for cleaning, repair, maintenance,
decoration and painting of the such Real Property Asset (including,
without limitation, parking lots and roadways), net of any insurance
proceeds in respect of any of the foregoing;
(ii) wages (including overtime payments), benefits,
payroll taxes and all other related expenses for Borrower's, the
Partnership's or HIC's, as the case may be, on-site personnel, up to
and including (but not above) the level of the on-site manager,
engaged in the repair, operation and maintenance of such Real Property
Asset and service to tenants and on- site personnel engaged in audit
and accounting functions performed by Borrower, the Partnership or
HIC;
(iii) management fees pursuant to the Management Agreement
providing for fees not exceeding market and approved by Lender in its
reasonable discretion, but in no event less than the percentage of
Gross Revenues set forth on Schedule 14 with respect to the applicable
Real Property Asset. Such fees shall include all fees for management
services whether such services are performed at such Real Property
Asset or off-site;
26
-19-
(iv) Franchise fees, reservation fees and other royalties
or similar payments due under the Franchise Agreements, not exceeding
market and approved by Lender in its reasonable discretion, but in no
event less than the percentage of gross room revenues set forth on
Schedule 14 with respect to the applicable Real Property Asset; if no
percentage is set forth, the calculation of Operating Expenses shall
be based on the actual franchise fees, if any;
(v) the cost of all electricity, oil, gas, water, steam,
heat, ventilation, air conditioning and any other energy, utility or
similar item and the cost of building and cleaning supplies;
(vi) the cost of any leasing commissions and tenant
concessions or improvements payable by Borrower, the Partnership, HIC
or any Loan Party pursuant to any leases which are in effect for such
Real Property Asset at the commencement of that period as such costs
are recognized in accordance with GAAP, but on no less than a straight
line basis over the remaining term of the respective Lease, exclusive
of any renewal or extension or similar options;
(vii) rent, liability, casualty, fidelity, errors and
omissions, dram shop liability, workmen's compensation and other
required insurance premiums;
(viii) legal, accounting and other professional fees and
expenses;
(ix) the cost (including leasing and financing) of all
equipment to be used in the ordinary course of business, which is not
capitalized in accordance with GAAP;
(x) real estate, personal property and other taxes;
(xi) advertising and other marketing costs and expenses;
(xii) casualty losses to the extent not reimbursed by an
independent third party; and
(xiii) all amounts that should be reserved, as reasonably
determined by Borrower, the Partnership or HIC, as the case may be,
with approval by Lender in its reasonable discretion, for repair or
maintenance of the Real Property Asset and to maintain the value of
the Real Property Asset including replacement reserves of no less than
4% of Gross Revenues.
Notwithstanding the foregoing, Operating Expenses shall not include (i)
depreciation or amortization or any other non-cash item of expense unless
approved by Lender; (ii) interest,
27
-20-
principal, fees, costs and expense reimbursements of Lender in administering the
Loan but not in exercising any of its rights under this Agreement or the Loan
Documents; (iii) any expenditure (other than leasing and financing costs,
leasing commissions, tenant concessions and improvements, and replacement
reserves) which is properly treatable as a capital item under GAAP; or (iv)
Operating Lease Payments.
"Operating Lease Payments" shall mean the rent due and payable
to Borrower under the Operating Leases, including, without limitation, all Base
Rent, Basic Rent and all Percentage Rent but excluding Additional Rent (as each
term is defined in the Operating Leases).
"Operating Leases" shall mean those operating leases between
Borrower as lessor and the Partnership or HIC as lessee with respect to each
Real Property Asset as set forth on Schedule 10, (as such Schedule may be
amended from time to time) and any other operating lease in the same form
between Borrower and the Partnership or HIC, if applicable, with respect to any
New or Substitute Property except that with respect to the Vagabond Inns, it
shall mean the Vagabond Leases.
"Participant" shall have the meaning provided in Section 9.9.
"Partnership" means SLC Operating Limited Partnership, a
Delaware limited partnership.
"Partnership Assignment of Contracts" shall have the meaning
provided in Section 3.1(a)(xix).
"Partnership Assignment of Leases and Rents" shall have the
meaning provided in Section 3.1(a)(xviii).
"Partnership Guaranties" shall have the meaning provided in
Section 3.1(a)(xv).
"Partnership Guaranty Security Agreement" shall have the
meaning provided in Section 3.1(a)(xvii).
"Partnership Mortgage" shall have the meaning provided in
Section 3.1(a)(xvi).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto.
"Permitted Financing" shall mean leases, licenses or financing
arrangements with respect to signage, televisions, audio-visual equipment,
office supplies, computers, reservation systems, telephone systems, or vans for
which aggregate annual lease payments, license fees and
28
-21-
debt service is less than the amount per annum set forth for each Real Property
Asset on Schedule 11. For each Real Property Asset, such amount is an
aggregate limit for that Real Property Asset on all leasing, licensing or
financing by the Partnership, HIC and Borrower. The licensing arrangement
between Lodge Net Entertainment Corporation and Hotel Investors Corporation
(the predecessor of the Corporation), dated August 30, 1994 as more fully
described on Schedule 11A, shall also be deemed a Permitted Financing and is
not subject to the per annum limitations set forth on Schedule 11.
"Permitted Liens" shall have the meaning provided in Section
6.3.
"Person" shall mean and include any individual, partnership,
joint venture, firm, corporation, limited liability company, association,
company, trust or other enterprise or any government or political subdivision
or agency, department or instrumentality thereof.
"Personal Property" shall mean all Equipment, Inventory and
Fixtures, each as defined in the Security Agreement.
"Plan" means any employee benefit plan covered by Title IV of
ERISA or subject to Section 412 of the Code or Section 302 of ERISA (i) that is
maintained by Borrower or any other Loan Party or (ii) with respect to which
any such person has or may have any obligation or liability, whether direct or
indirect; provided, however, that "Plan" shall not include any "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"Plan Asset Entity" shall mean any "employee benefit plan" as
defined in ERISA, any "plan" as defined in Section 4975 of the Code, and any
entity any portion or all of the assets of which are deemed pursuant to United
States Department of Labor Regulation Section 2510.3-101 or otherwise pursuant
to ERISA or the Code to be, for any purpose of ERISA or Section 4975 of the
Code, assets of any such "employee benefit plan" or "plan" which invests in
such entity.
"Pool" shall mean, individually or collectively, as the
context requires, Pool 1, Pool 2, Pool 3 and Pool 4 Real Property Assets and
the related Note.
"Pool 1 Real Property Assets" shall mean those Real Property
Assets set forth on Schedule 2A designated as such, as the same may be adjusted
in accordance with the terms of this Agreement.
"Pool 2 Real Property Assets" shall mean those Real Property
Assets set forth on Schedule 2B designated as such, as the same may be adjusted
in accordance with the terms of this Agreement.
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"Pool 3 Real Property Assets" shall mean those Real Property
Assets set forth on Schedule 2C designated as such, as the same may be adjusted
in accordance with the terms of this Agreement.
"Pool 4 Real Property Assets" shall mean those Real Property
Assets set forth on Schedule 2D designated as such, as the same may be adjusted
in accordance with the terms of this Agreement.
"Property Net Cash Flow" shall mean, with respect to any Real
Property Asset, the Gross Revenues derived from the customary operation of such
Real Property Asset during the period in question, less Operating Expenses
attributable to such Real Property Asset for such period, and shall include
only the Gross Revenues and other such income actually received and earned, in
accordance with GAAP, including any rent loss or business interruption
insurance proceeds, and laundry, parking or other vending or concession income,
which are actually received or accrued in accordance with GAAP attributable to
such Real Property Asset during the twelve (12) month period ending at the end
of the calendar month for which the Property Net Cash Flow is being calculated,
as set forth on operating statements satisfactory to Lender. Property Net Cash
Flow shall be calculated in accordance with customary accounting principles
applicable to real estate and in accordance with the Uniform System of
Accounts. Notwithstanding the foregoing, Property Net Cash Flow shall not
include (i) any condemnation or insurance proceeds (excluding rent or business
interruption insurance proceeds), (ii) any proceeds resulting from the sale,
exchange, transfer, financing or refinancing of all or any portion of the Real
Property Asset for which it is to be determined, (iii) amounts received from
tenants as security deposits, (iv) amounts received as advance reservation
deposits unless earned in accordance with GAAP, and (v) any type of income
otherwise included in Property Net Cash Flow but paid directly by any tenant to
a Person other than Borrower, or the Partnership or HIC or their respective
agents or representatives.
"Quality Assurance Reports" shall have the meaning provided in
Section 5.1(d).
"REIT" shall have the meaning set forth in the opening
paragraph of this Agreement.
"Real Property Assets" shall mean the real property described
on Schedule 2, including the Pool 1, Pool 2, Pool 3 and Pool 4 Real Property
Assets, including all of the Collateral relating to such Real Property Assets
and each New Property and Substitute Property, that, in each case is encumbered
by a Mortgage or a Substitute Mortgage and the other Loan Documents;
notwithstanding the foregoing, however, upon the release by Lender of the Lien
against all of the Collateral relating to a Real Property Asset, such Real
Property Asset, as of the effective date of such release, shall no longer be
included within the definition of all of the Real Property Assets, Pool 1, Pool
2, Pool 3 or Pool 4 Real Property Assets, as applicable.
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"Recording Taxes" shall have the meaning provided in Section
3.2(h).
"Refunded Swing Line Advances" shall have the meaning provided
in Section 2.10(a).
"Register" shall have the meaning provided in Section 9.9.
"Regulation D" shall mean Regulation D of the Federal Reserve
Board as from time to time in effect and any successor to all or any portion
thereof.
"Related Schedules" shall have the meaning provided in Section
2.21(a).
"Release Property" shall have the meaning provided in Section
2.21.
"Relevant BBC Date" shall have the meaning provided in Section
5.15.
"Relevant LTV Date" shall have the meaning provided in Section
5.20.
"Reportable Event" has the meaning set forth in Section
4043(c)(3), (5), (6) or (13) of ERISA (other than a Reportable Event as to
which the provision of 30 days' notice to the PBGC is waived under applicable
regulations).
"Required Lenders" shall mean (i) the Lender and (ii)
Co-Lenders (including the Swing Line Lender) which in the aggregate own a
direct pro rata ownership interest in the Loan of 66-2/3% or more.
"Security Agreement" shall have the meaning provided in Section
3.1(a)(x).
"Security Instruments" shall have the meaning provided in
Section 3.1(a)(iii).
"Senior Lenders" shall mean the Lender, each Co-Lender, and
their respective successors and assigns.
"Short Interest Period" shall mean any Interest Period that
begins on a day other than the first Business Day of any calendar month and
which shall end on the day that immediately precedes the first Business Day of
the next succeeding calendar month following the commencement of such Short
Interest Period.
"Solvent" as to any Person shall mean that (i) the sum of the
assets of such Person, at a fair valuation based upon appraisals or comparable
valuation, will exceed its
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liabilities, including contingent liabilities, (ii) such Person will have
sufficient capital with which to conduct its business as presently conducted
and as proposed to be conducted and (iii) such Person has not incurred debts,
and does not intend to incur debts, beyond its ability to pay such debts as
they mature. For purposes of this definition, "debt" means any liability on a
claim, and "claim" means (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or
(y) a right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent
liabilities, such liabilities shall be computed in accordance with GAAP at the
amount which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.
"Subordination, Attornment and Non-Disturbance Agreement"
shall have the meaning provided in Section 3.1(a)(xi).
"Subsidiary" of any Person shall mean and include (i) any
corporation Controlled by such Person, directly or indirectly through one or
more intermediaries, and (ii) any partnership, association, joint venture or
other entity Controlled by such Person, directly or indirectly through one or
more intermediaries and (iii) all of the parties listed as Subsidiaries on
Schedule 3.
"Substitute Mortgage" shall have the meaning provided in
Section 2.21.
"Substitute Property" shall have the meaning provided in
Section 2.21.
"Swing Line Advance" shall mean any Advance (or readvance) of
the Loan that is evidenced by the Swing Line Notes.
"Swing Line Lender" shall mean the Co-Lender designated as the
Swing Line Lender upon the closing of the Syndication to provide Swing Line
Advances.
"Swing Line Note" shall mean have the meaning provided in
Section 2.4(b).
"Swing Line Participation Certificate" shall have the meaning
provided in Section 2.10(b).
"Syndication" shall have the meaning provided in Section
9.9(k).
"Syndication Letter" shall have the meaning provided in
Section 9.9(k).
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"Taxes" shall have the meaning provided in Section 2.19.
"Telerate Page 314" means the display designated as "Page 314"
on the Telerate Service (or such other page as may replace Page 314 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).
"Telerate Page 3750" means the display designated as "Page
3750" on the 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 purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).
"Tenant Estoppel Certificate" shall have the meaning provided
in Section 3.1(a)(vii).
"Termination Date" shall mean the date on which the earliest
of the following occurs: (i) the Non-Competition Agreement expires or otherwise
terminates and the Required Lenders elect to terminate the Draw Period and make
no further advances; (ii) Borrower is in breach of the covenants contained in
Sections 5.26 and 6.4, and the Required Lenders elect to terminate the Draw
Period and make no further Advances or (iii) the Maturity Date.
"Termination Event" shall mean (i) a Reportable Event, or (ii)
the initiation of any action by Borrower, the REIT, any member of Borrower's,
the REIT's or any other Loan Party's ERISA Controlled Group or any other person
to terminate a Plan or the treatment of an amendment to Plan as a termination
under ERISA, in either case, which could result in liability to Borrower, the
REIT or any Loan Party, (iii) the institution of proceedings by the PBGC under
Section 4042 of ERISA to terminate a Plan or to appoint a trustee to administer
any Plan, (iv) any partial or total withdrawal from a Multiemployer Plan which
in either case, could result in liability to Borrower, the REIT or any Loan
Party or (v) the taking of any action that would require Security to the Plan
under Section 401(a)(29) of the Code.
"Title Policy" shall have the meaning provided in Section
3.1(i).
"Title Searches" shall have the meaning provided in Section
5.14.
"Total Debt" means with respect to any Person at any time, all
Indebtedness of such Person and its Subsidiaries as determined on a
consolidated basis in accordance with GAAP.
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-26-
"Transaction Costs" shall mean all costs and expenses paid or
payable by Borrower or any other Loan Party relating to the Transactions
including, without limitation, the costs and expenses of Lender in conducting
its due diligence with respect to the Transactions, financing fees, commitment
fees, advisory fees, appraisal fees, legal fees, accounting fees, title
insurance premiums, recording charges and taxes, mortgage recording taxes,
intangibles taxes, documentary taxes, stamp taxes or similar taxes and the
Collateral Agent Fees, whether directly or as reimbursement to Lender or to the
Collateral Agent. Borrower's and the REIT's obligation to pay Transaction
Costs which are costs and expenses of the Lender in connection with the closing
of the Initial Facility Amount and the Syndication (including any upfront fees
due to the Collateral Agent) is subject to the terms of the Syndication Letter
and the Expense Cap.
"Transactions" shall mean each of the transactions contemplated
by the Loan Documents.
"Transferee" shall have the meaning provided in Section 9.7.
"Treasury Rate" shall mean the semi-annual yield (without
de-compounding), as reported in The Wall Street Journal (of if such rate is not
published therein, in the Federal Reserve Statistical Release H.15 - Selected
Interest Rates under the heading "U.S. Government Securities/Treasury constant
maturities") on the date of the Available Borrowing Base calculation (provided,
however, if such date is not a Business Day, then on the next succeeding
Business Day) for the current U.S. Treasury security with a maturity date most
closely approximating the date which is 10 years from such date of calculation,
plus 3.25%. In the event such rate is not published in either The Wall Street
Journal or Release H.15, Lender shall select a comparable publication to
determine the Treasury Rate.
"Type" shall mean the type of any portion of the Loan
determined with respect to the interest option applicable thereto, i.e., a Base
Rate Portion or a Eurodollar Portion.
"UCC Searches" shall have the meaning provided in Section
3.1(g).
"Unfunded Benefit Liabilities" means with respect to any Plan
at a particular time, the amount (if any) by which (i) the present value of all
benefit liabilities under such Plan as defined in Section 4001(a)(16) of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan (on the basis of assumptions prescribed by the PBGC for the purpose of
Section 4044 of ERISA).
"Uniform System of Accounts" mean the Uniform System of
Accounts for Hotels as approved by the American Hotel and Motel Association (as
in effect from time to time) applied on a consistent basis.
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"Vagabond Inns" shall mean those Real Property Assets
identified as Vagabond Inns on Schedule 2B.
"Vagabond Leases" shall mean those three leases described on
Schedule 10 between Borrower as lessor and Imperial Hotels Corporation as
lessee with respect to the Vagabond Inns.
"Vagabond Subordination and Non-Disturbance Agreement" shall
have the meaning provided in Section 3.1(a)(xxi).
"Whole Loan Facility" means that certain Mortgage Loan Funding
Facility made by ▇▇▇▇▇▇ Commercial Paper Inc. to Borrower and SLT Realty
Company, L.L.C., dated July 25, 1995.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY.
Section 2.1 Advances. (a) Subject to and upon the terms
and conditions herein set forth, Lender (and each Co-Lender) agrees, at any
time and from time to time on and after the Closing Date and prior to the
Termination Date, to make its pro rata share of Advances to Borrower, and the
Swing Line Lender agrees, at any time and from time to time after the
Syndication occurs and prior to the Termination Date, to make Swing Line
Advances to the Borrower, which Advances with respect to each Note (including
all Swing Line Advances) shall not exceed in aggregate principal amount at any
time outstanding, the Available Facility Amount for such Note at such time.
(b) Advances may be voluntarily prepaid pursuant to
Section 2.11, and, subject to the other provisions of this Agreement,
including, without limitation, Sections 2.9, 2.10, 2.12 and 2.21, any amounts
so prepaid may be reborrowed prior to the Termination Date. All outstanding
Advances shall mature on the Maturity Date, without further action on the part
of Lender or any Co-Lender.
(c) Each Advance of the Loan (other than a Swing Line
Advance) shall be in the aggregate minimum amount of One Million Dollars (U.S.
$1,000,000.00) or any integral multiple of Five Hundred Thousand Dollars (U.S.
$500,000.00) in excess thereof. Each Swing Line Advance shall be in the
aggregate minimum amount of Two Hundred Fifty Thousand Dollars (U.S.
$250,000.00) or any integral multiple of Fifty Thousand Dollars (U.S.
$50,000.00) in excess thereof. No Advance shall be made after the Termination
Date.
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(d) The aggregate principal amount at any time
outstanding under all Notes shall not exceed the Aggregate Available Facility
Amount at such time for such Notes and the aggregate principal amount at any
time outstanding under each Note shall not exceed the Available Facility Amount
for such Note. Borrower may choose the Notes under which an Advance shall be
made, provided, however, that (i) the initial Advance will be made under the
Florida Note up to the principal amount of the Florida Note and under Note A-1,
up to, in the aggregate, the Available Facility Amount for Note A; and (ii) in
the event that the funding of an Advance would cause the principal amount of
the Note Borrower has designated for such Advance to exceed the Available
Facility Amount for such Note, or if Borrower fails to make such a designation,
the excess amount of such Advance shall be funded under the other Notes in the
following manner and priority: first, under Note A, up to the Available
Facility Amount for Note A, second, under Note B, up to the Available Facility
Amount for Note B, third, under Note C; up to the Available Facility Amount for
Note C, and fourth, under Note D, up to the Available Facility Amount for Note
D. The portion of the aggregate principal balance of the Aggregate Available
Facility Amount evidenced by the Swing Line Notes shall not exceed, in the
aggregate U.S. $10,000,000.00.
(e) The obligation of Lender and each Co-Lender to make
their pro rata share of each Advance of the Loan is several and not joint.
Neither Lender nor any Co-Lender shall be liable for the failure of any other
Co-Lender to fund its pro rata share of any Advance hereunder provided that such
Co-Lender has executed and delivered an Assignment and Assumption Agreement.
Except as provided in Section 2.10, no Lender or Co-Lender other than the Swing
Line Lender shall have any obligation to make a Swing Line Advance.
Section 2.2 Notice of Borrowing. (a) Whenever Borrower
desires an Advance hereunder (other than a Swing Line Advance), it shall give
Lender at Lender's Office prior to 11:00 A.M., New York City time, at least
three (3) Business Days' prior facsimile, or telephonic notice (promptly
confirmed in writing) of each Advance to be made hereunder. Each such notice
(a "Notice of Borrowing") (i) shall be irrevocable, (ii) shall be executed by
the general partner of Borrower or a senior executive officer of Borrower,
(iii) shall specify (x) the aggregate principal amount of the requested
Advance, (y) the date of the Advance, (which shall be a Business Day) and (z)
the initial Interest Period to be applicable thereto, or, if such Advance is
not a Eurodollar Portion, that such Advance shall be a Base Rate Portion, (iv)
the Note under which the Advance will be made, (v) shall certify that, taking
into account the amount of the requested Advance, no Default or Event of
Default has occurred and is continuing, and all provisions of the Loan
Documents including, but not limited to, the Available Borrowing Base Covenant
with respect to each Note and the Loan to Value Ratio Covenant with respect to
each Pool will be complied with after giving effect to such Advance, and (vi)
shall be in the form annexed hereto as Exhibit "A-1". Lender shall, upon
determining the Eurodollar Rate for any Interest Period, promptly notify
Borrower thereof. Notwithstanding the foregoing, if Borrower requests an
Advance to cure a default under the Whole Loan Facility, Borrower may request
such Advance one (1) Business
36
-29-
Day prior to the date of the requested Advance provided that in addition to
compliance with the conditions of this Section 2.2(a), such Advance shall be a
Base Rate Portion and Borrower certifies, in writing, that such Advance shall be
used solely for the purpose of curing such default under the Whole Loan Facility
and authorizes and directs Lender to make such Advance directly to, or for the
account of, ▇▇▇▇▇▇ Commercial Paper, Inc.
(b) Whenever Borrower desires a Swing Line Advance hereunder,
it shall give Lender and Swing Line Lender at Lender's Office and Swing Line
Lender's Office prior to 11:00 A.M. New York City time, on the date that the
Swing Line Advance is to be made, which shall be a Business Day, facsimile or
telephonic notice (confirmed in writing prior to 12:00 noon, New York City Time
on the same day). Each such notice (a "Notice of Swing Line Advance") (i)
shall be irrevocable, (ii) shall be executed by the general partner of Borrower
or a senior executive officer of Borrower (iii) shall specify the aggregate
principal amount of the requested Swing Line Advance, (iv) shall specify the
date of the Swing Line Advance, which shall be a Business Day, (v) shall
certify that, taking into account the amount of the requested Swing Line
Advance, no Default or Event of Default has occurred and is continuing, and all
provisions of the Loan Documents including, but not limited to, the Available
Borrowing Base Covenant with respect to each Note and the Loan to Value Ratio
Covenant with respect to each Pool will be complied with after giving effect to
such Swing Line Advance, and (vi) shall be in the form annexed hereto as
Exhibit "A-2." Each Swing Line Advance shall be a Base Rate Portion and shall
be allocated pro-rata among the four Swing Line Notes.
Section 2.3 Disbursement of Funds. No later than 2:00
P.M., New York City time on the date specified in each Notice of Borrowing,
provided all conditions precedent to the making of such Advance have been
complied with, and further provided that Lender has received, in immediately
available federal funds, each Co-Lender's pro rata share of such Advance from
each Co-Lender, (or, in the case of a Swing Line Advance, Lender has received
in immediately available funds the amount of the Swing Line Advance from the
Swing Line Lender), Lender will make available to Borrower by disbursing to or
at the direction of Borrower, the amount of the requested Advance. If Lender
has not received from any Co-Lender such Co-Lender's pro rata share of such
Advance, Lender shall nonetheless disburse the portion of the Advance received
by Lender, together with Lender's pro rata share of such Advance, pursuant to
this Section 2.3.
Section 2.4 The Note. (a) Borrower's and the REIT's
obligation to pay the principal of, and interest on, the Loan shall be
evidenced by (i) the promissory note (as amended, modified, supplemented,
extended or consolidated, "Note A-1") duly executed and delivered by Borrower
and the REIT substantially in the form of Exhibit "B-1" hereto in a principal
amount equal to $103,954,000.00, and the amended and restated renewal note (as
amended, modified, supplemented, extended or consolidated, the "Florida Note")
duly executed and delivered by Borrower substantially in the form of Exhibit
"B-2" hereto, in a principal amount equal to
37
-30-
$3,400,000.00, (Note A-1 and the Florida Note hereinafter referred to together
as "Note A") (ii) the promissory note (as amended, modified, supplemented,
extended or consolidated, "Note B") duly executed and delivered by Borrower and
the REIT substantially in the form of Exhibit "B-1" hereto in a principal amount
equal to $8,753,000.00, (iii) the promissory note (as amended, modified,
supplemented, extended or consolidated, "Note C") duly executed and delivered by
Borrower and the REIT substantially in the form of Exhibit "B-1" hereto in a
principal amount equal to $13,235,000.00, and (iv) the promissory note (as
amended, modified, supplemented, extended or consolidated, "Note D") duly
executed and delivered by Borrower and the REIT substantially in the form of
Exhibit "B-1" hereto in a principal amount equal to $5,658,000.00 (Note A, Note
B, Note C and Note D individually a "Note" and collectively, together with any
related Swing Line Note, as the context may require, hereinafter referred to as
the "Notes") with blanks in each Note appropriately completed in conformity
herewith. Each Note shall (i) be payable to the order of Lender, (ii) be dated
the Closing Date, and (iii) mature on the Maturity Date. After the Syndication,
if required by a Co-Lender, Borrower and (except for the Florida Note) the REIT
hereby agree to execute for each Note a supplemental Note in the principal
amount of such Co-Lender's pro rata share of each Note substantially in the form
of Exhibit "B-1" hereto, with blanks appropriately completed, and each such
supplemental Note shall (i) be payable to order of Lender, as Agent, on account
of such Co-Lender, (ii) be dated as of the Closing Date, and (iii) mature on
the Maturity Date. Each such supplemental Note shall evidence a portion of the
existing indebtedness hereunder and not any new or additional indebtedness of
Borrower.
(b) Borrower's and the REIT's obligation to pay the
principal of, and interest on the Swing Line Advances shall be evidenced by a
promissory note duly executed and delivered by Borrower and the REIT,
substantially in the form of Exhibit B-2 hereto (the "Swing Line Notes"),
supplementing Note A-1, in the principal amount of $10,000,000.00. The Swing
Line Note shall be a supplemental Note with respect to Note A-1 and shall
evidence a portion of the indebtedness under Note A-1 and not evidence any new
or additional indebtedness of Borrower or the REIT. The Swing Line Note shall
(i) be payable to order of Lender, as Agent, on account of the Swing Line
Lender or, at the Swing Line Lender's option, to the order of the Swing Line
Lender, (ii) be dated as of the date the Syndication occurs, and (iii) mature
on the Maturity Date.
(c) Lender is hereby authorized, at its option, (i) to
endorse on the schedule attached to each Note (including the Swing Line Note)
(or on a continuation of such schedule attached to each such Note and made a
part thereof) an appropriate notation evidencing the date and amount of each
Advance evidenced thereby (including the Swing Line Lender in the case of Swing
Line Advances), and the date and amount of each principal and interest payment
in respect thereof, and/or (ii) to record such Advances and such payments in
its books and records. Such schedule or such books and records, as the case
may be, shall be conclusive and binding on
38
-31-
Borrower absent manifest error provided that the failure to make any notation
shall not affect the obligations of Borrower or the REIT or the rights of
Lender or any Co-Lender hereunder.
Section 2.5 Interest. (a) Borrower and (except with
respect to the Florida Note) the REIT shall pay interest in respect of the
unpaid principal amount of each Base Rate Portion from the date of the making
of such Base Rate Portion until such Base Rate Portion shall be paid in full,
or converted to a Eurodollar Portion, at a rate per annum which shall be equal
to the sum of the Base Rate Margin plus the Base Rate in effect from time to
time, such rate to change automatically and without notice as and when the Base
Rate changes.
(b) Borrower and (except with respect to the Florida
Note) the REIT shall pay interest in respect of the unpaid principal amount of
each Eurodollar Portion from the date of the making of such Eurodollar Portion
until such Eurodollar Portion shall be paid in full, continued as a Eurodollar
Portion or converted to a Base Rate Portion, at a rate per annum which shall be
equal to the sum of the Eurodollar Rate Margin plus the relevant Eurodollar
Rate.
(c) Intentionally Omitted.
(d) In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal amount
of the Loan and, to the extent permitted by law, overdue interest in respect of
the Loan, shall bear interest at the Default Rate, calculated from the date such
payment was due without regard to any grace or cure periods contained herein.
(e) Interest on the Loan shall accrue from and including
the date of each Borrowing thereof to but excluding the date of any repayment
thereof (provided that any Advance borrowed and repaid on the same day shall
accrue one day's interest) and Borrower and (except with respect to the Florida
Note) the REIT shall pay such interest (i) in respect of each Base Rate
Portion, (A) monthly in arrears on the first day of each month, (B) on the date
of any prepayment or conversion, (C) on the Maturity Date (whether by
acceleration or otherwise) and (D) after the Maturity Date, on demand, and (ii)
in respect of each Eurodollar Portion, in arrears (A) on the last day of the
applicable Interest Period, (B) on the date of any prepayment or conversion (on
the amount prepaid or converted), (C) on the Maturity Date (whether by
acceleration or otherwise), and (D) after the Maturity Date, on demand.
(f) Interest on the outstanding principal balance of Base
Rate Portions shall be calculated on the basis of a three hundred sixty (360)
day year based on twelve (12) thirty (30) day months, except that interest due
and payable for a period of less than a full month shall be calculated by
multiplying the actual number of days elapsed in such period by a daily rate
based on said 360-day year. Interest on the outstanding principal balance of
Eurodollar Portions shall
39
-32-
be calculated on the basis of a three hundred sixty (360) day year based on the
actual number of days elapsed.
(g) This Agreement and the Note are subject to the
express condition that at no time shall Borrower or the REIT be obligated or
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender or any Co-Lender (including the Swing Line 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 Loan Documents,
Borrower or the REIT 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 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.
Section 2.6 Interest Periods. (a) Borrower shall, in
each Notice of Borrowing or Notice of Conversion or Continuation in respect of
the making of, conversion into or continuation of a Eurodollar Portion, select
the interest period (each such period or any Short Interest Period an "Interest
Period") applicable to such Eurodollar Portion, which Interest Period, other
than a Short Interest Period, shall, at the option of Borrower, be either a one
month, two-month or three-month period subject to Section 2.6(b) below,
provided that:
(i) the Interest Period (other than a Short Interest
Period) for any Eurodollar Portion shall commence on the first Business
Day of a calendar month and shall expire on the day immediately
preceding the day that the next Interest Period (other than a Short
Interest Period) commences;
(ii) if the date of an Advance is not the first Business
Day of a calendar month, the Interest Period for such Eurodollar
Portion shall be a Short Interest Period and shall commence on the date
of the making of such Advance and expire on the day immediately
preceding the first Business Day of the next succeeding calendar month;
and
(iii) no Interest Period in respect of any Eurodollar
Portion shall extend beyond the Maturity Date.
(b) Notwithstanding the foregoing, in the event that the
last day of an Interest Period for any Eurodollar Portion occurs within the
thirty (30) day period ending on a voluntary
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prepayment date pursuant to Section 2.11 or the Maturity Date, Borrower may upon
three (3) Business Days notice to Lender, which notice shall be in the form
annexed hereto as Exhibit C-1, request a Short Interest Period for such
Eurodollar Portion. Neither Lender nor the Co-Lenders shall be under any
obligation to permit Borrower to select a Short Interest Period, and the
Eurodollar Base Rate offered to Borrower for any Short Interest Period shall be
determined by Lender and the Co-Lenders in accordance with the provisions of
this Agreement. Lender shall notify Borrower, either orally or in writing,
prior to 11:00 a.m. New York City time, on the date on which the Short Interest
Period is to begin, of the Eurodollar Base Rate, Eurodollar Portion and the
length of the Short Interest Period that would be applicable to such Short
Interest Period and Borrower shall orally confirm its acceptance of such
Eurodollar Base Rate at or prior to 11:00 a.m. New York City time and shall
deliver written confirmation of such acceptance to Lender at or prior to 2:00
p.m. New York City time on such date. If such confirmation differs in any
respect with the commencement date or length of the Short Interest Period, the
Eurodollar Base Rate or applicable Eurodollar Portion agreed to by Lender,
Lender shall be under no obligation to create such Eurodollar Portion, and
Eurodollar Portions shall be continued in accordance with Section 2.6(c).
(c) If upon the expiration of any Interest Period,
Borrower has failed to elect or confirm a new Interest Period or Eurodollar Base
Rate to be applicable to any Eurodollar Portion as provided above in Sections
2.6(a) and 2.6(b) or failed to convert such Eurodollar Portion to a Base Rate
Portion, all in accordance with Section 2.8, Borrower shall be deemed to have
elected to continue such Eurodollar Portions as Eurodollar Portions with an
Interest Period of one month (or, if at such time Eurodollar Portions are not
available pursuant to Section 2.17, Borrower shall be deemed to have elected to
convert such Eurodollar Portion into a Base Rate Portion), effective as of the
expiration date of such current Interest Period.
Section 2.7 Minimum Amount of Eurodollar Portions. All
advances, borrowings, conversions, continuations, payments, prepayments and
selection of Interest Periods hereunder shall be made or selected so that,
after giving effect thereto, each Eurodollar Portion shall (i) have a principal
amount equal to or greater than One Million Dollars (U.S. $1,000,000.00) and
(ii) be in an integral multiple of Five Hundred Thousand and 00/100 Dollars
(U.S. $500,000.00) in excess of such minimum amount. Subject to compliance
with such minimum amounts there shall be no limit on the number of Eurodollar
Portions.
Section 2.8 Conversion or Continuation. (a) Subject to
the other provisions hereof, Borrower shall have the option (i) to convert at
any time all or any part of the outstanding Base Rate Portions (other than
Swing Line Advances, but including Refunded Swing Line Advances,) to Eurodollar
Portions, (ii) to convert, at the expiration of the applicable Interest Period,
any outstanding Eurodollar Portions to Base Rate Portions, or (iii) to continue
all or any part of the outstanding Eurodollar Portions as Eurodollar Portions
for one or more additional Interest Periods, subject to Section 2.7, on the
expiration of the Interest Period applicable thereto (or
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prior to such expiration date, provided Borrower pays Funding Costs in
connection therewith pursuant to Section 2.17); provided that Borrower shall not
have the right to continue any Eurodollar Portion or convert any Base Rate
Portion into, a Eurodollar Portion when any Default with respect to the payment
of interest or principal hereunder or any Event of Default has occurred and is
continuing and in such case all outstanding Eurodollar Portions shall
automatically convert into a Base Rate Portion effective as of the expiration
date of the related Interest Period. Notwithstanding anything to the contrary
herein, all Swing Line Advances shall be Base Rate Portions, and Borrower shall
not be entitled to convert any Swing Line Advance into a Eurodollar Portion. In
the event Eurodollar Portions are not available pursuant to Section 2.16,
Borrower shall be deemed to have elected to convert such Eurodollar Portions
into Base Rate Portions, and if such conversion occurs prior to the expiration
date of the applicable Interest Period, Borrower shall also pay all Funding
Costs and other costs, expenses and losses in connection therewith pursuant to
Sections 2.16 and 2.17.
(b) In order to elect to convert or continue a Loan
Portion under this Section 2.8, Borrower shall deliver an irrevocable notice
thereof in the form annexed hereto as Exhibit "C-2" (a "Notice of Conversion or
Continuation") to Lender no later than 11:00 A.M., New York City time, (which
notice may be by facsimile transmission provided that an original is delivered
prior to the close of business on the immediately succeeding Business Day)
three (3) Business Days prior to the proposed conversion or continuation date
in the case of a conversion to, or a continuation of, a Eurodollar Portion. A
Notice of Conversion or Continuation shall specify (v) the requested conversion
or continuation date (which shall be a Business Day), (w) the amount and Type
of the Loan Portion to be converted or continued, (x) whether a conversion or
continuation is requested, (y) in the case of a conversion to, or a
continuation of, a Eurodollar Portion, the requested Interest Period and (z)
the existing Contract Rate applicable to the Loan Portion to be converted or
continued.
Section 2.9 Voluntary Reduction of Maximum Facility
Amount; Termination of Maximum Facility Amount. (a) Upon at least three (3)
Business Days' prior irrevocable written notice annexed hereto as Exhibit "D"
(or telephonic notice promptly confirmed in writing) to Lender, Borrower shall
have the right, without premium or penalty, to permanently reduce the Maximum
Facility Amount, provided that (a) Borrower may not reduce the Maximum Facility
Amount below the aggregate principal amount outstanding under the Loan at the
time of such requested reduction, (b) any such partial reduction shall be in
the minimum aggregate amount of Five Million Dollars (U.S. $5,000,000.00) or
any integral multiple of One Million Dollars (U.S. $1,000,000.00) in excess
thereof, (c) notwithstanding any such voluntary reduction of the Maximum
Facility Amount, none of the Liens affecting the Collateral shall be released
unless Borrower shall have complied with the terms and conditions of Section
2.21, (d) Borrower may not reduce the Maximum Facility Amount to an amount less
than Twenty Five Million Dollars (U.S. $25,000,000.00) and (e) if the Maximum
Facility Amount shall be reduced below the Aggregate Available Facility Amount,
the Available Facility Amount for each Note shall be
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reduced at Borrower's direction, provided that such reductions do not result in
a breach of the Available Borrowing Base Covenant or the Loan to Value Covenant;
if such direction results in a breach of either the Available Borrowing Base
Covenant or the Loan to Value Covenant or if Borrower fails to specify the Note
or Notes to be reduced, the Available Facility Amount for each Note shall be
reduced pro rata, in each case so that the Aggregate Available Facility Amount
shall equal the Maximum Facility Amount. Any reduction of the Maximum Facility
Amount shall be applied pro rata to Lender's and each Co-Lender's respective
percentage interest in the Loan.
(b) Upon at least three (3) Business Days prior
irrevocable written notice to Lender, Borrower shall have the right to
terminate the Loan, this Agreement and reduce the Maximum Facility Amount to
zero, provided that Borrower, on the date specified in such notice, pays to
Lender the entire outstanding principal balance of the Loan, together with all
interest accrued and unpaid thereon, all Funding Costs, and all other sums due
under the Note (including without limitation, the Swing Line Note), this
Agreement and the other Loan Documents; upon such termination, Lender and the
Co-Lender shall have no further obligation to make any Advances.
Section 2.10 Swing Line Advances. (a) The Swing Line
Lender, at any time in its sole and absolute discretion, may on behalf of the
Borrower and the REIT (which hereby irrevocably directs the Swing Line Lender
to act on their behalf) request each Co-Lender, including the Swing Line
Lender, to make an Advance in an amount equal to such Co-Lender's pro rata
share of the amount of the Swing Line Advances (the "Refunded Swing Line
Advances") outstanding on the date such notice is given. Unless any of the
events described in Section 7.1(e) shall have occurred (in which event the
procedures of subsection 2.10(b) shall apply) each Co-Lender shall, not later
than 2:00 p.m., New York City time, on the Business Day next succeeding the
date on which such notice is given, make available to the Swing Line Lender in
immediately available funds an amount equal to the Refunded Swing Line Advance
to be made by such Co-Lender. The proceeds of such Refunded Swing Line Advance
shall be immediately applied to repay the Swing Line Advance. Upon any request
by the Swing Line Lender to the Co-Lenders pursuant to this subsection 2.10(a),
Lender shall promptly give notice to the Borrower of such request. Refunded
Swing Line Advances shall be Base Rate Portions until converted by Borrower in
accordance with Section 2.8.
(b) If prior to the making of a Refunded Swing Line
Advance pursuant to subsection 2.10(a), one of the events described in Section
7.1(e) shall have occurred, each Co-Lender will, on the date such Refunded
Swing Line Advance was to have been made, purchase an undivided participating
interest in the outstanding Swing Line Advance in an amount equal to its pro
rata share of such Swing Line Advance. Each Co-Lender will immediately
transfer to the Swing Line Lender, in immediately available funds, the amount
of its participation, and upon receipt thereof the Swing Line Lender will
deliver to such Co-Lender a participation certificate (a
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"Swing Line Participation Certificate") in the form annexed as Exhibit J,
appropriately completed by the Swing Line Lender, dated the date of receipt of
such funds and in the amount of such Co-Lender's participation.
(c) Whenever, at any time after the Swing Line Lender has
received from any Co-Lender such Co-Lender's participating interest in a Swing
Line Advance, the Swing Line Lender receives any payment on account thereof,
the Swing Line Lender will distribute to such Co-Lender its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Co-Lender's
participating interest was outstanding and funded); provided, however, that in
the event that such payment was received by the Swing Line Lender and is
required to be returned, such Co-Lender will return to the Swing Line Lender
any portion thereof previously distributed by the Swing Line Lender to it.
(d) Each Co-Lender's obligation to purchase participating
interests pursuant to subsection 2.10(b) shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation,
(a) any set-off, counterclaim, recoupment, defense or other right which such
Co-Lender or any Loan Party may have against the Swing Line Lender, any Loan
Party or anyone else for any reason whatsoever; (b) the occurrence or
continuation of any Default or Event of Default; (c) any adverse change in the
condition (financial or otherwise) of any Loan Party; (d) any breach of this
Agreement or the other Loan Documents by any Loan Party or any Co-Lender; or
(e) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
Section 2.11 Voluntary Prepayments. Borrower and the REIT
shall have the right to prepay the Loan, in whole or in part, from time to time
on the following terms and conditions: (a) Borrower shall give Lender written
notice (or telephonic notice promptly confirmed in writing), in the form
attached hereto as Exhibit E, which notice shall be irrevocable, of its intent
to prepay all or a portion of the Loan, at least three (3) Business Days prior
to a prepayment of Eurodollar Portions and Base Rate Portions, which notice
shall specify the amount of such prepayment and what Loan Portions are to be
prepaid, whether or not the prepayments shall be applied to a Swing Line
Advance, and, in the case of Eurodollar Portions, the specific Borrowing(s)
pursuant to which made, (b) each prepayment shall be in an aggregate principal
amount of One Million Dollars (U.S. $1,000,000.00) (Two Hundred Fifty Thousand
(U.S. $250,000.00) for a Swing Line Advance) or any integral multiple of Five
Hundred Thousand U.S. Dollars (U.S. $500,000.00) (Fifty Thousand (U.S.
$50,000.00) for a Swing Line Advance) in excess thereof, and (c) prepayments of
Eurodollar Portions made pursuant to this Section on a date other than the last
day of the Interest Period applicable thereto shall be accompanied by payment
of any Funding Costs which Lender and the Co-Lenders shall incur as a result of
such early payment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein.
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Section 2.12 Mandatory Prepayments. (a) On each date
after the Closing Date on which Borrower or the REIT actually receives a
distribution of the proceeds of any insurance payment or condemnation award in
respect of any of the Real Property Assets, and if Lender is not obligated to
make such proceeds available to Borrower for the restoration of any Real
Property Asset or to release such proceeds to Borrower under the terms of the
Security Instruments, Borrower shall prepay the outstanding principal balance
of the related Note secured by such Real property Asset in an amount equal to
the lesser of (i) one hundred percent (100%) of such proceeds and (ii) the
Allocated Loan Amount with respect to such Real Property Asset and, in either
case, the applicable Funding Costs as a result of such payment. All
prepayments made pursuant to this subsection shall be applied in accordance
with the provisions of Section 2.13, and the Available Facility Amount for such
Note shall be reduced by such amount. The Allocated Loan Amount with respect
to such Real Property Asset will be reduced in an amount equal to such
prepayment.
(b) On each day on which the Aggregate Available Facility
Amount is reduced pursuant to the terms of this Agreement, including, without
limitation, if the Available Borrowing Base Covenant or Loan to Value Ratio
Covenant are no longer satisfied, Borrower shall prepay the Loan to the extent,
if any, that the outstanding principal amount of the Loan exceeds such reduced
Aggregate Available Facility Amount, together with any applicable Funding Costs
as a result of such payment. Such payments shall be applied to the Notes for
which the Available Borrowing Base Covenant or Loan to Value Covenant is not
met.
Section 2.13 Application of Payments and Prepayments.
Unless specifically provided otherwise, all payments and prepayments of the
Loan, whether voluntary or otherwise, shall be applied first, to unpaid Fees
and any Funding Costs, second, to pay any accrued and unpaid interest then
payable with respect to the Loan, and third, to pay the outstanding principal
amount of the Loan. Payments applied to the outstanding principal amount of
the Loan shall if voluntary be applied to the Notes and Loan Portions
(including Swing Line Advances) specified by Borrower and if not specified by
Borrower, shall be first applied to the Swing Line Advances, then the other
Base Rate Portions of the Loan and then to pay the Eurodollar Portions of the
Loan being repaid in the order of such Eurodollar Portion's maturity and
allocated to each Note on a pro rata basis; notwithstanding the foregoing, no
payments shall be allocated to the Florida Note if such payment would reduce
the outstanding principal amount of the Florida Note to less than
$3,400,000.00, unless at the time of application of such payment the
outstanding principal amount of Notes A-1 (including the Swing Line Note, if
any) B, C and D are each $0.00.
Section 2.14 Method and Place of Payment. (a) Except as
otherwise specifically provided herein, all payments and prepayments under this
Agreement and the Note shall be made to Lender not later than 12:00 noon, New
York City time, on the date when due and shall be made in lawful money of the
United States of America in immediately available funds at Lender's Office, and
any funds received by Lender after such time shall, for all purposes hereof,
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be deemed to have been paid on the next succeeding Business Day. Each payment
(including all prepayments on account of principal and interest on the Loan), to
the extent received, shall constitute payment by Borrower to each Co-Lender and
Swing Line Lender in the amount of such Co-Lender's pro rata share or the Swing
Line Lender's share of such payment.
(b) Except as expressly provided to the contrary in
Section 2.6 hereof, whenever any payment to be made hereunder or under the Note
or other Loan Documents shall be stated to be due on a day which is not an
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
(c) All payments made by Borrower hereunder, under the
Note and the other Loan Documents, shall be made irrespective of, and without
any deduction for, any setoff or counterclaims.
Section 2.15 Fees. Borrower and the REIT shall pay to
Lender a fee (the "Non-use Fee"), computed at the per annum rate (based on a
year of 360 days, for the actual number of days elapsed) of one-quarter of one
percent (0.25%) on the average daily unfunded portion of the Initial Facility
Amount, or, if the Syndication has occurred, the applicable Maximum Facility
Amount from and including the Closing Date through and including the Maturity
Date, payable, in arrears, on the later of the Non-use Fee Due Date or the
first day of each calendar quarter beginning on the Closing Date through the
Maturity Date and on the Maturity Date. For purposes of calculating the
Non-use Fee, all amounts outstanding under any Swing Line Advance (but
excluding any Refunded Swing Line Advance) shall be deemed to be part of the
unfunded portion of the Initial Facility Amount or, if the Syndication has
occurred, the then applicable Maximum Facility Amount. Each payment of the
Non-use Fee, to the extent received by Lender, shall constitute payment by
Borrower and the REIT to each Co-Lender in the amount of such Co-Lender's pro
rata share of the Non-use Fee.
Section 2.16 Interest Rate Unascertainable, Increased
Costs, Illegality. (a) In the event that Lender has determined or, with
respect to any Co-Lender or Participants, has been notified that (which
determination or notice shall, if made in good faith and absent manifest error,
be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar
Rate for any Interest Period, that by reason of any changes arising
after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition
of the Eurodollar Rate; or
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(ii) at any time, that the relevant Eurodollar
Rate applicable to any of its Eurodollar Portions shall not represent
the effective pricing to Lender or any Co-Lender for funding or
maintaining its Eurodollar Portions, or Lender or any Co-Lender shall
incur increased costs or reduction in the amounts received or
receivable hereunder in respect of any Eurodollar Portion, in any such
case because of (x) any change since the date of this Agreement in any
applicable law or governmental rule, regulation, guideline, order,
request or directive or any interpretation thereof and including the
introduction of any new law or governmental rule, regulation,
guideline, order, request or directive (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D of the Federal
Reserve Board to the extent included in the computation of the
Eurodollar Rate), whether or not having the force of law and whether
or not failure to comply therewith would be unlawful, and/or (y) other
circumstances affecting Lender, any Co-Lender or the interbank
Eurodollar market or the position of Lender or any Co-Lender in such
market; or
(iii) at any time, that the making or continuance
by it of any Eurodollar Portion has become unlawful in order for
Lender or any Co-Lender, in good faith, to comply with any law or
governmental rule, regulation, guideline, order, request or directive
(whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or has become
impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, Lender shall, promptly after making such
determination or receiving notice thereof from any Co-Lender, give notice by
telephone promptly confirmed in writing to Borrower. Thereafter (x) in the
case of clause (i) above, Borrower's right to request advances, conversions or
continuations of Eurodollar Portions shall be suspended, and any Notice of
Borrowing, request for Short Interest Period or Notice of Conversion or
Continuation given by Borrower with respect to any Borrowing of Eurodollar
Portions which has not yet been made shall be deemed cancelled and rescinded by
Borrower, (y) in the case of clause (ii) above, Borrower shall pay to Lender,
within ten (10) Business Days after receipt of Lender's written demand
therefor, such additional amounts (in the form of an increased rate of
interest, or a different method of calculating interest, or otherwise, as
Lender shall determine) as shall be required to compensate Lender or any
Co-Lender for such increased costs or reduction in amounts received or
receivable hereunder (it being understood and agreed by the parties hereto that
in the event that Lender shall fail to notify Borrower within ten (10) Business
Days after such determination, then Borrower shall not be liable to pay to
Lender any additional amounts relating to the period prior to Lender's
notifying Borrower, and (z) in the case of clause (iii) above, Borrower shall
take one of the actions specified in clause (b) below as promptly as
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possible and, in any event, within the time period required by law. The written
demand provided for in clause (y) shall demonstrate in reasonable detail the
circumstances giving rise to such demand and the calculation of the amounts
demanded; provided that Borrower and the REIT shall not be obligated to pay an
amount in excess of the amount directly attributable to the Loan hereunder.
(b) In the case of any Eurodollar Portion or requested
Eurodollar Portion affected by the circumstances described in clause (a)(ii)
above, Borrower may, and in the case of any Eurodollar Portion affected by the
circumstances described in clause (a)(iii) above, Borrower shall, either (i) if
any such Eurodollar Portion has not yet been made but is then the subject of a
Notice of Borrowing, a request for Short Interest Period or a Notice of
Conversion or Continuation, be deemed to have cancelled and rescinded such
notice, or (ii) if any such Eurodollar Portion is then outstanding, require
Lender to convert each such Eurodollar Portion into a Base Rate Portion at the
end of the applicable Interest Period or such earlier time as may be required
by law, in each case by giving Lender notice (by telephone promptly confirmed
in writing) thereof within two (2) Business Days after Borrower was notified by
Lender pursuant to clause (a) above.
(c) In the event that Lender determines at any time
following the giving of notice based on the conditions described in clause
(a)(i) and (a)(iii) above that such conditions no longer exist, Lender shall
promptly give notice thereof to Borrower, whereupon Borrower's right to request
Eurodollar Portions from Lender and Lender's and any Co-Lender's obligation to
make Eurodollar Portions shall be automatically restored.
(d) The amount of any increased costs or reductions in
amounts referred to in Section 2.16(a)(ii) with respect to Lender and each
Co-Lender shall be based on the assumption that Lender and any Co-Lender funded
all of its Eurodollar Portions in the interbank Eurodollar market, although the
parties hereto agree that Lender or Co-Lender may fund all or any portion of a
Eurodollar Portion, in any manner it independently determines. For purposes of
any demand for payment made by a Lender under Sections 2.16(a)(ii) or 2.18, in
attributing Lender's or any Co-Lender's general costs relating to eurocurrency
operations or its commitments or customers, or in averaging any costs over a
period of time, Lender may use any reasonable attribution and/or averaging
method which it deems appropriate, reasonable and practical. The agreements in
this Section 2.16 shall survive the termination of this Agreement and the
payment of the Note and all other Obligations.
Section 2.17 Funding Losses. Borrower and, except with
respect to Funding Costs in connection with the Florida Note, the REIT, shall
compensate Lender, upon Lender's delivery of a written demand therefor to
Borrower and the REIT, (which demand shall set forth in detail the basis for
requesting such amounts and shall, absent manifest error, be final and
conclusive and binding upon all of the parties hereto), for all reasonable
losses, expenses and liabilities, to the
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extent actually incurred (including, without limitation, any loss, expense or
liability incurred by Lender or any Co-Lender in connection with the liquidation
or reemployment of deposits or funds required by it to make or carry its
Eurodollar Portions), excluding loss of anticipated profits ("Funding Costs"),
that Lender or any Co-Lender sustains: (a) if for any reason (other than a
default by Lender or any Co-Lender) a Borrowing of, or conversion from or into,
or a continuation of, Eurodollar Portions does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion or Continuation
(whether or not rescinded, cancelled or withdrawn or deemed rescinded, cancelled
or withdrawn, pursuant to Sections 2.16(a) or 2.16(b) or otherwise), (b) if any
prepayment (whether voluntary or mandatory), repayment (including, without
limitation, payment after acceleration) or conversion of any of its Eurodollar
Portions occurs on a date which is not the last day of the Interest Period
applicable thereto, (c) if any prepayment of any of its Eurodollar Portions is
not made on any date specified in a notice of prepayment given by Borrower, or
(d) as a consequence of any default by Borrower or the REIT in repaying its
Eurodollar Portions or any other amounts owing hereunder in respect of its
Eurodollar Portions when required by the terms of this Agreement. Calculation of
all amounts payable to Lender under this Section 2.17 shall be made on the
assumption that Lender and each Co-Lender has funded its relevant Eurodollar
Portion through (i) the purchase of a Eurodollar deposit bearing interest at the
Eurodollar Rate in an amount equal to the amount of such Eurodollar Portion with
a maturity equivalent to the Interest Period applicable to such Eurodollar
Portion, and (ii) the transfer of such Eurodollar deposit from an offshore
office of Lender or any Co-Lender to a domestic office of Lender or any
Co-Lender in the United States of America, provided that Lender or any Co-Lender
may fund its Eurodollar Portions in any manner that it in its sole discretion
chooses and the foregoing assumption shall only be made in order to calculate
amounts payable under this Section 2.17. The agreements in this Section 2.17
shall survive the termination of this Agreement and the payment of the Note and
all other Obligations.
Section 2.18 Increased Capital. With respect to each
Eurodollar Portion, if Lender shall have determined (or received notice from
any Co-Lender of its determination), in good faith, that compliance with any
applicable law, rule, regulation, guideline, request or directive (whether or
not having the force of law) which shall be imposed, issued or amended from and
after the date of this Agreement by any governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital or assets of Lender or any Co-Lender as a consequence of its
commitments or obligations hereunder, then from time to time, upon Lender's
delivering a written demand therefor to Borrower, setting forth its reasonable
calculations, Borrower and, except with respect to Increased Capital Costs in
connection with the Florida Note, the REIT, shall pay to Lender on demand such
additional amount or amounts ("Increased Capital Costs") as will compensate
Lender or any Co-Lender for such reduction. Such calculations may use any
reasonable averaging and attribution methods selected by Lender. The
agreements in this Section 2.18 shall survive the termination of this Agreement
and the payment of the Note and all other Obligations.
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Section 2.19 Taxes. (a) All payments made by Borrower or
the REIT under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, 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
Co-Lender, net income and franchise taxes imposed on Lender or any Co-Lender by
the jurisdiction under the laws of which Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which Lender's or Co-Lender's Domestic Lending Office or Eurodollar Lending
Office, as the case may be, is located or any political subdivision or taxing
authority thereof or therein (all such non-excluded taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called "Taxes").
(b) Notwithstanding anything to the contrary herein, if
at any time or from time to time Taxes are required to be deducted or withheld
from the payments required to be made to Lender or any Co-Lender hereunder
solely by reason of a Change in Law after the date hereof (other than as a
result of any transfer or assignment of any of the obligations of Borrower and
the REIT hereunder), all payments required to be made by Borrower and, except
with respect to the Florida Note, the REIT, hereunder (including any additional
amounts that may be payable pursuant to this clause (b)) shall be increased to
the extent required so that the net amount received by Lender or any Co-Lender
after the deduction or withholding of Taxes imposed solely by reason of a
Change in Law after the date hereof will be not less than the full amount that
would otherwise have been receivable had no such deduction or withholding been
imposed by reason of such Change in Law. In the event that this clause (b)
shall be operative, Borrower and the REIT shall promptly provide to Lender
evidence of payment of such Taxes to the appropriate taxing authority and shall
promptly forward to Lender any official tax receipts or other documentation
with respect to the payment of the Taxes as may be issued by the taxing
authority. If Borrower or the REIT fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to Lender the required receipts
or other required documentary evidence, Borrower and the REIT shall indemnify
Lender and any Co-Lender for any incremental taxes, interest or penalties that
may become payable by Lender or Co-Lender as a result of any such failure. The
agreements in this Section 2.19 shall survive the termination of this Agreement
and the payment of the Note and all other Obligations.
(c) For purposes of this Section 2.19 the term "Change in
Law" shall mean the following events: (i) the enactment of any legislation by
the United States, including the enactment, amendment or modification of a
treaty; (ii) the lapse, by its terms, of any law of the United States or any
treaty to which the United States is a party; or (iii) the promulgation of any
temporary or final regulation under the Code.
(d) Each Co-Lender that is not incorporated under the
laws of the United States of America or a state thereof agrees that, prior to
the first date on which any payment is
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due to it hereunder, it will deliver to Borrower and Lender (i) two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, certifying in each case that such
Co-Lender is entitled to receive payments under this Agreement and the Note
payable to it, without deduction or withholding of any United States federal
income taxes, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding tax. Each Co-Lender required to deliver to Borrower
and Lender a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the preceding
sentence further undertakes to deliver to Borrower and Lender two further copies
of the said letter and Form 1001 or 4224 and Form W-8 or 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 4224, is the last day of each U.S. taxable year of the non-U.S. Co-Lender)
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
Lender, and such other extensions or renewals thereof as may reasonably be
requested by Borrower or Lender, certifying in the case of a Form 1001 or 4224
that such Co-Lender is entitled to receive payments under this Agreement 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 Co-Lender from duly completing and delivering any such letter or
form with respect to it and such Co-Lender advises Borrower and Lender 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-8 or W-9,
establishing an exemption from United States backup withholding tax.
Notwithstanding clause (a), if a Co-Lender fails to provide a duly completed
Form 1001 or 4224 or other applicable form and, under applicable law, in order
to avoid liability for Taxes, Borrower is required to withhold on payments made
to such a Co-Lender that has failed to provide the applicable form, Borrower
shall be entitled to withhold the appropriate amount of Taxes. In such event,
Borrower shall promptly provide to such Co-Lender or Lender evidence of payment
of such Taxes to the appropriate taxing authority and shall promptly forward to
such Co-Lender or Lender any official tax receipts or other documentation with
respect to the payment of the Taxes as may be issued by the taxing authority.
Section 2.20 Use of Proceeds. Borrower shall use the
proceeds of the Loan to acquire interests in additional hospitality properties,
and hotels, for costs associated with the construction, renovation and
development of such hospitality properties and hotels, for working capital, for
the initial funding of capital expenditures, replacement reserves or other
escrows required hereunder, to pay various Transaction Costs and general
corporate purposes, including the payment of Distributions (subject to the
conditions of this Agreement).
Section 2.21 Release and Substitution of Collateral. (a)
Provided that no Event of Default has occurred and is continuing, Borrower
shall have the right, from time to time, to
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obtain a release of a Real Property Asset from the Lien of the related Security
Instrument and Loan Documents (a "Release Property") upon delivery to Lender of
a written request for such release at least five (5) Business Days prior to the
requested release date. In the event Borrower seeks to release a Real Property
Asset from the Lien of the related Security Instrument, Lender shall release
such Real Property Asset from the Lien of the related Security Instrument and
the Loan Documents, but only upon receipt by Lender of the following:
(i) if after giving effect to the Release, the aggregate
Allocated Loan Amounts for the remaining Real Property Assets in the
Pool to which the Release Property belonged is less than the then
outstanding principal balance of the related Note, a wire transfer of
immediately available federal funds in an amount equal to the
difference between (A) the outstanding principal balance of such Note
and (B) the aggregate Allocated Loan Amounts for such remaining Real
Property Assets; notwithstanding the foregoing, if the Non-Competition
Agreement has expired or is otherwise terminated, a wire transfer of
immediately available federal funds in an amount equal to the lesser
of (x) the outstanding principal balance of the related Note and (y)
the greater of the Allocated Loan Amount or the Available Borrowing
Base calculated for the Release Property, in either case together with
all accrued interest on the amount being prepaid, and any costs and
expenses incurred by Lender to effect the Transaction contemplated by
this Section; such payment shall be applied to the Note related to the
Release Property;
(ii) A certificate of the general partner of Borrower or
senior executive officer of Borrower certifying that (i) the
Non-Competition Agreement has either expired or terminated or is in
full force of effect, and (ii) the Real Property Assets remaining
encumbered by the Liens of the Security Instruments after giving
effect to the payment of the Allocated Loan Amount or the Available
Borrowing Base calculated for such Real Property Asset, continue to
satisfy the Available Borrowing Base Covenant and the Loan to Value
Ratio Covenant.
Simultaneously with compliance with the conditions set forth
in this Section 2.21(a), (w) Lender and any Co-Lender shall release the Lien
with respect to all Collateral relating to the applicable Release Property, (x)
Lender shall revise Schedules 1, 2, 2A, 2B, 2C, 2D, 3, 8, 10, 11, 11A, 12, 14,
16 and 17 (the "Related Schedules") and (y) the Available Facility Amount shall
be reduced to the extent of the applicable amounts prepaid hereunder. If the
Non-Competition Agreement has expired or otherwise terminated, the Maximum
Facility Amount, the Aggregate Available Facility Amount and the Available
Facility Amount for such Note shall be irrevocably reduced by the amount of
such prepayment.
(b) Provided that no Default or Event of Default has
occurred and is continuing, and the Non-Competition Agreement has not expired
or otherwise terminated, prior to the Termination Date, Borrower shall have the
right, subject to Lender's consent, which
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consent may be withheld in Lender's sole discretion, to obtain a release of a
Real Property Asset from the Lien of the related Security Instrument and Loan
Documents (a "Release Property"), if Borrower simultaneously substitutes
another fully licensed, stabilized and operating hospitality property owned in
fee simple by Borrower and leased by the Partnership pursuant to an Operating
Lease (a "Substitute Property"), and subjects such Substitute Property and
Operating Lease to the Lien of a new mortgage, deed of trust, deed to secure
debt or similar security instruments, in the same form and substance as the
Security Instruments ("Substitute Mortgage") and to the Lien of the Loan
Documents, as a first lien thereon. Lender's consent to such release and
substitution may be conditioned on, among other things, receipt by Lender of
the following:
(i) Evidence reasonably satisfactory to Lender that the
Substitute Property is fully operational, stabilized and is of similar
or higher quality or value to the Release Property.
(ii) An Appraisal (or, at the election of Lender, an
internal valuation by Lender) of the Substitute Property prepared
within six (6) months prior to delivery and reasonably satisfactory to
Lender.
(iii) Evidence reasonably satisfactory to Lender (which may
include an opinion of counsel with respect to the procedural and
substantive requirements for the enforcement of mortgages or deeds of
trust in the state where the Substitute Property is located and the
impact of an out of state enforcement action on the enforcement of the
Substitute Mortgage and related Loan Documents within the state where
the Substitute Property is located) that subjecting the Substitute
Property to the Lien of the Substitute Mortgage and the Loan Documents
does not and will not affect or impair the ability of Lender to
enforce its remedies under all of the Security Instruments and Loan
Documents with respect to the Pool to which the Substitute Property
has been added or to realize the benefits of the
cross-collateralization.
(iv) An opinion of Borrower's and the Partnership's (and
HIC's, if applicable) counsel reasonably satisfactory to Lender
stating (u) that the Substitute Mortgage and the Loan Documents by
which the Substitute Property will be encumbered have been duly
authorized, executed and delivered by Borrower and, if the Partnership
has entered into an Operating Lease with respect to the Substitute
Property, the Partnership, are valid and enforceable in accordance
with their terms, subject to bankruptcy and equitable principles, (v)
that Borrower (and the REIT, if necessary) and, if the Partnership
entered into an Operating Lease with respect to the Substitute
Property, the Partnership, are qualified to do business and in good
standing under the laws of the jurisdiction where the Substitute
Property is located, or that Borrower or the REIT or the Partnership,
as applicable, are not required by Applicable Law to qualify to do
business in such jurisdiction, (w) based on a certificate of Borrower
(or the Partnership, or HIC as the
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case may be) the encumbrance of the Substitute Property with the Liens
of the Substitute Mortgage and the Loan Documents shall 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 or
affected and (x) the anticipated release and substitution will not
affect the status of the REIT as a qualified real estate investment
trust under Section 856 of the Code.
(v) A certification by Borrower and the REIT (w) that the
Non-Competition Agreement has not expired or otherwise terminated and
is in full force and effect, (x) that the certificates, opinions and
other instruments which have been or are therewith delivered to or
deposited with Lender in connection with such release and substitution
conform to the requirements of this Agreement and the Security
Instruments, (y) that all conditions precedent herein have been
complied with and (z) that all conditions precedent to the delivery of
the Substitute Mortgage and Loan Documents contained in this Agreement
have been fulfilled.
(vi) Evidence reasonably satisfactory to Lender that
Borrower, the REIT and the other Loan Parties are, and will remain
after the consummation of the transaction, Solvent.
(vii) Original executed counterparts of the Substitute
Mortgage and the Loan Documents encumbering the Substitute Property
and the related Operating Lease and related Collateral, including
without limitation, a Partnership Guaranty Security Agreement and a
Partnership Mortgage, or a HIC Guaranty Security Agreement and a HIC
Mortgage, financing statements or other documents necessary to grant
or perfect Lender's first priority security interest in the fixtures
and personalty located thereon and the Gross Revenues and Accounts
Receivable derived therefrom; the principal amount of such Substitute
Mortgage shall equal the face amount of the Note that such Substitute
Mortgage secures.
(viii) A title insurance policy issued by a title insurance
company reasonably satisfactory to Lender insuring the lien of the
Substitute Mortgage on the Substitute Property, in form and substance
satisfactory to Lender insuring that the Substitute Mortgage is a
valid and enforceable first lien on the good and marketable fee simple
title or leasehold estate of Borrower to the Substitute Property, as
the case may be, in an amount equal to the amount of the Loan
allocated to the Substitute Property, subject only to such exceptions
that Lender has approved together with such affirmative insurance and
other endorsements reasonably required by Lender, including a
revolving credit endorsement, together with a "tie-in" and first loss
endorsement satisfactory to Lender, or, if such endorsement is not
available in the state in which the Substitute Property is located, in
an amount equal to the greater of one hundred ten percent (110%) of
the
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amount of the Loan allocated by Lender to the Substitute Property or
the amount on which mortgage or intangibles tax was paid with respect
to the Security Instrument for the Substitute Property, together with a
"last dollar endorsement". Such title insurance policy shall not
contain any exception for any state of facts that an accurate survey
might show or that a survey made after the date of the survey referred
to in Section 2.21(b)(xii) might show.
(ix) Evidence reasonably satisfactory to Lender to the
effect that the Substitute Property and the use thereof are in
substantial compliance with the applicable zoning, subdivision, and
all other applicable federal, state or local laws and ordinances
affecting the Substitute Property, and that all material building and
operating licenses and permits necessary for the use and occupancy of
the Substitute Property as an hospitality property or hotel including,
but not limited to, current certificates of occupancy, have been
obtained and are in full force and effect.
(x) An Environmental Report dated within six (6) months
prior to delivery which states that the Substitute Property does not
contain any Hazardous Substances (as defined in the Security
Instrument) or risk of contamination from off-site Hazardous
Substance, and which otherwise shall be reasonably satisfactory to
Lender.
(xi) Payment of all Transaction Costs and other expenses
incurred by Lender and all Co-Lenders including reasonable counsel
fees and disbursements in connection with the release of any Release
Property and the Substitute Property and its inclusion as Collateral.
In the event that the jurisdiction in which the Substitute Property is
located imposes a mortgage recording or intangibles tax, or similar
tax, and does not permit the allocation of indebtedness for the
purpose of determining the amount of such tax payable, if permitted by
law in such jurisdiction, such tax shall be paid on an amount equal to
125% of the Allocated Loan Amount for the Substitute Property.
(xii) A recent survey of the Substitute Property prepared
by a land surveyor licensed in the state where the Substitute Property
is located pursuant to standards for title surveys reasonably
satisfactory to Lender and otherwise reasonably satisfactory to
Lender, provided that no structural additions to the improvements
shown on such survey or new structures have been made or built since
the date of such survey and that there has been no change in the legal
description of the Substitute Property since the date of such survey,
whether due to sales, transfers, condemnation or otherwise.
(xiii) Evidence reasonably satisfactory to Lender indicating
whether the Substitute Property is in a flood plain.
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(xiv) Payment of all recording charges, filing fees, taxes,
or other expenses, including but not limited to intangibles taxes and
documentary stamp taxes in connection with the recording of the
Substitute Mortgage and the Lien necessary to grant and perfect Lender
a first priority lien on and security interest in the Substitute
Property.
(xv) A property inspection report dated within six (6)
months of delivery prepared by an independent licensed engineer
reasonably satisfactory to Lender, prepared in accordance with
Lender's then current guidelines for property inspection reports,
stating, among other things, that the Substitute Property is in good
condition and repair and free of damage or waste and complies in all
material respects with the Americans with Disabilities Act, and is
otherwise reasonably satisfactory to Lender.
(xvi) Annual operating statements and occupancy statements
for the Substitute Property for Borrower's and the Partnership's most
recent fiscal year (and such prior fiscal years as reasonably required
by Lender in order for Lender to perform its due diligence with
respect to the Substitute Property), together with a year to date
operating statement, current occupancy statements, and a budget for
the current fiscal year, each certified by Borrower and the
Partnership, and a certificate of no adverse change since the date
thereof executed by the general partner of Borrower and the
Partnership or senior executive officer of Borrower and the
Partnership, in each case in form and substance satisfactory to
Lender.
(xvii) Original certificates and copies of policies of
insurance required by Lender under the terms of the Substitute Mortgage
for the Substitute Property.
(xviii) Evidence of the qualification and good standing of
Borrower and, if the Partnership has entered into an Operating Lease
with respect to the Substitute Property, the Partnership, in the state
where the Substitute Property is located unless such qualification is
not required in such state by Applicable Law.
(xix) Certified copies of all Leases (as defined in the
Security Instrument) with respect to the Substitute Property and
Tenant Estoppel Certificates from tenants under Major Leases, as
required by Lender, all in form and substance reasonably satisfactory
to Lender.
(xx) Certified copies of all material contracts and
agreements relating to the management, leasing and operation of the
Substitute Property, including, without limitation, if any, the
Franchise Agreement each of which shall be in form and substance
reasonably satisfactory to Lender.
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(xxi) Such evidence as Lender reasonably deems necessary to
indicate compliance in all material respects with Applicable Laws and
such evidence as Lender may deem reasonably necessary or appropriate
to evidence the availability of all utilities, including water,
sewers, gas and electricity, as may be necessary for the use of the
Substitute Property as intended.
(xxii) Access to plans and specifications for the Substitute
Property.
(xxiii) Certified copies of all material consents, licenses
and approvals, if any, required in connection with the substitution of
a Substitute Property, including liquor and gaming licenses, as
applicable and such consents, licenses and approvals shall be in full
force and effect.
(xxiv) A certification by the general partner of Borrower or
senior executive officer of Borrower and the REIT certifying that all
of the representations and warranties contained in the Security
Instruments and in the other Loan Documents, after giving effect to
the substitution of the Substitute Property, are true and correct in
all material respects with respect to the Substitute Property and that
there is no Default or Event of Default hereunder.
(xxv) A certificate of the general partner of Borrower or
senior executive officer of Borrower and the REIT together with other
evidence satisfactory to Lender (which shall include the comfort
letter or audit described in Section 5.1(b)(iii)) that, after the
substitution of a Substitute Property and the release of the Release
Property, the Available Borrowing Base Covenant and the Loan to Value
Ratio Covenant are satisfied.
(xxvi) UCC Searches with respect to the Substitute Property,
Borrower, and the Loan Parties in the state where the Substitute
Property is located and the jurisdictions where such Person has its
principal place of business.
(xxvii) A Franchisor Estoppel and Recognition Letter from the
franchisor under the Franchise Agreement, if any, for the Substitute
Property.
(xxviii) A certified copy of the Operating Lease for the
Substitute Property with the Partnership satisfactory to Lender in its
reasonable discretion or with such other entity satisfactory to Lender
in its sole discretion and which Operating Lease is subordinate to the
Lien of the Security Instrument and is otherwise satisfactory to Lender
in Lender's sole discretion.
(xxix) Lender shall have received a certificate of the
general partner of Borrower and if the Partnership has entered into an
Operating Lease with respect to the Substitute
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Property, the general partner of the Partnership, and dated
the date of the Substitution, certifying (i) the names and true
signatures of the incumbent officers of such Person authorized to sign
the applicable Loan Documents, (ii) the by-laws of such Person as in
effect on the date of the Substitution, (iii) the resolutions of such
Person's board of directors approving and authorizing the execution,
delivery and performance of all Loan Documents executed by such
Person, and (iv) that there have been no changes in the certificate of
incorporation of such Person since the date of the most recent
certification thereof by the appropriate Secretary of State.
(xxx) Certified copies of the most recent Quality Assurance
Reports, if any, which shall be reasonably satisfactory to Lender.
(xxxi) If the Borrower owns a leasehold estate in the
Substitute Property, (A) 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 shall be
satisfactory in all respects to Lender in its sole discretion, and
which shall provide, among other things, (i) for a remaining term of
no less than 10 years from the Maturity Date, (ii) 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, (iii)
for a new lease on the same terms to the Lender as tenant if the
Ground Lease is terminated for any reason, (iv) the non-merger of fee
and leasehold interests, and (v) that insurance proceeds and
condemnation awards (from the fee interest as well as the leasehold
interest) will be applied pursuant to the terms of the Security
Instrument, and (B) a Ground Lease Estoppel substantially in the form
of Exhibit K, executed by the fee owner and ground lessor of the
Substitute Property, which estoppel shall be satisfactory to Lender in
its sole discretion.
(xxxii) Such other certificates, opinions, documents and
instruments relating to the substitution reasonably requested by
Lender, and all corporate and other proceedings and all other
documents (including, without limitation, all documents referred to
herein and not appearing as exhibits hereto) and all legal matters in
connection with the substitution shall be satisfactory in form and
substance to Lender in its reasonable discretion.
(c) Provided that Borrower is otherwise in compliance
with the terms and conditions of Section 2.21(b), Borrower shall be permitted
to request a Release of a Real Property Asset securing one Note and provide a
Substitute Property to further secure one of the other Notes, provided,
however, that all Pool 2 Real Property Assets shall be located in California
and secure the indebtedness under Note B only, and all Pool 3 Real Property
Assets shall be located in Washington and secure the indebtedness under Note C
only and all Pool 4
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Real Property Assets shall be located in Nevada and secure the indebtedness
under Note D only and the Available Facility Amount for such Note does not
exceed the face amount of such Note.
(d) Upon such substitution, Lender shall (i) revise
Schedules 1, 2, 2A, 2B, 2C, 2D and the Related Schedules to reflect the Release
of the Release Property and the addition of the Substitute Property (ii) adjust
the Allocated Loan Amounts as Lender deems reasonably necessary among the Real
Property Assets in the applicable Pool and (iii) in the event Borrower has
requested a Release and substitution of Real Property Assets which affects two
Notes as contemplated in Section 2.21(c), Lender shall increase or decrease the
Available Facility Amount for each Note as applicable.
Section 2.22 Increasing Available Facility Amount. Borrower may,
prior to the Termination Date and subject to the limitations set forth herein,
increase the Available Facility Amount for a Note by offering to add additional
properties (in addition to the Initial Assets) as security for the Loan and
encumbering them with the Lien of the Security Instrument securing such Note and
the Loan Documents (each, a "New Property"). If Lender determines that such New
Properties are satisfactory to Lender in Lender's sole discretion, subject to
continued satisfaction of the Loan to Value Ratio Covenant and the Available
Borrowing Base Covenant (after giving effect to such New Property) with respect
to the related Note, and all the conditions in this Section 2.22 are complied
with, the Available Facility Amount for such Note shall be increased when New
Properties have been encumbered by the Lien of the Security Instrument securing
such Note and the related Loan Documents by an amount equal to the lesser of 55%
of Lender's internal valuation of the New Properties or 50% of the appraised
value of the New Properties based on Appraisals reasonably satisfactory to
Lender; or, if the Syndication has occurred, 50% of the appraised value of the
New Properties based on Appraisals reasonably satisfactory to Lender and further
subject to the condition that each New Property (including the related Operating
Lease) be encumbered by the Lien of the Security Instruments securing such Note
and the Loan Documents prior to any increase in the Available Facility Amount
for such Note and within forty-five (45) days of notification by Lender to
Borrower that such New Property is satisfactory.
In no event shall the Aggregate Available Facility Amount,
after taking into account the increase in the Available Facility Amount for
such Notes be increased to more than the Maximum Facility Amount.
In addition to the restrictions set forth above, at any time
that the Available Facility Amount for such Note is to be increased at the
request of Borrower, the following conditions precedent must be satisfied:
(a) No Default or Event of Default has occurred and is
continuing or would result from the consummation of the proposed
addition of the New Property;
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(b) The increase in the Aggregate Available Facility
Amount for each addition shall be equal to or in excess of the lesser
of $10,000,000 or the difference between the Maximum Facility Amount
and the Aggregate Available Facility Amount;
(c) Borrower, REIT, the Partnership and all other
applicable Loan Parties have executed and delivered to Lender (at
Borrower's sole cost and expense) all of the documents required under
Section 2.21(b) for a Substitute Property and have complied with all
of the conditions contained in Section 2.21(b) with respect to a
Substitute Property;
(d) If the principal amount of a Note must be increased,
Borrower and the REIT agree that they shall execute a new or amended
Note covering the amount of such increase and provide to Lender such
amendments, supplements, modifications or increases to the applicable
Security Instruments and Loan Documents as Lender may deem reasonably
necessary in connection therewith, which may include some or all of
the documents or items required under Section 2.21(b) in connection
with a Substitute Property and under Section 3.1 in connection with
the initial Advance, and it is understood that any new Note shall be
cross-defaulted with all other Notes, Security Instruments and Loan
Documents and cross collateralized with the Real Property Assets
securing such Note, such cross collateralization to be accomplished
through the recordation of a Security Instrument as a first lien on
any New Property and a modification and increase of the Security
Instruments on the existing Real Property Assets securing such Note.
(e) No increase in the Available Facility Amount for any
Note may take place after the Termination Date.
Section 2.23 Breach of Available Borrowing Base Covenant
or Loan to Value Ratio Covenant. In the event that the Available Facility
Amount for a Note shall have been reduced pursuant to Section 5.15 or 5.20, and
Borrower elects to add additional Collateral pursuant to the terms of this
Section in order to cause the Available Borrowing Base Covenant and/or the Loan
to Value Ratio Covenant to be satisfied, in addition to complying with all of
the requirements of Section 2.22, Borrower shall:
(a) deliver to Lender within five (5) Business Days
after the breach of the Available Borrowing Base Covenant or the Loan to Value
Ratio Covenant, a "Request For Additional Collateral" substantially in the
form of Exhibit "F", hereto, executed by the general partner of Borrower or a
senior executive officer of Borrower, which request shall contain a
certification that (i) the appraised value of the New Property would be
adequate to satisfy the Loan to Value Ratio Covenant if combined with the then
existing Real Property Assets, (ii) that
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in Borrower's reasonable opinion the Net Operating Income from the New Property
would be sufficient to satisfy the Available Borrowing Base Covenant if combined
with the then existing Real Property Assets, (iii) to the best of Borrower's
knowledge after due inquiry, there are no Hazardous Materials (as defined in the
Security Instruments) on or in the New Property and (iv) the New Property is
subject to an Operating Lease with the Partnership or such other entity
satisfactory to Lender in its sole discretion and which Operating Lease is
subordinate to the Lien of the Security Instrument and is otherwise satisfactory
to Lender in its sole discretion.
(b) if Lender notifies Borrower that such request has been
accepted, within 45 days of receipt of such notice, Borrower shall comply with
all of the conditions in this Section 2.23 and have consummated the addition of
the New Property to the Collateral for the Loan. During such 45 day period
Borrower shall not be entitled to any Advance under the related Note.
Section 2.24 Adjustment of Allocated Loan Amounts upon
Addition of New Property. Upon the addition of any New Property pursuant to
Section 2.22 or 2.23, Lender shall revise Schedules 1, 2, 2A,2B, 2C and 2D and
the Related Schedules to reflect the addition of such New Property or
Properties and to adjust the Allocated Loan Amounts as Lender deems necessary
among the Real Property Assets.
Section 2.25 Maximum Number of Transactions.
Notwithstanding anything to the contrary herein, the maximum aggregate number of
(a) releases and simultaneous substitutions of Substitute Properties pursuant to
Section 2.21(b) and (b) the simultaneous addition of one or more New Properties
in a single transaction pursuant to Section 2.22, in any combination during the
term of the Facility shall not exceed seven (7). With respect to clause (b)
above, it is understood and agreed that additions of more than one New Property
in any single simultaneous transaction shall constitute one transaction for
purposes of this Section 2.25.
Section 2.26 Increasing Allocable Loan Amounts. Provided
no Default or Event of Default has occurred and is continuing, Borrower shall
have the one time right, upon written notice to Lender, commencing on October
1, 1996 and ending on April 1, 1997, to request Lender to revise the Allocated
Loan Amounts on Schedule 1 with respect to the Real Property Assets identified
on Schedule 1 as the Sheraton Colony Square Atlanta, the Dallas Park Central
and the Riverside Inn, Portland. Such notice shall be accompanied by an
Appraisal, reasonably satisfactory to Lender, for the related Real Property
Asset. All such Appraisals shall be prepared on an "as is" basis and be based
on the then existing condition of the Real Property Asset, and shall not assume
the completion or performance of any renovations or maintenance work in the
calculation of value. Borrower shall also provide such additional information
regarding the related Real Property Asset as Lender shall reasonably request in
connection with Lender's review of the related Allocated Loan Amounts. Lender
shall notify Borrower within 45 Business Days of its receipt of the Appraisal
and all required information that the Allocated Loan Amounts for the Related
Real Property Assets will not be revised or of the revised Allocated
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Loan Amounts, and shall revise Schedule 1 accordingly. Any revision of such
Allocated Loan Amounts shall be in Lender's reasonable discretion and shall be
based, in part, on 50% of the value of the related Real Property Asset as
indicated in the Appraisal delivered by Borrower in connection with the notice.
After any such revision the Available Borrowing Base Covenant and Loan to Value
Ratio Covenant shall continue to be satisfied. Notwithstanding the foregoing,
in no event shall the Allocated Loan Amounts for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ and Riverside Inn Portland exceed $18,000,000.00,
$6,200,000.00 and $8,800,000.00, respectively. No revision of the Allocated
Loan Amounts shall increase the Maximum Facility Amount, the Aggregate
Available Facility Amount or the Available Facility Amount with respect to any
Note.
SECTION 3. CONDITIONS PRECEDENT.
Section 3.1 Conditions Precedent to the Initial Advance.
The obligation of Lender and, after the Syndication, each Co-Lender to make the
initial Advance of the Loan (or its pro rata share thereof) on the Closing Date
and the first Advance after the Syndication is subject to the satisfaction by
Borrower on the Closing Date and on the date of Syndication of the following
conditions precedent:
(a) Loan Documents.
(i) Amended and Restated Line of Credit Agreement.
Borrower and the REIT shall have executed and delivered this Agreement
to Lender.
(ii) The Notes. Borrower and the REIT shall have
executed and delivered to Lender the Notes in the amount, maturity and
as otherwise provided herein.
(iii) Security Instruments. Borrower shall have
executed and delivered to Lender mortgages, deeds of trust, deeds to
secure debt or other security instruments substantially in the form
set forth as Exhibit "G" hereto (as amended, restated, modified or
supplemented from time to time, collectively, the "Security
Instruments"), with respect to each of the Real Property Assets.
(iv) Assignment of Leases and Rents. Borrower shall
have executed and delivered the Assignment of Leases and Rents
substantially in the form set forth as Exhibit "H" hereto with respect
to each Real Property Asset (as amended, restated, modified or
supplemented from time to time, the "Assignment of Leases and Rents").
(v) Environmental Indemnity. Borrower and the
REIT shall have executed and delivered to Lender the Environmental
Indemnity substantially in the form set forth
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as Exhibit "I" hereto, (as amended, restated, modified or supplemented
from time to time the "Environmental Indemnity").
(vi) Swing Line Note. Prior to the first Swing
Line Advance, Borrower and the REIT shall have executed and delivered
to Lender and the Swing Line Lender the Swing Line Note in the amount,
maturity and as otherwise provided herein.
(vii) Tenant Estoppel Certificates. Borrower, the
Partnership or HIC, as the case may be, shall have delivered to Lender
with respect to each tenant identified on Schedule 4, a tenant
estoppel certificate substantially in the form of Exhibit "O" hereto
or in a form otherwise satisfactory to Lender in its reasonable
discretion, executed by such tenant (as amended, restated, modified or
supplemented, the "Tenant Estoppel Certificate").
(viii) Assignment of Contracts. Borrower shall have
executed and delivered to Lender the Assignment of Franchise Agreement,
Agreements, Permits and Contracts substantially in the form set forth
as Exhibit "L" hereto, (as amended, restated, modified or supplemented
from time to time, the "Assignment of Contracts").
(ix) Franchisor Estoppel and Recognition Letter.
Borrower, or the Partnership, or HIC, as applicable, shall have
delivered to Lender with respect to each Real Property Asset subject
to a Franchise Agreement, a franchisor estoppel and recognition letter
substantially in the form set forth as Exhibit "M" hereto or in a form
otherwise satisfactory to Lender in its reasonable discretion,
executed by Franchisor, (as amended, restated, modified or
supplemented from time to time, the "Franchisor Estoppel and
Recognition Letter").
(x) Security Agreement. Borrower shall have
executed and delivered to Lender the Security Agreement with respect to
each Real Property Asset substantially in the form of Exhibit "N"
hereto, (as amended, restated, modified or supplemented from time to
time, the "Security Agreement").
(xi) Subordination, Attornment and Non-Disturbance
Agreements. Borrower shall have delivered a Subordination, Attornment
and Non-disturbance Agreement substantially in the form of Exhibit "P"
hereto with respect to each tenant identified on Schedule 4, fully
executed by such tenant (as amended, restated, modified or
supplemented from time to time, the "Subordination, Attornment and
Non-Disturbance Agreement").
(xii) Termination of Borrower's and the
Corporation's Security Interest in the Collateral. Borrower and the
Corporation shall have executed and delivered an
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agreement terminating all security interests either party may have in
the Collateral with respect to the Intercompany Debt and releasing the
Collateral from such security interest in a form reasonably
satisfactory to Lender.
(xiii) Intercompany Debt Subordination Agreement.
Borrower and the Partnership and HIC, as the case may be, shall have
executed and delivered an Intercompany Debt Subordination Agreement
substantially in the form of Exhibit "Q" hereto with respect to all
Intercompany Debt (as amended and restated, modified or supplemented
from time to time, the "Intercompany Debt Subordination Agreement").
(xiv) Ground Leases. If the Borrower owns a
leasehold estate in Real Property Asset, (A) a certified copy of the
Ground Lease for such Real Property Asset, together with all
amendments and modifications thereto and a recorded memorandum
thereof, which Ground Lease shall be satisfactory in all respects to
Lender in its sole discretion and (B) a Ground Lease Estoppel
substantially in the form of Exhibit K, executed by the fee owner and
ground lessor of such Real Property Asset, which estoppel shall be
satisfactory to Lender in its sole discretion.
(xv) Partnership Guaranties. The Partnership shall
have executed and delivered to Lender partnership guaranties
substantially in the form of Exhibit "R" hereto with respect to each of
Note A, Note B and Note C (as amended, restated, modified or
supplemented, the "Partnership Guaranties").
(xvi) Partnership Mortgage. The Partnership shall
have executed and delivered to Lender mortgages, deeds of trust, deeds
to secure debt or other security instruments substantially in the form
of Exhibit "S" hereto with respect to each Operating Lease under which
the Partnership is the lessee (as amended, restated, modified or
supplemented, the "Partnership Mortgage"), provided that, with respect
to Real Property Assets located in the District of Columbia, Florida
and Virginia, the related Partnership Mortgage shall not be recorded
unless an Event of Default shall have occurred.
(xvii) Partnership Guaranty Security Agreements.
The Partnership shall have executed and delivered to Lender a security
agreement substantially in the form of Exhibit "T" hereto with respect
to each Partnership Guaranty (as amended, restated, modified or
supplemented, the "Partnership Guaranty Security Agreement").
(xviii) Partnership Assignment of Leases and Rents.
The Partnership shall have executed and delivered an assignment of
leases and rents substantially in the form of Exhibit "U" hereto with
respect to each Operating Lease under which the Partnership is the
lessee (as amended, restated, modified or supplemented, the
"Partnership Agreement of Leases and Rents"), provided that, with
respect to Real Property Assets located in the
▇▇
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and Virginia, the related Partnership
Assignment of Leases and Rents shall not be recorded unless an Event of
Default shall have occurred.
(xix) Partnership Assignment of Contracts. The
Partnership shall have executed and delivered to Lender an assignment
of franchise agreement, agreements, permits and contracts
substantially in the form of Exhibit "L" hereto with respect to each
Partnership Guaranty (as amended, restated, modified or supplemented,
the "Partnership Assignment of Contracts").
(xx) Consent To Assignment, Subordination,
Estoppel and Attornment Agreement. Borrower and Partnership and HIC,
as applicable, shall have executed and delivered to Lender a consent
to assignment, subordination, estoppel and attornment agreement to
each Real Property Asset other than the Vagabond Inns substantially in
the form of Exhibit "V" hereto (as amended, restated, modified or
supplemented, the "Consent To Assignment, Subordination, Estoppel and
Attornment Agreement").
(xxi) Vagabond Subordination and Non-Disturbance
Agreement. Borrower shall have delivered a subordination and
non-disturbance agreement substantially in the form of Exhibit "W"
hereto executed by Imperial Hotels Corporation for each of the
Vagabond Inns (as amended, restated, modified or supplemented, the
"Vagabond Subordination and Non-Disturbance Agreement").
(xxii) HIC Guaranty. HIC shall have executed and
delivered to Lender a partnership guaranty substantially in the form of
Exhibit "X" hereto with respect to Note D (as amended, restated,
modified or supplemented, the "HIC Guaranty").
(xxiii) HIC Mortgage. The HIC shall have executed
and delivered to Lender mortgages, deeds of trust, deeds to secure debt
or other security, instruments substantially in the form of Exhibit "S"
hereto with respect to each of the Pool 4 Real Property Assets (as
amended, restated, modified or supplemented, the "HIC Mortgage").
(xxiv) HIC Guaranty Security Agreements. The HIC
shall have executed and delivered to Lender a security agreement
substantially in the form of Exhibit "T" hereto with respect to the
HIC Guaranty (as amended, restated, modified or supplemented, the "HIC
Guaranty Security Agreement").
(xxv) HIC Assignment of Leases and Rents. The HIC
shall have executed and delivered an assignment of leases and rents
substantially in the form of Exhibit "U" hereto with respect to each of
the Pool 4 Real Property Assets (as amended, restated, modified or
supplemented, the "HIC Agreement of Leases and Rents").
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(xxvi) HIC Assignment of Contracts. The HIC shall
have executed and delivered to Lender an assignment of franchise
agreements, permits and contracts substantially in the form of Exhibit
"L" hereto with respect to the HIC Guaranty (as amended, restated,
modified or supplemented, the "HIC Assignment of Contracts").
(xxvii) Termination of Participation. Borrower shall
have executed and delivered a termination of its participation interest
in the ▇▇▇▇▇▇▇ Facility in a form reasonably satisfactory to Lender.
(b) Opinions of Counsel.
Lender shall have received legal opinions, dated the Closing
Date, from counsel to Borrower, the REIT, the Partnership, the Corporation and
HIC, in form and substance reasonably satisfactory to Lender and its counsel,
that, among other things: (i) this Agreement and the Loan Documents have been
duly authorized, executed and delivered by Borrower and are valid and
enforceable in accordance with their terms, subject to bankruptcy and equitable
principles; (ii) that Borrower and the Partnership and HIC are qualified to do
business and in good standing under the laws of the jurisdiction in which it is
organized and where the Real Property Assets are located, or that they are not
required by Applicable Law to qualify to do business in such jurisdiction; (iii)
based upon a certificate of Borrower and the other Loan Parties, the encumbrance
of the Real Property Assets with the liens of the Loan Documents shall not cause
a breach of, or a default under, any material agreement, document or instrument
to which Borrower, the REIT, the Partnership, HIC or the Corporation is a party
or to which they or any of their properties are bound or affected; (iv) Lender
has a valid and perfected Lien in the Collateral; and (v) the Loan does not
violate any usury laws.
(c) Organizational Documents. Lender shall have received
(i) with respect to HIC and the Corporation, the certificate of incorporation
of such Loan Party, as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by the Borrower and such Loan Party
together with a good standing certificate from the appropriate Secretary of
State and a good standing certificate from the Secretaries of State (or the
equivalent thereof) of each other State in which each Real Property Asset is
located and in which each of them is required to be qualified to transact
business, each to be dated a date not more than ten (10) days prior to the
Closing Date, (ii) with respect to Borrower and the Partnership, the agreement
of limited partnership of such Person, as amended, modified or supplemented to
the Closing Date, together with a copy of the certificate of limited
partnership of such entity, as amended, modified or supplemented to the Closing
Date, certified to be true, correct and complete by a general partner of such
Person, together with a good standing certificate from the appropriate
Secretary of State and a good standing certificate from the Secretaries of
State (or the equivalent thereof) of each other State in which each Real
Property Asset is located and in which each of them is required to be qualified
to transact business, each to be dated not more than ten (10) days prior to the
Closing Date and (iii) with respect to the REIT, its declaration of trust, as
amended, modified or supplemented to the Closing Date, certified to be true,
complete and correct by a senior executive officer of the REIT, together with a
copy of a good standing certificate (or the equivalent thereof), from the
appropriate Secretary of State as of a date not more than ten
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(10) days prior to the Closing Date and a good standing certificate (or its
equivalent) from the Secretaries of State (or the equivalent thereof) or each
state in which the REIT is required to be qualified in order to transact
business.
(d) Certified Resolutions, etc. Lender shall have
received a certificate of the secretary or assistant secretary of Borrower and
each of the Loan Parties which is a corporation and dated the Closing Date,
certifying (i) the names and true signatures of the incumbent officers of such
Person authorized to sign the applicable Loan Documents, (ii) the by-laws of
such Person as in effect on the Closing Date, (iii) the resolutions of such
Person's board of directors approving and authorizing the execution, delivery
and performance of all Loan Documents executed by such Person, and (iv) that
there have been no changes in the certificate of incorporation of such Person
since the date of the most recent certification thereof by the appropriate
Secretary of State.
(e) Estoppel Certificates. Lender shall have received
executed estoppel letters or certificates substantially in the form of Exhibit
"O" hereto from each of the parties listed on Schedule 4, with respect to the
leases set forth on such schedule (each, an "Estoppel Certificate").
(f) Insurance. Lender shall have received certificates of
insurance demonstrating insurance coverage in respect of each of the Real
Property Assets of types, in amounts, and with insurers satisfactory to Lender
and otherwise in compliance with the terms, provisions and conditions of the
Mortgage.
(g) UCC Searches. Lender shall have received
satisfactory (i.e., showing no Liens other than Permitted Liens) UCC searches,
together with tax lien, judgment and litigation searches conducted in the
appropriate jurisdictions and as requested by Lender, performed by a search
firm acceptable to Lender with respect to the Real Property Assets, Accounts
Receivable, Borrower and each of the other Loan Parties (collectively, the "UCC
Searches").
(h) Financing Statements. Lender shall have received
UCC-1 financing statements signed by Borrower or other applicable Loan Party,
as debtor, naming the Collateral Agent as secured party, in form suitable for
filing in the appropriate offices of each jurisdiction where the Real Property
Assets and Borrower and the applicable Loan Parties are located (each, a
"Financing Statement").
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(i) Title Insurance Policies; Surveys. Lender shall have
received (i) title insurance policies issued by a title insurance company
satisfactory to Lender insuring the lien of the Security Instruments on the
Real Property Assets, in form and substance reasonably satisfactory to Lender
insuring that the Security Instruments are a first lien on the good and
marketable fee simple title or leasehold estate of Borrower to the Real
Property Asset, as the case may be, in an amount equal to the amount of the
Allocated Loan Amount for each Real Property Asset, subject only to such
exceptions that Lender has approved together with such affirmative insurance
and other endorsements reasonably required by Lender, including a revolving
credit endorsement, together with a "tie-in" and first loss endorsement
satisfactory to Lender, or, if such endorsement is not available in the state
in which such Real Property Asset is located, in an amount equal to the greater
of one hundred ten percent (110%) of the Allocated Loan Amount for such Real
Property Asset or the amount on which mortgage or intangibles tax was paid with
respect to the Security Instrument for such Real Property Asset, together with
a "last dollar endorsement" (the "Title Policy"); such title insurance policy
shall not contain any exception for any state of facts that an accurate survey
might show or that a survey made after the date of the survey referred to in
clause (ii) below might show; and (ii) a recent survey with respect to each of
the Real Property Assets prepared by a land surveyor licensed in each of the
states where the Real Property Assets are located pursuant to standards for
title surveys reasonably satisfactory to Lender and otherwise reasonably
satisfactory to Lender, provided that no structural additions to the
improvements shown on such survey or new structures have been made or built
since the date of such survey and that there has been no change in the legal
description of the Property since the date of such survey, whether due to sale,
transfer, condemnation or otherwise.
(j) Financial Statements. Lender shall have received the
(i) financial reports described in Section 5.1(a) for the most recently ended
fiscal year of Borrower and the relevant Loan Parties and the unaudited
consolidated financial statements of Borrower and the relevant Loan Parties for
each fiscal quarter of Borrower and such Loan Parties ending since the end of
such entity's most recent fiscal year and (ii) for each Real Property Asset,
annual operating statements and occupancy statements for Borrower's, the
Partnership's and HIC's most recent fiscal year together with current year to
date operating statements, current occupancy statements and the approved
operating and capital budget for the current fiscal year. Such financial
statements shall be acceptable to Lender in its sole discretion.
(k) Environmental Matters. Lender shall have received the
Environmental Reports dated within six (6) months prior to the Closing Date
each of which shall be in form and substance satisfactory to Lender and shall
include, without limitation, the following: (i) a Phase I environmental site
assessment analyzing the presence of environmental contaminants,
polychlorinated biphenyls or storage tanks and other Hazardous Substances at
each of the Real Property Assets, the risk of contamination from off-site
Hazardous Substances and compliance with Environmental Laws, such assessments
shall be conducted in accordance with ASTM Standard E 1527-93, or any successor
thereto published by ASTM, (ii) an asbestos survey of
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each of the Real Property Assets, which shall include random sampling of
materials and air quality testing, and (iii) such further site assessments
Lender may require due to the results obtained in (i) or (ii) hereof or in its
reasonable discretion.
(l) Fees and Operating Expenses. Lender shall have
received, for its account, all fees and expenses due and payable pursuant to
the Syndication Letter on or before the Closing Date.
(m) Consents, Licenses, Approvals, etc. Lender shall have
received certified copies of all material consents, licenses and approvals, if
any, required in connection with the execution, delivery and performance by
Borrower and the other Loan Parties, and the validity and enforceability, of
the Loan Documents, or in connection with any of the Transactions, and such
consents, licenses (including without limitation, liquor and gaming licenses,
as applicable) and approvals shall be in full force and effect.
(n) Appraisals. With respect to the Closing Date, Lender
shall have completed its internal valuation of the Real Property Assets or have
received Appraisals reasonably acceptable to Lender and the value of the Real
Property Assets as determined pursuant to Lender's internal valuations, or the
Appraisals, as the case may be, shall be reasonably satisfactory to Lender.
With respect to the first Advance after the Syndication, Lender shall have
received Appraisals reasonably acceptable to Lender for each of the Real
Property Assets and the value of the Real Property Assets, as determined
pursuant to the Appraisals, shall be reasonably satisfactory to Lender.
(o) Engineering Reports. Lender shall have received
engineering reports dated within six (6) months prior to the Closing Date and
in form and substance reasonably satisfactory to Lender with respect to each of
the Real Property Assets; such engineering reports shall be prepared in
accordance with Lender's then current guidelines for property inspection
reports by licensed engineers acceptable to Lender, and such report should
state, among other things, that each Real Property Asset is in good condition
and repair, free from damage and waste and, to the best of such engineer's
knowledge, complies in all material respects with the Americans with
Disabilities Act (the "Engineering Reports").
(p) Zoning Compliance. Lender shall have received
evidence reasonably satisfactory to Lender to the effect that each of the Real
Property Assets and the use thereof are in substantial compliance with the
applicable zoning, subdivision, and all other applicable federal, state or
local laws and ordinances affecting each of the Real Property Assets, and that
all building and operating licenses and permits necessary for the use and
occupancy of each of the Real Property Assets as hospitality properties or
hotels including, but not limited to, current certificates of occupancy, have
been obtained and are in full force and effect.
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(q) Leases. Lender shall have received certified copies
of all Operating Leases and the Leases identified on Schedule 15 with respect
to each Real Property Asset which shall be reasonably satisfactory to Lender.
(r) Contracts and Agreements. Lender shall have received
certified copies of all Franchise Agreements and all material contracts and
agreements relating to the management, leasing and operation of each of the
Real Property Assets, each of which shall be reasonably satisfactory to Lender.
(s) Plans and Specifications. Lender shall have had
access to copies of plans and specifications for each of the Real Property
Assets.
(t) Representations and Warranties. Lender shall have
received a certification by the general partner of Borrower or senior executive
officer of Borrower and the REIT certifying that all of the representations and
warranties contained in this Agreement, the Security Instruments and the other
Loan Documents are true and correct with respect to each of the Real Property
Assets, Borrower and each Loan Party, and that there is no Default or Event of
Default hereunder.
(u) Certification as to Covenants. Lender shall have
received a certificate of the general partner of Borrower or senior executive
officer of Borrower and the REIT together with other evidence reasonably
satisfactory to Lender (which shall include the comfort letter or audit
described in Section 5.1(b)(iii) with respect to the Net Operating Income of
each Real Property Asset and the calculation of financial covenants) that, as
of the Closing Date, the Available Borrowing Base Covenant and the Loan to
Value Ratio Covenant are satisfied for each Pool and that, as of the Closing
Date and after giving effect to the Transaction to be consummated thereon, the
financial covenants will be met, and there is no Default or Event of Default
hereunder.
(v) Certification as to Applicable Laws. Lender shall
have received such evidence as Lender shall deem reasonably necessary to
establish (including, without limitation, a certificate of the general partner
of Borrower, the Partnership or HIC, as applicable, or of a senior executive
officer of Borrower, the Partnership or HIC, as applicable, certifying) that
each Real Property Asset complies in all material respects with Applicable Laws
as of the Closing Date.
(w) Quality Assurance Reports. Lender shall have
received certified copies of the most recent Quality Assurance Reports, each of
which shall be reasonably satisfactory to Lender.
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(x) Intercompany Debt. Lender shall have received
certified copies of all Intercompany Loan Documents.
(y) Flood Plain. Lender shall have received reasonably
satisfactory evidence indicating which of the Real Property Assets are in a
flood plain.
(z) Additional Matters. Lender shall have received such
other certificates, opinions, documents and instruments relating to the
Transactions as may have been reasonably requested by Lender, and all corporate
and other proceedings and all other documents (including, without limitation,
all documents referred to herein and not appearing as exhibits hereto) and all
legal matters in connection with the Transactions shall be satisfactory in form
and substance to Lender.
Section 3.2 Conditions Precedent to All Advances of the
Loan. The obligation of Lender and, after the Syndication, each Co-Lender, to
make any Advance under the Loan (including the initial Advance made on or after
the Closing Date, the first Advance after the date of Syndication, and any
Swing Line Advances by the Swing Line Lender) (or its pro rata share thereof)
is subject to the satisfaction on the date such Advance is made of the
following conditions precedent:
(a) Representations and Warranties. The representations
and warranties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a different
date) shall be true and correct in all material respects on such date both
before and after giving effect to the making of such Advance or, if such
representations and warranties are not true and correct in all material
respects, the facts giving rise to the breach have been disclosed to Lender in
writing and Lender, has approved, in its sole discretion, such facts.
(b) No Event of Default. No Event of Default shall have
occurred and be continuing on such date either before or after giving effect to
the making of such Advance, and Borrower shall be in compliance with the
Available Borrowing Base Covenant and the Loan to Value Covenant.
(c) No Injunction. No law or regulation shall have been
adopted, no order, judgment or decree of any governmental authority shall have
been issued, and no litigation shall be pending or threatened, which in the
good faith judgment of Lender would enjoin, prohibit or restrain, or impose or
result in the imposition of any material adverse condition upon, the making of
the Advances or Borrower's obligation to pay (or Lender or any Co-Lender's or
the Swing Line Lender's rights to receive payment) of the Loan and the other
Obligations or the consummation of the Transactions.
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(d) No Material Adverse Change. No event, act or
condition shall have occurred after the Closing Date which, in the judgment of
Lender has had or could have a Material Adverse Effect.
(e) Notice of Borrowing. Lender shall have received a
fully executed Notice of Borrowing, Notice of Conversion or Continuation, or
Notice of Swing Line Advance, as the case may be, in respect of the Advance to
be made on such date.
(f) No Litigation. Except for matters identified on
Schedule 5 (as the same may be amended or supplemented), no actions, suits or
proceedings shall be pending or threatened with respect to the Transactions or
the Loan Documents, Borrower or any of the other Loan Parties, or with respect
to the Real Property Assets, that could, individually or in the aggregate,
likely be expected to result in a Material Adverse Effect and matters
identified on Schedule 5, individually or in the aggregate, do not result in a
Material Adverse Effect.
(g) Title Insurance Policies. If the amount of principal
outstanding at the time of any Advance (other than the initial Advance with
respect to any of the Notes) (and excluding the portion of such Advance, if
any, that is a Swing Line Advance) is less than $35,000,000.00 under Note A,
$8,753,000.00 under Note B, $13,235,000.00 under Note C or $5,658,000.00 under
Note D (the "Minimum Threshold"), then, with respect to an Advance under the
Note or Notes which have principal then outstanding of less than the respective
Minimum Threshold, if required by Lender in its sole discretion, Lender shall
have received an endorsement to each of the Title Policies insuring Lender with
respect to the Real Property Assets in the Pool securing such Note (or if such
Title Policy contains an endorsement that insures Lender that all future
Advances shall have the same priority as the initial Advance of the Loan, a
Title Search with respect to the related Real Property Asset securing such Note
indicating) that as of the date of the Advance, there are no Liens on the Real
Property Assets securing such Note other than the Liens existing on the Closing
Date and listed in the respective Title Policy issued on the Closing Date.
Notwithstanding the foregoing, Lender may elect, in its sole discretion, in
lieu of the foregoing, to perform Title Searches with respect to some or all of
the Real Property Assets with respect to Note A on a quarterly basis at
Borrower's sole cost and expense, provided that (i) Advances (other than Swing
Line Advances) aggregating $25,000,000.00 or more have been made during the
immediately preceding Quarter, or (ii) Advances (other than Swing Line
Advances) aggregating $25,000,000.00 or more have been made since the date of
the last Title Search. The results of all such Title Searches shall be
satisfactory to Lender in its reasonable discretion. Notwithstanding the
foregoing, provided that the outstanding principal amount under each Note is
equal to or greater than the respective Minimum Threshold, no endorsements or
Title Searches shall be required with respect to any Swing Line Advance.
(h) Payment of Recording Taxes. Lender shall have
received proof of payment of any required recording fees, mortgage recording
taxes, documentary stamp taxes,
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intangibles taxes or other similar costs ("Recording Taxes") in connection with
the making of such Advance. Borrower and the REIT acknowledge that if the
outstanding principal under the Florida Note is at any time less than
$3,400,000.00, no further Advance shall be permitted under the Florida Note
until Borrower has delivered proof of payment of all Recording Taxes in
connection with such Advance.
(i) Appraisals. Prior to the first Advance in connection
with or after the occurrence of the Syndication, Lender shall have received
satisfactory Appraisals of all of the Real Property Assets.
(j) Additional Matters. Lender shall have received such
other certificates, opinions, documents and instruments relating to the
Transactions as may have been reasonably requested by Lender, and all corporate
and other proceedings and all other documents (including, without limitation,
all documents referred to herein and not appearing as exhibits hereto) and all
legal matters in connection with the Transactions shall be reasonably
satisfactory in form and substance to Lender.
Section 3.3 Acceptance of Borrowings. The acceptance by
Borrower of the proceeds of each Advance shall constitute a representation and
warranty by Borrower to Lender that all of the conditions required to be
satisfied under this Section 3 in connection with the making of such Advance
and all of the terms and provisions of this Agreement have been satisfied.
Section 3.4 Sufficient Counterparts. All certificates,
agreements, legal opinions and other documents and papers referred to in this
Section 3, unless otherwise specified, shall be delivered to Lender and shall
be reasonably satisfactory in form and substance to Lender (unless the form
thereof is prescribed herein) and Borrower shall deliver sufficient
counterparts of all such materials for distribution to Lender and each
Co-Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In order to induce Lender to enter into this Agreement and to
make the Loan, Borrower and the REIT make the following representations and
warranties, which shall survive the execution and delivery of this Agreement
and the Note and the making of the Loan and each Advance:
Section 4.1 Corporate/Partnership Status. Each of
Borrower and the other Loan Parties (a) is a duly organized and validly
existing corporation or partnership, as the case may be, in good standing under
the laws of the jurisdiction of its incorporation or formation, (b) has all
requisite corporate or partnership power and authority, as the case may be, to
own its property and assets (including the Real Property Assets) and to
transact the business in which it is engaged or presently proposes to engage
(including this Transaction) and (c) has duly qualified
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and is authorized to do business and is in good standing as a foreign
corporation or foreign partnership, as the case may be, in every jurisdiction in
which the Real Property Assets are located, unless it is not required to so
qualify by Applicable Law, or in which the nature of its business requires it to
be so qualified.
Section 4.2 Corporate/Partnership Power and Authority.
Each of Borrower and the other Loan Parties has the corporate or partnership
power and authority, as the case may be, to execute, deliver and carry out the
terms and provisions of each of the Loan Documents to which it is a party and
has taken all necessary corporate or partnership action, as the case may be, to
authorize the execution, delivery and performance by it of such Loan Documents.
Each of Borrower and the other Loan Parties has duly executed and delivered
each such Loan Document, and each such Loan Document constitutes its legal,
valid and binding obligation, enforceable in accordance with its terms, except
as enforcement may be limited by applicable insolvency, bankruptcy or other
laws affecting creditors' rights generally, or general principles of equity
whether enforcement is sought in a proceeding in equity or at law.
Section 4.3 No Violation. Neither the execution,
delivery or performance by Borrower or any other Loan Party of the Loan
Documents to which it is a party, nor the compliance by such Person with the
terms and provisions thereof nor the consummation of the Transactions, (a)
will, to the best of Borrower's or the REIT's knowledge, contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, which
contravention would have a Material Adverse Effect on the value of the
Collateral as a whole, or (b) will conflict in any material respect with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Instruments and the Loan Documents) upon any of the property or assets
(including the Real Property Assets) of Borrower or any of the other Loan
Parties pursuant to the terms of any indenture, mortgage, deed of trust, or
other material agreement or instrument to which Borrower or any of the other
Loan Parties is a party or by which it or any of its property or assets
(including the Real Property Assets) is bound or to which it may be subject,
which contravention would have a Material Adverse Effect on the value of the
Collateral as a whole, or (c) will, with respect to Borrower or any Loan Party
which is a partnership, violate in any material respect any provisions of the
partnership agreement of such Person, or (d) will, with respect to the Borrower
or any of the Loan Parties which is a corporation, violate in any material
respect any provision of the Certificate of Incorporation or By-Laws of such
Person.
Section 4.4 Litigation. Except as set forth on Schedule
5, there are no actions, suits or proceedings, judicial, administrative or
otherwise (including any condemnation or similar proceeding) pending or, to the
best of Borrower's or the REIT's knowledge, threatened with respect to any of
the Transactions or Loan Documents, Borrower, its Subsidiaries, or any of the
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other Loan Parties or their respective Subsidiaries, or with respect to the
Real Property Assets, that could, individually or in the aggregate, result in a
Material Adverse Effect. All matters set forth on Schedule 5 do not,
individually or in the aggregate, result in a Material Adverse Effect.
Section 4.5 Financial Statements: Financial Condition;
etc. The financial statements delivered pursuant to Section 3.1(j) were
prepared in accordance with GAAP consistently applied and fairly present the
financial condition and the results of operations of Borrower, the Loan Parties
and the Real Property Assets covered thereby on the dates and for the periods
covered thereby, except as disclosed in the notes thereto and, with respect to
interim financial statements, subject to normally recurring year-end
adjustments. There is no material liability (contingent or otherwise) not
reflected in such financial statements or in the notes thereto. 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
or would affect Borrower's or the REIT's ability to perform its obligations
under this Agreement or Borrower's, the REIT's, the Partnership's, the
Corporation's or HIC's ability to perform its obligations under the Loan
Documents.
Section 4.6 Solvency. On the Closing Date and after and
giving effect to the Transactions, Borrower and the Loan Parties will be
Solvent.
Section 4.7 Material Adverse Change. Since the date of
the most recent audited financial statements delivered pursuant to Section
3.1(j), there has occurred no event, act or condition, and to the best of
Borrower's or the REIT's knowledge, there is no prospective event or condition
which has had, or could have, a Material Adverse Effect.
Section 4.8 Use of Proceeds; Margin Regulations. All
proceeds of each Advance will be used by Borrower only in accordance with the
provisions of Section 2.20. No part of the proceeds of any Advance will be
used by Borrower to purchase or carry any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock. Neither the
making of any Advance nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations G, T, U or X of the Federal
Reserve Board.
Section 4.9 Governmental Approvals. To the best of
Borrower's or the REIT's knowledge, no order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required (or, if required, has been obtained) to authorize, or in
connection with (i) the execution, delivery and performance of any Loan
Document or the consummation of any of the Transactions or (ii) the legality,
validity, binding effect or enforceability of any Loan Document, except for
such orders, consents, approvals, licenses, authorizations, filings, recording,
registration or exemption that would not have a Material Adverse Effect.
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Section 4.10 Security Interests and Liens. The Security
Instruments and the related Loan Documents create, as security for the
Obligations, valid and enforceable Liens on all of the Collateral, in favor of
Lender and subject to no other liens (except for Permitted Liens), except as
enforceability may be limited by applicable insolvency, bankruptcy or other
laws affecting creditors rights generally, or general principles of equity,
whether such enforceability is considered in a proceeding in equity or at law.
Section 4.11 Tax Returns and Payments. Borrower, the REIT
and the other Loan Parties filed all tax returns required to be filed by it for
which the filing date has passed and not been extended and has paid all taxes
and assessments payable by such Persons which have become due, other than (a)
those not yet delinquent or (b) those that are reserved against in accordance
with GAAP which are being diligently contested in good faith by appropriate
proceedings.
Section 4.12 ERISA. As of the Closing Date or disclosed
prior to an Advance, neither Borrower or any of the other Loan Parties has any
Plans other than those listed on Schedule 6. No accumulated funding deficiency
(as defined in Section 412 of the Code or Section 302 of ERISA) still
outstanding, or Reportable Event, which exceeds $5,000,000.00 or which has or
could reasonably be expected to have a Material Adverse Effect has occurred
with respect to any Plan and there is no lien outstanding under Section 412 of
the Code or Section 302 of ERISA with respect to any Loan Party's assets. As
of the Closing Date, the Unfunded Benefit Liabilities do not in the aggregate
exceed $1,000,000.00. Borrower and the other Loan Parties have not failed to
comply in all material respects with the requirements of ERISA and the Code and
plan documents for any Employee Benefit Plan which has or could reasonably be
expected to have a Material Adverse Effect and are not in default (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan which has or could reasonably be expected to have a Material Adverse
Effect. Neither Borrower nor any of the other Loan Parties, nor any member of
their respective ERISA Controlled Groups (determined without reference to
Section 414(m) or (o) of the Code, if liabilities of entities in Borrower or
the other Loan Parties' ERISA Controlled Group solely by reason of Section
414(m) or (o) could not result in liability to Borrower or any Loan Parties) is
subject to any present or potential withdrawal liability pursuant to Section
4201 or 4204 of ERISA which, individually or in the aggregate is in excess of
$5,000,000.00 or has or could reasonably be expected to have a Material Adverse
Effect. To the best knowledge of Borrower and the other Loan Parties, no
Multiemployer Plan is or is likely to be disqualified for tax purposes, in
reorganization (within the meaning of Section 4241 of ERISA or Section 418 of
the Code) or is insolvent (as defined in Section 4245 of ERISA), which event
would have a Material Adverse Effect. No liability to the PBGC (other than
required premium payments), the Internal Revenue Service (with respect to an
Employee Benefit Plan), any Plan or any trust established under Section 4049 of
ERISA has been, or is expected by Borrower or the other Loan Parties to be,
incurred by Borrower or the
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other Loan Parties (other than annual contributions) which is in excess of
$5,000,000.00 or would have a Material Adverse Effect. Except as otherwise
disclosed on Schedule 6 hereto or disclosed prior to an Advance, none of
Borrower or the other Loan Parties has any contingent liability with respect to
any post-retirement benefits under any "welfare plan" (as defined in Section
3(1) of ERISA) or withdrawal liability or exit fee or charge with respect to any
"welfare plan" (as defined in Section 3(1) of ERISA), other than liability for
continuation coverage under Part 6 of Title I of ERISA or state laws which
require similar continuation coverage for which the employee pays approximately
the full cost of coverage, and other than such liability that is both not more
than $5,000,000.00 and that would not have a Material Adverse Effect. No lien
under Section 412(n) of the Code or 302(f) of ERISA or requirement to provide
security under Section 401(a)(29) of the Code or Section 307 of ERISA has been
or is reasonably expected by Borrower or the other Loan Parties to be imposed on
the assets of Borrower or the other Loan Parties. Except as disclosed on
Schedule 6 or disclosed prior to an Advance neither Borrower nor any other Loan
Party is a party to any collective bargaining agreement. Neither Borrower nor
any Loan Party has engaged in any transaction prohibited by Section 408 of ERISA
or Section 4975 of the Code which has a Material Adverse Effect. As of the
Closing Date and throughout the term of the Loan, neither Borrower nor any other
Loan Party is or will be an "employee benefit plan" as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, and none of the assets of
Borrower or any other Loan Party will constitute "plan assets" of one or more
such plans for purposes of Title I of ERISA. As of the Closing Date and
throughout the term of the Loan, neither Borrower nor any other Loan Party is or
will be a "governmental plan" within the meaning of Section 3(3) of ERISA and
neither Borrower nor any other Loan Party will be subject to state statutes
applicable to Borrower or such Loan Party regulating investments and fiduciary
obligations, of Borrower or any Loan Party with respect to governmental plans.
Section 4.13 Intentionally Omitted.
Section 4.14 Representations and Warranties in Loan
Documents. All representations and warranties made by Borrower or any other
Loan Party in the Loan Documents are true and correct in all material respects.
Section 4.15 True and Complete Disclosure. All factual
information (taken as a whole) furnished by or on behalf of Borrower or any
other Loan Party in writing to Lender on or prior to the Closing Date, for
purposes of or in connection with this Agreement or any of the Transactions
(the "Furnished Information") is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of Borrower or any other Loan
Party in writing to Lender will be, true, accurate and complete in all material
respects and will not omit any material fact necessary to make such information
(taken as a whole) not misleading on the date as of which such information is
dated or furnished. As of the Closing Date, and as of the date of Syndication,
there are no facts, events or conditions directly and specifically affecting
Borrower,
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or any other Loan Party known to Borrower and not disclosed to Lender, in the
Furnished Information, in the Schedules attached hereto or in the other Loan
Documents, which, individually or in the aggregate, have or could be expected to
have a Material Adverse Effect.
Section 4.16 Ownership of Real Property; Existing Security
Instruments. Borrower has good and marketable fee simple title or a leasehold
estate, as the case may be, subject to any Permitted Liens, in all of the Real
Property Assets and Borrower, Partnership and HIC each have good title to all
of their personal property subject to no Lien of any kind except for Permitted
Liens. As of the date of this Agreement, there are no options or other rights
to acquire any of the Real Property Assets that run in favor of any Person and
there are no mortgages, deeds of trust, indentures, debt instruments or other
agreements creating a Lien against any of the Real Property Assets, other than
Permitted Liens.
Section 4.17 No Default. To the best of the Borrower's or
the REIT's knowledge, no Default or Event of Default exists under or with
respect to any Loan Document. No Default or Event of Default exists under or
with respect to the Operating Leases, the Intercompany Debt, the Franchise
Agreements or the Whole Loan Facility. To the best of Borrower's or the REIT's
knowledge, neither Borrower, any Loan Party nor any of their respective
Subsidiaries is in default in any material respect beyond any applicable grace
period under or with respect to any other material agreement, instrument or
undertaking to which it is a party or by which it or any of its properties or
assets is bound in any respect, the existence of which default could result in
a Material Adverse Effect.
Section 4.18 Licenses, etc. To the best of the Borrower's
or the REIT's knowledge, Borrower, the Partnership, and HIC for each Real
Property Asset other than the Vagabond Inns, have obtained and hold in full
force and effect, all material franchises, trademarks, tradenames, copyrights,
licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of the Real Property Assets
(other than the Vagabond Inns) and their respective businesses as presently
conducted, including without limitation, liquor and gaming licenses, as
applicable ("Licenses"). Other than as indicated on Schedule 18, all liquor
licenses are issued in either the name of (i) the Corporation, (ii) an entity
wholly owned and controlled by the Corporation which has entered into a
management agreement or lease agreement with respect to such liquor license
with the Partnership or the Corporation, on terms and conditions reasonably
satisfactory to Lender, or (iii) an individual who is both a resident of the
state in which the related Real Property Asset is located and is an employee of
either Borrower, the Partnership, the Corporation or the REIT at the level of
general manager for the Real Property Assets in such state or higher.
Section 4.19 Compliance With Law. To the best of the
Borrower's or the REIT's knowledge, Borrower and each Loan Party is in
compliance in all material respects with all
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Applicable Laws and other laws, rules, regulations, orders, judgments,
writs and decrees, noncompliance with which could result in a Material Adverse
Effect.
Section 4.20 Brokers. Borrower, each Loan Party, Lender
and each Co-Lender hereby represent and warrant that no brokers or finders were
used in connection with procuring the financing contemplated hereby and
Borrower hereby agrees to indemnify and save Lender and each Co-Lender harmless
from and against any and all liabilities, losses, costs and expenses (including
attorneys' fees or court costs) suffered or incurred by Lender or any Co-Lender
as a result of any claim or assertion by any party claiming by, through or
under Borrower, that it is entitled to compensation in connection with the
financing contemplated hereby, and Lender and each Co-Lender hereby agrees to
indemnify and save Borrower harmless from and against any and all liabilities,
losses, costs and expenses (including attorneys' fees or court costs) suffered
or incurred by Borrower as a result of any claim or assertion by any party
claiming by, through or under Lender or any Co-Lender that it is entitled to
compensation in connection with the financing contemplated hereby.
Section 4.21 Judgments. To the best of the Borrower's or
the REIT's knowledge, (i) there are no judgments, decrees, or orders of any
kind against Borrower or any Loan Party unpaid of record which would materially
or adversely affect the ability of Borrower or any Loan Party to comply with
its obligations under the Loan or this Agreement in a timely manner, (ii) there
are no federal tax claims or liens assessed or filed against Borrower or any
Loan Party, (iii) there are no material judgments against Borrower or any Loan
Party unsatisfied of record or docketed in any court of the States in which the
Real Property Assets are located or in any other court located in the United
States, (iv) no petition in bankruptcy or similar insolvency proceeding has
ever been filed by or against Borrower or any Loan Party, and (v) neither
Borrower nor any Loan Party has ever made any assignment for the benefit of
creditors or taken advantage of any insolvency act or any act for the benefit
of debtors.
Section 4.22 Property Manager. As of the date hereof, the
managers of the Real Property Assets are the entities described on Schedule 12
(the "Managers").
Section 4.23 Assets of the REIT. The sole asset of the
general partner of Borrower is its general partnership interest in Borrower and
such other assets that may be incidental to or required in connection with the
ownership of such general partnership interest, or as set forth in Schedule 13.
Section 4.24 REIT Status. The REIT intends to qualify for
its taxable year ending December 31, 1995, and intends thereafter to remain
qualified as a "real estate investment trust" as defined in Section 856 of the
Code and is grandfathered from the application of Section 269B of the Code
pursuant to Section 132(c)(3) of the Deficit Reduction Act of 1984.
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Section 4.25 The Partnership. The Corporation and
entities wholly owned and Controlled by the Corporation are the sole general
partners of the Partnership.
Section 4.26 HIC. The Corporation is the owner and holder
of all of the issued and outstanding stock of HIC.
Section 4.27 Intercompany Debt. No Intercompany Debt is
secured by any Collateral.
Section 4.28 Personal Property. For all Real Property
Assets other than the Vagabond Inns, Borrower, the Partnership and HIC, own,
lease or license adequate Personal Property to maintain and operate each Real
Property Asset as a hotel in accordance with the standards of this Agreement,
the Loan Documents, the related Operating Leases and the related Franchise
Agreements. The Personal Property is not subject to any liens, leases or
financing arrangements other than Permitted Liens.
Section 4.29 Operations. The REIT conducts its business
only through Borrower, except as described on Schedule 13 and the Corporation
conducts its business only through the Partnership and HIC, except as described
on Schedule 13A.
Section 4.30 Stock. The REIT and the Corporation list all
of their outstanding shares of stock on the New York Stock Exchange and such
shares trade as "paired shares" subject to a pairing agreement between the REIT
and the Corporation.
Section 4.31 Ground Leases. With respect to those Real
Property Assets in which Borrower holds a leasehold estate under a Ground
Lease, with respect to each such Ground Lease (except as may be set forth on
Schedule 8) (i) Borrower is the owner of a valid and subsisting interest as
tenant under the Ground Lease; (ii) the Ground Lease is in full force and
effect, unmodified and not supplemented by any writing or otherwise; (iii) all
rent, additional rent and other charges reserved therein have been paid to the
extent they are payable to the date hereof; (iv) Borrower enjoys the quiet and
peaceful possession of the estate demised thereby, subject to any sublease; (v)
the Borrower is not in default under any of the terms thereof and there are no
circumstances which, with the passage of time or the giving of notice or both,
would constitute an event of default thereunder; (vi) the lessor under the
Ground Lease is not in default under any of the terms or provisions thereof on
the part of the lessor to be observed or performed; (vii) the lessor under the
Ground Lease has satisfied all of its repair or construction obligations, if
any, to date pursuant to the terms of the Ground Lease; (viii) the execution,
delivery and performance of the Security Instrument do not require the consent
(other than those consents which have been obtained and are in full force and
effect) under, and will not contravene any provision of or cause a default
under, the Ground Lease; (ix) Schedule 8 lists all the Ground Leases to which
any of the Real Property Assets are subject and all amendments and
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modifications thereto; and (x) the lessor indicated on Schedule 8 for each
Ground Lease is the current lessor under the related Ground Lease.
Section 4.32 Survival. The foregoing representations and
warranties shall survive the execution and delivery of this Agreement and shall
continue in full force and effect until the indebtedness evidenced by the Note
has been fully paid and satisfied and Lender and the Co-Lenders have no further
commitment to advance funds hereunder. The request for any Advance under this
Agreement by Borrower or on its behalf shall constitute a certification that
the aforesaid representations and warranties are true and correct as of the
date of such request, except to the extent any such representation or warranty
shall relate solely to an earlier date.
SECTION 5. AFFIRMATIVE COVENANTS.
Borrower and the REIT covenant and agree that on and after the
Closing Date and until the Obligations are paid in full:
Section 5.1 Financial Reports. (a) Borrower and the REIT
will furnish to Lender: (i) annual audited consolidated or combined, as the
case may be, financial statements of (A) Borrower and REIT, (B) the
Partnership, HIC and the Corporation and (C) Borrower, the REIT, the
Partnership and the Corporation, each prepared in accordance with GAAP within
90 days of the end of Borrower's fiscal year prepared by nationally recognized
independent public accountants (which accountant's opinion shall be
unqualified), reasonably satisfactory to Lender; (ii) within 45 days after the
close of each quarterly accounting period in each fiscal year, the consolidated
or combined, as the case may be, balance sheet of (A) Borrower and REIT, (B)
the Partnership, HIC and the Corporation and (C) Borrower, the REIT, the
Partnership, HIC and the Corporation, each as of the end of such quarterly
period and the related consolidated statements of income, cash flow and
shareholders' equity for such quarterly period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period, each prepared
in accordance with GAAP certified by Borrower, the Partnership and HIC, as
applicable; (iii) quarterly and annual operating statements (prepared on a
basis consistent with that used in the preparation of the GAAP consolidated or
combined, as the case may be, financial statements of Borrower, the REIT, the
Partnership, the Corporation and HIC, and in compliance with the Uniform System
of Accounts) for each Real Property Asset, separately disclosing the amounts
paid under the related Operating Lease and including a comparison and
reconciliation with the most recent Annual Operating Budget, within 45 days of
the end of each calendar quarter, certified by the Borrower, the Partnership
and HIC (iv) copies of all of Borrower's, REIT's, the Partnership's, the
Corporation's and HIC's quarterly and annual filings with the Securities and
Exchange Commission and all shareholder reports and letters to the REIT's,
HIC's and the Corporation's shareholders and all other publicly released
information promptly after their filing or mailing, and (v) an annual operating
and capital budget for each of the Real Property Assets (the "Annual Operating
Budget"), including cash flow projections for the upcoming year,
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presented on a monthly basis consistent with the quarterly and annual operating
statements referred to in clause (iii) above at least 15 days prior to the start
of each calendar year. Borrower will furnish or cause to be furnished such
additional reports or data, but no more often than on a quarterly basis, as
Lender may reasonably request including, without limitation management and
marketing reports for each Real Property Asset. Borrower and each Loan Party
shall maintain a system of accounting capable of furnishing all such information
and data, and shall maintain its respective books and records respecting
financial and accounting matters in a proper manner and on a basis consistent
with that used in the preparation of the GAAP consolidated financial statements
of Borrower. Unless otherwise specified above financial reports requested by
Lender of Borrower shall be provided to Lender no later than 15 days after such
request.
(b) Officer's Certificates; Comfort Letters. (i) At the
time of the delivery of the financial statements under clause (a) above,
Borrower shall provide a certificate of the general partner of Borrower or a
senior executive officer of Borrower and the REIT that such financial
statements have been prepared in accordance with GAAP (unless such financial
statements are not required to be prepared in accordance with GAAP pursuant to
this Agreement) and fairly present the financial condition and the results of
operations of Borrower, REIT, the Partnership, HIC, the Corporation and the
Real Property Assets on the dates and for the periods indicated, subject, in
the case of interim financial statements, to normally recurring year end
adjustments, (y) to the best knowledge of such general partner or senior
executive officer of Borrower and the REIT that no Default or Event of Default
has occurred on the date of such certificate or, if any Default or Event of
Default has occurred and is continuing on such date, specifying the nature and
extent thereof and the action Borrower proposes to take in respect thereof and
(z) that since the date of the prior financial statements delivered pursuant to
such clause no change has occurred in the financial position of Borrower, REIT,
the Partnership, HIC, the Corporation which change could result in a Material
Adverse Effect, and (ii) at the time of delivery of the Annual Operating Budget
pursuant to Section 5.1(a)(v), a written statement of the assumptions used in
connection with respect to the Annual Operating Budget, together with a
certificate of the general partner of Borrower or a senior executive officer of
Borrower and the REIT to the effect that such budget and assumptions are
reasonable and represent Borrower's, Partnership's and HIC's good faith
estimate of such Property Net Cash Flow and anticipated capital expenditures,
it being understood and agreed that there may often be a difference between
financial projections and actual results.
(ii) Within 45 days of the end of each calendar quarter,
Borrower shall provide a certificate of the general partner of Borrower or of a
senior executive officer of Borrower and the REIT certifying that no Default or
Event of Default has occurred, that there has been no change in the REIT's tax
status as a real estate investment trust as defined under Section 856 of the
Code, confirming compliance with the covenant in Sections 5.3, 5.4, 5.5, 5.8,
5.9, 5.19 and 5.27 and demonstrating compliance with the financial covenants
set forth in
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Sections 5.15, 5.16, 5.17, 5.18, 5.20, 6.3, 6.4 and 6.7 hereof (including
providing copies of the most recently available unaudited operating statements
of the Real Property Assets) and the provisions of Sections 5.12, 5.13, 5.19(a),
(b) and (c), 5.21, 5.26, 5.27 and 5.28 and such other Sections as reasonably
requested by Lender and containing calculations verifying such compliance
commencing with the calendar quarter ending on December 31, 1995; provided that
the certificate for the last calendar quarter with respect to Sections 5.16,
5.17, 5.18 and 6.7 may be delivered within 90 days after the end of such fiscal
year with the audited financial statements for the year then ended. A similar
certificate with respect to covenants set forth in Sections 5.21, 6.3 and 6.4,
shall be provided by the Partnership and HIC at the same times that the
Borrower's and the REIT's certificate is required hereunder. In the event the
Available Borrowing Base is less than 102.5% of the Available Facility Amount
with respect to any Note, and until such time as the Available Borrowing Base is
equal to or greater than 102.5% of the Available Facility Amount for each of the
Notes, Lender may request that a certificate of the general partner of Borrower
or a senior executive officer of Borrower and the REIT certifying compliance
with the Available Borrowing Base Covenant set forth in Section 5.15 (and
containing calculations demonstrating such compliance) be delivered to Lender on
a monthly basis.
(iii) Within 90 days of the end of Borrower's fiscal year
through the Maturity Date, and prior to any increase of the Available Facility
Amount pursuant to Section 2.22, the addition of any New Property pursuant to
Section 2.23, the Release of any Collateral pursuant to Section 2.21(a) and the
substitution of any Substitute Properties pursuant to Section 2.21(b), Borrower
and the REIT, at Borrower and the REIT's sole cost and expense, shall provide a
comfort letter or audit prepared by a nationally recognized independent
certified public accounting firm satisfactory to Lender verifying that the
covenants contained in Sections 5.15, 5.16, 5.17, 5.18, 5.19(a), (b) and (c),
and 6.7 are complied with at the end of such period and will be in compliance
with such covenants after giving effect to such increase, addition, release or
substitution, as the case may be.
(c) Notice of Default or Litigation. Promptly after
Borrower or any other Loan Party obtains actual knowledge thereof, Borrower
shall give Lender notice of (i) the occurrence of a Default or any Event of
Default, (ii) the occurrence of (x) any default that is not cured, or any event
of default, under any partnership agreement of Borrower, any mortgage, deed of
trust, indenture or other debt or security instrument, covering any of the
assets of Borrower or (y) any event of default under any Franchise Agreement,
Operating Lease, Intercompany Debt or any other material agreement relating to
the Real Property Assets, to which Borrower, the Partnership or HIC is a party,
which, if not cured could result in a Material Adverse Effect, (iii) any
litigation or governmental proceeding pending or threatened (in writing)
against Borrower, any other Loan Party which could result in a Material Adverse
Effect and (iv) any other event, act or condition which could result in a
Material Adverse Effect. Each notice delivered pursuant to this Section 5.1(c)
shall be accompanied by a certificate of a general
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partner or senior executive officer of Borrower setting forth the details of
the occurrence referred to therein and describing the actions Borrower proposes
to take with respect thereto.
(d) Quality Assurance. Promptly after Borrower or the
Partnership or any other Loan Party receives any quality assurance reports or
similar reports of inspection or compliance from the Franchisor under any
Franchise Agreement ("Quality Assurance Reports"), Borrower shall deliver
copies thereof to Lender, but in no event later than thirty days after receipt.
(e) Other Information. From time to time, Borrower and
the REIT shall provide such other information and financial documents relating
to Borrower, the REIT or the other Loan Parties as Lender may reasonably
request.
Section 5.2 Books, Records and Inspections. Borrower,
the Partnership and HIC shall, at their respective principal places of business
or at each Real Property Asset, keep proper books of record and account in
which full, true and correct entries shall be made. Borrower, the Partnership
and HIC shall permit or cause to be permitted officers and designated
representatives of Lender and any Co-Lender to visit and inspect any of the
Real Property Assets, and to examine and copy the books of record and account
of Borrower, the Partnership and HIC and the Real Property Assets (including,
without limitation, leases, statements, bills and invoices), discuss the
affairs, finances and accounts of Borrower, the Partnership and HIC and be
advised as to the same by, its and their officers and independent accountants,
all upon reasonable notice and at such reasonable times as Lender or any
Co-Lender may desire.
Section 5.3 Maintenance of Insurance. Borrower and the
other Loan Parties shall (a) maintain with financially sound and reputable
insurance companies insurance on itself and its properties in commercially
reasonable amounts and with respect to the Real Property Assets in at least
such amounts and against at least such risks as are required, under the
Security Instruments, (b) maintain Lender as named additional insured in
respect of any such liability insurance required to be maintained under the
Security Instruments, and (c) furnish to Lender from time to time, upon written
request, certificates of insurance or certified copies or abstracts of all
insurance policies required under this Agreement and the other Loan Documents
and such other information relating to such insurance as Lender may reasonably
request.
Section 5.4 Taxes. Borrower and the other Loan Parties
shall pay or cause to be paid, when due (i.e., before any penalty or fine could
be levied or charged), all taxes, charges and assessments and all other lawful
claims required to be paid by Borrower, the other Loan Parties, except as
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves have been established with respect thereto in accordance with
GAAP. Upon request from Lender, Borrower shall provide evidence to Lender of
payment of such taxes, charges, assessments and other lawful claims.
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Section 5.5 Corporate Franchises; Conduct of Business.
(a) Borrower and each Loan Party shall do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and good
standing (i) in the State of its organization and (ii) in each state in which a
Real Property Asset is located, unless such Person is not required to qualify
in such State by Applicable Law, and its respective franchises, tradenames
licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals, except where the failure to so preserve any of the foregoing (other
than existence and good standing) could not, individually or in the aggregate,
result in a Material Adverse Effect.
(b) Borrower, the Partnership and HIC shall carry on and
conduct their businesses in substantially the same manner and substantially the
same field of enterprise as they are presently conducted.
(c) The REIT shall carry on and conduct its business in
substantially the same manner and substantially the same field of enterprise as
it is presently conducted and only through Borrower, except as described in
Schedule 13.
(d) The Corporation shall carry on and conduct its
business in substantially the same manner and substantially the same field of
enterprise as it is presently conducted and only through the Partnership and
HIC, except as described in Schedule 13A.
Section 5.6 Compliance with Law. Borrower and the other
Loan Parties shall comply in all material respects with all Applicable Laws, in
respect of the conduct of their business and the ownership of their property
(including the Real Property Assets), except for such Applicable Laws, (a)
which Borrower or such other Loan Party are contesting in good faith and in
compliance with and pursuant to appropriate proceedings diligently prosecuted
(provided that such contest does not and cannot (i) expose any of Lender, any
Co-Lender, Borrower, the other Loan Parties to any criminal liability or
penalty, (ii) give rise to a Lien against any of the Collateral or any Real
Property Asset, or (iii) otherwise materially adversely affect any of the
Collateral or the value thereof), or (b) the failure to observe which, taken
individually or in the aggregate, could not result in a Material Adverse
Effect.
Section 5.7 Performance of Obligations. Borrower and the
REIT shall perform all of their respective material obligations under the terms
of each mortgage, indenture, security agreement, debt instrument, lease,
undertaking and contract relating to any Real Property Assets, or by which it
or any of the Real Property Assets is bound.
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Section 5.8 Stock. REIT and the Corporation shall
maintain in good standing their listing of all outstanding shares of stock on
the New York Stock Exchange and such shares shall continue to trade as "paired
shares".
Section 5.9 Maintenance of Personal Property. Borrower,
the Partnership and HIC shall own, lease or license Personal Property adequate
to maintain and operate each Real Property Asset as a hotel in accordance with
the standards of this Agreement, the Loan Documents, the related Operating
Leases and the related Franchise Agreements, including compliance with the Loan
to Value Ratio Covenant for each Pool. Neither Borrower, the Partnership nor
HIC shall lease, license, encumber or enter into any other financing
arrangements with respect to any of the Personal Property in excess of the
Permitted Financing. With respect to the Real Property Asset identified on
Schedule 2 as Doubletree, California, and on all other California Real Property
Assets (other than the Vagabond Inns) which are owned, leased, or operated by
any Loan Party or an Affiliate thereof, all Personal Property shall be owned by
Borrower.
Section 5.10 Maintenance of Properties. Borrower and the
other Loan Parties shall ensure that the Real Property Assets are maintained in
a manner consistent with their current condition and repair, normal wear and
tear and casualty damage in the process of being repaired or restored excepted.
Section 5.11 Compliance with ERISA. (a) Borrower and the
other Loan Parties shall maintain each Employee Benefit Plan in compliance with
all material applicable requirements of ERISA and the Code and with all
material applicable regulations promulgated thereunder so that no failure to so
comply will cause liability to Borrower or any Loan Party in excess of
$5,000,000.00 or have a Material Adverse Effect. Borrower and the other Loan
Parties shall provide to Lender, within ten (10) days of Lender's request, any
document, filing or correspondence relating to an Employee Benefit Plan which
the Lender reasonably requests. Borrower and the other Loan Parties shall also
provide to Lender, with ten (10) days of filing or receipt, (i) any notice from
the Department of Labor or Internal Revenue Service of assessment or
investigation regarding a prohibited transaction under Section 4975 of the Code
or Section 406 of ERISA, (ii) any notice from a Multiemployer Plan of
withdrawal with respect to a Multiemployer Plan, (iii) notice from the Internal
Revenue Service of imposition of excise tax with respect to an Employee Benefit
Plan, (iv) any Form 5500 filed by any Borrower or Loan Party with respect to an
Employee Benefit Plan which includes a qualified accountant's opinion, or (v)
notice regarding a proposed termination from the PBGC; provided, however, that
items in (i)-(iii) need only be provided if the events could result in Material
Adverse Effect.
(b) Neither Borrower nor any other Loan Party shall engage in
any transaction which would cause any obligation, or action taken or to be
taken, hereunder (or the exercise by Lender of any of its rights under this
Agreement or the other Loan Documents) to be a non-
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exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA or result in a violation of a state statute regulating
governmental plans that would subject Lender to liability for a violation of
ERISA or such a state statute.
(c) Borrower and the REIT further covenant and agree to
deliver to Lender such certifications or other evidence from time to time
throughout the term of the Loan, as reasonably requested by Lender in its sole
discretion, that (i) neither Borrower or any other Loan Party is an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, or a "governmental plan" within the meaning of Section 3(3) of ERISA;
(ii) neither Borrower or any other Loan Party is subject to state statutes
applicable to Borrower or any Loan Party regulating investments and fiduciary
obligations of Borrower or any Loan Party with respect to governmental plans;
and (iii) with respect to each Loan Party and Borrower, at least one of the
following circumstances is true:
(1) Equity interests in Borrower or such Loan
Party are publicly offered securities, within the meaning of
29 C.F.R. Section 2510.3-101(b)(2);
(2) Less than 25 percent of each outstanding
class of equity interests in Borrower or such Loan Party are
held by "benefit plan investors" within the meaning of 29
C.F.R. Section 2510.3-101(f)(2); or
(3) Borrower or such Loan Party qualifies as an
"operating company" or a "real estate operating company"
within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e)
or an investment company registered under The Investment
Company Act of 1940.
Section 5.12 Settlement/Judgment Notice. Borrower and the
REIT agree that they shall, within ten (10) days after a settlement of any
obligation in excess of $1,000,000.00 provide written notice to Lender of such
settlement together with a certification signed by a senior executive officer of
Borrower and the REIT certifying based upon the most recent quarterly
consolidated financial statements of Borrower and the REIT, such settlement will
not cause Borrower or the REIT to violate the financial covenants set forth in
Sections 5.16, 5.17 and 5.18 hereof. Borrower and the REIT further agree that
they shall, within ten (10) days after entry of a final judgment in excess of
$1,000,000.00 or final judgments in excess of $1,000,000.00 in the aggregate
during the immediately preceding twelve (12) month period, provide written
notice to Lender of such judgment together with a certification signed by a
senior executive officer of Borrower and the REIT certifying, based upon the
most recent quarterly consolidated financial statements of Borrower and the
REIT, such judgment will not cause Borrower or the REIT to violate the financial
covenants set forth in Sections 5.16 and 5.17 hereof. Borrower and the REIT
further agree that they will provide written notice to Lender after entry of any
judgment in excess of $1,000,000.00.
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Section 5.13 Acceleration Notice. Borrower and the REIT
agree that they shall, within ten (10) days after receipt of written notice that
any Indebtedness of Borrower or the REIT hereof has been accelerated, provide
written notice to Lender of such acceleration.
Section 5.14 Lien Searches; Title Searches. In addition
to searches and endorsements required in connection with an Advance, Borrower
shall, upon Lender's request therefor given from time to time, and at Lender's
expense, deliver (a) reports of UCC, tax lien, judgment and litigation searches
with respect to Borrower, each of the other Loan Parties, and (b) searches of
title to each of the Real Property Assets (each, a "Title Search"). Such Title
Searches and lien searches required under this Agreement shall be conducted by
search firms designated by Lender in each of the locations designated by
Lender.
Section 5.15 Available Borrowing Base Covenant. Borrower
shall at all times maintain an Available Borrowing Base for each Note for the
aggregate of all Real Property Assets applicable to each such Note (measured on
a monthly basis based on a trailing twelve month analysis) greater than or
equal to the Available Facility Amount for each such Note; provided, however,
that to the extent the available borrowing base covenant (the "Available
Borrowing Base Covenant") set forth in the preceding clause is not met at the
end of any calendar month for a particular Note, then:
(a) the Available Facility Amount for such Note and the
Aggregate Available Facility Amount shall be immediately and
automatically, without any act or notice by Lender, reduced to the
extent necessary to cause the Available Borrowing Base Covenant to be
satisfied; and
(b) to the extent that the then outstanding principal
balance of the Loan (including outstanding Swing Line Advances)
exceeds the Available Facility Amount for such Note as reduced as a
result of a reduction of the Available Facility Amount for such Note
pursuant to clause (a) above, Borrower shall repay, without penalty or
premium (other than as provided in Section 2.17), that portion of the
outstanding principal balance of the Note which is in excess of the
Available Facility Amount for such Note within five (5) Business Days
of the earliest of (i) Borrower's receipt of written notice that the
Available Borrowing Base Covenant is no longer satisfied, (ii)
Borrower's delivery of the Section 5.1(b)(ii) certificate indicating
that the Available Borrowing Base Covenant is no longer satisfied (or,
if such certificate is not delivered on or prior to the date provided
for in Section 5.1(b)(ii), the date on which such certificate was
required to be delivered thereunder) and (iii) Borrower's
determination that the Available Borrowing Base Covenant is no longer
satisfied.
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(c) Neither the Aggregate Available Facility Amount nor
the Available Facility Amount with respect to such Note shall be
reduced pursuant to Section 5.15(a) above if (i) Borrower shall
provide Lender, within five Business Days of the earliest date in
clause (i), (ii) or (iii) of Section 5.15(b) (the "Relevant BBC
Date"), with (A) a certificate of the general partner or a senior
executive officer of Borrower substantially in the form of Exhibit F
stating that it intends to provide an additional real property or
properties to Lender pursuant to Section 2.23 within 45 days of the
Relevant BBC Date and (B) evidence, reasonably satisfactory to Lender,
that the Net Operating Income for such additional real property or
properties for the twelve (12) month period most recently ended
together with the Net Operating Income of the other Real Property
Assets securing such Note, would have enabled Borrower to meet the
Available Borrowing Base Covenant on the Relevant BBC Date with
respect to such Note and (C) such additional real property or
properties shall be satisfactory to Lender in its sole discretion and
(ii) Borrower shall have provided Lender within 45 days of the
Relevant BBC Date with such additional collateral pursuant to Section
2.23 hereof and such additional collateral, in the aggregate with the
other Real Property Assets securing the Loan, is capable of meeting
the Available Borrowing Base Covenant with respect to such Note at
such time. In the event that (I) Borrower shall fail to deliver to
Lender the items set forth in clause 5.15(c)(i) above within five (5)
Business Days of the Relevant BBC Date, (II) the additional property
or properties offered by Borrower are not satisfactory to Lender or
(III) Borrower shall fail to subject such additional property or
properties to the Liens of the Loan Documents pursuant to Section 2.23
or comply with any other provision of Section 2.23 within the time
period provided above, then the Aggregate Available Facility Amount
and the Available Facility Amount with respect to such Note shall
immediately be reduced without any further action on the part of
Borrower or Lender pursuant to Section 5.15(b) and Borrower shall
prepay the Loan to the extent, if any, required pursuant to Section
5.15(b).
(d) In the event that the Aggregate Available Facility
Amount and the Available Facility Amount with respect to such Note is
reduced pursuant to the terms of this Section 5.15, Borrower shall
have the ability to partially or fully reinstate the Aggregate
Available Facility Amount and the Available Facility Amount for such
Note to its previous level by delivering to Lender, with respect to
periods ending at the end of any calendar month (but no sooner than
one month following a Relevant BBC Date), a certificate of a general
partner or a senior executive officer of Borrower, in the form of the
quarterly certificate required pursuant to Section 5.1(b)(ii),
demonstrating that as of the end of such month, Borrower is in
compliance with the Available Borrowing Base Covenant to the extent of
the requested reinstatement of the Aggregate Available Facility Amount
and the Available Facility Amount with respect to such Note.
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Section 5.16 Minimum Net Worth. The minimum net worth of
Borrower shall not, at any time, be less than $215,000,000.00 plus 75% of the
net proceeds (after payment of underwriter and placement fees and other
expenses directly related to such equity offering) received from subsequent
equity offerings by the REIT, calculated on a GAAP basis; however, the
conversion or exchange of existing operating partnership units in Borrower for
shares in the REIT for which the REIT does not receive cash compensation shall
not be deemed an equity offering for purposes of this Section 5.16.
Section 5.17 Total Indebtedness. (a) The maximum
combined Total Debt of Borrower and the REIT shall not exceed at any time 55%
of the combined Net Book Value of Borrower and the REIT, calculated without
duplication.
(b) The maximum combined Total Debt of Borrower and the
Partnership shall not exceed at any time 55% of the combined Net Book Value of
Borrower and the Partnership, calculated without duplication, provided that
Total Debt and Net Book Value shall exclude amounts related to the Intercompany
Debt between (i) the Corporation and the Partnership and their consolidated
Subsidiaries and (ii) the REIT and Borrower and their consolidated
Subsidiaries.
Section 5.18 Coverage Ratios. (a) The ratio of (x) actual
consolidated EBITDA of Borrower and the REIT (without duplication) for any
period of twelve consecutive months (or if twelve consecutive months have not
passed since July 6, 1995, the period of time from July 6, 1995) (in either
case the "Base Period"), to (y) the sum of Debt Service plus Fixed Charges of
the Borrower and the REIT for such Base Period shall not at any time be less
than (i) 2.15 to 1 at any time during the nine month period commencing on July
6, 1995 and (ii) 2.25 to 1 for any period thereafter.
(b) The ratio of (x) actual EBITDA (adjusted to include
replacement reserves of 4% of gross hotel revenues) of Borrower and the
Partnership for the applicable Base Period, to (y) the sum of Debt Service plus
Fixed Charges of Borrower and the Partnership for the same Base Period shall
not at any time be less than (i) 2.40 to 1 at any time during the nine month
period commencing on July 6, 1995 and (ii) 2.50 to 1 thereafter. For purposes
of this Section 5.18(b), EBITDA and Debt Service shall exclude amounts related
to the Operating Leases with the Partnership as tenant and intercompany debt
between (A) the Corporation and the Partnership and their consolidated
Subsidiaries and (B) the REIT and the Borrower and their consolidated
Subsidiaries.
Section 5.19 Replacement Reserve and Deferred Maintenance
Reserve. (a) After the Closing Date Borrower shall spend at least the amounts
set forth on Schedule 16 for each Real Property Asset on or before December 31,
1996 (the "Initial Minimum Spending Requirement"). For the calendar year
commencing on January 1, 1997 and for each calendar year thereafter,
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Borrower shall spend, or cause to have spent, a minimum spending amount (the
"Minimum Spending Requirement") for each Real Property Asset equal to 4% of the
annual Gross Revenues from each Real Property Asset per annum on repair,
replacement and maintenance of the related Real Property Asset during the
applicable calendar year. The Minimum Spending Requirement for each calendar
year shall be determined annually by Lender, and shall be based on Gross
Revenues for the immediately preceding calendar year, and Lender shall revise
Schedule 16 accordingly. In the event that Borrower has spent more than the
Minimum Spending Requirement for a Real Property Asset in any calendar year,
Borrower may apply such excess, up to an amount equal to 2% of the annual Gross
Revenues from the Real Property Asset, to reduce the amount of the Minimum
Spending Requirement that must be spent in the immediately succeeding calendar
year. Borrower shall deliver evidence reasonably satisfactory to Lender no more
frequently than monthly, but at least quarterly, of the portion of the Initial
Minimum Spending Requirement and the Minimum Spending Requirement, as the case
may be, for each Real Property Asset that has been spent; such evidence shall
include copies of paid invoices or other receipts for work done or materials
provided and such other information as reasonably requested by Lender. On July
1, 1996, and on the first day of July of each year thereafter, Lender shall
determine the portion of the Initial Minimum Spending Requirement or the Minimum
Spending Requirement for that calendar year that has not been spent and
determine the amount to be reserved for such repair, replacement and maintenance
as provided below (such amount, the "Initial Replacement Reserve" or the
"Minimum Replacement Reserve", as the case may be). Such amount to be reserved
shall equal the difference between (i) the portion of the Minimum Spending
Requirement for the applicable year that has not been spent and (ii) the
difference between (A) (1) the lesser of 55% of the value of the related Real
Property Asset according to Lender's internal valuation or 50% of the value
according to an Appraisal of the related Real Property Asset, or (2) if the
Syndication has occurred, 50% of the value according to the Appraisal of such
Real Property Asset and (B) the Allocated Loan Amount for such Real Property
Asset. Borrower shall maintain, from the date of notice of the Initial
Replacement Reserve or the Minimum Replacement Reserve, as the case may be,
until such time as the Initial Minimum Spending Requirements or the Minimum
Spending Requirement, as the case may be, for such calendar year have been spent
in full, an amount equal to the Initial Replacement Reserve and the Minimum
Replacement Reserve for such calendar year, as the case may be, in the form of
(x) readily available and unrestricted cash held in a segregated account or (y)
borrowing capacity under this Agreement, as measured by the unfunded portion of
the Aggregate Available Facility Amount; provided however, that during any given
calendar year the amounts required to be maintained as the Initial Replacement
Reserve or the Minimum Replacement Reserve shall be reduced from time to time to
the extent that such sums were actually spent on repair, replacement and
maintenance of the Real Property Assets as determined by Lender in its
reasonable discretion.
(b) Borrower shall spend the amounts shown on Schedule 17
(as the same may be amended from time to time) for each Real Property Asset
listed on such Schedule prior to
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January 1, 1997 to perform the specified maintenance set forth on such
Schedule (the "Deferred Maintenance Spending Requirement"). Borrower shall
deliver evidence reasonably satisfactory to Lender on or prior to December 31,
1996 that such work has been completed; such evidence shall include copies of
paid invoices or other receipts for work done or materials provided, and may
include an updated Engineering Report. Borrower shall maintain an amount (the
"Deferred Maintenance Reserve") equal to the difference between (i) the
Deferred Maintenance Spending Requirement and (ii) the difference between (A)
(1) the lesser of 55% of the value of the related Real Property Asset according
to Lender's internal valuation or 50% of the value according to an Appraisal of
the related Real Property Asset, or (2) if the Syndication has occurred, 50% of
the value according to the Appraisal of such Real Property Asset and (B) the
Allocated Loan Amount for such Real Property Asset in the form of (x) readily
available and unrestricted cash held in a segregated account or (y) borrowing
capacity under this Agreement, as measured by the unfunded portion of the
Aggregate Available Facility Amount. The Deferred Maintenance Reserve shall be
reduced, from time to time, to the extent that such sums were actually spent to
perform the required work as determined by Lender in its reasonable discretion.
(c) With respect to the Real Property Asset identified as
Bay Valley, Michigan on Schedule 1, Borrower shall complete the soil excavation
and replacement as described in and pursuant to the Corrective Action Plan for
Bay Valley Resort Facility, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ prepared
for Hotel Investors Trust, Los Angeles, California, by Earth Tech, dated
January 1995, Project 22424.03 as modified by the Options Update for ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ prepared by Earth Tech and dated October 18, 1995
(the "Corrective Action Plan") on or prior to October 1, 1996, and shall comply
with the ground water monitoring program as described in and pursuant to the
Corrective Action Plan throughout the term of the Loan. Borrower shall deliver
a quarterly report to Lender with respect to the status of the soil excavation
and replacement and the ground water monitoring; upon the completion of the
soil excavation and replacement, Borrower shall deliver a report with respect
to the gound water monitoring every second quarter, in each case, concurrently
with the report delivered pursuant to Section 5.1(b)(ii). Until such time as
Lender receives a report from Earth Tech or another environmental consultant
reasonably satisfactory to Lender that the soil excavation and replacement has
been completed and the ground water monitoring has commenced, each in
accordance with Applicable Law and the Corrective Action Plan, Borrower shall
maintain the amount set forth on Schedule 17 with respect to such Real Property
Asset for soil excavation and remediation as part of the Deferred Maintenance
Reserve pursuant to Section 5.19(b); provided, however, that such amount shall
be reduced from time to time to the extent that such sums were actually spent
on the soil excavation and replacement, or on the ground water monitoring, as
determined by Lender in its reasonable discretion.
Section 5.20 Loan to Value Ratio. Borrower shall at all
times maintain the ratio of Available Facility Amount for each Note to the most
recent aggregate appraised value according to the Appraisals, updates to
existing Appraisals or Lender's internal valuation most recently
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delivered or prepared, as the case may be, pursuant to Section 5.25 or, if no
such updated appraisal has been prepared and delivered to Borrower with respect
to a Real Property Asset, according to the Appraisal or internal valuation
completed for such Real Property Asset on or before the Closing Date, unless
Borrower or Lender reasonably believes that the value is less, of not more than
50% of the value according to an Appraisal or 55% of the value according to
Lender's internal valuation, provided, however, that all determinations of Loan
to Value Ratios from and after the Syndication shall be based on 50% of
appraised value determined by Appraisals reasonably satisfactory to the Lender
of all Real Property Assets securing each such Note, measured in the aggregate
(the "Loan to Value Ratio"); provided, however, that to the extent the loan to
value ratio covenant (the "Loan to Value Ratio Covenant") set forth in the
preceding clause is not satisfied for a particular Note, then:
(a) the Available Facility Amount for such Note and the
Aggregate Available Facility Amount shall be immediately and
automatically, without any act or notice by Lender, reduced to the
extent necessary to cause the Loan to Value Ratio Covenant to be
satisfied; and
(b) to the extent that the then outstanding principal
balance of the Loan (including outstanding Swing Line Advances)
exceeds the Available Facility Amount for such Note as reduced as a
result of a reduction of the Available Facility Amount for such Note
pursuant to clause (a) above, Borrower shall repay, without penalty or
premium (other than as provided in Section 2.17), that portion of the
outstanding principal balance of the Note which is in excess of the
Available Facility Amount for such Note within five (5) Business Days
after the earlier to occur of (i) Borrower's receipt of the Section
5.25 Appraisal(s) or Lender's internal valuations, provided that, if
the Syndication has occurred, only Appraisals delivered in connection
with the Syndication or Section 5.25 shall be used, (ii) Borrower's
receipt of Lender's written notice that the Loan to Value Ratio
Covenant is no longer satisfied and (iii) Borrower's delivery of the
Section 5.1(b)(ii) certification indicating that the Loan to Value
Ratio Covenant is no longer satisfied;
provided, however, that Borrower has the option of returning the Aggregate
Available Facility Amount and the Available Facility Amount for such Note to its
level prior to the impact of clause (a) above, by (i) providing Lender with
evidence satisfactory to Lender respecting the value of the Real Property Assets
securing such Note (such as a new Appraisal) which would cause Lender, in its
sole discretion, or, if such evidence is a new Appraisal, in its reasonable
discretion, to modify its determination respecting the Loan to Value Ratio
Covenant, or (ii) providing Lender, within 45 days of the earliest date in
clause (i), (ii), or (iii) of Section 5.20(b), with additional collateral
satisfactory to Lender pursuant to Section 2.23 hereof which, in the aggregate
with the other Real Property Assets securing the Loan is capable of meeting the
Loan to Value Ratio Covenant and otherwise in compliance with Section 5.20(c).
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(c) Neither the Aggregate Available Facility Amount nor
the Available Facility Amount with respect to such Note shall be
reduced pursuant to Section 5.20(a) above if (i) Borrower shall
provide Lender within five Business Days of the earliest date in
clause (i), (ii) or (iii) of Section 5.20(b) (the "Relevant LTV
Date"), with (A) a certificate of the general partner or a senior
executive officer of Borrower substantially in the form of Exhibit F
stating that it intends to provide an additional real property or
properties to Lender pursuant to Section 2.23 within 45 days of the
Relevant LTV Date and (B) evidence, reasonably satisfactory to Lender
that the appraised value of such additional real property or
properties as determined by Appraisals satisfactory to Lender together
with the values of the other Real Property Assets securing the Loan
(as determined in accordance with this Section 5.20), would have
enabled Borrower to meet the Loan to Value Ratio Covenant on the
Relevant LTV Date and (C) such additional real property or properties
shall be satisfactory to Lender in its sole discretion and (ii)
Borrower shall have provided to Lender within 45 days of the Relevant
LTV Date with such additional collateral pursuant to Section 2.23
hereof and such additional collateral in the aggregate with the other
Real Property Assets securing the Loan is capable of meeting the Loan
to Value Ratio Covenant at such time. In the event that (I) Borrower
shall fail to deliver to Lender the items set forth in clause
5.20(c)(i) above within five (5) Business Days of the Relevant LTV
Date, (II) the additional property or properties offered by Borrower
are not satisfactory to Lender or (III) Borrower shall fail to subject
such additional property or properties to the Liens of the Loan
Documents pursuant to Section 2.23 or comply with any other provision
of Section 2.23 within the time period provided above, then the
Aggregate Available Facility Amount and the Available Facility Amount
with respect to such Note shall immediately be reduced without any
further action on the part of Borrower or Lender pursuant to Section
5.20(b) and Borrower shall prepay the Loan to the extent, if any,
required pursuant to Section 5.20(b).
(d) In the event that the Aggregate Available Facility
Amount and the Available Facility Amount with respect to such Note is
reduced pursuant to the terms of this Section 5.20, Borrower has the
ability to partially or fully reinstate the Aggregate Available
Facility Amount and the Available Facility Amount with respect to such
Note to its level prior to such reduction by providing Lender with
evidence satisfactory to Lender respecting the value of the Real
Property Assets (such as a new Appraisal) which would cause Lender, in
its sole discretion, or, if such evidence is a new Appraisal, in its
reasonable discretion, to modify its determination respecting the Loan
to Value Ratio Covenant.
Section 5.21 Manager. Borrower shall terminate
the management agreements listed on Schedule 12 (other than the
management agreement with respect to the Real Property Asset
identified on such Schedule as ▇▇▇▇▇▇ Wichita) prior to December 31,
1995 and the Partnership
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shall manage such Real Property Asset thereafter pursuant to the Operating
Lease; however, the Partnership may enter into a new management agreement for
any Real Property Asset with Lender's consent, which consent shall not be
unreasonably withheld, and provided that such management agreement shall be on
market terms and at market rates with a bona fide independent third party
manager that is in the business of managing hotels and otherwise reasonably
satisfactory to Lender.
Section 5.22 Further Assurances. Borrower and the REIT
will, at Borrower's and the REIT's sole cost and expense, at any time and from
time to time upon request of Lender take or cause to be taken any action and
execute, acknowledge, deliver or record any further documents, opinions, deeds
of trust, deeds to secure debt, mortgages, security agreements or other
instruments which Lender in its reasonable discretion deems necessary or
appropriate to carry out the purposes of this Agreement and the other Loan
Documents including (i) to consummate the transfer or sale of the Loan or any
portion thereof, provided that Borrower's, the REIT's and each other Loan
Party's obligations hereunder and under the Loan Documents shall not be
increased or their rights diminished or abridged without their consent, (ii) to
preserve, protect and perfect the security intended to be created and preserved
in the Real Property Assets and (iii) to establish, preserve and protect the
security interest of Lender in and to the Accounts Receivable and any personal
property owned by Borrower, the Partnership on HIC installed in, furnished to
or used or intended to be used in connection with any construction in
connection with the Real Property Assets or the operation thereof.
Section 5.23 REIT Status. The REIT shall elect to be
treated as a "real estate investment trust" for the taxable year ending on
December 31, 1995 and thereafter shall at all times maintain its status as and
continue to elect to be treated as, a "real estate investment trust" under
Section 856 of the Code and shall at all times maintain its status as
grandfathered from the application of Section 269B of the Code pursuant to
Section 132(c)(3) of the Deficit Reduction Act of 1984.
Section 5.24 Mortgage Covenants. Borrower shall comply
with all of the terms and conditions and covenants in the Security Instruments,
the Environmental Indemnity and the other Loan Documents.
Section 5.25 Appraisals. Lender shall have the right
during the term of the Loan to commission new Appraisals or updates to existing
Appraisals for one or more Real Property Assets. Prior to the first Advance
after the Syndication, Borrower shall have delivered satisfactory Appraisals
for all of the Real Property Assets (the cost of which, with respect to the
Initial Assets only, shall be subject to the Expense Cap). Borrower shall only
be obligated to pay for Appraisals or updated Appraisals or Lender's internal
valuations or updates thereof in connection with (i) an increase in the
Available Facility Amount (other than as a result of the Syndication, provided
that such increase is based on the Initial Assets), (ii) the addition of a
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Substitute Property or New Property, (iii) a Default or an Event of Default,
(iv) the first update of any Appraisal and (v) any Appraisal delivered pursuant
to Section 2.26. All other Appraisals, updates of Appraisals, internal
valuations or updates thereof shall be performed at Lender's sole cost and
expense. Borrower shall reasonably cooperate with the appraisers performing
the Appraisals of the Real Property Assets and, with respect to those
Appraisals requested by Lender, any Co- Lender or any Participant, shall
deliver copies of such Appraisals to Lender promptly after receipt but in no
event later than five days after written notice from Lender (provided Borrower
has theretofore received such Appraisal). In Lender's sole discretion, Lender
may elect to update and review its own internal valuation, or prepare its own
internal valuation in lieu of one or more of the Appraisals which may be
required under this Section 5.25. Borrower shall pay, to the extent required
pursuant to the provisions of this Section 5.25, within five (5) Business Days
of Lender's request therefor, Lender's out-of-pocket costs and expenses for
each such internal valuation or review or update thereof and each Appraisal or
update thereof for each Real Property Asset. Borrower shall reimburse Lender
for its out-of-pocket costs and expenses in accordance with the preceding
sentence in connection with the internal valuations done pursuant to Section
3.1(n) no later than the Closing Date (subject to the Expense Cap).
Notwithstanding the foregoing, however, if an internal valuation has been
prepared and the Loan to Value Ratio is in dispute, Borrower shall deliver to
Lender Appraisals, at Borrower's sole cost and expense, of each Real Property
Asset.
Section 5.26 Maintenance of Control. An officer,
director, employee or general partner of the Group shall at all times remain a
Trustee of the REIT and a Director of the Corporation (it being acknowledged by
Lender that changes in composition of REIT's Trustees or Corporation's
Directors shall not constitute a change in control).
Section 5.27 Maintenance of Intercompany Debt. Except as
set forth on Schedule 9, no Intercompany Debt shall be secured by any of the
Collateral.
Section 5.28 Transfer of Licenses. With respect to all of
the Real Property Assets (other than the Vagabond Inns but only for so long as
the Vagabond Inns are not leased or operated by a Loan Party or an Affiliate of
any Loan Party), to the extent that any Licenses are not in the name of the
applicable Loan Party, Borrower and the REIT shall promptly commence or cause
the applicable Loan Party to commence, and diligently proceed to have all such
Licenses issued in the name of the applicable Loan Party or deliver evidence
reasonably satisfactory to Lender that the failure to have such License in the
name of the applicable Loan Party does not materially adversely affect the
operation and use of the related Real Property Asset. Borrower shall notify
Lender within 10 Business Days of the end of each calendar quarter of the
status of the various Licenses that have not been transferred to the applicable
Loan Party. Notwithstanding the foregoing, Borrower shall have all liquor
licenses (other than with respect to the liquor licenses held by Imperial
Hotels Corporation with respect to the Vagabond Inns and the liquor license
held by the Currency Club as tenant under a restaurant lease on the
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Real Property Asset identified as Dallas Park Central on Schedule 2) issued and
maintained in either the name of (i) the Corporation, (ii) an entity wholly
owned and controlled by the Corporation which has entered into a management
agreement or lease agreement with respect to such liquor licenses with the
Partnership or the Corporation on terms and conditions reasonably satisfactory
to Lender or (iii) an individual who is both a resident of the state in which
the related Real Property Asset is located and is an employee of either
Borrower, the Partnership, the Corporation or the REIT at the level of general
manager for the Real Property Assets in such state or higher within ninety (90)
days of the date hereof.
SECTION 6. NEGATIVE COVENANTS.
Borrower covenants and agrees for itself and on behalf of the
other Loan Parties that on and after the Closing Date until the Obligations are
paid in full:
Section 6.1 INTENTIONALLY DELETED.
Section 6.2 INTENTIONALLY DELETED.
Section 6.3 Liens. Borrower, the Partnership and HIC
shall not, create, incur, assume or suffer to exist, directly or indirectly,
any Lien on any of the Collateral, or any of the Real Property Assets, other
than the following (collectively, the "Permitted Liens"):
(a) Liens existing on the Closing Date and set forth on
Schedule 7 hereto or listed in the Title Policies issued on the
Closing Date;
(b) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are being
maintained in accordance with GAAP;
(c) Statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by Law (other than any Lien
imposed by ERISA) created in the ordinary course of business for
amounts not yet due or (i) which are being contested in good faith by
appropriate proceedings diligently conducted, and with respect to
which adequate bonds have been posted if required to do so by
Applicable Law or the terms of the Mortgage;
(d) Easements, rights-of-way, zoning and similar
restrictions and other similar charges or encumbrances not interfering
with the ordinary conduct of the business of Borrower and which do not
detract materially from the value of any of the Real Property Assets
to which they attach or impair materially the use thereof by Borrower
or materially adversely affect the security interests of Lender in the
Collateral;
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(e) Permitted Financing; and
(f) Liens granted to Lender pursuant to the Security
Instruments securing the Obligations.
Section 6.4 Restriction on Fundamental Changes. Without
the prior written consent of Lender, which consent may be withheld in the sole
and absolute discretion of Lender, (a) Borrower and the other Loan Parties
shall not enter into any merger or consolidation following which the REIT or an
entity wholly owned by the REIT is no longer the sole general partner of the
Borrower; or a merger or consolidation following which the Corporation or
entities wholly owned by the Corporation are no longer the sole general
partners of the Partnership or the Corporation is no longer the sole
shareholder of HIC; if such events occur without the prior written consent of
Lender, all Advances shall be due and payable in full, including all principal,
interest and Fees, on the earliest to occur of the expiration of each related
Interest Period with respect to Eurodollar Portions or the next payment date
with respect to Base Rate Portions, or the Maturity Date; and (b) the REIT
shall not sell, transfer, pledge, assign or encumber its general partnership
interest in Borrower and the Corporation shall not sell, transfer, pledge,
assign or encumber its (i) general partnership interest in the Partnership or
(ii) its stock in HIC, except to an entity wholly owned by the Corporation.
Section 6.5 Transactions with Affiliates. Borrower and
the other Loan Parties shall not enter into any material transaction or series
of related transactions, whether or not in the ordinary course of business,
with any Affiliate of Borrower, other than on terms and conditions
substantially as favorable as would be obtainable at the time in a comparable
arm's-length transaction with a Person other than an Affiliate of Borrower.
Section 6.6 Plans. Borrower and the other Loan Parties
shall not, and shall make reasonable efforts under the circumstances not to
permit any member of their respective ERISA Controlled Group to, (i) take any
action which would (A) increase the aggregate present value of the Unfunded
Benefit Liabilities under all Plans, or withdrawal liability under a
Multiemployer Plan for which Borrower or any Loan Party or any member of their
respective ERISA Controlled Groups (determined without reference to Section
414(m) or (o) of the Code, if liabilities of entities in Borrower or the Loan
Parties' ERISA Controlled Group solely by reason of Section 414(m) or (o) of
the Code could not result in liability to Borrower or any Loan Party) could
reasonably be expected to be liable, to an amount in excess of $5,000,000.00 or
which has or could be reasonably expected to have a Material Adverse Effect or
(B) result in liability to Borrower or any Loan Party for any post-retirement
benefit under any "welfare plan" (as defined in Section 3(1) of ERISA) or any
withdrawal liability or exit fee or charge with respect to any "welfare plan"
(as defined in Section 3(1) of ERISA), other than liability for continuation
coverage under Part 6 of Title I of ERISA or state laws which require similar
continuation
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coverage for which the employee pays approximately the full cost
of coverage, and other than such liability would not be in excess of
$5,000,000.00 or have a Material Adverse Effect or (ii) engage in any
transaction prohibited by Section 408 of ERISA or Section 4975 of the Code
which has a Material Adverse Effect.
Section 6.7 Payout Ratios. (a) The REIT and the
Corporation (without duplication) shall not pay or declare Distributions that
exceed the greatest of (i) (A) 105% for the first three quarters commencing on
July 6, 1995, and (B) 100% for any period thereafter, of the Funds From
Operations of the REIT and the Corporation (without duplication) in any four
consecutive calendar quarters (or if four consecutive calendar quarters have
not passed since July 6, 1995, the quarterly periods from July 6, 1995);
provided that notwithstanding the foregoing, the REIT may pay or declare
Distributions during the period of time from July 1, 1995 through June 30, 1996
up to $0.47 per share of stock of the REIT per quarter without violating this
covenant, (ii) the amount necessary to maintain the REIT's status as a real
estate investment trust under Section 856 of the Code, or (iii) the amount
necessary for the REIT to avoid the payment of any federal income or excise tax
(the "Maximum Combined Payout Ratio").
(b) The REIT shall not pay or declare Distributions that
exceed the greatest of (i) (A) 105% for the first three quarters commencing on
July 6, 1995, and (B) 100% for any period thereafter of the combined Funds From
Operating of the REIT in any four consecutive calendar quarters (or if four
consecutive calendar quarters have nor passed since July 6, 1995, the quarterly
periods of time from July 6, 1995); provided that, notwithstanding the
foregoing, the REIT may pay or declare Distributions during the period of time
from July 1, 1995 through June 30, 1996 up to $0.47 per share of stock of the
REIT per quarter without violating this covenant, (ii) the amount necessary to
maintain the REIT's status as a real estate investment trust under Section 856
of the Code or (iii) the amount necessary for the REIT to avoid the payment of
any federal income or excise tax (the "Maximum REIT Payment Ratio").
Section 6.8 Operating Leases. Borrower shall not
terminate any Operating Lease, and shall not, without the prior written consent
of Lender, modify or amend any Operating Lease (other than modifications of a
ministerial nature which do not amend or modify any economic terms or terms
that would have an adverse effect on the value of the Collateral or Lender's
security interest therein).
Section 6.9 Borrower's Partnership Agreement. Neither
Borrower nor the REIT shall amend or modify Section 7.4 of Borrower's
Partnership Agreement or default under any of its obligations under Borrower's
Partnership Agreement.
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SECTION 7. EVENTS OF DEFAULT
Section 7.1 Events of Default. Each of the following
events, acts, occurrences or conditions shall constitute an Event of Default
under this Agreement, regardless of whether such event, act, occurrence or
condition is voluntary or involuntary or results from the operation of law or
pursuant to or as a result of compliance by any Person with any judgment,
decree, order, rule or regulation of any court or administrative or
governmental body:
(a) Failure to Make Payments. Borrower or the REIT shall
(i) default in the payment when due of any principal of the Loan, or
(ii) default in the payment within five (5) days after the due date of
(x) any interest on the Loan or (y) any Fees, Transaction Costs or any
other amounts owing hereunder; provided, however, that any interest
payable with respect to any delinquent payment shall be calculated at
the Default Rate from the date such payment was actually due as if
there were no grace period.
(b) Breach of Representation or Warranty. Any
representation or warranty made by Borrower the REIT or any other Loan
Party herein or in any other Loan Document or in any certificate or
statement delivered pursuant hereto or thereto shall prove to be false
or misleading in any material respect on the date as of which made or
deemed made: provided, however, that if such breach is capable of
being cured, then Borrower and the REIT shall have a period of thirty
(30) days after the earlier of (i) the actual knowledge of such breach
by Borrower or the REIT or (ii) delivery of notice from Lender of such
breach, to cure any such breach.
(c) Breach of Covenants.
(i) Borrower or the REIT or any other Loan Party shall
fail to perform or observe any agreement, covenant or obligation arising under
Sections 5.1, 5.8, 5.15, 5.20, 5.23, 6.4(b), 6.6, 6.8 and 6.9, the Fee Letter,
or fail to pay all sums when due pursuant to Section 6.4(a).
(ii) Borrower or any of the Loan Parties shall fail to
perform or observe any agreement, covenant or obligation arising under Sections
5.9, 5.16, 5.17, 5.18, 5.28, 6.3 and 6.7 and such failure shall continue
uncured for thirty (30) days after the earlier of (A) the actual knowledge of
such failure by Borrower or such Loan Party or (B) delivery of notice from
Lender thereof.
(iii) Borrower or any of the Loan Parties shall fail to
perform or observe any agreement, covenant or obligation arising under this
Agreement (except those described in subsections (a), (b) and (c)(i) and
(c)(ii) above and (d), (e), (f), (g), (h), (i) and (j) below), other than
Section 5.26, the breach of which shall not be deemed an Event of Default, and
such failure
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shall continue uncured for thirty (30) days after delivery of notice thereof,
or such longer period of time as is reasonably necessary to cure such Default,
provided that Borrower or such Loan Party has commenced and is diligently
prosecuting the cure of such Default and cures it within ninety (90) days.
(iv) An Event of Default shall occur under any of the Loan
Documents other than this Agreement.
(d) Default Under Other Agreements.
(i) Borrower, the REIT or any other Loan Party shall
default beyond any applicable grace period in the payment, performance or
observance of any obligation or condition with respect to any recourse
Indebtedness (other than the Whole Loan Facility) or any other event shall
occur or condition exist, if the effect of such default, event or condition is
to accelerate the maturity of any such recourse Indebtedness (other than the
Whole Loan Facility) or to permit (without regard to any required notice or
lapse of time) the holder or holders thereof, or any trustee or agent for such
holders, to accelerate the maturity of any such recourse Indebtedness (other
than the Whole Loan Facility), or any such recourse Indebtedness (other than
the Whole Loan Facility) shall become or be declared to be due and payable
prior to its stated maturity; or an Event of Default (as defined therein) shall
occur under the Whole Loan Facility.
(ii) Borrower or the REIT or HIC is in default under (A)
any non-recourse Indebtedness of Borrower that is equal to or in excess of
$10,000,000, which default results in accelerated Indebtedness or (B) any other
non-recourse Indebtedness that could have a Material Adverse Effect on
Borrower's ability to perform its obligations in connection with the Loan.
(iii) Borrower, the Partnership, HIC, or Imperial Hotels
Corporation, as the case may be, is in default under any material term of the
applicable Operating Lease beyond any applicable grace periods provided
therein.
(e) Bankruptcy, etc. (i) Borrower or any other Loan Party
shall commence a voluntary case concerning itself under the Bankruptcy Code; or
(ii) an involuntary case is commenced against Borrower or any other Loan Party
and the petition is not dismissed within ninety (90) days, after commencement
of the case or (iii) a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Borrower, any other Loan Party or Borrower or any other Loan Party commences
any other proceedings under any reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction whether now or hereafter in effect relating to Borrower,
any other Loan Party or there is commenced against Borrower or any other Loan
Party any such proceeding which remains undismissed for a period of ninety (90)
days; or (iv) any order of relief or other order approving any such case or
proceeding is entered;
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or (v) Borrower or any other Loan Party is adjudicated insolvent or bankrupt;
or (vi) Borrower or any other Loan Party suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of ninety (90) days; or (vii)
Borrower or any other Loan Party makes a general assignment for the benefit of
creditors; or (viii) Borrower, any other Loan Party shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or (ix) Borrower or any other Loan Party shall
call a meeting of its creditors with a view to arranging a composition or
adjustment of its debt; or (x) Borrower or any other Loan Party shall by any
act or failure to act consent to, approve of or acquiesce in any of the
foregoing; or (xi) any corporate or partnership action is taken by Borrower or
any other Loan Party for the purpose of effecting any of the foregoing.
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(f) ERISA. (i) Any Termination Event shall occur, or (ii)
any Plan shall incur an accumulated funding deficiency (as defined in Section
412 of the Code or Section 302 of ERISA), whether or not waived, or fail to
make a required installment payment on or before the due date under Section 412
of the Code or Section 302 of ERISA, or (iii) Borrower or any of the Loan
Parties or a member of their respective ERISA Controlled Group shall have
engaged in a transaction which is prohibited under Section 4975 of the Code or
Section 406 of ERISA and an exemption shall not be applicable or have been
obtained under Section 408 of ERISA or Section 4975 of the Code, or (iv)
Borrower or any of the other Loan Parties or any member of their respective
ERISA Controlled Group shall fail to pay when due an amount which it shall have
become liable to pay to the PBGC, any Plan, any Multiemployer Plan, or a trust
established under Section 4049 of ERISA, or (v) Borrower shall have received a
notice from the PBGC of its intention to terminate a Plan or to appoint a
trustee to administer such Plan, or Multiemployer Plan which notice shall not
have been withdrawn within fourteen (14) days after the date thereof, or (vi) a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that a Plan must be terminated or have a trustee appointed
to administer any Plan, or (vii) Borrower or any of the other Loan Parties or a
member of their respective ERISA Controlled Group suffers a partial or complete
withdrawal from a Multiemployer Plan or is in default (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan, or
(viii) a proceeding shall be instituted against any of Borrower or any of the
other Loan Parties, which proceeding is reasonably likely to succeed, to
enforce Section 515 of ERISA, or (ix) any other event or condition shall occur
or exist with respect to any Employee Benefit Plan or Plan, any Multiemployer
Plan, which could reasonably be expected to subject Borrower or any of the
other Loan Parties or any member of their respective ERISA Controlled Group to
any tax, penalty or other liability (other than annual contributions or which
is not an Event of Default otherwise under this Section 7.1) or the imposition
of any lien or security interest on Borrower or any of the other Loan Parties
or any member of their respective ERISA Controlled Group, or (x) with respect
to any Multiemployer Plan, the institution of a proceeding to enforce Section
515 of ERISA, which proceeding is reasonably likely to succeed, to terminate
such Plan, the receipt of a notice of reorganization or insolvency under
Sections 4241 or 4245 of ERISA, in any event; provided, however, that events or
circumstances in Sections 7.1(f)(i) through (x) shall only be an Event of
Default if it results in or is reasonably expected to result in liability to
Borrower or any Loan Party in excess of $5,000,000.00 or if it has or is likely
to have a Material Adverse Effect; or (xi) the assets of Borrower or any other
Loan Party become or are deemed to be assets of an Employee Benefit Plan. No
Event of Default under this Section 7.1(f) shall be deemed to have been or be
waived or corrected because of any disclosure by Borrower or any Loan Party.
(g) Judgments. One or more judgments or decrees (i) in an
aggregate amount of $5,000,000 or more are entered against Borrower or the REIT
or any Loan Party since the Closing Date or (ii) which, with respect to
Borrower, the REIT and the other Loan Parties, could result in a Material
Adverse Effect, shall be entered by a court or courts of competent
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jurisdiction against any of such Persons (other than any judgment as to which,
and only to the extent, a reputable insurance company has acknowledged coverage
of such claim in writing) and (x) any such judgments or decrees shall not be
stayed (by appeal or otherwise), discharged, paid, satisfied, bonded or vacated
within thirty (30) days.
(h) REIT. (i) The REIT fails to remain a publicly-traded
real estate investment trust or the REIT and the Corporation fail to remain in
good standing with the New York Stock Exchange and with the Securities and
Exchange Commission or (ii) their shares fail to continue to trade as "paired
shares" and such failure is not cured within thirty (30) days, if a cure is
permitted under Applicable Law.
(i) First Priority Lien. The Loan Documents after
delivery thereof shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority lien on the
Collateral (subject to the Permitted Liens) purported to be covered, hereby or
thereby.
(j) HIC. Notwithstanding anything to the contrary
contained herein, if an Event of Default has occurred solely with respect to
HIC or with respect to any Real Property Asset in Pool 4 or the related Loan
Document, (an "HIC Event of Default"), the Available Facility Amount for Note D
shall be immediately reduced to $0.00, and such HIC Event of Default shall not
be deemed an Event of Default under this Agreement unless Borrower has failed
to repay, without penalty or premium (other than as provided in Section 2.17)
the outstanding principal balance of Note D together with all accrued and
unpaid interest thereon and all Fees and Funding Costs within five (5) Business
Days of the date of the HIC Event of Default.
Section 7.2 Rights and Remedies. (a) Upon the occurrence
of any Event of Default described in Section 7.1(e), the Aggregate Available
Facility Amount, the Available Facility Amount with respect to each Note and
the Maximum Facility Amount shall automatically and immediately terminate and
the unpaid principal amount of and any and all accrued interest on the Loan and
any and all accrued Fees and other Obligations shall automatically become
immediately due and payable, with all additional interest thereon calculated at
the Default Rate from the occurrence of the Default until the Loan is paid in
full and without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by Borrower, the REIT
and the other Loan Parties, and the obligation of Lender and all Co-Lenders
(including the Swing Line Lender) to make any Advances hereunder shall
thereupon terminate; and upon the occurrence and during the continuance of any
other Event of Default, Lender may, by written notice to Borrower, (i) declare
that the Aggregate Available Facility Amount, the Available Facility Amount for
each Note and the Maximum Facility Amount is terminated, whereupon the
Aggregate Available
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Facility Amount, the Available Facility Amount for each Note and the Maximum
Facility Amount and the obligation of Lender and all Co-Lenders (including the
Swing Line Lender) to make any Advances (or their pro rata share thereof)
hereunder shall immediately terminate, and (ii) declare the unpaid principal
amount of and any and all accrued and unpaid interest on the Loan and any and
all accrued Fees and other Obligations to be, and the same shall thereupon be,
immediately due and payable with all additional interest thereon calculated at
the Default Rate from the occurrence of the Default until the Loan is paid in
full and without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by Borrower, the REIT
and the other Loan Parties.
(b) Upon the occurrence of any Event of Default and
during its continuance, Lender shall have the right to record the Partnership
Mortgages and the Partnership Assignments of Leases and Rents with respect to
the Real Property Assets located in the District of Columbia, Florida, and
Virginia, and Borrower and the REIT shall pay all Transaction Costs in
connection therewith.
(c) Lender and any Co-Lender (including the Swing Line
Lender) may offset any indebtedness, obligations or liabilities owed to
Borrower against any indebtedness, obligations or liabilities of Borrower to
it.
(d) Lender and any Co-Lender may avail itself of any
remedies available to it under the Loan Documents or at law or equity.
SECTION 8. INTENTIONALLY DELETED.
SECTION 9. MISCELLANEOUS.
Section 9.1 Payment of Lender's, Collateral Agent's and
Co-Lender's Expenses, Indemnity, etc. Borrower and the REIT shall:
(a) whether or not the Transactions hereby contemplated
are consummated, pay (i) all reasonable out-of-pocket costs and expenses of
Lender in connection with Lender's due diligence review of the Collateral, the
negotiation, preparation, execution and delivery of the Loan Documents, the
creation, perfection or protection of Lender's, the Collateral Agent and Co-
Lender's Liens in the Collateral (including, without limitation, fees and
expenses for title insurance, property inspections, consultants, surveys, lien
searches, filing and recording fees, and escrow fees and expenses), all
internal valuations and Appraisals of the Real Property Assets made by Lender
(subject to the provisions of Section 5.25) in connection with the
administration of the Loan and any amendment, waiver or consent relating to any
of the Loan Documents
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including Releases, substitutions of Substitute Properties and the addition of
New Properties (including, without limitation, as to each of the foregoing, the
reasonable fees and disbursements of any outside or special counsel to Agent,
Lender or the Collateral Agent) and of Agent, Lender, the Collateral Agent and
Co-Lenders in connection with the preservation of rights under, any amendment,
waiver or consent relating to, and enforcement of, the Loan Documents and the
documents and instruments referred to therein or in connection with any
restructuring or rescheduling of the Obligations (including, without
limitation, the reasonable fees and disbursements of counsel for Agent, Lender
and the Collateral Agent). Notwithstanding anything to the contrary contained
herein or in any other Loan Document, Borrower's and the REIT's obligation to
pay Lender's and the Collateral Agent's (other than the Collateral Agent Fees
but including the Collateral Agent's transition fee) reasonable out-of-pocket
costs and expenses in connection with the closing of the Loan and the
Syndication for legal fees, internal due diligence, Appraisals (subject to the
provisions of Section 5.25) and Engineering Reports and Environmental Reports
with respect to the Initial Assets only shall not exceed the Expense Cap.
(b) pay, and hold Agent, Lender and each Co-Lender
harmless from and against, any and all present and future stamp, excise and
other similar taxes with respect to the foregoing matters and hold Agent,
Lender and each Co-Lender harmless from and against any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to Lender or such Co-Lender) to pay such taxes; and
(c) indemnify Agent, Lender (in its capacity as Lender
and as Agent) and each Co-Lender, its officers, directors, employees,
representatives and agents (each an "Indemnitee") from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of
any kind or nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for such Indemnitee in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) that may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, asserted against or incurred by any Indemnitee
as a result of, or arising in any manner out of, or in any way related to or by
reason of, (i) any of the Transactions or the execution, delivery or
performance of any Loan Document, (ii) the breach of any of Borrower's, the
REIT's or other Loan Party's representations and warranties or of any of
Borrower's, the REIT's or other Loan Party's Obligations, (iii) a default under
Sections 4.12 or 5.11, 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 that
may be required, and (iv) the exercise by Agent, Lender and the Co-Lenders of
their rights and remedies (including, without limitation, foreclosure) under
any agreements creating any such Lien (but excluding, as to any Indemnitee, any
such losses, liabilities, claims, damages, expenses, obligations, penalties,
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actions, judgments, suits, costs or disbursements to the extent incurred by
reason of the gross negligence or willful misconduct of such Indemnitee as
finally determined by a court of competent jurisdiction) (collectively,
"Indemnified Liabilities"). Borrower and the REIT further agree that, without
Lender's prior written consent, which shall not be unreasonably withheld, they
will not enter into any settlement of a lawsuit, claim or other proceeding
arising or relating to any Indemnified Liability unless such settlement
includes an explicit and unconditional release from the party bringing such
lawsuit, claim or other proceeding of each Indemnitee. Notwithstanding
anything contained herein to the contrary, neither Borrower nor the REIT shall
be liable to pay to Agent, Lender or any Co-Lender any amounts with respect to
a Real Property Asset for claims, other than Environmental Claims (as defined
in the Environmental Indemnity), based upon an event occurring after the
consummation of a transfer by or in lieu of foreclosure of all of the
Collateral relating to such Real Property Asset to the extent such amounts
relate solely to the period after the date of the consummation of such transfer
of Collateral. Borrower's and the REIT's obligations under this Section shall
survive the termination of this Agreement and the payment of the Obligations.
Section 9.2 Notices. Except as otherwise by expressly
provided herein, all notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile, or
cable communication), and shall be deemed to have been duly given or made when
delivered by hand, or five (5) days after being deposited in the United States
mail, certified or registered, postage prepaid, or, in the case of facsimile
notice, when sent, answerback received, or, in the case of a nationally
recognized overnight courier service, one (1) Business Day after delivery to
such courier service, addressed, in the case of Borrower and Lender, at the
addresses specified below, or to such other addresses as may be designated by
any party in a written notice to the other parties hereto.
If to Lender, as follows:
For all notices given in accordance with Sections 2.2, 2.6(b),
2.8(b), 2.9(a) and 2.11 of this Agreement to:
▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a ▇▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
Three World Financial Center, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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with copies thereof to:
▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a ▇▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
Three World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a ▇▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
Three World Financial Center, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
For all other notices to:
▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a ▇▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
Three World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy thereof to:
▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a ▇▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
Three World Financial Center, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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If to Borrower, as follows:
SLT Realty Limited Partnership,
c/o Starwood Lodging Trust
11845 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with copies thereof to:
Sidley & Austin
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Section 9.3 Successors and Assigns; Participations;
Assignments. This Agreement shall be binding upon and inure to the benefit of
Borrower, the REIT, Lender, the Co-Lenders, all future holders of the Note and
their respective successors and assigns.
Section 9.4 Amendments and Waivers. (a) Neither this
Agreement, the Note, any other Loan Document to which Borrower, the REIT or any
Loan Party is a party nor any terms hereof or thereof may be amended,
supplemented, modified or waived other than in a writing executed by Borrower,
the REIT, such Loan Party and Lender. If all or a portion of the Loan and the
Maximum Facility Amount is sold to a Co-Lender pursuant to Section 9.9(k), the
Borrower and the REIT acknowledge and agree that any amendment, modification
approval, waiver or request to be granted regarding the terms of this Agreement
shall be given in accordance with the terms, provisions and conditions of the
intercreditor agreement (the "Intercreditor Agreement") to be entered into
between Lender, as agent, and each Co-Lender (the "Intercreditor Agreement"),
provided that such terms, provisions and conditions shall have been disclosed
to Borrower and the REIT; Lender agrees that the terms of such Intercreditor
Agreement shall not be inconsistent with this Agreement, the other Loan
Documents or the Assignment and Assumption.
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(b) In the case of any waiver, Borrower, the REIT, Lender
and all Co-Lenders shall be restored to their former position and rights
hereunder and under the outstanding Note and any other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
Section 9.5 No Waiver; Remedies Cumulative. No failure or
delay on the part of Lender or any Co-Lender in exercising any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between Borrower, the REIT or any other Loan Party and Lender or any Co-Lender
shall operate as a waiver thereof nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which Lender or any Co-Lender would otherwise have. No notice to or
demand on Borrower, the REIT or any other Loan Party in any case shall entitle
Borrower, the REIT or any other Loan Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights
of Lender or any Co-Lender, to any other or further action in any circumstances
without notice or demand.
Section 9.6 Governing Law; Submission to Jurisdiction.
(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, provided however, that with respect to the creation, perfection, priority
and enforcement of the lien of the Security Instruments, and the determination
of deficiency judgments, the laws of the State where the Real Property Asset is
located shall apply.
(b) Any legal action or proceeding with respect to this
Agreement or any other Loan Document and any action for enforcement of any
judgment in respect thereof may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and Lender, and each Co-Lender, and, by execution and delivery of this
Agreement, Borrower and the REIT hereby accept for themselves and in respect of
its property, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and appellate courts from any thereof. Borrower and the
REIT irrevocably consent to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to Borrower and the
REIT at its address set forth in Section 9.2. Borrower and the REIT and Lender
and each Co-Lender hereby irrevocably waive any objection which they may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Loan Document brought in the courts referred to above and hereby further
irrevocably waive and agree not to plead or claim in any such court that any
such
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action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall affect the right of Lender or any
Co-Lender, to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against Borrower or the REIT in any
other jurisdiction.
Section 9.7 Confidentiality; Disclosure of Information.
Each party hereto shall treat the transactions contemplated hereby and all
financial and other information furnished to it about Borrower, the other Loan
Parties and the Real Property Assets, as confidential; provided, however, that
such confidential information may be disclosed (a) as required by law or
pursuant to generally accepted accounting procedures, (b) to officers,
directors, employees, agents, partners, attorneys, accountants, engineers and
other consultants of the parties hereto who need to know such information,
provided such Persons are instructed to treat such information confidentially,
(c) by Lender to any Participant, Co-Lender, servicer, or assignee
("Transferee"), which disclosure to Transferees and prospective Transferees may
include any and all information which has been delivered to Lender by Borrower
pursuant to this Agreement or the other Loan Documents or which has been
delivered to Lender in connection with Lender's credit evaluation of Borrower
prior to entering into this Agreement, provided that such Transferee agrees to
be bound by the provisions of this Section 9.7, or (d) upon the written consent
of the party whose otherwise confidential information would be disclosed.
Borrower and the REIT acknowledge and agree that Lender may
provide to the Co-Lenders, and that Lender and each of the Co-Lenders may
provide to any Participant, originals or copies of this Agreement, all Loan
Documents and all other documents, instruments, certificates, opinions,
insurance policies, letters of credit, reports, requisitions and other
materials and information of every nature or description, and may communicate
all oral information, at any time submitted by or on behalf of Borrower or the
REIT or received by Lender in connection with the Loan or Borrower or the REIT.
Section 9.8 Recourse. The Loan and the Obligations shall
be fully recourse to Borrower; however, no personal liability or personal
deficiency judgment shall be asserted or enforced against the REIT except as a
result and to the extent of (i) fraud or intentional misrepresentation by
Borrower or any other Loan Party; (ii) Borrower's or any other Loan Party's
misapplication or misappropriation of Gross Revenues or Accounts Receivable
received by Borrower after the occurrence of an Event of Default; (iii) the
misapplication or the misappropriation of insurance proceeds or condemnation
awards; or (iv) the occurrence of an Event of Default under Section 7.1(f) of
this Agreement and nothing contained in this Section 9.8 shall limit, affect or
impair any of Lender's rights or remedies against the REIT under the
Environmental Indemnity Agreement. Notwithstanding the foregoing, the
agreement of Lender to not assert or enforce personal liability or a personal
deficiency judgment against the REIT SHALL BECOME NULL AND VOID and shall be of
no further force and effect in the event that there is any breach of Section
7.4 of Borrower's Partnership Agreement or of Sections
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5.5(c), 6.4(b) or 6.9 of this Agreement. Lender and each Co-Lender
acknowledges and agrees that the name "Starwood Lodging Trust" is a designation
of the REIT and its Trustees (as Trustees but not personally) under a
Declaration of Trust dated August 25, 1969, as amended and restated as of June
6, 1988, as further amended on February 1, 1995 and as further amended on June
19, 1995 and as the same may be further amended from time to time, and all
persons dealing with the REIT shall look solely to the REIT's assets for the
enforcement of any claims against the REIT, as the Trustees, officers, agents
and security holders of the REIT assume no personal liability for obligations
entered into on behalf of the REIT, and their respective individual assets
shall not be subject to the claims of any person relating to such obligations.
The foregoing shall govern all direct and indirect obligations of the REIT
under this Agreement and the Loan Documents.
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Section 9.9 Sale of Loan, Co-Lenders, Participations and
Servicing.
(a) After the earliest to occur of (or simultaneously
with) (i) the Syndication, (ii) January 31, 1996 or (iii) Borrower's rejection
of a Syndication, Lender may, at its option, sell with novation all or any part
of its right, title and interest in, and to, and under the Loan, including,
without limitation, all or a portion of its obligation to make Advances, and
its interest in the outstanding principal balance of the Loan, to one or more
entities (any entity that purchases an interest in the Loan with novation, a
"Co-Lender"); notwithstanding the foregoing, provided that no Event of Default
has occurred and is continuing, any such sale with novation during the Draw
Period to any Co-Lender that is not an Affiliate of Lender shall be subject to
Borrower's prior written approval, which approval shall not be unreasonably
withheld or delayed. Each Co-Lender shall purchase an interest in the Loan of
at least $5,000,000.00. Lender and each Co-Lender shall enter into an
assignment and assumption agreement substantially in the form attached hereto
as Exhibit "Y" (the "Assignment and Assumption") assigning a portion of
Lender's rights and obligations under the Loan, and pursuant to which the
Co-Lender accepts such assignment and assumes the assigned obligations. From
and after the effective date specified in the Assignment and Assumption (A)
each Co-Lender shall be a party hereto and to each Loan Document to the extent
of the applicable percentage or percentages set forth in the Assignment and
Assumption and, except as specified otherwise herein, shall succeed to the
rights and obligations of Lender hereunder and thereunder in respect of the
Loan (including, without limitation, its pro rata share of Lender's obligations
to make Advances hereunder), and (B) Lender, as lender shall, to the extent
such rights and obligations have been assigned pursuant to such Assignment and
Assumption, relinquish its rights and be released from its obligations
hereunder and under the Loan Documents. The liabilities of Lender and each of
the Co-Lenders shall be several and not joint, and Lender's obligations to
Borrower under this Agreement shall be reduced by the amount of each such
Assignment and Assumption. Neither Lender nor any Co-Lender shall be
responsible for the obligations of any other Co- Lender. Lender and each
Co-Lender shall be liable to Borrower only for their respective proportionate
shares of the Loan. If for any reason any of the Co-Lenders shall fail or
refuse to abide by their obligations under this Agreement, Lender and the other
Co- Lenders shall not be relieved of their obligations, if any, hereunder,
including their obligations to make their pro rata share of any Advance on the
date set forth for such Advance in the Notice of Borrowing.
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(b) Intentionally Omitted.
(c) Borrower and the REIT agree that they shall, in
connection with any sale of all or any portion of the Loan, whether in whole,
subject to Section 9.9(d), or to a Co-Lender or Participant, within ten (10)
business days after requested by Lender, furnish Lender with the certificates
required under Section 9.22(a) and (b) and such other information as reasonably
requested by any Co-Lender or Participant in performing its due diligence in
connection with its purchase of an interest in the Loan.
(d) During the Draw Period and provided that no Default
or Event of Default has occurred and is continuing, Lender shall retain at
least a ten percent (10%) direct ownership interest in the Loan and in the
Maximum Facility Amount.
(e) Unless the entire Loan has been sold to a single
entity other than an Affiliate of Lender, Lender (or an Affiliate of Lender)
shall act as administrative agent for itself and the Co-Lenders (together with
any successor administrative agent, the "Agent") pursuant to this Section
9.9(e). Subsequent to the Syndication, Lender shall have the right to appoint
a successor administrative agent for the Loan or delegate any portion of the
administrative agent's duties. Borrower acknowledges that Lender, as Agent
shall have the sole and exclusive authority to execute and perform this
Agreement and each Loan Document on behalf of itself, as Lender and as agent
for itself and the Co-Lenders. Borrower may rely conclusively on the actions
of Lender as Agent to bind Lender and the Co-Lenders, notwithstanding that the
particular action in question may, pursuant to this Agreement or any
Intercreditor Agreement among Lender and the Co-Lenders, be subject to the
consent or direction of the Co-Lenders. Lender may resign as Agent of the
Co-Lenders, in its sole discretion, without the consent of Borrower; provided
however, that prior to the Syndication, Lender may only resign as Agent (i)
after an Event of Default has occurred or (ii) if required to by the
Co-Lenders. Upon any such resignation, the Co-Lenders shall have the right to
appoint a successor Agent. If, within thirty (30) days of the Agent's
resignation, a successor Agent has not been appointed or such successor has not
accepted such appointment, then the retiring Agent may, on behalf of the
Co-Lenders, appoint a successor Agent. Upon appointment of a successor Agent,
the successor Agent shall succeed to the rights, powers and duties of the Agent
hereunder and the retiring Agent's rights, powers and duties as Agent shall be
terminated without any other or further act or deed on the part of the retiring
Agent, Borrower, or the Co-Lenders.
The Collateral Agent shall have no duties or obligations with
respect to Borrower or the Loan other than to serve as a custodian of the
Collateral as agent of Lender and the Co-Lenders and to serve as mortgagee,
beneficiary or secured party, as the case may be, of record with respect to the
Loan Documents for the benefit of Lender and the Co-Lenders pursuant to a
Custodial Agreement dated the date hereof between Lender as Agent, and the
Collateral Agent
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(the "Custodial Agreement"). Lender and the Co-Lenders shall have the right to
terminate or change the Collateral Agent and enter into a new Custodial
Agreement, provided that the Collateral Fees to be paid by Borrower hereunder
are not significantly increased.
(f) Except to the extent its obligations hereunder and
its interest in the Loan have been assigned pursuant to one or more Assignments
and Assumption, ▇▇▇▇▇▇ Brothers Holdings Inc. ("▇▇▇▇▇▇") as Lender, shall have
the same rights and powers under this Agreement as any other Co-Lender and may
exercise the same as though it were not the Agent. The term "Co-Lender" or
"Co- Lenders" shall, unless otherwise expressly indicated, include ▇▇▇▇▇▇ in
its individual capacity. ▇▇▇▇▇▇ and the other Co-Lenders and their respective
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, Borrower,
Loan Party or any Affiliate of Borrower or Loan Party and any Person or entity
who may do business with or own securities of Borrower or Loan Party or any
Affiliate of Borrower or Loan Party or any Subsidiary thereof, all as if they
were not serving in such capacities hereunder and without any duty to account
therefor to each other.
(g) This Agreement is being entered into by Lender
individually and as agent for one or more Co-Lenders, and upon the execution
and delivery of each Assignment and Assumption, privity of contract shall be
created as between (i) Lender and each Co-Lender and (ii) Borrower and each
Co-Lender.
(h) Lender, as Agent shall maintain at its domestic
lending office or at such other location as Lender, as Agent shall designate in
writing to each Co-Lender and Borrower a copy of each Assignment and Assumption
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Co-Lenders, the amount of each Co-Lender's proportionate
share of the Maximum Facility Amount and the Loan and the name and address of
each Co-Lender's agent for service of process (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Lender, as Agent and the Co-Lenders may treat each person
or entity whose name is recorded in the Register as a Co-Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
and copying by Borrower or any Co-Lender during normal business hours upon
reasonable prior notice to the Agent. A Co-Lender may change its address and
its agent for service of process upon written notice to Lender, as Agent and
Borrower, which notice shall only be effective upon actual receipt by Lender
and Borrower, which receipt will be acknowledged by Lender as Agent, and
Borrower upon request.
(i) Notwithstanding anything herein to the contrary, any
financial institution or other entity may be sold a participation interest in
the Loan by Lender or any Co-Lender without Borrower's consent (such financial
institution or entity, a "Participant") (x) if such sale is without novation
and (y) if the other conditions set forth in this paragraph are met. No
Participant shall be considered a Lender or Co-Lender hereunder or under any
Note or the Loan
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Documents. No Participant shall have any rights under this Agreement, the
Notes or any of the Loan Documents and the Participant's rights in respect of
such participation shall be solely against Lender or Co-Lender, as the case may
be, as set forth in the participation agreement executed by and between Lender
or Co-Lender, as the case may be, and such Participant. The terms of any
participation agreement between Lender or Co-Lender, as the case may be, and
its Participant shall not grant the Participant any consent rights except for
consent to (i) changes in the interest rate and term of the Loan, (ii) increase
in the principal amount of the Loan (except for protective advances and
increases made in accordance with Sections 2.22, 2.23 and 2.24 hereof), (iii)
release of collateral (except for Section 2.21 hereof), (iv) release of any
party liable for repayment of the Loan, (v) forbearance, (vi) consents to
subordinate financing of the Real Property Asset(s), (vii) the acceleration of
the Loan or commencement of foreclosure, (viii) the acquisition of foreclosed
property and (ix) the management of, and ultimate sale of, real estate owned.
No participation shall relieve Lender or Co-Lender, as the case may be, from
its obligations hereunder or under the Notes or the Loan Documents and Lender
or Co-Lender, as the case may be,shall remain solely responsible for the
performance of its obligations hereunder.
(j) Notwithstanding any other provision set forth in this
Agreement, the Lender or any Co-Lender may at any time create a security
interest in all or any portion of its rights under this Agreement (including,
without limitation, amounts owing to it in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System), provided that no such security interest or the exercise by the secured
party of any of its rights thereunder shall release Lender or Co-Lender from
its funding obligations hereunder.
(k) If prior to January 31, 1996, Lender receives written
commitments from one or more Co-lenders to fund, in the aggregate, up to an
additional $60,000,000.00 under the Loan, pursuant to the terms and conditions
of the Syndication Letter dated the date hereof between Lender and Borrower and
the REIT (the "Syndication Letter"), the Maximum Facility Amount shall, upon
execution and delivery of Assignment and Assumption Agreements and
Intercreditor Agreements satisfactory to Lender, upon payment of all Commitment
Fees pursuant to and as defined in the Fee Letter and the Syndication Letter,
and upon notice to and acceptance by Borrower, increase the Maximum Facility
Amount up to $135,000,000.00 without any further action on the part of Lender
or any Co- Lender (the "Syndication"). Any such increase in the Maximum
Facility Amount is subject to the terms and conditions of the Syndication
Letter. Upon Syndication, Borrower may elect to have a portion of the Maximum
Facility Amount, up to an aggregate amount of $10,000,000.00, consist of Swing
Line Advances from one designated Co-Lender (the "Swing Line Lender").
Notwithstanding anything to the contrary contained herein, but
subject to the terms and conditions of the Syndication Letter, Lender shall be
under no obligation to advance
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other proceeding arising or relating to such a liability unless such settlement
includes an explicit and unconditional release from the party bringing such
lawsuit, claim or more than $75,000,000.00 from its own funds. The sale of pro
rata interests in the initial $75,000,000.00 Initial Facility Amount to
Co-lenders shall not be deemed a Syndication.
(l) Each Lender, Co-Lender and Participant represents,
warrants and covenants, and each person to whom a Lender or Co-Lender or
Participant directly or indirectly sells or assigns or otherwise transfers all
or any part of its right, title or interest in, or to, or under the Loan (i.e.,
a Transferee), shall be deemed to represent, warrant and covenant, to Borrower
and each of the Loan Parties that they and each other Person to whom all or any
part of any Lender, Co-Lender, Participant or Transferee's right, title or
interest in, or to, or under the Loan is directly or indirectly sold or
assigned or otherwise transferred are not, and shall not be, a Plan Asset
Entity at any time any Lender, Co-Lender, Participant, Transferee or other
Person has any right, title or interest in, or to, or under the Loan, unless
such person being a Plan Asset Entity would not result in a non-exempt
prohibited transaction under section 406 of ERISA or Section 4975 of the Code
because of an exemption or otherwise. Notwithstanding any provision of this
Agreement or any Loan Document, if this representation, warranty and covenant
is breached and a prohibited transaction under Section 406 of ERISA in Section
4975 of the Code results, (i) neither Borrower nor any Loan Party shall be
considered to be in breach of any representation, warranty or covenant of this
Agreement or of any Loan Document that is breached or becomes untrue as a
result of a prohibited transaction caused by a sale or assignment or other
transfer in violation of the preceding sentence, (ii) no Event of Default or
Default shall be considered to occur pursuant to this Agreement as a result of
a prohibited transaction caused by a sale or assignment or other transfer in
violation of the preceding sentence, and similarly no default to the detriment
of Borrower or any Loan Party shall be deemed to occur pursuant to any other
Loan Document as a result of a prohibited transaction caused by a sale or
assignment or other transfer in violation of the preceding sentence and (iii)
the Person breaching the representation, warranty and covenant shall indemnify
and hold harmless Borrower and each Loan Party from any and all actual, but in
no event consequential, losses, expenses, and liabilities resulting to Borrower
and any Loan Party resulting therefrom or in connection therewith.
In the event that liability is sought to be imposed on any
Person pursuant to the indemnification in the subsection (iii) of the preceding
sentence ("ERISA Indemnitee"), then such ERISA Indemnitee shall have the right,
if it so chooses, to control any litigation or arbitration involving potential
liability, loss or expenses under such subsection (iii) and if such ERISA
Indemnitee is not timely informed of a claim for liability and given the right
to exercise such control, then indemnification under subsection (iii) in the
preceding sentence shall be null and void. Borrower and the Loan Parties agree
that, without the prior written consent of the ERISA Indemnitee, which shall
not unreasonably be withheld, they shall not enter into any settlement of a
lawsuit, claim or other proceeding arising or relating to such a liability
unless such settlement includes an explicit and unconditional release from the
party bringing such lawsuit, claim or
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other proceeding of each Lender, Co-Lender, Participant and any Transferee,
including each ERISA Indemnitee.
Section 9.10 Borrower's and REIT's Assignment. Neither
Borrower nor the REIT may assign its rights or obligations hereunder without
the prior written consent of Lender.
Section 9.11 Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Section 9.12 Effectiveness. This Agreement shall become
effective on the date on which all of the parties hereto shall have signed a
counterpart hereof and shall have delivered the same to Lender.
Section 9.13 Headings Descriptive. The heading of the
several Sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
Section 9.14 Marshaling; Recapture. Lender shall be under
no obligation to marshal any assets in favor of Borrower, the REIT, any other
Loan Party or any other party or against or in payment of any or all of the
Obligations. To the extent Lender receives any payment by or on behalf of
Borrower, the REIT or any other Loan Party, which payment or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to Borrower, the REIT or such other Loan Party
or its estate, trustee, receiver, custodian 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 repayment, the obligation or part thereof which
has been paid, reduced or satisfied by the amount so repaid shall be reinstated
by the amount so repaid and shall be included within the liabilities of
Borrower, the REIT or such other Loan Party to Lender as of the date such
initial payment, reduction or satisfaction occurred.
Section 9.15 Severability. In case any provision in or
obligation under this Agreement or the Note or the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
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Section 9.16 Survival. Except as expressly provided to
the contrary herein, all indemnities set forth herein including, without
limitation, in Sections 2.16, 2.17, 2.18, 2.19 and 9.1 shall survive the
execution and delivery of this Agreement, the Note and the Loan Documents and
the making and repayment of the Loan hereunder.
Section 9.17 Domicile of Loan Portions. Lender may
transfer and carry any Loan Portion at, to or for the account of any domestic
or foreign branch office, subsidiary or affiliate, subject to Sections 2.19 and
9.9, and provided that such transfer does not result in any increase in the
costs to be paid by Borrower and the REIT under Sections 2.16, 2.18 or 2.19.
Section 9.18 Intentionally Omitted.
Section 9.19 Calculations; Computations. Except as
otherwise expressly provided herein, the financial statements to be furnished
to Lender pursuant hereto shall be made and prepared in accordance with GAAP
consistently applied throughout the periods involved and consistent with GAAP
as used in the preparation of the financial statements referred to in Section
4.5.
SECTION 9.20 WAIVER OF TRIAL BY JURY. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BORROWER, THE REIT, LENDER AND ALL CO-LENDERS EACH
HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
Section 9.21 No Joint Venture. Notwithstanding anything
to the contrary herein contained, Lender by entering into this Agreement or by
taking any action pursuant hereto, will not be deemed a partner or joint
venturer with Borrower or the REIT and Borrower and the REIT agree to hold
Lender harmless from any damages and expenses resulting from such a
construction of the relationship of the parties hereto or any assertion
thereof.
Section 9.22 Estoppel Certificates. (a) Borrower, the
REIT and Lender each hereby agree at any time and from time to time upon not
less than ten (10) Business Days prior written notice by Borrower or Lender to
execute, acknowledge and deliver to the party specified in such notice, a
statement, in writing, certifying whether this Agreement is unmodified and in
full force and effect (or if there have been modifications, whether the same,
as modified, is in full force and effect and stating the modifications hereto),
and stating whether or not, to the best knowledge of such certifying party, any
Default or Event of Default has occurred and is then continuing, and, if so,
specifying each such Default or Event of Default; provided, however, that it
shall be a condition precedent to Lender's obligation to deliver the statement
pursuant to this
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Section, that Lender shall receive, together with Borrower's request for such
statement, a certificate of a general partner or senior executive officer of
Borrower and the REIT stating that no Default or Event of Default exists as of
the date of such certificate (or specifying such Default or Event of Default).
(b) Within ten (10) Business Days of Lender's request,
Borrower shall execute and deliver a certificate of the general partner of
Borrower or senior executive officer of Borrower and the REIT confirming the
then aggregate outstanding principal balance of the Loan, the outstanding
principal balance with respect to each Note of each Eurodollar Portion and each
Base Rate Portion, the Contract Rate for each Loan Portion, the dates to which
all interest has been paid, and the Interest Period for each Eurodollar
Portion. Such statement shall be binding and conclusive on Borrower absent
manifest error.
Section 9.23 No Other Agreements. This Agreement, the
Loan Documents, the Fee Letter and the Syndication Letter constitute the entire
understanding of the parties with respect to the transactions contemplated
hereby, and all prior understandings with respect thereto, whether written or
oral, shall be of no force and effect.
Section 9.24 Controlling Document. In the event of a
conflict between the provisions of this Agreement and the other Loan Documents
the provisions of this Agreement shall control and govern the conflicting
provisions of the other Loan Documents.
Section 9.25 No Benefit to Third Parties. This Agreement
is for the sole and exclusive benefit of Borrower, the REIT and Lender and the
Co-Lenders and the Swing Line Lender and all conditions of the obligation of
Lender and the Co-Lenders and the Swing Line Lender to make Advances hereunder
are imposed solely and exclusively for the benefit of Lender and the Co-Lenders
and the Swing Line Lender and their respective assigns 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 and any Co-Lender and the
Swing Line Lender will refuse to make Advances in the absence of strict
compliance with any and 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 at any time if it in
its sole discretion deems it advisable to do so. Without limiting the
generality of the foregoing, Lender shall not have any duty or obligation to
anyone to ascertain that funds advanced hereunder are used as required by the
terms hereof or to pay the cost of constructing the improvements on any of the
Real Property Assets or to acquire materials and supplies to be used in
connection therewith or to pay costs of owning, operating and maintaining same.
Section 9.26 Joint and Several. Subject to the terms and
conditions of Section 9.8, Borrower and the REIT are each jointly and severally
liable for the payment in full of the Loan
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and all other sums owing under this Agreement, the Note, the Security
Instruments and any other Loan Documents and the performance of all of the
Obligations.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
SLT REALTY LIMITED PARTNERSHIP
By: Starwood Lodging Trust, its general
partner
By:
-------------------------------
Name:
Title:
STARWOOD LODGING TRUST
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
D/B/A ▇▇▇▇▇▇ CAPITAL, A DIVISION
OF ▇▇▇▇▇▇ BROTHERS HOLDINGS
INC., a Delaware corporation
By:
-------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, AS
COLLATERAL AGENT FOR THE
BENEFIT OF THE SENIOR LENDERS
By:
-------------------------------------
Name:
Title: