Exhibit 10.1.1
LOAN AGREEMENT
Dated as of January 31, 1995
By and Among
SERVICO FORT XXXXX, INC., a Florida corporation,
WASHINGTON MOTEL ENTERPRISES, INC., a Pennsylvania corporation,
SERVICO HOTELS I, INC., a Florida corporation,
SERVICO HOTELS II, INC., a Florida corporation,
SERVICO HOTELS III, INC., a Florida corporation,
SERVICO HOTELS IV, INC., a Florida corporation,
NEW ORLEANS AIRPORT MOTEL ASSOCIATES, LTD. a Florida limited
partnership,
WILPEN, INC., a Pennsylvania corporation,
HILTON HEAD MOTEL ENTERPRISES, INC., a South Carolina
corporation,
and
MOON AIRPORT MOTEL, INC., a Pennsylvania corporation,
as Borrower
AND
COLUMN FINANCIAL, INC., a Delaware corporation,
as Lender
TABLE OF CONTENTS
Page
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I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION ......................... 1
Section 1.1 Definitions ................................... 1-18
Section 1.2 Principles of Construction .................... 18-19
II. GENERAL TERMS ................................................... 19
Section 2.1 Loan Commitment; Disbursement to Borrowers .... 19
2.1.1 The Loan ...................................... 19
2.1.2 Disbursement to Borrowers ..................... 19
2.1.3 The Note ...................................... 19
Section 2.2 Use of Proceeds ............................... 19
Section 2.3 Loan Repayment and Prepayments; Refinancing
Debt Service Coverage Ratio; Extensions ..... 20
2.3.1 Repayment; Refinancings ....................... 20
2.3.2 Prepayments ................................... 20
2.3.3 Pro Forma Debt Service Coverage Ratio ......... 20
2.3.4 Extensions .................................... 20
Section 2.4 Release of Individual Properties .............. 21
2.4.1 Release of Individual Properties .............. 21
2.4.2 Recalculation of Amortization Payments ........ 22
2.4.3 Release Documentation ......................... 22
Section 2.5 Interest ...................................... 23
2.5.1 Generally ..................................... 23
2.5.2 Default Rate; Post-Maturity Interest .......... 23
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Page
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Section 2.6 Payments; Computations ........................ 23
2.6.1 Making of Payments ............................ 23
2.6.2 Computations .................................. 23
2.6.3 Late Payment Charge ........................... 23
2.6.4 Application of Payments ....................... 24
Section 2.7 Central Account; Deposits and Distributions ... 24
2.7.1 Deposits in Central Account ................... 24
2.7.2 Establishment of Central Account and
Sub-Accounts ................................ 25
2.7.3 Funding of Basic Sub-Accounts ................. 25
2.7.4 Deposits During Operative Period and DSCR
Restricted Period ........................... 27
2.7.5 Eligible Investments .......................... 27
2.7.6 Interest on Accounts .......................... 28
2.7.7 Payment of Debt Service; Disbursement of Funds
in Basic Sub-Accounts; Excess Property
Income ...................................... 28
2.7.8 Payment of Loss Proceeds; Borrowers' Right to
Release ..................................... 37
III. CONDITIONS PRECEDENT ............................................ 39
Section 3.1 Conditions Precedent to Closing ............... 39
IV. REPRESENTATIONS AND WARRANTIES .................................. 42
Section 4.1 Borrowers' Representations .................... 42
Section 4.2 Survival of Representations ................... 53
V. AFFIRMATIVE COVENANTS ........................................... 54
Section 5.1 Borrowers' Covenants .......................... 54
VI. NEGATIVE COVENANTS .............................................. 63
Section 6.1 Borrowers' Negative Covenants ................. 63
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VII. SPECIAL PROVISIONS .............................................. 66
Section 7.1 Cooperation ................................... 66
7.1.1 Cooperation ................................... 66
7.1.2 Additional Financial Reporting Requirements ... 66
Section 7.2 Insurance; Casualty and Condemnation .......... 67
7.2.1 Insurance ..................................... 67
7.2.2 Casualty and Restoration ...................... 70
7.2.3 Condemnation .................................. 72
Section 7.3 Required Repairs .............................. 74
Section 7.4 FF&E Replacements ............................. 75
7.4.1 Performance of FF&E Replacements .............. 75
7.4.2 Additional Replacements ....................... deleted
7.4.3 Indemnification ............................... 77
Section 7.5 Inspections ................................... 77
VIII. DEFAULTS ........................................................ 77
Section 8.1 Event of Default .............................. 77
Section 8.2 Remedies ...................................... 80
Section 8.3 Remedies Cumulative ........................... 80
IX. MISCELLANEOUS ................................................... 81
Section 9.1 Survival ...................................... 81
Section 9.2 Lender's Discretion ........................... 81
Section 9.3 Governing Law ................................. 81
Section 9.4 Modification, Waiver in Writing ............... 82
Section 9.5 Delay Not a Waiver ............................ 83
Section 9.6 Notices ....................................... 83
Section 9.7 Trial by Jury ................................. 84
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Section 9.8 Headings ...................................... 84
Section 9.9 Successors and Assigns; Assignment ............ 84
Section 9.10 Severability .................................. 84
Section 9.11 Preferences ................................... 84
Section 9.12 Waiver of Notice .............................. 85
Section 9.13 Borrower to Act as Registrar .................. deleted
Section 9.14 Expenses; Indemnity ........................... 85
Section 9.15 Exhibits Incorporated ......................... 86
Section 9.16 Offsets, Counterclaims and Defenses ........... 86
Section 9.17 No Joint Venture or Partnership ............... 86
Section 9.18 Publicity ..................................... 86
Section 9.19 Waiver of Marshalling of Assets ............... 86
Section 9.20 Waiver of Counterclaim ........................ 87
Section 9.21 Conflict; Construction of Documents ........... 87
Section 9.22 Brokers and Financial Advisors ................ 87
Section 9.23 Prior Agreements .............................. 87
Section 9.24 Joint and Several ............................. 88
Section 9.25 Appointment of Servicer ....................... 88
Section 9.26 Exculpation ................................... 88
Section 9.27 Arizona Interest .............................. 89
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SCHEDULES
Schedule A - Borrowers
Schedule B - Allocable Principal Balances
Schedule C - Franchisors and Franchise Agreements
Schedule D - Properties
Schedule E - Required Repairs
Schedule F - FF&E Replacements
Schedule G - Permits
Schedule H - Equipment Leases
Schedule I - Leases
Schedule J - Form of Operating Statement
Schedule K - Operations and Maintenance Programs
Schedule L - Litigation
Schedule M - Fair Market Value
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of January 31, 1995, by and among
COLUMN FINANCIAL, INC., having an address at 0000 Xxxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000-0000, Attention: Xxxxxx X. Xxxxxx, Esq., together with
its successors and assigns, including, without limitation, the Loan Purchaser,
as lender ("Lender"), and those twelve entities set forth on Schedule A annexed
hereto, having an address at Servico Centre South, 0000 Xxxxxxxxx Xxxx, Xxxx
Xxxx Xxxxx, Xxxxxxx 00000, Attention: Chief Executive Officer, as borrower.
All capitalized terms used herein shall have the respective meanings
set forth in Section 1 hereof.
W I T N E S S E T H :
WHEREAS, Borrowers desire to obtain the Loan from Lender;
WHEREAS, Lender is willing to make the Loan to Borrowers, subject to
and in accordance with the terms of this Agreement and the other Loan Documents;
WHEREAS, Lender's interest in the Loan may be purchased by the Loan
Purchaser on or after the Closing Date; and
WHEREAS, Borrowers consent to the transfer described in the
preceding Recital.
NOW, THEREFORE, in consideration of the covenants, agreements,
representations and warranties set forth in this Agreement, and other good and
valuable consideration, the parties hereto hereby covenant, agree, represent and
warrant as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:
"Accountant's Certificate" shall have the meaning set forth in
Section 2.7.7(d) (ii).
"Accountant's Certificate Default" shall have the meaning set forth
in Section 2.7.7(e) (ii).
"Additional Sums" shall have the meaning set forth in Section 9.27.
"Adjusted Debt Service" shall mean, in connection with the proposed
release of one or more Individual Properties pursuant to Section 2.4, the Debt
Service, as determined by Lender, that would be due during the twelve (12) month
period commencing on the first Due Date after the proposed date of such release,
after giving effect to the application of the Release Amount required to be paid
under Section 2.4.1 with respect to the proposed release to the outstanding
principal balance of the Loan and the recalculation, pursuant to Section 2.4.2,
of payments necessary to amortize the remaining principal balance of the Loan by
February 1, 2015 and pay interest on the amount of such principal balance
outstanding from time to time at the Interest Rate.
"Adjusted Debt Service Coverage Ratio" shall mean, with respect to
any date, the ratio of Adjusted Cash Flow Available for Debt Service to Adjusted
Debt Service for the applicable Properties.
"Adjusted Cash Flow Available for Debt Service" shall mean, in
connection with the proposed Release of one or more Individual Properties
pursuant to Section 2.4, the aggregate Cash Flow Available for Debt Service for
the Properties for the twelve (12) calendar month period ending with the last
month for which monthly statements of Revenue and Operating Expenses shall have
been due pursuant to Section 5.1(k) (iv) prior to the date of Lender's receipt
of notice of such proposed release (excluding any Cash Flow Available for Debt
Service relating to the Individual Properties proposed to be released).
"Affiliate" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
"Agreement" shall mean this Loan Agreement, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
"Allocable Principal Balance" shall mean, with respect to any
Individual Property as of any date, the portion of the aggregate original
principal amount of the Loan allocable to such Individual Property as reduced by
such Individual Property's pro rata share of any principal amortization payments
or prepayments theretofore received. The initial Allocable Principal Balance for
each Individual Property is set forth on Schedule B annexed hereto.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"Annual Operating Budget" shall mean, with respect to each
Individual Property, an annual operating budget, showing all
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projected items of Revenue and Operating Expenses, prepared on an accrual basis
in accordance with GAAP and certified by Borrowers.
"Assignment of Leases" shall mean, collectively, that certain first
priority Assignment of Leases, Rents and Revenues, dated as of the date hereof,
from the applicable Borrower, as assignor, to Lender, as assignee, with respect
to each Individual Property, assigning to Lender all of Borrowers' interest in
and to the Leases, the Rents and the Revenue of such Individual Property as
security for the Loan, as such Assignment of Leases may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"Assignment of Consulting Agreement" shall mean, collectively, (a)
that certain first priority Assignment of Management Agreement, dated as of
January 31, 1995 from Xxxxxx Xxxxxxx Penn Borrower and Xxxxxx Xxxxxxx Penn
Manager with respect to the Xxxxxxx Penn Property, (b) that certain Assignment
and Subordination of Management Agreement dated as of the date hereof from the
applicable Borrower and Related Consultant with respect to the Individual
Property identified on Schedule D as the Radisson Inn New Orleans located in
Kennar, Louisiana and (b) those certain first priority Assignments and
Subordinations of Consulting Agreement, dated as of the date hereof, from the
applicable Borrower and Related Consultant to Lender, with respect to each other
Individual Property, assigning to Lender all of each such Borrower's interest in
and to the applicable Consulting Agreement with respect to such Individual
Property as security for the Loan and subordinating, pursuant to its terms, such
Consulting Agreement and any Lien or rights created thereunder to the Lien and
to the terms, covenants and provisions of the Loan Documents, as such Assignment
of Consulting Agreement may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"Bank" shall mean First National Bank of Chicago and any other
financial institution subsequently selected by Lender.
"Bankruptcy Order" shall mean that certain Order Confirming Debtors'
Plan of Reorganization filed on May 7, 1992 in that certain bankruptcy
proceeding captioned In re Servico, Inc., et al. in the United States Bankruptcy
Court, Southern District of Florida, Miami Division, Case No.
90-36655-BKC-AJC-X.
"Basic Carrying Costs" shall mean (a) with respect to an Individual
Property, the sum of the following costs for the relevant Fiscal Year or payment
period: (i) Impositions with respect to such Individual Property and (ii)
insurance premiums for the Policies with respect to such Individual Property or
(b) the aggregate amount of Basic Carrying Costs for all the Properties.
"Basic Carrying Costs Monthly Installment" shall mean an amount
equal to (i) one-twelfth (1/12) of an amount estimated
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by Lender to be necessary to pay the Impositions for all the Properties payable
during the next ensuing twelve (12) months, giving effect to any amount
deposited in the Basic Carrying Costs Sub-Account on the Closing Date and (ii)
during any Operative Period, DSCR Restricted Period and Franchise Restricted
Period, one-twelfth (1/12) of an amount estimated by Lender to be necessary to
pay the premiums on the Policies for all the Properties due during the next
ensuing twelve (12) months for the renewal of the coverage afforded by the
Policies upon the expiration thereof. In the event any of the Policies is a
blanket policy insuring risks other than those associated with the Properties,
the amount set forth in (ii) above shall be the premium that would be payable to
continue such policy in effect for just the Properties, as set forth in the
Insuror's Letter.
"Basic Carrying Costs Sub-Account" shall mean the sub-account of the
Central Account established and maintained pursuant to Section 2.7.2 to provide
for payment of Basic Carrying Costs for the Properties.
"Basic Sub-Accounts" shall have the meaning specified in Section
2.7.2.
"Borrower" shall mean, respectively, each of those ten (10) entities
set forth on Schedule A annexed hereto and "Borrowers" shall mean, collectively,
all such entities, but excluding, in either case, any such entity or entities
that own(s) an Individual Property released from the lien of the Mortgage
pursuant to Section 2.4.
"Borrower Material Adverse Effect" shall have the meaning specified
in Section 4.1(a).
"Borrowers' Accountant" shall mean Ernst & Young or any other
Independent firm of certified public accountants approved by Lender, which
approval shall not be unreasonably withheld or delayed.
"Building Evaluation Reports" shall mean those certain Building
Evaluation Reports prepared by the Engineer and delivered to Lender in
connection with the Loan.
"Business Day" shall mean any day other than a Saturday, Sunday or
any other day on which national banks in New York are not open for business.
"Capital Expenditures Budget" shall mean, with respect to each
Individual Property, an annual budget, prepared on an accrual basis in
accordance with GAAP and certified by Borrowers, showing all proposed capital
expenditures.
"Capital Expenditure Sub-Account" shall mean a sub-account of the
Central Account established pursuant to Section 2.7.2 hereof for the purpose of
holding certain Excess Property
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Income during any DSCR Restricted Period or any Franchise Restricted Period.
"Cash Flow Available for Debt Service" shall mean, with respect to
each Individual Property with respect to any period, the excess of (a) the
Revenue for such period, determined on an accrual basis, less (b) the Operating
Expenses for the same period, including, for the purposes of calculating Cash
Flow Available for Debt Service, all FF&E Installments calculated with respect
to the Revenues for such period or, with respect to any period prior to the
Closing Date, FF&E Installments that would have been calculated with respect to
such period if this Agreement had been in effect.
"Cash Management Agreement" shall mean that certain Cash Management
Agreement dated as of January 31, 1995 among Borrowers (except New Orleans Motel
Associates) certain Affiliates of Borrowers, Related Consultant and Servico,
Inc.
"Casualty" shall have the meaning specified in Section 7.2.2(a).
"Central Account" shall mean such Eligible Account maintained by
Lender at the Bank, in the name of Lender or its successors or assigns (as
secured party), as shall be designated by Lender.
"Certificate" shall mean any certificate representing an interest in
the Loan issued pursuant to the Trust and Servicing Agreement.
"Certificateholder" shall mean the holder of a Certificate.
"Closing Date" shall mean the date of the closing of the Loan.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
as it may be further amended from time to time, any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"Collateral Security Documents" shall mean any right, document or
instrument given as security for the Note, including, without limitation, the
Mortgage, the Assignment of Leases and the Assignment of Consulting Agreements,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"Commitment" shall have the meaning specified in Section 2.3.1
hereof.
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"Condemnation" shall mean any temporary or permanent taking of all
or any part of any Individual Property, or interest therein or right or use
thereof, as a result of, any proceeding in condemnation or eminent domain.
"Condemnation Proceeds" shall have the meaning specified in Section
2.7.8(b) hereof.
"Consultant" shall mean the Related Consultant and/or the Xxxxxx
Xxxxxxx Penn Manager, as applicable.
"Consultant Control Change" shall have the meaning specified in
Section 5.1(j).
"Consultant Control Notice" shall have the meaning specified in
Section 5.1(j).
"Consultant's Certifications" shall mean those certifications
required to be delivered by Consultant under Section 5.1(k) (iv).
"Consultant's Notice" shall have the meaning specified in Section
2.7.1.
"Consulting Agreement" shall mean the Related Consulting Agreement
and/or the Xxxxxx Xxxxxxx Penn Management Agreement, as applicable.
"Contribution Agreement" shall mean that certain Contribution
Agreement dated of even date herewith, by and among the Borrowers, relating to
contribution arrangements and reimbursement procedures in the event any Borrower
suffers losses or incurs expenses in excess of the Allocable Principal Balance
of such Borrower's Individual Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"Curtailment Reserve Fund Sub-Account" shall mean the sub-account of
the Central Account established and maintained pursuant to Section 2.7.2 hereof
during the Operative Period for the purpose of holding certain Excess Property
Income.
"Debt Service" shall mean, with respect to any particular period of
time, scheduled principal and interest payments under the Note, as adjusted as a
result of any reamortization of the Loan pursuant to Section 2.4.2 hereof.
"Debt Service Payment Sub-Account" shall mean the sub-account of the
Central Account established and maintained pursuant to Section 2.7.2 hereof for
the purposes of making Debt Service payments.
"Default Rate" shall have the meaning specified in the Note.
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"Depositor" shall mean the entity described as such in the Trust and
Servicing Agreement, and its successors and assigns.
"DSCR Determination Date" shall mean each January 1, April 1, July 1
and October 1 commencing on April 1, 1995.
"DSCR Restricted Period" shall have the meaning specified in Section
2.3.3 hereof.
"Due Date" shall mean the first Business Day of each calendar month.
"Eligible Account" shall mean a segregated account held by and at
the Bank or an account that is either: (a) maintained with a depository
institution or trust company the long-term unsecured debt obligations of which
(or, in the case of a depository institution or trust company that is the
principal subsidiary of a holding company, the long-term unsecured debt
obligations of such holding company) have been rated by the Rating Agency in one
of its two highest rating categories or the short-term commercial paper of which
is rated by the Rating Agency in its highest rating category at the time of any
deposit therein; or (b) a trust account or accounts maintained with a federal or
state chartered depository institution or trust company with trust powers acting
in its fiduciary capacity, provided that any such state chartered institution or
trust company shall be subject to regulations or has established internal
guidelines regarding fiduciary funds on deposit substantially similar to federal
regulation 12 C.F.R. 910 (b). The title of each Eligible Account shall indicate
that funds held therein are held in trust for the uses and purposes set forth
herein. Any funds deposited in the Eligible Account shall only be invested in
Eligible Investments.
"Eligible Investments" shall mean any one or more of the following
acquired at a purchase price of not greater than par:
(a) direct obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United
States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States of America;
(b) fully FDIC-insured demand and time deposits; and
(c) interests in money market or common trust funds
which as of the date of acquisition of the interest in such fund has
been approved for investment by trust funds securing obligations
rated AAAm or AAAm-
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G by Standards & Poor's Ratings Group, Inc. and P-1 by Xxxxx'x
Corporation.
"Engineer" shall mean RKTL Associates, Inc., which is acknowledged
by Lender and Borrowers to be an Independent Person, or any other Independent
engineer or engineering firm reasonably approved by Lender.
"Engineering Escrow Sub-Account" shall mean a sub-account of the
Central Account established pursuant to Section 2.7.2 hereof, for the purpose of
holding funds to pay for the Required Repairs.
"Environmental Consultant" shall mean Environmental Management
Group, Inc. or any other Independent environmental consulting firm reasonably
approved by Lender.
"Environmental Indemnity" shall mean the certain Environmental
Indemnity Agreement of even date herewith, by Borrower in favor of Lender with
respect to environmental conditions on the Properties, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
"Equipment" shall have the meaning specified in the Mortgage with
respect to each Individual Property.
"Equipment Lease" shall mean a lease or other financing arrangement
with respect to any furniture, fixtures and equipment (including, without
limitation, any motor vehicle) used in the operation of the Properties.
"Event of Default" shall have the meaning specified in Section 8.1.
"Excess Property Income" shall mean the amounts available in the
Central Account during any Operative Period, any DSCR Restricted Period or any
Franchise Restricted Period after the allocations under clauses (a) through (e),
inclusive, of Section 2.7.3 have been made.
"FF&E Monthly Installment" shall mean a payment on each Due Date in
an amount equal to the sum of the product for each of the Properties of (a) the
Revenue of such Individual Property for the calendar month prior to the calendar
month immediately preceding the Due Date in question and (b) (i) five and
one-half percent (5.5%) for the Xxxxxx Xxxxxxx Penn Property or (ii) four
percent (4.0%) for the other Properties.
"FF&E Replacements" shall have the meaning specified in Section
2.7.7(e).
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"FF&E Sub-Account" shall mean a sub-account of the Central Account
established pursuant to Section 2.7.2 hereof for the purpose of holding reserves
to fund FF&E Replacements.
"Fiscal Year" shall mean that period beginning on the first Friday
after the last Thursday in December of each year and ending on the last Thursday
in December, which Fiscal Year shall be composed of four (4) quarters composed
of thirteen (13) weeks each.
"Franchise Agreement" shall mean, with respect to each Individual
Property, that certain franchise agreement more specifically identified on
Schedule C annexed hereto, and any other Franchise Agreement entered into by a
Borrower with respect to an Individual Property with the consent of Lender in
accordance with the terms hereof.
"Franchise Agreement Letters" shall mean each of those certain
Letter Agreements by the applicable Borrower and the applicable Franchisor in
favor of Lender, with respect to each Individual Property, establishing Lender's
rights with respect to the applicable Franchise Agreement, as such Franchise
Agreement Letters may be amended, restated, replaced, supplemented or otherwise
modified from time to time or, collectively, all such Franchise Agreement
Letters.
"Franchise Restricted Period" shall have the meaning specified in
Section 6.1(a).
"Franchisor" shall mean, with respect to each Individual Property,
which is subject to a Franchise Agreement, the franchisor with respect thereto,
as same are identified on Schedule C annexed hereto or any replacement
franchisor approved by Lender pursuant to the Assignment of Franchise Agreement.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
"Governmental Authority" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever for any governmental
xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise) whether
now or hereafter in existence.
"Impositions" shall mean all real estate and personal property taxes
and all other taxes, levies, assessments and other similar charges, general and
special, ordinary and extraordinary, foreseen and unforeseen, of every kind and
nature whatsoever, which at any time prior to, at or after the execution hereof
may be assessed, levied or imposed by, in each case, a Governmental Authority
upon an Individual Property or the Revenue or the ownership, use, occupancy or
enjoyment thereof, and any interest, costs or penalties with respect to any of
the foregoing, provided
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that water, sewer and utility charges not be deemed to be an Imposition.
"Improvements" shall have the meaning specified in the Mortgage with
respect to each Individual Property.
"Indebtedness" shall mean the indebtedness in the original principal
amount set forth in, and evidenced by, the Note, together with all other
obligations and liabilities of Borrowers due or to become due to Lender pursuant
to the Note, this Agreement or any other Loan Document, including, without
limitation, all interest thereon and all Yield Maintenance Premiums due in
connection therewith.
"Independent" means, when used with respect to any Person, a Person
who (i) is in fact independent, (ii) does not have any direct financial interest
or any material indirect financial interest in any Borrower, or in any Affiliate
of any Borrower or any constituent partner, shareholder, member or beneficiary
of any Borrower, and (iii) is not connected with any Borrower or any Affiliate
of any Borrower or any constituent partner, shareholder, member or beneficiary
of any Borrower as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions. In each instance where
the opinion or certificate of an Independent Person is required in order to
comply with any of the provisions hereof, the opinion or certificate so supplied
shall include a statement that the individual executing the same has read this
definition and that the Person supplying such opinion or certificate is
Independent within the meaning hereof.
"Independent Director" shall have the meaning specified in Section
4.1(dd) (xv).
"Individual Property" shall mean each parcel of real property and
the Improvements thereon owned by a Borrower and encumbered by the Mortgage,
together with all rights and property pertaining to such real property and
Improvements, as more particularly described in the Granting Clauses of the
Mortgage and referred to therein as the "Mortgaged Property".
"Insurance Proceeds" shall have the meaning specified in Section
2.7.8(a).
"Insurance Requirements" shall mean, with respect to each Individual
Property, all material terms of any insurance policy required pursuant to this
Agreement or the related Loan Documents, all material requirements of the issuer
of any such policy, and all material regulations and then current standards
applicable to or affecting such Individual Property or any part thereof or any
use or condition thereof, which may, at any time, be recommended by the state
insurance commissioner or other state regulatory body, if any, having
jurisdiction over such Individual Property, or such other body exercising
similar functions.
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"Insuror's Letter" shall mean a letter provided by the issuer of the
Policies setting forth, with respect to any such Policy that is a blanket policy
covering risks other than those associated with the Properties, the annual
premium that would be required to keep such Policies in effect for just the
Properties and making the statement required pursuant to clause (B) of the final
sentence of Section 7.2.1(c), as such letter shall be updated from time to time
as the amounts of the premiums for the Policies shall change.
"Interest Rate" shall have the meaning specified in the Note.
"Late Payment Charge" shall have the meaning specified in the Note.
"Lease" shall mean any lease, or, to the extent of the interest
therein of any Borrower, any sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in any
Individual Property, and every modification, amendment or other agreement
relating thereto and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed thereunder,
excluding, however, any occupancy of hotel rooms by guests in the ordinary
course of business.
"Legal Requirements" shall mean, with respect to each Individual
Property, all federal, state, county, municipal and other governmental statutes,
laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions
of Governmental Authorities to which such Individual Property or any part
thereof or the construction, use, alteration or operation thereof, or any part
thereof, is subject, including, without limitations, all zoning, land use,
building, and environmental statutes, laws, codes, resolutions and ordinances,
whether now or hereafter enacted and in force, and all permits, licenses,
variances and authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrowers, at any time in force
affecting such Individual Property or any part thereof, including, without
limitation, any which may (i) require repairs, modifications or alterations in
or to such Individual Property or any part thereof or (ii) in any way limit the
use and enjoyment thereof.
"Lender" shall have the meaning specified in the first Paragraph
hereof.
"Lien" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting any
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Individual Property or any portion thereof or any Borrower, or any interest
therein, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, any financing statement, and mechanic's,
materialmen's and other similar liens and encumbrances.
"Loan" shall mean the loan, evidenced by the Note, and secured by
the Mortgage and the other Collateral Security Documents, to be made by Lender
to Borrowers pursuant hereto.
"Loan Documents" shall mean, collectively, this Agreement, the Note,
the Mortgage, the Environmental Indemnity and the other Collateral Security
Documents and any other document executed or delivered by or on behalf of
Borrowers in connection with the Loan.
"Loan Purchaser" shall mean any purchaser of the Loan from the
Lender, such purchaser's designee, the respective successors and/or assigns of
such purchaser or designee and any subsequent holder of the Note.
"Loan Year" shall mean each one (1) year period commencing on the
Closing Date and on each anniversary of the Closing Date.
"Lock-Out Date" shall have the meaning specified in the Note.
"Long-Term Required Repairs" shall mean those Required Repairs
designated as "long-term" on Schedule E annexed hereto.
"Long-Term Required Repairs Installment" shall mean a payment in the
amount of $373,875 to be made by Borrowers to Lender on each of the Closing Date
and the first Due Date occurring after each of the first two anniversaries of
the Closing Date, to be deposited in the Engineering Escrow Account, provided
that if the Borrowers shall expend funds (other than funds disbursed by Lender
hereunder) in payment of the costs of any Long-Term Required Repair (other than
a Long-Term Required Repair designated as sprinklers on Schedule E annexed
hereto) and shall deliver to Lender reasonably satisfactory evidence of such
payment, together with the contractor's certification required to be delivered
as a condition of disbursement pursuant to Section 2.7.7(d) (ii) with respect to
such Long-Term Required Repair, Borrowers shall, upon reasonable approval of the
foregoing by Lender, receive a credit in the amount of such payment against the
amount of the Long-Term Required Repairs Installment next due, if any, provided
that the amount of such credit together with any disbursements made from the
Engineering Escrow Sub-Account, expressed as a percentage of the costs allocated
for such item on Schedule E, shall not exceed the percentage of the work on such
item then completed.
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"Loss Proceeds" shall have the meaning specified in Section 2.7.8(c)
hereof.
"Major Required Repair" shall have the meaning specified in Section
2.7.7 (d).
"Maturity Date" shall mean March 1, 2010, subject to extension as
provided in Section 2.3.4.
"Minor Required Repair" shall have the meaning specified in Section
2.7.7(d) (i).
"Mortgage" shall mean, with respect to each Individual Property,
that certain first priority (a) Mortgage, Security Agreement and Assignment of
Leases and Rents, (b) Leasehold Mortgage, Security Agreement and Assignment of
Leases and Liens or (c) Deed of Trust, Security Agreement and Assignment of
Leases and Rents, as applicable, executed and delivered by the Borrower that
owns such Individual Property as security for the Loan and encumbering such
Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time or, collectively, all such
Mortgages, Leasehold Mortgages and Deeds of Trust, as the context may require.
"Non-Consolidation Opinion" shall have the meaning specified in
Section 3.1(f).
"Note" shall mean that certain Promissory Note of even date
herewith, made by Borrowers in favor of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"Officer's Certificate" shall mean a certificate delivered to Lender
by a Borrower which is signed by an officer of such Borrower who also serves as
Chief Executive Officer, Chief Financial Officer, Treasurer, Controller or Vice
President of Servico, Inc.
"Operating Expenses" shall mean, for each Individual Property, all
ordinary and customary expenses payable in the ordinary course of operating such
Individual Property as a hotel project (such expenses being determined on an
accrual basis for the relevant calculation period, unless otherwise expressly
provided herein) but excluding distributions to stockholders or partners in the
applicable Borrower, Debt Service payable by Borrowers, income taxes, non-cash
items such as depreciation and any fees payable to the Related Consultant in
excess of four percent (4%) of Revenue.
"Operations and Maintenance Expense Monthly Installment" shall mean
with respect to each month in a particular year, an amount, as determined by
Lender, equal to the aggregate of one-twelfth (1/12th) of the product for each
Individual Property
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of (a) 1.05 and (b) the Operating Expenses for such Individual Property in the
immediately preceding Fiscal Year.
"Operations and Maintenance Expense Sub-Account" shall mean a
sub-account of the Central Account established and maintained during any
Operative Period, any DSCR Restricted Period and any Franchise Restricted Period
pursuant to Section 2.7.2 hereof relating to the payment of Operating Expenses.
"Operative Period" shall mean (a) any period during which a monetary
Event of Default shall have occurred and be continuing, (b) if Borrowers fail to
provide Lender with a Commitment or Commitments on or prior to the Refinance
Notification Date, the period commencing on the Refinance Notification Date and
ending on the date the Indebtedness has been paid in full, and (c) if Borrowers
provide Lender with a Commitment or Commitments on or prior to the Refinance
Notification Date and the Void Commitment Date occurs, the period commencing on
the Void Commitment Date and ending on the date the Indebtedness has been paid
in full.
"Other Charges" shall have the meaning specified in Section 5.1(b)
"Permits" shall have the meaning specified in Section 4.1(w).
"Permitted Encumbrances" shall mean, with respect to each Individual
Property, (a) the Liens created by the Loan Documents, (b) all Liens,
encumbrances and other matters disclosed in the Title Insurance Policies
relating to such Individual Property or any part thereof or in UCC-11 searches
delivered to Lender, (c) Liens for Impositions not yet due and payable or being
contested in good faith and by appropriate proceedings in accordance with the
applicable provisions of the Loan Documents, (d) Equipment Leases and any
conditional sale agreement with respect to the purchase of any Equipment,
provided the same have been or shall be entered into by the applicable Borrower
in the ordinary course of business, (e) Liens given by a Borrower to finance
capital improvements to an Individual Property as permitted under the Mortgage,
subject to the prior written approval of Lender, in its sole discretion, which
approval shall not be granted if such Lien would result in any withdrawal,
downgrade or other adverse effect on any rating of the Certificates issued by
the Rating Agency, (f) other Liens expressly permitted by the terms of the Loan
Documents and (g) such other title and survey exceptions as Lender has approved
or may approve in writing in Lender's sole discretion.
"Person" shall mean any individual, corporation partnership, joint
venture, estate, trust, unincorporated association, any federal, state, county
or municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing.
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"Policies" shall have the meaning specified in Section 7.2.1(c).
"Premises" shall, with respect to each Individual Property, have the
meaning specified in the Granting Clause of the Mortgage encumbering such
Individual Property.
"Pro Forma Debt Service Coverage Ratio" shall mean, with respect to
any DSCR Determination Date, the ratio of (a) the aggregate Cash Flow Available
for Debt Service for all the Properties determined on an accrual basis for the
twelve (12) month period ending with the calendar month prior to the calendar
month immediately preceding such DSCR Determination Date to (b) the aggregate
amount of Debt Service scheduled to be due during the twelve (12) month period
immediately following such DSCR Determination Date, assuming, for the purpose of
this calculation, that no payments of principal other than scheduled
amortization payments will be made during such period.
"Properties" shall mean, collectively, all of the Individual
Properties, which Individual Properties are identified on Schedule D annexed
hereto, but excluding any such Individual Properties released from the lien of
the Mortgage pursuant to Section 2.4.
"Qualified Institutional Lender" shall mean a financial institution
or other lender with a long term credit rating which is not less than investment
grade.
"Rating Agency" shall mean Fitch Investors Service, Inc.
"Recourse Distributions" shall have the meaning specified in Section
9.26.
"Refinance Notification Date" shall have the meaning specified in
Section 2.3.1 hereof.
"Related Consulting Agreement" shall mean, collectively, those
certain agreements entered into by and between Borrowers (other than the Xxxxxx
Xxxxxxx Penn Borrower) and Related Consultant, pursuant to which Related
Consultant is to provide management consulting, or, in the case of the
Individual Property identified on Schedule D as the Radisson Inn New Orleans
located in Kennar, Louisiana, management and other services with respect to each
Individual Property other than the Xxxxxx Xxxxxxx Penn Property.
"Related Consultant" shall mean Servico Management Corp., a Florida
corporation.
"Release Amount" shall have the meaning specified in Section
2.4.1(a).
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"Rents" shall mean, with respect to each Individual Property, all
rents, income, issues, revenues and profits arising from the Leases and renewals
thereof.
"Required Repairs" shall mean those repairs, if any, with respect to
any Individual Property specified in Schedule E annexed hereto.
"Required Repairs Installment" shall mean the Long-Term Required
Repairs Installment and the Sprinkler Installment.
"Restoration" shall have the meaning specified in Section 7.2.2(a).
"Revenue" shall mean, with respect to each Individual Property, all
Rents and all other revenue of any kind derived from such Individual Property,
all determined on an accrual basis (unless otherwise indicated) in accordance
with GAAP consistently applied, after deducting all allowances for rebates and
adjustments, whether cash or credit, derived directly or indirectly from any
source including, without limitation: rental of rooms; food and beverage; sales
from gift or other shops managed directly by the applicable Borrower or any
agent of such Borrower; telephone; net vending income (gross vending revenue
reduced by the amount payable to equipment vendors for the use thereof);
commissions; net rentals of cars, bicycles and other items; meeting room
rentals; all net revenue received from any third party concessionaires operating
any concession under any agreement with such Borrower or its agents, and other
persons occupying space at such Individual Property and/or rendering services to
guests staying at such Individual Property; and any form of incentive payments
or awards received by Borrower from any source whatsoever which are attributable
to the operation of such Individual Property.
"Royce Property" shall mean the Individual Property identified on
Schedule D as the Royce Hotel-Pittsburgh Airport located in Pittsburgh,
Pennsylvania.
"Securitization Transaction" shall mean the transactions
contemplated by the Trust and Servicing Agreement, including, without
limitation, (a) the assignment and transfer of the Loan and the Loan Documents
to the Depositor, (b) the issuance, sale and rating of the Certificates, and (c)
the assignment and transfer of the Loan and the Loan Documents to the Trustee
for the benefit of the Certificateholders.
"Servicer" shall mean (a) the entity described as such in the Trust
and Servicing Agreement or its successor in interest, or if any successor
servicer is appointed pursuant to the Trust and Servicing Agreement, such
successor servicer or (b) any other entity appointed to service the Loan
pursuant to Section 9.25.
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"Short-Term Required Repairs" shall mean any Required Repairs not
designated "long-term" on Schedule E annexed hereto.
"Short-Term Required Repair Deposit" shall mean an amount equal to
the aggregate of one hundred twenty-five percent (125%) of the estimated costs
of Short-Term Required Repairs for each Individual Property as set forth on
Schedule E annexed hereto.
"Sprinkler Installment" shall mean a payment in the amount of
$1,312,500 to be made by Borrower to Lender on the Closing Date and the first
Due Date occurring after each of the first four anniversaries of the Closing
Date, to be deposited in the Engineering Escrow Account, provided that if
Borrowers shall expend any funds (other than amounts disbursed by Lender
hereunder) in payment of any Long-Term Required Repair designated as sprinklers
on Schedule E annexed hereto and shall deliver to Lender reasonably satisfactory
evidence of such payment, together with the contractor's certification required
to be delivered as a condition of disbursement pursuant to Section 2.7.7(d) (ii)
with respect to such Long-Term Required Repair, Borrowers shall, upon reasonable
approval of the foregoing by Lender, receive a credit in the amount of such
payment against the amount of the Sprinkler Installment next due, if any,
provided that the amount of such credit together with any disbursements made
from the Engineering Escrow Sub-Account, expressed as a percentage of the costs
allocated for such item on Schedule E, shall not exceed the percentage of the
work on such item then completed.
"State" shall mean, with respect to an Individual Property, the
State or Commonwealth in which such Individual Property or any part thereof is
located.
"Survey" shall mean a survey of the Individual Property in question
prepared by a surveyor, licensed in the State, in accordance with ALTA standards
and satisfactory to Lender and the company or companies issuing the Title
Insurance Policies, and containing a certification of such surveyor satisfactory
to Lender.
"Survey Requirements" shall have the meaning specified in Section
3.1 (c) (iii).
"Term Sheet" shall have the meaning specified in Section 9.23.
"Title Insurance Policy" shall mean, with respect to each Individual
Property, the ALTA extended coverage mortgagee title insurance policy (1970 form
B or other loan policy acceptable to Lender) issued with respect to such
Individual Property and insuring the lien of the Mortgage encumbering such
Individual Property and containing such endorsements and affirmative assurances
as Lender shall reasonably require (to the extent authorized in each State).
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"Trust and Servicing Agreement" shall mean any trust and servicing
agreement or pooling and servicing agreement pursuant to which the Loan is
assigned to a Trustee in trust and one or more classes of Certificates are
issued representing beneficial ownership interests in the Loan and the other
assets of such trust.
"Trustee" shall mean the entity described as such in the Trust and
Servicing Agreement or its successor in interest, or if any successor trustee is
appointed pursuant to the Trust and Servicing Agreement, such successor trustee.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in the State in which an Individual Property is located.
"Void Commitment Date" shall have the meaning specified in Section
2.3.1 hereof.
"Xxxxxx Xxxxxxx Penn Borrower" shall mean Wilpen, Inc., a
Pennsylvania corporation.
"Xxxxxx Xxxxxxx Penn Management Agreement" shall mean that certain
Management Agreement dated March 5, 1984 between Xxxxxx Xxxxxxx Penn Borrower
and Xxxxxx Xxxxxxx Penn Manager, as amended by that certain Amendment to
Management Agreement dated as of August 13, 1984 between Xxxxxx Xxxxxxx Penn
Borrower and Xxxxxx Xxxxxxx Penn Manager and as amended and assumed under that
certain Agreement for Assumption of Contract dated as of July 7, 1991, by and
between Xxxxxx Xxxxxxx Penn Borrower and Xxxxxx Xxxxxxx Penn Manager and further
amended by that certain Second Amendment of Management Agreement dated January
28, 1995.
"Xxxxxx Xxxxxxx Penn Manager" shall mean Westin Hotel Company, a
Delaware corporation, together with its permitted successors and assigns under
the Xxxxxx Xxxxxxx Penn Management Agreement.
"Xxxxxx Xxxxxxx Penn Property" shall mean the Individual Property
identified on Schedule D as the Xxxxxx Xxxxxxx Penn Hotel located in Pittsburgh,
Pennsylvania.
"Yield Maintenance Premium" shall have the meaning specified in the Note.
Section 1.2 Principles of Construction.
All references to sections, schedules and exhibits are to sections,
schedules and exhibits in or to this Agreement unless otherwise specified.
Unless otherwise specified, the words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all meanings attributed to defined
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terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP, as modified herein.
II. GENERAL TERMS
Section 2.1 Loan Commitment; Disbursement to Borrowers.
2.1.1 The Loan. Subject to and upon the terms and conditions set
forth herein, Lender hereby agrees to make the Loan to Borrowers on the Closing
Date, in the original principal amount set forth in the Note, which Loan shall
mature on the Maturity Date. Borrowers hereby agree to accept the Loan on the
Closing Date, subject to and upon the terms and conditions set forth herein.
2.1.2 Disbursement to Borrowers. Borrowers may request and receive
only one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed. Borrowers shall,
on the Closing Date, receive the Loan, subject to the direction given by
Borrowers as to the application of Loan proceeds to pay certain closing costs
and to fund (i) the Basic Carrying Cost Sub-Account in an amount equal to (a)
the amount necessary to enable Lender to make each payment of Impositions coming
due during the twelve (12) months following the Closing Date on the date each
such payment is due, taking into account the Basic Carrying Costs Monthly
Installments that will be due and payable before each such payment of
Impositions is due plus (b) twice the amount indicated in the Insuror's Letter
as the premium necessary to keep the Policies in effect for one month and (ii)
the Engineering Escrow Sub-Account in an amount equal to (a) the Short-Term
Required Repair Deposit plus (b) the first Long-Term Required Repair Installment
plus (c) the first Sprinkler Installment, in accordance with the provisions of
this Agreement.
2.1.3 The Note. The Loan shall be evidenced by the Note, in the
original principal amount of the Loan. The Note shall bear interest as provided
in such Note, shall be subject to repayment and prepayment as provided in
Section 2.3. The Note shall be entitled to the benefits of this Agreement and
shall be secured by the Mortgage, the Assignment of Leases and the other
Collateral Security Documents.
Section 2.2 Use of Proceeds.
Borrowers shall use the proceeds of the Loan disbursed to it
pursuant to Section 2.1 to (i) repay and discharge any existing loans relating
to the Properties, except the Permitted Encumbrances, (ii) pay all past-due
Basic Carrying Costs, if any,
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in respect of the Properties, (iii) fund the Basic Carrying Costs Sub-Account,
as provided in Section 2.1.2, and the Engineering Escrow Sub-Account and (iv)
pay costs and expenses incurred in connection with the Closing of the Loan, as
mutually approved by Lender and Borrowers. Any remaining proceeds of the Loan
shall be used for commercial purposes only.
Section 2.3 Loan Repayment and Prepayments; Refinancing; Extensions.
2.3.1 Repayment; Refinancings. Borrowers shall repay the Loan in
accordance with the provisions of the Note. Borrowers shall deliver to Lender
written commitment(s) or engagement letter(s) (either, a "Commitment" or
"Commitments"), which Commitment or Commitments shall set forth specific terms
and conditions for the refinancing of the entire outstanding amount of the Loan
from a Qualified Institutional Lender or Lenders or a nationally recognized
investment banking firm or firms on or before that date which is six (6) months
prior to the Maturity Date (the "Refinance Notification Date"). If Borrowers
fail to deliver such Commitment or Commitments prior to the Refinancing
Notification Date or if such Commitment or Commitments are delivered on or
before the Refinance Notification Date, but lapse, terminate or are otherwise
withdrawn prior to the funding of such Commitment or Commitments and the use of
the proceeds thereof to pay the entire outstanding amount of the Loan (the date
upon which such Commitment or Commitments lapse, terminate or are otherwise
withdrawn is hereinafter referred to as the "Void Commitment Date"), unless the
Indebtedness shall have been paid in full prior to the Refinance Notification
Date or the Void Commitment Date, as the case may be, an Operative Period shall
be in effect and all Excess Property Income shall be applied by Lender pursuant
to Section 2.7.3(f).
2.3.2 Prepayments. The Loan may be prepaid only as provided in the
Note.
2.3.3 Pro Forma Debt Service Coverage Ratio. If on any DSCR
Determination Date, the Pro Forma Debt Service Coverage Ratio, is less than or
equal to 1.2/1.0, then for the period (the "DSCR Restricted Period") commencing
on such DSCR Determination Date and ending on the next DSCR Determination Date
on which the Pro Forma Debt Service Coverage Ratio exceeds 1.2/1.0 all Excess
Property Income for all the Properties shall be deposited in the Central Account
and allocated as provided in Section 2.7.3(g), provided that if a DSCR
Restricted Period and an Operative Period shall both be in effect with respect
to any period of time, such period will be deemed an Operative Period for the
purposes of this Agreement.
2.3.4 Extensions. At the request of Borrower, which request must be
made at least one hundred eighty (180) days prior to the Maturity Date, Lender
shall have the option, in its sole discretion, to extend the maturity of the
Loan to the next
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anniversary of the Maturity Date, provided, however, in no event shall Lender
extend the maturity of the Loan beyond March 1, 2015.
Section 2.4 Release of Individual Properties. Except as set forth in
this Section 2.4, no repayment or prepayment of all or any portion of the
principal of the Loan shall cause, give rise to a right to require, or otherwise
result in, the release of any Lien of any Mortgage on any Individual Property.
2.4.1 Release of Individual Properties. From and after the Lock-Out
Date or in connection with any application by Lender of Loss Proceeds to the
Loan pursuant to Section 2.7.8 and Section 7.2, Borrowers may obtain (i) the
release (in whole but not in part) of an Individual Property from the Lien of
the Mortgage thereon and (ii) the release of such Borrower's obligations under
the Loan Documents (other than those expressly stated to survive satisfaction of
the Indebtedness), upon satisfaction of each of the following conditions:
(a) Lender shall have received payment of an amount equal to the sum
of (i) the then current Allocable Principal Balance for the Individual Property
to be released, (ii) twenty-five percent (25%) of (A) if such release shall
occur on or before the seventh (7th) anniversary of the Closing Date, the
initial Allocable Principal Balance for such Individual Property or (B) if such
release shall occur after such seventh (7th) anniversary of the Closing Date,
the then current Allocable Principal Balance for such Individual Property and
(iii) the amount of any additional reduction in the outstanding principal
balance of the Loan necessary to cause the Adjusted Debt Service Coverage Ratio
to equal at least (A) if such release shall occur on or before the seventh (7th)
anniversary of the Closing Date, the greater of (I) 1.53/1.0 or (II) the ratio
of (x) the Cash Flow Available for Debt Service for all of the Properties for
the twelve (12) month period ending with the last month for which Lender shall
have received financial reports for all of the Properties pursuant to Section
5.1(k) (iv) to (y) twelve (12) times the amount of the payment of Debt Service
payable on the Due Date occurring immediately prior to the date of such release
or (B) if such release shall occur after such seventh (7th) anniversary, the
greater of (I) 1.53/1.0 or (II) the ratio of (x) the Cash Flow Available for
Debt Service for all of the Properties for the twelve (12) month period ending
with the last month for which Lender shall have received financial reports for
all of the Properties pursuant to Section 5.1(k) (iv) to (y) twelve (12) times
the amount of the payment of Debt Service payable on the Due Date occurring
immediately prior to the date of such release (collectively, the "Release
Amount"), together with the Yield Maintenance Premium, if any, payable in
connection with payment of the Release Amount;
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(b) Lender shall have received all other payments of principal,
interest, Yield Maintenance Premiums and other amounts then due and payable
under the Note, this Agreement and the other Loan Documents;
(c) The Borrower in question shall have delivered an Officer's
Certificate to Lender at least thirty (30) days prior to the date the applicable
Individual Property is to be released from the Lien of the applicable Mortgage,
and again on the date of such release, certifying in each case that the
conditions in this Section have been satisfied (or will be satisfied on the date
of such release), with detailed calculations indicating the derivation of the
Adjusted Debt Service Coverage Ratio and of the amounts of the Release Amount,
the Yield Maintenance Premiums and other amounts payable pursuant to
subparagraphs (a) and (b) above, which amounts shall be subject to confirmation
by Lender;
(d) After giving effect to the proposed release, no Default or Event
of Default shall have occurred and be continuing; and
(e) Borrowers shall have submitted to Lender, not less than fifteen
(15) days prior to the date of such release, all documentation Lender reasonably
requires to be delivered by Borrowers in connection with such release, together
with an Officer's Certificate of the Borrower in question certifying that such
documentation (i) is in compliance with all Legal Requirements, (ii) will effect
such release in accordance with the terms of this Agreement, and (iii) will not
impair or otherwise adversely affect the Liens and other rights of Lender under
the Loan Documents and with respect to Properties not being released.
2.4.2 Recalculation of Amortization Payments. Commencing on the
first Due Date after the receipt of any Release Amount, the amount of the Debt
Service payment due on each Due Date shall be adjusted to equal the amount, as
determined by Lender and Borrowers, of the fixed monthly payment necessary to
fully amortize the remaining principal balance of the Loan by February 1, 2015
while paying interest at the Interest Rate on the principal balance of the Loan
outstanding from time to time.
2.4.3 Release Documentation. Lender shall, upon the written request
and at the expense of Borrowers, upon payment in full of all principal,
interest, Yield Maintenance Premiums and all other amounts then due and payable
under the Loan Documents, execute and deliver documents, prepared by Borrower or
Borrower's counsel and in form and substance reasonably satisfactory to Lender,
to release the Lien of the Mortgage from the applicable Individual Property.
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Section 2.5 Interest.
2.5.1 Generally. Borrowers shall pay interest at the Interest Rate
on the outstanding principal balance of the Loan on each Due Date.
2.5.2 Default Rate; Post-Maturity Interest. If Borrowers shall fail
to make any payment of principal, interest, Yield Maintenance Premiums or any
other amount payable by Borrowers under the Note, this Agreement or any other
Loan Documents within the grace period provided with respect to such payment
under Section 8.1 or, if no grace period is provided, on the date on which such
payment is due, whether by acceleration or otherwise, Borrowers shall pay
interest at the Default Rate with respect to such amounts and/or with respect to
the entire unpaid principal balance of the Loan as provided in the Note. The
preceding sentence shall not be construed as an agreement or privilege to extend
the date for payment of any such amounts nor as a waiver of any other right or
remedy accruing to Lender by reason of the occurrence of an Event of Default.
Section 2.6 Payments; Computations.
2.6.1 Making of Payments. Each payment by Borrowers hereunder or
under the Note shall be made directly into the Central Account by wire transfer
of immediately available funds to:
The First National Bank of Chicago
Chicago, Illinois
ABA #000000000
Credit Clearing A/C No. BNF=7521-7623/DES
Ref: 19203932/LSU
or to such other designated bank or place, or in such other manner, as Payee may
from time to time specify in writing. Whenever any payment hereunder or under
the Note shall be stated to be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day.
2.6.2 Computations. Interest payable hereunder or under the Note by
Borrowers shall be computed on the basis of a 360-day year consisting of twelve
(12) months of thirty (30) days each except that interest due and payable for a
period less than a full month shall be calculated by multiplying the actual
number of days elapsed in such period by a daily rate based on said 360-day
year.
2.6.3 Late Payment Charge. If any principal, interest, Yield
Maintenance Premiums or any other sums due under the Loan Documents is not paid
in full within three (3) Business Days of the date on which it is due, Borrowers
shall pay to Lender a Late Payment Charge pursuant to the Note.
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2.6.4 Application of Payments. Unless otherwise expressly provided
herein, all payments received on account of the Indebtedness shall be applied,
first, to accrued and unpaid interest, second, to the outstanding principal
balance of the Loan, third, to any Yield Maintenance Premium then due and
payable and thereafter to other amounts payable under the Loan Documents.
Section 2.7 Central Account; Deposits and Distributions.
2.7.1 Deposits in Central Account. (a) On each Due Date, Borrower
shall pay, or cause to be paid, to Lender, by wire transfer directly to the
Central Account as provided in Section 2.6.1 or as otherwise directed by Lender,
(i) the payment of Debt Service then due and payable, together with all Yield
Maintenance Premiums and other amounts payable under the Note, this Agreement
and the other Loan Documents, (ii) the Basic Carrying Costs Monthly Installment,
(iii) the FF&E Monthly Installment, (iv) during any Operative Period, DSCR
Restricted Period or Franchise Restricted Period, (A) the Operations and
Maintenance Expense Monthly Installment and (B) all Excess Property Income and
(v) if such Due Date is the first Due Date occurring after each of the first
four anniversaries of the Closing Date, the Required Repairs Installment, all
for application as provided herein.
(b) On each Due Date, Lender shall allocate all funds deposited into
the Central Account to the Debt Service Payment Sub-Account, the Basic Carrying
Costs Sub-Account, the Engineering Escrow Sub-Account (if such Due Date is the
first Due Date occurring after each of the first four anniversaries of the
Closing Date) and the FF&E Sub-Account, in that order, provided that during any
Operative Period, any DSCR Restricted Period or any Franchise Restricted Period,
Lender shall allocate such funds pursuant to Section 2.7.3.
(c) Upon commencement of any Operative Period, any DSCR Restricted
Period or any Franchise Restricted Period, Lender may deliver a Consultant's
Notice to Consultant. Borrowers shall cause Consultant, upon receipt by
Consultant of a notice from Lender so directing Consultant (a "Consultant's
Notice") until directed otherwise by Lender, to collect all Revenue (determined
for the purposes of this provision on a cash basis) relating to each Individual
Property and pay over all such Revenue or, in the case of the Xxxxxx Xxxxxxx
Penn Manager, all amounts that would otherwise be payable to Xxxxxx Xxxxxxx Penn
Borrower under the Xxxxxx Xxxxxxx Penn Management Agreement, to Lender by wire
transfer directly to the Central Account as provided in Section 2.6.1 or as may
be otherwise designated from time to time by Lender. From and after the day
immediately following the date on which a Consultant's Notice is received,
Consultant shall collect all of the Revenue of each of the Individual Properties
and shall deposit such funds directly into the Central Account within One
-24-
(1) Business Day after receipt thereof or, in the case of the Xxxxxx Xxxxxxx
Penn Manager, when required to be paid to the Xxxxxx Xxxxxxx Penn Borrower
pursuant to the Xxxxxx Xxxxxxx Penn Management Agreement. Upon termination of
the applicable Operative Period, DSCR Restricted Period or Franchise Restricted
Period, provided no other such Period shall then be in effect, Lender shall
deliver a notice to Consultant directing Consultant that from and after the date
of such notice Consultant shall not be required to collect and pay over Revenue
pursuant to the applicable Consultant's Notice.
(d) Borrowers pledge, assign and grant a security interest to Lender
in all amounts deposited into the Central Account, as security for payment of
all sums due under the Loan and the performance of all other terms and covenants
of the Loan Documents and this Agreement on Borrowers' part to be paid and
performed.
2.7.2 Establishment of Central Account and Sub-Accounts. Lender
shall establish and maintain the Central Account with the Bank, in the name of
Lender, as secured party. The Central Account shall be an Eligible Account and
shall include (a) the Debt Service Payment Sub-Account, (b) the Basic Carrying
Costs Sub-Account, (c) the FF&E Sub-Account, (d) the Engineering Escrow
Sub-Account, (e) the Operations and Maintenance Expense Sub-Account, (f) the
Curtailment Reserve Fund Sub-Account and (g) the Capital Expenditure Sub-Account
(collectively, the "Basic Sub-Accounts"), to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of
this Agreement. The Central Account and the Basic Sub-Accounts shall be under
the sole dominion and control of Lender. Borrowers hereby irrevocably direct and
authorize Lender to deposit funds into and withdraw funds from the Central
Account and the Basic Sub-Accounts in accordance with the terms and conditions
of this Agreement. Borrowers shall have no direct right of withdrawal in respect
of the Central Account or the Basic Sub-Accounts, but shall have the right to
receive disbursements as provided herein. Each transfer of funds to be made
hereunder shall be made only to the extent that funds are on deposit in the
Central Account or the affected Basic Sub-Account and Lender shall have no
responsibility to make additional funds available in the event that funds on
deposit are insufficient.
2.7.3 Funding of Basic Sub-Accounts During Operative Period, DSCR
Restricted Period and Franchise Restricted Period. During any Operative Period,
DSCR Restrictive Period and any Franchise Restricted Period, Lender shall
allocate all funds deposited into the Central Account each day among the Basic
Sub-Accounts in the following priority:
(a) first, to the Basic Carrying Costs Sub-Account, until an amount
equal to the sum of (i) an amount equal to the Basic Carrying Costs Monthly
Installment for any prior month(s), to the extent not previously paid, plus (ii)
an
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amount equal to the Basic Carrying Cost Monthly Installment due on the current
Due Date, has been allocated to the Basic Carrying Costs Sub-Account;
(b) second, to the Operations and Maintenance Expense Sub-Account,
until an amount equal to the sum of (i) an amount equal to the Operations and
Maintenance Expense Monthly Installment for any prior month(s), to the extent
not previously paid, plus (ii) an amount equal to the Operations and Maintenance
Expense Monthly Installment due on the current Due Date, has been allocated to
the Operations and Maintenance Expense Sub-Account;
(c) third, to the Debt Service Payment Sub-Account, until an amount
equal to the sum of (i) the amount, if any, deducted therefrom during any
preceding month to pay any amounts due to any other Basic Sub-Account in
accordance with the provisions of this Section 2.7 to the extent not previously
reimbursed by such other Basic Sub-Account to the Debt Service Payment
Sub-Account, plus (ii) an amount equal to the payment of Debt Service for any
prior month(s), to the extent not previously paid, plus (iii) an amount equal to
the payment of Debt Service for the current Due Date (and any other amounts
required to be paid under the Note on such Due Date), has been allocated to the
Debt Service Payment Sub-Account;
(d) fourth, but only if all of the Required Repair Installments have
not yet been paid, to the Engineering Escrow Sub-Account, until an amount equal
to the sum of (i) the amount, if any, deducted therefrom during any preceding
month to pay any amounts due to any other Basic Sub-Account in accordance with
the provisions of this Section 2.7 to the extent not previously reimbursed by
such other Basic Sub-Account to the Engineering Escrow Sub-Account, plus (ii) an
amount equal to the payment of any portion of any Required Repairs Installment
previously payable, to the extent not previously paid, plus (iii) an amount
equal to the aggregate of the Required Repairs Installment, if any, payable
hereunder on the first Due Date occurring after the next anniversary of the
Closing Date divided by the number of Due Dates to occur between the date such
funds are received and the first Due Date occurring after the next anniversary
of the Closing Date, inclusive;
(e) fifth, to the FF&E Sub-Account, until an amount equal to the sum
of (i) the amount, if any, deducted therefrom during any preceding month to pay
any amounts due to any other Basic Sub-Account in accordance with the provisions
of this Section 2.7 to the extent not previously reimbursed by such other Basic
Sub-Account to the FF&E Sub-Account, plus (ii) an amount equal to the FF&E
Monthly Installment for any prior month(s), to the extent not previously paid,
plus (iii) an amount equal to the FF&E Monthly Installment due on the current
Due Date, has been allocated to the FF&E Sub-Account;
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(f) sixth, but only during any Operative Period, to the Curtailment
Reserve Fund Sub-Account to be applied pursuant to Section 2.7.7(g), unless
Lender shall elect, in its sole discretion, to disburse all or any portion of
such funds in payment of any Operating Expenses or any other charges affecting
all or a portion of the Properties, upon such terms and conditions as Lender
shall elect; and
(g) seventh, but only during any DSCR Restricted Period or any
Franchise Restricted Period, to the Capital Expenditure Sub-Account, to be
disbursed as provided in Section 2.7.7(f).
2.7.4 Deposits During Operative Period, DSCR Restricted Period and
Franchise Restricted Period. If on any Due Date during any Operative Period,
DSCR Restricted Period or any Franchise Restricted Period, the funds then on
deposit in the Central Account shall be less than the amount of funds which are
required to be deposited therein pursuant to Section 2.7.3(a) through (d) for
such Due Date, Borrowers shall be obligated to deposit immediately available
funds (in addition to Revenue) by wire transfer directly into the Central
Account as provided in Section 2.6.1, on such Due Date (subject to the grace
period provided in Section 8.1 (a) (i)), in the amount of such deficiency, and
failure to make such deposit shall be an Event of Default hereunder. Lender may
(but shall not be obligated to) withdraw funds from the Debt Service Payment
Sub-Account the Engineering Escrow Sub-Account, the FF&E Sub-Account, the
Curtailment Reserve Sub-Account or the Capital Expenditure Sub-Account (in each
case to the extent funds are available in each such Basic Sub-Account) and pay
any deficiency in any other Basic Sub-Account, in such order of priority as
Lender determines in Lender's sole discretion. Lender shall not withdraw or
disburse funds from the Basic Carrying Costs Sub-Account or the Operation and
Maintenance Sub-Account except as expressly provided in Section 2.7.7(b) and
(c).
2.7.5 Eligible Investments. Lender shall direct the Bank to invest
and reinvest any balance in the Central Account from time to time in Eligible
Investments, provided that (a) the maturities of the Eligible Investments on
deposit in the Central Account, if fixed, shall, to the extent such dates are
ascertainable, be selected and coordinated to become due not later than the day
before any disbursements from the Central Account and the Basic Sub-Accounts
must be made, (b) all such Eligible Investments shall be held in the name of
Lender (as secured party) and be under the sole dominion and control of Lender,
and (c) no Eligible Investment shall be made unless Lender shall retain a
perfected first priority Lien in such Eligible Investment securing the
Indebtedness and all filings and other actions necessary to ensure the validity,
perfection, and priority of such Lien have been taken and Lender shall have been
provided with an opinion of counsel satisfactory to Lender confirming the
perfection of such Lien in such Eligible
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Investment. All funds in the Central Account that are invested in a Eligible
Investment shall be deemed to be held in the Central Account for all purposes of
this Agreement and the other Loan Documents. Neither Lender nor the Bank shall
have any liability for any loss in investments of funds in the Central Account
that are invested in Eligible Investments and no such loss shall affect
Borrowers' obligation to fund, or liability for funding, the Central Account, as
the case may be. Borrowers agree that Borrowers shall include all such earnings
on the Central Account as income of the Borrowers for federal and applicable
state tax purposes.
2.7.6 Interest on Accounts. All interest paid or other earnings on
the Eligible Investments made hereunder shall be deposited into the Central
Account and shall be allocated to the Basic Sub-Account which contained the
funds with respect to which such interest was paid or other earnings earned. All
such interest and earnings shall be treated as Revenue. Except during a DSCR
Restricted Period, a Franchise Restricted Period, an Operative Period or any
period when an Event of Default has occurred and is continuing, all such
interest paid or other earnings earned with respect to funds in the Basic
Carrying Costs Sub-Account and the Debt Service Payment Sub-Account shall, after
each anniversary of the Closing Date, at Lender's option, either be paid over to
Borrowers or, on notice to Borrowers, credited against the amounts payable by
Borrowers on the next Due Date. Except for amounts to be paid or credited to
Borrowers pursuant to the preceding sentence, all interest paid or earnings
earned with respect to funds on deposit in any Basic Sub-Account shall be
retained in such Basic Sub-Account and disbursed pursuant to Section 2.7.7.
2.7.7 Payment of Debt Service; Disbursement of Funds in Basic
Sub-Accounts; Excess Property Income. Transfers and payments from the Central
Account and the Basic Sub-Accounts shall be made in accordance with the
following provisions:
(a) Payment of Debt Service. On each Due Date during the term of the
Loan, Lender shall withdraw from the Debt Service Payment Sub-Account and apply
to the Indebtedness an amount equal to the sum of all payments of Debt Service
and any other amounts payable to Lender under the Note, this Agreement or the
other Loan Documents, provided that if any such payment of Debt Service or other
amounts is past due, Lender shall make such withdrawal immediately upon
allocation of funds to the Debt Service Payment Sub-Account.
(b) Payment of Basic Carrying Costs. Borrower shall use its best
efforts to cause all notices of the amount and due date of payments of Basic
Carrying Costs to be sent to Lender at least ten (10) Business Days prior to
such due date. Provided that (i) Lender has received notice of the amount and
due date of any payment of Basic Carrying
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Costs and (ii) there are sufficient funds available in the Basic Carrying Costs
Sub-Account, Lender shall make such payment of Basic Carrying Costs directly to
the Governmental Authority or insuror entitled thereto. If the amount in the
Basic Carrying Costs Sub-Account is not sufficient to pay the Basic Carrying
Costs, Borrowers shall pay to Lender, within five (5) Business Days of written
notice, an amount which Lender shall estimate as sufficient to make up the
deficiency. Notwithstanding anything contained herein to the contrary, Borrowers
may only request disbursements from the Basic Carrying Costs Sub-Account to pay
premiums on the Policies to the extent of amounts deposited in the Basic
Carrying Costs Sub-Account pursuant to clause (ii) of the definition of "Basic
Carrying Costs Monthly Installment". Nevertheless, Lender shall also have the
right, without Borrowers' request, but not the obligation, to disburse amounts
in the Basic Carrying Costs Sub-Account in payment of premiums for the Policies
if Borrowers shall fail to pay the same when due.
(c) Payment of Operating Expenses. (i) Borrowers hereby agree to
pay, or cause to be paid, when due all Operating Expenses with respect to the
Properties (whether or not any amounts on deposit in the Operations and
Maintenance Expense Sub-Account shall be sufficient for such purpose); provided
that any Borrower may contest any Operating Expenses which it in good faith
disputes, provided that (A) no Lien shall attach to the applicable Individual
Property (except for the Lien of any Impositions being contested by Borrowers as
permitted under the Loan Documents), (B) such Borrower shall have demonstrated
to Lender's reasonable satisfaction that it has established adequate reserves to
provide for payment of such Operating Expense, if ultimately required, and (C)
failure to pay such Operating Expense shall not have a material adverse effect
on the operation of such Individual Property. Borrowers may, not more frequently
than twice in any calendar month, give Lender written notice, at least five (5)
Business Days prior to the due date with respect to any Operating Expenses,
requesting that Lender pay such Operating Expenses on behalf of such Borrower on
or prior to the due date thereof, which notice shall be accompanied by (I) an
Officer's Certificate for each Borrower making such request, specifying the
Operating Expenses for which payment is requested and certifying that all
requested amounts are properly payable hereunder and (II) evidence reasonably
satisfactory to Lender that all Operating Expenses for which disbursements have
previously been requested have been paid. Provided that (A) Lender has received
the Consultant's Certifications for the most recent period for which the same
are due, and (B) there are sufficient funds available in the Operations and
Maintenance Expense Sub-Account, Lender shall, as Lender in its sole discretion
shall determine, either make such payments out of such Basic Sub-Account or
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disburse funds from such Basic Sub-Account to the applicable Borrower or to the
Consultant on behalf of such Borrower for the purpose of making payment of such
Operating Expenses within five (5) Business Days of receipt of the documentation
required hereby; provided that if an Event of Default with respect to any
amounts payable under the Loan Documents shall have occurred and be continuing
or the Indebtedness shall have been accelerated, Lender shall disburse payments
of Operating Expenses only to third parties entitled to payment thereof.
(ii) Notwithstanding anything to the contrary contained herein,
Lender shall not be obligated to make any disbursement from the Operations and
Maintenance Sub-Account to pay Basic Carrying Costs, Debt Service, the costs of
any FF&E Replacements, the costs of Required Repairs or legal fees in connection
with any dispute arising under any Loan Document or any management or consulting
fees in excess of four percent (4%) of Revenues with respect to the applicable
Individual Property, except as may be required under the Xxxxxx Xxxxxxx Penn
Management Agreement.
(d) Payment of Costs of Required Repairs. (i) Borrowers shall pay
all costs in connection with the performance of the Required Repairs (without
regard to the amount of money then available in the Engineering Escrow
Sub-Account). With respect to any Required Repair for which the cost set forth
on Exhibit E annexed hereto is less than the greater of (A) $75,000 or (B) one
and one-half percent (1.5%) of the initial Allocable Principal Balance for the
Individual Property in question (a "Minor Required Repair"), the applicable
Borrower may submit one request for a disbursement from the Engineering Escrow
Sub-Account of the actual cost of such Required Repair, provided that all
requests by Borrowers for disbursement for Minor Required Repairs in any
calendar month shall be submitted simultaneously and each such request shall be
accompanied by an Officer's Certificate specifying the costs to be paid from
such disbursement and certifying that all requested amounts are properly payable
hereunder and that (I) all costs of Required Repairs for which disbursements
have previously been made hereunder have been paid to the extent due and payable
and (II) any amounts disbursed by Lender for the costs of Required Repairs that
are not yet due and payable have been reserved by the applicable Borrower for
payment of such costs. Borrowers shall cause Borrowers' Accountant to deliver to
Lender, on or before the first day of each February, May, August and November of
each Fiscal Year, commencing on May 1, 1995, a certificate of Borrowers'
Accountant (an "Accountant's Certificate") stating that (A) Borrowers'
Accountant has reviewed (I) all Officer's Certificates delivered by Borrowers
pursuant to the preceding sentence during the quarter of Borrowers' Fiscal Year
last ended, (II) the invoice from the appropriate
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contractor or supplier for each expenditure for which an advance from the
Engineering Escrow Sub-Account was requested pursuant to such Officer's
Certificates, (III) the cancelled check written by the applicable Borrower in
payment of each such invoice, (IV) all receipts and other evidence of payment
received by Borrower with respect to such payments and (V) such evidence as
Borrowers' Accountant, in its professional judgment, deems necessary to
establish that all amounts requested by Borrowers to be disbursed from the
Engineering Escrow Sub-Account during such quarter of the Fiscal Year have in
fact been expended for purposes permitted under this Agreement and (B) all
amounts disbursed by Lender during such quarter of Borrowers' Fiscal Year (I)
(x) were in fact expended in payment of amounts payable out of funds on deposit
in the Engineering Escrow Sub-Account under the terms of this Agreement or (y)
have been reserved by the applicable Borrower for payment of such amounts or
(II), if any such disbursements were not used to pay amounts properly payable
hereunder or reserved for future payment of such amounts, specifying the amounts
so misapplied, provided that upon completion of any Minor Required Repair and
payment in full of costs payable in connection therewith, Borrowers shall not be
required to account for any excess funds disbursed from the Engineering
Sub-Account in connection with such Minor Required Repair. If any such
Accountant's Certificate shall indicate that amounts disbursed from the
Engineering Escrow Sub-Account were misapplied, Borrowers shall immediately
deposit in the Central Account, for allocation to the Engineering Escrow
Sub-Account, funds equal to the amount so misapplied.
(ii) With respect to any Required Repair for which the cost set
forth on Exhibit E annexed hereto is not less than the greater of (A) $75,000 or
(B) one and one-half percent (1.5%) of the initial Allocable Principal Balance
for the Individual Property in question (a "Major Required Repair") the
applicable Borrower may from time to time, but not more frequently than once in
any calendar month, request a disbursement from the Engineering Escrow Account
of amounts to pay for the costs of such Major Required Repair, accompanied by an
Officer's Certificate specifying the costs to be paid from such disbursement and
certifying that all such costs are properly payable hereunder, provided that (I)
prior to commencement of such Major Required Repair, Borrower shall have
submitted to Lender a budget for such Major Required Repair and a plan detailing
the time frames for each stage of such work, the percentage of the total Major
Required Repair represented by each stage and the percentage of the budget
allocated to each such stage; (II) such request shall be accompanied by (x) a
certification of the Independent contractor setting forth the percentage of the
Major Required Repair then completed and (y) evidence reasonably satisfactory to
Lender that all costs of such
-31-
Major Required Repair for which disbursements have previously been made
hereunder have been paid; and (III) Lender shall not be required to advance any
funds from the Engineering Escrow Sub-Account with respect to any Major Required
Repair to the extent that the aggregate funds advanced for such item, expressed
as a percentage of the costs allocated for such item on Schedule E, would exceed
the percentage of the work on such item then completed.
(iii) Provided that (A) no Event of Default has occurred and is
continuing, (B) Lender has received the Consultant's Certifications and the
Accountant's Certificates for the most recent period for which the same are due
and the conditions set forth in subparagraphs (i) and (ii) above have been met,
Lender shall disburse to the applicable Borrower the funds in the Engineering
Escrow Sub-Account with respect to such Individual Property to pay the costs of
the Required Repairs, up to the amount set forth on Schedule E annexed hereto
for each such Required Repair, subject to Borrowers' right to request
disbursement of excess funds pursuant to clause (v) below; provided that Lender
may condition the disbursement of the final twenty-five percent (25%) of the
funds in the Engineering Escrow Sub-Account with respect to any Major Required
Repair upon an inspection by Lender or its agent, at Borrowers' expense, to
confirm that such item has been completed.
(iv) After completion of all Short-Term Required Repairs at any
Individual Property and after completion of all Long-Term Required Repairs at
any Individual Property, Borrowers shall submit to Lender (A) (i) a certificate
from the Engineer with respect to any of the Short-Term Required Repairs or
Long-Term Required Repairs at such Individual Property that were Major Required
Repairs or (ii) an Officer's Certificate with respect to all of the Short-Term
Required Repairs or Long-Term Required Repairs at such Individual Property that
were not Major Required Repairs stating that all such Short-Term Required
Repairs or Long-Term Required Repairs, as applicable, at the applicable
Individual Property have been completed in good and workmanlike manner and in
accordance with all Legal Requirements, that all Permits necessary for the use
or occupancy of the applicable Individual Property upon completion of such
Required Repairs have been obtained (with copies of all such Permits attached),
(B) at Lender's option, a title search for such Individual Property indicating
that such Individual Property is free from all liens, claims and other
encumbrances not previously approved by Lender, and (C) such other evidence as
Lender shall reasonably request that the Short-Term Required Repairs or
Long-Term Required Repairs, as applicable, Required Repairs at such Individual
Property have been completed and paid for, including, without limitation, copies
of lien waivers.
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(v) If, after completion of all Short-Term Required Repairs with
respect to any Individual Property, a portion of the funds deposited in the
Engineering Escrow Sub-Account with respect to Short-Term Required Repairs at
such Individual Property remains on deposit the applicable Borrower may submit
an Officer's Certificate stating that all Short-Term Required Repairs with
respect to such Individual Property have been completed in compliance herewith,
that all amounts payable in connection with such Short-Term Required Repairs
have been paid and that the applicable Borrower is entitled to receive a
disbursement of the remaining funds on deposit in the Engineering Escrow
Sub-Account with respect to the Short-Term Required Repairs at such Individual
Property. Lender shall, at Lender's option, pay such funds remaining in the
Engineering Escrow Sub-Account applicable to Short-Term Required Repairs at such
Individual Property to such Borrower or, upon notice to Borrowers, apply such
amount to the amounts payable hereunder on the next Due Date.
(vi) If, after completion of all Required Repairs with respect to
any Individual Property, a portion of the funds deposited in the Engineering
Escrow Sub-Account with respect to such Individual Property remains on deposit
and/or any Required Repairs Installments are not yet due and payable with
respect to such Individual Property, the applicable Borrower may submit an
Officer's Certificate stating that all Required Repairs with respect to such
Individual Property have been completed in compliance herewith, that all amounts
payable in connection with such Required Repairs have been paid and that the
applicable Borrower is entitled to receive a disbursement of the remaining funds
on deposit in the Engineering Escrow Sub-Account with respect to such Individual
Property and/or that any Required Repairs Installments with respect to such
Individual Property not yet due and payable should be waived. Lender shall, at
Lender's option, pay such funds remaining in the Engineering Escrow Sub-Account
applicable to such Individual Property to such Borrower or, upon notice to
Borrowers, apply such amount to the amounts payable hereunder on the next Due
Date, and any Required Repairs Installments with respect to such Individual
Property not yet due and payable shall be waived.
(vii) Upon the occurrence of an Event of Default with respect to any
amounts payable under the Loan Documents or the acceleration of the
Indebtedness, Lender may apply the funds on deposit in the Engineering Escrow
Sub-Account, as Lender in its sole discretion may determine, either (A) in
payment of any costs of Required Repairs or any other charges affecting all or
any portion of the Properties or (B) in payment, in such order as Lender may
elect, of the Indebtedness then due and payable, whether by acceleration or
otherwise; provided, however, that no such application
-33-
shall be made by operation of law or otherwise until actually made by Lender as
herein provided.
(e) Disbursement from FF&E Sub-Account. (i) Borrowers shall pay the
costs of those items listed on Schedule F annexed hereto (the "FF&E
Replacements") (without regard to any amounts on deposit in the FF&E
Sub-Account). Borrowers may, not more frequently than once in any calendar month
and not with respect to any requested disbursement of less than $1,000, give
Lender written notice requesting that Lender pay for the costs of any FF&E
Replacements performed or to be performed in accordance with Section 7.4 hereof,
which notice shall be accompanied by an Officer's Certificate from each Borrower
performing FF&E Replacements that are subject to such request stating (A) the
specific FF&E Replacements for which the disbursement is requested, (B) the
quantity and price of each item purchased, if the FF&E Replacement includes the
purchase or replacement of specific items, (C) the price of all materials
(grouped by type or category) used or to be used in any FF&E Replacement other
than the purchase or replacement of specific items, (D) the cost of all
contracted labor or other services applicable to each FF&E Replacement for which
such request for disbursement is made, (E) that all FF&E Replacements have been
or will be made in accordance with all Legal Requirements and (F) that all costs
incurred in connection with the FF&E Replacements subject to such disbursement
are costs payable from the FF&E Sub-Account pursuant to the terms of this
Agreement.
(ii) Borrowers shall cause Borrowers' Accountant to deliver to
Lender, on or before the first day of each February, May, August and November of
each Fiscal Year, commencing on May 1, 1995, an Accountant's Certificate stating
that (A) Borrowers' Accountant has reviewed (I) all Officer's Certificates
delivered by Borrowers pursuant to subparagraph (i) above during the quarter of
Borrowers' Fiscal Year last ended, (II) the invoice from the appropriate
contractor or supplier for each expenditure for which an advance from the FF&E
Sub-Account was requested pursuant to such Officer's Certificates, (III) the
cancelled check written by the applicable Borrower in payment of each such
invoice, (IV) all receipts and other evidence of payment received by Borrower
with respect to such payments and (V) such evidence as Borrowers' Accountant, in
its professional judgment, deems necessary to establish that all amounts
requested by Borrowers to be disbursed from the FF&E Sub-Account during such
quarter of the Fiscal Year have in fact been expended for purposes permitted
under this Agreement and (B) all amounts disbursed by Lender during such quarter
of Borrowers' Fiscal Year were in fact expended in payment of amounts payable
out of funds on deposit in the FF&E Sub-Account under the terms of this
Agreement. If Borrowers' Accountant is unable to deliver the Accountant's
-34-
Certificate containing the certifications required under the preceding sentence
when due, or if any Accountant's Certificate contains any incorrect Statement
(either occurrence is herein referred to as an "Accountant's Certificate
Default"), thereafter the Officer's Certificate delivered in connection with any
request for a disbursement from the FF&E Sub-Account shall, in addition to all
the other matters described in clause (i) above, (Y) state that all costs for
which such disbursement is requested have been paid in full by Borrowers and (Z)
be accompanied by copies of invoices for all items or materials purchased and
all contracted labor or services provided and each request shall include copies
of lien waivers or other evidence satisfactory to Lender of payment of all such
amounts.
(iii) If (A) the cost of an FF&E Replacement exceeds $10,000 and (B)
the contractor performing such FF&E Replacement requires periodic payments
pursuant to terms of a written contract, a copy of which has been delivered to
Lender, a request for disbursement from the FF&E Sub-Account may be made from
time to time to make such periodic payments when payable under such contract,
provided (I) all other conditions in this Agreement for disbursement have been
satisfied, (II) funds remaining in the FF&E Sub-Account are, in Lender's
judgment, sufficient to complete such FF&E Replacement and other FF&E
Replacements when required, and (III) each contractor or subcontractor receiving
payments under such contract shall have provided a waiver of lien with respect
to amounts which have been paid to that contractor or subcontractor and, if
requested by Lender, the applicable Borrower shall have delivered copies of such
lien waivers to Lender.
(iv) Except for requests for disbursement described in clause (iii)
above, each request for disbursement from the FF&E Sub-Account shall be made
only after completion of the FF&E Replacement for which disbursement is
requested and Borrowers, collectively, shall make only one simultaneous
submission of such requests in any calendar month. Borrowers shall provide
Lender evidence of completion of the FF&E Replacements subject to such requests
satisfactory to Lender in its reasonable judgment and the Officer's Certificates
submitted in connection with such requests shall state that all costs of the
FF&E Replacements subject thereto have been paid in full.
(v) Provided that (A) no Event of Default has occurred and is
continuing, (B) Lender has received the Consultant's Certifications and the
Accountant's Certificate for the most recent period for which the same are due,
(C) the requirements set forth in this clause (e) and Section 7.4 of this
Agreement are satisfied and (D) there are sufficient funds available in the FF&E
Sub-Account, Lender shall disburse to the applicable Borrowers amounts from the
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FF&E Sub-Account necessary to pay the actual costs of the FF&E Replacements,
provided that after the occurrence of an Accountant's Certificate of Default,
such disbursements shall be made only to reimburse Borrowers for actual costs of
FF&E Replacements that Borrowers have demonstrated pursuant to subparagraph (ii)
above have already been paid and that are properly payable from the FF&E
Sub-Account under this Agreement. Lender shall not be obligated to make
disbursements from the FF&E Sub-Account to pay, or to reimburse Borrowers for,
the costs of routine maintenance to an Individual Property or for costs which
are to be disbursed from the Required Repair Fund.
(vi) Upon the occurrence of an Event of Default with respect to any
amounts payable under the Loan Documents or acceleration of the Indebtedness,
Lender may apply the funds on deposit in the FF&E Sub-Account, as Lender in its
sole discretion may determine, either (A) in payment of the costs of any FF&E
Replacements or other charges affecting all or any portion of the Properties or
(B) in payment, in such order as Lender may elect, of the Indebtedness then due
and payable, whether by acceleration or otherwise, any Yield Maintenance Premium
payable with respect to any portion applied in reduction of the principal
balance of the Loan; provided, however, that no such application shall be deemed
to have been made by operation of law or otherwise until actually made by Lender
as herein provided.
(f) Disbursement of Funds in Capital Expenditure Sub-Account. (i)
Notwithstanding anything to the contrary contained in the Note, this Agreement
or the other Loan Documents, Lender may elect to (a) retain the funds on deposit
in the Capital Expenditure Sub-Account as additional collateral to secure
repayment of the Indebtedness and performance of the other obligations of
Borrowers hereunder or (b) disburse such funds in payment of the costs and
expenses of any improvement, repair or replacement approved by Lender, in its
sole discretion, to any Individual Property, the cost of which Borrower would be
required to capitalize for federal income tax purposes, provided, however, that
notwithstanding the foregoing, if the Pro Forma Debt Service Coverage Ratio has
been (I) less than or equal to 1.2/1.0 on two (2) consecutive DSCR Determination
Dates, exclusive, with respect to any DSCR Restricted Period, of the initial
DSCR Determination Date on which the Pro Forma Debt Service Coverage Ratio fell
below 1.2/1.0, Lender may elect to apply any funds on deposit in the Capital
Expenditure Sub-Account as a prepayment of the principal balance of the Loan or
other amounts payable in connection therewith, on the next occurring Due Date,
with no Yield Maintenance Payable in connection with such application, or (II)
at least equal to 1.3/1.0 for four (4) consecutive DSCR Determination Dates,
Lender shall, at Lender's option, either pay over any funds on deposit in the
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Xxxxxxx Xxxxxxxxxxx Sub-Account to Borrowers or credit such funds, on notice to
Borrowers, against the amounts payable by Borrowers on the next Due Date,
provided that nothing contained in this clause (II) shall limit Lenders rights
elsewhere in this paragraph (f)(i). If any Franchise Restricted Period shall
terminate prior to the occurrence of an Event of Default hereunder and no DSCR
Restricted Period is then in effect, Lender shall, at Lender's option, either
pay over any funds on deposit in the Capital Expenditure Sub-Account to
Borrowers or credit such funds, on notice to Borrowers, against the amounts
payable by Borrowers on the next Due Date.
(ii) Each Borrower may, not more frequently than once in each
calendar month, give Lender written notice requesting that Lender pay the costs
of, or reimburse such Borrower for payment of the costs of any such capital
improvement, repair or replacement, together with an Officer's Certificate from
such Borrower stating the amounts of charges for which disbursement is requested
and that such charges are properly payable hereunder, and, if required,
satisfactory evidence of the progress and/or completion of such capital
improvement and the cost thereof, satisfactory evidence that any and all
completed capital improvement, repair or replacement work complies with Legal
Requirements and lien waivers, copies of bills, invoices and other evidence as
may be required by Lender to establish that the costs of any such capital
improvement, repair or replacement for which reimbursement is requested, or for
which disbursement has been previously made, have been paid by such Borrower.
(g) Disbursement of Funds in Curtailment Reserve Fund Sub-Account.
Lender shall apply the funds on deposit in the Curtailment Reserve Fund
Sub-Account as a prepayment of the principal balance of the Loan, together with
any Yield Maintenance Premium and other amounts payable in connection therewith
on the next occurring Due Date.
2.7.8 Payment of Loss Proceeds; Borrowers' Right to Release. (a) In
the event of a Casualty with respect to an Individual Property, Lender and
Borrowers shall cause all proceeds under any insurance policy required to be
maintained by Borrowers ("Insurance Proceeds") to be paid by the respective
insurers directly into the Central Account, except for Insurance Proceeds
relating to Equipment subject to Equipment Leases that require such Insurance
proceeds be paid to the lessor thereunder. Unless Lender shall elect or be
required to make such Insurance Proceeds available to Borrowers for Restoration
pursuant to Section 7.2.2 (a), Lender shall (after deducting out Lender's cost
of recovering such Insurance Proceeds, including, without limitation, reasonable
attorneys' fees) apply such Insurance Proceeds on the next occurring Due Date as
a prepayment of the principal balance of the Loan in accordance with the terms
of the
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Note. If such Insurance Proceeds are to be made available for Restoration of
such Individual Property, Lender shall hold such funds in a segregated bank
account at the Bank, which, to the extent feasible in the context of the
administration of construction disbursement draw requests, shall be interest
bearing, and shall disburse such funds in accordance with Section 7.2.2(b).
(b) In the event of a Condemnation to an Individual Property, Lender
and Borrowers shall cause all of the proceeds in respect of any Condemnation
("Condemnation Proceeds") to be paid directly into the Central Account. Unless
Lender shall elect or be required to make such Condemnation Proceeds available
to Borrowers pursuant to Section 7.2.3 (a), Lender shall (after deducting out
Lender's cost of recovering such Condemnation Proceeds, including, without
limitation, reasonable attorneys' fees) apply such Condemnation Proceeds on the
next occurring Due Date as a prepayment of the principal balance of the Loan in
accordance with the terms of the Note. If such Condemnation Proceeds are to be
made available to Borrowers, Lender shall hold any such funds not immediately
disbursed to Borrowers in a segregated bank account at the Bank, which, to the
extent feasible in the context of the purposes for which Lender shall disburse
such funds, shall be interest-bearing, and shall disburse such funds in
accordance with Section 7.2.3(a).
(c) If any Insurance Proceeds or Condemnation Proceeds
(collectively, "Loss Proceeds") are received by Borrowers, such Loss Proceeds
shall be received in trust for Lender, shall be segregated from other funds of
Borrowers, and shall be forthwith paid into the Central Account, to be applied
or disbursed in accordance with the foregoing.
(d) If Lender shall apply any Loss Proceeds as a prepayment of the
principal balance of the Loan as provided above, the applicable Borrower may
elect to have the Individual Property in question released from the Lien of the
Mortgage, notwithstanding anything to the contrary contained herein, without
payment of any Yield Maintenance Premium and whether or not the Lock-Out Date
shall have occurred, provided that (i) (A) the Loss Proceeds applied by Lender
toward payment of the Loan shall be at least equal to the then current Allocable
Principal Balance for such Individual Property or (B) Borrowers shall pay to
Lender any amount by which the then current Allocable Principal Balance of such
Individual Property exceeds the amount of Loss Proceeds so applied toward
payment of the Loan and (ii) the conditions set forth in Section 2.4.1(d) and
(e) shall have been satisfied.
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III. CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Closing.
The obligation of Lender to make the Loan hereunder is subject to
the fulfillment by Borrowers, or waiver by Lender, of the following conditions
precedent no later than the Closing Date:
(a) Representations and Warranties; Compliance with Conditions. The
representations and warranties of Borrowers contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date, and no event shall have occurred and be continuing that
would constitute, by reason of the execution, delivery and performance of this
Agreement or the other Loan Documents, the grant of the Liens on the Properties
contemplated hereby, the making of the Loan, or the consummation of the other
transactions contemplated by this Agreement or the other Loan Documents, a
Default or an Event of Default; and Borrowers shall be in compliance in all
material respects with all terms and conditions set forth in this Agreement and
in each other Loan Document on its part to be observed or performed.
(b) Loan Agreement, Note, Environmental Agreement and Contribution
Agreement. Lender shall have received an original of this Agreement, the Note,
the Environmental Indemnity and the Contribution Agreement in each case duly
executed and delivered on behalf of each of the Borrowers.
(c) Delivery of Mortgages; Assignment of Leases; Franchise Agreement
Letters and Assignment of Consulting Agreement; Title Insurance; Reports;
Leases.
(i) Mortgage, Assignment of Leases, Franchise Agreement Letters and
Assignment of Consulting Agreement. Lender shall have received from each
Borrower fully executed and acknowledged counterparts of the Mortgage, the
Assignment of Leases, the Franchise Agreement Letters (except with respect to
the Xxxxxx Xxxxxxx Penn Property and the Royce Property) and the Assignment of
Consulting Agreement relating to each of the Individual Properties and evidence
that counterparts of the Mortgage and Assignment of Leases for each Individual
Property have been delivered to the title company for recording so as to
effectively create upon such recording, in the reasonable judgment of Lender,
valid and enforceable Liens upon such Properties, of the requisite priority, in
favor of Lender (or such other trustee as may be required or desired under local
law), subject only to the Permitted Encumbrances and such other Liens as are
permitted pursuant to the Loan Documents.
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(ii) Title Insurance. Lender shall have received the Title Insurance
Policy for each Mortgage, or a marked, re-dated and recertified title commitment
establishing the form of the Title Insurance Policy and providing title
insurance effective as of the Closing Date, issued by First American Title
Insurance Company and dated as of the Closing Date, with endorsements,
reinsurance and direct access agreements acceptable to Lender. Such policies
shall (A) provide coverage in amounts satisfactory to Lender, (B) insure Lender
that the relevant Mortgage creates a valid first priority Lien on the Individual
Property, free and clear of all exceptions from coverage other than Permitted
Encumbrances and standard exceptions and exclusions from coverage (as modified
by the terms of any endorsements), (C) contain such endorsements and affirmative
coverages as Lender may request, and (D) name Lender. The Title Insurance
Policies shall be assignable without charge. Lender also shall have received
evidence that all premiums in respect of such title policies have been paid.
(iii) Survey. Lender shall have received a current survey of each
Individual Property in form and content satisfactory to Lender, prepared by a
professional and properly licensed land surveyor satisfactory to Lender in
accordance with the 1992 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Survey (the "Survey Requirements") and certified to the issuer of the
Title Insurance Policy, Lender and its successors and assigns by a certification
in the form set forth in paragraph 8 of the Survey Requirements. Such survey
shall reflect the same legal description contained in the Title Insurance Policy
relating to such Individual Property referred to in clause (ii) above and shall
meet the requirements of an "Urban Survey as set forth in the Survey
Requirements and shall include items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11 and 13 set
forth on Table A of the Survey Requirements.
(iv) Insurance. Lender shall have received certified copies of the
Policies required hereby, together with original certificates issued by the
insuror evidencing such Policies, naming Lender as an additional insured or loss
payee, together with evidence satisfactory to Lender that such policies are in
full force and effect, that all premiums then payable for the existing policy
period have been paid and that such policies may not lapse or be terminated
without at least thirty (30) days notice to Lender.
(v) Environmental Reports. Lender shall have received a Phase I
environmental report and, if indicated, a Phase II environmental report in
respect of each Individual Property, in each case satisfactory to Lender.
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(vi) Zoning. With respect to each Individual Property, Lender shall
have received, at Lender's option, (i) letters or other evidence with respect to
such Individual Property from the appropriate municipal authorities (or other
Persons acceptable to Lender) concerning applicable zoning laws, or (ii) a
zoning opinion letter from Borrowers' local counsel, in form and substance
satisfactory to Lender.
(vii) Encumbrances. Borrowers shall have taken or caused to be taken
such actions to provide Lender, as of the Closing Date, with a valid, perfected,
first priority Lien with respect to the Mortgage in each Individual Property,
subject only to applicable Permitted Encumbrances, and Lender shall have
received satisfactory evidence thereof.
(d) Related Documents. Each additional Loan Document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly authorized, executed and delivered by all parties
thereto and Lender shall have received and approved certified copies thereof.
(e) Delivery of Organizational Documents. On or before the Closing
Date, Borrowers shall deliver or cause to be delivered to Lender copies
certified by each of the respective Borrowers of all organizational
documentation related to such Borrower and/or its formation, structure,
existence, good standing and/or qualification to do business, as Lender may
request in its sole discretion, including, without limitation, good standing
certificates, qualifications to do business in the appropriate jurisdictions,
resolutions authorizing the entering into of the Loan and incumbency
certificates.
(f) Opinions of Borrowers' Counsel. Lender shall have received (i)
the opinion of Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A.,
special counsel for Borrowers, with respect to non-consolidation issues (the
"Non-Consolidation Opinion"), (ii) opinions of counsel for Borrowers with
respect to due formation of Borrowers, due authorization, execution and delivery
of the Note, this Agreement and the other Loan Documents and enforceability of
the Note, this Agreement and the other Loan Documents and (iii) opinions of
counsel for Borrowers (who shall be satisfactory to Lender), in the States in
which the Individual Properties are located with respect to (A) enforceability
of the Mortgage, the Assignment of Leases and the other Loan Documents with
respect to the Individual Properties located in such State, (B) perfection of
Lender's security interest in the Revenue of such Individual Properties, (C)
perfection of Lender's security interest in all liquor licenses, restaurant
licenses and hotel operating licenses with respect to each such Individual
Property, if permitted under the laws of such State and (D) adequacy of Permits
listed on an affidavit of an officer of each Borrower with respect to each such
Individual Property, to the knowledge
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of such counsel, each in form and substance satisfactory to Lender, dated as of
the Closing Date and addressing such matters as Lender may reasonably request.
(g) Budgets. Borrower shall have delivered the Capital Expenditures
Budget and the Annual Operating Budget for each Individual Property for the
prior Fiscal Year and the current Fiscal Year (on a forecast basis).
(h) Basic Carrying Costs. Borrower shall have paid all Basic
Carrying Costs relating to each of its Properties which are due and payable
through the Closing Date, including, without limitation, all Impositions
relating to each of the Borrowers or the Individual Properties, which amounts
may be funded with proceeds of the Loan.
(i) Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated by this
Agreement and other Loan Documents shall be reasonably satisfactory in form and
substance to Lender, and Lender shall have received all such counterpart
originals or certified copies of such documents as Lender may reasonably
request.
(j) Evidence of Insurance Premiums. Borrowers shall have delivered,
or caused to be delivered, the Insuror's Letter.
(k) Cash Management Agreement. Borrowers shall have delivered to
Lender a certified copy of the Cash Management Agreement.
IV. REPRESENTATIONS AND WARRANTIES
Section 4.1 Borrowers' Representations.
Borrowers represent and warrant that:
(a) Organization. Each Borrower has been duly organized and is
validly existing and in good standing under the laws of the jurisdiction of its
formation. Each Borrower and any general partner of any Borrower has requisite
corporate or partnership power and authority to (i) own its properties, (ii)
transact the businesses in which it is now engaged, (iii) execute and deliver
this Agreement, the Note, the Mortgage and the other Loan Documents and (iv)
consummate the transactions contemplated hereby and thereby. Each Borrower is
duly qualified to do business and is in good standing in the jurisdiction where
its respective Individual Property is located and in each other jurisdiction
where it is required to be so qualified in connection with the ownership,
maintenance, management and operation of its Individual Property, except where
the failure to be so qualified or in good standing would not have a material
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adverse effect on the financial condition or the business of such Borrower or
the ownership, condition or operation of its Individual Property (a "Borrower
Material Adverse Effect"). Each Borrower possesses all rights, licenses, permits
and authorizations, governmental or otherwise, necessary to entitle it to own
its properties and to transact the businesses in which it is now engaged. The
sole business of each Borrower is the ownership, management and operation of
Individual Property.
(b) Authorization; Enforceability. The execution, delivery and
performance of Borrowers' obligations under this Agreement, the Note, the
Mortgage and the other Loan Documents has been duly authorized by all requisite
corporate or partnership action of each Borrower, including, where required, the
consent of its partners or shareholders and directors. This Agreement, the Note,
the Mortgage and such other Loan Documents have been duly executed and delivered
by or on behalf of Borrowers and constitute legal, valid and binding obligations
of Borrowers enforceable against Borrowers in accordance with their respective
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
rights of creditors generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(c) No Conflicts. The execution, delivery and performance of this
Agreement, the Note, the Mortgage and the other Loan Documents by Borrowers will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
(other than pursuant to the Loan Documents) upon any of the property or assets
of any Borrower pursuant to the terms of any indenture, mortgage, deed of trust,
loan agreement, partnership agreement or other agreement or instrument to which
any Borrower is a party or to which any of Borrowers' property or assets is
subject, which conflict, breach, default or imposition of Lien would have a
Borrower Material Adverse Effect, nor will such action result in any violation
of the provisions of any statute or any order, rule or regulation of any
Governmental Authority having jurisdiction over any Borrower or any of
Borrowers' Properties or assets, and any consent, approval, authorization,
order, registration or qualification of or with any Governmental Authority
required for the execution, delivery and performance by Borrowers of this
Agreement, the Note, the Mortgage or any other Loan Documents has been obtained
and is in full force and effect.
(d) Litigation. Except as set forth on Schedule L, there are no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority for which service has been made on any Borrower or any Affiliate or,
to the knowledge of any Borrower, threatened against or affecting any Borrower
or any of the Properties, which actions, suits or proceedings are not covered by
insurance and, if determined against such Borrower or any of the Properties,
would materially adversely affect the
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condition (financial or otherwise) or business of such Borrower or the condition
or ownership of any of the Properties.
(e) Agreements. No Borrower is a party to any agreement or
instrument or subject to any restriction which would materially adversely affect
such Borrower or any of the Properties, or Borrower's business, properties or
assets, operations or condition, financial or otherwise. No Borrower is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party or by which such Borrower or any of the Properties are bound, except for
any defaults that would not have a Borrower Material Adverse Effect.
(f) Title. Each Borrower has good, marketable and indefeasible title
in fee to the real property comprising part of its respective Individual
Properties and good title to the balance of such Properties, free and clear of
all Liens, restrictions, covenants, easements and other matters affecting title
whatsoever, except the Permitted Encumbrances. The Mortgage, when properly
recorded in the real property records of the county or parish where each
Individual Property is located, and the other Collateral Security Documents,
together with any Uniform Commercial Code financing statements required to be
filed in connection therewith, will create (i) a valid, perfected first priority
Lien on the applicable Individual Property, subject only to Permitted
Encumbrances and (ii) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Leases) and other
collateral described therein, all in accordance with the terms thereof, in each
case subject only to any applicable Permitted Encumbrances. There are no
outstanding options or rights of first refusal affecting any of the Properties.
There are no claims for payment for work, labor or materials affecting any of
the Properties which are or may become a lien prior to, or of equal priority
with, the Liens created by the Loan Documents. All of the Permitted Encumbrances
reflected in the Title Insurance Policies are customary exceptions for
commercial mortgage lending transactions involving properties similar to the
Properties.
(g) No Bankruptcy Filing. No Borrower is contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of such Borrower's assets or
property, and no Borrower has knowledge of any Person contemplating the filing
of any such petition against it. Except for the Bankruptcy Order, no Borrower is
currently the subject of any bankruptcy or similar proceeding under any state or
federal law and none of the Properties is currently under the jurisdiction of
any bankruptcy court or other court having similar jurisdiction.
(h) Full and Accurate Disclosure. No statement of fact made by any
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material
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fact or omits to state any material fact necessary to make statements contained
herein or therein not misleading. There is no material fact presently known to
any Borrower which has not been disclosed to Lender which adversely affects, or
might reasonably be expected to adversely affect, any of the Properties or the
business, operations or condition (financial or otherwise) of any Borrower.
(i) No Plan Assets. No Borrower is an "employee benefit plan," as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the
assets of any Borrower constitutes or will constitute "plan assets" of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101.
(j) Compliance. Each Borrower and each of the Properties and the use
thereof comply in all material respects with all applicable Legal Requirements,
including, without limitation, parking requirements. No Borrower is in default
or violation of any order, writ, injunction, decree or demand of any
Governmental Authority, the violation of which would materially adversely affect
the condition (financial or otherwise) or business of such Borrower.
(k) Contracts. There are no material contracts, excluding Leases,
Equipment Leases, Franchise Agreements and cable television contracts affecting
any Individual Property that would be binding upon Lender or its designee after
foreclosure or transfer in lieu of foreclosure of such Individual Property that
are not terminable on one month's notice or less without cause and without
penalty or premium.
(l) Financial Information. All financial data of the Borrowers,
including, without limitation, the statements of cash flow and income and
operating expense, that have been delivered to Lender (i) are true, complete and
correct in all material respects, (ii) fairly represent the financial condition
of the Properties and Borrowers as of the date of such reports, and (iii) have
been prepared in accordance with GAAP, consistently applied throughout the
periods covered, except as disclosed therein. As of the date of this Agreement,
no Borrower has any material contingent liability, liability for taxes (other
than taxes not yet due and payable) or other unusual or forward commitment.
Since June 30, 1994, there has been no material adverse change in the results of
operations of any of the Properties or the assets, liabilities or financial
condition of any Borrower. Except as disclosed in such financial statements, no
Borrower has incurred any obligation or liability, contingent or otherwise,
which would materially adversely affect its business operations or any of the
Properties.
(m) Condemnation. No Borrower or Affiliate of any Borrower has
received notice of any proceeding with respect to Condemnation, nor, to
Borrower's best knowledge, is any
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Condemnation contemplated, with respect to all or any portion of any of the
Properties.
(n) Federal Reserve Regulations. No part of the proceeds of the Loan
will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.
(o) Utilities and Public Access. Each Individual Property has rights
of access to public ways and is served by water, gas, electric, telephone,
sanitary sewer and storm drain facilities adequate to service such Properties
for their respective intended uses. To the knowledge of Borrowers, except as
disclosed in the surveys, all public utilities necessary or convenient to the
full use and enjoyment of each Individual Property are located in the public
right-of-way abutting such Individual Property, and all such utilities are
connected so as to serve such Individual Property without passing over other
property. All roads necessary for access to each Individual Property for its
current purposes have been completed and dedicated to public use and accepted by
all Governmental Authorities. No road providing access to any of the Properties
is currently (i) closed or severely restricted in use or (ii) to the best of any
Borrower's knowledge, contemplated to be relocated, closed or severely
restricted in use.
(p) Not a Foreign Person. No Borrower is a "foreign person" within
the meaning of 1445(f) (3) of the I.R.C.
(q) Separate Lots. Each Individual Property is comprised of one (1)
or more parcels, which constitutes a separate tax lot and does not constitute a
portion of any other tax lot not a part of such Individual Property. No
Individual Property is assessed jointly with any other real property
constituting a separate tax lot or with any personal property not constituting
part of such Individual Property such that the lien of any taxes which may be
levied against such personal property shall be assessed or levied or charged as
a lien on such Individual Property.
(r) Assessments. There are no pending or, to the best of Borrowers'
knowledge, proposed special or other assessments for public improvements or
otherwise affecting any of the Properties, except for Permitted Encumbrances,
nor, to the best of Borrowers' knowledge, are there any contemplated
improvements to any of the Properties that may result in such special or other
assessments.
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(s) No Defenses. As of the Closing Date, this Agreement, the Note
and the other Loan Documents are not subject to any right of rescission,
set-off, counterclaim or defense by Borrowers, including the defense of usury,
and no Borrower has asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.
(t) No Prior Assignment. Lender is the assignee of all Borrowers'
interests under the Leases and there are no prior assignments of any of the
Leases or any portion of the Revenue which are presently outstanding.
(u) Insurance. Borrower has obtained and has delivered to Lender the
Policies, or certified copies thereof, together with original certificates
evidencing such Policies, reflecting the insurance coverages, amounts and other
requirements set forth herein, which Policies are in full force and effect and
may not lapse or be terminated without at least thirty (30) days notice to
Lender or ten (10) days for nonpayment of premium.
(v) Use of Properties. Each Individual Property is used exclusively
for hotel purposes and other appurtenant and related uses, except for those
portions of the Xxxxxx Xxxxxxx Penn Property which are, as of the Closing Date,
leased or offered for lease for commercial uses not related to the use of such
Property as a hotel.
(w) Certificate of Occupancy; Permits and Licenses. Borrowers have
obtained all permits, licenses, approvals and franchises, including, without
limitation, certificates of occupancy, hotel licenses and liquor licenses (the
"Permits"), required by Legal Requirements in order to use and operate each of
the Properties for hotel use as currently operated, except for Permits the
failure of which to so obtain would not have a Borrower Material Adverse Effect.
All such Permits are (i) listed on Schedule G annexed hereto, (ii) have been
validly issued and are in full force and effect and (iii) are issued in or have
been transferred into the name of the related Borrower or the related Individual
Property, except as indicated on Schedule G. Where permitted by Legal
Requirements, each Borrower has granted Lender a valid, perfected first priority
security interest in all such Permits. All fees due and payable with respect to
each Permit have been paid. There are no proceedings pending or threatened which
may result in the revocation, suspension or, to the best of Borrowers'
knowledge, termination of any Permit. Each Individual Property is operated in
compliance, in all material respects, with the related Permits.
(x) Flood Zone. None of the Improvements on any Individual Property
are located in a flood hazard area as defined by the Federal Emergency
Management Agency, except for the Individual Properties identified on Schedule D
as the Radisson
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Inn New Orleans located in Kennar, Louisiana and the Holiday Inn Hilton Head on
Hilton Head Island, South Carolina.
(y) Physical Condition. To the best of Borrowers' knowledge, except
as disclosed in the Building Evaluation Reports, each Individual Property,
including, without limitation, all buildings, parking facilities, sidewalks,
storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all other Improvements thereon are in
operating condition, order and repair in all material respects. To the best of
Borrowers' knowledge, except as disclosed in the Building Evaluation Reports,
there exists no structural or other material defect in any of the Properties,
whether latent or otherwise. Neither any Borrower nor any Affiliate of any
Borrower has received written notice from any insurance company or bonding
company of any defects or inadequacies in any of the Properties, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.
(z) Solvency. The fair saleable value of each Borrower's assets
(taking into account the rights and obligations of each Borrower against each of
the other Borrowers pursuant to the Contribution Agreement) exceeds and will,
immediately following the making of the Loan, exceed such Borrower's total
liabilities, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. The fair saleable value of each Borrower's assets
(taking into account the rights and obligations of each Borrower against each of
the other Borrowers pursuant to the Contribution Agreement) is and will,
immediately following the making of the Loan, be greater than such Borrower's
probable liabilities, including its contingent liabilities, on its debts as such
debts become absolute and matured. In the good faith judgment of each Borrower,
such Borrower's assets constitute, and immediately following the making of the
Loan will constitute, reasonably sufficient capital to carry out its business as
conducted or as proposed to be conducted. No Borrower intends to, or believes
that it will, incur debts and liabilities (including, without limitation,
contingent liabilities and other commitments) beyond its ability to pay such
debts as they mature.
(aa) Casualty. No Individual Property has sustained any material
loss or interference with its operations from fire, explosion, flood or other
calamity, or from any labor dispute or any action, order or decree by any
Governmental Authority.
(bb) Components of Value. The portions of the Properties
constituting real property interests have a fair market value as of the date
hereof at least equal to seventy percent (70%) of the original principal balance
of the Loan. The
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portion of each Individual Property constituting interests in real property have
a fair market value as of the date hereof at least equal to seventy percent
(70%) of the Allocable Principal Balance for such Individual Property.
(cc) Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements in connection with the
transfer of the Properties to Borrower have been paid. All mortgage, mortgage
recording, stamp, intangible or other similar tax required to be paid by any
Person under applicable Legal Requirements in connection with the execution,
delivery, recordation, filing, registration, perfection or enforcement of any of
the Loan Documents, including, without limitation, the Mortgage encumbering each
Individual Property have been paid, and, under current Legal Requirements, the
Mortgage is enforceable in accordance with its terms by Lender (or any
subsequent holder thereof) against each Individual Property.
(dd) Single-Purpose. Borrowers hereby represent and warrant to, and
covenant with, Lender that, as of the date hereof and until such time as the
Indebtedness shall be paid in full, except as otherwise provided herein, in the
other Loan Documents or in the Related Consulting Agreement or the Cash
Management Agreement, each Borrower, and if any such Borrower is a limited
partnership, the general partner of such Borrower:
(i) does not own and shall not own any asset other than the related
Individual Property or, in the case of a general partner, its interest in such
Borrower;
(ii) is not engaged and shall not engage in any business other than
those necessary for the ownership, use, management or operation of the such
Individual Property and any transactions entered into in connection with such
business with any Affiliate of such Borrower or such general partner, other than
any such transactions embodied in the Loan Documents and the Related Consulting
Agreement, shall be entered into upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arms-length basis with third parties other than an Affiliate of such Borrower
or such general partner;
(iii) has not incurred, created or assumed any currently outstanding
debt, and shall not incur, create or assume any debt, secured or unsecured,
direct or contingent (including guaranteeing any obligation), other than the
Indebtedness, trade indebtedness incurred in the ordinary course of such
Borrower's or such general partner's business (including the financing of
insurance premiums) and the Permitted Encumbrances, except as may be otherwise
expressly permitted hereunder;
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(iv) has not made any currently outstanding, and shall not make any,
loans or advances to any third party (including any Affiliate of such Borrower
or such general partner), provided that (A) the execution and delivery of the
Loan Documents, the payment by any Borrower of any amounts payable to Lender
thereunder and the disbursement by Lender of any amounts hereunder shall not be
deemed a violation of this provision, regardless of to which Individual Property
any such amounts relate, provided that Borrowers shall account for all amounts
advanced by each Borrower on behalf of any other Borrower pursuant to the Cash
Management Agreement and (B) participation by such Borrower under the Cash
Management Agreement shall not be deemed a violation of this provision;
(v) is and shall be solvent and paying its liabilities (including,
as applicable, reasonable allocations of personnel and overhead expenses) from
its assets as the same shall become due;
(vi) has done or caused to be done and shall do or cause to be done
all things necessary to preserve its existence, and shall not, nor shall any
general partner thereof, as applicable, amend, modify or otherwise change its
articles of incorporation or by-laws or partnership agreement, as applicable
without the prior written consent of Lender, in its sole discretion;
(vii) shall observe all corporate or partnership formalities, as
applicable, and conduct and operate its business as presently conducted and
operated and in accordance with the assumptions set forth in the
Non-Consolidation Opinion;
(viii) shall maintain books and records and bank accounts separate
from those of its Affiliates or any other Person;
(ix) shall maintain a separate business office at its Individual
Property;
(x) shall be, and at all times shall hold itself out to the public
as, a legal entity separate and distinct from any other entity, including any
Affiliate thereof, provided that each Borrower may identify its Individual
Property as associated with the applicable Franchisor;
(xi) shall file its own tax returns, if required by the Code;
(xii) shall maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations, which capital may include amounts
deposited by such Borrower under the Cash Management Agreement;
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(xiii) shall not seek or consent to the liquidation, dissolution or
winding up, in whole or in part, of such Borrower or such general partner, nor
enter into any consolidation, merger, joint venture, syndication or other
combination;
(xiv) shall not commingle its funds and other assets with those of
any Affiliate or any other Person, except as may be provided herein, in the
other Loan Documents or in the Cash Management Agreement;
(xv) has caused, and at all times shall cause, there to be at least
one duly appointed member of the board of directors (an "Independent Director")
of such Borrower or such general partner who has not been at the time of such
individual's appointment, and may not have been at any time during the preceding
two years (A) a stockholder of, or an officer, director (other than with respect
to such Independent Director's service as director of such Borrower, such
general partner or any other Borrower hereunder) or employee of, such Borrower
or any of its Affiliates, or such general partner or any of its Affiliates, (B)
a customer or supplier to such Borrower or any of its Affiliates, or to such
general partner or any of its Affiliates, (C) a person or other entity
controlling any such stockholder, supplier or customer, or (D) a member of the
immediate family of any such stockholder, officer, employee, supplier or
customer or any other director of such Borrower or such general partner. As used
in this subsection (dd), the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise;
(xvi) has not caused, and shall not cause, the board of directors of
such Borrower or such general partner to take any action which, under the terms
of any certificate of incorporation, by-laws or any voting trust agreement with
respect to such Borrower's common stock, requires the unanimous affirmative vote
of one hundred percent (100%) of the members of the board of directors, unless
at the time of such action there shall be at least one member who is an
Independent Director;
(xvii) shall comply with the provisions of its articles of
incorporation or by-laws or partnership agreement, as applicable; and
(xviii) shall use separate and distinct invoices and stationery and
checks that indicate, by printed or typed identification, that such Borrower is
the entity for which payment is made.
(ee) Enforceability of Franchise and Consulting Agreement. Each of
the Franchise Agreements, the Related Consulting Agreement and the Xxxxxx
Xxxxxxx Penn Management Agreement has been duly authorized, executed and
delivered or
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duly assumed by the applicable Borrower or Borrowers and constitutes a valid and
legally binding instrument enforceable against such Borrower or Borrowers in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
(ff) Compliance with Franchise Agreements. A true and complete copy
of each Franchise Agreement (including all amendments, agreements, side letters
and other documents relating thereto) has been delivered to Lender and there are
no other documents or agreements between any Borrower or any Franchisor with
respect to any of its Properties. All amounts due and payable under the
Franchise Agreements through the Closing Date have been paid, and to Borrowers'
knowledge, there is no default by either party under any Franchise Agreement and
no event has occurred and is continuing which, with the passage of time and/or
the giving of notice, would constitute a default or event of default by either
party under any Franchise Agreement, except in any case for defaults that would
not have a Borrower Material Adverse Effect. Any work on any Individual Property
required by the Franchisor under any Franchise Agreement to have been completed
prior to the date hereof has been completed and either (i) has been approved by
such Franchisor or (ii) Borrowers know of no reason why such work should not be
approved. All necessary consents, if any, of any Franchisor to the transactions
contemplated by this Agreement and the other Loan Documents have been obtained.
(gg) Compliance with Consulting Agreements. A true and complete copy
of the Related Consulting Agreement and the Xxxxxx Xxxxxxx Penn Management
Agreement (including, in each case, all amendments, agreements, side letters and
other documents relating thereto) has been delivered to Lender and there are no
other agreements or documents providing for the management or the supervision of
any Individual Property. All amounts due and payable under the Related
Consulting Agreement and the Xxxxxx Xxxxxxx Penn Management Agreement as of the
Closing Date have been paid and, to the best of Borrowers' knowledge, there is
no default in any material respect by any party under the Related Consulting
Agreement or the Xxxxxx Xxxxxxx Penn Management Agreement, and no event has
occurred and is continuing which, with the passage of time and/or the giving of
notice, would constitute a default or event of default in any material respect
by any party under either the Related Consulting Agreement or the Xxxxxx Xxxxxxx
Penn Management Agreement.
(hh) Equipment Leases. True and complete copies of all Equipment
Leases (including all amendments, agreements, side letters and documents
relating thereto) have been delivered to Lender. All Equipment Leases are listed
on Schedule H annexed hereto and, except as set forth on Schedule H, all of such
Equipment Leases are unmodified. All of the Equipment Leases are
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in full force and effect and there is no default in any material respect by any
Borrower thereunder, nor, to the best knowledge of Borrowers, by the lessor or
other party thereunder and, to the best knowledge of Borrowers, no event has
occurred and is continuing which, with the passage of time and/or the giving of
notice, would constitute a default or event of default in any material respect
under any such Equipment Leases. Except for items subject to the Equipment
Leases, all furniture, fixtures, equipment and personal property used in
connection with the ownership, operation, management and maintenance of the
Properties is owned by the Borrowers.
(ii) No Encroachments. To the best knowledge of the Borrowers,
except as disclosed in the Surveys or Title Insurance Policies, all improvements
comprising a portion of each Individual Property lie wholly within the boundary
and building restriction lines of such Individual Property and no improvements
on adjoining properties encroach upon any Individual Property in any respect.
(jj) Leases. Schedule I, annexed hereto, sets forth all Leases
affecting any part of the Properties. All such Leases are in full force and
effect and have not been amended or modified except as set forth on Schedule I.
To the best of Borrowers' knowledge, no material default has occurred and is
continuing thereunder.
(kk) Royce Hotel. There is no Franchise Agreement in effect with
respect to the Royce Property and Borrower has the right to use the name "Royce"
in connection with the operation thereof without a license by or agreement with
any other party. Upon taking title to the Royce Property, by foreclosure, deed
in lieu of foreclosure or otherwise, Lender will have full right to use the
"Royce" name.
(ll) Cash Management Agreement. The Cash Management Agreement is in
full force and effect and has not been modified, amended or terminated and there
are no other agreements, other than the Consulting Agreements, among Borrowers
and any Affiliates regarding the transfer of funds between Borrowers and any
Affiliates.
(mm) Bankruptcy Order. No Borrower nor any Affiliate of Borrowers is
in default in any material respect under its obligations under the Bankruptcy
Order.
Section 4.2 Survival of Representations.
Borrowers agree that all of the representations and warranties of
Borrowers set forth in Section 4.1 and elsewhere in this Agreement and in the
other Loan Documents shall survive for so long as any amount remains owing to
Lender under this Agreement or any of the other Loan Documents. All
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representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by Borrowers shall be deemed to have been relied
upon by Lender notwithstanding any investigation heretofore or hereafter made by
Lender or on its behalf.
V. AFFIRMATIVE COVENANTS
Section 5.1 Borrowers' Covenants.
From the date hereof and until payment and performance in full of
all obligations of Borrowers under the Loan Documents or the earlier release of
the Lien of the Mortgage (and all related obligations) from all the Properties
in accordance with the terms of this Agreement and the other Loan Documents,
Borrowers hereby covenant and agree with Lender that:
(a) Existence; Compliance with Legal Requirements and Insurance
Requirements. Each Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and corporate franchises and comply with all Legal
Requirements applicable to it and its Individual Property. Each Borrower shall
at all times use its best efforts to maintain, preserve and protect all its
corporate franchises and trade names and preserve all the remainder of its
property used or useful in the conduct of its business and shall keep all of its
Individual Property, including, without limitation, all Equipment, in
satisfactory working order and repair and in compliance with all Legal
Requirements and Insurance Requirements, and from time to time make, or cause to
be made, all reasonably necessary repairs, renewals, replacements, betterments
and improvements thereto in order to maintain such Individual Property in
compliance with the prevailing standards for a hotel property of similar age,
size, construction and the then applicable franchise affiliation in the
metropolitan area in which such Individual Property is located, all as more
fully provided in the Mortgage.
(b) Impositions and Other Charges. Each Borrower shall pay all
Impositions, now or hereafter levied or assessed or imposed against its
Individual Property or any part thereof, subject to Lender's obligation to
disburse funds from the Basic Carrying Costs Sub-Account pursuant to Section
2.7.7(b) and shall pay all water, sewer, maintenance and other charges now or
hereafter levied or assessed or imposed against such Individual Property or any
part thereof (the "Other Charges") as same become due and payable. No Borrower
shall suffer, and each Borrower shall promptly cause to be paid and discharged,
any Lien whatsoever which may be or become a lien or charge against Individual
Property other than Permitted Encumbrances, and shall promptly pay for all
utility services provided to its Individual Property. Each Borrower shall
furnish to Lender or its designee
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upon request, receipts for the payment, or other evidence reasonably
satisfactory to Lender of payment, of such Impositions, Other Charges and said
utility services prior to the date the same shall become delinquent, except with
respect to amounts that Lender is obligated to disburse pursuant to Section
2.7.7(b). After prior written notice to Lender, a Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Impositions or Other Charges, provided that (i) no Event
of Default has occurred and is continuing, (ii) such proceeding shall suspend
the collection of the Impositions or Other Charges from the applicable
Individual Property, (iii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
such Borrower or the related Individual Property is subject and shall not
constitute a default thereunder, and (iv) such Borrower shall have furnished
such security as may be required in the proceeding, or as may be reasonably
requested by Lender, to insure the payment of any such Impositions or Other
Charges, together with all interest and penalties thereon.
(c) Litigation. Each Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened
against such Borrower which might materially adversely affect such Borrower's
condition (financial or otherwise) or its business or its Individual Property.
(d) Access to Premises. Borrowers shall permit agents,
representatives and employees of Lender to inspect any of the Properties or any
part thereof at reasonable hours upon reasonable advance notice.
(e) Notice of Default. Each Borrower shall promptly advise Lender of
any material adverse change in such Borrower's condition, financial or
otherwise, or of the occurrence of any default or Event of Default of which such
Borrower has knowledge.
(f) Cooperate in Legal Proceedings. Borrowers shall cooperate fully
with Lender with respect to any proceedings before any Governmental Authority
with respect to Borrowers or the Properties which may in any way affect the
rights of Lender hereunder or any rights obtained by Lender under any of the
other Loan Documents and, in connection therewith, permit Lender, at its
election and at Borrowers' expense, to participate in any such proceedings.
(g) Perform Loan Documents. Each Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions of, and shall pay
when due all costs, fees and expenses to the extent required under the Loan
Documents executed and delivered by, or applicable to, such Borrower.
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(h) Insurance Benefits. Each Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any proceeds of any insurance lawfully or
equitably payable in connection with its Individual Property, and Lender shall
be reimbursed for any expenses incurred in connection therewith (including
reasonable attorneys' fees and disbursements, and the payment by such Borrower
of the expense of an appraisal on behalf of Lender if reasonably requested by
Lender in case of a fire or other casualty affecting its Individual Property or
any part thereof) out of such insurance proceeds.
(i) Further Assurances; Supplemental Mortgage Affidavits. (i)
Borrowers shall, at Borrowers' sole cost and expense:
(A) furnish to Lender all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by Borrowers pursuant to the terms of the Loan Documents or reasonably requested
by Lender in connection therewith;
(B) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable to evidence, preserve and/or protect, and to maintain Lender's
perfected lien upon, and security interest in, the collateral (including,
without limitation, the Central Account and all funds on deposit therein) at any
time securing or intended to secure the obligations of Borrowers under the Loan
Documents, as Lender may reasonably require; and
(C) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time.
(ii) The Lien created by the Mortgage is intended to encumber each
Individual Property on a joint and several basis to the full extent of the
Indebtedness. As of the date hereof, Borrowers represent that they have paid all
state, county and municipal recording and all other taxes imposed upon the
execution and recordation of the Mortgage against each of the Properties based
upon the foregoing and such security is not limited by the Allocable Principal
Balance for any Individual Property. If at any time Lender determines, based on
applicable law, that Lender is not being afforded the maximum amount of security
available from any one or more of the Properties as a direct or indirect result
of applicable taxes not having been paid with respect to any such Properties,
Borrowers will execute, acknowledge and deliver to Lender, immediately upon
Lender's request, supplemental affidavits increasing the amount of the
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Indebtedness for which all applicable taxes have been paid to an amount
determined by Lender to be equal to the lesser of (a) the greater of the fair
market value of the applicable Individual Property (i) as of the Closing Date
and (ii) as of the date such supplemental affidavits are to be delivered to
Lender, and (b) the amount of the Indebtedness, and Borrower shall, on demand,
pay any additional taxes required in connection therewith.
(j) Management of Mortgaged Property. Each Borrower covenants and
agrees with Lender that (i) its Individual Property will be managed at all times
(A) by the Xxxxxx Xxxxxxx Penn Manager pursuant to the Xxxxxx Xxxxxxx Penn
Management Agreement with respect to the Xxxxxx Xxxxxxx Penn Property or by the
Related Consultant with respect to the Individual Property identified on
Schedule D as the Radisson Inn New Orleans located in Kennar, Louisiana pursuant
to the applicable Related Consulting Agreement or (B) in consultation with the
Related Consultant pursuant to the Related Consulting Agreement with respect to
each other Individual Property, (ii) immediately upon the occurrence of a fifty
percent (50%) or more change in control of the Related Consultant (a "Consultant
Control Change"), Borrower will promptly give Lender notice thereof (a
"Consultant Control Notice") and (iii) any Related Consulting Agreement may be
terminated by Lender (A) For Cause (as defined below) at any time, (B) at any
time after the occurrence and during the continuance of an Event of Default with
respect to any amounts payable hereunder or under the Note, the Mortgage or the
other Loan Documents, (C) upon commencement of any foreclosure proceeding with
respect to the applicable Individual Property and (D) after any Consultant
Control Change with respect to the applicable Consultant if the Rating Agency
has failed to confirm, after written request, in writing that as a result of
such Consultant Control Change the then current rating of the Certificates will
not be downgraded, withdrawn or otherwise adversely affected. Upon such
termination, a substitute managing agent shall be appointed by the applicable
Borrower, subject to Lender's approval, in Lender's sole discretion, for such
Individual Property. As used in this subsection (j), the term "control", means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of Consultant, whether through
ownership of voting securities, by contract or otherwise, and the term "For
Cause" means on account of Consultant's gross negligence, willful misconduct or
fraud or Consultant's default beyond the expiration of any applicable notice or
grace period in the performance of its obligations under the applicable
Consulting Agreement. The Consulting Agreements shall be subject and subordinate
in all respects to the Lien and to the terms, covenants and provisions of the
Mortgage and the other Loan Documents in accordance with those certain
Assignments of Consulting Agreements, dated as of the date hereof. Provided no
Event of Default has occurred and is then continuing hereunder, Consultant shall
be entitled to collect fees under the Consulting Agreement, provided that any
such fees in excess of four percent (4%) of Revenues shall not be
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paid or collected unless all amounts then payable under the Loan Documents shall
have been paid in full and Operating Expenses are being paid consistent with
Borrowers' practices in effect as of the Closing Date and Borrowers shall not
reasonably expect future Revenue to be insufficient to pay Operating Expenses
accrued or thereafter accruing. Borrowers further covenant and agree that
Borrowers shall require the Consultant to maintain at all times during the term
of the Loan worker's compensation insurance as required by Governmental
Authorities. Each Borrower shall perform its obligations under the Consulting
Agreements.
(k) Financial Reporting.
(i) Borrowers will keep and maintain or will cause to be kept and
maintained on a Fiscal Year basis, in accordance with GAAP, proper and accurate
books, records and accounts reflecting all of the financial affairs of Borrowers
and all items of income and expense in connection with the operation on an
individual basis of each Individual Property and in connection with any services
or Equipment provided in connection with the operation thereof, whether such
income or expense be realized by any Borrower or by any other Person whatsoever,
excepting lessees unrelated to and unaffiliated with any Borrower who have
leased from a Borrower portions of any Individual Property for the purpose of
occupying the same. Lender shall have the right from time to time at all times
during normal business hours upon reasonable notice to examine such books,
records and accounts at the office of any Borrower or other Person maintaining
such books, records and accounts and to make such copies or extracts thereof as
Lender shall desire. After the occurrence of an Event of Default, Borrowers
shall pay any reasonable costs and expenses incurred by Lender in connection
with such examination.
(ii) Borrowers will furnish to Lender annually (with a copy to the
Rating Agency), within one hundred twenty (120) days following the end of each
Fiscal Year of Borrowers, a certified complete copy of the financial statement
of Borrowers, prepared on a combined basis, audited by Borrowers' Accountant in
accordance with GAAP covering on a combined basis the operation of the
Properties for such Fiscal Year and containing a statement of Revenues and
Operating Expenses, a statement of assets and liabilities and a statement of
Borrowers' equity. Together with Borrowers' annual combined financial statement,
each Borrower shall furnish to Lender an unaudited operating statement for such
Individual Property, accompanied by an Officer's Certificate representing as of
the date thereof (A) that the annual operating statement accurately represents
the operation of the related Individual Property, in accordance with GAAP
consistently applied and (B) whether there exists an event or circumstance which
constitutes a default or Event of Default under the Loan Documents executed and
delivered by, or applicable to, such Borrower, and if such default or Event of
Default exists, the nature thereof, the period of time it has existed and the
action then being taken to remedy the same.
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(iii) Borrowers shall timely file any and all required reports with
the Securities and Exchange Commission, required to be filed pursuant to the
Securities Exchange Act of 1934, as amended.
(iv) Borrowers will furnish, or cause to be furnished, to Lender
monthly (with a copy to the Rating Agency), within twenty (20) days following
the end of each month, both (A) a true, complete and correct cash flow statement
with respect to each Individual Property on an individual basis in form
reasonably acceptable to Lender showing (I) all cash receipts of any kind
whatsoever and all cash payments and disbursements for such month, and (II)
year-to-date summaries of such cash receipts, payments and disbursements, (III)
all Revenue and Operating Expenses for such month and (IV) all Revenue and
Operating Expenses for the preceding twelve (12) full calendar months and (B) an
operations statement with respect to each Individual Property prepared on an
accrual basis, in the form of Schedule J annexed hereto, showing the operations
of such Individual Property for the preceding twelve (12) full calendar months
and (C) a balance sheet for each Borrower, together with a certification of the
Related Consultant (a "Consultant's Certification") stating that, in all
material respects, (a) each such cash flow statement and operating statement is
true, complete and correct and (b) all Operating Expenses with respect to such
Individual Property which have accrued as of the last day of the month preceding
the delivery of such cash flow statement have been fully paid or otherwise
provided for by or on behalf of the related Borrower.
(v) Borrowers shall furnish to Lender (with a copy to the Rating
Agency), within fourteen (14) days after request, such further detailed
information with respect to the operation of any of the Properties and the
financial affairs of Borrowers as may be reasonably requested by Lender.
(vi) Lender shall have the right to audit, at Lender's expense, each
Borrower's books and records to determine Revenue and Operating Expenses for
each Individual Property; provided, however, that if such audit reveals a
misstatement of Revenue or Operating Expenses in any financial statement
submitted by or on behalf of any Borrower by more than five percent (5%) of such
amount for the period which is the subject of such audit, Borrowers shall
reimburse Lender on demand for the cost of such audit.
(l) Business and Operations. Each Borrower will continue to engage
in the businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of its
Individual Property. Each Borrower will qualify to do business and will remain
in good standing under the laws of each jurisdiction as and to the extent the
same are required for the ownership, maintenance, management and operation of
its Individual Property.
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(m) Title to the Properties. Borrowers will warrant and defend (i)
the title to each of the Properties and every part thereof, subject only to the
Permitted Encumbrances, and (ii) the validity and priority of the Liens of the
Mortgage and the Assignment of Leases on each Individual Property, subject only
to the Permitted Encumbrances, in each case against the claims of all Persons
whomsoever. Borrowers shall reimburse Lender for any losses, costs, damages or
expenses (including reasonable attorneys' fees and court costs) incurred by
Lender if an interest in any of the Properties, other than as permitted
hereunder, is claimed by another Person.
(n) Costs of Enforcement. In the event (i) that the Mortgage is
foreclosed in whole or in part or is put into the hands of an attorney for
collection, suit, action or foreclosure, (ii) of the foreclosure of any other
mortgage encumbering any of the Properties in which proceeding Lender is made a
party, or (iii) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of any Borrower or an assignment by any Borrower for the
benefit of its creditors, Borrowers, their successors or assigns, shall be
chargeable with and agree to pay all costs of collection and defense, including
attorneys' fees in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, which shall be due and
payable hereunder together with all required service or use taxes.
(o) Estoppel Statement. Borrowers, within ten (10) days after
request from Lender, shall from time to time furnish to Lender a statement, duly
acknowledged and certified by Borrowers, setting forth (i) the amount then owing
by Borrowers in respect of the Indebtedness, (ii) the date through which
interest on the Loan has been paid, and (iii) any offsets, counterclaims,
credits or defenses to the payment of Borrowers' obligations under the Loan
Documents and acknowledging that this Agreement and the other Loan Documents
executed and delivered by, or applicable to, Borrowers are legal, valid and
binding obligations of Borrowers and have not been modified or, if modified,
giving the particulars of such modification. Lender, within ten (10) days after
a request by Borrowers, shall from time to time, but not more frequently than
four (4) times in any calendar year, furnish to Borrowers a statement, duly
acknowledged and certified by Lender, setting forth (A) the amount then owing by
Borrowers with respect to the Indebtedness, (B) the date through which Interest
on the Loan has been paid and (C) that, to the best of Lender's knowledge, no
default has occurred hereunder, and acknowledging that this Agreement and the
other Loan Documents have not been modified, or if modified, giving the
particulars of such modification.
(p) Loan Proceeds. The proceeds of the Loan shall be used only for
the purposes set forth in Section 2.2.
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(q) Permits. Each Borrower shall comply, and cause its Individual
Property to be operated in compliance, in all material respects, with all
Permits and shall extend or renew any Permit that may expire.
(r) Annual Operating Budget and Capital Expenditure Budget.
Borrowers shall prepare and deliver to Lender, not less than fifteen (15)
Business Days prior to the commencement of each Fiscal Year of Borrowers, (i) an
Annual Operating Budget with respect to each Individual Property for such
ensuing Fiscal Year, and (ii) a Capital Expenditures Budget with respect to each
Individual Property for such ensuing Fiscal Year.
(s) Confirmation of Representations. In addition to and not in
limitation of the covenants and agreements of Borrower contained in Section 7.1,
each Borrower shall deliver, in connection with any Securitization Transaction,
one or more Officer's Certificates certifying as to the accuracy of all
representations made by Borrowers in the Loan Documents as of the date of the
closing of such Securitization Transaction or specifying any changes in the
accuracy of such representations.
(t) No Joint Assessment. No Borrower shall suffer, permit or
initiate the joint assessment of any Individual Property (i) with any other real
property constituting a tax lot separate from such Individual Property, and (ii)
with any other personal property, whereby the lien of any taxes which may be
levied against such other personal property shall be assessed or levied or
charged to such Individual Property.
(u) Leasing Matters. Any Lease with respect to any Individual
Property that covers more than one thousand (1,000) rentable square feet shall
be written on a form of lease which has been approved by Lender, which approval
shall not be unreasonably withheld. Upon request, Borrowers shall furnish Lender
with executed copies of all Leases. All proposed Leases or renewals of existing
leases entered into after the Closing Date shall be on commercially reasonable
terms and shall not contain any terms which would materially affect Lender's
rights under the Loan Documents. All Leases executed after the date hereof shall
be subordinate to the Mortgage encumbering the applicable Individual Property.
Notwithstanding anything to the contrary contained herein, with respect to those
portions of the Xxxxxx Xxxxxxx Penn Property which are, as of the Closing Date,
leased or offered for lease for commercial uses not related to the use of the
Property as a hotel, the Xxxxxx Xxxxxxx Penn Borrower may enter, extend, modify
or terminate, or take any other actions with respect to, any Lease, in a
commercially reasonable manner provided that the uses permitted under such
Leases shall be commercially suitable to the operation of the Xxxxxx Xxxxxxx
Penn Property as a first-class hotel. Borrowers (i) shall observe and perform
the obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (ii) shall enforce, and may amend or terminate, the terms,
covenants
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and conditions contained in the Leases upon the part of the lessee thereunder to
be observed or performed in a commercially reasonable manner; (iii) shall not
collect any of the rents more than one (1) month in advance (other than security
deposits); (iv) shall not execute any other assignment of lessor's interest in
the Leases or the Revenue (except as contemplated by the Loan Documents); (v)
shall not alter, modify or change the terms of the Leases in a manner
inconsistent within the provisions of the Loan Documents; and (vi) shall execute
and deliver at the request of Lender all such further assurances, confirmations
and assignments in connection with the Leases as Lender shall from time to time
require.
(v) Financing Statements. Borrowers shall, promptly upon Lender's
request, at Borrowers' sole cost and expense, timely file or refile, or cause to
be filed or refiled, all continuations and any assignments of any of the Uniform
Commercial Code Financing Statements filed in connection with the Loan, as
appropriate, in the appropriate recording or filing offices, such that Lender
will continue to have a valid and perfected first priority lien on the
collateral subject to such financing statements.
(w) Equipment Leases. Each Borrower shall observe and perform or
cause to be observed or performed all of its obligations under all Equipment
Leases and replace any expired Equipment Leases with similar agreements as
necessary to maintain the operating standards of its Individual Property.
(x) Franchise Inspection Reports. Each Borrower shall deliver to
Lender, or cause the Consultant to deliver to Lender, a copy of each inspection
report of any Franchisor with respect to any Individual Property within five (5)
Business Days after such Borrowers' or Consultant's receipt thereof.
(y) Compliance with Franchise Agreements. Each Borrower shall
operate its Individual Property as a hotel open for business under the Franchise
Agreement, and shall perform all of its obligations under the Franchise
Agreement.
(z) Operations and Maintenance Programs. The Borrowers that own the
Individual Properties referred to on Schedule K annexed hereto shall cause such
Individual Properties to be operated and maintained in all material respects in
accordance with those certain operations and maintenance programs, approved by
the Environmental Consultant, listed on Schedule K and shall deliver an
Officer's Certificate to Lender within thirty (30) days of the Closing Date
stating that such Borrowers have instructed the relevant employees at such
Individual Property in compliance with such operations and maintenance program.
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(aa) Insuror's Letter. Borrowers shall deliver an updated Insuror's
Letter within ten (10) Business Days of any change in the premiums payable with
respect to the Policies.
(bb) Cash Management Agreement. Each Borrower shall comply with its
obligations under the Cash Management Agreement, including, without limitation,
that during any Operative Period, DSCR Restricted Period or Franchise Restricted
Period or if a receiver, liquidator or trustee shall be appointed for Servico,
Inc., Consultant or a Non-Borrower Participant (as defined in the Cash
Management Agreement) 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 Servico, Inc., Consultant or any Non-Borrower
Participant, Borrowers will cease to participate in the Cash Management
Agreement and shall reconcile in cash any underpayments or overpayments existing
at that time and that from the date of any such appointment or filing, Lender
may, by delivery of a Consultant's Notice, cause the Consultant to collect the
Revenue of each Individual Property and pay such Revenue over to Lender pursuant
to Section 2.7.1(c), to be allocated by Lender pursuant to Section 2.7.3 as if a
DSCR Restricted Period were then in effect, until such time aa Lender shall be
reasonably satisfied that Borrowers are no longer participating in the Cash
Management Agreement.
VI. NEGATIVE COVENANTS
Section 6.1 Borrowers' Negative Covenants.
From the date hereof until payment and performance in full of all
obligations of Borrowers under the Loan Documents or the earlier release of the
Liens of the Mortgage (and all related obligations) from all the Properties in
accordance with the terms of this Agreement and the other Loan Documents,
Borrowers covenant and agree with Lender that none of them will do, directly or
indirectly, any of the following:
(a) Operation of Properties. No Borrower shall, without the prior
consent of Lender, which consent shall not be unreasonably withheld or delayed,
amend, modify, terminate or extend, or consent to an assignment of Franchisor's
or Consultant's rights under, any Franchise Agreement or Consulting Agreement
relating to any Individual Property or otherwise replace any Franchisor or
Consultant of any Individual Property or enter into any other management or
franchise agreements with respect to any of the Properties. Notwithstanding the
foregoing, if any Franchise Agreement or the Xxxxxx Xxxxxxx Penn Management
Agreement shall expire or be terminated, other than any termination by a
Borrower or on account of a Borrower's default thereunder, the applicable
Borrower shall enter into a new Franchise Agreement, in form and substance
reasonably
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satisfactory to Lender. During any Franchise Restricted Period, all Excess
Property Income for all the properties shall be deposited in the Central Account
and allocated as provided in Section 2.7.3(g), provided that if a Franchise
Restricted Period and a DSCR Restricted Period shall both be in effect with
respect to any period of time, such period will be deemed a DSCR Restricted
Period for the purposes of this Agreement and if a Franchise Restricted Period
and an Operative Period shall both be in effect with respect to any period of
time, such period of time shall be deemed an Operative Period for the purposes
of this Agreement. A "Franchise Restricted Period" shall mean any period of time
(i) commencing on the ninetieth (90th) day after the expiration or termination,
other than a termination by a Borrower or on account of a Borrower's default
thereunder, of any Franchise Agreement or of the Xxxxxx Xxxxxxx Penn Management
Agreement and continuing until such Franchise Agreement or the Xxxxxx Xxxxxxx
Penn Management Agreement shall have been replaced by a new Franchise Agreement
pursuant to the second preceding sentence or (ii) any period of time during
which three (3) or more of the Franchise Agreements and the Xxxxxx Xxxxxxx Penn
Management Agreement shall have been expired or been terminated, other than a
termination by a Borrower or on account of a Borrower's default thereunder, and
shall not have been replaced by a new Franchise Agreement pursuant to the third
preceding sentence. It shall be an Event of Default hereunder if any Franchise
Restricted Period shall continue for more than ninety (90) days.
(b) Liens. No Borrower shall, without the prior written consent of
Lender, create, incur, assume or suffer to exist any Lien on any portion of any
of the Properties or permit any such action to be taken, except:
(i) Permitted Encumbrances; or
(ii) Liens for Impositions or Other Charges not yet due or which are
being contested in compliance with Section 5.1(b)
(c) Dissolution. No Borrower shall dissolve, terminate, liquidate,
merge with or consolidate into another Person.
(d) Chance In Business. No Borrower shall enter into any line of
business other than the ownership and operation of its Individual Property, or
make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.
(e) Debt Cancellation. No Borrower shall cancel or otherwise forgive
or release any claim or debt (other than termination of Leases in accordance
herewith) owed to Borrower by
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any Person, except for adequate consideration and in the ordinary course of
Borrower's business.
(f) Affiliate Transactions. No Borrower shall enter into, or be a
party to, any transaction with an Affiliate of any Borrower or of any partner of
any Borrower except (a) under the Cash Management Agreement, (b) the Related
Consulting Agreement, (c) in the ordinary course of business and on terms which
are fully disclosed to Lender in advance and are no less favorable to such
Borrower or such Affiliate than would be obtained in a comparable arm's-length
transaction with an unrelated third party or (d) as may be otherwise expressly
provided for hereunder.
(g) Zoning. No Borrower shall initiate or consent to any zoning
reclassification of all or any portion of its Individual Property or seek any
variance under any existing zoning ordinance or use or permit the use of any
portion of any such Individual Property in any manner that could result in such
use becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation, without the prior consent of
Lender.
(h) Assets. No Borrower shall purchase or own any properties other
than its Individual Property.
(i) Debt. No Borrower shall create, incur or assume any debt other
than the Indebtedness and other than unsecured, short-term trade indebtedness
incurred in the ordinary course of operating its Individual Property (including
financing of insurance premiums) and permitted Encumbrances.
(j) Misapplication of Funds. No Borrower shall, or permit any
Consultant to, (i) distribute any Revenue to any Borrower or any partners or
shareholders thereof either (A) in violation of the provisions of Section 2.7
hereof or (B) unless true and correct Consultant's Certifications as referred to
in Section 5.1(k) (iv) shall have been delivered for the most recent period for
which the same are due, or (ii) misappropriate any security deposit made under
any Lease or portion thereof.
(k) Cash Management Agreement. No Borrower shall amend, modify,
rescind or terminate the Cash Management Agreement, nor waive any rights of such
Borrower thereunder, provided that the addition or release of Affiliates as
parties thereto shall not be deemed an amendment thereof provided that any
Affiliate so withdrawing shall have repaid all advances made to it under such
Cash Management Agreement.
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VII. SPECIAL PROVISIONS
Section 7.1 Cooperation.
7.1.1 Cooperation. (a) Lender intends to make the Loan pursuant to
and in accordance with the Loan Documents and the Loan Purchaser intends to
purchase the Loan, in each case, prior to effecting any Securitization
Transaction. Borrowers and their Affiliates shall, at Lender's cost and expense,
including, without limitation, reasonable legal fees, cooperate in good faith
with the Lender, the Loan Purchaser, any Servicer and the Securities and
Exchange Commission in effecting such Securitization Transaction, including
obtaining Franchise Agreement Letters for the benefit of the Loan Purchaser, and
shall cooperate in good faith to implement all requirements imposed by the
Rating Agency or any rating agencies including, without limitation, changes to
the Loan and the Loan Documents occasioned by the Securitization Transaction and
all additional conditions imposed by such rating agencies in connection with any
rating of the Certificates, including, without limitation, delivery of opinions
of counsel acceptable to such Rating Agencies and addressing such matters as
such Rating Agencies may reasonably require; provided, however, that Borrowers
shall not act as a Depositor or issuer in connection with a Securitization
Transaction or be required to acquiesce in respect of material modifications to
the Loan or the Loan Documents, including, without limitation, any modifications
(whether material or not) relating to (i) the interest rate payable in respect
of the Loan, (ii) the Maturity Date, (iii) the amortization of the Loan, (iv)
the calculation of Yield Maintenance Premiums or the instances in which such
Yield Maintenance Premiums are applicable, (v) the limitations on recourse set
forth in the Loan Documents, (vi) the conditions for release of an Individual
Property set forth in Section 2.4 or (vii) the Cash Management Agreement.
(b) The Loan Purchaser, at its election, may determine to resell the
Loan or retain title to the Loan instead of implementing the Securitization
Transaction. In such event, Borrower shall cooperate in good faith with the Loan
Purchaser in connection with effecting any such resale or retention of the Loan.
7.1.2 Additional Financial Reporting Requirements.
Borrowers hereby agree that Borrowers and their Affiliates shall, at
Borrowers' cost and expense, execute and deliver all documentation and
statistical information as may be reasonably requested by Lender and take all
action deemed reasonably necessary or desirable by Lender, in both cases for the
implementation of the Securitization Transaction(s) including, without
limitation, delivery of (i) audited financial statements fulfilling Securities
and Exchange Commission
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requirements as to form, content and period covered, (ii) consents of experts
fulfilling Securities and Exchange Commission requirements, (iii) other matters
as may be customary for offerings of securities similar to the Certificates,
(iv) the satisfaction of all reasonable Rating Agency requirements with respect
to documentation and statistical information and (v) all ongoing periodic
reporting requirements under the Securities Exchange Act of 1934, as amended,
arising out of the registration of the Certificates.
Section 7.2 Insurance; Casualty and Condemnation.
7.2.1 Insurance. (a) Each Borrower, at its sole cost and expense,
shall keep its Individual Property insured during the entire term of the Loan
for the mutual benefit of such Borrower and Lender on an "All Risk" basis,
including without limitation, insurance against loss or damage by fire and
against loss or damage by other risks and hazards covered by a standard extended
coverage policy, including, but not limited to, riot and civil commotion,
vandalism, malicious mischief, burglary and theft. Such insurance shall be in an
amount (i) equal to the then full replacement cost of the Improvements
(exclusive of footings and foundations) and Equipment, without deduction for
physical depreciation, and (ii) such that the insurer would not deem such
Borrower a co-insurer under said policies, provided that if such coverage is
provided under a blanket policy, such coverage may be provided through a "loss
limit" policy in the amount of not less than $100,000,000 per occurrence and not
in the aggregate (which amount may be increased, in Lender's reasonable
discretion, if the number of properties covered by such blanket policy is
increased after the Closing Date). The policies of insurance carried in
accordance with this Section shall be paid monthly or quarterly in advance and,
unless such policies shall be blanket policies pursuant to the preceding
sentence, shall contain the "Replacement Cost Endorsement with a waiver of
depreciation.
(b) Each Borrower, at its sole cost and expense, for the mutual
benefit of such Borrower and Lender, shall also obtain and maintain, or cause to
be maintained, during the entire term of the Loan the following policies of
insurance with respect to its Individual Property:
(i) flood insurance if any part of such Individual Property is
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 the
Allocable Principal Balance attributable to such Individual Property or the
maximum limit of coverage available with respect to the Improvements and
Equipment under said Act, whichever is less;
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(ii) comprehensive public liability insurance in the amount of
$5,000,000 or such additional amount reasonably requested by Lender, including
broad form property damage, blanket contractual and personal injuries (including
death resulting therefrom) coverages;
(iii) business interruption insurance in an amount not less than the
Revenues projected by Lender for such Individual Property for a period of
twenty-four (24) months at one hundred percent (100%) occupancy, provided that
notwithstanding the foregoing, if the hazard insurance under paragraph (a) above
is provided under a "loss limit" blanket policy as permitted thereunder, such
business interruption insurance may be included in such policy, provided that
such insurance shall provide coverage for each Individual Property for the
actual loss of Cash Flow Available for Debt Service for such Individual Property
sustained due to the suspension of operations during the period of the
restoration of operations and continuing normal Operating Expenses incurred
during such period. The term "period of restoration" as used in this
subparagraph means the period of time (a) from the date of the applicable
Casualty until the date on which the Restoration of the Individual Property, if
prosecuted with reasonable diligence, should be completed and (b) from the date
on which the Restoration of such Individual Property is technically completed
until the earlier of (I) the date on which the business operations and condition
of the Individual Property should be restored to their status prior to such
Casualty, if pursued with reasonable diligence, and (II) the date which is sixty
(60) consecutive days after the actual completion of the Restoration;
(iv) insurance against loss or damage from leakage of sprinklers or
explosion of steam boilers, air conditioning equipment, high pressure piping,
machinery and equipment, pressure vessels or similar apparatus now or hereafter
installed on such Individual Property;
(v) Worker's compensation insurance with respect to any employees of
such Borrower or of Consultant employed at such Individual Property, as required
by Governmental Authorities, or Legal Requirements; and
(vi) such other or additional insurance as may from time to time be
reasonably required by Lender.
(c) All policies of insurance (the "Policies") required pursuant to
this Section 7.2.1: (i) shall be issued by an insurer rated "A" (or the
equivalent) by the Rating Agency and satisfactory to Lender, (ii) shall contain
the standard New York mortgagee non-contribution clause (or equivalent) naming
Lender as the person to whom all payments made by such insurance company,
relating to property losses, shall be paid (except with respect to (A) Equipment
subject to an Equipment Lease that requires insurance proceeds to be paid to the
lessor thereunder
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and (B) provided no Event of Default shall have occurred and be continuing,
refunds of premiums made as a result of policy audits), (iii) shall be
maintained throughout the term of this Agreement without cost to Lender, (iv)
shall contain a waiver of subrogation, (v) shall be delivered to Lender (or
Lender shall receive original certificates of insurance and certified copies of
all Policies), (vi) shall contain such provisions as Lender deems reasonably
necessary or desirable to protect its interest including, without limitation,
endorsements providing that neither Borrower, Lender nor any other party shall
be a co-insurer under said Policies and that Lender shall receive at least
thirty (30) days' prior written notice of any modification or cancellation,
except that Lender shall receive ten (10) days' prior written notice of any
cancellation for non-payment of any premium, and (vii) shall be reasonably
satisfactory to Lender and shall be approved by Lender as to amounts, form, risk
coverage, deductibles, loss payees, and insureds, which approval shall not be
unreasonably withheld or delayed. Borrowers shall pay the premiums for such
Policies as the same become due and payable. Not later than ten (10) days prior
to the expiration date of each of the Policies, Borrowers will deliver to Lender
satisfactory evidence of the renewal of each of the Policies. The Policies may
be part of a blanket policy only if (A) such blanket policy covers only
Individual Properties subject to the Mortgage (excluding, without limitation,
any Individual Property released from the Lien of the Mortgage pursuant to
Section 2.4) or (B) the provider of such blanket policy provides Borrowers and
Lender with a letter confirming that coverage for any Individual Property will
not be cancelled or reduced because of any matter relating to any property other
than the Properties.
(d) All insurers shall be authorized to issue insurance in the State
in which the applicable Individual Property is located.
(e) In the event Borrowers fail to provide, maintain, keep in force,
or deliver and furnish to Lender the Policies required hereunder, Lender may
procure such insurance as Lender shall deem appropriate, and Borrowers will
reimburse Lender for all premiums paid by Lender promptly upon demand by Lender,
together with interest thereon at the Default Rate from the date of demand. The
amounts advanced by Lender to pay for such insurance, together with such
interest thereon, shall be a part of the Indebtedness and secured by the
Mortgage.
(f) Borrowers shall pay, or cause to be paid, all premiums therefor
not later than the date due and shall submit to Lender, within three (3)
Business Days of the date such premium payment is due, other than with respect
to payments disbursed from the Basic Carrying Costs Sub-Account, a copy of each
check written in payment of such premiums or other evidence reasonably
satisfactory to Lender that such premium has been paid or, if such payment shall
be made by wire transfer, evidence of such transfer reasonably satisfactory to
Lender.
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7.2.2 Casualty and Restoration. (a) Borrowers shall give prompt
written notice to Lender of any damage to or destruction of all or any portion
of any Individual Property (any such event being herein referred to as a
"Casualty"). Provided that Lender shall make Insurance proceeds available
pursuant to Section 7.2.2(b), Borrowers shall promptly and diligently restore,
replace, rebuild and repair such Individual Property as nearly as possible to
the value and condition of such Individual Property immediately prior to such
Casualty (such restoration, replacement, rebuilding and repair is herein
referred to as the "Restoration"), regardless of whether Insurance Proceeds
shall be payable with respect to such Casualty or shall be sufficient to pay for
the Restoration. The plans and specifications and Permits for the Restoration
shall be submitted to Lender in advance and shall be reasonably satisfactory to
Lender in all respects. The Restoration shall be done in compliance with all
Legal Requirements, and the applicable Borrower shall carry builder's risk
insurance satisfactory to Lender in connection with the Restoration. Lender, its
agents and representatives shall have the right to inspect the Individual
Property to monitor the Restoration. All reasonable costs and expenses incurred
by Lender, its agents or representatives in connection with the Restoration,
including, without limitation, counsel fees and engineers fees incurred by
Lender in connection with the review of plans, specifications and Permits and
the monitoring of the Restoration, shall be paid by Borrowers. Upon completion
of the Restoration, the applicable Borrower shall deliver to Lender an Officer's
Certificate (or if the cost of such Restoration shall exceed $250,000, a
certificate of an Engineer) stating that (A) all materials installed and work
and labor performed in connection with the Restoration have been paid for in
full, (B) no mechanics' or other Liens on the applicable Individual Property
arising out of the Restoration exist which have not been bonded or otherwise
discharged of record, (C) the Restoration has been completed in compliance with
the plans and specifications submitted to Lender and all Legal Requirements and
(D) all Permits required for use of the Individual Property after the
Restoration have been obtained, together with such other evidence of the
foregoing as Lender may request.
(b) Lender may elect to make all or any portion of any Insurance
Proceeds received by Lender pursuant to Section 2.7.8(a) (after deducting out
Lender's cost of obtaining such Insurance Proceeds, including, without
limitation, reasonable attorneys' fees) available to pay the costs of the
Restoration, provided that Lender shall make such Insurance Proceeds (after
deducting Lender's cost as aforesaid) available to pay the costs of the
Restoration if (i) such Insurance Proceeds are paid to Lender prior to February
1, 2007, and (ii) (A) the Insurance Proceeds received with respect to any
Casualty (after deducting out such costs) shall not exceed fifty percent (50%)
of the fair market value for the Individual Property in question as set forth on
Schedule M annexed hereto or (B) such Insurance Proceeds (after deducting out
such costs) shall equal or exceed fifty
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percent (50%) of such fair market value for such Individual Property and the
ratio of (x) the Cash Flow Available for Debt Service for such Individual
Property for the twelve (12) month period ending with the last day of the last
full month prior to such Casualty for which Lender shall have received financial
reports for such Individual Property pursuant to Section 5.1(k) (iv) to (y) the
aggregate amount of payments of principal and interest that would be payable
over the twelve (12) months following the date of such Casualty in order to
amortize the current Allocable Principal Balance for such Individual Property,
with interest at the Interest Rate, over the period from the date of such
Casualty to the Maturity Date shall be at least equal to 1.53/1.0, unless, in
such case, Borrowers shall elect not to perform the Restoration (provided that
with respect to the Individual Property identified as the Hilton Head Holiday
Inn located on Hilton Head Island, South Carolina, Lender may elect to apply
such Insurance Proceeds as a prepayment of the principal balance of the Loan in
accordance with Section 2.7.8 unless Borrowers shall demonstrate to Lender's
reasonable satisfaction that Borrowers have obtained any zoning variations or
permits required to reconstruct such Individual Property to substantially its
configuration prior to such Casualty), and (iii) no Default or Event of Default
shall have occurred and be continuing and (iv) Borrowers shall have deposited
with Lender an amount equal to the difference between the cost of the
Restoration, as reasonably estimated by Lender, and the amount of Insurance
Proceeds to be made available by Lender to pay such costs. If such Insurance
Proceeds are less than $100,000, Lender shall pay such Insurance Proceeds over
to the Borrower in question upon receipt of an Officer's Certificate stating the
costs of such Restoration to which such Insurance Proceeds shall be applied. If
the Insurance Proceeds equal or exceed $100,000 and are to be made available to
pay the costs of the Restoration, such Insurance Proceeds shall be paid by
Lender to, or as directed by, the applicable Borrower, less retainage customary
in the area where such Individual Property is located, from time to time during
the course of the Restoration (but not more frequently than once per calendar
month), upon (x) receipt of a written request for such disbursement by the
applicable Borrower accompanied by an Officer's Certificate (or if the cost of
such Restoration shall exceed $250,000, a certificate of an Engineer) stating
that (l) all materials installed and work and labor performed to date (except to
the extent they are to be paid for out of the requested payment) in connection
with the Restoration have been paid for in full, and (2) no mechanics' or other
Liens on the applicable Individual Property arising out of the Restoration exist
which have not been bonded or otherwise discharged or released, together with
such other evidence of the foregoing as Lender may request and (y) compliance
with such other reasonable conditions as Lender may from time to time impose.
(c) Any amount of Insurance Proceeds which Lender does not elect, or
is not required, to make available to pay the costs
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of the Restoration, or which remains after payment of the costs of any
restoration or reconstruction, shall be applied as provided in Section 2.7.8(a)
7.2.3 Condemnation. (a) Borrowers shall promptly give Lender notice
of the actual or threatened commencement of any Condemnation proceeding relating
to any Individual Property and shall deliver to Lender copies of any and all
papers served in connection with such proceedings. Following any Condemnation of
less than all of an Individual Property, provided that Lender shall make
Condemnation Proceeds available pursuant to Section 7.2.3(b), Borrowers shall
promptly and diligently perform such restoration and reconstruction of the
affected Individual Property as is necessary to retain, as nearly as possible,
the economic value of such Individual Property, regardless of whether
Condemnation Proceeds payable with respect thereto shall be sufficient to pay
for such restoration and reconstruction. The plans and specifications and
Permits for such restoration and reconstruction shall be submitted to Lender in
advance and shall be reasonably satisfactory to Lender in all respects. Such
restoration and reconstruction shall be done in compliance with all Legal
Requirements, and the applicable Borrower shall carry builder's risk insurance
satisfactory to Lender in connection therewith. Lender, its agents and
representatives shall have the right to inspect the Individual Property to
monitor such restoration and reconstruction. All reasonable costs and expenses
incurred by Lender, its agents or representatives in connection with such
restoration and reconstruction, including, without limitation, counsel fees and
engineers fees incurred by Lender in connection with the review of plans,
specifications and Permits and the monitoring of such restoration and
reconstruction, shall be paid by Borrowers. Upon completion of such restoration
and reconstruction, the applicable Borrower shall deliver to Lender an Officer's
Certificate (or if the cost of such restoration and reconstruction shall exceed
$250,000, a certificate of an Engineer) stating that (A) all materials installed
and work and labor performed in connection with such restoration and
reconstruction have been paid for in full, (B) no mechanics' or other Liens on
the applicable Individual Property arising out of such restoration and
reconstruction exist which have not been bonded or otherwise discharged of
record, (C) such restoration and reconstruction have been completed in
compliance with the plans and specifications submitted to Lender and all Legal
Requirements and (D) all Permits required for use of the Individual Property
after such restoration and reconstruction have been obtained, together with such
other evidence of the foregoing as Lender may request.
(b) Any Condemnation Proceeds received by Lender (after deducting
out Lender's costs of obtaining such Condemnation Proceeds, including, without
limitation, reasonable attorneys' fees) may, in Lender's discretion, be either
retained and applied by Lender toward payment of the Loan or, at the discretion
of Lender be disbursed, either in whole or in part, to
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the applicable Borrower for such purposes and upon such conditions as Lender
shall designate, provided that Lender shall make such Condemnation Proceeds
(after deducting Lender's cost as aforesaid) available to pay the costs of such
restoration and reconstruction if (i) such Condemnation Proceeds (after
deducting out such costs) are paid to Lender prior to February 1, 2007, and (ii)
(A) the Condemnation Proceeds received with respect to any Condemnation shall
not exceed fifty percent (50%) of the fair market value for the Individual
Property in question as set forth on Schedule M, or (B) such Condemnation
Proceeds shall equal or exceed fifty percent (50%) of such fair market value for
such Individual Property and the ratio of (x) the Cash Flow Available for Debt
Service for such Individual Property for the twelve (12) month period ending
with the last day of the last full month prior to such Condemnation for which
Lender shall have received financial reports for such Individual Property
pursuant to Section 5.1(k) (iv) to (y) the aggregate amount of payments for
principal and interest that would be payable over the twelve (12) months
following the date of such Condemnation in order to amortize the current
Allocable Principal Balance for such Individual Property, with interest at the
Interest Rate, over the period from the date of such Condemnation to the
Maturity Date shall be at least equal to 1.53/1.0, unless in such case Borrowers
shall elect not to perform such restoration and construction, and (iii) the
remainder of the Individual Property is, in Lender's reasonable judgment,
susceptible to being restored or reconstructed to a satisfactory economic value,
and (iv) no Default or Event of Default shall have occurred and be continuing
and (v) Borrowers shall have deposited with Lender an amount equal to the
difference between the cost of such restoration and reconstruction, as
reasonably estimated by Lender, and the amount of Insurance Proceeds to be made
available by Lender to pay such costs. If such Condemnation Proceeds are less
than $100,000, Lender shall pay such Condemnation Proceeds over to the Borrower
in question upon receipt of an Officer's Certificate stating the costs of such
Restoration to which such Condemnation Proceeds shall be applied. If the
Condemnation Proceeds equal or exceed $100,000 and are to be made available to
pay the costs of such restoration and reconstruction, such Condemnation Proceeds
shall be paid by Lender to, or as directed by, the applicable Borrower, less
retainage customary in the area where such Individual Property is located, from
time to time during the course of such restoration and reconstruction (but not
more frequently than once per calendar month), upon (x) receipt of a written
request for such disbursement by the applicable Borrower accompanied by an
Officer's Certificate (or if the cost of such restoration and reconstruction
shall exceed $250,000, a certificate of an Engineer) stating that (1) all
materials installed and work and labor performed to date (except to the extent
they are to be paid for out of the requested payment) in connection with such
restoration and reconstruction have been paid for in full, and (2) no mechanics'
or other Liens on the applicable Individual Property arising out of such
restoration and reconstruction exist which have not been bonded or otherwise
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discharged or released, together with such other evidence of the foregoing as
Lender may request and (y) compliance with such other reasonable conditions as
Lender may from time to time impose.
(c) Any amount of Condemnation Proceeds that Lender does not elect,
or is not required, to make available to Borrowers, or that remains after
payment of the costs of any restoration or reconstruction, shall be applied as
provided in Section 2.7.8(b).
(d) Notwithstanding any Condemnation (including but not limited to
any transfer made in lieu of or in anticipation of the exercise of such taking),
Borrower shall continue to pay the Loan at the time and in the manner provided
for its payment in the Note and the Loan shall not be reduced until any
Condemnation Proceeds shall have been actually received and applied by Lender,
after the deduction of expenses of collection as provided above, to the
reduction of the Indebtedness, if permitted hereunder. 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. If the Individual Property subject to the Condemnation proceeding
is sold, through foreclosure or otherwise, prior to the receipt by Lender of
such Condemnation Proceeds, Lender shall have the right, notwithstanding the
limitations on recourse under the Loan Documents and whether or not a deficiency
judgment on the Note shall have been sought, recovered, denied or available
hereunder, to receive said Condemnation proceeds, or a portion thereof
sufficient to pay the Indebtedness.
Section 7.3 Required Repairs.
Borrowers shall promptly commence and diligently continue the
Required Repairs at each Individual Property, provided that Long-Term Required
Repairs shall be commenced as may be reasonably required to permit the
completion thereof by the dates required pursuant to the following sentence. It
shall be an Event of Default under this Agreement if Borrower does not complete
the Short-Term Required Repairs at each Individual Property by the first (1st)
anniversary of the Closing Date (except as set forth on Schedule E with respect
to certain Short-Term Required Repairs at the Individual Property identified on
Schedule D as the Holiday Inn Meadowlands located in Washington, Pennsylvania)
or, with respect to any Long-Term Required Repair by the first to occur of (a)
the fifth (5th) anniversary of the Closing Date or (b) the date by which such
Long-Term Required Repair may be required to be completed pursuant to any
applicable Franchise Agreement.
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Section 7.4 FF&E Replacements.
7.4.1 Performance of FF&E Replacements. (a) Borrowers shall make
FF&E Replacements when required by sound hotel management practices in order to
keep each Individual Property in condition and repair consistent with
requirements under the applicable Franchise Agreements and Borrowers' standards
and practices as of the Closing Date, but in any event not below prevailing
standards for hotel properties of similar age, size, construction and the
then-current franchise affiliation in the metropolitan area in which the
respective Individual Property is located, and to keep each Individual Property
from deteriorating. Borrowers shall complete all FF&E Replacements in a good and
workmanlike manner as soon as practicable following the commencement of making
each such FF&E Replacement.
(b) Upon Lender's request, Borrowers shall deliver copies of, and
assign to Lender any contract or subcontract relating to such FF&E Replacements.
(c) Borrowers shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) to enter onto each Individual Property, upon reasonable prior notice,
during normal business hours (subject to the rights of tenants under their
leases) to inspect the progress of any FF&E Replacements and all material being
used in connection therewith and to examine all plans and shop drawings
relating to such FF&E Replacements which are or may be kept at each Individual
Property. Borrowers shall cause all contractors and subcontractors to cooperate
with Lender and such agents and representatives in connection with such
inspections.
(d) In the event Lender determines, in its reasonable discretion,
that any FF&E Replacement is not being performed in a workmanlike or timely
manner or that any FF&E Replacement has not been completed in a workmanlike
manner and timely manner, Lender may elect to withhold disbursement under
Section 2.7.7(e) for such unsatisfactory FF&E Replacement and, if Borrowers have
failed to remedy any deficiencies in the performance of such FF&E Replacement
within fifteen (15) days after notice thereof by Lender, to proceed under
existing contracts or to contract with third parties to complete such FF&E
Replacement and to apply any funds in the FF&E Sub-Account toward the costs to
complete such FF&E Replacement, upon five (5) Business Days' prior written
notice.
(e) In order to facilitate Lender's making the FF&E Replacements
pursuant to subsection (d) above, Borrowers grant Lender the right to enter onto
any Individual Property and perform any and all work and acquire all materials
necessary to complete or make the FF&E Replacements and/or employ watchmen to
protect such Individual Property from damage. All sums so expended Lender shall
be deemed to have been advanced under
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the Loan to Borrowers and secured by the Mortgage encumbering such Individual
Property. For this purpose each Borrower constitutes and appoints Lender its
true and lawful attorney-in-fact with full power of substitution to complete or
undertake the FF&E Replacements in the name of such Borrower pursuant to
subsection (d) above. Such power of attorney shall be deemed to be a power
coupled with an interest and cannot be revoked. Each Borrower empowers said
attorney-in-fact as follows: (i) to use any funds in the FF&E Sub-Account for
the purpose of making or completing the FF&E Replacements; (ii) to make such
additions, changes and corrections to the FF&E Replacements as shall be
necessary or desirable to complete the FF&E Replacements; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all existing bills
and claims which are or may become Liens against any Individual Property, or as
may be necessary or desirable for the completion of the FF&E Replacements; (v)
to execute all applications and certificates in the name of such Borrower which
may be required by any contract documents relating to such FF&E Replacements;
(vi) to prosecute and defend all actions or proceedings relating to the FF&E
Replacements in connection with any Individual Property; and (vii) to do any and
every act which such Borrower might do in its own behalf to fulfill the terms of
this Agreement relating to the FF&E Replacements.
(f) In addition to any other insurance required under the Loan
Documents, Borrowers shall provide or cause to be provided workmen's
compensation insurance, builder's risk, and public liability insurance and other
insurance to the extent required by Legal Requirements in connection with a
particular FF&E Replacement. All such policies shall be in form and amount
reasonably satisfactory to Lender.
(g) All FF&E Replacements shall be constructed, installed or
completed, as applicable, free and clear of all mechanic's, materialman's or
other Liens and in compliance with all Legal Requirements and all Insurance
Requirements.
(h) Nothing in this Section 7.4.1 nor the exercise by Lender of its
rights hereunder shall: (i) require Lender to expend funds in addition to such
funds as may be on deposit from time to time in the FF&E Sub-Account to make or
complete any FF&E Replacements; (ii) obligate Lender to make or complete any
FF&E Replacements; (iii) obligate Lender to demand from Borrowers additional
sums to make or complete any FF&E Replacements; or (iv) be construed as
constituting Lender a "mortgagee in possession" of any Individual Property.
(i) It shall be an Event of Default under this Agreement if
Borrowers fail to comply with any provision of this Section 7.4.1. and such
failure is not cured within ten (10) days after notice from Lender or, if such
failure is not reasonably susceptible to cure within such ten (10) day period,
if Borrowers
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shall fail to commence to cure such failure within such ten (10) day period or
to complete such cure within such longer period, not to exceed sixty (60) days
or, if such cure shall require construction, one hundred eighty (180) days,
except as such 180-day period may be extended to the extent Borrowers' cure of
such failure is prevented by fire or other casualty, acts of God, strike or
other labor trouble of general application (but not a labor dispute directed
particularly at any Borrower or Borrowers) or similar event (excluding financial
difficulties of Borrower) beyond the control of Borrowers, as may be required to
complete the same with reasonable diligence.
7.4.2 Indemnification. Borrowers shall indemnify Lender and hold
Lender harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations, costs and expenses (including
litigation costs and reasonable attorneys fees and expenses) arising from or in
any way connected with the performance of the FF&E Replacements, except for any
such actions, suits, claims, demands, liabilities, losses, damages, obligations,
costs and expenses arising solely out of the willful misconduct or gross
negligence of Lender. Borrowers shall assign to Lender all rights and claims
Borrowers may have against all persons or entities supplying labor or materials
in connection with the FF&E Replacements; provided, however, that Lender may not
pursue any such right or claim unless an Event of Default has occurred and
remains uncured.
Section 7.5 Inspections.
Without limiting any other rights provided to Lender under the Loan
Documents, Lender shall have the right to inspect each Individual Property, at
Borrowers' expense (a) once during any DSCR Restricted Period and (b) after
receipt of any report indicating that such Individual Property has failed an
inspection by the applicable Franchisor.
VIII. DEFAULTS
Section 8.1 Event of Default.
(a) Each of the following events occurring with respect to
Borrowers, any Borrower, the Properties or any Individual Property shall
constitute an "Event of Default" hereunder:
(i) if Borrowers fail to make any payment required to fund the Debt
Service Payment Sub-Account, the Basic Carrying Costs Sub-Account, the FF&E
Sub-Account and, during any Operative Period and any DSCR Restricted Period, the
Operations and Maintenance Expense Sub-Account, in full on any Due Date and such
failure continues for two (2) days, provided that if such grace
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period shall end on a day other than a Business Day, such grace period shall be
extended to the next Business Day;
(ii) if Borrowers fail to pay all or any portion of the principal
amount of the Loan on the Maturity Date;
(iii) if Borrowers fail to pay any amount (other than amounts that
may be referred to in clauses (i) and (ii) above) payable by Borrowers pursuant
to this Agreement or any other Loan Document when due and such failure continues
for five (5) days after Lender delivers written notice thereof to Borrowers,
provided that if such grace period shall end on a day other than a Business Day,
such grace period shall be extended to the next Business Day;
(iv) the continuation of any Franchise Restricted Period for ninety
(90) days;
(v) if any representation or warranty made by any Borrower herein or
in any other Loan Document, or in any report, certificate, financial statement
or other instrument, agreement or document furnished by Borrowers in connection
with this Agreement or any other Loan Document, shall be misleading in any
material respect as of the date representation or warranty was made and such
misleading respect shall not have been remedied within fifteen (15) days of the
earlier of discovery by Borrowers or written notice by Lender;
(vi) if any Borrower or any general partner of any Borrower shall
make an assignment for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for
any Borrower or any general partner of any Borrower or if any Borrower or any
general partner of any Borrower shall be adjudicated a bankrupt or insolvent, or
if any petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be filed by
or against, consented to, or acquiesced in by, any Borrower or any general
partner of any Borrower, or if any proceeding for the dissolution or liquidation
of any Borrower or any general partner of any Borrower shall be instituted;
provided, however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by such Borrower or such general partner, upon
the same not being discharged, stayed or dismissed within thirty (30) days, or
if any Borrower or any general partner of any Borrower shall generally not be
paying its debts as they become due;
(viii) if any Borrower attempts to (A) assign its respective rights
under this Agreement or any of the other Loan Documents or any interest herein
or therein or (B) transfer its Individual Property or any interest therein in
contravention of the Loan Documents;
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(ix) if any Borrower breaches any of its covenants contained in
Section 6.1 or any covenant contained in Section 4.l(dd) hereof and such breach
is not remedied within five (5) days of written notice by Lender;
(x) if an Event of Default as defined or described in the Note, the
Mortgage or any of the other Loan Documents occurs, whether as to any Borrower
or its Individual Property or as to Borrowers or all or any portion of the
Properties;
(xi) if Borrowers, or any Borrower shall continue to be in Default
under any of the other terms, covenants or conditions of this Agreement or any
other Loan Document, for ten (10) days after written notice from Lender, in the
case of any default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice from Lender in the case of any other default;
provided, however, that if such non-monetary default is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided further that
Borrowers shall have commenced to cure such default within such 30-day period
and thereafter diligently and expeditiously proceeds to cure the same, such
30-day period shall be extended for such time as is reasonably necessary for
Borrowers in the exercise of due diligence to cure such default, such additional
period not to exceed sixty (60) days or, if such cure shall require
construction, one hundred eighty (180) days, except as such 180-day period may
be extended to the extent Borrowers' cure of such default is prevented by fire
or other casualty, acts of God, strike or other labor trouble of general
application (but not a labor dispute directed particularly at any Borrower or
Borrowers) or similar event (excluding financial difficulties of Borrower)
beyond the control of Borrowers, as may be required to complete the same with
reasonable diligence;
(xii) if the Policies required to be procured and maintained by
Borrowers are not so procured and maintained in accordance with the terms
hereof; or
(xiii) if Borrowers shall fail to complete the Required Repairs as
required under Section 7.3
(b) Upon the occurrence of an Event of Default (other than an Event
of Default described in clauses (vi), (vii) or (viii) above) and at any time
thereafter the Lender may, in addition to any other rights or remedies available
to it pursuant to this Agreement and. the other Loan Documents or at law or in
equity, take such action, without notice or demand, that Lender deems advisable
to protect and enforce its rights against any one or more of the Borrowers and
in and to all or any of the Properties, including, without limitation, giving
notice to Borrowers that the Indebtedness is immediately due and payable, and
Lender may enforce or avail itself of any or all rights or remedies provided in
the Loan Documents against any one or more of the Borrowers and any or all of
the Properties, including,
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without limitation, all rights or remedies available at law or in equity. Upon
any Event of Default described in clauses (vi), (vii) or (viii) above, the
Indebtedness shall immediately and automatically become due and payable, without
notice or demand, and Borrowers hereby expressly waive any such notice or
demand, anything contained herein or in any other Loan Document to the contrary
notwithstanding.
Section 8.2 Remedies.
(a) Upon the occurrence of an Event of Default, all or any one or
more of the rights, powers, privileges and other remedies available to Lender
against Borrowers under this Agreement or any of the other Loan Documents or at
law or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Indebtedness shall be declared due and payable,
and whether or not Lender shall have commenced any foreclosure proceeding or
other action for the enforcement of its rights and remedies under any of the
Loan Documents with respect to all or any of the Individual Properties. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth herein
or in the other Loan Documents.
(b) With respect to Borrowers and the Properties, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to any Individual Properties for the satisfaction of any of the
Indebtedness in preference or priority to any other such Individual Properties,
and Lender may seek satisfaction out of all such Individual Properties or any
part thereof, in its absolute discretion, in respect of the Indebtedness.
Section 8.3 Remedies Cumulative.
The rights, powers and remedies of Lender under this Agreement shall
be cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be
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deemed expedient. A waiver of one default or Event of Default with respect to
any one or more of Borrowers shall not be construed to be a waiver of any such
default or Event of Default with respect to any other Borrowers or with respect
to any subsequent default or Event of Default by such Borrower or Borrowers or
any other Borrowers, or to impair any remedy, right or power consequent thereon.
IX. MISCELLANEOUS
Section 9.1 Survival.
This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Indebtedness of Borrowers is outstanding and unpaid. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party. All covenants,
promises and agreements contained in this Agreement shall be binding upon, and
shall inure to the benefit of, Lender, together with its successors and assigns,
and Borrowers, together with their permitted successors and assigns.
Section 9.2 Lender's Discretion.
Whenever pursuant to this Agreement, Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.
Section 9.3 Governing Law.
(a) This Agreement was negotiated in the State of New York, and made
by Lender and accepted by Borrowers in the State of New York, and the proceeds
of the Note delivered pursuant hereto shall be disbursed from the State of New
York, which State the parties agree has a substantial relationship to the
parties and to the underlying transaction embodied hereby, and in all respects,
including, without limiting the generality of the foregoing, matters of
construction, validity and performance, this Agreement and the obligations
arising hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to contracts made and performed in such
State and any applicable law of the United States of
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America, except that at all times the provisions for the creation, perfection,
and enforcement of the liens and security interests created pursuant hereto and
pursuant to the other Loan Documents shall be governed by and construed
according to the law of the State in which the applicable Individual Property is
located, it being understood that, to the fullest extent permitted by the law of
such State, the law of the State of New York shall govern the validity and the
enforceability of all Loan Documents and all of the Indebtedness or obligations
arising hereunder or thereunder. To the fullest extent permitted by law,
Borrowers hereby unconditionally and irrevocably waive any claim to assert that
the law of any other jurisdiction governs this Agreement and the Note, and this
Agreement and the Note shall be governed by and construed in accordance with the
laws of the State of New York pursuant to Section 5-1401 of the New York General
Obligations Law.
(b) Any suit, action or proceeding against Lender or any Borrower or
Borrowers arising out of or relating to this Agreement shall be instituted in
any federal or state court in New York, New York, pursuant to Section 5-1402 of
the New York General Obligations Law, or, at Lender's discretion, in any State
where any Individual Property is located, and each Borrower waives any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding, and each Borrower hereby irrevocably submits to the
jurisdiction of any such court in any suit, action or proceeding. Borrowers do
hereby designate and appoint C.T. Corporation System, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as its authorized agent to accept and acknowledge on its behalf
service of any and all process which may be served in any such suit, action or
proceeding in any federal or state court in New York, New York, and agrees that
service of process upon said agent at said address and written notice of said
service of Borrowers mailed or delivered to Borrowers in the manner provided
herein shall be deemed in every respect effective service of process upon
Borrowers, in any such suit, action or proceeding in the State of New York.
Borrowers (i) shall give prompt notice to Lender of any changed address of its
authorized agent hereunder, (ii) may at any time and from time to time designate
a substitute authorized agent with an office in New York, New York (which office
shall be designated as the address for service of process), provided that all
Borrowers shall have the same authorized agent with the same address, and (iii)
shall promptly designate such a substitute if its authorized agent ceases to
have an office in New York, New York or is dissolved without leaving a
successor.
Section 9.4 Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination or
waiver of any provision of this Agreement, or of the Note, or of any other Loan
Document, nor consent to any
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departure by Borrowers therefrom, shall in any event be effective unless the
same shall be in a writing signed by the party against whom enforcement is
sought, and then any such waiver or consent shall be effective only in the
specific instance, and for the purpose, for which given. Except as otherwise
expressly provided herein, no notice to, or demand on Borrowers, shall entitle
Borrowers to any other or future notice or demand in the same, similar or other
circumstances.
Section 9.5 Delay Not a Waiver.
Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, under the Note or
under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the date on which the same is due of any
amount payable under this Agreement, the Note or any other Loan Document, Lender
shall not be deemed to have waived any right either to require prompt payment
when due of all other amounts due under this Agreement, the Note or the other
Loan Documents, or to declare a default for failure to effect prompt payment of
any such other amount.
Section 9.6 Notices.
All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested, or (b)
nationally recognized overnight delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, addressed if to Lender
at its address set forth on the first page hereof, and if to Borrowers to
Borrowers' address set forth on the first page hereof, or at such other address
and person as shall be designated from time to time by any party hereto, as the
case may be, in a written notice to the other parties hereto in the manner
provided for in this Section. A copy of all notices, consents, approvals and
requests directed to Borrower shall be delivered to Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx,
Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq. A notice shall be deemed to
have been given: in the case of hand delivery, at the time of delivery; in the
case of registered or certified mail, when delivered or upon the first attempted
delivery on a Business Day; or in the case of overnight delivery
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service, when delivered or upon the first attempted delivery on a Business Day.
Section 9.7 Trial by Jury.
EACH BORROWER, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO,
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT, THE
NOTE, OR THE OTHER LOAN DOCUMENTS.
Section 9.8 Headings.
The Article and/or Section headings and the Table of Contents in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
Section 9.9 Successors and Assigns; Assignment.
This Agreement shall be binding upon and shall inure to the benefit
of each party hereto and their respective permitted successors and assigns.
Lender shall have the right, upon notice to Borrowers, to transfer, sell or
assign this Agreement and any of the other Loan Documents and the obligations
hereunder to any Person who purchases or otherwise acquires an interest in the
Loan.
Section 9.10 Severability.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
Section 9.11 Preferences.
Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrowers to any portion of the
obligations of Borrowers hereunder. To the extent Borrowers make a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or
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proceeds received, the obligations hereunder or part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by Lender.
Section 9.12 Waiver of Notice.
Borrowers shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which (a) this
Agreement or the other Loan Documents specifically and expressly provide for the
giving of notice by Lender to Borrowers and (b) Borrowers are not, pursuant to
applicable law, permitted to waive the giving of notice. To the extent permitted
by Applicable Law, Borrowers hereby expressly waive the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrowers.
Section 9.13 Intentionally Deleted.
Section 9.14 Expenses; Indemnity.
Borrowers covenant and agree to reimburse Lender upon receipt of
written notice from Lender for all reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) incurred by Lender in connection
with (i) the negotiation, preparation, execution, delivery and administration of
any consents, amendments, waivers or other modifications to this Agreement and
the other Loan Documents and any other documents or matters requested by
Borrower; (ii) the filing and recording fees and expenses, title insurance and
other similar expenses incurred in creating and perfecting the Liens in favor of
Lender pursuant to this Agreement and the other Loan Documents; (iii) enforcing
or preserving any rights, in response to third party claims or the prosecuting
or defending of any action or proceeding or other litigation, in each case
against, under or affecting Borrowers, this Agreement, the other Loan Documents,
the Properties, or any other security given for the Loan; and (iv) enforcing any
obligations of or collecting any payments due from Borrowers under this
Agreement, the other Loan Documents or with respect to the Properties or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or of any insolvency
or bankruptcy proceedings; provided, however, that Borrowers shall not be liable
for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of
Lender.
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Section 9.15 Exhibits Incorporated.
The Exhibits and Schedules annexed hereto are hereby incorporated
herein as a part of this Agreement with the same effect as if set forth in the
body hereof.
Section 9.16 Offsets, Counterclaims and Defenses.
Any assignee of Lender's interest in and to this Agreement, the Note
and the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which Borrowers may have against any assignor of such
documents that are unrelated to the Loan, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrowers in any action or proceeding
brought by any such assignee upon such documents and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by each Borrower.
Section 9.17 No Joint Venture or Partnership.
Borrowers and Lender intend that the relationships created hereunder
and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrowers and Lender
nor to grant Lender any interest in the Properties other than that of mortgagee
or lender.
Section 9.18 Publicity.
All news releases, publicity or advertising by Borrowers or their
Affiliates through any media intended to reach the general public which refers
to the Loan Documents or the Loan, to the Lender, the Loan Purchaser, the
Depositor, the Servicer or the Trustee shall be subject to the prior written
approval of Lender, provided that Lender shall have no right to prevent
Borrowers from making any news releases, filings or statements required by Legal
Requirements.
Section 9.19 Waiver of Marshalling of Assets.
To the fullest extent Borrowers may legally do so, each Borrower
waives all rights to a marshalling of the assets of such Borrower, such
Borrower's partners, if any, and others with interests in Borrower, and of such
Borrower's Individual Property, and to a marshalling of the assets of any other
Borrower, its partners or others with interests therein and of the other
Properties, or to a sale in inverse order of alienation in the event of
foreclosure of the interests hereby created, and
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agrees not to assert any right under any laws pertaining to the marshalling of
assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of the applicable Individual Properties for the collection of the Indebtedness
without any prior or different resort for collection, or the right of Lender or
any deed of trust trustee to the payment of the Indebtedness out of the net
proceeds of the Individual Property in preference to every other claimant
whatsoever.
Section 9.20 Waiver of Counterclaim.
Each Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents, including, without limitation, any Servicer.
Section 9.21 Conflict; Construction of Documents.
In the event of any conflict between the provisions of this
Agreement and any of the other Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were represented by
counsel in connection with the negotiation and drafting of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same.
Section 9.22 Brokers and Financial Advisors.
Each Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement other than the
Blackstone Group L.P. and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
which Borrower will pay pursuant to separate agreements. Each of Borrowers and
Lender hereby agree to indemnify and hold the other harmless from and against
any and all claims, liabilities, costs and expenses of any kind in any way
relating to or arising from a claim by any other Person that such Person acted
on behalf of the indemnifying party in connection with the transactions
contemplated herein. The provisions of this Section 9.22 shall survive the
expiration and termination of this Agreement and the repayment of the
Indebtedness.
Section 9.23 Prior Agreements.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or
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written, including, without limitation, the Commitment Letter dated July 19,
1994 between DLJ Mortgage Capital, Inc. and Servico, Inc., and those certain
supplemental letters dated August 19, 1994 and August 29, 1994 by DLJ Mortgage
Capital, Inc. to Servico Hotels & Resorts (together with any subsequent term
sheets, supplemental letters or amendments, the "Term Sheet") are superseded by
the terms of this Agreement and the other Loan Documents, except for the
provisions of Schedule I of the Term Sheet, as the same may be amended, which
shall survive the execution and delivery of this Agreement and the other Loan
Documents.
Section 9.24 Joint and Several.
The obligations and liabilities of Borrowers, and of each Borrower
hereunder, shall be joint and several.
Section 9.25 Appointment of Servicer.
Lender may appoint a Servicer to administer the Loan, which Servicer
shall have the power and authority to exercise all of the rights and remedies of
Lender and to act as agent of Lender hereunder and under the Note, the Mortgage
and the other Loan Documents. Upon receipt of notice of the appointment of
Servicer, Borrowers shall recognize Servicer as the agent of Lender and shall
make all payments and deliver all notices as directed by Servicer and accept all
notices from Servicer hereunder.
Section 9.26 Exculpation.
Notwithstanding any provision herein or in any of the Loan Documents
(other than the Environmental Indemnity) to the contrary, in any action brought
to enforce the obligations of Borrowers under the Note, this Agreement, the
Mortgage or the other Loan Documents (other than the Environmental Indemnity),
the judgment or decree shall be enforceable against Borrowers only to the extent
of their respective interests in the Properties and any other collateral given
to Lender to secure Borrowers' obligations hereunder, and any such judgment
shall not be subject to execution on, nor be a lien on, other assets of
Borrowers other than their respective interests in the Properties and any other
Collateral given to Lender to secure the Borrowers' obligations hereunder,
except as otherwise expressly provided hereinafter. The provisions of this
paragraph shall not, however, limit the liability of Borrowers for loss, costs
or damage arising out of the following matters: (i) any failure to apply the
Revenue of the Properties to pay the operating expenses of the Properties or to
fulfill the then current obligations of Borrowers under this Agreement, the
Note, the Mortgage or any other Loan Document; (ii) any misapplication of Loss
Proceeds, security deposits or trust funds in violation of applicable law or the
provisions of this Agreement, the Mortgage or any other Loan Document; (iii) any
collection of Rent for more than one
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month in advance of the time when the same becomes due; (iv) failure to pay all
Impositions prior to the date on which such payments become delinquent (subject
to Lender's obligation to make disbursements from the Basic Carrying Costs
Sub-Account); (v) any willful misrepresentation by any Borrower (or any
constituent partner or shareholder of any Borrower) in connection with
Borrowers' application, negotiation or documentation of the Loan; or (vi) a
fraudulent conveyance or a fraudulent transfer of the Properties or any part
thereof or any other properties or assets of any Borrower; (vii) any material
misrepresentation or breach of warranty or covenant made by any Borrower under
the Environmental Indemnity. Nothing herein shall be deemed (w) to be a waiver
of any right which Lender may have under any bankruptcy law of the United States
or of any State in which any part of the Properties are located to file a claim
for the full amount of the Loan or to require that all of the Properties and any
other collateral securing the Loan shall continue to secure all of the
Indebtedness; (x) to impair the validity of the Indebtedness; (y) to impair the
right of Lender as mortgagee or secured party to foreclose any Lien or (z)
impair the right of Lender to obtain the Recourse Distributions received by
Borrowers, including, without limitation, the right to proceed against any
constituent partner or shareholder of any Borrower to the extent any such
Recourse Distribution has actually theretofore been distributed to such
constituent partner or shareholder. The provisions of this Section 9.26 shall be
inapplicable to any Borrower if any petition for bankruptcy, reorganization or
arrangement pursuant to federal or state law shall be filed by, consented to or
acquiesced in by or with respect to such Borrower or if such Borrower shall
institute any proceeding for the dissolution or liquidation of such Borrower or
if such Borrower shall make an assignment for the benefit of creditors, in which
event Lender shall have recourse against all of the assets of such Borrower and
the Recourse Distributions received by the constituent partners and shareholders
of such Borrower. For purposes of this Section 9.26, the term "Recourse
Distributions" shall mean the Revenue arising from the Properties to the extent
received by any Borrower (or actually received by any partner or shareholder of
any Borrower if not actually received by any Borrower) after the occurrence and
written notice (including any Consultant's Notice) of an Event of Default.
Section 9.27 Arizona Interest.
Borrowers agree that, for the purposes of Arizona law, the effective
rate of interest shall be the Interest Rate stated in the Note plus any
additional rate of interest resulting from any other charges in the nature of
interest paid or to be paid in connection with this Loan Agreement, the Note and
the other Loan Documents. All fees, charges, goods and things in action or any
other sums or things of value, other than the interest resulting from the
Interest Rate and the Default Rate, as applicable, paid or payable by Maker
(collectively, the "Additional Sums"),
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whether pursuant to this Loan Agreement, the Note, the Loan Documents or any
other document or instrument in any way pertaining to this lending transaction,
or otherwise with respect to this lending transaction, shall, for the purpose of
any laws of the State of Arizona that may limit the maximum amount of interest
to be charged with respect to the Loan transaction, be payable by the Borrowers
as, and shall be deemed to be, additional interest, and for such purposes only,
the agreed upon and "contracted for rate of interest" of the Loan shall be
deemed to be increased by the rate of interest resulting from the Additional
Sums. Borrowers understand and believe that the Loan complies with the usury
laws of the State of Arizona; however, for the purposes of Arizona law, if any
interest or other charges in connection with this lending transaction are ever
determined to exceed the maximum amount permitted by law, then Borrowers agree
that (a) the amount of interest or charges payable pursuant to this lending
transaction shall be reduced to the maximum amount permitted by law and (b) any
excess amount previously collected from Borrower in connection with this lending
transaction that exceeded the maximum amount permitted by law, will be credited
against the principal balance then outstanding hereunder as provided in the
Note. If the outstanding principal balance hereunder has been paid in full, the
excess amount paid will be refunded to Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.
LENDER:
COLUMN FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President & COO
BORROWERS:
SERVICO FORT XXXXX, INC.,
a Florida corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxxx, President
WASHINGTON MOTEL ENTERPRISES, INC.,
a Pennsylvania corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxxx, President
SERVICO HOTELS III, INC., a Florida
corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxxx, President
SERVICO HOTELS IV, INC., a Florida
corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxxx, President
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NEW ORLEANS AIRPORT MOTEL
ASSOCIATES, LTD. a Florida limited
partnership
By New Orleans Airport Motel
Enterprises, Inc., a Louisiana
corporation
By: /s/ Xxxxx Xxxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxxx
President
WILPEN, INC., a Pennsylvania
corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxx, President
HILTON HEAD MOTEL ENTERPRISES,
INC., a South Carolina corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxx, President
SERVICO HOTELS I, INC., a Florida
corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxx, President
SERVICO HOTELS II, INC., a Florida
corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxx, President
MOON AIRPORT MOTEL, INC.,
a Pennsylvania corporation
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxx, President
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