EXHIBIT 10.1
LOAN AGREEMENT
This LOAN AGREEMENT dated as of May __, 2003, between LODGIAN DENVER
LLC, LODGIAN NORTH MIAMI LLC, LODGIAN COCONUT GROVE LLC, LODGIAN AUGUSTA LLC,
LODGIAN XXXXXXXX LLC, LODGIAN FORT XXXXXXXX LLC, LODGIAN LAFAYETTE LLC, LODGIAN
MERRIMACK LLC, LODGIAN HAMBURG LLC, LODGIAN SYRACUSE LLC, LODGIAN CINCINNATI
LLC, LODGIAN TULSA LLC, LODGIAN XXXXXXX LLC, LODGIAN MEMPHIS LLC, LODGIAN
COLCHESTER LLC, LODGIAN BRIDGEPORT LLC, LODGIAN FAIRMONT LLC, and LODGIAN
MORGANTOWN LLC, each a Delaware limited liability company, having its principal
place of business at c/o Lodgian, Inc., 0000 Xxxxxxxxx Xxxx, X.X. -- Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000 (collectively "Borrower"), and XXXXXX BROTHERS HOLDINGS
INC., a Delaware corporation, having an address at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 ("Lender").
W I T N E S S E T H:
WHEREAS, Lender is concurrently herewith making a loan to Borrower
in the original principal amount of $80,000,000.00 (the "Loan") secured by a
mortgage, deed of trust, deed to secure debt lien on, and security interest in,
Borrower's interest in and to the real and personal property comprising the
hotels listed on the attached Schedule A;
WHEREAS, Lender is the holder of those certain promissory notes
described on Exhibit A hereto (collectively, the "Underlying Note"); and secured
by, among other things, those certain mortgages described on Exhibit B
(collectively, and as such mortgages may be modified from time to time, the
"Underlying Mortgages") and Borrower is an obligor under the Underlying Note and
mortgagor under the Underlying Mortgages; and
WHEREAS, Lender and Borrower desire: (i) to combine, consolidate,
and coordinate the liens of the Underlying Mortgages in the aggregate principal
amount of $80,000,000.00 and to consolidate the Underlying Notes to evidence a
single indebtedness in the principal amount of $80,000,000.00, and (ii) to
modify the terms and provisions of the Underlying Note and the loan evidenced
thereby, by and amending and restating same as more particularly set forth
herein;
WHEREAS, the Loan is evidenced by a certain Consolidated, Amended
and Restated Mortgage Note dated the date hereof made by Borrower in favor of
Lender (the "Note") and secured by, among other things, certain mortgage, deed
of trust or deed to secure debt instruments dated as of the date hereof and
encumbering the Mortgaged Property (collectively, the "Mortgage"; the Note, the
Mortgage, this Agreement and all other documents executed by Borrower, entities
comprising Borrower and/or Lodgian, Inc., in any capacity, in connection with
the Loan, collectively, the "Loan Documents"); and
WHEREAS, Lender and Borrower have agreed to enter into this Loan
Agreement to memorialize their understanding regarding their respective rights
and obligations in respect of the Loan.
NOW, THEREFORE, in consideration of the making of the Loan and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereby covenant, agree, represent and warrant as follows:
1. DEFINED TERMS
The following terms shall have the following meanings:
(a) "Access Laws" has the meaning set forth in Section 39 hereof.
(b) "Acceptable Franchisor" means those hotel franchise companies
listed on Exhibit E hereto, subject to the limitations listed on Exhibit E.
(c) "Accounts" has the meaning set forth in Section 7 hereof.
(d) "Additional Interest" has the meaning set forth in the Note.
(e) "Asbestos" has the meaning set forth in Section 36 hereof.
(f) "Assignment" has the meaning set forth in Section 2 hereof.
(g) "Borrower" has the meaning set forth in the preamble to this
Agreement.
(h) "Budget" means the budget for the use and application of the
Loan and gross revenues derived from the operation of the Mortgaged Property,
including all operations and capital items and expenses to be satisfied from the
Accounts, as set forth in Exhibit C hereto with respect to the balance of the
current calendar year, and the annual budget for each subsequent calendar year
for so long as any portion of the Debt remains outstanding.
(i) "By-Laws" shall mean the by-laws of any condominium providing
for the operation of a portion of the Mortgage Property, a true copy of which
has been provided to Lender.
(j) "Capital Expenses" means all payments for any fixed assets or
improvements, or for replacements, substitutions or additions thereto, that are
required to be capitalized consistent with accounting methods employed by
Borrower for the Mortgaged Property.
(k) "Capital Reserve" has the meaning set forth in Section 7 hereof.
(l) "Collateral" has the meaning set forth in Section 29 hereof.
(m) "Condemnation" has the meaning set forth in Section 8 hereof.
(n) "Condominium" means any declaration of condominium affecting a
portion of the Mortgaged Property.
(o) "Condominium Act" shall mean the provisions of any state or
other applicable statute affecting a Condominium.
(p) "Condominium Board" shall mean the organization managing a
Condominium.
(q) "Condominium Documents" shall mean collectively the Declaration
and the By-Laws.
(r) "Controlling Interest" means the possession directly or
indirectly of the power to direct or cause the direction of management and
policies of a person or entity, whether through the ownership of voting
securities or by contract or otherwise.
(s) "Debt" means the outstanding principal balance of the Note from
time to time, with all accrued and unpaid interest thereon, and all other sums
now or hereafter due under the Loan Documents.
(t) "Debt Service Coverage Ratio" shall mean the ratio of: (i) the
NOI produced by the operation of the Mortgaged Property during the 12 calendar
month period immediately preceding the calculation to (ii) the payments of
principal and interest due under this Loan Agreement and the Note for the 12
calendar month period immediately following the calculation using the Applicable
Interest Rate on the date of calculation (or imputed for such period if such
payments have actually accrued for less than 12 calendar months).
(u) "Debt Service Reserve" has the meaning set forth in Section 7
hereof.
(v) "Declaration" means any declaration forming a Condominium
affecting a portion of the Mortgaged Property.
(w) "Default Rate" means the rate of interest payable from and after
the occurrence of an Event of Default, as more particularly described in the
Note; provided, however, that with respect to an Event of Default of the type
described in Section 24(a) hereof, such rate of interest shall apply from and
after the date on which any such payment is due, without any period of grace or
cure except as expressly set forth in Section 24(a) hereof, as more particularly
described in the Note.
(x) "Environmental Agreement" has the meaning set forth in Section 2
hereof.
(y) "Environmental Laws" has the meaning set forth in Section 35
hereof.
(z) "Equipment" means all machinery, furnishings, equipment,
fixtures (including, without limitation, all heating, air conditioning,
plumbing, lighting, communications and elevator fixtures), inventory and
articles of personal property and accessions thereof and renewals, replacements
thereof and substitutions therefor (including, without limitation, beds,
bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables,
rugs, carpeting, drapes, draperies, curtains, shades, venetian blinds, screens,
paintings, hangings, pictures, divans, couches, luggage carts, luggage racks,
stools, sofas, chinaware, linens, pillows, blankets, glassware, foodcarts,
cookware, dry cleaning facilities, dining room wagons, keys or other entry
systems, bars, bar fixtures, liquor and other drink dispensers, icemakers,
radios, clock radios, television sets, intercom and paging equipment, electric
and electronic equipment, dictating equipment, private telephone systems,
medical equipment, potted plants, heating, lighting and plumbing fixtures, fire
prevention and extinguishing apparatus, cooling and air-conditioning systems,
elevators, escalators, fittings, plants, apparatus, stoves, ranges,
refrigerators, laundry machines, tools, machinery, engines, dynamos, motors,
boilers, incinerators, switchboards, conduits, compressors, vacuum cleaning
systems, floor cleaning, waxing and polishing equipment, call systems, brackets,
electrical signs, bulbs, bells, fuel, conveyors, cabinets, lockers, shelving,
spotlighting equipment, dishwashers, garbage disposals, washer and dryers),
other customary hotel equipment and other property of every kind and nature,
whether tangible or intangible, whatsoever owned by Borrower, or in which
Borrower has or shall have an interest, now or hereafter located upon the
Premises and the Improvements, or appurtenant thereto, and usable in connection
with the present or future operation and occupancy of the Premises and the
Improvements and all building equipment, materials and supplies of any nature
whatsoever owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, or usable in connection with the present or future
operation, enjoyment and occupancy of the Premises and the Improvements.
(aa) "ERISA" has the meaning set forth in Section 40 hereof.
(bb) "Event of Default" has the meaning set forth in Section 24
hereof.
(cc) "Executive Order" has the meaning set forth in Section 62
hereof.
(dd) "Expenses" means the aggregate of the following items actually
incurred by Borrower, whether or not paid, during the 12 month period ending one
month prior to the date on which the NOI is to be calculated (except that
Capital Expenses and reserves set forth in subsection (viii) below shall be
adjusted by Lender to reflect projected adjustments for the subsequent 12 month
period beginning on the date on which the NOI is to be calculated):
(i) Taxes and Other Charges;
(ii) personal property taxes;
(iii) management fees of not less than four (4%) percent of
the gross revenue derived from the operation of the Mortgaged
Property and disbursements;
(iv) wages, salaries, pension costs and all fringe and other
employee-related benefits and expenses;
(v) franchise fees and other fees due under the Franchise
Agreement;
(vi) Insurance Premiums and other related insurance costs;
(vii) the cost of utilities, and all other administrative,
management, ownership, operating, leasing and maintenance expenses
and professional fees incurred in connection with the operation of
the Mortgaged Property;
(viii) the cost of necessary repair or replacement of existing
improvements on the Mortgaged Property with repairs or replacements
of like kind and quality or such kind or quality that is necessary
to maintain the Mortgaged Property to the same standards as
competitive properties of similar size and location to the Mortgaged
Property or that are required under the Franchise Agreements
together with (but without duplication) amounts required to be
deposited in the Replacement Reserve Account;
(ix) the cost of replacement of Equipment; and
(x) the cost of any other maintenance materials, HVAC repairs,
parts and supplies, and equipment.
(ee) "Franchise Agreement" means, a franchise agreement set forth on
Schedule A hereto (or such franchise agreements as may be entered into from and
after the date hereof in accordance with the terms hereof) pursuant to which
Borrower has the right to operate the hotels located on the Mortgaged Property
under a name and/or hotel system controlled by such franchisor.
(ff) "Franchisor" means, for each of the individual hotels
comprising a portion of the Mortgaged Property, the franchisor under the
respective Franchise Agreement.
(gg) "Guarantor" means any guarantor of all or any part of the Debt.
(hh) "Hazardous Substances" has the meaning set forth in Section 35
hereof.
(ii) "IEEPA" means the International Emergency Economic Power Act,
50 U.S.C.ss.1701 et seq.
(jj) "Improvements" means the buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter located on the Premises.
(kk) "Insurance Premiums" has the meaning set forth in Section 4(d)
hereof.
(ll) "Insured Casualty" has the meaning set forth in Section
4(e)(ii) hereof.
(mm) "Intangibles" means, without limitation, all accounts, escrows,
documents, instruments, chattel paper, claims, deposits and general intangibles,
as such terms are defined in the Uniform Commercial Code, and all contract
rights, franchises, books, records, appraisals, architects and engineering
plans, specifications, environmental and other reports relating to the Premises,
trademarks, trade names, symbols, permits, licenses (to the extent assignable),
approvals, actions, tenant or guest lists, correspondence with present and
prospective purchasers, tenants, guests and suppliers, advertising materials and
telephone exchange numbers as identified in such materials, refunds of real
estate taxes and assessments and causes of action which now or hereafter relate
to, are derived from or are used in connection with the Premises, or the use,
operation, maintenance, occupancy or enjoyment thereof or the conduct of any
business or activities thereon.
(nn) "Interest and Principal Amortization Account" has the meaning
set forth in Section 7 hereof.
(oo) "Interest Rate Protection Agreement" means that certain ISDA
form interest rate protection agreement (together with the confirmation and
schedules relating thereto) dated as of the date hereof between Borrower and a
counterparty reasonably acceptable to Lender which counterparty is an
institution with a rating from Standard & Poor's of at least "AA-" or higher,
and such replacement agreement is in form and substance acceptable to Lender.
(pp) "Knowledge" whenever used in this Agreement or any other Loan
Documents, or in any document or certificate executed on behalf of any Borrower
pursuant to this Agreement or any other Loan Documents, reference is made to
knowledge of Borrower or entity comprising Borrower or Guarantor (whether by use
of the words "best knowledge", "knowledge" or "known" or other words of similar
meaning, and whether or not the same are capitalized), such shall be deemed to
refer to the knowledge (without independent investigation unless otherwise
specified) of (i) the individuals who have significant responsibility for any
policy making, major decisions or financial affairs of the applicable entity;
(ii) the general manager for the applicable hotel comprising a portion of the
Mortgaged Property; (iii) the regional vice president of operations for
Guarantor, and the officers of each entity comprising Borrower involved in the
operational issues of any hotel comprising a portion of the Mortgaged Property
or any entity comprising Borrower; (iv) the chief operating officer of
Guarantor, with respect to representations regarding Guarantor, and (v) the
knowledge of the person signing such document or certificate.
(qq) "LIBOR Rate" has the meaning ascribed to it in the Note.
(rr) "Leases" means all leases and other agreements affecting the
use, enjoyment or occupancy of the Premises or the Improvements heretofore or
hereafter entered into by Borrower or its predecessor-in-interest (including,
without limitation, subleases, licenses, concessions, tenancies and other
occupancy agreements covering or encumbering all or any portion of the
Premises), together with any guarantees, supplements, amendments, modifications,
extensions and renewals of any thereof, and all additional remainders,
reversions, and other rights and estates appurtenant thereto.
(ss) "Lender" has the meaning set forth in the preamble to this
Agreement.
(tt) "Loan" has the meaning set forth in the recitals of this
Agreement.
(uu) "Loan Documents" has the meaning set forth in the recitals of
this Agreement.
(vv) "Loan-to-Value Ratio" means the ratio of: (i) the Debt, plus
all other debt (or other liquidated economic obligations) which are then
outstanding and secured by the Mortgaged Property, to (ii) the appraised value
of the Mortgaged Property as estimated by an appraiser reasonably acceptable to
Lender. Any appraisal for purposes of calculating the Loan-to-Value Ratio shall
be performed in accordance with the then-approved standards under the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended (FIRREA).
(ww) "Lockbox Account" has the meaning set forth in Section 7
hereof.
(xx) "Management Agreement" means, collectively, the Management
Agreements more particularly set forth on Schedule A hereto pursuant to which
the managers identified therein operate the Mortgaged Property as hotels.
(yy) "Maturity Date" means the Applicable Maturity Date (as such
term is defined in the Note).
(zz) "Mortgage" has the meaning set forth in the recitals of this
Agreement.
(aaa) "Mortgaged Property" shall mean the Premises, all real and
personal property located on or related to the Premises, including without
limitation, the Collateral, Equipment, Improvements, Intangibles, Rents,
Condemnation awards, insurance proceeds, tradenames, trademarks, servicemarks,
logos, copyrights, goodwill, books and records, all refunds, rebates or credits
in connection with a reduction in real estate taxes and assessments charged
against the Premises as a result of tax certiorari or any applications or
proceedings for reduction, all agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all proceeds, substitutions and replacements
thereof.
(bbb) "NOI" means the gross revenue derived from the operation of
the Mortgaged Property less Expenses. NOI shall include only Rents and such
other income, including any rent loss, business interruption or business income
insurance proceeds, vending or concession income, late fees, forfeited security
deposits and other miscellaneous tenant charges, which are earned and Expenses
incurred during the period for which the NOI is being calculated, as set forth
on operating statements reasonably satisfactory to Lender. NOI shall be
calculated on an accrual basis in accordance with generally accepted accounting
principles consistently applied, based on the Uniform System of Accounts.
(ccc) "Non-Flagged Properties" means the properties comprising
portions of the Mortgaged Properties located at 0000 Xxxxxxx Xxxxxx, Xxxxx,
Xxxxxxx and 000 Xxxx 0xx Xxxxxx, Xxxxxxxxxx, Xxxx.
(ddd) "Note" has the meaning set forth in the recitals of this
Agreement.
(eee) "OFAC" means the U.S. Department of Treasury's Office of
Foreign Asset Control.
(dd) "Operating Expense Account" has the meaning set forth in
Section 7 hereof.
(ee) "Other Charges" has the meaning set forth in Section 5 hereof.
(fff) "PATRIOT Act" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Public Law 107-56) (The USA PATRIOT Act).
(ggg) "Payment Date" has the meaning ascribed to it in the Note.
(hhh) "Policies" has the meaning set forth in Section 4(d) hereof.
(iii) "Premises" means, collectively, the real property comprising
the Mortgaged Property, more particularly described on Exhibits A to each of
instruments comprising the Mortgage.
(jjj) "Prohibited Person" has the meaning set forth in Section 62
hereof.
(kkk) "Remedial Work" has the meaning set forth in Section 37
hereof.
(lll) "Rents" means all income, rents, room rates, issues, profits,
revenues (including oil and gas or other mineral royalties and bonuses),
deposits and other benefits from the Mortgaged Property including, without
limitation, all revenues and credit card receipts collected from guest rooms,
restaurants, bars, mini-bars, meeting rooms, banquet rooms and recreational
facilities and otherwise, all receivables, customer obligations, installment
payment obligations and other obligations now existing or hereafter arising or
created out of the sale, lease, sublease (to the extent such rents are payable
to Borrower), license, concession or other grant of the right of the possession,
use or occupancy of all or any portion of the Mortgaged Property or personalty
located thereon, or rendering of services by Borrower or any operator or manager
of the Mortgaged Property (to the extent any amounts thereof are payable to
Borrower) or acquired from others including, without limitation, from the rental
of any office space, retail space, commercial space, guest room or other space,
halls, stores or offices, including any deposits securing reservations of such
space, exhibit or sales space of every kind, license, lease, sublease (to the
extent such rents are payable to Borrower) and concession fees and rentals,
health club use fees (if any), food and beverage wholesale and retail sales,
service charges, vending machine sales and proceeds, if any, from business
interruption or other loss of income insurance relating to the use, enjoyment or
occupancy of the Mortgaged Property.
(mmm) "Repair Agreement" means that certain Repair Escrow Agreement
dated as of the date hereof between Borrower and Lender.
(nnn) "Repair Escrow Account" has the meaning set forth in Section 7
hereof.
(ooo) "Replacement Agreement" means that certain Replacement Reserve
Agreement dated as of the date hereof between Borrower and Lender.
(ppp) "Replacement Reserve Account" has the meaning set forth in
Section 7 hereof.
(qqq) "Sale Properties" means, collectively, (i) Mayfair House, 0000
Xxxxxxx Xxx., Xxxxx, XX 00000, (ii) Holiday Inn N. Miami, 00000 Xxxxxxxx Xxxx.,
Xxxxx, XX 00000, (iii) Holiday Inn, 0000 Xxxxxxxx Xxx., Xxxxxxxxxx, XX 00000
(iv) 000 Xxxx 0xx Xx., Xxxxxxxxxx, XX 00000, and (v) Holiday Inn, 0000 Xxxxx
Xxx, Xx. Xxxxxxxx, XX 00000
(rrr) "Securities" has the meaning set forth in Section 21 hereof.
(sss) "Servicer" means the servicer of the Loan designated by
Lender, in its sole and absolute discretion, from time to time.
(ttt) "Tax and Insurance Escrow Account" has the meaning set forth
in Section 7 hereof.
(uuu) "Tax and Insurance Escrow Fund" has the meaning set forth in
Section 6 hereof.
(vvv) "Taxes" has the meaning set forth in Section 5 hereof.
(www) "Uncured Franchise Default" means any of the following
circumstances or occurrences: (i) if Borrower terminates or cancels a Franchise
Agreement or operates any property comprising a portion the Mortgaged Property
under the name of any hotel chain or system other than the respective franchises
set forth on Schedule A hereto, without Lender's prior written consent; or (ii)
if, with respect to any property comprising a portion the Mortgaged Property,
Franchisor terminates or cancels a Franchise Agreement as a result of a default
thereunder unless (A) a replacement franchise agreement with an Acceptable
Franchisor is effective with respect to such property within five business days
following the termination or cancellation, (B) such replacement franchise
agreement is reasonably acceptable to Lender, and (C) Acceptable Franchisor
provides Lender with a fully-executed comfort letter reasonably acceptable to
Lender; or (iii) if a default has occurred and continues beyond any applicable
cure period under a Franchise Agreement, which default permits a party to
terminate or cancel such Franchise Agreement, and Borrower has not obtained an
extension of the applicable cure period within 45 days after the expiration
thereof (provided, that, if Franchisor terminates such Franchise Agreement
within such 45-day period, such termination shall, subject to Borrower's
replacement right contained in clause (ii), constitute an Uncured Franchise
Default under clause (ii)); or (iv) if without Lender's prior written consent,
there is any material change in a Franchise Agreement (or any succeeding
franchise agreement).
(xxx) "Uniform Commercial Code" means the Uniform Commercial Code,
as adopted and enacted by the State or States where any of the Mortgaged
Property is located.
(yyy) "Uniform System of Accounts" has the meaning set forth in
Section 10(f) hereof.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Note.
2. RESTATED NOTE; PAYMENT OF DEBT; INCORPORATION OF COVENANTS,
CONDITIONS AND AGREEMENTS
(a) In connection with the execution and delivery of this Agreement,
and as a material inducement for Lender's agreement to accept the Loan
Documents, Borrower has agreed to execute and deliver to Lender the Note
pursuant to which all of the terms of the Underlying Note are restated in their
entirety. The Underlying Note and the Note shall together evidence the
indebtedness described in, and payable in accordance with, the Note.
(b) To the extent of any inconsistency between the terms of any of
the Loan Documents and the terms hereof, the terms of this Agreement shall
control. Each of the Loan Documents is hereby modified such that all of the
inconsistent terms of the Loan Documents are superseded by the applicable terms
hereof and all of the terms and provisions hereof are hereby made part of the
Loan Documents with the same force and effect as if each such term and provision
were expressly set forth therein. The Mortgage is hereby modified to expressly
provide for each and every term and condition set forth herein, and further, to
provide that it secures each and every obligation and liability of Borrower
under the Note.
(c) Borrower will pay the Debt at the time and in the manner
provided in the Note, the Mortgage and in this Agreement. All gross revenue
derived from the Mortgaged Property shall be paid into the Lockbox Account (it
being acknowledged that Borrower has advised Lender in writing that rental
payments under certain identified Leases relating to a portion of the Mortgage
Property are paid by the lessee thereunder to the respective brokers that
arranged such Leases and thus rental payments received by Borrower are net of
such brokers' commissions). Subject to the occurrence and continuance of an
Event of Default, on a weekly basis, or more frequently if dictated by specific
circumstances, Servicer shall release funds held in the Lockbox Account for
distribution to the Accounts and otherwise in accordance with the Budget in the
following order of priority:
(i) first, to fund the Tax and Insurance Escrow Account in an
amount required for the next succeeding calendar month;
(ii) next, the balance, if any, to fund the Operating Expense
Account in an amount required for the next succeeding calendar month
pursuant to the Budget (and any extraordinary expenses not otherwise
contained in the Budget for which the prior written approval of Lender
shall have been obtained, which approval shall not be unreasonably
withheld); provided, that, first dollars funded into the Operating Expense
Account shall be applied to the sublease obligations of Lodgian Colchester
LLC, a Borrower, under the Lease Documents as such term is defined in that
certain Amended and Restated Leasehold Mortgage, Deed of Trust, Assignment
of Leases and Rents and Security Agreement dated as of the date hereof by
Lodgian Colchester LLC for the benefit of Lender;
(iii) next, the balance, if any, to fund the Interest and
Principal Amortization Account, for application first to interest and then
to principal amortization obligations, in an amount required for the next
succeeding calendar month;
(iv) next, the balance, if any, to reimburse Lender for
reasonable costs and expenses in servicing the Loan (including, without
limitation, servicing fees);
(v) next, the balance, if any, to reimburse Lender for any
unpaid reasonable costs and expenses incurred by Lender on Borrower's
behalf or in the enforcement of Lender's rights hereunder with respect to
any of which Lender shall advise Borrower no later than ten days prior to
the last business day of any given month (and, to the extent any such
notice is given after such day, such amount shall be payable in the
following month);
(vi) next, the balance, if any, to fund the Replacement
Reserve Account in an amount required for the next succeeding calendar
month;
(vii) next, the balance, if any, to fund the Capital Reserve;
(viii) next, the balance, if any, to fund the Debt Service
Reserve;
(ix) next, 75% of the balance, if any, to reduce the
Additional Interest and 25% of such balance, to Borrower, to be used by
Borrower for any purpose; and
(x) lastly, 75% of the remaining balance, if any, to reduce
the outstanding principal balance of the Loan and 25% of such remaining
balance to Borrower, to be used by Borrower for any purpose.
(d) Anything herein to the contrary notwithstanding, if funds on
deposit in the Lockbox Account are insufficient to fully fund: (i) the Interest
and Principal Amortization Account when payments of interest and principal
amortization are due under the Note and this Agreement, Servicer shall disburse
funds from the Debt Service Reserve to fund such Account to the extent of such
shortfall or (ii) the Operating Expense Account to pay operating expenses in
accordance with the Budget or as otherwise agreed to by Lender pursuant to the
Loan Documents, Servicer shall disburse funds from the Capital Reserve to fund
such Account to the extent of such shortfall. In addition, in any month,
Borrower may request an additional disbursement of funds from the Lockbox
Account to fund the Operating Expense Account for unanticipated increases in
operating expenses, which request shall be accompanied by supporting
documentation reasonably required by Lender and which disbursement shall be
subject to Lender's prior approval not to be unreasonably withheld, delayed or
conditioned.
(e) Servicer shall, on Borrower's behalf, pay from the Interest and
Principal Amortization Account, the interest and principal payments due under,
and at the time and in the manner provided in, the Note, the Mortgage and in
this Agreement. If funds are available in the Lockbox Account to pay timely any
amounts payable hereunder or under any other Loan Document and such amounts are
not timely paid by reason of Servicer's failure to credit properly funds in the
Lockbox Account, to transfer funds from the Lockbox Account or otherwise to
follow its instructions properly given in accordance with the Loan Documents,
such non-payment shall not constitute a default of Borrower's obligations
hereunder.
(f) All the covenants, conditions and agreements contained in the
Note, the Mortgage, the Assignment of Leases and Rents dated as of the date
hereof from Borrower to Lender (the "Assignment"), the Environmental Indemnity
Agreement dated as of the date hereof among Lender, Borrower and Lodgian, Inc.
(the "Environmental Agreement") and the other Loan Documents are hereby made a
part of this Agreement to the same extent and with the same force as if fully
set forth herein.
3. WARRANTY OF TITLE
Borrower represents and warrants that each entity comprising
Borrower has good, marketable and insurable fee simple (or, in the case of
Lodgian Colchester LLC, leasehold) title to the portion of the Mortgaged
Property indicated opposite such entity's name on Schedule A hereto (subject to
any financed equipment leasing permitted under the Loan Documents) and each has
the full power, authority and right to execute, deliver and perform its
obligations under this Agreement and to encumber, mortgage, give, grant,
bargain, sell, alienate, enfeoff, convey, confirm, pledge, assign, hypothecate
and grant a security interest in and to such portion of the Mortgaged Property
and that each such entity possesses an unencumbered fee (or, in the case of
Lodgian Colchester LLC, leasehold) estate in the portion of the Premises and the
Improvements indicated opposite such entity's name on Schedule A hereto, and
that each such entity holds its right, title and interest in and to such portion
of the Mortgaged Property free and clear of all liens, encumbrances and charges
whatsoever except for those exceptions shown in the title insurance policy
insuring the lien of the Mortgage or otherwise permitted hereunder, and that the
Mortgage is and will remain a valid and enforceable first lien on and security
interest in the Mortgaged Property, subject only to such exceptions. Borrower
shall forever warrant, defend and preserve such title and the validity and
priority of the lien of the Mortgage and shall forever warrant and defend such
title, validity and priority to Lender against the claims of all persons
whomsoever.
4. INSURANCE
(a) Borrower, at its sole cost and expense, will keep the Mortgaged
Property insured during the entire term of this Agreement for the mutual benefit
of Borrower and Lender against loss or damage by fire and against loss or damage
by other risks and hazards covered by a standard extended coverage insurance
policy including, without limitation, riot and civil commotion, vandalism,
malicious mischief, burglary and theft. The insurance policy shall contain
option perils and income loss endorsements and if any of the Improvements or the
use of the Mortgaged Property shall at any time constitute legal non-conforming
structures or uses, a law and ordinance endorsement. Such insurance shall be in
an amount: (i) equal to the lesser of: (A) the original principal amount of the
Loan (in no event less than the minimum amount required to compensate for damage
or loss on a replacement cost basis), and (B) the then full replacement cost of
the Improvements and the Equipment, without deduction for physical depreciation;
provided, however, that such insurance shall be in an amount such that the
insurer would not deem Borrower a co-insurer under such policies. The deductible
in respect of such insurance shall not exceed $250,000.00, unless a higher
deductible is required by law. Unless such premiums are deposited in escrow
pursuant to Section 6 of this Agreement, the premiums for the insurance carried
in accordance with this Section shall be paid annually in advance and each
policy shall contain the "Replacement Cost Endorsement" with a waiver of
depreciation.
(b) Borrower shall also obtain and maintain during the entire term
of this Agreement, at its sole cost and expense, for the mutual benefit of
Borrower and Lender, the following policies of insurance:
(i) Flood insurance if any part of the Improvements is
currently or at any time in the future located in an area identified by
the Federal Emergency Management Agency as an area having special flood
hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968 (and any amendment or successor act
thereto) in an amount at least equal to the lesser of: (A) the outstanding
principal amount of the Note; and (B) the maximum limit of coverage
available with respect to the Improvements and the Equipment under such
Act.
(ii) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal injuries (including
death resulting therefrom) coverages and "Dram shop" or other liquor
liability coverage if alcoholic beverages are sold from or may be consumed
at the Mortgaged Property, and containing minimum limits per occurrence of
$50,000,000.00 for the Premises and the Improvements, or such greater
amount as may be required under the applicable Franchise Agreement.
(iii) intentionally omitted;
(iv) Business income insurance: (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance
provided for in Section 4(a); (C) containing an extended period of
indemnity endorsement which provides that after the physical loss to the
Improvements and all personal property has been repaired, the continued
loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of 12 months
from the date of the loss, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period; and (D) in an
amount equal to the sum of Expenses and NOI, in each case for the
preceding full calendar year. The amount of such business income insurance
shall be determined prior to the date hereof and at least once each year
thereafter based on clause (D) of this subsection. All insurance proceeds
payable to Lender pursuant to this Section shall be held by Lender and
shall be applied to the obligations secured hereunder from time to time
due and payable hereunder and under the Note in accordance with Section 2
hereof; provided, however, that nothing herein contained shall be deemed
to relieve Borrower of its obligations to pay the obligations secured
hereunder on the respective dates of payment provided for in the Note
except to the extent such amounts are actually and timely paid out of the
proceeds of such business income insurance;
(v) Insurance, in an amount equal to the lesser of
$2,000,000.00, or the insurable value of the Improvements, against loss or
damage from: (A) leakage of sprinkler systems; and (B) explosion of steam
boilers, air conditioning equipment, high pressure piping, machinery and
equipment, pressure vessels or similar apparatus now or hereafter
installed in the Improvements.
(vi) Worker's compensation insurance with respect to any
employees of Borrower, as required by any governmental authority or legal
requirement.
(vii) Motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles used in the
operation of the Mortgaged Property containing minimum limits per
occurrence of $5,000,000.00 or such greater amount as may be required
under the applicable Franchise Agreement.
(viii) Crime protection insurance for corporate personnel at
Borrower's corporate offices.
(ix) Earthquake insurance (including subsidence), if the
Mortgaged Property is located in an earthquake prone region.
(x) Terrorism insurance in the form of a blanket policy in an
amount of no less than $35,000,000.00 with a deductible of no more than
$150,000.00 and is otherwise reasonably acceptable to Lender; provided,
however, for any 12-month period following the first anniversary of the
date hereof, Borrower shall not be required to expend more than 150% of
the amount expended in the first year following the date hereof to acquire
the terrorism insurance required by this Section 4(b)(x); provided,
further, however, that insurance coverages for the Property under the
existing insurance policies carried by Borrower as of the date hereof
satisfy the requirements of this Section 4(b)(x).
(xi) Such other insurance as may from time to time be
reasonably required by Lender, upon 60 days' notice to Borrower, in order
to protect its interests in the Mortgaged Property, or as may be required
by the Franchise Agreements. In any event, such other insurance shall be
in amounts and covering such risks as are consistent with the requirements
of like lenders for like properties in the vicinity of any such property
comprising a portion of the Mortgaged Property.
(c) Borrower shall increase the amount of insurance required to be
provided hereunder at the time that each such policy is renewed (but, in any
event not less frequently than once during each 12-month period) by using the
X.X. Xxxxx Building Index to determine whether there has been an increase in the
replacement cost of the improvement since the most recent adjustment of any such
policy and, if there has been any such increase, the amount of insurance
required to be provided hereunder shall be adjusted accordingly.
(d) All policies of insurance required pursuant to this Section
(collectively, the "Policies") shall: (i) be issued by an insurer with an "A"
rating or better for claims paying ability by Xxxxx'x Investors Service, Inc.
and Standard & Poor's Rating Group, or a general policy rating of "A" or better
and a financial class of VIII or better assigned by A.M. Best Company, Inc.;
(ii) with respect to the property policies (including, without limitation,
casualty insurance) contain a standard noncontributory mortgagee clause naming
Lender as the person to which all payments made by such insurance company shall
be paid and, with respect to the liability policies, name Lender as an
"additional insured"; (iii) be maintained throughout the term of this Agreement
without cost to Lender; (iv) be assigned and delivered to Lender; (v) contain
such provisions as Lender deems reasonably necessary or appropriate to protect
its interest including, without limitation, endorsements providing that neither
Borrower, Lender nor any other party shall be a co-insurer thereunder, and that
Lender shall receive at least 30 days prior written notice of any modification,
reduction or cancellation; and (vi) be otherwise satisfactory in form and
substance to Lender, and be approved by Lender as to amounts, form, risk
coverage, deductible, loss payees and insureds. Subject to the provisions of
Section 6 hereof, Borrower shall pay the premiums for the Policies (the
"Insurance Premiums") as they become due and payable. Not later than 5 days
prior to the expiration date of each of the Policies, Borrower will deliver to
Lender satisfactory evidence of the renewal of each Policy.
(e) If the Mortgaged Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty, Borrower shall give prompt notice
thereof to Lender.
(i) In the case of a loss covered by Policies, Lender may, in
consultation with Borrower, settle and adjust for a reasonable amount any
claim for losses in excess of $250,000.00 per property comprising a
portion of the Mortgaged Property and, absent the occurrence and
continuance of an Event of Default, Borrower shall be allowed to adjust
losses aggregating not in excess of $250,000.00. Each of such adjustments
shall be carried out in a commercially reasonable and timely manner, and
provided in any case that Lender shall be, and is hereby, authorized to
collect and receipt for any such insurance proceeds and make such proceeds
available to Borrower for restoration of the Mortgaged Property in
accordance with the terms hereof. The reasonable expenses incurred by
Lender in the adjustment and collection of insurance proceeds shall become
part of the Debt, shall be secured by the Mortgage and shall be reimbursed
by Borrower to Lender within 10 days of demand therefor.
(ii) In the event of any insured damage to or destruction of
the Mortgaged Property or any part thereof (an "Insured Casualty") where:
(A) the proceeds of insurance, or cash, letter of credit or other security
deposited by Borrower reasonably acceptable to Lender, are sufficient to
enable Borrower to fully restore the Mortgaged Property; (B) the term of,
and proceeds derived from, Borrower's business interruption insurance (or
other similar insurance) and anticipated proceeds from operations of the
Mortgaged Property shall be sufficient to fully cover the period that the
Mortgaged Property is undergoing restoration; (C) Lender determines that
the restoration is reasonably capable of being completed at least 6 months
prior to the Maturity Date; (D) the Loan-to-Value Ratio upon completion of
restoration is estimated, by an appraiser acceptable to Lender, to be no
greater than .7:1.0; (E) the applicable Franchise Agreement has not been,
and will not be (pursuant to the terms of such Franchise Agreement or by
written consent of Franchisor), terminated as a result of the Insured
Casualty; (F) the restoration can be completed within 15 months from the
date that the Insured Casualty occurred, or within such shorter time
period as may be required by such Franchise Agreement (which shorter time
period may be extended pursuant to Franchisor consent up to a maximum of
15 months); (G) the restoration is permitted or required under such
Franchise Agreement or Franchisor has consented to the restoration; and
(H) the Debt Service Coverage Ratio upon completion is reasonably
anticipated to be at least 1.25, then, if no Event of Default shall have
occurred and be continuing, the proceeds of insurance shall be applied to
reimburse Borrower for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or the part thereof subject to the
Insured Casualty, as provided for below; and Borrower hereby covenants and
agrees forthwith to commence and diligently to prosecute such restoring,
repairing, replacing or rebuilding. NOI for purposes of this calculation
shall be NOI for the 12 calendar month period immediately preceding the
casualty, unless the appraiser referenced in clause (D) above estimates
that NOI after the restoration will be more than ten (10%) percent less
than NOI for such 12 calendar month period, in which case the Debt Service
Coverage Ratio shall be calculated using the appraiser's estimate of NOI.
Notwithstanding anything in this Section 4(e)(ii) to the contrary, if the
aggregate proceeds from an Insured Casualty with respect to a property
comprising a portion of the Mortgaged Property do not exceed the greater
of $250,000.00 and 5.00% of the "allocated loan amount" listed on Schedule
A hereto for such property, Borrower shall be entitled to such proceeds
for the restoration of such property without compliance with the
requirements of this Section 4(e)(ii)(A)-(H).
(iii) Except as provided above, the proceeds of insurance
collected upon any Insured Casualty shall, at the option of Lender in its
sole discretion, be applied to the payment of the Debt or applied to
reimburse Borrower for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or the part thereof subject to the
Insured Casualty, in the manner set forth below. If Lender applies such
insurance proceeds from an Insured Casualty with respect to a property
comprising a portion of the Mortgaged Property to the payment of the Debt,
Borrower may obtain the release of such property upon payment of the
applicable "release price" listed on Schedule A hereto, less the amount of
such insurance proceeds paid to Lender and applied in reduction of the
Debt. In no case shall any such application reduce or postpone any
payments otherwise required pursuant to the Note, other than the final
payment on the Note.
(iv) In the event that proceeds of insurance, if any, shall be
made available to Borrower for the restoring, repairing, replacing or
rebuilding of the Mortgaged Property, Borrower hereby covenants to
restore, repair, replace or rebuild the Mortgaged Property to be, to the
extent commercially feasible and legally possible, of at least equal value
and of substantially the same character as prior to such damage or
destruction, all to be effected in accordance with applicable law and
plans and specifications approved in advance by Lender, which approval
shall not be unreasonably withheld, delayed or conditioned,; and otherwise
in accordance with the requirements of the applicable Franchise Agreement,
if any; provided, however, that Borrower shall pay all costs (and if
required by Lender, shall deposit the total thereof, or other security
reasonably satisfactory to Lender, with Lender in advance) of such
restoring, repairing, replacing or rebuilding in excess of the net
proceeds of insurance made available pursuant to the terms hereof.
(v) In the event Borrower is entitled to reimbursement out of
insurance proceeds held by Lender, such proceeds shall be disbursed from
time to time upon Lender being furnished with: (A) evidence reasonably
satisfactory to it of the estimated cost of completion of the restoration,
repair, replacement and rebuilding; (B) funds or reasonable assurances
satisfactory to Lender that such funds are available, sufficient in
addition to the proceeds of insurance to complete the proposed
restoration, repair, replacement and rebuilding; and (C) such architect's
certificates, waivers of lien for work previously performed, contractor's
sworn statements, title insurance endorsements, bonds, plats of survey and
such other reasonable evidences of cost, payment and performance as Lender
may reasonably require and approve. Lender may, in any event, require that
all plans and specifications for such restoration, repair, replacement and
rebuilding be submitted to and approved by Lender prior to commencement of
work (which approval shall not be unreasonably withheld). No payment made
prior to the final completion of the restoration, repair, replacement and
rebuilding shall exceed ninety (90%) percent of the value of the work
performed from time to time. Funds other than proceeds of insurance shall
be disbursed prior to disbursement of such proceeds, and at all times the
undisbursed balance of such proceeds remaining in Lender's possession,
together with funds deposited for that purpose or irrevocably committed to
the reasonable satisfaction of Lender by or on behalf of Borrower for that
purpose, shall be at least sufficient in the reasonable judgment of Lender
to pay for the cost of completion of the restoration, repair, replacement
or rebuilding, free and clear of all liens and claims of lien. Any surplus
which may remain out of insurance proceeds held by Lender after payment of
such costs of restoration, repair, replacement or rebuilding shall be
delivered to Borrower, provided such restoration was performed
substantially in accordance with the provisions of this Section and
Borrower is not then in default of its obligations under the Loan
Documents.
(f) Borrower shall not carry separate insurance, concurrent in kind
or form or contributing in the event of loss, with any insurance required under
this Section. Notwithstanding the foregoing, Borrower may carry insurance not
required under this Agreement, provided any such insurance affecting the
Mortgaged Property shall be for the mutual benefit of Borrower and Lender, as
their respective interests may appear, and shall be subject to all other
provisions of this Section.
(g) Any insurance coverages required hereunder may be carried under
a blanket policy which covers property other than the Mortgaged Property.
5. PAYMENT OF TAXES
Borrower shall pay all taxes, assessments, water rates and sewer
rents, now or hereafter levied, assessed or imposed against the Mortgaged
Property or any part thereof (collectively, the "Taxes") and all ground rents,
maintenance charges, other governmental impositions, and other charges
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Premises, now or hereafter
levied, assessed or imposed against the Mortgaged Property or any part thereof
(collectively, the "Other Charges") prior to delinquency, subject to the
provisions of Section 6 hereof. Borrower will deliver to Lender evidence
reasonably satisfactory to Lender that the Taxes and Other Charges have been so
paid, or are not then delinquent, no later than 30 days following the date on
which the Taxes and/or Other Charges would otherwise be delinquent if not paid;
provided, however, that for so long as Lender shall pay Taxes from funds
escrowed by Borrower for such purpose, Borrower shall not be required to pay or
furnish Lender with evidence of such payment. Borrower shall not suffer, and
shall promptly cause to be paid and discharged, any lien or charge whatsoever
which may be or become a lien or charge against the Mortgaged Property, and
shall promptly pay for all utility services provided to the Mortgaged Property.
Upon Lender's request, Borrower shall furnish to Lender or its designee invoices
of the charges for utility services showing no past due amounts. Borrower shall
be entitled to contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount of any Taxes or Other
Charges or utility services. Notwithstanding the preceding sentence, during the
pendency of any such contest Borrower shall pay or cause to be paid all Taxes,
Other Charges and utility services as and when due and payable, or otherwise in
accordance with Section 32 hereof.
6. TAX AND INSURANCE ESCROW FUND
Borrower shall pay to Lender on the first day of each calendar
month: (a) one-twelfth of an amount which would be sufficient to pay the Taxes
payable, or reasonably estimated by Lender to be payable, during the next
ensuing 12 months; and (b) one-twelfth of an amount which would be sufficient to
pay the Insurance Premiums due for the renewal of the coverage afforded by the
Policies upon the expiration thereof (the amounts described in clauses (a) and
(b) above, collectively, the "Tax and Insurance Escrow Fund"). The Tax and
Insurance Escrow Fund and the monthly installments of principal and interest
payable under the Note shall be added together and shall be paid as an aggregate
sum by Borrower to Lender. Borrower hereby pledges to Lender any and all monies
now or hereafter deposited in the Tax and Insurance Escrow Fund as additional
security for the payment of the Debt. Lender will apply the Tax and Insurance
Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to Sections 4 and 5 hereof; provided, however, that, with
respect to Insurance Premiums, Borrower shall be reimbursed within 5 business
days following Servicer's receipt of a copy of the invoice for such Insurance
Premiums and the check issued by or on behalf of Borrower in payment thereof. If
the amount of the Tax and Insurance Escrow Fund shall exceed the amounts due for
Taxes and Insurance Premiums pursuant to Sections 4 and 5 hereof, Lender shall,
in its discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Tax and Insurance Escrow Fund. If the Tax and
Insurance Escrow Fund is not sufficient to pay the items set forth in clauses
(a) and (b) above when required, Borrower shall promptly pay to Lender, upon
demand, an amount which Lender shall estimate as sufficient to make up the
deficiency. Upon the occurrence of an Event of Default, Lender may apply any
sums then comprising the Tax and Insurance Escrow Fund to the payment of the
Debt in any order in its sole discretion. Until expended or applied as above
provided, any amounts in the Tax and Insurance Escrow Fund shall constitute
additional security for the Debt. To the extent permitted by applicable law, the
Tax and Insurance Escrow Fund shall not constitute a trust fund and may be
commingled with other monies held by Lender. Earnings or interest on the Tax and
Insurance Escrow Fund shall remain in the Tax and Insurance Escrow Fund for
application to Borrower's obligations for payment of Taxes and Insurance
Premiums as described herein, or as otherwise determined by Lender in accordance
with the Loan Documents.
7. ANNUAL BUDGET; ACCOUNTS
(a) No later than December 15 of each year Borrower shall submit to
Lender, for Lender's approval, a form of Budget for the 12 calendar months
succeeding the term covered by the last approved Budget. The Budget may contain
a line item for unexpected contingencies equal to up to ten (10%) percent of the
total approved amount of the Budget. Lender's approval of any proposed Budget
shall not be unreasonably withheld or delayed. If Lender's approval or
disapproval is not given prior to January 15, Borrower shall be deemed to be
authorized to operate the Mortgaged Property in accordance with the most
recently approved Budget with each expense line item increased by five (5%)
percent or, with respect to Taxes, Other Charges and Insurance and utilities, by
such amounts as may be in effect for such year based on usage for prior year;
provided, however, that if Lender does not affirmatively disapprove such
proposed Budget by January 31, the proposed Budget shall be deemed approved. In
any given calendar year, Borrower may, at its option, reallocate among and
between any line items in the Budget an amount equal to up to five (5%) percent
of any surplus in any particular line item reasonably anticipated to be
available once all obligations, projects or uses in respect of such line item
have been completed in accordance with the terms of the Budget.
(b) Servicer, on behalf of Borrower, shall this day, or as soon
hereafter as is practicable, establish and shall thereafter maintain the
following interest-bearing escrow accounts at one or more federally insured
institutions to be designated by Lender (collectively, the "Accounts"), each of
which shall be in Servicer's name with Borrower as beneficial owner (except for
the Operating Expense Account, which shall be in Borrower's name), pledged to
Lender pursuant to the Loan Documents as additional security for the Loan:
(i) Lockbox Account, into which shall be paid, all gross
revenue derived from operation of the Mortgaged Property (the "Lockbox
Account");
(ii) Operating Expense Account, into which shall be deposited
weekly, pursuant to the Budget, proceeds from the Lockbox Account
sufficient for Borrower to discharge the normal and ordinary day-to-day
general operating expenses of the Mortgaged Property for which a separate
Account has not been established, including sales and use taxes (the
"Operating Expense Account");
(iii) Replacement Reserve Account, into which shall be
deposited monthly for amounts to be paid on the next Payment Date,
pursuant to the Budget, proceeds from the Lockbox Account in an amount
equal to four (4%) percent of the gross revenue derived from the operation
of the Mortgaged Property during the preceding calendar month from which
Borrower may draw from time to time to refurbish, repair or replace
Equipment at the Mortgaged Property, all as more particularly set forth in
the Replacement Agreement (the "Replacement Reserve Account");
(iv) Repair Escrow Account, into which shall be deposited at
closing not less than the sum of $3,277,077.00 for certain improvements at
the Mortgaged Property, all as more particularly set forth in the Repair
Agreement (the "Repair Escrow Account");
(v) Interest and Principal Amortization Account, into which
shall be deposited monthly, proceeds from the Lockbox Account in an amount
sufficient to satisfy Borrower's obligations for the regular and periodic
monthly payment of interest on the outstanding principal balance of the
Loan and periodic monthly principal payments required to be paid on the
next Payment Date (the "Interest and Principal Amortization Account");
(vi) Tax and Insurance Escrow Account, into which shall be
deposited monthly, pursuant to the Budget, proceeds from the Lockbox
Account in an amount sufficient to satisfy Borrower's obligations under
Section 6 hereof for the next Payment Date (the "Tax and Insurance Escrow
Account"); and
(vii) Capital Reserve, into which shall be deposited at
closing not less than $500,000.00 and, thereafter, into which shall be
deposited monthly proceeds from the Lockbox Account to the extent
available, up to a maximum balance at any one time not to exceed
$500,000.00, and from which amounts may be withdrawn and applied to the
payment of amounts due under Section 2(c)(i), (ii) and (vi) hereof from
time to time to the extent funds derived from the operation of the
Mortgaged Property are insufficient therefor (the "Capital Reserve").
(vii) Debt Service Reserve, into which shall be deposited at
closing not less than $1,000,000.00 and, thereafter, into which shall be
deposited monthly proceeds from the Lockbox Account to the extent
available, up to a maximum balance at any one time not to exceed
$1,000,000.00, and from which amounts may be withdrawn and applied to the
payment of amounts due under Section 2(c)(iii) and (iv) hereof from time
to time to the extent funds derived from the operation of the Mortgaged
Property are insufficient therefor (the "Debt Service Reserve").
(c) Servicer, as Lender's agent, shall have sole signatory authority
with respect to any and all withdrawals from the Accounts, except for the
Operating Expense Account with respect to which Borrower shall have sole
signatory authority. All such withdrawals shall be made solely in accordance
with the Budget, and by this instrument Borrower does hereby irrevocably
authorize and direct Servicer to make all such withdrawals on Borrower's behalf
to satisfy Borrower's obligations hereunder.
8. CONDEMNATION
(a) Borrower shall promptly give Lender written notice of the actual
or threatened commencement of any condemnation or eminent domain proceeding (a
"Condemnation") and shall deliver to Lender copies of any and all papers served
in connection with such proceedings. Lender is hereby irrevocably appointed as
Borrower's attorney-in-fact, coupled with an interest, with exclusive power to
collect, receive and retain any award or payment for such Condemnation and to
make any compromise or settlement in connection with such proceeding, subject to
the provisions of this Agreement. Notwithstanding any taking by any public or
quasi-public authority through eminent domain or otherwise (including, without
limitation, any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for in the Note, the Mortgage, this Agreement, the Assignment,
the Environmental Agreement and the other Loan Documents, and the Debt shall not
be reduced until any award or payment therefor shall have been actually received
after expenses of collection and applied by Lender to the discharge of the Debt.
Lender shall not be limited to the interest paid on the award by the condemning
authority but shall be entitled to receive out of the award interest at the rate
or rates provided in the Note.
(b) If the Mortgaged Property shall be the subject of a
Condemnation, in whole or in part, Borrower shall give prompt notice thereof to
Lender.
(i) In the case of a Condemnation, Lender may, in consultation
with Borrower, settle and adjust any claim with the reasonable consent of
Borrower for losses in excess of $250,000.00 per property comprising a
portion of the Mortgaged Property and Borrower, absent the occurrence and
continuance of an Event of Default, shall be allowed to adjust losses
aggregating not in excess of $250,000.00. Each of such adjustments shall
be carried out in a commercially reasonable and timely manner, and
provided in any case that Lender shall be, and is hereby, authorized to
collect and receipt for any such Condemnation award or proceeds. The
reasonable expenses incurred by Lender in the adjustment and collection of
a Condemnation award or proceeds shall become part of the Debt, shall be
secured by the Mortgage and shall be reimbursed by Borrower to Lender
within 10 days of demand therefor.
(ii) In the event of any Condemnation affecting all or any
portion of the Mortgaged Property where: (A) the Condemnation award or
proceeds, or cash, letter of credit or other security deposited by
Borrower reasonably acceptable to Lender, are sufficient to enable
Borrower to fully restore the Mortgaged Property; (B) the term of, and
proceeds derived from, Borrower's business interruption insurance (or
other similar insurance) and anticipated proceeds from the operation of
the Mortgaged Property shall be sufficient to fully cover the period that
the Mortgaged Property is undergoing restoration; (C) Lender determines
that the restoration is reasonably capable of being completed at least 6
months prior to the Maturity Date; (D) the Loan-to-Value Ratio upon
completion of restoration is estimated, by an appraiser acceptable to
Lender, to be no greater than .7:1.0; (E) the applicable Franchise
Agreement has not been, and will not be (pursuant to the terms of such
Franchise Agreement or by written consent of Franchisor), terminated as a
result of the Condemnation; (F) the restoration can be completed within 15
months from the date that the Condemnation occurred, or within such
shorter time period as may be required by such Franchise Agreement or
Franchisor consent (which shorter time period may be extended pursuant to
Franchisor consent up to a maximum of 15 months); (G) the restoration is
permitted or required under such Franchise Agreement or Franchisor has
consented to the restoration; and (H) the Debt Service Coverage Ratio upon
completion is reasonably anticipated to be at least 1.25, then, if no
Event of Default shall have occurred and be continuing, the Condemnation
award or proceeds shall be applied to reimburse Borrower for the cost of
restoring, repairing, replacing or rebuilding the Mortgaged Property or
the part thereof subject to the Condemnation, as provided for below; and
Borrower hereby covenants and agrees forthwith to commence and diligently
to prosecute such restoring, repairing, replacing or rebuilding. NOI for
purposes of this calculation shall be NOI for the 12 calendar month period
immediately preceding the Condemnation, unless the appraiser referenced in
clause (D) above estimates that NOI after the restoration will be more
than ten (10%) percent less than NOI for such 12 calendar month period, in
which case the Debt Service Coverage Ratio shall be calculated using the
appraiser's estimate of NOI. Notwithstanding anything in this Section
8(b)(ii) to the contrary, if the aggregate Condemnation awards or proceeds
with respect to a property comprising a portion of the Mortgaged Property
do not exceed the greater of $250,000.00 and 5.00% of the "allocated loan
amount" listed on Schedule A hereto for such property, Borrower shall be
entitled to such proceeds for the restoration of such property without
compliance with the requirements of this Section 8(b)(ii)(A)-(H).
(iii) Except as provided above, the award or proceeds
collected upon any Condemnation shall, at the option of Lender in its sole
discretion, be applied to the payment of the Debt or applied to reimburse
Borrower for the cost of restoring, repairing, replacing or rebuilding the
Mortgaged Property or the part thereof subject to the Condemnation in the
manner set forth below. If Lender applies such award or proceeds with
respect to a property comprising a portion of the Mortgaged Property to
the payment of the Debt, Borrower may obtain the release of such property
upon payment of the applicable "release price" listed on Schedule A
hereto, less the amount of any Condemnation awards or proceeds applied by
Lender to the payment of the Debt. In no case shall any such application
reduce or postpone any payments otherwise required pursuant to the Note,
other than the final payment on the Note.
(iv) In the event that a Condemnation award or proceeds, if
any, shall be made available to Borrower for the restoring, repairing,
replacing or rebuilding of the Mortgaged Property, Borrower hereby
covenants to restore, repair, replace or rebuild the Mortgaged Property to
be, to the extent commercially feasible and legally possible, of at least
equal value and of substantially the same character as prior to such
Condemnation, all to be effected in accordance with applicable law and
plans and specifications approved in advance by Lender, which approval
shall not be unreasonably withheld, delayed or conditioned; provided,
however, that Borrower shall pay all costs (and if required by Lender,
shall deposit the total thereof, or other security reasonably satisfactory
to Lender, with Lender in advance) of such restoring, repairing, replacing
or rebuilding in excess of the net award or proceeds made available
pursuant to the terms hereof.
(v) In the event Borrower is entitled to reimbursement out of
proceeds held by Lender, such proceeds shall be disbursed from time to
time upon Lender being furnished with: (A) evidence reasonably
satisfactory to it of the estimated cost of completion of the restoration,
repair, replacement and rebuilding; (B) funds reasonable assurances
satisfactory to Lender that such funds are available, sufficient in
addition to the Condemnation award or proceeds to complete the proposed
restoration, repair, replacement and rebuilding; and (C) such architect's
certificates, waivers of lien for work previously performed, contractor's
sworn statements, title insurance endorsements, bonds, plats of survey and
such other reasonable evidences of cost, payment and performance as Lender
may reasonably require and approve. Lender may, in any event, require that
all plans and specifications for such restoration, repair, replacement and
rebuilding be submitted to and approved by Lender prior to commencement of
work (which approval shall not be unreasonably withheld). No payment made
prior to the final completion of the restoration, repair, replacement and
rebuilding shall exceed ninety (90%) percent of the value of the work
performed from time to time. Funds other than the Condemnation award or
proceeds shall be disbursed prior to disbursement of such proceeds, and at
all times the undisbursed balance of such proceeds remaining in Lender's
possession, together with funds deposited for that purpose or irrevocably
committed to the reasonable satisfaction of Lender by or on behalf of
Borrower for that purpose, shall be at least sufficient in the reasonable
judgment of Lender to pay for the cost of completion of the restoration,
repair, replacement or rebuilding, free and clear of all liens and claims
of lien. Any surplus which may remain out of a Condemnation award or
proceeds held by Lender after payment of such costs of restoration,
repair, replacement or rebuilding shall be delivered to Borrower, provided
such restoration was performed substantially in accordance with the
provisions of this Section, and Borrower is not then in default of its
obligations under the Loan Documents.
9. LEASES AND RENTS
(a) In connection with the Loan, Borrower has absolutely and
unconditionally assigned to Lender all of Borrower's right, title and interest
in all current and future Leases and Rents, it being intended by Borrower that
such assignment constitutes a present, absolute assignment and not an assignment
for additional security only. Such assignment to Lender shall not be construed
to bind Lender to the performance of any of the covenants, conditions or
provisions contained in any such Lease or otherwise to impose any obligation
upon Lender. Borrower shall execute and deliver to Lender such additional
instruments, in form and substance reasonably satisfactory to Lender, as may
hereafter be requested by Lender to further evidence and confirm such
assignment. Nevertheless, subject to the terms of this Section, Lender has
granted to Borrower a revocable license to operate and manage the Mortgaged
Property and to collect the Rents. Borrower shall hold the Rents, or a portion
thereof sufficient to discharge all current sums due on the Debt, in trust for
the benefit of Lender for use in the payment of such sums. Upon the occurrence
and during the continuance of an Event of Default, the license granted to
Borrower shall automatically be revoked, and Lender shall immediately be
entitled to possession of all Rents, whether or not Lender enters upon or takes
control of the Mortgaged Property. Lender is hereby granted and assigned by
Borrower the right, at its option, upon revocation of the license granted herein
(and subject to the rights of tenants, if any), to enter upon the Mortgaged
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected during the continuance of any revocation of the
license may be applied toward payment of the Debt in such priority and
proportions as Lender in its discretion shall deem appropriate.
(b) Borrower shall furnish Lender with executed copies of all
Leases. All renewals of Leases and all proposed Leases shall provide for rental
rates comparable to existing local market rates and shall be arms-length
transactions. All proposed Leases shall be subject to the prior approval of
Lender except that with respect to proposed Leases which:
(i) do not individually or in the aggregate materially alter
the ratio of office/retail space to hotel space as presently utilized in
the Mortgaged Property;
(ii) are for less than 1,500 rentable square feet in the
aggregate at each hotel comprising a portion of the Mortgaged Property;
(iii) provide for minimum terms of not less than two years
(unless the proposed Lease is for a gift shop or concession);
(iv) provide for work letters and other tenant improvement
allowances that are commercially reasonable and customary business
practice for a lease of the kind considered;
(v) do not contain any provision for free rent or rent
abatement greater than that which is commercially reasonable and customary
business practice for a lease of the kind considered, but in no event
shall the free rent or rent abatement exceed an amount equal to two
months' rent under the proposed Lease;
(vi) except as may be required by applicable law, do not
contain any cancellation or termination rights exercisable by the tenant
thereunder;
(vii) are the result of an arms-length transaction with a bona
fide, independent third-party;
(viii) provide for rental rates comparable to existing market
rates; and
(ix) do not contain any terms which would materially affect
Lender's rights under the Note, the Mortgage, this Agreement, the
Assignment, the Environmental Agreement or the other Loan Documents,
Lender's approval shall not be unreasonably withheld or delayed and, if Lender
does not affirmatively disapprove a proposed Lease within 20 days following
Lender's receipt of Borrower's request for approval of such Lease, the proposed
Lease shall be deemed approved. All Leases shall provide that they are
subordinate to the Mortgage and that the lessee agrees to attorn to Lender.
Borrower shall: (A) observe and perform, in all material respects, all the
obligations imposed upon the lessor under the Leases and shall not do or permit
to be done anything to impair the value of the Leases as security for the Debt;
(B) promptly send to Lender copies of all notices of default which Borrower
shall send or receive thereunder; (C) enforce, in all material respects, all of
the terms, covenants and conditions contained in the Lease on the part of the
lessee thereunder to be observed or performed, short of termination thereof; (D)
not collect any Rents more than one month in advance; (E) not execute any other
assignment of the lessor's interest in the Leases or Rents; (F) other than
immaterial non-financial amendments, not alter, modify or change the terms of
the Leases without the prior written consent of Lender (which consent shall not
be unreasonably withheld), or, except if a lessee is in default, cancel or
terminate the Leases or accept a surrender thereof or convey or transfer or
suffer or permit a conveyance or transfer of the Mortgaged Property or of any
interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, lessees thereunder; provided,
however, that any Lease may be cancelled if at the time of the cancellation
thereof a new Lease is entered into with a bona fide, independent third-party on
substantially the same terms or more favorable terms as the cancelled Lease; (G)
not alter, modify or change the terms of any guaranty of a Lease or cancel or
terminate such guaranty without the prior written consent of Lender; (H) not
consent to any assignment of or subletting under the Leases not in accordance
with their terms, without the prior written consent of Lender, which consent
shall not be unreasonably withheld, delayed or conditioned; and (I) execute and
deliver at the request of Lender all such further assurances, confirmations and
assignments in connection with the Mortgaged Property as Lender shall from time
to time reasonably request.
(c) All security deposits of lessees, whether held in cash or any
other form, shall not be commingled with any other funds of Borrower and, if
cash, shall be deposited by Borrower into the Security Deposits Account other
than security deposits held by Borrower on and as of the date hereof and which
in the aggregate do not exceed $5,000.00. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under any
applicable legal requirements shall be maintained in full force and effect
unless replaced by cash deposits as hereinabove described, shall be issued by an
institution reasonably satisfactory to Lender, shall, if permitted pursuant to
any legal requirements, name Lender as payee or mortgagee thereunder (or at
Lender's option, be fully assignable to Lender) and shall, in all respects,
comply with any applicable legal requirements and otherwise be reasonably
satisfactory to Lender. Borrower shall, upon request, provide Lender with
evidence reasonably satisfactory to Lender of Borrower's compliance with the
foregoing. Following the occurrence and during the continuance of any Event of
Default, Borrower shall, upon Lender's request, if permitted by any applicable
legal requirements, turn over to Lender the security deposits (and any interest
theretofore earned thereon) with respect to all or any portion of the Mortgaged
Property, to be held by Lender subject to the terms of the Leases.
10. REPRESENTATIONS CONCERNING LOAN
Borrower represents, warrants and covenants as follows:
(a) The Note, the Mortgage, this Agreement, the Assignment, the
Environmental Agreement and the other Loan Documents are the legal, valid and
binding obligations of Borrower, subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and to
general principles of equity. The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor would the operation of any of the terms of the Note, the Mortgage, this
Agreement, the Assignment, the Environmental Agreement and the other Loan
Documents, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury.
(b) Except as disclosed to Lender in writing, to the best of
Borrower's knowledge, all material certifications, permits, licenses and
approvals required for the legal use, occupancy and operation of portions of the
Mortgaged Property as hotels including, without limitation, any applicable
liquor license, certificate of completion and occupancy permit, have been
obtained and are in full force and effect; provided, however, that
notwithstanding the foregoing, Borrower has valid liquor licenses at each of the
properties comprising the Mortgaged Property where liquor is being served.
Nothing herein shall excuse Borrower from obtaining all such certifications,
permits, licenses and approvals required for the legal use, occupancy and
operation of portions of the Mortgaged Property as hotels. Except as disclosed
in the comfort letters from franchisor(s) with agreements affecting the
Mortgaged Property delivered to Lender on or before the date hereof, the
Mortgaged Property is free of material damage and is in good repair, and there
is no proceeding pending or, to the best of Borrower's knowledge, threatened for
the total or partial condemnation of, or affecting, the Mortgaged Property.
(c) To the best of Borrower's knowledge, except as disclosed on the
title policies and surveys delivered to Lender in connection with the Loan, all
of the Improvements which were considered in determining the appraised value of
the Mortgaged Property lie wholly within the boundaries and building restriction
lines of the Mortgaged Property, no improvements on adjoining properties
encroach upon the Mortgaged Property, and no easements or other encumbrances
upon the Premises encroach upon any of the Improvements, so as to affect the
value or marketability of the Mortgaged Property. To Borrower's knowledge,
except as disclosed on the title policies and surveys delivered to Lender in
connection with the Loan, the Mortgaged Property is contiguous to and has access
to a physically and legally open all-weather public street, has all necessary
permits and approvals for ingress and egress, is adequately serviced by public
water, sewer systems and utilities and is on one or more separate tax parcels,
all of which are separate and apart from any other property owned by Borrower or
any other person. To Borrower's knowledge, the Mortgaged Property has all
necessary access by public roads or easements which in each case are not
terminable and are not subordinate to any mortgage other than the Mortgage. To
the best of Borrower's knowledge, all of the Improvements comply with all
requirements of applicable building codes, zoning and subdivision laws and
ordinances.
(d) The Mortgaged Property is not subject to any leases, licenses or
other use or occupancy agreements other than the Leases described in the rent
roll delivered to Lender in connection with this Agreement and transient hotel
guests and one on-site property manager for each property comprising a portion
of the Mortgaged Property. No person has any possessory interest in the
Mortgaged Property or right to occupy any portion thereof except under and
pursuant to the provisions of the Leases or transient hotel guests, and one
on-site property manager for each property comprising a portion of the Mortgaged
Property, in the ordinary course of Borrower's business.
(e) To Borrower's knowledge, the survey of the Mortgaged Property
delivered to Lender in connection with this Agreement has been performed by a
duly licensed surveyor or registered professional engineer in the jurisdiction
in which the Mortgaged Property is situated, and does not fail to reflect any
material matter affecting the Mortgaged Property or the title thereto.
(f) The financial statements heretofore furnished to Lender are, as
of the date specified therein, complete and correct in all material respects and
fairly present the financial condition of Borrower, and are prepared in
accordance with the Uniform System of Accounts for hotel and motel properties as
approved by the American Hotel and Motel Association (as in effect from time to
time, the "Uniform System of Accounts") applied on a consistent basis. Borrower
does not have on the date hereof any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments which in each case are known to Borrower
and which, in Borrower's opinion, are reasonably likely to result in a material
adverse effect on the Mortgaged Property or the operation thereof as a hotel,
except as referred to or reflected or provided for in the financial statements
heretofore furnished to Lender or as otherwise disclosed to Lender herein. Since
the last date of such financial statements, there has been no material adverse
change in the financial condition, operations or business of Borrower from that
set forth in such financial statements as of the dates thereof.
(g) Except as set forth on Schedule B hereto, each Franchise
Agreement is in full force and effect and, to Borrower's knowledge, there is no
default, breach or violation existing thereunder by any party thereto and no
event (other than payments due but not yet delinquent) which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a default, breach or violation by any party thereunder.
(h) The Management Agreement is in full force and effect and there
is no default, breach or violation existing thereunder by any party thereto and
no event (other than payments due but not yet delinquent) which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach or violation by any party thereunder.
(i) Neither the execution and delivery of the Loan Documents,
Borrower's performance thereunder, the recordation of the Mortgage, nor the
exercise of any remedies by Lender, will adversely affect: (A) Borrower's rights
under any Franchise Agreement or Management Agreement; or (B) the licenses,
registrations, permits, certificates, authorizations and approvals necessary for
the operation of the Mortgaged Property as a hotel.
(j) The current Leases are in full force and effect and there are no
defaults thereunder by Borrower or, to Borrower's knowledge, any other party,
and there are no conditions which with the passage of time and/or notice would
constitute defaults thereunder.
(k) To Borrower's knowledge, each of Borrower, Borrower's
constituent entities, and Guarantor has complied with the provisions of The
Foreign Corrupt Practices Act of 1977, as amended or other laws addressing
bribery and corruption. Without limiting the foregoing sentence, to Borrower's
knowledge, none of Borrower, Borrower's constituent entities or Guarantor or any
affiliates thereof has made, offered to make or authorized the making of any
improper payment or other improper contribution of value, directly or
indirectly, to any officer, employee or representative of a government or
instrumentality thereof or of any public international organization or made any
other illegal payment.
(l) None of Borrower, Borrower's constituent entities or Guarantor
or any affiliate thereof has off-balance sheet arrangements with any entity to
(i) provide financing, liquidity, or market or credit risk support for Borrower,
Borrower's constituent entities or Guarantor or any affiliate thereof; (ii)
engage in leasing, hedging, or research and development services with Borrower,
Borrower's constituent entities or Guarantor or any affiliate thereof; or (iii)
expose Borrower, Borrower's constituent entities or Guarantor or any affiliate
thereof to any material liability that is not reflected on the face of the
associated financial statements.
(m) Borrower has obtained, and shall hereafter maintain in effect,
an Interest Rate Protection Agreement, having a term equal to the term of the
Loan and covering the original principal amount of the Loan. The Interest Rate
Protection Agreement shall at all times be (i) unless otherwise approved by
Lender, with the same counterparty under the Interest Rate Protection Agreement
in effect on the date hereof, (ii) in form and substance substantially similar
the Interest Rate Protection Agreement in effect on the date hereof and (iii)
shall be a cap agreement under which the cap provider would pay the excess, if
any, of LIBOR over 5.0% in exchange for a premium paid by Borrower.
11. SINGLE PURPOSE ENTITY; AUTHORIZATION
Borrower represents and warrants, and covenants for so long as any
obligations secured by the Mortgage remain outstanding, as follows:
(a) Each entity included within Borrower does not and will not own
any asset or property other than: (i) its interest in its respective portion of
the Mortgaged Property; and (ii) incidental personal property necessary for the
ownership or operation of the Mortgaged Property.
(b) Each entity included within Borrower does not and will not
engage in any business other than the ownership, management and operation of its
interest in its respective portion of the Mortgaged Property, and each entity
comprising Borrower will conduct and operate its business in all material
respects as presently conducted and operated.
(c) Except with respect to the Management Agreement which, in its
present form, is acceptable to Lender, Borrower will not enter into any contract
or agreement with any Guarantor or an affiliate, except upon terms and
conditions that are intrinsically fair and substantially similar to those that
would be available on an arms-length third-party basis.
(d) Borrower has not incurred and will not incur any indebtedness,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than: (i) the Debt; (ii) trade and
operational debt incurred in the ordinary course of business with trade
creditors and in amounts as are customary and reasonable under the
circumstances; and (iii) equipment leasing in the ordinary course of business in
amounts as are customary and reasonable under the circumstances. Except with
Lender's prior written approval in each instance, no indebtedness other than the
Debt is or shall be secured by the Mortgaged Property (other than in connection
with equipment leasing as provided herein). Lender's approval shall be granted
or withheld at Lender's sole discretion. In connection with any such financing
approved by Lender, Borrower shall be required to obtain and deliver to Lender a
subordination and standstill agreement from such lender which shall be in form
and substance satisfactory to Lender in its sole discretion.
(e) Borrower has not made and will not make any loans or advances to
any third party (including any constituent party, any Guarantor or any affiliate
of Borrower, of any constituent party or of any Guarantor), except in de minimis
amounts in the ordinary course of business and of the character of trade or
operational expenses.
(f) Borrower has done or caused to be done, and will do or cause to
be done, all things necessary to preserve its existence, and Borrower will not,
nor will Borrower permit any constituent party or Guarantor, to amend, modify or
otherwise change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, trust or other organizational documents, as the case
may be, of Borrower or such constituent party or Guarantor in a manner which
would adversely affect Borrower's existence as a single purpose entity.
(g) Borrower will maintain books and records and bank accounts
separate from those of its affiliates and any constituent party (except that
Borrower may be included in consolidated statements of its affiliates), and
Borrower will file or cause to be filed separate tax returns (or consolidated
tax returns if applicable). Borrower shall not change the principal place of its
business without providing Lender with at least 30 days prior written notice of
such change to Lender.
(h) Borrower is and will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any affiliate of Borrower, any constituent party, any Guarantor or
any affiliate of any constituent party or Guarantor).
(i) Neither Borrower nor any constituent party will cause or seek
the dissolution or winding up, in whole or in part, of Borrower.
(j) Borrower will not commingle its funds and other assets with
those of any constituent party, any Guarantor, any affiliate of Borrower, of any
constituent party or of any Guarantor, or any other person, except as expressly
permitted by the Loan Documents.
(k) Borrower will not file or consent to the filing of any petition
to take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, or make an assignment for the benefit of creditors.
(l) Borrower does not and will not hold itself out to be responsible
for the debts or obligations of any other person, except as expressly permitted
by the Loan Documents.
(m) Each entity comprising Borrower shall at all times maintain at
least one duly appointed independent director on its Board of Directors, which
manager has not been at the time of such individual's appointment and may not
have been at any time during the preceding two years: (i) a stockholder of, or
an officer or an employee of any entity comprising Borrower or any affiliate
thereof; (ii) a customer of or supplier to any entity comprising Borrower or any
affiliate thereof; (iii) a person or other entity controlling any such
stockholder, officer, employee, customer or supplier; or (iv) a member of the
immediate family of any such stockholder, officer, employee, customer or
supplier or any other director of any entity comprising Borrower or any
affiliate thereof. An independent director may sit as an independent director on
more than one Board of Directors of the entities comprising Borrower and
affiliates of Borrower. As used in this subsection (m), the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person or entity, whether
through ownership of voting securities by contract or otherwise.
12. MAINTENANCE OF MORTGAGED PROPERTY
Borrower shall cause the Mortgaged Property to be maintained in a
good and safe condition and repair. The Improvements and the Equipment shall not
be removed, demolished or materially altered (except for normal replacement of
the Equipment) without the consent of Lender in its reasonable discretion.
Borrower shall promptly comply with all laws, orders and ordinances affecting
the Mortgaged Property, or the use thereof. Borrower shall promptly repair,
replace or rebuild any part of the Mortgaged Property which may be destroyed by
any casualty, or become damaged, worn or dilapidated, or which may be affected
by any proceeding of the character referred to in Section 8 hereof, and shall
complete and pay for any structure at any time in the process of construction or
repair on the Premises. Except as expressly permitted in writing by Lender,
which permission shall not be unreasonably withheld, Borrower shall not
initiate, join in, acquiesce in, or consent to any change in any private
restrictive covenant, zoning law or other public or private restriction limiting
or defining the uses which may be made of the Mortgaged Property or any part
thereof. If under applicable zoning provisions the use of all or any portion of
the Mortgaged Property is or shall become a nonconforming use, Borrower will not
cause or permit such nonconforming use to be discontinued or abandoned without
the prior written consent of Lender. Borrower shall not: (a) change the use of
the Mortgaged Property as currently configured and utilized; (b) permit or
suffer to occur any waste on or to the Mortgaged Property or to any portion
thereof; or (c) take any steps whatsoever to convert the Mortgaged Property, or
any portion thereof, to a condominium or cooperative form of ownership.
13. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY
(a) Borrower acknowledges that Lender has examined and relied on the
creditworthiness and experience of Borrower and its general partners, principals
and (if Borrower is a trust) beneficial owners in owning and operating
properties such as the Mortgaged Property in agreeing to make the Loan, and that
Lender will continue to rely on Borrower's ownership of the Mortgaged Property
and Guarantor's indirect ownership of Borrower as means of maintaining the value
of the Mortgaged Property as security for repayment of the Debt. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Mortgaged Property so as to ensure that, should Borrower default in the
repayment of the Debt, Lender can recover the Debt by a sale of the Mortgaged
Property. Borrower shall not, and shall cause Guarantor not to, without the
prior written consent of Lender, sell, convey, alienate, mortgage, encumber,
pledge or otherwise transfer the Mortgaged Property or any part thereof, or
permit the Mortgaged Property or any part thereof to be sold, conveyed,
alienated, mortgaged, encumbered, pledged or otherwise transferred, other than
Leases and easement agreements executed in accordance with the Loan Documents.
(b) A sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer within the meaning of this Section shall be deemed to include: (i) an
installment sales agreement wherein Borrower agrees to sell the Mortgaged
Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Borrower leasing all or a substantial part of the Mortgaged
Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rents; (iii)
subject to the provisions in the last sentence of this subsection, if Borrower,
any Guarantor, or any general partner or manager of Borrower or any Guarantor is
a corporation, the voluntary or involuntary sale, conveyance or transfer of such
corporation's stock (or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise) or the creation
or issuance of new stock in one or a series of transactions by which an
aggregate of more than forty-nine (49%) percent of such corporation's stock
shall be vested in a party or parties who are not now stockholders; and (iv) if
Borrower, any Guarantor or any general partner of Borrower or any Guarantor is a
limited or general partnership or joint venture or a limited liability company,
the change, removal or resignation of a general partner, managing partner or
joint venturer, manager, managing member or a director (unless a manager or
majority of the directors continue to be directors or officers of Guarantor), or
the transfer of the partnership interest of any general partner, managing
partner or joint venturer or, in the case of a limited liability company, the
transfer of the limited liability company interests by a manager or managing
member; provided, however, that the direct or indirect holders of equity
interests (whether limited liability company interests, limited partnership
interests, stock or otherwise) in Borrower as of the date hereof may transfer in
the aggregate up to 49% of such equity interests so long as such direct or
indirect holders at all times during the term of the Loan maintain, directly or
indirectly, controlling and voting ownership of no less than 51% of the equity
interests in Borrower and, provided, further, that (A) any transferee of equity
interests or interests as a general partner, managing member or director is a
reputable entity or person, creditworthy, with sufficient financial worth
considering any obligations assumed and undertaken with respect to the Loan, as
evidenced by financial statements and other information reasonably requested by
Lender; (B) the properties comprising the Mortgaged Property at all times shall
continue to be managed by reputable property managers, experienced in the
management of properties similar to those comprising the Mortgaged Property, and
reasonably acceptable to Lender; and (C) if reasonably requested by Lender or,
after issuance of Securities with respect to all or a portion of the Loan, as
may be required by one or more national rating agencies, with respect to the
transfer of 20% or more of the direct or indirect equity interests in Borrower,
Lender shall have received customary legal substantive non-consolidation
opinions, and such other opinions as customarily required in circumstances where
an entity is a single member limited liability company, reasonably acceptable to
Lender regarding the entities comprising Borrower and any entity owning a
beneficial interest in an entity comprising Borrower. In addition to the
foregoing, Impac Hotels II, L.L.C. and Impac Hotels III, L.L.C., the holders, in
the aggregate, of 100% of the equity interests in and to Borrower, may transfer
all, but not a portion, of such equity interests to Impac Hotel Group, L.L.C., a
Delaware limited liability company, provided, that: (w) Impac Hotel Group,
L.L.C. is, and remains through the term of the Loan, wholly owned by Lodgian,
Inc., (x) Borrower notifies Lender not less than 30 days in advance of such
transfer and, upon the actual transfer, simultaneous notice thereof, (y)
Borrower provides Lender with financial statements and organizational documents
of Impac Hotel Group, L.L.C. certified by such entity and such other documents
as Lender may reasonably request, (z) the transferor and transferee otherwise
comply with clauses (B)-(C) of this Section 13(b) if reasonably requested by
Lender. Notwithstanding anything to the contrary provided herein, transfers of
publicly traded equity in Lodgian, Inc. shall be permitted provided that, until
such time as (1) the original principal amount of the Loan has been reduced by
$20,000,000.00 and (2) the Debt Service Coverage Ratio equals at least 1.20 for
three consecutive calendar months, such transfers shall not individually or in
the aggregate result in a transfer of a Controlling Interest of or in Lodgian,
Inc. to any person or entity.
(c) Except as set forth herein, no sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged Property, or of any
interest therein, shall be permitted during the term of the Loan without
Lender's prior written approval. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon Borrower's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property without Lender's consent if required hereunder. This
provision shall apply to every sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property regardless of whether
voluntary or not, or whether or not Lender has consented to any previous sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property.
(d) Lender's consent to one sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property shall not be deemed to
be a waiver of Lender's right to require such consent in the future. Any sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property made in contravention of this Section shall be null and void
and of no force or effect.
(e) Borrower agrees to bear and shall pay or reimburse Lender on
demand for all expenses (including, without limitation, Lender's reasonable
out-of-pocket expenses, reasonable attorney's fees and disbursements, title
search costs and title insurance endorsement premiums) incurred by Lender in
connection with the review, approval or disapproval, and documentation of any
such sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer.
(f) Anything herein to the contrary notwithstanding, transfers and
partial releases of the Mortgaged Property shall be permitted in accordance with
the terms of Section 61 hereof.
14. ESTOPPEL CERTIFICATES; AFFIDAVITS
(a) Within 10 days after request, Borrower and Lender shall furnish
the other with a statement, duly acknowledged and certified, setting forth: (i)
the amount of the original principal amount of the Note; (ii) the then
outstanding principal balance of the Note; (iii) the rate of interest of the
Note; (iv) the date on which installments of interest and/or principal were last
paid; (v) any offsets or defenses to the payment of the Debt; and (vi) that the
Note, the Mortgage, this Agreement, the Assignment, the Environmental Agreement
and the other Loan Documents are valid, legal and binding obligations, which
have not been modified or if modified, giving particulars of such modification;
provided, however, that a party is only required to furnish two such statements
in any 12 calendar month period during the term of the Loan.
(b) Within ten (10) days after request by Lender, in connection with
Lender's efforts with respect to any sale, securitization, pooling, split,
severance or hypothecation of all or a portion of the Loan, Borrower shall
furnish Lender with a certificate reaffirming all representations and warranties
of Borrower set forth herein and in the other Loan Documents as of the date
requested by Lender or, to the extent of any changes to any such representations
and warranties, so stating such changes.
(c) Borrower shall use commercially reasonable efforts to deliver to
Lender upon request, tenant estoppel certificates from each tenant under a Lease
in form and substance reasonably satisfactory to Lender; provided, however, that
Lender may only request up to two tenant estoppel certificates from the same
tenant in any 12 calendar month period during the term of the Loan.
15. CHANGES IN THE LAWS REGARDING TAXATION
If any law is enacted, adopted or amended after the date of this
Agreement which deducts the Debt from the value of the Mortgaged Property for
the purpose of taxation, or which imposes a tax, either directly or indirectly,
on the Debt or Lender's interest in the Mortgaged Property, Borrower will pay
such tax, with interest and penalties thereon, if any. In the event Lender or
its counsel determines in good faith that the payment of such tax or interest
and penalties by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then in any such
event, Lender shall have the option, by written notice of not less than 90 days,
to declare the Debt immediately due and payable.
16. NO CREDITS ON ACCOUNT OF THE DEBT
Borrower will not claim, demand or be entitled to any credit or
credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Mortgaged Property, or any part thereof, and no deduction
shall otherwise be made or claimed from the assessed value of the Mortgaged
Property, or any part thereof, for real estate tax purposes by reason of the
Mortgage or the Debt. In the event such claim, credit or deduction shall be
required by law, Lender shall have the option, by written notice of not less
than 90 days, to declare the Debt immediately due and payable.
17. DOCUMENTARY STAMPS
If at any time the United States of America, any State thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note or the Mortgage, or shall impose any other tax or charge on
the same, Borrower will pay for the same, with interest and penalties thereon,
if any.
18. CONTROLLING AGREEMENT
It is expressly stipulated and agreed to be the intent of Borrower
and Lender at all times to comply with applicable state law or applicable United
States federal law (to the extent that it permits Lender to contract for,
charge, take, reserve, or receive a greater amount of interest than under state
law) and that this Section shall control every other covenant and agreement in
this Agreement and the other Loan Documents. If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any amount
called for under the Note or under any of the other Loan Documents, or
contracted for, charged, taken, reserved, or received with respect to the Debt,
or if Lender's exercise of the option to accelerate the maturity of the Note, or
if any prepayment by Borrower results in Borrower having paid any interest in
excess of that permitted by applicable law, then it is Borrower's and Lender's
express intent that all excess amounts theretofore collected by Lender shall be
credited on the principal balance of the Note and all other Debt (or, if the
Note and all other Debt have been or would thereby be paid in full, refunded to
Borrower), and the provisions of the Note and the other Loan Documents
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
19. BOOKS AND RECORDS
Borrower will maintain full and accurate books of accounts and other
records reflecting the independent operations of each of the individual hotels
comprising a portion of the Mortgaged Property. Borrower will furnish, or cause
to be furnished to Lender, within 30 days of the end of each calendar month, the
following items, each certified by a senior financial officer of Borrower as
true, correct and complete in all material respects as of the end of and for
such period (subject to normal year-end adjustments), and as having been
prepared in accordance with the Uniform System of Accounts, consistently
applied: (a) a written occupancy statement dated as of the last day of the most
recently ended calendar quarter identifying each of the Leases by the term,
space occupied, rental required to be paid, security deposit paid, any rental
concessions, and identifying any defaults or payment delinquencies thereunder;
(b) monthly and year to date operating statements detailing the total revenues
earned and total expenses incurred in connection with the ownership and
operation of each of the individual hotels comprising a portion of the Mortgaged
Property, including a comparison of the budgeted income and expenses and the
actual income and expenses for such month and the year to date (which operating
information shall include the Improvements); and (c) a written statement dated
as of the last day of the most recently ended month showing the percentage of
hotel or motel rooms rented and occupied during such month and the average daily
room rate charged during such month. Upon request by Lender, Borrower will
provide a detailed explanation of any variances of ten (10%) percent or more
between budgeted and actual amounts for such periods. Borrower shall furnish,
within 120 days following the end of each calendar year, a statement of the
financial affairs and condition of the hotels comprising the Mortgaged Property,
including a statement of profit and loss and a balance sheet for the Mortgaged
Property (and Borrower) for the immediately preceding fiscal year, certified on
a review basis by an independent certified public accountant acceptable to
Lender; provided, however, that for purposes of such statements of the financial
affairs and conditions, Borrower may produce such statements of the financial
affairs and condition on a consolidated basis for groups of hotels, which groups
shall be designated by Lender and in no event shall Lender designate more than
three groups for such statements for any one year; provided, further, however,
that if Lender shall in good faith determine that there is a discrepancy in any
such consolidated statements that is not resolved, in Lender's sole, but good
faith, determination, after conferring with Borrower, Lender shall have the
right to require such statements for each of the hotels comprising a portion of
the Mortgaged Property, certified on a review basis by the independent certified
public accountant. Borrower shall deliver to Lender on or before December 15 of
each calendar year an itemized operating budget and capital expenditure budget
for the Mortgaged Property and a management plan for the Mortgaged Property for
the next succeeding calendar year in such detail as Lender may reasonably
request. Borrower shall promptly after receipt deliver to Lender copies of all
quality inspection reports or similar reports or inspection results that are
delivered to it by the Franchisor. At any time and from time to time Borrower
shall deliver to Lender or its agents such other financial data as Lender or its
agents shall reasonably request with respect to Borrower and the ownership,
maintenance, use and operation of each of the individual hotels comprising a
portion of the Mortgaged Property. All information required to be furnished to
Lender pursuant to this Section shall be on the form provided by Lender (which
form shall accompany Lender's request) substantially in the form annexed hereto
as Exhibit D.
20. PERFORMANCE OF OTHER AGREEMENTS
Borrower shall observe and perform in all material respects each and
every term to be observed or performed by Borrower pursuant to the terms of any
agreement or recorded instrument affecting or pertaining to the Mortgaged
Property.
21. FURTHER ASSURANCES; RIGHT TO SPLIT AND PARTICIPATE THE LOAN
(a) Borrower will, at the cost of Borrower, and without expense to
Lender, do, execute, acknowledge and deliver all and every such further acts,
deeds, conveyances, mortgages, assignments, notices of assignment, Uniform
Commercial Code financing statements or continuation statements, transfers and
assurances as Lender shall, from time to time, reasonably require, for the
better assuring, conveying, assigning, transferring, and confirming unto Lender
the property and rights hereby mortgaged, given, granted, bargained, sold,
alienated, enfeoffed, conveyed, confirmed, pledged, assigned and hypothecated or
intended now or hereafter so to be, or which Borrower may be or may hereafter
become bound to convey or assign to Lender, or for carrying out the intention or
facilitating the performance of the terms of this Agreement or for filing,
registering or recording the Mortgage. Borrower, within 5 days after demand,
will execute and deliver and hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements, chattel mortgages or other instruments,
to evidence more effectively the security interest of Lender in the Mortgaged
Property; provided, however, that Lender agrees not to execute any such
documents in Borrower's name unless Borrower fails to comply within 5 days after
Lender's demand therefor. Borrower grants to Lender an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Lender at law and in equity,
including without limitation such rights and remedies available to Lender
pursuant to this Section; provided, however, that so long as no Event of Default
has occurred or is continuing, Lender will first seek Borrower's assistance in
exercising and perfecting such rights and remedies.
(b) Borrower acknowledges that Lender may sell all or a portion of
the Loan evidenced by all or a portion of the Loan Documents to a party who may
pool the Loan with a number of other loans and to have the holder of such loans
grant participations therein or issue one or more classes of Mortgage Backed,
Pass-Through Certificates or other securities evidencing a beneficial interest
in a rated or unrated public offering or private placement (the "Securities").
The Securities may be rated by one or more national rating agencies. In
connection therewith, Borrower agrees to make available to Lender all
information concerning its business and operations which Lender reasonably
requests. Lender may share such information with the investment banking firms,
rating agencies, accounting firms, law firms and other third-party advisory
firms involved with the Loan or the Securities; provided, however, information
with respect to Guarantor shall be shared to the extent such information is
publicly available. The information provided by Borrower to Lender with respect
to Borrower, the Mortgaged Property and/or Guarantor (with respect to Guarantor,
information only to the extent that it is publicly available) may ultimately be
incorporated into the offering documents for the Securities and thus such
information may be disclosed to various investors. Lender and all of the
aforesaid third-party advisors and professional firms shall be entitled to rely
on the information supplied by, or on behalf of, Borrower.
(c) Lender shall have the right, at any time in its sole and
absolute discretion, to split and sever the Loan into two or more separate loans
with the same or differing priorities, each secured by liens on some or all of
the Mortgaged Property, to sell participations in the Loan to third parties or
sell, assign, pledge or otherwise hypothecate the Loan or one or more severed
portions of the Loan to third parties. Borrower shall execute and deliver all
such instruments, documents and other papers, and do or cause to be done all
such acts and things as Lender may reasonably request in order to effect such
splitter and severance or participation. In connection with any participation,
Borrower agrees to make available to Lender all information concerning its
business and operations, the Mortgaged Property and/or Guarantor which Lender
reasonably requests and Lender may share such information and any other
information in Lender's possession concerning Borrower and the Loan with
prospective participants and other third-party advisory firms involved with such
activities.
(d) Borrower shall cooperate with Lender in Lender's efforts with
respect to any sale, securitization, pooling, split, severance or hypothecation
of the Loan described in this Section 21 by executing and delivering all such
documents, certificates, instruments and other things reasonably necessary to
evidence or confirm Borrower's obligations hereunder, and in no such event shall
the Debt or Borrower's obligations hereunder be increased, or Borrower's rights
hereunder be decreased, as a result thereof, nor shall Borrower be required to
incur additional expense; provided, however, that Borrower's obligations
hereunder may be modified so long as the aggregate Debt and the monthly payments
of principal and interest do not change. Lender shall pay all of Borrower's
actual out-of-pocket expenses and third-party costs (including attorney's fees
and expenses associated therewith).
22. RECORDING OF MORTGAGE
Borrower forthwith upon the execution and delivery of this Agreement
and thereafter, from time to time, will cause the Mortgage, and any security
instrument creating a lien or security interest or evidencing the lien thereof
upon the Mortgaged Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect the lien or security interest thereof upon, and the interest of Lender
in, the Mortgaged Property. Borrower will pay all filing, registration or
recording fees, and all expenses incident to the preparation, execution and
acknowledgment of the Mortgage, any mortgage supplemental thereto, any security
instrument with respect to the Mortgaged Property and any instrument of further
assurance, and all federal, state, county and municipal taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of the Mortgage, any mortgage supplemental thereto, any security
instrument with respect to the Mortgaged Property or any instrument of further
assurance, except where prohibited by law so to do. Borrower shall hold harmless
and indemnify Lender, its successors and assigns, against any liability incurred
by reason of the imposition of any tax on the making and recording of the
Mortgage.
23. REPORTING REQUIREMENTS
Borrower agrees to give prompt notice to Lender of the insolvency or
bankruptcy filing of Borrower or any constituent thereof, or the death,
insolvency or bankruptcy filing of any Guarantor.
24. EVENTS OF DEFAULT
The term "Event of Default" as used herein shall mean the occurrence
or happening, at any time and from time to time, of any one or more of the
following:
(a) if any portion of the Debt is not paid prior to the tenth (10th)
day after the date such payment is due or if the entire Debt is not paid on or
before the Maturity Date;
(b) subject to Borrower's right to contest as provided herein, if
any of the Taxes or Other Charges are not paid in accordance with Section 5
hereof;
(c) if the Policies are not kept in full force and effect, or if the
Policies are not delivered to Lender upon request, or if, within 15 days after
notice, Borrower has not delivered notice of renewal;
(d) if Borrower transfers or encumbers any portion of the Mortgaged
Property in violation of the terms of this Agreement;
(e) if any representation or warranty of Borrower, or of any
Guarantor, made herein, in any Loan Document, any guaranty, or in any
certificate, report, financial statement or other instrument or document
furnished to Lender shall have been intentionally false or intentionally
misleading in any material respect when made;
(f) if Borrower or any Guarantor shall make an assignment for the
benefit of creditors, or if Borrower shall generally not be paying its debts as
they become due;
(g) if a receiver, liquidator or trustee of Borrower or of any
Guarantor shall be appointed, or if Borrower or any Guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Borrower or any Guarantor or if any proceeding for the dissolution or
liquidation of Borrower or of any Guarantor shall be instituted; provided,
however, that such appointment, adjudication, petition or proceeding, if
involuntary and not consented to by Borrower or such Guarantor, shall constitute
an Event of Default only if not being discharged, stayed or dismissed within 90
days;
(h) if Borrower shall be in default under any ground lease or any
other mortgage or security agreement covering any part of the Mortgaged
Property, whether it be superior or junior in lien to the Mortgage, which
default continues beyond applicable notice and grace periods, if any;
(i) subject to Borrower's right to contest as provided herein, if
the Mortgaged Property becomes subject to any mechanic's, materialman's or other
lien, other than a lien for local real estate taxes and assessments not then due
and payable, and such lien is not paid or discharged within ten days from the
date such lien becomes an encumbrance on the Mortgaged Property;
(j) if Borrower fails to cure promptly any material violations of
laws or ordinances affecting the Mortgaged Property;
(k) except as permitted in this Agreement, the alteration,
improvement, demolition or removal of any of the Improvements without the prior
written consent of Lender;
(l) if there shall occur any material damage to the Mortgaged
Property in any manner which is not covered by insurance solely as a result of
Borrower's failure to maintain insurance required in accordance with this
Agreement;
(m) if without Lender's prior written consent: (i) the manager under
the Management Agreement (or any succeeding management agreement) resigns or is
removed; (ii) the ownership, management or control of such manager is
transferred to a person or entity other than the general partner or managing
partner of Borrower; or (iii) there is any material change in or termination of
the Management Agreement (or any succeeding management agreement);
(n) if an Uncured Franchise Default occurs;
(o) if for more than 30 days after receipt of notice from Lender,
Borrower shall continue to be in default under any term, covenant,
representation, warranty or condition of this Agreement, the Assignment, the
Environmental Agreement or any of the other Loan Documents other than as
specified in any of subsections (a) through (n) of this Section; provided,
however, that if the cure of any such default cannot reasonably be effected
within such 30-day period and Borrower shall have promptly and diligently
commenced to cure such default within such 30-day period, then, the period
within which Borrower may cure shall be deemed extended for up to 90 days from
Lender's default notice so long as Borrower diligently and continuously proceeds
to cure such default to Lender's satisfaction;
(p) if a default has occurred and continues beyond any applicable
cure period under the Management Agreement if such default permits a party to
terminate or cancel the Management Agreement;
(q) intentionally omitted;
(r) if Borrower ceases to operate a hotel on any of the individual
properties comprising a portion of the Mortgaged Property or terminates such
business for any reason whatsoever (other than temporary cessation in connection
with any renovations to the Mortgaged Property or restoration of the Mortgaged
Property after casualty or condemnation);
(s) if any of the common charges and special assessments to be paid
by Borrower pursuant to the Condominium Documents are not paid by Borrower when
the same are due and payable and such default shall continue for ten (10)
business days after written notice thereof;
(t) if, the Condominium Board (to the extent it is required pursuant
to the Condominium Documents) or Borrower fails in accordance with the terms of
the Condominium Documents, (a) to pay, as and when the same becomes due and
payable, any charge or encumbrance which, if unpaid, would become a lien against
the applicable portion of the Mortgaged Property or any part thereof prior to or
on a parity with the lien of the Mortgage and, if such failure shall result in
the imposition of a lien against such property and such lien shall not be
discharged, dismissed or bonded by the Condominium Association or Borrower
within thirty (30) days of such imposition and, in either case, the default
shall continue for an additional ten (10) days after written notice thereof to
Borrower subject, however, to the Condominium Board's or Borrower's right to
contest same pursuant to this Agreement and/or the Condominium Documents;
(u) if, any material provision of the Condominium Act is held
invalid and such invalidity shall adversely affect the lien of the Mortgage;
(v) if, without the prior written consent of Lender, Borrower votes
for, or acquiesces to permit, the Condominium Board to effectuate, any
modification or amendment to any of the terms or provisions of the Condominium
Documents so as to materially adversely affect the applicable portion of the
Mortgaged Property and/or increase Borrower's obligations under the Condominium
Documents in any material respect;
(w) if, without the prior written consent of Lender, Borrower fails
to comply with any material terms of the Condominium Documents and the
Condominium Act and such default continues for ten (10) days after written
notice;
(x) if, without the prior written consent of Lender, which consent
shall not be unreasonably withheld, Borrower votes for, or acquiesces to permit,
the Condominium Board, such other party as may in writing be designated by the
Condominium Board, or any other party, as the case may be, to effectuate, any
expansion of the Condominium and annexes to the land covered by the Condominium
additional land and improvements thereon;
(y) if Borrower votes or acquiesces to permit a portion of the
Mortgaged Property that is subject to a Condominium or other condominium unit to
be withdrawn from regime established by the Condominium Act in connection with
any condemnation, any casualty or otherwise, without Lender's written consent,
which consent shall not be unreasonably withheld; or
(z) if Borrower votes or acquiesces to permit the Condominium to be
terminated without Lender's written consent, which consent shall not be
unreasonably withheld.
25. LATE PAYMENT CHARGE; SERVICING FEES
(a) If any portion of the Debt is not paid prior to the tenth (10th)
day after the date such payment is due (other than if the entire Debt is not
paid on or before the Maturity Date), Borrower shall pay to Lender upon demand
an amount equal to five (5%) percent of such overdue portion of the Debt, to
defray the expense incurred by Lender in handling and processing such delinquent
payment and to compensate Lender for the loss of the use of such delinquent
payment, and such amount shall be secured by the Mortgage, the Assignment, the
Environmental Agreement and the other Loan Documents.
(b) Borrower shall pay all fees to the Servicer in respect of
servicing the Loan, payable on a monthly basis, not to exceed ten basis points
of the Loan on an annual basis and Borrower shall reimburse the Servicer for all
of the Servicer's out-of-pocket costs and expenses incurred in connection with
the Servicer's servicing of the Loan, including without limitation, lease
review, preparing and reviewing subordination, non-disturbance and attornment
agreements, property inspections (for which Lender has a right to receive
reimbursement under this Agreement or other Loan Documents), casualty or
condemnation matters or defaults under the Loan.
26. RIGHT TO CURE DEFAULTS
Upon the occurrence of any Event of Default or if Borrower fails to
make any payment or to do any act as herein provided, Lender may, but without
any obligation to do so and without notice to or demand on Borrower and without
releasing Borrower from any obligation hereunder, take such action as Lender may
deem necessary to protect its security for the Loan. Lender is authorized to
enter upon the Mortgaged Property for such purposes or to appear in, defend, or
bring any action or proceeding to protect its interest in the Mortgaged Property
or to foreclose the Mortgage or collect the Debt, and the cost and expense
thereof (including Lender's attorneys' fees to the extent permitted by law),
with interest at the Default Rate for the period after notice from Lender that
such cost or expense was incurred to the date of payment to Lender, shall
constitute a portion of the Debt, shall be secured by the Mortgage, the
Assignment, the Environmental Agreement and the other Loan Documents and shall
be due and payable to Lender upon demand.
27. REMEDIES
(a) Upon the occurrence of any Event of Default, Lender may take
such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Borrower and in and to the Mortgaged Property by
Lender itself or otherwise including, without limitation, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such
order as Lender may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Lender:
(i) declare the entire Debt to be immediately due and payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the complete foreclosure
of the Mortgage in which case the Mortgaged Property or any interest
therein may be sold for cash or otherwise in one or more parcels or in
several interests or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of the Mortgage for the portion of
the Debt then due and payable, subject to the continuing lien of the
Mortgage for the balance of the Debt not then due;
(iv) sell for cash or otherwise the Mortgaged Property or any
part thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to the power
of sale contained herein or otherwise, at one or more sales, as an entity
or in parcels, at such time and place, upon such terms and after such
notice thereof as may be required or permitted by law;
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, in the Assignment, the Environmental Agreement, the Note or in the
other Loan Documents;
(vi) recover judgment on the Note either before, during or
after any proceedings for the enforcement of the Mortgage;
(vii) apply for the appointment of a trustee, receiver,
liquidator or conservator of the Mortgaged Property, without notice and
without regard for the adequacy of the security for the Debt and without
regard for the solvency of Borrower, any Guarantor or of any person, firm
or other entity liable for the payment of the Debt;
(viii) revoke the license granted to Borrower to collect the
Rents and other sums due under the Leases and enforce Lender's interest in
the Leases and Rents and enter into or upon the Mortgaged Property, either
personally or by its agents, nominees or attorneys and dispossess Borrower
and its agents and servants therefrom, and thereupon Lender may to the
maximum extent permitted, or not restricted, under applicable law: (A)
use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Mortgaged Property subject
to the rights of tenant, if any, and conduct the business thereat; (B)
complete any construction on the Mortgaged Property in such manner and
form as Lender deems advisable; (C) make alterations, additions, renewals,
replacements and improvements to or on the Mortgaged Property; (D)
exercise all rights and powers of Borrower with respect to the Mortgaged
Property, whether in the name of Borrower or otherwise including, without
limitation, the right to make, cancel, enforce or modify Leases, obtain
and evict tenants, and demand, xxx for, collect and receive all earnings,
revenues, rents, issues, profits and other income of the Mortgaged
Property and every part thereof; and (E) apply the receipts from the
Mortgaged Property to the payment of the Debt, after deducting therefrom
all expenses (including Lender's attorneys' fees) incurred in connection
with the aforesaid operations and all amounts necessary to pay the taxes,
assessments, insurance and other charges in connection with the Mortgaged
Property, as well as just and reasonable compensation for the services of
Lender, its counsel, agents and employees;
(ix) require Borrower to pay monthly in advance to Lender, or
any receiver appointed to collect the Rents, the fair and reasonable
rental value for the use and occupancy of any portion of the Mortgaged
Property occupied by Borrower (by way of example, but not limitation, use
of hotel rooms as offices, complimentary use of hotel rooms by
representatives and agents of Borrower or its affiliates, but excluding
use of reception areas) and require Borrower to vacate and surrender
possession of the Mortgaged Property to Lender or to such receiver and, in
default thereof, evict Borrower by summary proceedings or otherwise; and
(x) pursue such other rights and remedies as may be available
at law or in equity or under the Uniform Commercial Code, including the
right to establish a lock box for all Rents and other receivables of
Borrower relating to the Mortgaged Property.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Mortgaged Property, the Mortgage shall continue as a lien on the remaining
portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
Section, together with any other sums which then may be held by Lender under
this Agreement, whether under the provisions of this Section or otherwise, shall
be applied by Lender to the payment of the Debt in such priority and proportion
as Lender in its sole discretion shall deem proper.
(c) Lender may adjourn from time to time any sale by it to be made
under or by virtue of the Mortgage by announcement at the time and place
appointed for such sale or for such adjourned sale or sales; and, except as
otherwise provided by any applicable provision of law, Lender, without further
notice or publication, may make such sale at the time and place to which such
sale shall be so adjourned.
(d) Upon the completion of any sale or sales pursuant hereto, Lender
or an officer of any court empowered to do so, shall execute and deliver to the
accepted purchaser or purchasers a good and sufficient instrument, or good and
sufficient instruments, conveying, assigning and transferring all estate, right,
title and interest in and to the property and rights sold. Lender is hereby
irrevocably appointed the true and lawful attorney-in-fact of Borrower, to act
in its name and stead (such power of attorney being coupled with an interest,
and irrevocable), to make all necessary conveyances, assignments, transfers and
deliveries of the Mortgaged Property and rights so sold and for that purpose
Lender may execute all necessary instruments of conveyance, assignment and
transfer, and may substitute one or more persons with like power, Borrower
hereby ratifying and confirming all that its attorney or such substitute or
substitutes shall lawfully do by virtue hereof. Any sale or sales made under or
by virtue of this Section, whether made under the power of sale herein granted
or under or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale, shall operate to divest all the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of Borrower
in and to the properties and rights so sold, and shall be a perpetual bar both
at law and in equity against Borrower and against any and all persons claiming
or who may claim the same, or any part thereof from, through or under Borrower.
(e) Upon any sale made under or by virtue of this Section, whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Lender may bid
for and acquire the Mortgaged Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
Debt the net sales price after deducting therefrom the expenses of the sale and
costs of the action and any other sums which Lender is authorized to deduct
under the Mortgage.
(f) No recovery of any judgment by Lender and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Borrower shall affect in any manner or to any extent the lien of the
Mortgage upon the Mortgaged Property or any part thereof, or any liens, rights,
powers or remedies of Lender hereunder, but such liens, rights, powers and
remedies of Lender shall continue unimpaired as before.
(g) Lender may terminate or rescind any proceeding or other action
brought in connection with its exercise of the remedies provided in this Section
at any time before the conclusion thereof, as determined in Lender's sole
discretion and without prejudice to Lender.
(h) Lender may resort to any remedies and the security given by the
Note, the Mortgage, this Agreement, the Assignment, the Environmental Agreement
or the other Loan Documents in whole or in part, and in such portions and in
such order as determined by Lender's sole discretion. No such action shall in
any way be considered a waiver of any rights, benefits or remedies evidenced or
provided by the Note, the Mortgage, this Agreement, the Assignment, the
Environmental Agreement or the other Loan Documents. The failure of Lender to
exercise any right, remedy or option provided in the Note, the Mortgage, this
Agreement, the Assignment, the Environmental Agreement or the other Loan
Documents shall not be deemed a waiver of such right, remedy or option or of any
covenant or obligation secured by the Note, the Mortgage, this Agreement, the
Assignment, the Environmental Agreement or the other Loan Documents. No
acceptance by Lender of any payment after the occurrence of any Event of Default
and no payment by Lender of any obligation for which Borrower is liable
hereunder shall be deemed to waive or cure any Event of Default with respect to
Borrower, or Borrower's liability to pay such obligation. No sale of all or any
portion of the Mortgaged Property, no forbearance on the part of Lender, and no
extension of time for the payment of the whole or any portion of the Debt or any
other indulgence given by Lender to Borrower, shall operate to release or in any
manner affect the interest of Lender in the remaining Mortgaged Property or the
liability of Borrower to pay the Debt. No waiver by Lender shall be effective
unless it is in writing and then only to the extent specifically stated.
(i) The interests and rights of Lender under the Note, the Mortgage,
this Agreement, the Assignment, the Environmental Agreement or the other Loan
Documents shall not be impaired by any indulgence, including: (i) any renewal,
extension or modification which Lender may grant with respect to any of the
Debt; (ii) any surrender, compromise, release, renewal, extension, exchange or
substitution which Lender may grant with respect to the Mortgaged Property or
any portion thereof; or (iii) any release or indulgence granted to any maker,
endorser, guarantor or surety of any of the Debt.
(j) Anything herein to the contrary notwithstanding, if any of the
foregoing remedies conflict or are otherwise inconsistent with any remedies
available under the Mortgage (or as a matter of law in the jurisdiction
governing the Mortgage) then, to the extent permitted as a matter of law in the
jurisdiction in which any such remedy is being sought, such inconsistency shall
be resolved in favor of the interpretation that would grant Lender the broadest
possible remedies.
(k) Borrower hereby expressly waives and releases to the fullest
extent permitted by law, the pleading of any statute of limitations as a defense
to payment of the Debt or performance of its obligations under any of the Loan
Documents.
28. RIGHT OF ENTRY
Lender and its agents shall have the right to enter and inspect the
Mortgaged Property during normal business hours upon reasonable notice. Lender
shall use commercially reasonable efforts to avoid material disruption to hotel
guests and tenants, if any, at the Mortgaged Property.
29. SECURITY AGREEMENT
This Agreement is a "security agreement" within the meaning of the
Uniform Commercial Code. The Mortgaged Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Borrower in the Mortgaged Property. By executing and delivering this
Agreement, Borrower has granted and hereby grants to Lender, as security for the
Debt, a security interest in the Mortgaged Property to the full extent that the
Mortgaged Property may be subject to the Uniform Commercial Code (such portion
of the Mortgaged Property so subject to the Uniform Commercial Code being called
in this Section the "Collateral"). Borrower hereby agrees with Lender to execute
and deliver to Lender, in form and substance satisfactory to Lender, such
financing statements and such further assurances as Lender may from time to
time, reasonably consider necessary to create, perfect or preserve Lender's
security interest therein granted. The Mortgage shall also constitute a "fixture
filing" for the purposes of the Uniform Commercial Code. All or part of the
Mortgaged Property are or are to become fixtures. If an Event of Default shall
occur, Lender, in addition to any other rights and remedies which it may have,
shall have and may exercise immediately and without demand, any and all rights
and remedies granted to a secured party upon default under the Uniform
Commercial Code including, without limitation, the right to take possession of
the Collateral or any part thereof, and to take such other measures as Lender
may deem necessary for the care, protection and preservation of the Collateral.
Upon request or demand of Lender, Borrower shall at its expense assemble the
Collateral and make it available to Lender at the Mortgaged Property. Borrower
shall pay to Lender on demand any and all reasonable out-of-pocket expenses,
including Lender's reasonable attorneys' fees, incurred or paid by Lender in
protecting the interest in the Collateral and in enforcing the rights hereunder
with respect to the Collateral. Any notice of sale, disposition or other
intended action by Lender with respect to the Collateral sent to Borrower in
accordance with the provisions hereof at least 10 days prior to such action,
shall constitute commercially reasonable notice to Borrower. The proceeds of any
disposition of the Collateral, or any part thereof, may be applied by Lender to
the payment of the Debt in such priority and proportions as Lender in its
discretion shall deem proper. In the event of any change in name, identity or
structure of any Borrower, such Borrower shall notify Lender thereof and
promptly after request shall execute, file and record such Uniform Commercial
Code forms as are necessary to maintain the priority of Lender's lien upon and
security interest in the Collateral, and shall pay all expenses and fees in
connection with the filing and recording thereof. If Lender shall require the
filing or recording of additional Uniform Commercial Code forms or continuation
statements, Borrower shall, promptly after request, execute, file and record
such Uniform Commercial Code forms or continuation statements as Lender shall
deem necessary, and shall pay all expenses and fees in connection with the
filing and recording thereof, it being understood and agreed, however, that no
such additional documents shall increase Borrower's obligations under the Note,
the Mortgage, this Agreement, the Assignment, the Environmental Agreement and
the other Loan Documents. Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to file with the appropriate public
office on its behalf any financing or other statements signed only by Lender, as
secured party, in connection with the Collateral covered by the Mortgage.
30. ACTIONS AND PROCEEDINGS
Lender has the right to appear in and defend any action or
proceeding brought with respect to the Mortgaged Property and to bring any
action or proceeding, in the name and on behalf of Borrower, which Lender, in
its reasonable discretion, decides should be brought to protect its interest in
the Mortgaged Property. Lender shall, at its option, be subrogated to the lien
of any mortgage or other security instrument discharged in whole or in part by
the Debt, and any such subrogation rights shall constitute additional security
for the payment of the Debt.
31. WAIVER OF SETOFF AND COUNTERCLAIM
All amounts due under the Mortgage, the Note and the other Loan
Documents shall be payable without setoff, counterclaim or any deduction
whatsoever. Borrower hereby waives the right to assert a counterclaim (other
than compulsory counterclaims) in any action or proceeding brought against it by
Lender, or arising out of or in any way connected with this Agreement, the
Mortgage, the Note, any of the other Loan Documents, or the Debt.
32. CONTEST OF CERTAIN CLAIMS
Notwithstanding the provisions of Sections 5 and 24(i) hereof,
Borrower shall not be in default for failure to pay or discharge Taxes, Other
Charges or a mechanic's or materialman's lien asserted against the Mortgaged
Property if, and so long as: (a) Borrower shall have notified Lender of such
nonpayment and the reasons therefor within five days of obtaining knowledge
thereof; (b) Borrower shall diligently and in good faith contest such Taxes,
Other Charges or lien by appropriate legal proceedings which shall operate to
prevent the enforcement or collection thereof and the sale of the Mortgaged
Property or any part thereof, in satisfaction thereof; (c) Borrower shall have
furnished to Lender, at Borrower's option, either a cash deposit, or an
indemnity bond satisfactory to Lender with a surety satisfactory to Lender, in
the amount of the Taxes, Other Charges or mechanic's or materialman's lien
claim, plus a reasonable additional sum to pay all costs, interest and penalties
that may be imposed or incurred in connection therewith, to assure payment of
the matters under contest and to prevent any sale or forfeiture of the Mortgaged
Property or any part thereof; (d) Borrower shall promptly upon final
determination thereof pay the amount of any such Taxes, Other Charges or claim
so determined, together with all costs, interest and penalties which may be
payable in connection therewith; and (e) the failure to pay the Taxes, Other
Charges or mechanic's or materialman's lien claim does not constitute a default
under any other deed of trust, mortgage or security interest covering or
affecting any part of the Mortgaged Property. Notwithstanding the foregoing,
Borrower shall immediately upon request of Lender pay (and if Borrower shall
fail so to do, Lender may, but shall not be required to, pay or cause to be
discharged or bonded against) any such Taxes, Other Charges or claim
notwithstanding such contest, if in the reasonable opinion of Lender, the
Mortgaged Property or any part thereof or interest therein may be in danger of
being sold, forfeited, foreclosed, terminated, cancelled or lost. Lender may pay
over any such cash deposit or part thereof to the claimant entitled thereto at
any time when, in the reasonable judgment of Lender, the entitlement of such
claimant is established.
33. RECOVERY OF SUMS REQUIRED TO BE PAID
Lender shall have the right from time to time to take action to
recover any sum or sums which constitute a part of the Debt as they become due,
without regard to whether or not the balance of the Debt shall be due, and
without prejudice to the right of Lender thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Borrower existing
at the time such earlier action was commenced.
34. MARSHALLING AND OTHER MATTERS
Borrower hereby waives, to the extent permitted by law, the benefit
of all appraisement, valuation, stay, extension, reinstatement and redemption
laws now or hereafter in force, and all rights of marshalling in the event of
any sale hereunder of the Mortgaged Property or any part thereof or any interest
therein. Further, Borrower hereby expressly waives any and all rights of
redemption from sale under any order or decree of foreclosure of the Mortgage on
behalf of Borrower, and on behalf of each and every person acquiring any
interest in or title to the Mortgaged Property subsequent to the date of this
Agreement and on behalf of all persons to the extent permitted by applicable
law.
35. HAZARDOUS SUBSTANCES
Borrower hereby represents and warrants to Lender that, to the best
of Borrower's knowledge, except as disclosed in the Environmental Reports: (a)
the Mortgaged Property is not in material violation of any local, state, federal
or other governmental authority, statute, ordinance, code, order, decree, law,
rule or regulation pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or clean-up including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, the Resource Conservation and Recovery Act, as
amended, and any state super-lien and environmental clean-up statutes
(collectively, "Environmental Laws"); (b) the Mortgaged Property is not subject
to any private or governmental lien or judicial or administrative notice or
action relating to hazardous and/or toxic, dangerous and/or regulated,
substances, solvents, wastes, materials, pollutants or contaminants, petroleum,
tremolite, anthlophylie or actinolite or polychlorinated biphenyls (including,
without limitation, any raw materials which include hazardous constituents) and
any other substances, materials or solvents which are included under or
regulated by Environmental Laws (collectively, "Hazardous Substances"); (c) no
Hazardous Substances are or have been, prior to Borrower's acquisition of the
Mortgaged Property, discharged, generated, treated, disposed of or stored on,
incorporated in or removed or transported from the Mortgaged Property other than
in compliance with all Environmental Laws; and (d) no underground storage tanks
exist on any of the Mortgaged Property in violation of Environmental Laws. So
long as Borrower owns or is in possession of the Mortgaged Property, Borrower
shall keep or cause the Mortgaged Property to be kept free from Hazardous
Substances (other than de minimis quantities of Hazardous Substances that are
necessary and lawfully used in the operation of the Mortgaged Property as a
hotel or motel, and which are stored and disposed of in compliance with all
Environmental Laws) and in compliance with all Environmental Laws, shall
promptly notify Lender if Borrower shall become aware of any Hazardous
Substances on the Mortgaged Property (other than de minimis quantities of
Hazardous Substances that are necessary and lawfully used in the operation of
the Mortgaged Property as a hotel or motel, and which are stored and disposed of
in compliance with all Environmental Laws) and/or if Borrower shall become aware
that the Mortgaged Property is in direct or indirect violation of any
Environmental Laws and Borrower shall remove such Hazardous Substances and/or
cure such violations, as applicable, as required by law, promptly after Borrower
becomes aware of such Hazardous Substances or such violations, at Borrower's
sole expense. Borrower shall have the right to contest any Environmental Law (as
such term is defined in the Environmental Agreement) as provided in the
Environmental Agreement, subject to any and all conditions to the exercise of
such right contained therein. Nothing herein shall prevent Borrower from
recovering such expenses from any other party that may be liable for such
removal or cure. Upon Lender's request, at any time and from time to time while
this Agreement is in effect (but in no event more frequently than once in any
three-year period or more frequently if specific facts and circumstances
reasonably dictate, or otherwise at Lender's election but at Lender's expense),
Borrower shall provide at Borrower's sole expense, an inspection or audit of the
Mortgaged Property prepared by a licensed hydrogeologist or licensed
environmental engineer reasonably approved by Lender indicating the presence or
absence of Hazardous Substances on the Mortgaged Property; provided, however,
unless Lender demonstrates a reasonable factual basis to believe that Hazardous
Substances or Asbestos exists on a property comprising a portion of the
Mortgaged Property creating a condition in violation of applicable law, Borrower
shall not be required to expend during the term of the Loan in excess of
$45,000.00 in the aggregate for such inspections or audits or inspections or
audits of the Mortgaged Property prepared by an engineering or consulting firm
reasonably approved by Lender, indicating the presence or absence of Asbestos on
the Mortgaged Property pursuant to Section 36 hereof. If Borrower fails to
provide such inspection or audit within 60 days after such request, Lender may
order such inspection or audit, and Borrower hereby grants to Lender and its
employees and agents access to the Mortgaged Property and a license to undertake
such inspection or audit at reasonable hours and on reasonable notice to
Borrower. Subject to the limitations contained in this Section concerning
aggregate expense to Borrower, the cost of such inspection or audit shall be
paid by Borrower and, if not so paid, shall be added to the principal balance of
the sums due under the Note and the Mortgage and shall bear interest thereafter
until paid at the Default Rate. The liabilities of Borrower under this Section
shall survive any termination, satisfaction, or assignment of the Mortgage and
the exercise by Lender of any of its rights or remedies thereunder including,
without limitation, the acquisition of the Mortgaged Property by foreclosure or
a conveyance in lieu of foreclosure. Notwithstanding anything herein to the
contrary, Borrower shall have no liability under this Section with respect to:
(i) any acts or omissions which occur from and after the conveyance of the
Mortgaged Property to Lender, or its designee, by foreclosure, deed in lieu of
foreclosure or similar transaction, or the discharge, by satisfaction or
assignment of the Mortgage; or (ii) any matters which arise by reason of the
acts or omissions of Lender or any of successors, assigns or designees.
36. ASBESTOS
(a) Borrower hereby represents and warrants to Lender that, to the
best of Borrower's knowledge, except as disclosed in the Environmental Reports,
no asbestos or any substance containing asbestos (collectively, "Asbestos") is
located on the Mortgaged Property. Borrower shall not install in the Mortgaged
Property, nor permit to be installed in the Mortgaged Property, Asbestos and
shall remove (if, and to the extent, required by, and in accordance with,
applicable Environmental Laws) any Asbestos promptly upon discovery to the
satisfaction of Lender, at Borrower's sole expense. Upon Lender's reasonable
request, at any time and from time to time (but in no event more frequently than
once in any three-year period or more frequently if specific facts and
circumstances reasonably dictate, or otherwise at Lender's election but at
Lender's expense), Borrower shall provide, at Borrower's sole expense (subject
to the limitations of Borrower's expense obligations set forth in Section 35
hereof), an inspection or audit of the Mortgaged Property prepared by an
engineering or consulting firm approved by Lender, indicating the presence or
absence of Asbestos on the Mortgaged Property. If Borrower fails to provide such
inspection or audit within 60 days after such request, Lender may order such
inspection or audit. Subject to the limitations contained in Section 35
concerning aggregate expense to Borrower, the cost of such inspection or audit
shall be paid by Borrower and added to the principal balance of the sums due
under the Note and the Mortgage, and shall bear interest thereafter until paid
at the Default Rate. The liabilities of Borrower under this Section shall
survive any termination, satisfaction, or assignment of the Mortgage and the
exercise by Lender of any of its rights or remedies thereunder, including but
not limited to, the acquisition of the Mortgaged Property by foreclosure or a
conveyance in lieu of foreclosure.
(b) Borrower shall, subject to Lender's reasonable approval, develop
an operations and maintenance plan for the Mortgaged Property with respect to
the presence of Asbestos in the Improvements (the "O&M Plan"). Borrower shall
comply in all respects with the terms and conditions of the O&M Plan. Unless
required by Environmental Laws, Borrower shall not modify or amend the O&M Plan
in any material manner without Lender's prior written consent, which consent
shall not be unreasonably withheld, delayed or conditioned.
(c) Borrower shall not remove, disturb, encapsulate or otherwise
remediate the Asbestos in the Improvements except in compliance with the O&M
Plan and all Environmental Laws. If Borrower makes any alterations or
modifications to the Improvements that would disturb or expose any Asbestos in
the Improvements or cause any of such Asbestos to become friable, Borrower shall
remove or encapsulate such Asbestos in compliance with all applicable
Environmental Laws before allowing occupancy of such space or opening such space
to the public.
37. ENVIRONMENTAL MONITORING
Borrower shall give prompt written notice to Lender of: (a) any
governmental proceeding or inquiry with respect to the presence of any Hazardous
Substance on, under, from or about the Mortgaged Property; (b) all written
claims made by any third party against Borrower or the Mortgaged Property
relating to any material loss or injury resulting from any Hazardous Substance;
and (c) Borrower's actual discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Mortgaged Property that could
reasonably be expected to cause the Mortgaged Property to be subject to any
investigation or cleanup pursuant to any Environmental Law. Borrower shall
permit Lender to join and participate, as a party if it so elects, in any legal
proceedings or actions initiated with respect to the Mortgaged Property in
connection with any Environmental Law or Hazardous Substance, and Borrower shall
pay all attorneys' fees incurred by Lender in connection therewith, provided
that, unless Lender shall reasonably determine that a conflict of interest
exists between Lender and Borrower, Lender and Borrower shall both be
represented by one counsel selected by Borrower and reasonably acceptable to
Lender. In the event that any environmental site assessment report prepared for
the Mortgaged Property recommends that an operations and maintenance plan be
implemented for Asbestos or any Hazardous Substance, Borrower shall cause such
operations and maintenance plan to be prepared and implemented at Borrower's
expense upon request of Lender and in accordance with the recommendation. In the
event that any investigation, site monitoring, containment, cleanup, removal,
restoration, or other work of any kind which is reasonably necessary or
desirable under an applicable Environmental Law ("Remedial Work"), Borrower
shall, at its sole cost and expense, commence and thereafter diligently
prosecute to completion all such Remedial Work within 90 days after written
demand by Lender for performance thereof (or such shorter period of time as may
be required under applicable law).
38. MANAGEMENT OF THE MORTGAGED PROPERTY
Borrower further covenants and agrees with Lender as follows:
(a) Borrower shall cause each hotel located on the Mortgaged
Property to be operated pursuant to the applicable Franchise Agreement (other
than the Non-Flagged Properties) and the Management Agreement. Borrower may,
absent an Uncured Franchise Default, replace a franchisor with an Acceptable
Franchisor in the same numbered or lower numbered tier as listed for such then
current franchisor as set forth on Exhibit E hereto, provided, that (i) the
proposed franchise agreement with such proposed Acceptable Franchisor is
reasonably acceptable to Lender, (ii) Lender receives a fully executed comfort
letter from such proposed Acceptable Franchisor reasonably acceptable to Lender
and (iii) such proposed replacement franchise or license could not reasonably
result in any downgrade, withdrawal or qualification of the current rating of
any Securities (or if Securities have not yet been issued, would not reasonably
result in any downgrade, withdrawal or qualification of the anticipated rating
thereof).
(b) Borrower shall:
(i) pay all sums required to be paid by Borrower under each
Franchise Agreement and the Management Agreement and promptly perform
and/or observe in all material respects all of the covenants and
agreements required to be performed and observed by it under each
Franchise Agreement and the Management Agreement and do all things
necessary to preserve and to keep unimpaired its material rights
thereunder;
(ii) promptly notify Lender of any default under any Franchise
Agreement of which it has received, or been given notice, or under the
Management Agreement, and provide Lender with copies of any notices
delivered in connection therewith;
(iii) promptly deliver to Lender a copy of each financial
statement, business plan, capital expenditures plan, notice, report and
estimate received by it under any Franchise Agreement or the Management
Agreement;
(iv) promptly enforce the performance and observance of all of
the covenants and agreements required to be performed and/or observed by
the franchisor under the applicable Franchise Agreement and the manager
under the Management Agreement;
(v) assign to Lender any right, to the extent assignable, it
may have to modify a Franchise Agreement or the Management Agreement;
(vi) grant Lender the right, to the extent assignable (but
Lender shall be under no obligation) to pay any sums and to perform any
act or take any action as may be appropriate to cause all the terms,
covenants and conditions of each Franchise Agreement on the part of
Borrower to be performed or observed to be promptly performed or observed
on behalf of Borrower, to the end that the rights of Borrower in, to and
under each Franchise Agreement shall be kept unimpaired and free from
default;
(vii) use its reasonable efforts to obtain, from time to time,
from the franchisor under each Franchise Agreement such certificates of
estoppel with respect to compliance by Borrower with the terms of the
applicable Franchise Agreement as may be requested by Lender, not to
exceed two such certificates in any 12 calendar month period during the
term of the Loan; and
(viii) exercise each individual option, if any, to extend or
renew the term of each Franchise Agreement upon demand by Lender made at
any time within one year of the last day upon which any such option may be
exercised, and Borrower hereby expressly authorizes and appoints Lender
its attorney-in-fact to exercise any such option in the name of and upon
behalf of Borrower if Borrower fails to exercise any such option, which
power of attorney shall be irrevocable and shall be deemed to be coupled
with an interest.
(c) Borrower shall not, without Lender's prior written consent,
exercise any right, option or discretion to: (i) surrender, terminate or cancel
any Franchise Agreement or the Management Agreement; (ii) reduce or consent to
the reduction of the term of any Franchise Agreement or the Management
Agreement; (iii) increase or consent to the increase of the amount of any
charges under any Franchise Agreement or the Management Agreement; (iv)
otherwise modify, change, supplement, alter or amend, or waive or release any of
its rights and remedies under any Franchise Agreement or the Management
Agreement in any material respect; or (v) operate the Mortgaged Property (other
than the Non-Flagged Properties) under the name of any hotel chain or system
other than as set forth on Schedule A with respect to each hotel comprising a
portion of the Mortgaged Property.
(d) Except pursuant to existing terms of the applicable Franchise
Agreement and the Management Agreement, Borrower shall not, without Lender's
prior written consent, enter into transactions with any affiliate including,
without limitation, any arrangement providing for the management of the hotel on
the Mortgaged Property, the rendering or receipt of services or the purchase or
sale of inventory, except any such transaction in the ordinary course of
business of Borrower if the monetary or business consideration arising therefrom
would be substantially as advantageous to Borrower as the monetary or business
consideration which would obtain in a comparable transaction with a person not
an affiliate of Borrower.
(e) Borrower irrevocably authorizes and directs Franchisor to
deliver to Lender: (i) all operating information concerning the Property
submitted by Borrower to Franchisor; (ii) the written results of all quality
assurance inspections of the Property performed by Franchisor's Quality
Assurance Directors; and (iii) such other information that Lender or Lender's
agents may reasonably request, from time to time, including any information in
the possession of Franchisor relating to Borrower not included in the reports
referred to above.
39. HANDICAPPED ACCESS
(a) Borrower agrees that the Mortgaged Property shall at all times
strictly comply to the extent applicable with the requirements of the Americans
with Disabilities Act of 1990, all state and local laws and ordinances related
to handicapped access and all rules, regulations, and orders issued pursuant
thereto including, without limitation, the Americans with Disabilities Act
Accessibility Guidelines for Buildings and Facilities (collectively, "Access
Laws").
(b) Notwithstanding any provisions set forth herein or in any other
document regarding Lender's approval of alterations of the Mortgaged Property,
Borrower shall not alter the Mortgaged Property in any manner which would
increase Borrower's responsibilities for compliance with the applicable Access
Laws without the prior written approval of Lender, which approval shall not be
unreasonably withheld, delayed or conditioned. The foregoing shall apply to
tenant improvements constructed by Borrower or by any of its tenants. Lender may
condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer or other person acceptable to Lender.
(c) Borrower agrees to give prompt notice to Lender of the receipt
by Borrower of any written complaints from any governmental authority related to
violation of any Access Laws and of the commencement of any proceedings or
investigations which relate to compliance with applicable Access Laws.
40. ERISA
(a) Borrower covenants and agrees that it shall not engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Lender of any of its rights under the Note, the
Mortgage, this Agreement and the other Loan Documents) to be a non-exempt (under
a statutory or administrative class exemption) prohibited transaction under the
Employee Retirement Income Security Act of 1974 (or any successor legislation
thereto), as amended ("ERISA").
(b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of this
Agreement, as requested by Lender in its sole discretion, that: (i) Borrower is
not 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(32) of ERISA; (ii) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (iii) one or more of the following circumstances is true:
(A) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. ss. 2510.3-101(b)(2);
(B) Less than 25 percent of each outstanding class of equity
interests in Borrower are held by "benefit plan investors" within the
meaning of 29 C.F.R. ss. 2510.3-101(f)(2); or
(C) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. ss. 2510.3-101(c) or
(e) or an investment company registered under The Investment Company Act
of 1940.
41. INDEMNIFICATION
In addition to any other indemnifications provided herein, in the
Assignment, the Environmental Agreement or in the other Loan Documents, Borrower
shall protect, defend, indemnify and save harmless Lender from and against all
liabilities, obligations, claims, demands, damages, penalties, causes of action,
losses, fines, costs and expenses (including, without limitation, reasonable
out-of-pocket attorneys' fees and expenses), imposed upon or incurred by or
asserted against Lender by reason of: (a) ownership of the Mortgage, the
Mortgaged Property or any interest therein or receipt of any Rents; (b) any
accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Mortgaged Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (c) any use, nonuse or condition in, on or about the Mortgaged Property
or any part thereof or on adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (d) any failure on the part of Borrower
to perform or comply with any of the terms of this Agreement; (e) performance of
any labor or services or the furnishing of any materials or other property in
respect of the Mortgaged Property or any part thereof; (f) the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release, or
threatened release of any Hazardous Substance or Asbestos on, from, or affecting
the Mortgaged Property or any other property; (g) any personal injury (including
wrongful death) or property damage (real or personal) arising out of or related
to such Hazardous Substance or Asbestos; (h) any lawsuit brought or threatened,
settlement reached, or government order relating to such Hazardous Substance or
Asbestos; (i) any violation of the Environmental Laws, which are based upon or
in any way related to such Hazardous Substance or Asbestos including, without
limitation, the reasonable costs and expenses of any remedial action, reasonable
out-of-pocket attorney's and consultant's fees, investigation and laboratory
fees, court costs, and reasonable litigation expenses; (j) any failure of the
Mortgaged Property to comply with any Access Laws; (k) any representation or
warranty made in the Note, the Mortgage, this Agreement, the Environmental
Agreement or the other Loan Documents being false or misleading in any material
respect as of the date such representation or warranty was made; (l) any claim
by brokers, finders or similar persons claiming to be entitled to a commission
in connection with any Lease or other transaction involving the Mortgaged
Property or any part thereof under any legal requirement or any liability
asserted against Lender with respect thereto; and (m) the claims of any lessee
of all or any portion of the Mortgaged Property or any person acting through or
under any lessee or otherwise arising under or as a consequence of any Lease.
Any amounts payable to Lender by reason of the application of this Section shall
be immediately due and payable within 10 days after written demand, shall be
secured by the Mortgage and shall bear interest at the Default Rate from the
date loss or damage is sustained by Lender until paid. The obligations and
liabilities of Borrower under this Section shall survive any termination,
satisfaction or assignment of this Agreement or the entry of a judgment of
foreclosure, sale of the Mortgaged Property by nonjudicial foreclosure sale, or
delivery of a deed in lieu of foreclosure. Notwithstanding the foregoing,
Borrower shall not be obligated to indemnify Lender for the gross negligence or
willful misconduct of Lender or anyone claiming by, through or under Lender.
42. NOTICE
Any notice, demand, statement, request or consent made hereunder
shall be in writing and shall be deemed given on the next business day if sent
by Federal Express or other reputable overnight courier and designated for next
business day delivery, or on the third day following the day such notice is
deposited with the United States postal service first class certified mail,
return receipt requested, addressed to the address, as set forth above, of the
party to whom such notice is to be given, or to such other address or additional
party as Borrower or Lender, as the case may be, shall in like manner designate
in writing.
43. AUTHORITY
Borrower represents and warrants that: (a) it has full power,
authority and right to execute, deliver and perform its obligations pursuant to
this Agreement, and to mortgage, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, warrant, pledge, hypothecate and assign the Mortgaged Property
pursuant to the terms hereof and to keep and observe all of the terms of this
Agreement on Borrower's part to be performed; and (b) Borrower is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986, as amended, and the related Treasury Department regulations, including
temporary regulations. Lender represents and warrants that it has full power,
authority and right to execute, deliver and perform its obligations pursuant to
this Agreement.
44. WAIVER OF NOTICE
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provides for the giving
of notice by Lender to Borrower and except with respect to matters for which
Lender is required by applicable law to give notice, and Borrower hereby
expressly waives the right to receive any notice from Lender with respect to any
matter for which this Agreement does not specifically and expressly provide for
the giving of notice by Lender to Borrower.
45. REMEDIES OF BORROWER
In the event that a claim or adjudication is made that Lender has
acted unreasonably or has unreasonably delayed acting in any case where by law
or under the Note, the Mortgage, this Agreement, the Assignment, the
Environmental Agreement or the other Loan Documents, it has an obligation to act
reasonably or promptly, Lender shall not be liable for any monetary damages, and
Borrower's remedies shall be limited to injunctive relief or declaratory
judgment.
46. SOLE DISCRETION OF LENDER
Wherever pursuant to this Agreement Lender exercises any right given
to it to approve or disapprove, or any arrangement or term is to be satisfactory
to Lender, the decision of Lender to approve or disapprove or to decide that
arrangements or terms are satisfactory or not satisfactory shall be in the sole,
but reasonable, discretion of Lender and shall be final and conclusive, except
as may be otherwise expressly and specifically provided herein.
47. NON-WAIVER
The failure of Lender to insist upon strict performance of any term
hereof shall not be deemed to be a waiver of any term of this Agreement.
Borrower shall not be relieved of Borrower's obligations hereunder by reason of:
(a) the failure of Lender to comply with any request of Borrower or any
Guarantor to take any action to foreclose the Mortgage or otherwise to enforce
any of the provisions hereof or of the Note, the Assignment, the Environmental
Agreement or the other Loan Documents; (b) the release, regardless of
consideration, of the whole or any part of the Mortgaged Property, or of any
person liable for the Debt or any portion thereof; or (c) any agreement or
stipulation by Lender extending the time of payment or otherwise modifying or
supplementing the terms of the Note, the Mortgage, this Agreement, the
Assignment, the Environmental Agreement or the other Loan Documents. Lender may
resort for the payment of the Debt to any other security held by Lender in such
order and manner as Lender, in its discretion, may elect. Lender may take action
to recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Lender thereafter to foreclose the Mortgage.
The rights and remedies of Lender under this Agreement shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Lender shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provision. Lender shall not
be limited exclusively to the rights and remedies herein stated but shall be
entitled to every right and remedy now or hereafter afforded at law or in
equity.
48. NO ORAL CHANGE
This Agreement, and any provisions hereof, may not be modified,
amended, waived, extended, changed, discharged or terminated orally or by any
act or failure to act on the part of Borrower or Lender, but only by an
agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
49. JOINT AND SEVERAL LIABILITY
If Borrower consists of more than one person, the obligations and liabilities of
each such person hereunder shall be joint and several, and any reference to the
"Mortgaged Property" shall refer to each of the individual hotels comprising a
portion of the Mortgaged Property, and to all of such hotels, collectively, as
the context may require. Subject to the provisions hereof requiring Lender's
consent to any transfer of the Mortgaged Property, this Agreement shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.
50. INAPPLICABLE PROVISIONS
If any term, covenant or condition of the Note, the Mortgage or any
other Loan Document is held to be invalid, illegal or unenforceable in any
respect, the Note, the Mortgage and other Loan Documents shall be construed
without such provision.
51. SECTION HEADINGS
The headings and captions of the various Sections of this Agreement
are for convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.
52. COUNTERPARTS
This Agreement may be executed in any number of counterparts and
each such duplicate original shall be deemed to be an original.
53. CERTAIN DEFINITIONS
Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Agreement may be used
interchangeably in singular or plural form and the word "Borrower" shall mean
"each Borrower, and each of the entities comprising Borrower, individually, as
the context may require, and any subsequent owner or owners of the Mortgaged
Property or any part thereof or any interest therein", the word "Lender" shall
mean "Lender and any subsequent holder of the Note", the word "Debt" shall mean
"the Note and any other evidence of indebtedness secured by the Mortgage", the
word "person" shall include an individual, corporation, partnership, limited
liability company, trust, unincorporated association, government, governmental
authority and any other entity, and the words "Mortgaged Property" shall include
any portion of the Mortgaged Property and any interest therein, and shall refer
to each and every property comprising a portion of the Mortgaged Property, as
the context may require, and the words "attorneys' fees" shall include any and
all attorneys' fees, paralegal and law clerk fees including, without limitation,
fees at the pretrial, trial and appellate levels incurred or paid by Lender in
protecting its interest in the Mortgaged Property and Collateral and enforcing
its rights hereunder, and any of the Loan Documents shall include any
extensions, renewals, amendments, restatements and modifications thereof.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
54. HOMESTEAD
Borrower hereby waives and renounces all homestead and exemption
rights provided by the constitution and the laws of the United States and of any
state, in and to the Premises as against the collection of the Debt, or any part
thereof.
55. ASSIGNMENTS
Lender shall have the right to assign or transfer its rights under
this Agreement without limitation. Any assignee or transferee shall be entitled
to all the benefits afforded Lender under this Agreement.
56. SUBMISSION TO JURISDICTION
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW
YORK STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY OVER ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. LENDER MAY, AT ITS SOLE
DISCRETION, ELECT THE STATE OF NEW YORK, NEW YORK COUNTY, OR THE UNITED STATES
OF AMERICA, FEDERAL DISTRICT COURT HAVING JURISDICTION OVER NEW YORK COUNTY, AS
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING. BORROWER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE TO SUCH VENUE AS BEING AN INCONVENIENT FORUM.
57. AGENT FOR RECEIPT OF PROCESS
Borrower hereby irrevocably appoints Cadwalader, Xxxxxxxxxx & Xxxx
LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxx XxXxxxxxx, Esq., as
its authorized agent to accept and acknowledge, on behalf of Borrower, service
of any and all process which may be served in any suit, action or proceeding of
the nature referred to in Section 56 hereof in any State or Federal court within
New York County. If such agent shall cease so to act, Borrower shall irrevocably
designate and appoint without delay another such agent satisfactory to Lender,
and shall promptly deliver to Lender written evidence of such other agent's
acceptance of such appointment.
58. SERVICE OF PROCESS
To the extent permitted by applicable law, process in any suit,
action or proceeding of the nature referred to in Section 56 hereof may be
served: (a) by registered or certified mail, postage prepaid, to Borrower at the
address set forth above or to such other address of which Borrower shall have
given Lender written notice; or (b) if Borrower shall not have made an
appearance within 21 days after service in accordance with clause (a) of this
Section, by hand delivery to the agent identified in Section 57 hereof, or such
successor agent as shall have been identified in accordance with Section 57
hereof. Nothing in this Section shall affect the Lender's right to serve process
in any manner permitted by law, or limit Lender's right to bring proceedings
against Borrower in the courts of any other jurisdiction.
59. WAIVER OF JURY TRIAL
EACH OF LENDER AND BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE NOTE, THE MORTGAGE, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR
ANY CLAIM, COUNTERCLAIM (OTHER THAN COMPULSORY COUNTERCLAIMS) OR OTHER ACTION
ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY LENDER AND BORROWER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER AND BORROWER IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY THE OTHER PARTY.
60. CHOICE OF LAW
THIS LOAN 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 SUCH
JURISDICTION.
61. RELEASE OF PORTIONS OF THE MORTGAGED PROPERTY
(a) Borrower shall have the right to obtain the release of any one
or more individual properties that comprises a portion of the Mortgaged Property
from the lien of the Mortgage provided that, in each instance: (i) no Event of
Default shall have occurred and be continuing; (ii) each such sale is to a third
party purchaser unrelated to Borrower or Guarantor; (iii) Borrower pays to
Lender the greater of:
(A) 100% of the proceeds of the sale or refinancing of such
individual property (net of usual and customary costs, fees and expenses
associated therewith, including without limitation, transfer taxes,
customary brokerage commissions and legal fees) with respect to which such
partial release is being sought; and
(B) the applicable "Release Price" set forth on Schedule A hereto
with respect to such property;
together with all other sums then due and payable in respect of the Loan
(including, without limitation, interest, late fees, costs and expenses payable
in accordance herewith); (iv) the Debt Service Coverage Ratio with respect to
the remaining properties that comprise the Mortgaged Property on or about the
date of a partial release of lien under this Section is equal to or greater than
1.20 to 1.0 (provided, however, that with respect to the release of any of the
Sale Properties, the Debt Service Coverage Ratio with respect to the remaining
properties that comprise the Mortgaged Property after giving effect to such
partial release of lien under this Section need not be equal to or greater than
1.20 to 1.0, so long as the Debt Service Coverage Ratio is higher after giving
effect to such release than it is prior to such release and Borrower may
increase the amount payable under this Section 61 to an amount sufficient to
cause such Debt Service Coverage Ratio to be met); and (v) Borrower shall
deliver to Lender a current title search with respect to the remaining Mortgaged
Property showing no liens or other encumbrances other than as permitted
hereunder or to which Lender shall have consented. In order to confirm or effect
such release, Lender shall execute one or more instruments as reasonably
requested by Borrower, in recordable form, evidencing such release and the
release of the entity of the Borrower that owned (or, in the case of a
refinancing, owns) the released property from liability in respect of the Loan.
(b) Any sums paid to Lender in respect of a release under this
Section in excess of the outstanding balance of the Loan allocated to that
portion of the Mortgaged Property (including, without limitation, all interest
other than the Additional Interest, deferred financing fees, costs and expenses)
shall be applied by Lender as follows: (i) 4.5% of the such excess to reduce the
outstanding amount of the Additional Interest and (ii) the balance, if any, of
such excess to reduce the principal amount of the Loan (which reduction shall be
applied, pro rata, to the "allocated loan amounts" of the remaining properties
comprising the Mortgaged Property, as set forth on Schedule A hereto). Nothing
herein shall obligate Borrower to repay amounts in excess of the Loan.
62. PATRIOT ACT
(a) Borrower hereby represents and warrants to, and covenants with,
Lender that as of the date hereof and until such time as the Debt shall be paid
in full:
(i) To Borrower's knowledge, none of Guarantor or any indemnitor or
principal under the Loan Documents, or entities comprising Borrower, or
any of their respective constituents or affiliates, any of their
respective officers or directors (including officers or directors of any
such constituents or affiliates), and, to Borrower's knowledge, any of
their respective brokers, investors or other agents acting or benefiting
in any capacity in connection with the Loan, is a Prohibited Person (as
defined below);
(ii) None of Guarantor or any indemnitor or principal under the Loan
Documents, or entities comprising Borrower, or any of their respective
direct or indirect constituents or affiliates, any of their respective
officers or directors (including officers or directors of any such
constituents or affiliates) (A) to Borrower's knowledge, has conducted or
will conduct any business or has engaged or will engage in any transaction
or dealing with any Prohibited Person, including making or receiving any
contribution of funds, goods or services to or for the benefit of any
Prohibited Person, (B) to Borrower's knowledge, has dealt or will deal in,
or otherwise has engaged or will engage in any transaction relating to,
any property or interests in property blocked pursuant to the Executive
Order (as defined below); or (C) to Borrower's knowledge, has engaged or
will engage in or has conspired or will conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the requirements or prohibitions
set forth in the Executive Order or the PATRIOT Act (as defined below);
(iii) To Borrower's knowledge, none of the brokers, investors or
other agents for any entity comprising Borrower, Guarantor or any
indemnitor or principal under the Loan Documents acting in any capacity in
connection with the Loan (A) has conducted or will conduct any business or
has engaged or will engage in any transaction or dealing with any
Prohibited Person, including making or receiving any contribution of
funds, goods or services to or for the benefit of any Prohibited Person,
(B) has dealt or will deal in, or otherwise has engaged or will engage in
any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order; or (C) has engaged or will engage in or
has conspired or will conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the requirements or prohibitions set forth in the Executive Order
or the PATRIOT Act;
(iv) Borrower covenants and agrees to deliver to Lender any
certification or other evidence reasonably requested from time to time by
Lender, confirming Borrower's compliance with this Section;
(v) Borrower represents and warrants that to its knowledge Borrower,
Guarantor, and any indemnitors or principals under the Loan Documents and
all of their respective affiliates (including any officers and directors
of any of the foregoing) are in full compliance with all applicable
orders, rules and regulations issued by, and recommendations of, the U.S.
Department of the Treasury and OFAC (as defined below) pursuant to IEEPA
(as defined below), the PATRIOT Act, other legal requirements relating to
money laundering or terrorism and any executive orders related thereto;
(vi) At all times throughout the term of the Loan, Borrower,
Guarantor, and any indemnitors or principals under the Loan Documents and
all of their respective affiliates (including any officers and directors
of any of the foregoing) shall be in full compliance with all applicable
orders, rules and regulations issued by, and recommendations of, the U.S.
Department of the Treasury and OFAC pursuant to IEEPA, the PATRIOT Act,
other legal requirements relating to money laundering or terrorism and any
executive orders related thereto;
(vii) Borrower is advised that, by law, Lender may be obligated to
"freeze its account" or any account of its investors, either by
prohibiting additional funds, declining any withdrawal, redemption, or
transfer request(s) and/or segregating assets in compliance with
governmental regulations, and Lender may also be required to report such
action to governmental or regulatory authorities, including OFAC;
(viii) Borrower covenants that it will adopt policies, procedures
and internal controls to be fully compliant with any additional laws,
rules or regulations relating to money laundering and/or terrorism,
including the PATRIOT Act, to which it may become subject;
(ix) intentionally omitted;
(x) intentionally omitted;
(xi) Guarantor applies, and will continue to apply, its anti-money
laundering program and/or procedures to all investors as required by
applicable law, and will take appropriate steps as required by applicable
law that all required relevant documentation is retained, including
identification relating to those investors;
(xii) Borrower does not believe, and has no reason to believe, that
any of its investors is a "Prohibited Foreign Shell Bank" (as defined in
the PATRIOT Act), or is named on any available lists of known or suspected
terrorists, terrorist organizations or of other sanctioned persons issued
by the United States government and/or the government(s) of any
jurisdiction(s) in which Borrower is doing business;
(xiii) intentionally omitted;
(xiv) Borrower does not believe, and has no reason to believe, that
the person or entity from whom Borrower acquired the Mortgaged Property is
a Prohibited Foreign Shell Bank, or is named on any available lists of
known or suspected terrorists, terrorist organizations or of other
sanctioned persons issued by the United States government and/or the
government(s) of any jurisdiction(s) in which Borrower is doing business;
(xv) Each of Guarantor and any indemnitors and principals under the
Loan Documents has adopted reasonable procedures as required by applicable
law as of the date hereof with respect to the matters contained in this
Section; and
(xvi) Borrower will advise Lender immediately of any material change
that would affect the representations, covenants and warranties provided
in this Section.
"Prohibited Person" means any Person: (a) listed in the Annex to, or is
otherwise subject to the provisions of, the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, and relating to Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (the "Executive Order"); (b) that is owned or
controlled by, or acting for or on behalf of, any person or entity that is
listed in the Annex to, or is otherwise subject to the provisions of the
Executive Order; (c) with whom Lender is prohibited from dealing or otherwise
engaging in any transaction by any terrorism or money laundering legal
requirements, including the PATRIOT Act and the Executive Order; (d) that
commits, threatens or conspires to commit or supports "terrorism" as defined in
the Executive Order; (e) that is named as a "specifically designated national
(SDN)" on the most current list published by the U.S. Treasury Department Office
of Foreign Assets Control at its official website,
xxxx://xxx.xxxxx.xxx.xxxx/x00xxx.xxx or at any replacement website or other
replacement official publication of such list or is named on any other U.S. or
foreign government or regulatory list issued post-09/11/01; (f) that is covered
by IEEPA, OFAC or any other law, regulation or executive order relating to the
imposition of economic sanctions against any country, region or individual
pursuant to United States law or United Nations resolution; or (g) that is an
affiliate (including any principal, officer, immediate family member or close
associate) of a person or entity described in one or more of clauses (a) - (f)
of this definition of Prohibited Person.
IN WITNESS WHEREOF, Borrower and Lender have executed this
instrument as of the day and year first above written.
BORROWER:
LODGIAN DENVER LLC
LODGIAN NORTH MIAMI LLC
LODGIAN COCONUT GROVE LLC
LODGIAN AUGUSTA LLC
LODGIAN XXXXXXXX LLC
LODGIAN FORT XXXXXXXX LLC
LODGIAN LAFAYETTE LLC
LODGIAN MERRIMACK LLC
LODGIAN HAMBURG LLC
LODGIAN SYRACUSE LLC
LODGIAN CINCINNATI LLC
LODGIAN TULSA LLC
LODGIAN XXXXXXX LLC
LODGIAN MEMPHIS LLC
LODGIAN COLCHESTER LLC
LODGIAN BRIDGEPORT LLC
LODGIAN FAIRMONT LLC
LODGIAN MORGANTOWN LLC
By: ___________________________
Name:
Authorized Signatory
LENDER:
XXXXXX BROTHERS HOLDINGS INC.
By:________________________________
Name:
Authorized Signatory
[ACKNOWLEDGMENT]
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of _________________ in the year 2003 before me, the
undersigned, personally appeared _____________________________, personally known
to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument, and that such individual made such appearance before
the undersigned in the _____________________________________.
(Notarial Seal)
_____________________________________
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On the ___ day of _________________ in the year 2003 before me, the
undersigned, a Notary Public in and for said State, personally appeared
_____________________________, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument, the individual(s), or the person upon behalf of
which the individual(s) acted, executed the instrument.
(Notarial Seal)
_____________________________________
Notary Public
SCHEDULE A
List of Mortgaged Properties
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
NAME OF ENTITY PROPERTY LOCATION AND FRANCHISE FRANCHISOR MANAGEMENT MANAGER ALLOCATED RELEASE
COMPRISING NAME AGREEMENT(1) AGREEMENT LOAN AMOUNT PRICE
BORROWER
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Denver Marriott Hotel - 238 License Agreement Marriott Management Lodgian $20,967,742 $26,209,677
LLC #0707 DIA dated May 19, International, Agreement Management
00000 Xxxx 00xx Xxxxxx 1997, as amended Inc. dated the Corp.
Xxxxxx, XX 00000 December 23, 1998 ("Marriott") date hereof ("LMC")
between
individual
Borrower and
LMC
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Xxxxxxx Xxxxx - 000 X/X X/X Management LMC $10,887,097 $13,608,871
Coconut Grove #1178 MAY Agreement
LLC 0000 Xxxxxxx Xxx. dated the
Xxxxx, XX 00000 date hereof
between
individual
Borrower and
LMC
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian North Holiday Inn N. Miami - Change of Holiday Management LMC $1,693,548 $2,116,935
Miami LLC 98 Ownership License Hospitality Agreement
#1183 MHJ Agreement dated Franchising, dated the
00000 Xxxxxxxx Xxxx. December 11, 1998, Inc. ("HHF") date hereof
Xxxxx, XX 00000 together with an between
Addendum to individual
License Agreement Borrower and
dated as of March LMC
14, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Fairfield Inn - 117 Franchise Marriott Management LMC $2,016,129 $2,520,161
Augusta LLC #1265 AUG Agreement dated Agreement
201 Boy Scout Rd. April 28, 1995, as dated the
Xxxxxxx, XX 00000 assumed October date hereof
30, 1997, as between
assigned as of individual
December 7, 1998, Borrower and
as amended as of LMC
December 23, 1998,
as amended
December 15, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Holiday Inn - 105 Change of HHF Management LMC $2,016,129 $2,520,161
Florence LLC #2050 FHI Ownership License Agreement
8050 Holiday Place Agreement dated dated the
Xxxxxxxx, XX 00000 December 11, 1998 date hereof
between
individual
Borrower and
LMC
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Fort Holiday Inn - 214 Change of HHF Management LMC $1,774,194 $2,217,742
Xxxxxxxx LLC #2020 CNS Ownership License Agreement
0000 Xxxxx Xxx Agreement dated dated the
Ft. Xxxxxxxx, XX 00000 December 11, 1998, date hereof
together with an between
Addendum to individual
License Agreement Borrower and
dated as of March LMC
14, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Courtyard - 90 Franchise Marriott Management LMC $5,645,161 $7,056,452
Lafayette LLC #1515 LAF Agreement dated Agreement
214 E. Xxxxxxx Xxxxxx March 4, 1996, as dated the
Rd. assumed and date hereof
Xxxxxxxxx, XX 00000 assigned October between
29, 1997, as individual
amended as of Borrower and
December 23, 1998 LMC
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Fairfield Inn - 116 Franchise Marriott Management LMC $3,387,097 $4,233,871
Merrimack LLC #2828 MMK Agreement dated Agreement
0 Xxxxxxx Xx April 28, 1995, as dated the
Xxxxxxxxx, XX 00000 assumed October date hereof
30, 1997, as between
amended January 1, individual
1998, as assigned Borrower and
as of December 7, LMC
1998, as amended
as of December 23,
1998, as amended
December 15, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Holiday Inn - 130 Change of HHF Management LMC $3,225,806 $4,032,258
Hamburg LLC #3398 HAM Ownership License Agreement
0000 Xxxx Xx. Agreement dated dated the
Xxxxxxx, XX 00000 December 11, 1998, date hereof
together with an between
Addendum to individual
License Agreement Borrower and
dated as of March LMC
14, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Holiday Inn - 152 Change of HHF Management LMC $2,419,355 $3,024,194
Syracuse LLC #3348 SYR Ownership License Agreement
000 Xxxxxxx Xx. Agreement dated dated the
Xxxxxxxx, XX 00000 December 11, 1998 date hereof
between
individual
Borrower and
LMC
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian #3535 CND N/A N/A Management LMC $1,451,613 $1,814,516
Cincinnati LLC 000 Xxxx 0xx Xx. Xxxxxxxxx
Xxxxxxxxxx, XX 00000 dated the
date hereof
between
individual
Borrower and
LMC
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Tulsa Courtyard - 122 Franchise Marriott Management LMC $6,451,613 $8,064,516
LLC #3636 TUL Agreement dated Agreement
0000 Xxxxx 00xx Xxxx February 7, 1996, dated the
Ave. as assumed July date hereof
Xxxxx, XX 00000 31, 1997, as between
assigned as of individual
December 7, 1998, Borrower and
as amended as of LMC
December 23, 1998
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Fairfield Inn - 105 Franchise Marriott Management LMC $1,693,548 $2,116,935
Jackson LLC #4205 JTN Agreement dated Agreement
000 Xxxxx Xxxxxx Xx. April 28, 1995, as dated the
Xxxxxxx, XX 00000 assumed October date hereof
30, 1997, as between
amended January 1, individual
1998, as assigned Borrower and
as of December 7, LMC
1998, as amended
as of December 23,
1998, as amended
December 15, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Holiday Inn Sycamore - Change of HHF Management LMC $2,580,645 $3,225,806
Memphis LLC 173 Ownership License Agreement
#4242 MHI Agreement dated dated the
0000 Xxxxxx Xxxx Xx. December 11, 1998, date hereof
Xxxxxxx, XX 00000 together with an between
Addendum to individual
License Agreement Borrower and
dated as of March LMC
14, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Fairfield Inn - 117 Franchise Marriott Management LMC $2,419,355 $3,024,194
Colchester LLC #4545 BVT Agreement dated Agreement
00 Xxxxx Xxxx Xxxxx April 28, 1995, as dated the
Xxxxxxxxxx, XX 00000 assumed October date hereof
30, 1997, as between
amended January 1, individual
1998, as assigned Borrower and
as of December 7, LMC
1998, as amended
as of December 23,
1998, as amended
December 15, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Holiday Inn - 159 Change of HHF Management LMC $6,048,387 $7,560,484
Bridgeport LLC #4899 CWV Ownership License Agreement
000 Xxxxxxxxxx Xx. Agreement dated dated the
Xxxxxxxxxx, XX 00000 December 11, 1998, date hereof
together with an between
Addendum to individual
License Agreement Borrower and
dated as of March LMC
14, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Holiday Inn - 106 Change of HHF Management LMC $2,822,581 $3,528,226
Fairmont LLC #4800 FWV Ownership License Agreement
I-79 and Old Grafton Agreement dated dated the
Rd. December 11, 1998, date hereof
Xxxxxxxx, XX 00000 together with an between
Addendum to individual
License Agreement Borrower and
dated as of March LMC
14, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
Lodgian Holiday Inn - 147 Change of HHF Management LMC $2,500,000 $3,125,000
Morgantown LLC #4848 MWV Ownership License Agreement
0000 Xxxxxxxx Xxx. Agreement dated dated the
Xxxxxxxxxx, XX 00000 December 11, 1998, date hereof
together with an between
Addendum to individual
License Agreement Borrower and
dated as of March LMC
14, 2000
--------------- ----------------------- -------------------- -------------- --------------- ------------ ------------ -------------
------------------
(1) All Franchise Agreements are further modified by the agreements between
Franchisors and the predecessors-in-interest of Borrower, which agreements
are filed of record in the proceedings under Chapter 11 of 11 U.S.C. 101 et
seq. captioned In re Lodgian, Inc., et al., Case No. 01-16345 (BRL), and
copies of which agreements have been provided to Lender.
SCHEDULE B
DEFAULTS UNDER FRANCHISE AGREEMENTS
See attached letters
EXHIBIT A
Underlying Notes
GAP MORTGAGE NOTE dated the date hereof in the principal amount of
$[__,000,000.00] made by Lodgian Denver LLC, Lodgian North Miami LLC, Lodgian
Coconut Grove LLC, Lodgian Augusta LLC, Lodgian Xxxxxxxx LLC, Lodgian Fort
Xxxxxxxx LLC, Lodgian Lafayette LLC, Lodgian Merrimack LLC, Lodgian Hamburg LLC,
Lodgian Syracuse LLC, Lodgian Cincinnati LLC, Lodgian Tulsa LLC, Lodgian Xxxxxxx
LLC, Lodgian Memphis LLC, Lodgian Colchester LLC, Lodgian Bridgeport LLC,
Lodgian Fairmont LLC, and Lodgian Morgantown LLC to Xxxxxx Brothers Holdings
Inc.
CONSOLIDATED AMENDED AND RESTATED PROMISSORY NOTE dated August 31, 2000 from
Impac Hotels II, L.L.C. and Impac Hotels III, L.L.C. to The Capital Company of
America LLC in the principal amount of $108,651,655.38, which promissory note
consolidates, amends and restates the following notes:
Impac II Notes
1. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 from Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $6,489,309.07 (Clarksburg, WV).
2. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 from Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $4,257,083.66 (Morgantown, VW).
3. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 from Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $3,323,884.40 (Fairmont, WV).
4. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 from Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $2,918,487.35 (Florence, KY).
5. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 form Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $7,539,560.20 (Memphis, TN).
6. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 from Impac Hotels L.L.C to Nomura Asset Capital Corporation in the
principal amount of $8,009,007.01 (Cincinnati, OH).
7. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 from Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $6,964,165.71 (Ft. Xxxxxxxx, KY).
8. Amended Restated and Consolidated Secured Promissory Note dated May 9,
1997 from Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $4,651,284.95 (N. Miami, FL).
9. Secured Promissory Note dated April 15, 1997 from Impac Hotels II, L.L.C.
to Nomura Asset Capital Corporation in the principal amount of
$2,122,303.00 (Hamburg, NY).
10. Secured Promissory Note dated May 9, 1997 from Impac Hotels II, L.L.C. to
Nomura Asset Capital Corporation in the principal amount of $1,821,295.85
(Hamburg, NY).
11. Secured Promissory Note dated March 12, 1997 from Impac Hotels II, L.L.C.
to Nomura Asset Capital Corporation in the principal amount of
$2,128,901.99 (Syracuse, NY).
12. Secured Promissory Note dated May 9, 1997 from Impac Hotels II. L.L.C. to
Nomura Asset Capital Corporation in the principal amount of $l,006,788.10
(Syracuse, NY).
13. Amended, Restated and Consolidated Secured Promissory Note dated December
3, 1997 from Impac Hotels II, L.L.C. to Nomura Asset Capital Corporation
in the principal amount of $24,400,000 (Coconut Grove, FL).
14. Secured Promissory Note dated July 31, 1997 from Impac Hotels II, L.L.C.
to Nomura Asset Capital Corporation in the principal amount of
$4,709,407.15 (Tulsa, OK).
15. Secured Promissory Note dated November 19, 1997 from Impac Hotels II,
L.L.C. to Nomura Asset Capital Corporation in the principal amount of
$16,893,738.61 (Denver, CO).
Impac III Notes
1. Second Amended and Restated Secured Promissory Note dated December 15,
1997 from Impac Hotels III, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $2,877,009.22. (Augusta, GA)
2. Amended and Restated Secured Promissory Note dated December 16, 1997 from
Impac Hotels III, L.L.C. to Nomura Asset Capital Corporation in the
principal amount of $4,025,388.29. (Lafayette, LA)
3. Second Amended and Restated Secured Promissory Note dated December 16,
1997 from Impac Hotels III, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $2,953,646.50. (Merrimack, NH)
4. Second Amended and Restated Secured Promissory Note dated December 16,
1997 from Impac Hotels III, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $1,875,754.41. (Jackson, TN)
5. Second Amended and Restated Secured Promissory Note dated December 16,
1997 from Impac Hotels III, L.L.C. to Nomura Asset Capital Corporation in
the principal amount of $2,620,319.34. (Colchester, VT)
EXHIBIT B
Underlying Mortgages
EXHIBIT C
Budget
EXHIBIT D
Forms for Reporting Certain Financial Data
EXHIBIT E
Acceptable Franchisors
================================================================================
LOAN AGREEMENT
between
XXXXXX BROTHERS HOLDINGS INC.
Lender
and
LODGIAN DENVER LLC, LODGIAN NORTH MIAMI LLC, LODGIAN COCONUT GROVE LLC,
LODGIAN AUGUSTA LLC, LODGIAN XXXXXXXX LLC, LODGIAN FORT XXXXXXXX LLC,
LODGIAN LAFAYETTE LLC, LODGIAN MERRIMACK LLC, LODGIAN HAMBURG LLC,
LODGIAN SYRACUSE LLC, LODGIAN CINCINNATI LLC, LODGIAN TULSA LLC, LODGIAN
XXXXXXX LLC, LODGIAN MEMPHIS LLC, LODGIAN COLCHESTER LLC, LODGIAN
BRIDGEPORT LLC, LODGIAN FAIRMONT LLC, and LODGIAN MORGANTOWN LLC
Borrower
Dated: as of May __, 2003
Property Location:
-------------------------- ------------------------- ---------------------------
Marriott Hotel - 238 Courtyard - 90 Fairfield Inn - 105
#0707 DIA #1515 LAF #4205 JTN
00000 Xxxx 00xx Xxxxxx 000 X. Xxxxxxx Xxxxxx Xx. 000 Xxxxx Xxxxxx Xx.
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
-------------------------- ------------------------- ---------------------------
Mayfair House - 179 Fairfield Inn - 000 Xxxxxxx Xxx Xxxxxxxx - 000
#0000 MAY #2828 MMK #4242 MHI
0000 Xxxxxxx Xxx. 0 Xxxxxxx Xx 0000 Xxxxxx Xxxx Xx.
Xxxxx, XX 00000 Xxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
-------------------------- ------------------------- ---------------------------
Holiday Inn N. Miami - 98 Holiday Inn - 130 Fairfield Inn - 117
#1183 MHJ #3398 HAM #4545 BVT
00000 Xxxxxxxx Xxxx. 0000 Xxxx Xx. 00 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000 Xxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
-------------------------- ------------------------- ---------------------------
Fairfield Inn - 117 Holiday Inn - 152 Holiday Inn - 159
#1265 AUG #3348 SYR #4899 CWV
201 Boy Scout Rd. 000 Xxxxxxx Xx. 000 Xxxxxxxxxx Xx.
Xxxxxxx, XX 00000 Xxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
-------------------------- ------------------------- ---------------------------
Holiday Inn - 105 Hotel Holiday Inn - 106
#2050 FHI #3535 CND #4800 FWV
8050 Holiday Place 000 Xxxx 0xx Xx. X-00 and Xxx Xxxxxxx Xx.
Xxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
-------------------------- ------------------------- ---------------------------
Holiday Inn - 214 Courtyard - 122 Holiday Inn - 147
#2020 CNS #3636 TUL #4848 MWV
0000 Xxxxx Xxx 3340 South 79th East Ave. 0000 Xxxxxxxx Xxx.
Xx. Xxxxxxxx, XX 00000 Xxxxx, XX 00000 Xxxxxxxxxx, XX 00000
-------------------------- ------------------------- ---------------------------
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxx X. Block, Esq.
================================================================================
TABLE OF CONTENTS
Section
1. DEFINED TERMS...........................................................
2. RESTATED NOTE; PAYMENT OF DEBT; INCORPORATION OF COVENANTS, CONDITIONS
AND AGREEMENTS..........................................................
3. WARRANTY OF TITLE.......................................................
4. INSURANCE...............................................................
5. PAYMENT OF TAXES........................................................
6. TAX AND INSURANCE ESCROW FUND...........................................
7. ANNUAL BUDGET; ACCOUNTS.................................................
8. CONDEMNATION............................................................
9. LEASES AND RENTS........................................................
10. REPRESENTATIONS CONCERNING LOAN.......................................
11. SINGLE PURPOSE ENTITY; AUTHORIZATION..................................
12. MAINTENANCE OF MORTGAGED PROPERTY.....................................
13. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.....................
14. ESTOPPEL CERTIFICATES; AFFIDAVITS.....................................
15. CHANGES IN THE LAWS REGARDING TAXATION................................
16. NO CREDITS ON ACCOUNT OF THE DEBT.....................................
17. DOCUMENTARY STAMPS....................................................
18. CONTROLLING AGREEMENT.................................................
19. BOOKS AND RECORDS.....................................................
20. PERFORMANCE OF OTHER AGREEMENTS.......................................
21. FURTHER ASSURANCES; RIGHT TO SPLIT AND PARTICIPATE THE LOAN...........
22. RECORDING OF MORTGAGE.................................................
23. REPORTING REQUIREMENTS................................................
24. EVENTS OF DEFAULT.....................................................
25. LATE PAYMENT CHARGE; SERVICING FEES...................................
26. RIGHT TO CURE DEFAULTS................................................
27. REMEDIES..............................................................
28. RIGHT OF ENTRY........................................................
29. SECURITY AGREEMENT....................................................
30. ACTIONS AND PROCEEDINGS...............................................
31. WAIVER OF SETOFF AND COUNTERCLAIM.....................................
32. CONTEST OF CERTAIN CLAIMS.............................................
33. RECOVERY OF SUMS REQUIRED TO BE PAID..................................
34. MARSHALLING AND OTHER MATTERS.........................................
35. HAZARDOUS SUBSTANCES..................................................
36. ASBESTOS..............................................................
37. ENVIRONMENTAL MONITORING..............................................
38. MANAGEMENT OF THE MORTGAGED PROPERTY..................................
39. HANDICAPPED ACCESS....................................................
40. ERISA.................................................................
41. INDEMNIFICATION.......................................................
42. NOTICE................................................................
43. AUTHORITY.............................................................
44. WAIVER OF NOTICE......................................................
45. REMEDIES OF BORROWER..................................................
46. SOLE DISCRETION OF LENDER.............................................
47. NON-WAIVER............................................................
48. NO ORAL CHANGE........................................................
49. JOINT AND SEVERAL LIABILITY...........................................
50. INAPPLICABLE PROVISIONS...............................................
51. SECTION HEADINGS......................................................
52. COUNTERPARTS..........................................................
53. CERTAIN DEFINITIONS...................................................
54. HOMESTEAD.............................................................
55. ASSIGNMENTS...........................................................
56. SUBMISSION TO JURISDICTION............................................
57. AGENT FOR RECEIPT OF PROCESS..........................................
58. SERVICE OF PROCESS....................................................
59. WAIVER OF JURY TRIAL..................................................
60. CHOICE OF LAW.........................................................
61. RELEASE OF PORTIONS OF THE MORTGAGED PROPERTY.........................
62. PATRIOT ACT...........................................................
