EXHIBIT 10.23
LOAN AGREEMENT
BY AND BETWEEN
SUMMIT HOTEL PROPERTIES, LLC,
A SOUTH DAKOTA LIMITED LIABILITY COMPANY
AND
ING LIFE INSURANCE AND ANNUITY COMPANY,
A CONNECTICUT CORPORATION
DATED AS OF JUNE 15, 2006
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ING No. 27924
LOAN AGREEMENT
THIS AGREEMENT is made and entered into as of June 15, 2006 by and between
SUMMIT HOTEL PROPERTIES, LLC, a South Dakota limited liability company
("BORROWER"), and ING LIFE INSURANCE AND ANNUITY COMPANY, a Connecticut
corporation ("LENDER").
WINESSETH:
WHEREAS, Borrower has requested that Lender make that certain loan
(the "LOAN") to Borrower in the principal amount of $36,600,800.00, and
WHEREAS, Lender is willing to make the Loan to Borrower on the terms
and subject to the conditions and requirements set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties to this Agreement hereby agree as
follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.01 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the indicated meanings as set forth below:
"AFFILIATE" shall mean any corporation, limited liability company,
partnership or other entity which is controlling of, controlled by or under
common control with Borrower.
"AGREEMENT" shall mean this Loan Agreement, as amended, supplemented
or modified from time to time.
"ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean the Assignment,
Consent and Subordination Regarding Management Agreement executed this date by
Borrower in favor of Lender, and any modifications or replacements thereof or
therefor.
"ASSIGNMENTS OF RENTS AND LEASES" shall mean collectively the
Assignments of Rents and Leases executed this date by Borrower in favor of
Lender, to be recorded in the real estate records of the county where the
Property is located, and any extensions, renewals, modifications or replacements
thereof or therefor.
"BORROWER" shall have the meaning given such term in the preamble to
this Agreement and shall include its successors and assigns.
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"BUSINESS DAY" shall mean any day excluding Saturday, Sunday and any
other day on which banks in Atlanta, Georgia are customarily closed.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean any and all of the property which is
granted, pledged or assigned to Lender or in which Lender is otherwise granted a
Lien to secure the obligations pursuant to any and all of the Security
Documents.
"DEFAULT" shall mean any condition or event which, with notice or
lapse of time or both, would constitute an Event of Default.
"ENVIRONMENTAL INDEMNIFICATION AGREEMENT" shall mean the
Environmental Indemnification Agreement executed this date by Borrower in favor
of Lender, and any extensions, renewals, modifications or replacements thereof
or therefor.
"EVENT OF DEFAULT" shall have the meaning provided in ARTICLE VII
hereof.
"IMPROVEMENTS" shall mean all improvements constructed on the Land.
"LAND" shall mean, collectively, all of the real property described
and defined as "Land" in the Mortgage.
"LEASES" shall have the meaning given such term in the Security
Instruments.
"LENDER" shall have the meaning given such term in the preamble to
this Agreement and shall include such Persons' successors and assigns.
"LIEN" shall mean any mortgage, deed to secure debt, deed of trust,
pledge, security interest, security deposit, encumbrance, lien or charge of any
kind (including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction).
"LOAN" shall have the meaning given such term in the preamble to
this Agreement.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note,
the Security Documents, and any other certificates or written undertakings of
Borrower in favor of Lender delivered contemporaneously with the delivery of
this Agreement, other than the Environmental Indemnification Agreement.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect upon,
or a material adverse change in, any of the (i) results of operations,
properties, or financial condition
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xx Xxxxxxxx, (xx) validity, binding effect or enforceability of any Loan
Document or the Environmental Indemnification Agreement, or (iii) ability of
Borrower to perform its payment obligations or other Obligations under the Loan
Documents or the Environmental Indemnification Agreement.
"MORTGAGE" shall mean collectively the Deeds of Trusts [or
Mortgages, if applicable], Security Agreements, Financing Statements, and
Fixture Filings executed this date by Borrower for the benefit of Lender, to be
recorded in the real estate records of the county where the Property is located,
and any extensions, renewals, modifications or replacements thereof or therefor.
"NOTE" shall mean that certain Promissory Note executed by Borrower
and payable to the order of Lender in the original principal amount of
$36,600,800.00 as evidence of the Loan, and any extensions, renewals,
modifications or replacements thereof or therefor.
"OBLIGATIONS" shall mean, collectively, all amounts now or hereafter
owing to Lender by Borrower pursuant to the terms of or as a result of this
Agreement, the Note, or any other Loan Documents or the Environmental
Indemnification Agreement, including without limitation, the unpaid principal
balance of the Loan and all interest, fees, expenses and other charges relating
thereto or accruing thereon, as well as any and all other indebtedness,
liabilities, covenants, duties and obligations of Borrower, whether direct or
indirect, absolute or contingent, or liquidated or unliquidated, monetary or
non-monetary, which may be now existing or may hereafter arise under or as a
result of any of the Loan Documents, the Environmental Indemnification
Agreement, and together with any and all renewals, extensions, or modifications
of any of the foregoing.
"PERSON" shall mean any individual, partnership, limited
partnership, limited liability company, firm, corporation, association, joint
venture, trust or other entity, or any government or political subdivision or
agency, department or instrumentality thereof.
"PROPERTY" shall mean, collectively, the property, including the
Land and all improvements, fixtures and related personal property located
thereon.
"REQUIREMENTS" shall have the meaning given such term in SECTION
4.12 hereof.
"SECURITY DOCUMENTS" shall mean, collectively, the Security
Instruments, the Assignment of Management Agreement, and each other affidavit,
certificate, security, mortgage, assignment, financing statements or other
collateral document, whether now existing or hereafter executed and delivered in
connection with, or securing any or all of, the Obligations.
"SECURITY INSTRUMENTS" shall mean, collectively, the Mortgage, the
Assignment of Rents and Leases, the UCC Financing Statements, and other security
instruments executed this date by Borrower in favor of Lender, to be recorded in
the real estate records of the county where the Property is located, and any
extensions, renewals, modifications or replacements thereof or therefor.
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"TAXES" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, now or hereafter imposed or levied by the United States of America, or
any state or local government or by any department, agency or other political
subdivision or taxing authority thereof or therein and all interest, penalties,
additions to tax and similar liabilities with respect thereto other than taxes
on the income of Lender.
SECTION 1.02 OTHER DEFINITIONAL TERMS. 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. Any pronoun used herein shall be deemed to cover all genders and all
singular terms used herein shall include the plural and vice versa. Unless
otherwise expressly indicated herein, all references herein to a period of time
which runs "from" or "through" a particular date shall be deemed to include such
date, and all references herein to a period of time which runs "to" or "until" a
particular date shall be deemed to exclude such date.
ARTICLE II
LOANS
SECTION 2.01 DISBURSEMENT. Subject to the terms and conditions of this
Agreement, Lender agrees to advance to Borrower the Loan in accordance with the
terms and provisions of the Note.
SECTION 2.02 NOTE; REPAYMENT OF PRINCIPAL AND INTEREST. Borrower's
obligations to pay to Lender the principal of and interest on the Loan shall be
evidenced by the Note. The Loan shall bear interest at the rate or rates per
annum specified in the Note and such interest shall be calculated and shall be
paid and shall accrue in the manner specified in the Note.
ARTICLE III
GENERAL TERMS
SECTION 3.01 FEES. In consideration of Lender's entering into this
Agreement and making the Loan hereunder, Borrower agrees to pay (from deposits
previously delivered to Lender) to Lender, on the date of the funding of the
Loan hereunder, a processing fee in the amount of $25,000.00, which processing
fee shall be deemed fully earned upon Lender's execution and delivery of this
Agreement and the funding of the Loan.
SECTION 3.02 PAYMENTS, PREPAYMENTS AND COMPUTATIONS. Except as may be
otherwise specifically provided herein, all payments by Borrower with respect to
the Loan or any other Obligations under this Agreement or any of the other Loan
Documents or the Environmental Indemnification Agreement shall be made without
defense, set-off or counterclaim to Lender not later than 2:00 p.m. (Eastern
Time) on the date when due and shall be made in lawful money of the United
States of America in immediately available funds. Any payment received by Lender
on a non-Business Day or after 2:00 p.m. (Eastern Time) on any
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Business Day shall be deemed received by Lender at the opening of its business
on the next Business Day. Whenever any payment to be made hereunder or under the
Note or any of the other Loan Documents or the Environmental Indemnification
Agreement shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the
applicable rate during such extension. Interest shall be calculated on the basis
of a year consisting of 360 days and with twelve thirty-day months, except that
interest due and payable for less than a full month shall be calculated by
multiplying the actual number of days elapsed in such period by a daily interest
rate based on a 360-day year. The Loan may not be prepaid in whole or in part
except as specifically provided in the Note.
SECTION 3.03 COLLATERAL. The Obligations shall be secured pursuant to any
or all Security Documents. Borrower also shall execute or deliver (or cause to
be executed and delivered) any and all financing statements and such other
documents as Lender may reasonably request from time to time in order to perfect
or maintain the perfection of Lender's Liens under such Security Documents.
SECTION 3.04 AGREEMENTS REGARDING INTEREST AND OTHER CHARGES. Borrower and
Lender hereby agree that the only charges imposed or to be imposed by Lender
upon Borrower for the use of money in connection with the Loan is and will be
the interest required to be paid under the provisions of this Agreement as well
as the related provisions of the Note. In no event shall the amount of interest
due and payable under this Agreement, the Note or any of the other Loan
Documents or the Environmental Indemnification Agreement exceed the maximum rate
of interest allowed by applicable law. It is the express intent hereof that
Borrower not pay and Lender not receive, directly or indirectly or in any
manner, interest in excess of that which may be lawfully paid under applicable
law. Any and all charges, fees, and other amounts payable hereunder not
identified as "interest" are not intended, and shall not be deemed, to be
interest. All interest, and all other charges, fees or other amounts deemed to
be interest notwithstanding the preceding sentence, which are paid or agreed to
be paid to Lender under this Agreement, the Note or any of the other Loan
Documents shall, to the maximum extent permitted by applicable law, be
amortized, allocated and spread on a pro rata basis throughout the entire actual
term of the Loan (including any extension or renewal period), or at Lender's
election and to the extent permitted by applicable law, credited as a payment of
principal.
SECTION 3.05 LETTER OF CREDIT. In the event Lender requires or agrees to
accept a letter of credit with respect to the Loan, said letter of credit, and
any extension, renewal, or replacement thereof, shall be an unconditional,
irrevocable letter of credit issued by a bank approved by Lender and in
substance and form acceptable to Lender. Any such letter of credit shall not
contain any conditions for its cashing beyond presentation by its authorized
representative. Its term shall be for not less than three (3) months beyond the
end of the time period, or any extension thereof, specified by Lender for
satisfaction of such requirement.
SECTION 3.06 PROHIBITION ON DRY CLEANERS. Borrower shall not, during the
term of the Loan, conduct or permit any tenant to conduct any dry cleaning
operations on or at the Property.
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SECTION 3.07 PROPERTY RELEASE PRIVILEGE. Provided no Event of Default (as
hereinafter defined) exists, Borrower shall be allowed, subsequent to the
Lockout Period (as that term is defined in the Note), to partially prepay the
Loan, upon thirty (30) days prior written notice to Lender ("RELEASE REQUEST"),
and to thereby obtain a partial release of the Mortgage of any parcel of
Property securing the Loan (the "RELEASE PRIVILEGE") subject to the following
conditions:
(i) The total principal amount of the Loan to be funded pursuant to this
Agreement is hereby allocated by Lender to each Property comprising the
security hereunder in the following initial amounts ("PRINCIPAL
ALLOCATION"), resulting in the following percentages of the total Loan
amount ("ALLOCATION PERCENTAGE") for each parcel as follows:
PRINCIPAL
PROPERTY ALLOCATION ALLOCATION PERCENTAGE RELEASE FACTOR
------------------------------ ----------- --------------------- --------------
(1) Fairfield Inn $ 2,637,900 7.21% 110%
0000 Xxxxx Xxxxxx
(2) Comfort Inn $ 3,312,900 9.05% 110%
0000 Xxxxxxx Xxxx
(3) Hampton Inn $ 5,632,900 15.39% 120%
0000 Xxxx Xxxxxxxxx Xxxx.
(4) Courtyard by Marriott $ 5,709,900 15.60% 125%
0000 Xxxxx Xxxxxxx Xx.
(5) Comfort Inn $ 2,345,900 6.41% 110%
0000 Xxxxx Xxxxxxx Xx.
(6) Hawthorn Suites $ 5,607,900 15.32% 120%
000 Xxxxx Xxxxxxxx Xxxx.
(7) Hampton Inn $ 5,862,900 16.02% 125%
0000 Xxxx Xxxxxxxx Xx.
(8) Comfort Suites $ 2,894,900 7.91% 120%
00000 Xxxxx Xxxxxxxx Xx.
(9) Fairfield Inn $ 2,595,600 7.09% 125%
0000 Xxxx Xxxxx Xxxxx
----------- ------
TOTAL $36,600,800 100.00%
=========== ======
As monthly installments of principal and interest are made in accordance
with the terms and conditions of the Note and Loan Documents, the
Principal Allocation for each Property shall be reduced by that Allocation
Percentage of the amortized principal amount paid, but the Allocation
Percentage for each Property shall remain constant until Borrower
exercises its Release Privilege, at which time the Allocation Percentage
for each Property shall be redetermined and reallocated among the
remaining Property(ies) by Lender in its sole discretion.
(ii) Promptly following Lender's receipt of Borrower's Release Request, Lender
shall determine the release price (the "RELEASE PRICE") payable for each
parcel of Property,
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which shall be an amount equal to the product of (x) the release factor
for the parcel of Property to be released as set forth in the chart in
SUBPARAGRAPH 3.07(I) hereinabove ("RELEASE FACTOR") times (y) the
Allocation Percentage for such parcel of Property to be released
multiplied by the then outstanding principal balance of the Loan
("AMORTIZED PRINCIPAL ALLOCATION"). For example, if Borrower submitted a
request for a release of Property (1) Fairfield Inn, 2303 North Fourth in
accordance with the conditions herein set forth, the calculation would be
as follows:
(a) Release Price = 110% x Amortized Principal
Allocation
and
(b) Amortized Principal
Allocation = 7.21% x outstanding principal
balance of Note
(c) Assuming a principal balance of $36,600,800, the Property (1)
release price would be calculated as: 1.10 x 0.0721 x $36,600,800
= $2,902,809
(iii) In addition to the Release Price, Borrower also shall pay to Lender,
simultaneously with the Release Price, the "Prepayment Premium" (as that
term is defined in the Note) on such Release Price calculated in
accordance with the Note;
(iv) Lender shall have the right to apply the Release Price to the Loan in such
manner as Lender may determine in its sole discretion;
(v) After the Lender has applied the Release Price to the Loan, Lender shall
redetermine and reallocate the Allocation Percentages and redetermine the
Principal Allocations for the remaining parcels of Property, in its sole
discretion, and shall advise Borrower in writing within thirty (30) days
of receipt of the Release Request as to the amounts of the reallocated
Allocation Percentages and Principal Allocations.
(vi) Borrower shall pay all costs, fees and expenses associated with the
Release Privilege, including without limitation, one hundred percent
(100%) of all attorneys' fees and expenses incurred by or on behalf of
Lender in connection therewith, and all such sums shall be due and payable
on the date of closing and delivery of the release documentation by
Lender;
(vii) Borrower shall provide Lender with an endorsement to its loan title
policies (as to the Mortgage) with respect to the remaining parcels in
form and substance satisfactory to Lender in its sole discretion insuring
the Loan through the date and time of recording of the release and
modification instrument, with no new exceptions since the date of this
Agreement unless approved by Lender in writing. To the extent that a
released Property adjoined a remaining parcel or shared common areas,
parking, utilities or amenities or services with the a remaining parcel of
Property, such endorsement will also (a) insure that the remaining
Property has access to the same publicly dedicated streets as it did prior
to the release and (b) amend the legal description to include only the
remaining parcels;
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(viii) Borrower shall be limited in its ability to exercise the Release
Privilege herein as follows:
(a) Borrower shall not be permitted to release any parcel of the
Property from the Collateral for the Loan at such time as the
original Principal Allocation set forth in the chart in SUBPARAGRAPH
3.07(i) of all Property released on or prior to the date of such
release would exceed $18,300,400 ("FINAL RELEASE LIMITATION");
(b) Borrower shall not be permitted to release any parcel of the
Property from the Collateral for the Loan at such time as the
original Principal Allocation set forth in the chart in SUBPARAGRAPH
3.07(i) of all Property released on or prior to the date of such
release would exceed $10,934,000 ("INTERIM RELEASE LIMITATION")
unless (x) Borrower has previously released or is at such time
obtaining the release of at least one parcel of Property identified
in the chart set forth in SUBPARAGRAPH 3.07(i) at (1), (2) or (5)
("110% FACTOR PROPERTIES"), and (y) for each release to be closed
between the point of the Interim Release Limitation and the Final
Release Limitation, at least two of the three 110% Factor Properties
previously must have been or will be released in connection with the
current exercise of the Release Privilege.
SECTION 3.08 SUBSTITUTION OF COLLATERAL. Notwithstanding the provisions of
this Agreement or any of the Loan Documents to the contrary, Borrower may submit
a written request ("SUBSTITUTION REQUEST"), upon at least ninety (90) days prior
notice, that Lender permit a substitution (each a "SUBSTITUTION") of a
substitute property (each a "SUBSTITUTE PROPERTY") (which previously has not
been the subject of inclusion in the collateral for the Loan) for any individual
Property on the list in the chart in SUBPARAGRAPH 3.07(i) herein (in such
capacity a "REPLACED PROPERTY") upon and subject to the following terms and
conditions:
(a) Borrower must submit a Substitution Request, identifying the
proposed Substitute Property and the proposed Replaced Property at
least ninety (90) days prior to the proposed closing date for the
Substitution. Lender shall evaluate the request for the proposed
Substitution and the proposed Substitute Property pursuant to its
then customary underwriting and pricing criteria. The amount of the
"PRINCIPAL ALLOCATION" Lender would determine to allocate to the
Substitute Property must be at least equal to the amount of the then
remaining Principal Allocation for the proposed Replaced Property,
and the loan-to-value ratio for the Lender's proposed Principal
Allocation for the Substitute Property, based upon a current MAI
appraisal in accordance with SUBPARAGRAPH (h) below, must be at
least equal to the then current loan-to-value ratio for the proposed
Replaced Property. In its underwriting and pricing analysis, Lender
may review items such as, but not limited to, location, occupancy,
lease term, rollover, tenant exposure, tenant's credit, average
daily room rates and operating statements.
(b) The owner of the Substitute Property must be the Borrower (such that
the Substitute Property is owned 100% by the same entity as owns all
the collateral
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constituting the Property). No properties will be permitted other
than limited service or full service hotels or motels operating
under a hotel or motel franchise acceptable to Lender. The
Substitute Property must be located in the continental United
States.
(c) Lender in its sole discretion shall acknowledge within ten (10)
business days of the Lender's receipt of the Substitution Request
whether the proposed Substitute Property appears to be acceptable to
permit the Substitution. If in the Lender's sole discretion it is
determined that the proposed Substitute Property is equal to or
greater in value and quality than the Property, then Lender, through
its loan correspondent, GMAC Commercial Mortgage, will process the
Borrower's formal request for Substitution. The proposal will be
reviewed by and presented to Lender's and ING Investment Management
LLC's investment review committees pursuant to each of their then
current commercial mortgage loan policies, practices, standards and
procedures. If the investment review committee approves the formal
request for Substitution, the Substitution will be subject to the
other conditions outlined in this SECTION 3.08.
(d) No more than one (1) Substitution Request shall be considered in any
calendar year for the entire Loan.
(e) Borrower shall not be permitted to request and close more than a
total of three (3) Substitutions during the Loan term.
(f) Borrower shall pay a processing fee to Lender equal to $25,000 at
closing of each approved Substitution. A "SUBSTITUTION DEPOSIT" of
$5,000 shall be required with submission of a Substitution Request,
which deposit shall be applied to the processing fee at closing of
the Substitution. The deposit and processing fee contemplated by
this subsection are in addition to attorneys' fees and expenses
incurred in the documentation of such Substitution and in the review
of due diligence.
(g) All improvements on the Substitute Property shall have been
completed in a good and workmanlike manner and in compliance, in all
material respects, with all applicable governmental requirements.
The Substitute Property must be lien free and all land, improvements
and personal property must be paid for in full.
(h) The appraised fair market "As Is" value of the Substitute Property
shall be equal to or greater than the greater of (x) the then
appraised fair market value, or gross sales proceeds, as the case
may be, of the Replaced Property, and (y) the original appraised
value of the Replaced Property as set forth in the appraisal
delivered to Lender in connection with the closing of the loan on
the Replaced Property. The fair market "As Is" value of the Replaced
Property and Substitute Property shall be determined by a firm of
appraisers selected by GMAC Commercial Mortgage and approved by the
Lender, based on an MAI appraisal satisfactory to Lender,
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dated not more than ninety (90) days prior to the closing of the
Substitution. All costs of such appraisals shall be paid by the
Borrower on or prior to the closing of the Substitution. Lender
shall have the right to readjust the Principal Allocations and
Allocation Percentages for all properties constituting the Property
(or such number remaining if the Release Privilege previously has
been exercised).
(i) The actual net operating income relating to the Substitute Property
(based upon the trailing twelve (12) month financial results or such
shorter period, as Lender deems appropriate, for a Substitute
Property opened for less than one year) shall equal or exceed the
actual net operating income relating (based upon the trailing twelve
(12) month financial results or such shorter period, as Lender
reasonably deems appropriate, for any Substitute Property opened for
less than one year) to the Replaced Property.
(j) Lender's outside counsel shall prepare and Borrower shall execute
(1) amendments to the Note, the Mortgage, the Assignments of Rents
and Leases, the Environmental Indemnification Agreement, this
Agreement and tax and insurance escrows, and (2) all Loan Documents
Lender shall deem appropriate, including, but not limited to, any
new security instrument, assignment of rents and leases,
environmental indemnities, etc. relating to the Substitute Property
(all of which documentation shall be substantially in the form of
the applicable documents executed in connection with the Loan with
such changes thereto as Lender reasonably deems appropriate to
reflect the terms and circumstances of the Substitution and
Substitute Property) (collectively, the "SUBSTITUTE LOAN
DOCUMENTS"). The Substitution Loan Documents shall be
cross-defaulted and cross-collateralized with the existing Loan
Documents for the Loan.
(k) Borrower shall be required to supply for Lender's review and
approval due diligence materials relating to the Substitute Property
prior to closing of the Substitution including those items required
for closing of this Loan, and such other materials as may then be
customarily required as part of its then current commercial loan
closing policies, procedures, standards and practices for properties
of similar type and in similar locations as the Substitute Property,
including, without limitation, a current as-built ALTA survey, proof
of adequate insurance, title insurance in conformance with the
requirements for the closing of this Loan, proof of compliance with
governmental regulations, tenant estoppel certificates,
subordination, non-disturbance and attornment agreements, franchise
agreements and comfort letters. The Lender shall, at the Borrowers'
sole cost and expense, receive for its review and approval all
additional due diligence materials in any way relating to the
Substitute Property, including but not limited to, appraisal,
hazardous substance report, seismic report and engineer report as
required by Lender in its sole discretion. The items listed in this
subsection are not exhaustive.
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(l) The Substitute Loan Documents, financing statements, and other
instruments required to perfect the liens in the Substitute Property
and all collateral under such documents shall be recorded,
registered and filed (as applicable) in such manner as may be
required by law to create a valid, perfected lien and security
interest with respect to the Substitute Property and the personal
property related thereto. The liens created by the Substitute Loan
Documents shall be first liens and security interests on the
Substitute Property and the personal property related thereto,
subject only to such exceptions as Lender shall approve in its sole
discretion. At closing of the Substitution, the Borrower shall have
good and marketable title to the Substitute Property and good and
valid title to any personal property located thereon or used in
connection therewith, in each case satisfactory to the Lender. The
title policies to the remaining parcels of Property in the Loan must
also be endorsed to bring forward the effective dates thereof
through the dates and times of recording of the modification
instruments and showing no new exceptions since the original Loan
closing unless approved by Lender in writing and continuing all
coverage provided in the original Loan title policies.
(m) Lender shall receive (1) a confirmation and reaffirmation of all
Loan Documents by the Borrower for the other properties in the Loan,
(2) a consent to such Substitution by any guarantors or indemnitors,
if any, and (3) such other instruments and agreements and such
certificates and opinions of counsel, in form and substance
satisfactory to the Lender in connection with such Substitution as
it may reasonably request.
(n) Borrower shall be responsible for all documentary stamp and
intangible taxes on the Substitution and the Mortgage encumbering
the Substitute Property and all other parcels of Property in the
Loan that shall arise in connection with such Substitution. Lender
shall require payment of all such documentary stamp and intangibles
taxes required by law and authorities having jurisdiction as a
condition of closing the Substitution and the corresponding loan
modifications to the Loan, regardless of whether the taxing
authority imposes taxes duplicative of those incurred at the
original closing of the Loan.
(o) No Event of Default shall have occurred and be continuing hereunder
or under any other Loan Documents for the Loan on the date of
Substitution Request or at closing of the Substitution.
(p) Lender shall be satisfied that no material adverse change in the
financial condition, operations or prospects of any guarantor,
Borrower (or controlling member of Borrower or general partner or
limited partner of Borrower, as applicable) has occurred after
closing of this Loan.
(q) The Borrower shall pay all reasonable out-of-pocket costs and
expenses incurred in connection with any such Substitution and the
reasonable out-of-pocket fees and expenses incurred by Lender, its
outside counsel and its loan correspondent
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and servicer in connection therewith. Without limiting the
generality of the foregoing, the Borrower shall, in connection with,
and as a condition to, each Substitution, pay the reasonable fees
and expenses of Lender's counsel, the reasonable fees and expenses
of Lender's engineers, appraisers, construction consultants,
insurance consultants and other due diligence consultants and
contractors, recording charges, title insurance charges, and
documentary stamp and/or mortgage or similar taxes, transfer taxes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to Lender as follows:
SECTION 4.01 ORGANIZATION; AUTHORIZATION; VALID AND BINDING OBLIGATIONS.
Borrower is a limited liability company duly organized and validly existing
under the laws of the State of South Dakota. The Summit Group, Inc. is the
Company Manager of Borrower and is duly organized and validly existing under the
laws of the State of South Dakota. Borrower is duly qualified and authorized to
do business and is in good standing in all other states and jurisdictions where
the ownership of property or the nature of the business transacted by it, makes
such qualification necessary, including, without limitation, the state where the
Property is located. Borrower has all requisite power and authority to execute
and deliver the Loan Documents and the Environmental Indemnification Agreement,
to perform its obligations under such Loan Documents and the Environmental
Indemnification Agreement and to own its property and carry on its business. The
Loan Documents and the Environmental Indemnification Agreement have been duly
authorized by all requisite corporate, partnership, limited liability company or
other action on the part of Borrower and duly executed and delivered by
authorized officers, partners or other representatives (as the case may be) of
Borrower. Each of the Loan Documents and the Environmental Indemnification
Agreement constitutes a valid obligation of Borrower, legally binding upon and
enforceable against Borrower in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
SECTION 4.02 FINANCIAL STATEMENTS. Borrower covenants and agrees that it
will keep and maintain books and records of account, or cause books and records
of account to be kept and maintained in the manner prescribed in PARAGRAPH 25 of
the Mortgage.
SECTION 4.03 ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of Borrower, threatened against
Borrower, any properties, assets or rights of Borrower other than the Property,
by or before any court, arbitrator or administrative or governmental body that
would have a material adverse effect on Borrower if resulting in a decision not
in favor of Borrower. There is no action, suit, investigation or proceeding
pending, or, to the knowledge of Borrower, threatened against the Property, by
or before any court, arbitrator or administrative or governmental body involving
an amount in controversy exceeding $100,000.
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SECTION 4.04 TITLE TO LAND. The Land is free and clear of all liens and
encumbrances, except for the Loan Documents and except as specifically set forth
in the mortgagee title policy(ies) delivered to Lender in connection with the
Loan, and except for unrecorded leases provided to Lender.
SECTION 4.05 TAXES. Borrower has filed all federal, state and other income
tax returns prior to the required filing date which, to the knowledge of
Borrower, are required to be filed, and has paid all Taxes as shown on such
returns and on all assessments received by it to the extent that such Taxes have
become due, except such Taxes as are not due or which are being contested in
good faith by Borrower by appropriate proceedings for which adequate reserves
have been established in accordance with sound accounting practices consistently
applied or by any tenant under any Leases, in which case such contest is being
conducted as permitted pursuant to the applicable Lease(s).
SECTION 4.06 CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
execution nor delivery of this Agreement, nor fulfillment of or compliance with
the terms and provisions of this Agreement, will conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of any Lien (other than
any Lien arising under any Loan Document) upon the Property or any other
properties or assets of Borrower, the charter or by-laws or other organizational
documents of Borrower, any award of any arbitrator or any agreement, instrument,
order, judgment, decree, statute, law, rule or regulation to which Borrower, the
Property or any other properties or assets of Borrower is subject.
SECTION 4.07 GOVERNMENTAL CONSENT. Except for any recording or filing
which may be required by applicable law to perfect or maintain the perfection of
Lender's Liens in the Collateral, no consent, approval or authorization of, or
declaration or filing with, any governmental authority is required for the valid
execution, delivery and performance by Borrower of the Loan Documents or the
Environmental Indemnification Agreement or the consummation of any of the
transactions contemplated by the Loan Documents.
SECTION 4.08 DISCLOSURE. To Borrower's knowledge, neither this Agreement
nor any other document, certificate or statement furnished to Lender by Borrower
in connection herewith contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein and therein not materially misleading.
SECTION 4.09 [INTENTIONALLY OMITTED]
SECTION 4.10 IMPROVEMENTS. All certificates, permits and licenses required
in connection with the ownership, operation and occupancy of the Property have
been issued and are in full force and effect.
SECTION 4.11 NO DEFAULT. The Loan Documents and the Environmental
Indemnification Agreement have been complied with and are in full force and
effect and no
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defaults or events of default exist thereunder; Borrower has no knowledge of any
facts or circumstances, which with the giving of notice or passage of time (or
both) would constitute a default or event of default thereunder, and all
obligations and agreements required to be performed by Borrower thereunder have
been performed.
SECTION 4.12 COMPLIANCE WITH REQUIREMENTS. To the best of Borrower's
knowledge, the Improvements have been constructed free from faults and defects,
and in all material respects conform to and comply with all valid and applicable
laws, ordinances, regulations and rules of all governmental entities having
jurisdiction over, and all covenants, conditions, restrictions and reservations
affecting the Land and the Improvements (the "REQUIREMENTS"). Borrower has no
knowledge of any noncompliance (either substantial or unsubstantial) of the
Improvements with any of the applicable Requirements.
SECTION 4.13 CONDITION OF LAND AND IMPROVEMENTS. Neither the Land nor the
Improvements have been injured or damaged by fire or other casualty which has
not been restored.
SECTION 4.14 PERSONALTY. Except as otherwise expressly provided in the
Leases, title to all goods, materials, supplies, equipment, machinery and other
personal property and fixtures used in the operation or maintenance of the
Property, is vested in Borrower free and clear of all liens, encumbrances and
security interests, other than the lien and security interest of the Security
Instruments, and Borrower has not executed any security agreement, purchase
order or other contract or agreement under which any person or other entity is
granted or reserves the right to retain title to, remove or repossess any of
such goods, materials, supplies, equipment, machinery or other personal property
or fixtures.
SECTION 4.15 ZONING. Under the applicable zoning ordinance of each
jurisdiction in which each parcel of Land is located, each parcel of Land is
zoned in a zoning classification that permits the use of the Land and
Improvements for all purposes as currently used, without any conditions other
than with respect to which such conditions have been complied in full and
without exception. Furthermore, to the best of Borrower's knowledge but without
any independent investigation by Borrower, in the event the Improvements were
damaged or destroyed, the Improvements could be restored or reconstructed as
they now exist without the requirement of any zoning variance or waiver.
SECTION 4.16 RESTRICTIONS. To the best of Borrower's knowledge, the Land
is not subject to: (i) any use or occupancy restrictions, except those imposed
by applicable zoning laws and regulations, except any such restrictions
described in the mortgagee title policy(ies) delivered to Lender in connection
with the Loan and those restrictions set forth in the Security Instruments; (ii)
special taxes or assessments; (iii) utility tap-in fees, except those generally
applicable throughout the tax districts in which the Land is located; or (iv)
charges or restrictions, whether existing of record or arising by operation of
law, unrecorded agreement, the passage of time or otherwise, except any such
charges or restrictions described in the mortgagee title policy(ies) delivered
to Lender in connection with the Loan.
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SECTION 4.17 STATUS OF SERVICE CONTRACTS. To the best of Borrower's
knowledge, Borrower is not in default under any development, management, service
or other agreements and contracts relating to the operation or management of the
Property in a manner which could reasonably be expected to have a Material
Adverse Effect; there is no material default on the part of any other party to
any of such contracts, there is no material default of Borrower under any such
contracts or the existence of any facts or circumstances, which with the giving
of notice or passage of time (or both), would constitute a material default
under any of such contracts, which defaults could reasonably be expected to have
a Material Adverse Effect. Such contracts have not been modified or amended in
any material respect since the date true and correct copies of the same were
delivered to Lender by Borrower. Borrower has not done or omitted to do any act
so as to be estopped from exercising any of its rights under any of such
contracts, and there is no assignment of any of Borrower's rights under any of
such contracts to any person or entity, other than Lender.
SECTION 4.18 STATUS OF LEASES. To its knowledge, Borrower is not in
default under any of the Leases, and there is no default on the part of any
other party to any Lease, which defaults could reasonably be expected to have a
Material Adverse Effect. None of the Leases have been modified or amended in any
material respect since the date true and correct copies of the same were
delivered to Lender by Borrower. Borrower has not done or omitted to do any act
so as to be estopped from exercising any of its rights under any of the Leases,
and there is no assignment of any of Borrower's right under any of such
contracts to any person or entity other than Lender.
SECTION 4.19 ENCROACHMENTS. Except as shown on those certain surveys
previously delivered to Lender in connection with the Loan, there are no
encroachments on the Land; there are no strips or gores within or affecting the
boundaries of the Land; and all Improvements are situated entirely within the
boundaries of the Land and within any applicable building lines.
SECTION 4.20 ACCESS. All streets and roads necessary for access to the
Land have been completed, dedicated to public use and accepted for maintenance
for all necessary governmental entities.
SECTION 4.21 AVAILABILITY OF UTILITIES. Except as set forth in that
certain Certificate of Borrower executed and delivered in connection herewith,
all utility facilities and services necessary for the full use, occupancy and
operation of the Improvements are available to the Land through public or
private easements or rights-of-way at the boundaries of the Land, including,
without limitation, water, storm and sanitary sewer, electricity and telephone.
SECTION 4.22 BROKERAGE COMMISSIONS. All real estate and land brokerage
commissions payable in connection with the acquisition of the Land, construction
of the Improvements and the Loan, and all brokerage commissions or finders fees
due and payable in connection with the current terms of any of the Leases, have
been paid in full, or will be paid in full upon the execution of this Agreement.
SECTION 4.23 COMPOSITION OF PROPERTY. Subject to the matters disclosed in
the title policies delivered to Lender in connection with the Loan, the Property
includes all improvements
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and land, and other estates and rights (including, without limitation, any
appurtenant easement rights and covenants and restrictions) which are necessary
to allow for the continued use thereof as hotels/motels, or other uses presently
in effect as of the date of this Agreement, and as may be required by any of the
Requirements, or to satisfy all tenant requirements under the Leases.
ARTICLE V
COVENANTS
For so long as this Agreement is in effect, and unless Lender
expressly consents in writing to the contrary, Borrower covenants and agrees to
comply with the following covenants:
SECTION 5.01 OPERATING STATEMENTS AND RENT ROLL. Borrower shall deliver to
Lender operating statements and rent rolls as required in PARAGRAPH 25 of the
Mortgage.
SECTION 5.02 BOOKS AND RECORDS. Borrower shall keep its books, records and
accounts in accordance with accepted industry standards and as required
hereunder and under the Loan Documents.
SECTION 5.03 MAINTENANCE OF EXISTENCE, PROPERTIES, LICENSES, ETC. Except
to the extent otherwise permitted hereby, Borrower will do or cause to be done
all things reasonably necessary to preserve, renew and keep in full force and
effect the corporate, partnership or other legal existence of Borrower and the
patents, trademarks, service marks, trade names, service names, copyrights,
licenses, leases, permits, franchises and other rights, that continue to be
useful in some material respect to the business of Borrower or to the operation
of the Property, and at all times maintain, preserve and protect all licenses,
leases, permits, franchises and other rights that continue to be useful in some
related in some material respect to the business of Borrower or to the operation
of the Property.
SECTION 5.04 PAYMENT OF TAXES AND CLAIMS. Borrower will pay and discharge
or cause to be paid and discharged all Taxes, assessments and governmental
charges or levies imposed upon it or upon its respective income and profits or
upon any of its property, real, personal or mixed or upon any part thereof,
before the same shall become in default as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might become a Lien or
charge upon such properties or any part thereof. Notwithstanding anything
contained herein to the contrary, Borrower shall not be required to pay or
discharge any Taxes, assessments and governmental charges or levies and liens
for labor, materials, supplies or otherwise so long as the Borrower shall in
good faith contest the same or the validity thereof by appropriate legal
proceedings which shall operate to prevent the collection of the xxxx, xxxx or
imposition so contested and the sale of the Premises, or any part thereof, to
satisfy any obligation arising therefrom, provided that the Borrower shall give
such security as may be demanded by the Lender to insure such payments and
prevent any sale or forfeiture of the Premises by reason of such nonpayment,
failure of performance or contest by Borrower. Any such contest shall be
prosecuted with due diligence and the Borrower shall promptly after final
determination thereof
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pay the amount of any xxxx, xxxx or imposition so determined, together with all
interest and penalties, which may be payable in connection therewith.
Notwithstanding the provisions of this paragraph, Borrower shall (and if
Borrower shall fail so to do, Lender may but shall not be required to) pay any
such xxxx, xxxx or imposition notwithstanding such contest if in the reasonable
opinion of the Lender, the Premises shall be in jeopardy or in danger of being
forfeited or foreclosed.
SECTION 5.05 PARKING REQUIREMENTS. At all times during the terms of the
Loan, there shall be sufficient parking spaces to satisfy requirements of all
Leases, parking or cross-parking agreements, and applicable zoning requirements
and other Requirements.
SECTION 5.06 EXPENSES. Borrower shall pay all cost, fees, documentary
stamp taxes, intangibles taxes and charges of closing of the Loan, including,
without limitation, Lender's attorneys' fees, recording costs, environmental
audit costs, survey and appraisal costs, title examination fees, and title
insurance premiums.
SECTION 5.07 INDEMNITY. Borrower covenants and agrees to indemnify and
hold Lender harmless from and against any and all claims for brokerage fees or
commissions with respect to the making or consummation of the Loan, and all
claims, actions, suits, proceedings, costs, expenses, losses, damages and
liabilities of any kind, including but not limited to attorneys' fees, expenses,
penalties and interest, which may be asserted against or incurred by Lender by
reason of any matter relating directly to the Loan, and arising out of the
ownership, condition, development, construction, sale, rental or financing of
the Property or any part thereof, other than to the extent arising as a direct
result of the gross negligence or willful misconduct of Lender. The foregoing
indemnity shall survive the payment and performance of all Obligations to Lender
under the Loan Documents, and should Lender incur any liability for or in
defense of any of the foregoing matters, the amount thereof (and all costs,
expenses and attorneys' fees incurred by Lender in connection therewith) shall
be added to the principal amount of the Loan and shall bear interest at the
Default Rate (as defined in the Note) to the extent permitted by applicable law.
Furthermore, Borrower covenants that, upon notice from Lender that any action or
proceeding has been brought against Lender by reason of any such matters,
Borrower shall promptly resist or defend such action or proceeding in a manner
satisfactory to Lender at Borrower's expense.
SECTION 5.08 FISCAL YEAR. Borrower shall not change its fiscal year except
upon prior written notice to Lender.
SECTION 5.09 ESTOPPEL CERTIFICATES. Borrower shall, from time to time,
upon request by Lender, promptly execute, acknowledge and deliver to Lender a
certificate of Borrower stating the amount of principal and interest then owing
on the Obligations, whether or not any setoffs or defenses exist with respect to
all or any part of the Obligations, and, if any such setoffs or defenses exist,
stating in detail the specific facts relating to each such setoff or defense.
Any such certificate may be relied upon by any prospective assignee of Lender.
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SECTION 5.10 REPLACEMENT OF NOTE. Upon receipt of notice from Lender of
the loss, theft, destruction or mutilation of the Note, Borrower shall execute
and deliver, in lieu thereof, a replacement note identical in form and substance
to the Note and dated as of the date of the Note, except that such replacement
note shall state on its face that it is a replacement and upon such execution
and delivery all references in the Loan Documents and the Environmental
Indemnification Agreement to such Note so replaced shall be deemed to refer to
such replacement note.
SECTION 5.11 NOTIFICATION OF NAME CHANGE; LOCATION. Borrower shall furnish
Lender with notice of any change in Borrower's name or address or principal
place of business within fifteen (15) days of the effective date of such change,
and Borrower shall promptly execute any financing statements or other
instruments deemed necessary by Lender to prevent any filed financing statement
from becoming misleading or losing its perfected status.
SECTION 5.12 NO JOINT VENTURE. Neither the provisions of any of the Loan
Documents or the Environmental Indemnification Agreement nor the acts of the
parties thereto shall be construed to create a partnership or joint venture
between Borrower and Lender.
SECTION 5.13 LOANS BY PARTNERS AND AFFILIATES. Borrower agrees that any
loan or other advance heretofore or hereafter made to Borrower by a partner,
member or any Affiliate shall be subordinate in all respects to the Loan, and
Borrower agrees that, following any Event of Default, and until repayment of the
Obligations, Borrower shall make no repayment to the partner, member or
Affiliate of any such loan or advance.
ARTICLE VI
FURTHER DISBURSEMENTS
SECTION 6.01 FURTHER DISBURSEMENTS. Borrower agrees that the Note has been
fully disbursed by Lender, and that Lender shall have no further duty or
obligation to make any additional advances or disbursements to Borrower under
the Note.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01 EVENTS OF DEFAULT. Each of the following events shall
constitute an Event of Default under this Agreement:
(a) The occurrence of an Event of Default under the Security Instruments
or any of the other Loan Documents or the Environmental Indemnification
Agreement;
(b) Should any Default occur in the performance or observance of any term,
condition or provision contained in this Agreement which does not relate to the
nonpayment of
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any monetary sum, and Default is not cured within thirty (30) days after the
Lender gives Borrower written notice thereof or within such longer period of
time, not exceeding an additional thirty (30) days, as may be reasonably
necessary to cure such non-compliance if Borrower is diligently and with
continuity of effort pursuing such cure and the failure is susceptible of cure
within an additional period of thirty days; provided, however, no notice and
cure rights shall be afforded to Borrower for a Default of Paragraphs 15(a),
(b), (d), (e), (f), (g), or (h) of the Mortgage other than those notice and cure
rights granted under such applicable provisions;
(c) Should any representation or warranty made by Borrower herein or in
any of the other Loan Documents or the Environmental Indemnification Agreement
be false or misleading in any material respect on the date as of which made (or
deemed made); and
(d) Should Borrower be terminated, liquidated, dissolved or otherwise
cease to exist.
SECTION 7.02 REMEDIES. Upon the occurrence of an Event of Default, Lender
may, in its discretion, exercise one or more of the following remedies:
(a) Accelerate the maturity of the Obligations and declare the entire
unpaid principal balance of, and any unpaid interest then accrued on, the Note,
together with any Prepayment Premium, without demand or notice of any kind to
Borrower or any other Person, to be immediately due and payable.
(b) Take all, any or any combination of the actions Lender may take under
any of the other Loan Documents or the Environmental Indemnification Agreement
upon the occurrence of a default or an event of default thereunder,
notwithstanding the fact that the event that is an Event of Default hereunder
may not constitute a default or an event of default under any such other Loan
Document or the Environmental Indemnification Agreement, including, without
limitation acceleration of the Obligations evidenced by the Note and foreclosure
and sale of the Land and the Improvements under the Security Instruments.
(c) Perform, or cause to be performed, any obligation, covenant or
agreement that Borrower has failed to perform or comply with, and in such event
all costs and expenses incurred by Lender in performing any such obligation,
covenant or agreement shall be added to the Obligations and shall be secured by
the Security Instruments, and shall bear interest at the Default Rate (as
defined in the Note) from the date paid or incurred by Lender, and the interest
thereon shall also be added to and become a part of the Obligations and shall be
secured by the Security Instruments.
(d) Continue to act, with respect to Borrower and the Loan, as if no Event
of Default had occurred, which continuance shall not be or be construed as a
waiver of Lender's rights; and assert the Event of Default and take any action
provided for herein at any time after the occurrence and during the existence of
the Event of Default.
(e) Proceed as authorized by law to obtain payment of the Loan.
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(f) Take all, any, or any combination of the actions Lender may take under
applicable law or equity subject to the limitations on liability of Borrower
contained herein and in the Note and the Security Instruments.
No failure or delay on the part of Lender to exercise any right or remedy
hereunder or under the Loan Documents or the Environmental Indemnification
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy hereunder preclude any further exercise thereof
or the exercise of any further right or remedy hereunder or under the Loan
Documents or the Environmental Indemnification Agreement. No exercise by Lender
of any remedy under the other Loan Documents or the Environmental
Indemnification Agreement shall operate as a limitation on any rights or
remedies of Lender under this Agreement, except to the extent of moneys actually
received by Lender under the other Loan Documents or the Environmental
Indemnification Agreement.
SECTION 7.03 COSTS AND EXPENSES. All costs and expenses incurred by Lender
in connection with any of the actions authorized in this Article, after an Event
of Default, including without limitation attorneys' fees, shall be and
constitute a portion of the Loan, secured in the same manner and to the same
extent as the Loan, even though such costs and expenses may cause the amount of
the Loan to exceed the face amount of the Note. Whenever the terms of this
Agreement require Borrower to pay attorneys' fees of Lender, such obligation
shall extend only to reasonable attorneys' fees, without regard to statutory
interpretations, actually incurred at normal hourly rates.
SECTION 7.04 REMEDIES CUMULATIVE. The foregoing remedies are cumulative
of, and in addition to, and not restrictive or in lieu of, the other remedies
provided for herein and the remedies provided for or allowed by the other Loan
Documents or the Environmental Indemnification Agreement, or provided for or
allowed by law, or in equity.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 NOTICES.
(a) All notices, demands, requests, and other communications desired or
required to be given hereunder ("NOTICES"), shall be in writing and shall be
given by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.
(b) All Notices shall be deemed given and effective upon the earlier to
occur of (i) the hand delivery of such Notice to the address for Notices; (ii)
one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (iii) three business days after depositing the Notice in the United
States mail as set forth in (a)(iii) above. All Notices shall be addressed to
the following addresses:
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Borrower: Summit Hotel Properties, LLC
c/o The Summit Group, Inc.
0000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx 0
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx Xxxx
With a copy to: Xxxxx, Xxxxx & Xxxxxx, P.C.
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Lender: ING Life Insurance and Annuity Company
c/o ING Investment Management LLC
0000 Xxxxxx Xxxxx Xxxx, XX, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Mortgage Loan Servicing Department
and to: ING Investment Management at LLC
0000 Xxxxxx Xxxxx Xxxx, XX, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Real Estate Law Department
With a copy to: Xxxxxx Xxxxxxxxx LLP
One Atlantic Center
Fourteenth Floor
0000 Xxxx Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice; provided, however, that the
"copy to" Notice to be given as set forth above is a courtesy copy only; and a
Notice given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.
SECTION 8.02 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of Lender in exercising any right or remedy hereunder and no course of
dealing between Borrower and Lender shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy hereunder or under the
Note preclude any other or further exercise thereof or the exercise of any other
right or remedy hereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which Lender would
otherwise have. No notice to or demand on Borrower not required hereunder or
under any other Loan Document in any case shall entitle Borrower to any other or
further notice or demand in
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similar or other circumstances or constitute a waiver of the rights of Lender to
any other or further action in any circumstances without notice or demand.
SECTION 8.03 SUCCESSORS AND ASSIGNS; SALE OF INTEREST. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective legal representatives, successors and permitted assigns of the
parties hereto; provided that Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender,
other than to the extent expressly permitted by the Security Instruments. Lender
may sell or assign all or any part of Lender's rights, title or interests
hereunder and under the other Loan Documents or the Environmental
Indemnification Agreement without the prior written consent of Borrower;
provided, however that any such assignment shall not increase any of the
obligations of Borrower under the Loan Documents or the Environmental
Indemnification Agreement. In that event, such successor or assignee shall be
entitled to all of the rights of Lender under the Loan Documents or the
Environmental Indemnification Agreement.
SECTION 8.04 MODIFICATION. This Agreement shall not be modified or amended
in any respect except by a written agreement executed by the parties in the same
manner as this Agreement is executed.
SECTION 8.05 TIME OF ESSENCE. Time is of the essence of this Agreement and
each of the other Loan Documents and the Environmental Indemnification
Agreement.
SECTION 8.06 GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the laws
of the State of Illinois, without regard to principles of conflicts of laws
thereof.
SECTION 8.07 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
SECTION 8.08 EFFECTIVENESS; SURVIVAL.
(a) This Agreement shall become effective on the date on which all of the
parties hereto shall have signed a copy hereof (whether the same or different
copies) and Lender shall have received the same.
(b) All representations and warranties made herein, in the certificates,
reports, notices, and other documents delivered pursuant to this Agreement shall
survive the execution and delivery of this Agreement, the other Loan Documents,
the Environmental Indemnification Agreement, and such other agreements and
documents, the making of the Loan hereunder and the execution and delivery of
the Note, and shall terminate at such time as the Obligations have been paid and
satisfied in full; provided, however, that the Environmental Indemnification
Agreement shall remain in full force and effect in accordance with the terms
thereof notwithstanding any payment and dissatisfaction of the Obligations.
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SECTION 8.09 SEVERABILITY. In case any provision in or Obligation under
this Agreement or the other Loan Documents or the Environmental Indemnification
Agreement shall be invalid, illegal or unenforceable, in whole or in part, in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 8.10 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists. To the extent any of the terms of this Agreement
conflicts with the terms of the other Loan Documents, the terms of this
Agreement shall control.
SECTION 8.11 HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 8.12 TERMINATION OF AGREEMENT. At such time as all Obligations
have been paid and satisfied in full, this Agreement shall terminate; provided
however, that any and all indemnity obligations of Borrower to Lender arising
hereunder or under any of the other Loan Documents, which are expressly stated
to survive satisfaction of the Obligations shall survive the termination of this
Agreement or such other Loan Documents, and provided further that all indemnity
obligations under the Environmental Indemnification Agreement shall survive such
payment and satisfaction of the Obligations as set forth in the Environmental
Indemnification Agreement.
SECTION 8.13 ENTIRE AGREEMENT. This Agreement and the other Loan Documents
and the Environmental Indemnification Agreement constitute the entire agreement
between Borrower and Lender with respect to the Loan, the other Obligations and
the Collateral and, except as regards the side letter concerning insurance
escrows, supersede all prior agreements, representations and understandings
related to such subject matters.
SECTION 8.14 JURY TRIAL WAIVER; CONSENT TO FORUM.
(a) TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER IRREVOCABLY WAIVES
ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR ANY MATTER ARISING HEREUNDER OR
THEREUNDER.
(b) BORROWER ALSO AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
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DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS OR TO ENFORCE ANY
JUDGMENT OBTAINED AGAINST BORROWER IN CONNECTION WITH THIS AGREEMENT OR SUCH
OTHER LOAN DOCUMENT, MAY BE BROUGHT BY LENDER IN ANY STATE OR FEDERAL COURT
SITTING IN THE COUNTY OF THE STATE IN WHICH LENDER'S ADDRESS SHOWN ABOVE IS
LOCATED, OR IN ANY ONE OR MORE OTHER STATE OR FEDERAL COURTS SITTING IN ANY
COUNTY AND STATE IN WHICH ANY OF THE PROPERTY IS LOCATED. BORROWER IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE AFORESAID STATE AND FEDERAL COURTS, AND
IRREVOCABLY WAIVES ANY PRESENT OR FUTURE OBJECTION TO VENUE IN ANY SUCH COURT,
AND ANY PRESENT OR FUTURE CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM, IN
CONNECTION WITH ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE ENVIRONMENTAL INDEMNIFICATION AGREEMENTS.
SECTION 8.15 EXCULPATION. The liability of Borrower to pay the
Indebtedness (as defined in the Mortgage) or perform any obligation under this
Agreement or the other Loan Documents is limited to the extent set forth in the
Note.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
[LOAN AGREEMENT]
ING No. 27924
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IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed and delivered on their behalf as of the date first
above stated.
BORROWER:
SUMMIT HOTEL PROPERTIES, LLC,
a South Dakota limited liability company
By: /s/ Xxxxx X. Xxxxxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxxxxx,
Chief Executive Officer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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ING No. 27924
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[SIGNATURES CONTINUED FROM PRECEDING PAGE]
LENDER:
ING LIFE INSURANCE AND ANNUITY
COMPANY, a Connecticut corporation
By: ING Investment Management, LLC, as
Authorized Agent
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Sr. Vice President
[LOAN AGREEMENT]
ING No. 27924
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