Exhibit 10.3
AMENDED AND RESTATED LOAN AGREEMENT
By and Between
MUTUAL BENEFIT CHICAGO MARRIOTT SUITE HOTEL PARTNERS, L.P.
As Borrower
And
NATIONAL BANK OF CANADA
(New York Branch)
As Lender
Dated as of
September 24, 1996
TABLE OF CONTENTS
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ARTICLE PAGE
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1 INCORPORATION OF RECITALS AND EXHIBITS; APPLICATION OF
AGREEMENT............................................................... 2
1.1 Incorporation of Recitals and Exhibits............................ 2
1.2 Application of Agreement.......................................... 2
2 CERTAIN DEFINITIONS..................................................... 2
2.1 Accounting Period................................................. 2
2.2 Accrual Rate Interest............................................. 2
2.3 Additional Accrued Interest....................................... 2
2.4 Annual Operating Projection....................................... 2
2.5 Affiliated Party.................................................. 2
2.6 Asbestos.......................................................... 3
2.7 Asbestos-Containing Construction Materials........................ 3
2.8 Assignment of Management Agreement................................ 3
2.9 Assignment of Rents............................................... 3
2.10 Bankruptcy Code................................................... 3
2.11 Base Management Fee............................................... 3
2.12 Base Rate Interest................................................ 3
2.13 Business Day...................................................... 3
2.14 Capital Improvements.............................................. 3
2.15 Cash Collateral................................................... 3
2.16 Consultant's Fee.................................................. 3
2.17 Contract Rate..................................................... 3
2.18 Contract Rate Interest............................................ 3
2.19 Conversion Date................................................... 4
2.20 Cumulative NOI Threshold Amount................................... 4
2.21 Debt Service Agreement............................................ 4
2.23 Default Rate...................................................... 4
2.24 Dollars........................................................... 4
2.25 Environmental Claims.............................................. 4
2.26 Environmental Conditions.......................................... 4
2.27 Environmental Expenses............................................ 5
2.28 Environmental Laws................................................ 5
2.29 Environmental Noncompliance....................................... 5
2.30 Event of Default.................................................. 5
2.31 Excess Cash Flow.................................................. 6
2.32 Excess Cash Flow Payments......................................... 6
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ARTICLE PAGE
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2.33 Fiscal Year....................................................... 6
2.34 Foreclosure Guaranty.............................................. 6
2.35 General Partner................................................... 6
2.36 Gross Revenues.................................................... 6
2.37 Ground Lease...................................................... 6
2.38 Hazardous Materials............................................... 6
2.39 Host Marriott..................................................... 7
2.40 Hotel............................................................. 7
2.41 Improvements...................................................... 7
2.42 Indebtedness...................................................... 7
2.43 Land.............................................................. 7
2.44 Legal Requirements................................................ 7
2.45 Lender's Expenses................................................. 7
2.46 Loan.............................................................. 7
2.47 Loan Documents.................................................... 7
2.48 Management Agreement.............................................. 7
2.49 Manager........................................................... 7
2.50 Marriott.......................................................... 7
2.51 Maturity Date..................................................... 7
2.52 Maximum Amount.................................................... 7
2.53 Mortgage.......................................................... 7
2.54 Net House Profit.................................................. 8
2.55 NOI Threshold Amount.............................................. 8
2.56 NOI Shortfall Year................................................ 8
2.57 Note.............................................................. 8
2.58 Permitted Encumbrances............................................ 8
2.59 Person............................................................ 8
2.60 Personal Property Inventory....................................... 8
2.61 Prime Rate........................................................ 8
2.62 Property.......................................................... 9
2.63 Reaffirmation of Environmental Indemnification Agreement.......... 9
2.64 Reference Rate.................................................... 9
2.66 Responsible Officer............................................... 9
2.67 Scheduled Principal Payment....................................... 9
2.68 Security Agreement................................................ 9
3 THE LOAN................................................................ 9
3.1 Consolidation, Amendment and Restatement of Obligations........... 9
3.2 Loan Documents.................................................... 10
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ARTICLE PAGE
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3.3 Interest Rates and Payments....................................... 11
3.4 Term of the Loan.................................................. 11
3.5 Prepayments....................................................... 11
3.6 Bankruptcy Stipulations........................................... 11
3.7 Waiver and Release................................................ 15
3.8 Restructuring Fee................................................. 15
3.9 Lender's Expenses................................................. 16
4 CONDITIONS PRECEDENT.................................................... 16
4.1 Condition to Closing.............................................. 16
(a) Loan Documents............................................. 16
(b) Borrower Organizational Documents.......................... 16
(c) Partner Organizational Documents........................... 17
(d) Host Marriott Organizational Documents..................... 17
(e) Property Documents......................................... 18
(f) Opinions of Counsel........................................ 19
(g) Filing and Recordation..................................... 20
(h) Additional Information..................................... 20
(i) Representations and Warranties............................. 20
5 REPRESENTATIONS AND WARRANTIES.......................................... 20
5.1 Representations and Warranties.................................... 20
(a) Formation and Power........................................ 20
(b) Due Execution.............................................. 20
(c) Due Authorization.......................................... 20
(d) No Conflicts or Defaults................................... 21
(e) Ownership of Property...................................... 21
(f) Accuracy of Financial Information.......................... 21
(g) Litigation................................................. 21
(h) Legal Requirements......................................... 21
(i) No Usury................................................... 21
(j) Zoning..................................................... 21
(k) Availability of Service.................................... 22
(l) Binding Effect of Loan Documents........................... 22
(m) Subdivision................................................ 22
(n) Environmental.............................................. 22
(o) Sewage..................................................... 22
(p) Utilities.................................................. 23
(q) Governmental Approvals..................................... 23
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ARTICLE PAGE
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(r) Leases..................................................... 23
(s) Truth of Financial Statements.............................. 23
(t) Change in Financial Condition.............................. 23
(u) Regulation U............................................... 23
(v) ERISA...................................................... 23
(w) Truth of Recitals.......................................... 23
(x) Freedom from Default....................................... 24
(y) Trade Name................................................. 24
(z) Principal Business Address................................. 24
(aa) Foreign Person............................................. 24
(ab) Transactions with Affiliated Parties....................... 24
(ac) Employees.................................................. 24
(ad) Other Indebtedness......................................... 24
5.2 Nature of Representations and Warranties.......................... 24
6 ANNUAL BUSINESS PLAN AND BUDGET; LENDER'S CONSULTANT;
NOI COVENANT............................................................ 25
6.1 .................................................................... 25
6.2 .................................................................... 25
6.3 .................................................................... 25
7 FINANCIAL STATEMENTS.................................................... 26
8 BANK ACCOUNTS AND APPLICATION OF GROSS REVENUES......................... 28
8.1 Establishment of Bank Accounts.................................... 28
8.2 Deposits to Bank Accounts; Withdrawal of Funds.................... 28
8.3 Payment of Deductions............................................. 29
8.4 Application of Net House Profit................................... 29
8.5 Application of Excess Cash Flow............................. 30
9 GENERAL COVENANTS OF BORROWER........................................... 31
9.1 Maintenance of Existence.......................................... 31
9.2 Conduct of Business............................................... 31
9.3 Maintenance of Property........................................... 31
9.4 Maintenance of Records............................................ 31
9.5 Maintenance of Insurance.......................................... 31
9.6 Compliance with Legal Requirements................................ 31
9.7 Right of Inspection............................................... 32
9.8 .................................................................. 32
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ARTICLE PAGE
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(a) Notice of Events of Default................................ 32
(b) General Information........................................ 32
(c) General Partner............................................ 32
9.9 Liens............................................................. 32
9.10 Leasehold Interest................................................ 32
(a) Performance of Ground Lease................................ 32
(b) No Amendments.............................................. 33
9.11 Environmental Compliance.......................................... 33
9.12 Documents of Further Assurance.................................... 33
9.13 Furnishing Reports................................................ 33
9.14 Leases............................................................ 33
9.15 Management Agreement and Other Contracts.......................... 33
9.16 Furnishing Notices................................................ 34
9.17 Indebtedness...................................................... 34
9.18 Prohibition Against Cash Distributions............................ 34
9.19 Transactions with Affiliated Parties.............................. 34
9.20 Appraisals........................................................ 34
9.21 Maintenance of Existence.......................................... 35
9.22 ERISA............................................................. 35
9.23 Trade Name........................................................ 35
9.24 Principal Place of Business....................................... 35
9.25 Information and Approvals with respect to Management
Agreement......................................................... 35
10 DEFAULTS................................................................ 36
10.1 Events of Default................................................. 36
(a) Failure to Pay............................................. 36
(b) Voluntary Bankruptcy....................................... 36
(c) Involuntary Bankruptcy..................................... 36
(d) Insolvency................................................. 36
(e) Inability to Pay........................................... 37
(f) Existence.................................................. 37
(g) Amendment of Entity Documents.............................. 37
(h) Transfer of Property....................................... 37
(i) Attachment................................................. 37
(j) Breach of Representations and Warranties................... 37
(k) Failure to Deliver Funds or Instruments.................... 38
(l) Encroachment............................................... 38
(m) Filing of Liens............................................ 38
(n) Damage to Improvements..................................... 38
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ARTICLE PAGE
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(o) Injunction Against Performance............................. 38
(p) Lapse of Permits or Services............................... 38
(q) Condemnation............................................... 39
(r) Compliance with Law........................................ 39
(s) Management Agreement....................................... 39
(t) Ground Lease............................................... 39
(u) Environmental Noncompliance................................ 39
(v) Handling of Funds and Bank Accounts........................ 39
(w) Partnership Distributions.................................. 39
(x) Change in Financial Condition of Property.................. 39
(y) Breach of Other Covenants.................................. 39
(z) Other Loan Documents....................................... 40
11 LENDER'S REMEDIES IN EVENT OF DEFAULT................................... 40
11.1 Remedies Conferred Upon Lender.................................... 40
11.2 Non-Waiver of Remedies............................................ 41
11.3 Availability of Remedies.......................................... 41
11.4 Application of Proceeds........................................... 42
12 GENERAL PROVISIONS...................................................... 43
12.1 No Waiver; Lender's Action for Its Own Protection Only............ 43
12.2 No Third Parties Benefitted....................................... 43
12.3 Notices........................................................... 43
12.4 Expenses.......................................................... 44
12.5 Actions........................................................... 44
12.6 Commissions and Brokerage Fees.................................... 44
12.7 Governing Law..................................................... 45
12.8 Heirs, Successors and Assigns..................................... 45
12.9 Time.............................................................. 45
12.10 Supplements Mortgage.............................................. 45
12.11 Severability...................................................... 45
12.12 Attorneys' Fees................................................... 45
12.13 Usury Limitation.................................................. 46
12.14 Section Headings.................................................. 46
12.15 Notice of Future Proceedings or Events............................ 46
12.16 Amendment......................................................... 46
12.17 Assignment and Participations..................................... 47
12.18 Indemnity......................................................... 47
12.19 Survival.......................................................... 48
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ARTICLE PAGE
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12.20 Environmental Matters............................................. 48
(a) Environmental Indemnification by Borrower.................. 48
(b) Borrower's Covenants Regarding Environmental Matters....... 49
12.21 Non-recourse...................................................... 50
(a) Extent of Non-recourse..................................... 50
(b) Borrower's Liability for Damages or Misapplication
of Funds................................................... 50
(c) Liability of General Partners.............................. 51
12.22 Consent to Jurisdiction and Service of Process; Waiver
of Jury Trial..................................................... 51
12.23 Confidentiality................................................... 51
12.24 Counterparts...................................................... 52
EXHIBITS
A -- Legal Description
B -- Form of Note
C -- Form of Mortgage
D -- Form of Assignment of Rents
E -- Form of Security Agreement
F -- Form of Assignment of Management Agreement
X-0, X-0,
X-0, G-4 -- Forms of Pledge Agreements
H -- Environmental Reports
I -- Annual Operating Projection and Repairs and Equipment
Estimate for Fiscal Year 1996
J -- Form of Rent Letter
K -- Equipment Leases
L -- Permitted Investments
vii
AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
THIS AMENDED AND RESTATED LOAN AGREEMENT (which, together with any
subsequent amendments or supplements, is referred to herein as the "Agreement")
is made and entered into as of September 24, 1996, by and between MUTUAL BENEFIT
CHICAGO MARRIOTT SUITE HOTEL PARTNERS, L.P., a Rhode Island limited partnership
("Borrower"), and NATIONAL BANK OF CANADA, New York, a duly licensed branch of
National Bank of Canada, a Canadian bank ("Lender").
R E C I T A L S:
- - - - - - - -
A. Lender has previously made a loan in the principal amount of Twenty-
Five Million Five Hundred Thousand Dollars ($25,500,000.00) (the "Original
Loan") to Borrower pursuant to a Loan Agreement (the "Original Loan Agreement")
dated as of June 12, 1989. The Loan was evidenced or secured by certain
instruments referred to collectively in the Original Loan Agreement as the "Loan
Documents," which instruments (including the Original Loan Agreement) are
referred to herein collectively as the "Original Loan Documents."
B. The Original Loan matured on June 12, 1996 and has not been repaid.
Borrower hereby confirms to Lender that Borrower is indebted to Lender as set
forth in the Original Loan Documents with respect to the $25,500,000 principal
amount outstanding with respect to the Original Loan plus interest accrued and
accruing thereon and costs and expenses incurred by Lender in connection
therewith, including attorneys' fees.
C. In lieu of exercising its rights and remedies with respect to
Borrower's failure to repay the Original Loan when due, Lender has agreed with
Borrower to amend and restate all of the terms, conditions, covenants and
provisions of the Original Loan Documents on the terms set forth herein. The
Original Loan Documents, as so amended and restated, are referred to herein
collectively as the "Loan Documents." The Original Loan, as amended and
restated pursuant to the Loan Documents, is referred to herein as the "Loan."
AGREEMENT
---------
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and promises herein, Borrower and Lender agree as follows:
ARTICLE 1
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INCORPORATION OF RECITALS AND
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EXHIBITS; APPLICATION OF AGREEMENT
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1.1 Incorporation of Recitals and Exhibits. The foregoing Recitals and
--------------------------------------
all exhibits hereto are hereby made a part of this Agreement.
1.2 Application of Agreement. This Agreement and the other Loan
------------------------
Documents collectively supersede in all respects the Original Loan Documents.
ARTICLE 2
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CERTAIN DEFINITIONS
-------------------
2.1 Accounting Period. Each Accounting Period shall commence at 12:01
-----------------
a.m. local time on a Saturday and shall end at midnight on the Friday that is
the twenty-eighth (28th) day of said Accounting Period. Each Accounting Period
shall commence immediately following the last day of the previous Accounting
Period. The first Accounting Period of each Fiscal Year shall commence on the
first day of said Fiscal Year and the last Accounting Period of each Fiscal Year
shall end on the last day of said Fiscal Year. As stated above, each Accounting
Period shall contain twenty-eight (28) days; provided, however, that in certain
Fiscal Years one of the Accounting Periods shall contain thirty-five (35) days
if necessary in order to cause the last day of the last Accounting Period to
coincide with the last day of the Fiscal Year in question.
2.2 Accrual Rate Interest. "Accrual Rate Interest" has the meaning set
---------------------
forth in the Note.
2.3 Additional Accrued Interest. "Additional Accrued Interest" has the
---------------------------
meaning set forth in the Note.
2.4 Annual Operating Projection. "Annual Operating Projection" has the
---------------------------
meaning set forth in Section 6.1 hereof.
2.5 Affiliated Party. (i) Any member, shareholder, partner, officer,
----------------
director, agent or fiduciary of or for Borrower, (ii) any Person that controls,
is controlled by or is under common control with Borrower, (iii) any Person that
owns, directly or indirectly, 10% or more of the legal or beneficial interests
in Borrower, and (iv) any Person in which Borrower or any member, shareholder,
partner, officer, director, agent or fiduciary of or for Borrower owns 10% or
more of the legal or beneficial interests. For purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such
2
Person, whether through the ownership of voting securities, by contract or
otherwise. The term "controlled" has a meaning correlative to the foregoing.
2.6 Asbestos. "Asbestos" means fibrous forms of various hydrated
--------
minerals, including chrysotile (fibrous serpentine), crocidolite (fibrous
reibecktite), amosite (fibrous cummingtonite-grunerite), fibrous tremolite,
fibrous actinolite, and fibrous anthophyllite.
2.7 Asbestos-Containing Construction Materials. "Asbestos-Containing
------------------------------------------
Construction Materials" means any manufactured construction material that
contains more than one-tenth of one percent Asbestos by weight.
2.8 Assignment of Management Agreement. "Assignment of Management
----------------------------------
Agreement" has the meaning set forth in Section 3.2 hereof.
2.9 Assignment of Rents. "Assignment of Rents" shall have the meaning
-------------------
set forth in Section 3.2 hereof.
2.10 Bankruptcy Code. "Bankruptcy Code" means the Bankruptcy Reform Act
---------------
of 1978, as amended or any future federal legislation relating to the same
general subject matter.
2.11 Base Management Fee. The "Base Management Fee," in an amount equal
-------------------
to three percent (3%) of Gross Revenues, payable to the Manager by Borrower
pursuant to the Management Agreement.
2.12 Base Rate Interest. "Base Rate Interest" has the meaning set forth
------------------
in the Note.
2.13 Business Day. "Business Day" shall mean a day on which national
------------
banks are open for business in New York, New York and on which major American
money center banks are also dealing in Dollar deposits in the London interbank
market.
2.14 Capital Improvements. "Capital Improvements" means any and all
--------------------
repairs, replacements or improvements to the Property which are capital in
nature in accordance with the Uniform System of Accounts (as such term is
defined in the Management Agreement).
2.15 Cash Collateral. As defined in Section 3.6(b) hereof.
---------------
2.16 Consultant's Fee. "Consultant's Fee" shall have the meaning set
----------------
forth in Section 6.3 hereof.
2.17 Contract Rate. As defined in the Note.
-------------
3
2.18 Contract Rate Interest. As defined in the Note.
----------------------
2.19 Conversion Date. As defined in the Note.
---------------
2.20 Cumulative NOI Threshold Amount. "Cumulative NOI Threshold Amount"
-------------------------------
means, as of any given date, the sum of the respective NOI Threshold Amounts
applicable to each Fiscal Year or portion thereof falling within the period from
and after the date hereof, through and including the date in question.
2.21 Debt Service Agreement. "Debt Service Agreement" means that certain
----------------------
Debt Service Agreement dated as of June 12, 1989 by and between Borrower,
Marriott and MBIP for the benefit of Lender.
2.22 Deductions. Shall have the meaning ascribed thereto in the
----------
Management Agreement.
2.23 Default Rate. If the Conversion Date has not yet occurred, (i) three
------------
percent (3%) per annum plus the Base Rate through and including the last day of
----
the then current Interest Period, and (ii) at all times thereafter, three
percent per annum plus the Reference Rate determined by Lender from time to
----
time. If the Conversion Date has occurred, three percent (3%) per annum plus
----
the Base Rate that became effective as of the Conversion Date.
2.24 Dollars. "Dollar(s)," whether or not capitalized, and the sign "$"
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shall mean lawful money of the United States of America.
2.25 Environmental Claims. "Environmental Claims" means claims, demands,
--------------------
suits, causes of action for personal injury or property damage (including any
depreciation of property values), lost use of property or consequential damages
arising directly or indirectly out of Environmental Conditions or Environmental
Noncompliance, including, without limitation, actual or threatened damages to
natural resources, claims for the recovery of response costs, or administrative
or judicial orders directing the performance of investigations, response or
remedial actions under any Environmental Laws, a requirement to implement
"corrective action" pursuant to any order or permit issued pursuant to RCRA or
similar provisions of Illinois law, claims for restitution, contribution or
equitable indemnity from third parties or any governmental agency, fines,
penalties, liens of any kind against property, claims for injunctive relief or
other orders or notices of violation from federal, state or local agencies or
courts, and, with regard to any present or former employees, exposure to or
injury from Environmental Conditions.
2.26 Environmental Conditions. "Environmental Conditions" means
------------------------
conditions of the environment, including natural resources (including flora and
fauna), soil, surface water, ground water, any present or potential drinking
water supply, subsurface strata or ambient air, relating
4
to or arising out of the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, pouring,
emptying, discharging, injecting, escaping, leaching, disposal, dumping or
threatened release of Hazardous Materials by Borrower or Borrower's predecessors
or successors in interest (including specifically, for these purposes, any prior
owners of the Land or the Improvements), agents, representatives, employees or
independent contractors. With respect to Claims by third parties, Environmental
Conditions also include the exposure of persons to Hazardous Materials within a
workplace on the Property or the exposure of persons or property to Hazardous
Materials migrating from or otherwise emanating from or located on the Land or
the Property.
2.27 Environmental Expenses. "Environmental Expenses" means any
----------------------
liability, loss, cost or expense incurred in compliance with any Environmental
Laws or in response to Environmental Conditions, including, without limitation,
costs of investigation, cleanup, remedial, corrective or response action, the
costs associated with posting financial assurances for the completion of
response, remedial or corrective actions, the preparation of any closure or
other necessary or required plans or analyses, or other reports or analyses
submitted to or prepared by regulating agencies, including the costs of health
assessments, epidemiological or other medical studies, retention of engineers
and other expert consultants, legal counsel, capital improvements, operation and
maintenance testing and monitoring costs, power and utility costs and pumping
taxes or fees, and administrative costs incurred by governmental agencies.
2.28 Environmental Laws. "Environmental Laws" means the Comprehensive
------------------
Environmental Response, Compensation and Liability Act of 1980, as amended; the
Toxic Substances Control Act, as amended; the Hazardous Materials Transportation
Act, as amended; the Resource Conservation and Recovery Act of 1976, as amended;
the Federal Water Pollution Control Act, as amended; the Safe Drinking Water
Act, as amended; the Clean Air Act, as amended; the Illinois Environmental
Protection Act, as amended; the Illinois Solid Waste Management Act, as amended;
federal and state statutes and regulations concerning occupational safety and
health relating to Environmental Conditions, and the plans, rules, regulations
or ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar laws, regulations, rules or ordinances now
or hereafter in effect.
2.29 Environmental Noncompliance. "Environmental Noncompliance" means,
---------------------------
but is not limited to: (a) the release or threatened release of any Hazardous
Materials into the environment, any storm drain, sewer, septic system or
publicly owned treatment works, in violation of any effluent or emission
limitations, standards or other criteria or guidelines established by
Environmental Laws; (b) any noncompliance of physical structure, equipment,
process or facility with any Environmental Laws; (c) any facility operations,
procedures or designs that do not conform to the requirements of any
Environmental Laws; and (d) the failure to have obtained permits, variances or
other authorizations necessary under any Environmental Laws for the legal
operation of any equipment, process, facility or any other activity.
5
2.30 Event of Default. "Event of Default" has the meaning set forth in
----------------
Article 10 hereof.
2.31 Excess Cash Flow. "Excess Cash Flow" has the meaning set forth in
----------------
Section 8.5 hereof.
2.32 Excess Cash Flow Payments. "Excess Cash Flow Payments" has the
-------------------------
meaning set forth in the Note.
2.33 Fiscal Year. A period of thirteen (13) Accounting Periods, ending at
-----------
midnight on the Friday closest to December 31st in each calendar year; the new
Fiscal Year begins on the Saturday immediately following said Friday. A partial
Fiscal Year during the term of this Note shall, for purposes of this Note,
constitute a separate Fiscal Year.
2.34 Foreclosure Guaranty. "Foreclosure Guaranty" means that certain
--------------------
Foreclosure Guaranty dated as of June 12, 1989, by and between General Partner
and Lender, as reaffirmed pursuant to a certain Reaffirmation of Foreclosure
Guaranty dated as of the date hereof.
2.35 General Partner. "General Partner" means MOHS Corporation, a
---------------
Delaware corporation, and, to the extent that the transfer of such party's
interests in the Borrower is permitted pursuant to this Agreement, any such
permitted successor. Any references in the Loan Documents to the "Managing
General Partner" shall be deemed to refer to the General Partner.
2.36 Gross Revenues. Shall have the meaning ascribed thereto in the
--------------
Management Agreement.
2.37 Ground Lease. "Ground Lease" means the Ground Lease, the lessee's
------------
interest in which has heretofore been assigned to Borrower, originally made and
dated as of June 16, 1986 by and between Marriott, as lessee, and Simon-Rosemont
Developers, as lessor, a memorandum of which was recorded on April 3, 1987 as
Document 3604964, as amended by First Amendment to Lease recorded on April 3,
1987 as Document 36049654, and as further amended by Second Amendment to Lease
recorded on February 9, 1989 as Document 89063670, and as further supplemented
and amended by those documents identified on Exhibit E to the Mortgage.
2.38 Hazardous Materials. "Hazardous Materials" means hazardous wastes,
-------------------
hazardous substances, hazardous constituents, toxic substances or related
materials, whether solids, liquids or gases, substances defined as "hazardous
wastes," "hazardous substances," "toxic substances," "pollutants,"
"contaminants," "radioactive materials," or any other similar substances,
constituents or wastes subject to regulation under the Environmental Laws. By
way of example only, the term "Hazardous Materials" includes but is not limited
to (1) Asbestos; (2) petroleum and petroleum distillates or by-products;
(3) waste oil or waste vehicle fuel; (4) radionucleides; and (5) methane.
6
2.39 Host Marriott. "Host Marriott" means Host Marriott Corporation, a
-------------
Delaware corporation, formerly known as Marriott Corporation.
2.40 Hotel. "Hotel" means that certain hotel located on the Property and
-----
known as the Chicago Marriott Suites X'Xxxx Hotel.
2.41 Improvements. "Improvements" means the improvements located on the
------------
Land.
2.42 Indebtedness. "Indebtedness" means, in the aggregate, all
------------
obligations of Borrower, of any kind or nature, evidenced or secured by one or
more of the Loan Documents.
2.43 Land. "Land" means the real property legally described on Exhibit A
----
attached hereto and by this reference made a part hereof.
2.44 Legal Requirements. "Legal Requirements" shall mean any and all
------------------
judicial or administrative decisions, statutes, rulings, directions, rules,
regulations, permits, certificates or ordinances of any governmental authority
applicable to Borrower or the Property or Improvements, including, without
limitation, the ownership, division, use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction thereof.
2.45 Lender's Expenses. As defined in Section 3.9 hereof.
-----------------
2.46 Loan. "Loan" has the meaning set forth in the Recitals.
----
2.47 Loan Documents. "Loan Documents" has the meaning set forth in
--------------
Section 3.2 hereof.
2.48 Management Agreement. "Management Agreement" means that certain
--------------------
Management Agreement dated as of June 12, 1989 between Borrower (as owner) and
Manager.
2.49 Manager. "Manager" means Marriott International, Inc., a Delaware
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corporation.
2.50 Marriott. "Marriott" means Marriott Corporation, a Delaware
--------
corporation, now known as Host Marriott Corporation.
2.51 Maturity Date. "Maturity Date" has the meaning set forth in the
-------------
Note.
2.52 Maximum Amount. "Maximum Amount" has the meaning set forth in
--------------
Section 12.14 hereof.
7
2.53 Mortgage. "Mortgage" has the meaning set forth in Section 3.2
--------
hereof.
2.54 Net House Profit. Shall have the meaning ascribed thereto in the
----------------
Management Agreement, provided however that in determining Net House Profit,
there shall be no double counting, either in terms of including a single item
more than once in the deductions made in determining Net House Profit, or in
terms of excluding an item from Gross Revenues and, at the same time, deducting
said item in determining Net House Profit. Furthermore, notwithstanding the
fact that the definitions of Gross Revenues, Deductions and Net House Profit
under this Agreement have the same meanings as are set forth in the Management
Agreement, if the amount characterized by Manager as constituting Net House
Profit for the purposes of Section 5.01(B)(1) of the Management Agreement for
any given period of time is, for any reason, greater than the amount that might
otherwise be derived by the application of said definitions, and if said
greater amount has been agreed to or acquiesced in by Borrower for purposes of
the Management Agreement, then said greater amount shall constitute Net House
Profit for the period in question for the purposes of this Agreement and the
other Loan Documents; provided, that the adjustments made pursuant to this
sentence shall not be made, as to any given Fiscal Year, until the final
accounting statements for said Fiscal Year have been furnished in accordance
with clause (iii) of Article 7 of this Agreement.
2.55 NOI Threshold Amount. "NOI Threshold Amount" shall mean, with
--------------------
respect to each Fiscal Year or portion thereof during the term of this
Agreement, the respective amount set forth on Exhibit A to the Note opposite the
listing of said Fiscal Year. Said amount shall be prorated for periods of less
than the full period contemplated in said exhibit based upon the number of days
in the period in question, divided by the number of days in the full period
contemplated in said exhibit.
2.56 NOI Shortfall Year. NOI Shortfall Year means any Fiscal Year with
------------------
respect to which Net House Profit is less than the NOI Threshold Amount.
2.57 Note. "Note" has the meaning set forth in Section 3.2 hereof.
----
2.58 Permitted Encumbrances. "Permitted Encumbrances" has the meaning set
----------------------
forth in the Mortgage.
2.59 Person. "Person" means an individual, corporation, partnership,
------
trust or unincorporated organization, or a government or any agency or political
subdivision thereof.
2.60 Personal Property Inventory. A description of the current contents
---------------------------
of the furniture, fixtures and equipment of the guest rooms at the Hotel.
8
2.61 Prime Rate. "Prime Rate" at any time shall mean the rate of interest
----------
per annum then most recently announced by Lender at its New York branch as its
prime rate. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer of Lender.
Lender may make commercial loans or other loans at rates of interest at, above
or below the Prime Rate. A certificate of Lender as to its Prime Rate in effect
on any day shall be conclusive (in the absence of manifest error) for purposes
hereof as to the Prime Rate in effect on such day. If Lender shall not announce
such a rate at its New York branch, or shall not have a New York branch, then
the term "Prime Rate" shall mean the prime rate or base rate from time to time
announced by an American money center bank designated by Lender.
2.62 Property. "Property" means, collectively, the Improvements, the
--------
related personal property and Borrower's leasehold interest in the Land.
2.63 Reaffirmation of Environmental Indemnification Agreement.
--------------------------------------------------------
"Reaffirmation of Environmental Indemnification Agreement" means that certain
Reaffirmation of Environmental Indemnification Agreement of even date herewith
by and between Host Marriott and Lender.
2.64 Reference Rate. "Reference Rate" at any time shall mean the Prime
--------------
Rate plus one (1) percent per annum.
2.65 Repairs and Equipment Estimate shall have the meaning set forth in
------------------------------
Section 6.1 hereof.
2.66 Responsible Officer. "Responsible Officer" means, with respect to
-------------------
any corporation, the President or any Vice President.
2.67 Scheduled Principal Payment. "Scheduled Principal Payment" has the
---------------------------
meaning set forth in the Note.
2.68 Security Agreement. "Security Agreement" has the meaning set forth
------------------
in Section 3.2 hereof.
ARTICLE 3
---------
THE LOAN
--------
3.1 Consolidation, Amendment and Restatement of Obligations. Borrower
-------------------------------------------------------
acknowledges the validity and enforceability of the Original Loan Documents.
Borrower and Lender confirm that the current principal amount of the Original
Loan (prior to giving effect to this Agreement) is $25,500,000, that accrued
interest in the amount of $149,812.49 was due and owing in respect thereof as of
the date hereof and that said accrued interest is being paid to Lender
9
by Borrower concurrently with, and as a condition to, the execution and delivery
of this Agreement. Upon the making of said interest payment in said amount, all
accrued interest under the Original Loan Documents shall have been paid in full.
Borrower's obligation to pay the principal indebtedness referred to hereinabove,
together with Lender's Expenses and the Restructuring Fee, shall be evidenced
and secured by an Amended and Restated Secured Promissory Note dated as of the
date hereof, made by Borrower to the order of Lender in the face principal
amount of $25,500,000 (the "Note"), by this Agreement and by the other Loan
Documents.
3.2 Loan Documents. In furtherance of the agreements set forth in
--------------
Section 3.1, on the date hereof, Borrower is delivering to Lender the following
(collectively, together with this Agreement, referred to herein as the "Loan
Documents"), all dated as of the date hereof:
(a) The Note, executed by Borrower, which shall be in the form
attached hereto as Exhibit B;
(b) An Amended and Restated Leasehold Mortgage executed by Borrower
(the "Mortgage"), in the form attached hereto as Exhibit C;
(c) An Assignment of Rents executed by Borrower (the "Assignment of
Rents"), in the form attached hereto as Exhibit D;
(d) A Security Agreement executed by Borrower (the "Security
Agreement"), in the form attached hereto as Exhibit E;
(e) UCC-3 financing statements executed by Borrower (the "Financing
Statements"), in form and substance reasonably satisfactory to Lender;
(f) An Amended and Restated Assignment of Management Agreement,
executed by Borrower and Manager (the "Assignment of Management
Agreement"), in the form attached hereto as Exhibit F;
(g) Four (4) separate Deposit, Pledge and Security Agreements,
executed by Borrower and acknowledged, respectively, by the depositary
institutions identified therein (each a "Pledge Agreement"), in the form
attached hereto as Exhibits G-1, G-2, G-3 and G-4;
(h) A Reaffirmation of the Foreclosure Guaranty (the "Foreclosure
Guaranty Reaffirmation") executed by the General Partner, in form and
substance reasonably satisfactory to Lender;
10
(i) Reaffirmation of Environmental Indemnification Agreement,
executed by Host Marriott (the "Reaffirmation of Environmental
Indemnification Agreement"), in form and substance reasonably satisfactory
to Lender; and
(j) Such other instruments and documents as may be required by this
Agreement or as Lender many reasonably require.
3.3 Interest Rates and Payments. The Loan will bear interest at the
---------------------------
Contract Rate in effect from time to time as set forth in the Note, and, in
addition, the Loan shall bear Additional Accrued Interest as set forth in the
Note. Interest on the Loan shall be computed on the principal balance of the
Loan from time to time on a basis of a 360-day year, but shall be charged for
the actual number of days within the period elapsed. From and after the earlier
to occur of (i) any Event of Default or (ii) Maturity, the interest rate under
the Loan shall be at the Default Rate. The Contract Rate shall be determined
from time to time by Lender in the manner set forth in the Note and, absent
manifest error, such determination shall be conclusive and binding on Borrower.
Borrower shall make payments of interest and principal (including without
limitation, all regularly scheduled payments of Base Rate Interest, all
Scheduled Principal Payments and Excess Cash Flow Payments, and all payments of
Accrual Rate Interest and Additional Accrued Interest) at the time and in the
manner set forth in the Note; provided, however, that Lender hereby agrees to
waive payment of Additional Accrued Interest if (i) Borrower repays the
Indebtedness in full on or before the Maturity Date (with the exception of any
payment made following the acceleration of the Indebtedness by Lender consequent
to any Event of Default) or (ii) (x) Net House Profit for the period from
June 13, 2000 through and including June 12, 2001 is greater than or equal to
the NOI Threshold Amount for said period and (y) the cumulative Net House Profit
for the period from the date hereof through and including June 12, 2001 is
greater than or equal to the Cumulative NOI Threshold Amount for said period.
3.4 Term of the Loan. The entire Indebtedness and all other sums due and
----------------
payable under the Note or the other Loan Documents, if not sooner paid (and
subject to the provisions of the Loan Documents by which the Loan may be
accelerated by Lender), shall be due and payable by Borrower to Lender on
June 12, 2001 (the "Maturity Date").
3.5 Prepayments. Borrower may prepay the Loan in full or in part solely
-----------
in accordance with Section 2.8 of the Note.
3.6 Bankruptcy Stipulations. Borrower, for itself and its successors and
-----------------------
assigns, hereby agrees to the following limitations and waivers of certain
rights and protections that might otherwise be available to Borrower or its
successors and assigns under the Bankruptcy Code. Except as otherwise expressly
stated herein, all agreements and stipulations of Borrower in regard to
bankruptcy and related matters shall be applicable at all times following the
execution of this Agreement, whether before, on, or after the Maturity Date.
BORROWER, TO THE FULLEST
11
EXTENT PERMITTED BY APPLICABLE LAW, EXPRESSLY ACKNOWLEDGES THAT (I) "CAUSE"
EXISTS FOR PURPOSES OF SECTION 362(D) OF THE BANKRUPTCY CODE FOR RELIEF FROM THE
AUTOMATIC STAY UNDER THE CIRCUMSTANCES DESCRIBED IN PARAGRAPH (a) OF THIS
SECTION, AND (II) THE AGREEMENTS, STIPULATIONS, AND ACKNOWLEDGEMENTS BEING MADE
BY BORROWER UNDER THIS SECTION, INCLUDING BUT NOT LIMITED TO THE AGREEMENT IN
PARAGRAPH (a) THAT LENDER WILL BE ENTITLED TO RELIEF FROM THE AUTOMATIC STAY
UNDER THE CIRCUMSTANCES DESCRIBED BELOW, HAVE CONSTITUTED A MATERIAL INDUCEMENT
TO LENDER TO ENTER INTO THE RESTRUCTURING TRANSACTION EVIDENCED HEREBY AND AN
ESSENTIAL BASIS ON WHICH LENDER IS AGREEING TO OTHERWISE MODIFY THE ORIGINAL
LOAN DOCUMENTS ON THE TERMS SET FORTH HEREIN FOR THE BENEFIT OF BORROWER, AND
LENDER HAS CHANGED, AND WILL CONTINUE TO CHANGE, ITS POSITION IN RELIANCE
THEREON. BORROWER HAS BEEN REPRESENTED BY LEGAL COUNSEL, INCLUDING COUNSEL
SOPHISTICATED IN BANKRUPTCY MATTERS, AND HAS KNOWINGLY AND VOLUNTARILY AGREED TO
THE PROVISIONS OF THIS SECTION.
(a) In the event of a bankruptcy filing following any Event of
Default on or prior to the Maturity Date arising by reason of any of the
following:
(i) failure to pay interest on the Loan (Base Rate Interest,
Accrual Rate Interest or Additional Accrued Interest), any Scheduled
Principal Payment, any Excess Cash Flow Payment or any other payment
due under the Loan Documents;
(ii) application of any Gross Revenues for purposes other
than those permitted pursuant to the Loan Documents, or the
misapplication of any insurance proceeds, condemnation proceeds, or
other funds arising from the Hotel that may come into the hands of
Borrower;
(iii) failure by Borrower to furnish to Lender the financial
reports and information required to be provided under Article 7
hereof when required or within the period for cure of such default;
or
(iv) any material misrepresentation or fraud by Borrower or
any Affiliated Party in connection with the Loan, the Hotel, or the
transactions contemplated by this Agreement;
then, Lender, to the fullest extent permitted by applicable law, will be
----
immediately entitled to relief from the automatic stay imposed by Section 362 of
the Bankruptcy Code, to permit Lender to exercise any and all rights and
remedies available to Lender under the Loan Documents or applicable non-
bankruptcy law.
12
(b) Any attempt by Borrower to use any "Cash Collateral" (i.e., any
funds, proceeds, or property that constitutes "cash collateral" under
Section 363 of the Bankruptcy Code or otherwise expressly designated as
"cash collateral" in the Loan Documents) shall be subject to the prior
entry of an order pursuant to Section 363 of the Bankruptcy Code (a "Cash
Collateral Order") which specifically incorporates, without change or
modification, the provisions of this Agreement and the Pledge Agreements
respecting the use and application of such Cash Collateral. The Cash
Collateral Order shall also require that Borrower deposit and retain in a
segregated account all tenant security deposits under then existing leases
and all advance room receipts or deposits. Borrower shall not use, or seek
to use, Cash Collateral except as provided above, nor contest the entry of
a Cash Collateral Order in accordance with the above. Borrower's right to
the use and application of Cash Collateral shall terminate 120 days after
entry of the Cash Collateral Order, or earlier upon the appointment of a
trustee or examiner, the dismissal of the bankruptcy case or its conversion
to a Chapter 7 case, or the entry of an order of the bankruptcy court
lifting the automatic stay or terminating Borrower's rights to use the Cash
Collateral. The terms of the Cash Collateral Order as described herein do
not constitute a comprehensive listing of all provisions and conditions
that the Cash Collateral order may contain, but any additional provisions
shall not diminish the protections of Lender's interests with respect to
Cash Collateral that are intended by the provisions of this Agreement and
the Pledge Agreements. Either party shall be entitled to petition the court
to extend the Cash Collateral Order, provided that such extension (x) shall
contain all of the terms described in this Agreement and in the Pledge
Agreements and (y) shall not diminish the protections of Lender's interests
with respect to Cash Collateral that are intended by the provisions in this
Agreement and the Pledge Agreements. All amounts paid to Lender pursuant to
the Pledge Agreements shall be deemed applicable first to fees, expenses,
and other charges payable or reimbursable to Lender under the Loan
Documents, then to interest, and then principal; provided, that to the
extent Lender is determined in any bankruptcy to be undersecured, payments
that would otherwise have been applied to interest (including Contract Rate
Interest and Additional Accrued Interest) and/or expenses shall be deemed
to have been applied instead to principal, and all payments applied to
principal shall be deemed applicable first to the unsecured portion of
Borrower's indebtedness to Lender.
(c) To the extent deemed to be property of Borrower's bankruptcy
estate, all existing and future revenues, accounts, deposits, or
instruments payable to or held by or for the benefit of Borrower (including
but not limited to all of the rents,room rents, issues, profits and
proceeds of the Hotel) shall constitute Cash Collateral and shall be
subject to Lender's liens and security interests, which Borrower
acknowledges and agrees are and shall be present, perfected, first priority
liens and security interests. Borrower agrees that the foregoing shall
constitute cash collateral (in addition to all other collateral of Lender)
13
for Lender's secured claims under Section 506 of the Bankruptcy Code and
shall be entitled to adequate protection.
As minimum requirements for (but without limiting what may be required
in order to provide Lender with) adequate protection for Borrower's use of
such Cash Collateral, (i) Lender shall be deemed to have, and shall
automatically be granted, a continuing, perfected post-bankruptcy lien and
security interest in all rents, room rents, lease, license agreements,
contracts, deposits, and other receipts and revenues from the Hotel,
whether received or entered into before or after the filing of the
bankruptcy petition, and (ii) Borrower shall at all times maintain all
insurance coverages in the forms and amounts required under the Loan
Documents. In the event that such adequate protection as is required proves
to be insufficient, the amount of such insufficiency shall constitute an
administrative expense claim having priority over other kinds of
administrative expenses in accordance with Section 364(c)(1) of the
Bankruptcy Code.
(d) To the extent that any of the rights granted under any of the
Loan Documents are, or are deemed to be, security interests or liens,
during the pendency of Borrower's bankruptcy they shall be perfected and
deemed perfected without the necessity of filing any documents or
commencement of any proceedings otherwise required for the perfection of
such security interests or liens.
(e) Borrower and any other representative of Borrower's bankruptcy
estate hereby waive any right to seek a surcharge of Lender's collateral
under Section 506(c) of the Bankruptcy Code or other applicable law, unless
prior to making or incurring any obligation or making any expenditure that
may become the subject of such a surcharge, Borrower obtains Lender's
agreement that such expenditure or obligation will be a surcharge against
Lender's collateral for purposes of Section 506(c) of the Bankruptcy Code.
(f) In any circumstance (and only during the period) in which
Lender is entitled to relief from the automatic stay under paragraph (a)
above, but where the bankruptcy court does not grant such relief, Borrower,
to the fullest extent permitted by applicable law, hereby waives its right
to the exclusivity period provided under Section 1121 of the Bankruptcy
Code and agrees that (i) "cause" exists for termination of the exclusivity
period and (ii) Borrower will not oppose any motion by Lender to terminate
the exclusivity period.
(g) In any circumstance (and only during the period) in which
Lender is entitled to relief from the automatic stay under paragraph (a)
above, but where the bankruptcy court does not grant such relief, Borrower,
to the fullest extent permitted by applicable law, hereby waives any right
to seek an order under Sections 363, 364, 1129, or any other
14
provision of the Bankruptcy Code to impose liens or security interests of
senior or equal priority with the liens and security interests of Lender in
the Hotel, the Cash Collateral, or other collateral or security for the
Loan.
(h) Borrower agrees, to the fullest extent permitted by applicable
law, that in no event shall Cash Collateral be used to pay counsel for
Borrower or for the debtor-in-possession, except that fees and expenses of
counsel incurred in the course of the operation, leasing, maintenance and
management of the Hotel vis-a-vis third parties shall be permitted, subject
---------
to the budgetary approval requirements set forth herein.
(i) Borrower stipulates (i) that it is a "single-asset real estate"
entity within the meaning of Section 101(51B) of the Bankruptcy Code, or
would constitute such an entity if Section 101(51B) were amended to include
entities with noncontingent, liquidated secured debts in an amount
exceeding $4,000,000 and that all provisions of the Bankruptcy Code, now or
hereinafter enacted, applicable to single-asset real estate entities are
applicable to Borrower, and (ii) for purposes of Section 552 of the
Bankruptcy Code, that all rents, room rents and revenues derived from the
Hotel constitute rents, profits or proceeds of property in which Lender has
a perfected security interest.
(j) Nothing in the foregoing agreements and stipulations, or
elsewhere in the Loan Documents, shall be deemed to limit or restrict
Lender's rights to seek in the bankruptcy court any relief or remedy that
Lender would otherwise be entitled to obtain, including dismissal or
conversion of the bankruptcy case, the appointment of a trustee or
examiner, or relief from the automatic stay.
3.7 Waiver and Release. As additional consideration for, and as an
------------------
inducement to Lender's entering into this Agreement and consummating the loan
modification, Borrower, on behalf of itself and all parties claiming by, through
or under Borrower, does hereby release, remise, acquit, waive, relinquish and
forever discharge Lender and its agents, employees, directors, officers,
attorneys, affiliates, shareholders, parents, subsidiaries, participants,
predecessors, successors and assigns, and all persons, firms, corporations and
organizations in its behalf (the "Lender's Parties") of and from all damage,
loss, claims, demands, liabilities, obligations, defenses, rights of setoffs,
claims, actions and causes of action whatsoever which Borrower may now have or
claim to have against Lender or Lender's Parties, directly or indirectly,
arising out of, based upon or in any manner connected with any "Prior Related
Event" (as hereinafter defined), whether known or unknown. The term "Prior
Related Event" means any transaction, event, circumstance, action, failure to
act, or occurrence of any sort or type, whether known or unknown, which are
current, existed, was taken, permitted or begun prior to the execution of this
Agreement in accordance with, pursuant to or by virtue of, any of the terms of
the Loan Documents, or which was related or connected in any manner, directly or
indirectly, to the Loan Documents, Original Loan Documents, the obligations
under the Original Loan or any
15
part thereof or the Property. In addition, Borrower acknowledges and agrees that
it has no defenses, setoffs, claims, counterclaims or causes of action of any
kind or nature whatsoever in connection with the Loan, Original Loan, the Loan
Documents or the Original Loan Documents, or the administration or funding
thereof or the Property.
3.8 Restructuring Fee. Borrower shall pay to Lender an amount equal to
-----------------
$191,250 as a fee for restructuring the Original Loan in accordance with the
Loan Documents (the "Restructuring Fee"). The Restructuring Fee shall be payable
solely from Net House Profit in accordance with Section 8.4 hereof; provided
that Borrower is paying a portion of the Restructuring Fe, in the amount of
$63,750, to Lender concurrently with the execution and delivery of this
Agreement.
3.9 Lender's Expenses. The fees, costs and expenses incurred by Lender
-----------------
in connection with the restructuring of the Original Loan, including without
limitation (i) Borrower's failure to repay the Original Loan prior to maturity
(including all such amounts incurred by Lender in anticipation of Borrower's
failure to repay the Original Loan prior to maturity) or (ii) the negotiation,
preparation and execution of the Loan Documents and all term sheets or
agreements preliminary thereto, are referred to herein as "Lender's Expenses."
Borrower shall cause Lender's Expenses, to be repaid from Net House Profit in
the manner provided in Section 8.4 hereof. Lender shall notify Borrower, within
sixty (60) days following the date hereof, as to the amount of Lender's
Expenses. Concurrently herewith, Lender has advised Borrower as to the amount of
Lender's Expenses as estimated by Lender.
ARTICLE 4
---------
CONDITIONS PRECEDENT
--------------------
4.1 Condition to Closing. Lender's obligations under this Agreement are
--------------------
subject to the fulfillment of each of the following conditions, subject,
however, to the right of Lender to waive any one or more of such conditions in
whole or in part.
(a) Loan Documents. Lender shall have received, at Borrower's sole
--------------
cost and expense, the Loan Documents, in form and substance reasonably
satisfactory to Lender:
(b) Borrower Organizational Documents. Lender shall have received,
---------------------------------
at Borrower's sole cost and expense, the following documents, in form and
substance reasonably satisfactory to Lender:
(i) a copy of Borrower's Certificate of Limited Partnership
certified as of a recent date by the Secretary of State of Rhode
Island;
16
(ii) a Certificate of Existence issued by the Secretary of
State of Rhode Island with respect to Borrower, dated not more than
thirty (30) days prior to the date hereof;
(iii) a copy of the Amended and Restated Agreement of Limited
Partnership certified by the Managing General Partner as of the date
hereof; and
(iv) a certificate of the Secretary of State of Illinois
dated as of a recent date certifying that Borrower is duly qualified
as a foreign limited partnership to transact business in Illinois;
and
(v) evidence of the withdrawal of MB Investment Properties,
Inc., a Rhode Island corporation as a general partner of the Borrower
and that the General Partner is currently the sole general partner of
the Borrower.
(c) Partner Organizational Documents. Lender shall have received,
--------------------------------
at Borrower's sole cost and expense, the following documents, in form and
substance reasonably satisfactory to Lender:
(i) a copy of the Certificate of Incorporation of each
General Partner and all amendments thereto certified as of a recent
date by the Secretary of State of the state of incorporation of such
General Partner;
(ii) a certificate of the Secretary of State of the state of
incorporation of each General Partner dated as of a date reasonably
near the date hereof confirming the due incorporation, filing of
annual reports and payment of franchise taxes of such General
Partner;
(iii) a certificate from the Secretary of State of the state
of incorporation of each General Partner confirming as of the date
hereof the good standing of such General Partner;
(iv) a certificate of the Secretary of State of Illinois
dated as of a date reasonably near the date hereof certifying that
each General Partner is in good standing and duly qualified as a
foreign corporation to transact business in Illinois; and
(v) a copy of the Certificate of Incorporation and by-laws
of each General Partner, a copy of the resolutions or other corporate
action taken by the board of directors of each General Partner
authorizing the transactions contemplated hereby and a list and
specimen signatures of incumbent officers of
17
each General Partner signing any Loan Documents, each certified by the
Secretary of such General Partner as of the date hereof.
(d) Host Marriott Organizational Documents. Lender shall have
--------------------------------------
received at Borrower's sole cost and expense, the following documents, in
form and substance reasonably satisfactory to Lender:
(i) a copy of the Certificate of Incorporation of Host
Marriott and all amendments thereto certified as of a recent date by
the Secretary of State of Delaware;
(ii) a certificate of the Secretary of State of Delaware, dated
as of a date reasonably near the date hereof, confirming the due
incorporation, filing of annual reports and payment of franchise taxes
by Host Marriott;
(iii) a certificate from the Secretary of State of Delaware
dated as of the Closing Date confirming the good standing of Host
Marriott;
(iv) a copy of the Certificate of Incorporation and by-laws of
Host Marriott, evidence of authority for the execution of the
Reaffirmation of Environmental Indemnification Agreement, and a list
and specimen signatures of incumbent officers of Host Marriott signing
any Loan Documents, certified by the Secretary of Host Marriott as of
the date hereof; and
(v) A copy of a change-of-name certificate confirming that
Marriott's name was changed to Host Marriott.
(e) Property Documents. Lender shall have received, at Borrower's
------------------
sole cost and expense, the following documents, in form and substance
reasonably satisfactory to Lender:
(i) a copy of the Ground Lease and all amendments thereto,
certified by Managing General Partner as of the Closing Date;
(ii) a certificate of the landlord under the Ground Lease as to
the absence of defaults under the Ground Lease and such other matters
as Lender may request;
(iii) an update, dated not more than thirty (30) days prior to
the date hereof, of that certain plat of survey dated July 29, 1996,
prepared by Xxxxxx X.
18
Xxxxxx & Associates, Ltd., as job no. 960577 (the "Original Survey")
certifying to Lender and the title insurer that there have been no
changes therefrom;
(iv) the evidence of insurance referred to in the Mortgage;
(v) ALTA 1990 Loan Policy of Title Insurance dated as of the
closing date for the restructured loan subject to no additional title
exceptions and confirming the continued first priority of the loan
documents, including all endorsements previously obtained and, in
addition, endorsements re (i) deletion of creditors' rights, (ii) no
joint venture, (iii) usury and (iv) "participation interest."
(vi) current Uniform Commercial Code searches made in the
Office of the Secretary of State of the State of Illinois, the Office
of the County Recorder for Xxxx County, Illinois, the Office of the
Secretary of State of Maryland, the Office of the Secretary of State
of Rhode Island and such other places as Lender may specify, covering
Borrower and the General Partners showing no filings relating to, or
which could relate to, the Improvements other than those made
hereunder or under the Original Loan;
(vii) copies of all Governmental Approvals, environmental
permits and licenses, building permits, certificates of occupancy,
liquor licenses and other licenses and permits relating to the
Property;
(viii) The Personal Property Inventory or similar listing of all
the personal property located at the Property;
(ix) An estoppel certificate from the Manager (the "Manager's
Estoppel");
(x) An estoppel certificate from the ground lessor under the
Ground Lease, dated not more than seven (7) days prior to the date
hereof (the "Ground Lessor Estoppel");
(xi) A Reaffirmation of the Foreclosure Guaranty (the
"Foreclosure Guaranty Reaffirmation") executed by the General Partner;
(xii) A Reaffirmation of Environmental Indemnification
Agreement, executed by Host Marriott (the "Reaffirmation of
Environmental Indemnification Agreement");
19
(xiii) A letter from Host Marriott, in form reasonably
satisfactory to Lender that the Debt Service Agreement has expired,
that no sums are owing by the Borrower in connection therewith and
that no mortgages or other security have been furnished by the
Borrower to Host Marriott in connection therewith with respect to the
Property; and
(xiv) Such other notices, filings, tax returns and other
instruments as shall be necessary to record or give notice of the
liens, security interest and assignments contemplated herein.
(f) Opinions of Counsel. Lender shall have received opinions of
-------------------
counsel for Borrower and an opinion of counsel for Host Marriott all dated
as of the date hereof, satisfactory to Lender and relating to such matters
with respect to this Agreement, the Loan Documents and the transactions
contemplated hereby as Lender may request.
(g) Filing and Recordation. The Mortgage, the Assignment of Rents,
----------------------
the Financing Statements and any of the other documents listed above whose
recording and/or filing is required by Lender shall have been properly
recorded and/or filed in the appropriate offices.
(h) Additional Information. Borrower shall have provided such other
----------------------
information and documents as Lender may reasonably require.
(i) Representations and Warranties. The representations and
------------------------------
warranties of Borrower contained in this Agreement and in the other Loan
Documents shall be true and correct in all material respects as of the date
hereof.
ARTICLE 5
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
5.1 Representations and Warranties. As a material inducement to Lender to
------------------------------
enter into this Agreement and to amend and restate the Original Loan as set
forth in the Loan Documents, Borrower unconditionally represents and warrants as
follows:
(a) Formation and Power. Borrower is a limited partnership, duly
-------------------
formed and validly existing under the laws of the State of Rhode Island and
duly qualified to do business in and in good standing in the State of
Illinois, with requisite power and authority to (i) incur the indebtedness
evidenced by the Note; (ii) execute this Agreement and the other Loan
Documents, and (iii) enter into any other instruments executed and
delivered to Lender concurrently herewith.
20
(b) Due Execution. This Agreement, the Note, and all the other Loan
-------------
Documents were executed in accordance with the requirements of law and in
accordance with the requirements of Borrower's certificate of limited
partnership and partnership agreement and any amendments thereto.
(c) Due Authorization. The execution of this Agreement, the Note, and
-----------------
all the other Loan Documents, and the full and complete performance of the
provisions thereof, are authorized by Borrower's certificate of limited
partnership and partnership agreement.
(d) No Conflicts or Defaults. The execution of this Agreement, the
------------------------
Note, and all other Loan Documents, and the full and complete performance
of the provisions thereof, will not result in any material breach of, or
constitute a material default under, or result in the creation of any lien,
charge or encumbrance (other than those contained in any of the Loan
Documents) upon any property or assets of Borrower under any indenture,
mortgage, deed of trust, bank loan or credit agreement or other instrument
or agreement to which Borrower is a party or by which Borrower or the
Property is bound.
(e) Ownership of Property. Borrower is the sole legal and beneficial
---------------------
owner of the Property free and clear, to the best of Borrower's knowledge,
of all claims, liens and encumbrances other than the Permitted
Encumbrances.
(f) Accuracy of Financial Information. Any and all balance sheets,
---------------------------------
statements of income or loss, reconciliation of surplus and financial data
of any other kind heretofore furnished Lender by or on behalf of Borrower
are true and correct in all material respects, have been prepared on a
federal tax basis and fully and accurately present the financial condition
of the subjects thereof as of the dates thereof and no material adverse
change has occurred in the financial condition reflected therein since the
dates of the most recent thereof.
(g) Litigation. There are no actions, suits or proceedings of a
----------
material nature pending or, to the knowledge of Borrower threatened,
against or adversely affecting Borrower or the Property, including any
Environmental Claims, and no event has occurred that will violate, be in
conflict with, result in the breach of or constitute (with due notice or
lapse of time, or both) a default under, any Legal Requirement, or result
in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever on the Property other than the liens and security
interests created by, or otherwise permitted by, the Loan Documents.
(h) Legal Requirements. Borrower has complied with all Legal
------------------
Requirements the non-compliance with which would have a material adverse
affect on Borrower or the Property.
21
(i) No Usury. The Loan is a business loan within the meaning of
--------
Paragraph 6404(1)(d) of Chapter 17 of Illinois Revised Statutes, 815 ILCS
205/4 (1992), the Loan is an exempted transaction under the Truth In
Lending Act, 12 U.S.C. Section 1601 et seq. and the Loan does not violate
-- ---
the provisions of the Illinois usury laws, any consumers credit laws or the
usury laws of any state which may have jurisdiction over this transaction,
Borrower or any property securing the Loan.
(j) Zoning. The use and occupancy of the Property and Improvements
------
comply with all Legal Requirements except where non-compliance with such
Legal Requirement would not have a material adverse affect on the Borrower
or the Property. Except for Permitted Encumbrances, no portion of the
Improvements are constructed over areas subject to easements or set-back
restrictions. Neither the zoning nor any other right to construct or to use
the Improvements is to any extent dependent upon or related to any real
estate other than the Property except to the extent that the use of the
Improvements is limited by the terms of the Ground Lease or under one or
more of the Permitted Encumbrances. All approvals, licenses, permits,
certifications, filings, and other actions normally accepted as proof of
compliance with the Legal Requirements by prudent lending institutions that
make investments secured by real estate in the general area of the
Property, to the extent available as of the date hereof, have been duly
made, issued, or taken.
(k) Availability of Service. All streets, easements, utilities and
-----------------------
related services necessary for the construction of the Improvements and the
operation thereof for their intended purpose are available to the Property,
including potable water, storm and sanitary sewer, gas, electric and
telephone facilities and garbage removal.
(l) Binding Effect of Loan Documents. Each Loan Document constitutes
--------------------------------
a legal and binding obligation of, and is valid and enforceable against,
Borrower, all other persons (other than Lender) obligated thereunder (if
any) and the Property and Improvements (as the case may be) in accordance
with the terms thereof (except as such enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws,
or by equitable principles, applicable to the rights of creditors
generally) and is not subject to any defenses or setoffs.
(m) Subdivision. The Property is not in violation of any Illinois
-----------
law or local ordinance relating to the division or transfer of land and no
such violation has occurred or will occur by reason of a transfer or
mortgage of the Property, that, in either case, would affect the validity
or enforceability of any subsequent conveyance or encumbrance of any
interest in the Property.
(n) Environmental. To Borrower's actual knowledge, without having
-------------
undertaken any investigation other than the environmental reports
identified in Exhibit H,
22
(i) no Hazardous Materials exist on, over, under or about the Property or
the Land and (ii) there have been no actual or claimed violations of any
Environmental Laws with respect to the Property or the Land, other than as
set forth in environmental reports identified on Exhibit H.
(o) Sewage. To Borrower's actual knowledge, the storm and sanitary
------
sewage disposal system, water system and all mechanical systems of the Land
and the Property comply with all applicable laws, statutes, ordinances,
rules and regulations, including, without limitation, all Environmental
Laws. The applicable environmental protection agency, pollution control
board and/or other governmental agencies having jurisdiction of the Land
and the Property have issued their permits for the construction, tap-on and
operation of those systems.
(p) Utilities. To Borrower's actual knowledge, all utility, parking,
---------
access (including curb-cuts and highway access), construction, recreational
and other permits and easements required for the construction and use of
the Property have been granted and issued.
(q) Governmental Approvals. To Borrower's actual knowledge, no
----------------------
authorization, approval or license from, filing with or notice to, and no
other action by, any Governmental Authority (each, a "Governmental
Approval") is required in connection with the due execution, delivery and
performance by Borrower of any Loan Document.
(r) Leases. Borrower has not entered into any lease or other
------
arrangement for occupancy of space within the Property. Borrower is not
holding any security deposits with respect to any leases or occupancy
agreements for space within the Property, and Borrower has not received any
prepayments of rent more than one month in advance under any such leases or
occupancy agreements.
(s) Truth of Financial Statements. All financial statements and other
-----------------------------
reports furnished to Lender by Borrower or any Affiliated Party are true,
correct and complete in all material respects and do not fail to state any
material fact necessary to make the statements made not misleading.
(t) Change in Financial Condition. No material adverse change in the
-----------------------------
operations or financial condition of Borrower or Host Marriott has occurred
since the respective effective dates of their financial statements most
recently submitted to Lender.
(u) Regulation U. The Loan was not made for the purpose of
------------
purchasing or carrying "margin stock" within the meaning of Regulation G,
T, U or X issued by the Board of Governors of the Federal Reserve System,
and Borrower agrees to execute all
23
instruments necessary to comply with all the requirements of Regulation U
of the Federal Reserve System.
(v) ERISA. The assets of Borrower are not "plan assets" of any
-----
employee benefit plan covered by ERISA or Section 4975 of the Internal
Revenue Code.
(w) Truth of Recitals. All statements set forth in the Recitals are
-----------------
true and correct.
(x) Freedom from Default. No Default or Event of Default has occurred
--------------------
or is continuing, other than the failure of the Borrower to repay the
Original Loan upon the maturity thereof.
(y) Trade Name. Neither the Borrower nor the General Partner uses
----------
any trade name other than its actual name set forth herein.
(z) Principal Business Address. The principal place of business of
--------------------------
Borrower and the General Partner are located at the address provided in
Section 12.3 hereof for the furnishing of notices to Borrower.
(aa) Foreign Person. Borrower is not a "foreign person" within the
--------------
meaning of Sections 1445 or 7701 of the Internal Revenue Code.
(bb) Transactions with Affiliated Parties. Borrower has not
------------------------------------
purchased, acquired or leased any property from, or sold, transferred or
leased any property to, or loaned or advanced any money to, or borrowed any
obligation of, or acquired any stock, obligations or securities of, or
entered into any merger or consolidation agreement or any management or
similar agreement with, any Affiliated Party, or entered into any other
transaction or arrangement with or made any payment to or otherwise dealt
with, in the ordinary course of business or otherwise any Affiliated Party,
other than the Management Agreement and any payments made pursuant thereto
and other than Host Marriott.
(cc) Employees. Borrower has no employees.
---------
(dd) Other Indebtedness. Borrower has no indebtedness other than (i)
------------------
the Indebtedness, (ii) any deferred Incentive Management Fees owing to
Manager under the Management Agreement, which deferred amounts are not in
excess of $3,061,998 as of the date hereof and (iii) any accounts payable
to trade creditors in the ordinary course of the operation of the Hotel,
which accounts payable do not exceed $220,209 as of the date hereof and, to
Borrower's knowledge, Borrower is not in default to any such trade
creditors.
24
(ee) No Distributions. Borrower has made no distributions to any of
-----------------
its constituent partners in the twelve (12) month period ending with the
date hereof.
5.2 Nature of Representations and Warranties. As of the date hereof, all
----------------------------------------
representations and warranties made in this Agreement and in any other Loan
Document are true and correct in all material respects and do not contain untrue
statements of a material fact or omit any material fact necessary to make such
representations and warranties not misleading. Such representations and
warranties shall survive so long as any of Borrower's obligations hereunder have
not been satisfied or the Loan or any part thereof shall remain outstanding, and
for any applicable statute of limitations period thereafter. All
representations and warranties made in this Agreement or in any certificate or
other document delivered to Lender by or on behalf of Borrower or Host Marriott,
or any General Partner pursuant to or in connection with this Agreement shall be
deemed to have been relied upon by Lender notwithstanding any investigation
heretofore or hereafter made by Lender or on its behalf. Except as specifically
provided hereinabove to the contrary, the representations and warranties
contained herein that are made to the best knowledge and belief of Borrower have
been made after diligent inquiry calculated to ascertain the truth and accuracy
of the subject matter of each of such representations and warranties.
ARTICLE 6
---------
ANNUAL BUSINESS PLAN AND BUDGET; LENDER'S CONSULTANT;
-----------------------------------------------------
NOI COVENANT
------------
6.1 Not less than twenty-five (25) days prior to the end of each Fiscal
Year, Borrower shall provide Lender with an Annual Operating Projection and a
Repairs and Equipment Estimate (as such terms are defined in the Management
Agreement) for the Property for the following Fiscal Year which shall include
(i) a proposed operating budget for the Hotel prepared in accordance with the
Management Agreement showing the estimated Gross Revenues, departmental profits,
Deductions and other authorized deductions, and the projected Net House Profit
for the forthcoming Fiscal Year and (ii) a proposed Capital Improvements budget
for such Fiscal Year prepared in accordance with the Management Agreement. To
the extent that the proposed budget for each Fiscal Year is broken down into
thirteen (13) Accounting Periods, at any time during any Fiscal Year, Borrower
shall promptly furnish Lender with a copy of said breakdown. A copy of the
Annual Operating Projection and the Repairs and Equipment Estimate for Fiscal
Year 1996 is attached hereto as Exhibit I.
6.2 Borrower shall arrange for Manager to meet with Lender at the Hotel on
a semi-annual basis at a mutually agreeable time to discuss the performance of
the Hotel and the applic able (or proposed) Annual Operating Projection and
Repairs and Equipment Estimate. Borrower
25
and Lender shall meet with Manager to discuss the reallocation of certain
expenses between the Hotel and the nearby Marriott Hotel to more accurately
reflect the costs and benefits of certain services between such hotels. This
discussion shall include the van service and reservation expenses between the
foregoing hotels.
6.3 Lender shall have the right to engage one or more consultants to whom
Lender may provide, following the execution by each such consultant of a
confidentiality agreement in form and substance reasonably satisfactory to
Borrower, copies of all budgets, business plans, financial statements and other
information pertaining to the Hotel. As Lender's agent such consultant (i) shall
have the right to review and inspect the books and records of the Borrower and
visit the Hotel upon reasonable prior notice and (ii) shall have the right to
attend the semi-annual meetings with representatives of the Manager and the
Borrower described in Section 6.2 above. The consultant's fee (the "Consultant's
Fee") shall be paid for by the Lender; provided, however that Borrower shall be
liable for the Consultant's Fee (limited to $10,000) only for any NOI Shortfall
Year.
ARTICLE 7
---------
FINANCIAL STATEMENTS
--------------------
Financial Statements. Borrower agrees to furnish to Lender, at Borrower's
--------------------
expense:
(i) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each Accounting Period, Xxxxx
Travel Research's STAR Report for the Hotel (to the extent provided by
the Manager) together with an unaudited balance sheet for the Hotel,
as of the end of such accounting period and the related unaudited
"rent letter" of Manager (together with Manager's so-called "Format
90" or its equivalent) in the form of Exhibit J hereto for such
Accounting Period and for the portion of the calendar year through the
last day of said Accounting Period, setting forth in each case in
comparative form the figures for the previous year and the figures
under the Annual Operating Projection for the period or periods in
question, and setting forth the actual Capital Improvement expenditure
for the period, certified by a Responsible Officer of the General
Partner, each such financial statement to be complete and correct in
all material respects and prepared in reasonable detail. The
financial statements shall also set forth the monthly balance of the
FF&E Account. If the Manager supplies other financial information or
similar reports, the Borrower shall supply copies of such to Lender.
26
(ii) as soon as available and in any event within 90 days after
the end of each of the first three quarters of each Fiscal Year of
Borrower, a balance sheet of Borrower as of the end of such quarter
and an income statement and statement of changes in cash flows and
statement of changes in equity, of Borrower for the period commencing
at the end of the previous Fiscal Year and ending with the end of such
quarter, all in reasonable detail and stating in com parative form the
respective figures for the corresponding date and period in the
previous Fiscal Year and all prepared on a federal tax basis (or in
accordance with generally accepted accounting principles applied on a
consistent basis if such "GAAP" financial statements become available
subsequent to the date hereof) and certified by a Responsible Officer
of the General Partner;
(iii) annually, within 120 days after the close of each of
Borrower's Fis cal Years, consolidated operating statement for the
Property for said Fiscal Year and a financial statement for such
Fiscal Year, consisting of a balance sheet and profit and loss
statement, in such reasonable detail as Lender may request, setting
forth the financial condition and the income and expenses of both
Borrower and of the Property for such Fiscal Year and a certificate
executed by Borrower certi fying that such financial statement has
been prepared on a federal tax basis (or in accordance with generally
accepted accounting principles applied on a consistent basis if such
"GAAP" financial statements become available subsequent to the date
hereof) and fairly presents Borrower's financial condition as of the
date thereof and the results of Borrower's operations for the period
covered thereby. Such financial statement shall be audited at
Borrower's expense by a certified public accountant selected by
Borrower and satisfactory to Lender;
(iv) upon Lender's request, Borrower shall also furnish to
Lender, at Borrower's expense, such unaudited interim balance sheets
and profit and loss statements as Borrower shall have otherwise
prepared. Upon Lender's request, Borrower shall furnish Lender with
convenient facilities and all books and records necessary for an audit
of such statements. At any time and from time to time, Borrower shall
deliver to Lender such other financial data as Lender reasonably shall
request with respect to ownership, maintenance, use and operation of
the Property. Borrower shall notify Lender immediately of any
material adverse change in its financial condition or business
prospects;
(v) Borrower shall use its best efforts to furnish Lender with
copies of the 10Q and 10K reports for Host Marriott within thirty (30)
days after the filing thereof, provided that Borrower's failure to
furnish said copies within said time period shall not constitute an
Event of Default hereunder.
27
Lender shall require the auditor furnishing such financial statements to
furnish an opinion to Borrower as to the amount of Excess Cash Flow for the
year in question, and the amount of any Excess Cash Flow Payments so that
the payments required to be made pursuant to Section 2.3 of the Note may be
verified. The auditor providing such financial statements shall be subject
to the prior written approval of the Lender. Lender acknowledges that it
has currently approved Xxxxxx Xxxxxxxx, L.L.P. as said auditor, and that
Lender shall approve any other "Big 6" accounting firm as said auditor,
provided that prior written notice of said selection is provided to Lender.
Approval of any auditor may be withdrawn upon prior written notice from the
Lender if Lender believes that there has been a material adverse change in
the ability of said auditor to adequately perform the work contemplated
under this Article 7.
ARTICLE 8
---------
BANK ACCOUNTS AND APPLICATION OF GROSS REVENUES
-----------------------------------------------
8.1 Establishment of Bank Accounts. Borrower shall not commingle or
------------------------------
permit to be commingled the Gross Revenues with any monies or funds of any
Affiliated Party or with any revenues from any properties other than the
Property. Borrower shall establish four separate bank accounts, referred to
herein as the "Main Disbursing Account," the "General Investment Account," the
"FF&E Account" and the "Operating Account" (collectively, the "Bank Accounts").
Each Bank Account shall be pledged to Lender as security for the performance of
Borrower's obligations under the Loan Documents pursuant to a separate deposit,
pledge and security agreement in substantially the form of the Pledge
Agreements. As of the date hereof, the Bank Accounts are as follows:
(a) The Main Disbursing Account has been established at First
National Bank of Chicago as Account No. 58-06704. As of September 17, 1996,
the balance of said account was $549,492.57.
(b) The General Investment Account has been established at Xxxxxxx
Xxxxx & Company as Account No. 0000000-5. As of September 17, 1996, the
balance of said account was $66,842.96.
(c) The FF&E Account has been established at Xxxxxxx Xxxxx & Company
as Account No. 0000000-7. As of September 17, 1996, the balance of said
account was $929,822.31.
28
(d) The Operating Account has been established at Xxxxxxx Xxxxx &
Company as Account No. 000-0000000-0. As of September 17, 1996, the
balance of said account was $515,005.29.
Borrower shall not at any time during the term of the Loan close any of the Bank
Accounts or open or maintain any accounts at any other financial institution
without the prior written consent of Lender. Each of the Bank Accounts shall be
an interest-bearing account, and the proceeds of each account shall be invested
solely in the types of investments identified on Exhibit L attached hereto,
unless Lender's prior written approval shall first be obtained. Borrower agrees
that it shall include all earnings on the Bank Accounts as income of Borrower
for all applicable federal and state tax purposes.
8.2 Deposits to Bank Accounts; Withdrawal of Funds.
----------------------------------------------
(a) Borrower shall deposit or cause to be deposited all Gross
Revenues in the Main Disbursing Account upon Manager's receipt thereof.
Manager shall have signature authority with respect to the Main Disbursing
Account, provided that (i) Manager shall be authorized to withdraw funds
therefrom solely in accordance with the terms of the Management Agreement
and (ii) Manager shall be authorized to withdraw funds for the purpose of
transferring such funds to the General Investment Account. Borrower shall
cause Manager, not later than the 20th day following the end of each
Accounting Period, to transfer from the Main Disbursing Account into the
Operating Account an amount equal to the Net House Profit for such
Accounting Period.
(b) Manager shall have signature authority with respect to the
General Investment Account, provided Manager shall not cause any funds to
be disbursed therefrom other than for the purpose of transferring said
funds to the Main Disbursing Account for the payment of costs and expenses
which, pursuant to Section 8.2(a) hereinabove, are authorized to be
disbursed from the Main Disbursing Account.
(c) Borrower shall deposit or cause to be deposited in the FF&E
Account within twenty (20) days following the close of each Accounting
Period, an amount equal to (i) four percent (4%) of the Gross Revenues for
said period, if said period falls within calendar years 1996, 1997, 1998 or
1999, and (ii) five percent (5%) of the Gross Revenues for said period, if
said period occurs on or after January 1, 2000. Borrower and Manager shall
have signature authority with respect to the FF&E Account, provided that
neither Borrower nor Manager shall cause any funds to be withdrawn
therefrom other than to pay for Capital Improvements in accordance with the
Management Agreement.
(d) Borrower shall have signature authority with respect to the
Operating Account, provided that Borrower hereby agrees not to withdraw any
funds therefrom other
29
than for the purposes for which Borrower is permitted or required to apply
Net House Profit pursuant to Sections 8.4 and 8.5 hereinbelow.
(e) Notwithstanding the foregoing, Borrower shall not have the right
to withdraw any funds from any Bank Account during the continuation of any
Event of Default or any event which, with the passage of time or the giving
of notice, would constitute an Event of Default.
8.3 Payment of Deductions. Borrower (or Manager, pursuant to the
---------------------
Management Agreement and as agent for Borrower) shall cause Gross Revenues to be
applied first to the payment of all Deductions which are then payable.
Deductions shall, as provided above, be paid from the Main Disbursing Account.
8.4 Application of Net House Profit. The balance of Gross Revenues
-------------------------------
remaining after the payment of Deductions (i.e., Net House Profit) shall be
applied by Borrower as follows:
(i) First, to the payment of rent and other charges then due and
payable to the ground lessor under the Ground Lease;
(ii) Second, to the payment of Base Rate Interest then due and
payable;
(iii) Third, to the payment of Scheduled Principal Payments then due
and payable;
(iv) Fourth, to the payment of any Incentive Management Fee or
Contingent Management Fees then due and payable to Manager in accordance
with Article V of the Management Agreement;
(v) Fifth, to the payment of actual out-of-pocket expenses incurred
by Borrower to parties that are not Affiliated Parties and are not
employees of Borrower or any Affiliated Party (with the exception of Host
Marriott, but only to the extent that the compensation paid to Host
Marriott does not exceed the amounts that would be payable at arm's-length)
in connection with the administration of Borrower's limited partnership
structure, provided that said amount shall not include overhead not
specifically attributable to the Borrower entity and shall not exceed
$75,000 in any given calendar year (which amount shall be ratably adjusted
for partial Fiscal Years during the term hereof based upon the number of
days in said Fiscal year that fall within the term hereof);
(vi) Sixth, to the payment of any Lender's Expenses not previously
repaid;
30
(vii) Seventh, to the payment of any portion of the Restructuring Fee
not previously repaid;
(viii) Eighth, to the payment of any Consultant's Fees incurred by
Lender in any year in which there is an NOI Shortfall; and
(ix) Ninth, to the payment of any "Permitted Payments" (as such term
is defined in the Subordination Agreement of even date herewith between
Lender and Manager) payable to Manager from time to time by Borrower.
8.5 Application of Excess Cash Flow. The balance of Net House Profit
-------------------------------
remaining after application to the costs and expenses described in Section 8.4
hereinabove as referred to herein as "Excess Cash Flow." All Excess Cash Flow
shall be applied in accordance with the terms of Section 2.3 of the Note. The
items in clauses (vi), (vii) and (viii) above shall be paid to Lender by
Borrower concurrently with the making of the Excess Cash Flow Payments pursuant
to Section 2.3 of the Note.
ARTICLE 9
---------
GENERAL COVENANTS OF BORROWER
-----------------------------
So long as any of Borrower's obligations hereunder have not been satisfied
or the Loan or any part thereof shall remain outstanding Borrower shall:
9.1 Maintenance of Existence. Preserve and maintain its partnership
------------------------
existence and good standing in the jurisdiction of its formation, and qualify
and remain qualified in each jurisdiction in which such qualification is
required. Without the prior written consent of Lender, Borrower shall not
permit or suffer any amendment or modification of its partnership agreement, the
withdrawal of the General Partner or the admission of a new General Partner.
9.2 Conduct of Business. Operate the Hotel as a first class Hotel at all
-------------------
times.
9.3 Maintenance of Property. Maintain, keep and preserve all of the
-----------------------
Property (tangible and intangible) that is necessary or useful in the operation
of the Property and the conduct of Borrower's business in good working order and
condition, ordinary wear and tear excepted; provided, however, that so long as
no Event of Default is then continuing, Borrower may dispose of any worn out or
obsolete items of personal property no longer useful or necessary to the
operation of the Hotel and may replace items of personal property so long as the
replacement property is of quality, value and utility at least equal to that of
the property being replaced at the time it was placed in service. All such
Property shall be owned by Borrower and not leased and shall be kept free and
clear of all chattel mortgages, conditional vendor's liens, and
31
all other liens, encumbrances and security interests of any kind other than
liens in favor of Lender, with the exception of the equipment leases identified
on Exhibit K attached hereto, and equipment leases of a similar scope or nature
entered into in the future, to the extent consistent with the customary
standards for the operation of a first class hotel facility.
9.4 Maintenance of Records. Keep adequate records and books of account,
----------------------
in which complete entries will be made reflecting all financial transactions
concerning the Property.
9.5 Maintenance of Insurance. Maintain such insurance as is required by
------------------------
the Mortgage.
9.6 Compliance with Legal Requirements. Comply in all respects with all
----------------------------------
Legal Requirements unless such noncompliance does not materially adversely
affect the Property or Borrower; provided, however, that Borrower may contest in
good faith the validity or applicability to Borrower or to the Property of any
Legal Requirement by appropriate proceedings in a manner that does not, in the
judgment of Lender, materially and adversely affect Lender's rights or the first
priority of its lien against the Property.
9.7 Right of Inspection. From time to time upon reasonable prior notice
-------------------
permit Lender or any agent or representative thereof, during normal business
hours, to examine and make copies and abstracts from the records and books of
account of, and visit the Property; provided, however, that in cases of
emergency no such notice shall be required.
9.8
(a) Notice of Events of Default. At its expense, furnish to Lender as
---------------------------
soon as possible and in any event within 10 days after Borrower becomes
aware of the occurrence of any Event of Default or event that, with notice
or lapse of time or both, would become an Event of Default, a written
notice setting forth the details of such Event of Default or event and the
action that is proposed to be taken by Borrower with respect thereto.
(b) General Information. At its expense, furnish to Lender such other
-------------------
information respecting the condition or operations, financial or otherwise,
of Borrower as Lender may from time to time reasonably request.
(c) General Partner. Upon request by Lender, Borrower shall provide
---------------
to Lender any and all financial statements and other documents and
information with respect to the General Partner described in such request,
to the extent that such statements, documents and information exist and are
available.
32
Upon Lender's request, Borrower shall furnish Lender with convenient
facilities and all books and records necessary for an audit of such
statements. At any time and from time to time, Borrower shall deliver to
Lender such other financial data as Lender reasonably shall request with
respect to ownership, maintenance, use and operation of the Property.
Borrower shall notify Lender immediately of any material adverse change in
its financial condition or business prospects.
9.9 Liens. Save and except for taxes and assessments that are to be paid
-----
by Borrower as specified in the Mortgage, not create or suffer or permit to be
created or to exist, subsequent to the date hereof, any lien or encumbrance upon
the Property that shall be or may become superior to the lien of the Mortgage.
9.10 Leasehold Interest.
------------------
(a) Performance of Ground Lease. At all times fully perform and
---------------------------
comply with all agreements, covenants, terms and conditions imposed upon or
assumed by it under the Ground Lease and permit Lender, if Borrower shall
fail so to do, to take any action Lender deems necessary or desirable to
prevent or to cure any default by Borrower in the performance of or
compliance with any of Borrower's covenants or obligations under the Ground
Lease.
(b) No Amendments. Not surrender the leasehold estate and interest
-------------
under, nor terminate or cancel the Ground Lease nor, without the express
written consent of Lender, modify, change, supplement, alter or amend the
Ground Lease either orally or in writing.
9.11 Environmental Compliance. Except for Hazardous Materials used in the
------------------------
ordinary course of the hotel and restaurant business, Borrower will not, and
will not permit any other Person to, use, manufacture, process, store, dispose
of or otherwise handle Hazardous Materials on the Property.
9.12 Documents of Further Assurance. Borrower shall, from time to time,
------------------------------
upon Lender's request, execute, deliver, record and furnish such documents as
Lender may reasonably deem necessary or desirable to (i) perfect, and maintain
perfected as valid liens upon the Property, the liens granted by Borrower
pursuant to the Mortgage and the assignments and other security interests
granted by Borrower to Lender under the other Loan Documents as contemplated by
this Agreement, (ii) correct any errors of a typographical nature which may be
contained in any of the Loan Documents, and (iii) consummate fully the
transactions contemplated under this Agreement.
9.13 Furnishing Reports. Upon Lender's reasonable request, Borrower shall
------------------
provide Lender promptly after receipt with copies of all inspections, reports,
test results and other
33
information received by Borrower from time to time from its employees, agents,
representatives, architects, engineers, contractors, and any other parties
heretofore or hereafter involved in the operation of the Property which in any
way relate to the Property (or any part thereof).
9.14 Leases.
------
(a) Borrower shall not enter into any lease of space in the Property
without the prior written consent of Lender (any lease that is so approved
being referred to herein as an "Approved Lease"). Borrower shall not
modify, amend, waive any material pro vision of, terminate or cancel any
Approved Lease of space in the Property for more than 2,000 square feet
without the prior written consent of Lender. Nothing in this Section 9.14,
or in Section 9.16, however, shall detract from the rights of the Manager
under the Management Agreement.
(b) Borrower shall deliver copies of all Approved Leases to Lender
promptly following execution.
9.15 Management Agreement and Other Contracts.
----------------------------------------
(a) Borrower shall not amend, modify, waive any provision of,
terminate or cancel the Management Agreement. In the event that the Manager
is no longer the property manager of the Property, the selection of a
successor property manager (including the material terms of such manager's
employment) shall be subject to Lender's prior written approval.
(b) Borrower shall not enter into, amend, modify, waive any provision
of, terminate or cancel any other management contracts for the Property or
agreements with leasing agents or brokers.
9.16 Furnishing Notices. Borrower shall deliver to Lender copies of all
------------------
notices received or given by Borrower (or its agents or representatives) under
any of the Approved Leases within three (3) days after such notice is given or
received, as the case may be. Borrower shall also provide Lender with copies of
all notices pertaining to the Property or any part thereof received by Borrower
(or their respective agents or representatives) from any Governmental Authority
or from any insurance company providing insurance in respect of the Property,
within three (3) days after such notice is received.
9.17 Indebtedness. Borrower shall not incur any indebtedness (whether
------------
personal or non-recourse, secured or unsecured) other than customary trade
payables paid within sixty (60) days after they are incurred, or equipment
leases permitted pursuant to Section 9.3 hereof.
34
9.18 Prohibition Against Cash Distributions. No cash flow from the
--------------------------------------
Property shall be distributed to any partners of Borrower or applied other than
as provided in Article 8.
9.19 Transactions with Affiliated Parties. Borrower shall not purchase,
------------------------------------
acquire or lease any property from, or sell, transfer or lease any property to,
or loan or advance any money to, or borrow any money from, or guarantee any
obligation of, or acquire any stock, obligations or securities of, or enter into
any merger or consolidation agreement or any management or similar agreement
with, any Affiliated Party, or enter into any other transaction or arrangement
or make any payment to or otherwise deal with, in the ordinary course of
business or otherwise, any Affiliated Party on terms other than arm's-length
commercially reasonable terms other than the management arrangements
contemplated by the Management Agreement or in connection with the
administration of Borrower's limited partnership structure.
9.20 Appraisals and Certain Legal Expenses. Lender shall have the right to
-------------------------------------
obtain appraisals of the Property from time to time from an appraiser
satisfactory to Lender. Borrower shall provide such appraiser access to the
Property, Borrower's books and records relating to the Property and such other
information as is customarily required in order to allow an appraiser to perform
its appraisal. Borrower shall pay, within thirty (30) days after Lender's
request, the cost of such appraisals as follows: Borrower shall pay such costs,
not to exceed (i) $10,000, in connection with any one appraisal performed at
Lender's request in 1996; and (ii) $50,000 in connection with any appraisal
performed by Lender after March 1, 2001 and any legal expenses incurred by
Lender after March 1, 2001, if (x) Borrower shall have failed to repay the Loan
in full prior to such date or (y) Borrower shall have failed to deliver to
Lender a notice of its intention to repay the Loan in full on or before June 12,
2001, accompanied by a written binding commitment from a third party lender or a
sales contract from a third party purchaser which commitment or sales contract
(as the case may be) demonstrates to the Lender's reasonable satisfaction that
the Loan will be repaid in full on or before the Maturity Date or (z) the
Borrower delivers to the Lender a commitment or sales contract which is approved
by the Lender but Borrower thereafter fails to repay the Loan in full by the
Maturity Date. The agreement of Borrower to reimburse certain appraisal costs
and legal expenses pursuant to clause (ii) of the preceding sentence shall
supersede any limitations in Section 5 of the Note and shall not limit the right
of Lender to reimbursement from Borrower for the expenses of appraisers and
legal counsel otherwise provided under the Note or this Agreement.
9.21 Maintenance of Existence. Borrower shall at all times preserve and
------------------------
maintain in full force and effect all rights, privileges and franchises
necessary in the normal conduct of owning and operating a first-class hotel.
9.22 ERISA. Borrower shall comply with any applicable provisions of ERISA,
-----
and not (i) engage in any transaction which could cause the Loan (or the
exercise by Borrower of any rights under the Mortgage or the other Loan
Documents) to be a non-exempt prohibited transaction
35
under ERISA or the Internal Revenue Code, to be in violation of any requirement
applicable to or restriction on any ERISA plan, (ii) allow underlying assets of
any Borrower to become "plan assets," as defined under ERISA, or (iii) maintain,
---- ------
sponsor, contribute to or become obligated to contribute to any ERISA plan which
is subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the
Internal Revenue Code.
9.23 Trade Name. Borrower shall not use any trade name other than its
----------
actual name set forth herein.
9.24 Principal Place of Business. Borrower shall not change its principal
---------------------------
place of business without giving Lender at least thirty (30) days prior written
notice thereof.
9.25 Information and Approvals with respect to Management Agreement.
--------------------------------------------------------------
Borrower shall promptly deliver to Lender a copy of any written information or
written notice given to Borrower by Manager in connection with the Management
Agreement. Borrower agrees that, without the prior written consent of Lender,
Borrower shall not exercise any rights of consent or approval with respect to
budgets or any other matter as to which Borrower has consent or approval rights
under the Management Agreement, to the extent that said matter could reasonably
be projected to result in a material increase in Deductions and/or a material
reduction in Excess Cash Flow.
ARTICLE 10
----------
DEFAULTS
--------
10.1 Events of Default. Any of the following shall constitute an "Event of
-----------------
Default" hereunder:
(a) Failure to Pay. The failure of Borrower to make any payment
--------------
required hereunder or under the Note or any of the other Loan Documents,
whether such payment is required to be made to Lender or to some other
person or entity, within five (5) days after the due date thereof.
(b) Voluntary Bankruptcy. The filing of any petition or the
--------------------
commencement of any case or proceeding by Borrower or any general partner
of Borrower under any provision or chapter of the Federal Bankruptcy Code
or any other federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, or an adjudication that
Borrower or any such general partner is insolvent or bankrupt, or the entry
of an order for relief under the Federal Bankruptcy Code with respect to
Borrower or any such general partner.
36
(c) Involuntary Bankruptcy. The filing of any petition or the
----------------------
commencement of any case or proceeding described in Section 10.1(b) hereof
against Borrower or any general partner of Borrower, or against the assets
of any such persons or entities, unless such petition and the case or
proceeding initiated thereby are dismissed within 60 days from the date of
such filing; the filing of an answer by Borrower, or any such general
partner, admitting the allegations of any such petition; or the appointment
of, or the taking of possession by, a custodian, trustee, agent or receiver
for all or any assets of Borrower, or any such general partner, unless such
appointment is vacated or dismissed or such possession is terminated within
60 days from the date of such appointment or commencement of such
possession, but not later than five days before the proposed sale of any
assets of Borrower, or any such general partner, by such custodian,
trustee, agent or receiver, other than in the ordinary course of the
business of Borrower or such general partner.
(d) Insolvency. The insolvency of Borrower or any general partner of
----------
Borrower; or the execution by Borrower or any such general partner of an
assignment for the benefit of creditors; or the convening by Borrower or
any such general partner of a meeting of its creditors, or any class
thereof, for purposes of effecting a moratorium upon or extension or
composition of its debts; or the failure of Borrower or of any such general
partner to pay its debts as they mature; or if Borrower or any such general
partner is generally not paying its debts as they mature.
(e) Inability to Pay. The admission in writing by Borrower or any
----------------
general partner of Borrower that it is unable to pay its debts as they
mature or that it is generally not paying its debts as they mature.
(f) Existence. The liquidation, termination or dissolution of
---------
Borrower or any general partner of Borrower. A merger of either general
partner into an entity that is directly or indirectly wholly owned by the
same ultimate parent as such general partner shall not constitute a
liquidation, termination or dissolution of such general partner.
(g) Amendment of Entity Documents. The amendment or modification in
-----------------------------
any manner that would adversely affect Lender without the prior written
consent of Lender of the articles of incorporation, bylaws, articles of
partnership or limited partnership agreement, certificate of partnership or
other charter or enabling documents of Borrower or Borrower's general
partners, or the termination, by operation of law or otherwise of any of
the foregoing.
(h) Transfer of Property. The sale, lease, exchange, conveyance,
--------------------
transfer, mortgage, assignment, pledge or encumbrance, either voluntarily
or involuntarily, without the prior written consent of Lender, or the
agreement by Borrower to do so, without the
37
prior written consent of Lender (unless all obligations of Borrower under
such agreement are conditioned upon such consent or upon prepayment of the
Loan in accordance with the provisions of the Note, this Agreement and the
other Loan Documents) of (i) any right, title or interest of Borrower or of
any successor to Borrower in and to all or any portion of the Property,
other than (A) utility easements not adversely affecting the value of the
Property to the extent otherwise permitted under the Mortgage or (B)
dispositions or replacements of items of personal property permitted under
Section 9.3 hereof or (C) a taking pursuant to eminent domain or
condemnation powers; (ii) any general partnership interest in Borrower,
except for transfers of general partnership interest to a transferee that
is directly or indirectly wholly owned by the same ultimate parent as the
transferor; or (iii) any beneficial ownership interests in either General
Partner, except for transfers of beneficial ownership interests to a
transferee that is directly or indirectly wholly owned by the same ultimate
parent as the transferor.
(i) Attachment. The levy, attachment or seizure pursuant to court
----------
order ("Order") of (i) any right, title or interest of Borrower or of any
successor to Borrower, in and to all or any portion of the Property or (ii)
any general partnership interest in Borrower if such Order is not vacated
and the proceeding in which it was entered is not dismissed or bonded over
to Lender's satisfaction within 60 days of the entry of such Order.
(j) Breach of Representations and Warranties. The materially false or
----------------------------------------
misleading nature of any representation or warranty contained herein or in
any of the other Loan Documents or the materially false or misleading
nature of any representation to Lender concerning the financial condition
or credit standing of Borrower or any general partner of Borrower.
(k) Failure to Deliver Funds or Instruments. The failure of Borrower
---------------------------------------
to make any deposit of funds or instruments required hereunder or under the
Mortgage within the time period provided herein or in the Mortgage, or, if
no time period has been provided hereunder or under the Mortgage, within
five days after written demand therefor from Lender.
(l) Encroachment. The existence of any material encroachment that has
------------
occurred without the approval of Lender and that is not removed or
corrected or as to which Borrower has not made other arrangements
reasonably satisfactory to Lender within 60 days after the earlier of (i)
Lender's written notice to Borrower of the existence thereof, or (ii)
Borrower's discovery thereof.
(m) Filing of Liens. Subject to Borrower's right to contest the
---------------
assertion of any claims, liens or encumbrances in accordance with the
provisions of the Mortgage, the filing
38
of any claim of lien or encumbrance against the Property, or the
Improvements or any part thereof, or any interest or right made appurtenant
thereto if such claim of lien or encumbrance has not been dismissed or
vacated within 30 days after such claim was filed.
(n) Damage to Improvements. Subject to the provisions of Sections 10,
----------------------
11 and 12 of the Mortgage, the demolition, destruction, or substantial
damage of the Improvements so that in Lender's reasonable judgment they
cannot be restored or rebuilt with available funds (including insurance
proceeds, as and to the extent the same are made available pursuant to the
Mortgage) to a profitable condition within a reasonable time.
(o) Injunction Against Performance. The obtaining by any person of an
------------------------------
order or decree in any court enjoining or prohibiting Borrower, any
Affiliated Party, or Lender or either of them from performing this
Agreement or any of the other Loan Documents, which order or decree is not
vacated and which proceedings are not discontinued within 60 days after the
granting of such order or decree.
(p) Lapse of Permits or Services. The neglect, failure, or refusal of
----------------------------
Borrower to keep in full force and effect any permit, license, consent or
approval required under Section 9.6 hereof or the curtailment in
availability to the Property or Improvements of utilities or other public
services necessary for the full occupancy and utilization of the
Improvements.
(q) Condemnation. The commencement of proceedings by any public or
------------
quasi-public body of competent jurisdiction to acquire the Property, or any
portion thereof or any interest therein (other than a portion that, in
Lender's reasonable judgment, does not materially adversely affect the
operations of the Property) pursuant to eminent domain or condemnation
powers, and (i) such proceedings are not dismissed within 30 days, or (ii)
Borrower fails to make a deposit with Lender in an amount sufficient to
protect Lender's security under the Mortgage.
(r) Compliance with Law. The failure of Borrower or the Property or
-------------------
improvements to comply with any present or future Legal Requirement if such
non compliance materially adversely affects Borrower or the Property.
(s) Management Agreement. The existence of an unwaived or uncured
--------------------
"event of default" as defined in the Management Agreement, or the
termination of the Management Agreement.
(t) Ground Lease. The occurrence of an "Event of Default" by Borrower
------------
as defined in the Ground Lease or the subordination of the Ground Lease to
the lien of any
39
mortgage of the fee interest in the Land, or the occurrence of any actual
or purported surrender, termination or modification of the Ground Lease.
(u) Environmental Noncompliance. At the option of Lender and except
---------------------------
as set forth on Exhibit H hereto, if any other property owned by Borrower
becomes subject to any claim, notice or action of a nature constituting an
Environmental Condition or Environmental Noncompliance.
(v) Handling of Funds and Bank Accounts. The failure by Borrower to
-----------------------------------
deposit or cause to be deposited in the Main Disbursing Account all Gross
Revenues, the closing or transfer by Borrower or Manager of any Bank
Account other than as permitted under this Agreement, or the withdrawal by
Borrower of any funds from any Bank Account, except to the extent and for
the purposes permitted under this Agreement.
(w) Partnership Distributions. The making by Borrower of any
-------------------------
distribution to any partner in Borrower.
(x) Change in Financial Condition of Property. If Borrower causes,
-----------------------------------------
suffers or permits any materially adverse financial change to occur in the
operation or financial condition of the Property.
(y) Breach of Other Covenants. The failure of Borrower to perform in
-------------------------
any material respect any covenant or agreement hereunder if such failure
(i) would not, with the giving of notice or the lapse of time or both,
constitute an Event of Default under any other provision of this Article 10
and (ii) is not cured within 30 days after such failure has occurred or, if
the failure is such that it cannot reasonably be cured within such 30-day
period, if Borrower fails to commence the cure of such failure within such
30-day period or thereafter fails to diligently pursue such efforts to
completion, provided, however, that in no event shall the amount of time
permitted for any such cure exceed 90 days after such failure shall occur;
(z) Other Loan Documents. The occurrence of an Event of Default under
--------------------
any of the other Loan Documents.
ARTICLE 11
----------
LENDER'S REMEDIES IN EVENT OF DEFAULT
-------------------------------------
11.1 Remedies Conferred Upon Lender. Upon the occurrence of any Event of
------------------------------
Default, Lender shall, in addition to all remedies conferred upon Lender by law
and by the terms of the
40
Note, the Mortgage and the other Loan Documents, have the right but not the
obligation to pursue any one or more of the following remedies concurrently or
successively, it being the intent hereof that all such remedies shall be
cumulative and that no such remedy shall be to the exclusion of any other:
(a) Take any action whatever which, in Lender's sole judgment, is
necessary to fulfill the covenants, agreements and obligations of Borrower
under this Agreement and the other Loan Documents, including the right to
(i) avail itself of and procure performance of existing contracts and
subcontracts, and (ii) let any contracts with the same contractors and
subcontractors or others and to employ watchmen to protect the Property
from injury. Without restricting the generality of the foregoing, and for
the purpose aforesaid, Borrower hereby appoints and constitutes Lender its
lawful attorney-in-fact, coupled with an interest and with full power of
substitution in the Property, and agrees that Lender shall be entitled to
(A) use unadvanced funds which may be reserved, escrowed or set aside for
any purpose whatever at any time, to perform obligations that Borrower
shall have failed to perform, (B) advance funds in excess of the face
amount of the Note, (C) retain or employ such project developers,
construction managers, general contractors, subcontractors, architects,
engineers and inspectors as may be required for such purposes, (D) pay,
settle or compromise all existing bills and claims the non-payment of which
might result in liens or security interests on the Property, or prevent
such bills and claims from resulting in liens against the Property or
security interests against fixtures, furnishings, furniture or equipment or
other property, or as may be necessary or desirable for performing any
repairs or other work upon the Property, equipping and furnishing of the
Property, or for the clearance of title, (E) execute all applications and
certificates which may be required by any of the Loan Documents, (F)
prosecute and defend all actions or proceedings connected with or relating
to the Property, (G) take such action and require such performance as
Lender deems necessary under any payment or performance bonds furnished
under this Agreement, and make settlements and compromises with the surety
or sureties thereunder, and, in connection therewith, execute instruments
of release and satisfaction, (H) take possession of and operate the
Property, and (I) do any and every act which borrower might do in its own
behalf; it being understood and agreed that the foregoing power of attorney
shall be a power coupled with an interest and cannot be revoked;
(b) Declare the Note and the entire Indebtedness (including without
limitation all accrued and unpaid Contract Rate Interest and Additional
Accrued Interest and all principal) to be immediately due and payable;
(c) Use and apply any monies in the Bank Accounts and any monies
deposited by Borrower with Lender, regardless of the purpose for which the
same was deposited to
41
cure any such default or to apply on account of any Indebtedness under this
Agreement which is due and owing to Lender; and
(d) Exercise or pursue any other right or remedy permitted under this
Agreement or any other Loan Document or conferred upon Lender by operation
of law, including without limitation, the remedies of foreclosure and/or
appointment of a receiver in accordance with the terms of the Mortgage or
as otherwise permitted pursuant to applicable law.
11.2 Non-Waiver of Remedies. No waiver of any breach or default hereunder
----------------------
shall constitute or be construed as a waiver by Lender of any subsequent breach
or default or of any breach or default of any other provision of this Agreement.
11.3 Availability of Remedies. All of the remedies set forth herein and/or
------------------------
provided by law or equity shall be equally available to Lender, and the choice
by Lender of one such alternative over another shall not be subject to question
or challenge by Borrower or any other Person, nor shall any such choice be
asserted as a defense, setoff, or failure to mitigate damages in any action,
proceeding, or counteraction by Lender to recover or seeking any other remedy
under this Agreement or any of the other Loan Documents, nor shall such choice
preclude Lender from subsequently electing to exercise a different remedy. The
parties have agreed to the alternative remedies hereof specified in part because
they recognize that the choice of remedies in the event of a failure will
necessarily be and should properly be a matter of business judgment, which the
passage of time and events may or may not prove to have been the best choice to
maximize recovery by Lender at the lowest cost to Borrower. It is the intention
of the parties that such choice by Lender be given conclusive effect regardless
of such subsequent developments. At any sale of the security or collateral for
the Loan or any part thereof whether by foreclosure or otherwise, Lender may in
its discretion purchase all or any part of such collateral so sold or offered
for sale for its own account and may apply against the balance due Lender
pursuant to the terms of the Note the amount bid therefor.
11.4 Application of Proceeds. The proceeds received by Lender in respect
-----------------------
of any sale of, collection from or other realization upon all or any part of the
Property pursuant to the exercise by Lender of its remedies provided in this
Agreement, any other Loan Document or by law, and any insurance and/or
condemnation proceeds which are applied to the Indebtedness pursuant to the
terms of the Mortgage shall be applied, together with any other sums then held
by Lender, as follows:
FIRST, to the payment of all costs and expenses, fees, commissions and
-----
taxes of such sale, collection or other realization, including amounts
payable pursuant to Section 2.12 of the Note, Lender's Expenses, the
Restructuring Fee and Lender's reasonable attorneys' fees, and all expenses
or advances made by Lender in connection
42
therewith, together with interest on each such amount at the Default Rate
then in effect, from and after the date such amount is due, owing or unpaid
until paid in full;
SECOND, to the indefeasible payment in full in cash of all accrued and
------
unpaid Contract Rate Interest and any and all other accrued and unpaid
interest (other than Additional Accrued Interest) owing by Borrower under
or in connection with this Agreement or the other Loan Documents, together
with interest on each such amount at the Default Rate then in effect, from
and after the date such amount is due, owing and unpaid until paid in full.
THIRD, to the indefeasible payment in full in cash of all accrued and
-----
unpaid Additional Accrued Interest, together with interest on each such
amount at the Default Rate from and after the date such amount is due,
owing or unpaid until paid in full;
FOURTH, to the indefeasible payment in full in cash of principal owing
------
by Borrower under or in connection with this Agreement or the other Loan
Documents, together with interest on each such amount at the Default Rate
then in effect, from and after the date such amount is due, owing or unpaid
until paid in full; and
FIFTH, any surplus then remaining from such proceeds shall be paid to
-----
Borrower, or its successor or assigns, or to whomever may be lawfully
entitled to receive such proceeds or as a court of competent jurisdiction
may direct.
ARTICLE 12
----------
GENERAL PROVISIONS
------------------
12.1 No Waiver; Lender's Action for Its Own Protection Only. No waiver of
------------------------------------------------------
any Event of Default or breach by Borrower hereunder shall be implied from any
omission by Lender to take action on account of such Event of Default, and no
express waiver shall affect any Event of Default other than the Event of Default
specified in the waiver and the waiver shall be operative only for the time and
to the extent therein stated. Waivers of any covenant, term or condition
contained herein shall not be construed as a waiver of any subsequent breach of
the same covenant, term, or condition. The consent or approval by Lender to or
of any act by Borrower requiring further consent or approval shall not be deemed
to waive or render unnecessary the consent or approval to or of any subsequent
similar act. The authority herein conferred upon Lender, and any action taken
by Lender, including, without limitation, actions to inspect the Property, to
approve leases and all other documents and instruments submitted to Lender,
shall be exercised and taken by Lender and by Lender's consultants, advisors or
representatives for their own protection only and may not be relied upon by
Borrower or any other Person for any purposes
43
whatever; and neither Lender nor Lender's agents, employees, consultants,
advisors, or representatives shall have any liability for or with respect to the
proper construction of improvements on the Property, performance of contracts,
subcontracts or purchase orders by any contractor, subcontractor or material
supplier, prevention of mechanics' liens rom being claimed or asserted against
any of the Property or performance under any lease or other agreement.
12.2 No Third Parties Benefitted. This Agreement is made and entered into
---------------------------
for the sole protection and benefit of Lender and Borrower, their successors and
assigns, and no other person or persons shall have any right to action hereon or
rights to the Loan funds at any time.
12.3 Notices. All notices, requests and demands to or upon the respective
-------
parties hereto, to be effective, shall be in writing and shall be delivered by
hand or sent by (x) mail (certified or registered, postage prepaid, return
receipt requested), (y) by a nationally recognized overnight courier service, or
(z) by facsimile transmission (provided that the original of any notice sent by
facsimile transmission shall be sent by a nationally recognized overnight
courier service) and unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered if delivered by hand, or three
Business Days following deposit if sent by certified or registered mail, or on
the next Business Day following deposit with a nationally recognized overnight
courier service, or upon receipt if sent by facsimile with an original by
nationally recognized overnight courier service (provided that if said facsimile
was received after 5:00 p.m. in the local time zone of the recipient on any
Business Day, said notice shall not be deemed to have been received until the
following Business Day), addressed in each case as follows, or to such address
or other address as may be hereafter notified by such parties:
Borrower: Mutual Benefit Chicago Marriott Suite Hotel
Partners, L.P.
Host Marriott Corporation
00000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Law Department
Facsimile No. : (000) 000-0000
Lender: National Bank of Canada
New York Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: XxxxXxx Xxxxxx
Facsimile No. : (000) 000-0000
12.4 Expenses. Borrower shall pay promptly upon demand by Lender therefor,
--------
44
all costs, charges and expenses incurred by Lender in connection with the Loan,
including without limitation the negotiation, drafting and preparation of the
Loan documents and any amendments thereto and waivers thereof and the
administration and enforcement thereof (whether or not the transactions
contemplated therein shall be consummated) including, without limitation, title
charges, tax and lien service charges, costs of inspection, recording fees,
appraisal fees, attorneys' fees and insurance premiums and all other costs,
charges and expenses that are payable by Borrower pursuant to this Agreement or
the other Loan Documents. All amounts payable under this Section 12.4 that are
reimbursements for amounts actually paid by Lender shall bear interest
retroactively from the date Lender makes demand for payment to the date such
amounts are paid to Lender at the lesser of (a) the Default Rate or (b) the
maximum rate then permitted by law (if any such maximum is applicable) unless
Borrower pays such amounts to Lender within ten Business Days of Lender's demand
therefor. Notwithstanding anything to the contrary herein contained, any item of
expense within the scope of this Section 12.4 incurred by Lender through and
including the date hereof shall be included in Lender's Expenses and shall be
payable by Borrower solely as provided elsewhere in the Loan Documents.
12.5 Actions. Lender shall have the right to commence, appear in or defend
-------
any action or proceeding purporting to affect the rights, duties, or liabilities
of the parties hereunder, the disbursement of any funds, or in any way relating
to or arising out of the Loan. In connection therewith, Lender may incur and
pay costs and expenses, including without limitation reasonable attorneys' fees.
Borrower shall pay to Lender on demand all such expenses.
12.6 Commissions and Brokerage Fees. Borrower hereby agrees to indemnify
------------------------------
Lender from any responsibility and/or liability for the payment of any
commission, charge or brokerage fees to anyone which may be payable by Borrower
or any Affiliated Parties in connection with the purchase or refinance of the
Loan (other than any sale of participations or assignments contemplated in
Section 12.17 hereof), it being understood that any such commission, charge, or
brokerage fees will be paid directly by Borrower or said Affiliated Parties to
the party or parties entitled thereto.
12.7 Governing Law. This Agreement and the other Loan Documents shall be
-------------
governed by and construed in accordance with the laws of the State of Illinois
except to the extent preempted by United States federal law.
12.8 Heirs, Successors and Assigns. This Agreement shall be binding upon
-----------------------------
and inure to the benefit of the heirs, successors, assigns and personal
representatives of the parties hereto; provided, however, that Borrower shall
not assign its rights hereunder, under the Note or under any other Loan Document
in whole or in part. Any such assignments shall be void.
12.9 Time. Time is of the essence of this Agreement and all of the other
----
Loan Documents and each provision hereof and thereof of which time is an
element.
45
12.10 Supplements Mortgage. The provisions of this Agreement are not
--------------------
intended to supersede the provisions of the Mortgage and the other Loan
Documents but shall be construed as supplemental thereto. In the event of any
inconsistency between the provisions hereof and of the Mortgage or the Note, it
is intended that this Agreement shall be controlling. Notwithstanding anything
to the contrary herein contained, Borrower and Lender acknowledge that although
this Agreement is binding as between Borrower and Lender, nothing herein shall
be construed as modifying or detracting from the rights of Manager with respect
to Lender pursuant to Section 9 of the Assignment of Management Agreement.
12.11 Severability. If any provision of this Agreement or any of the
------------
other Loan Documents or the application thereof to any person or situation
shall, to any extent, be held invalid or unenforceable, the remaining provisions
of this Agreement and the other Loan Documents, and the application of such
provision to persons or situations other than those to which it shall have been
held invalid or unenforceable, shall not be affected thereby, but shall continue
to be valid and enforceable to the fullest extent permitted by law unless the
invalid or unenforceable provision is of such a material nature to either or
both of the parties that such party or parties would not have entered into this
Agreement and the other Loan Documents if this Agreement or the other Loan
Documents had not contained such provision.
12.12 Attorneys' Fees. If at any time hereafter prior to repayment of the
---------------
Loan in full, Lender employs counsel for advice or other representation (whether
or not any suit has been or shall be filed and whether or not other legal
proceedings have been or shall be instituted and, if such suit is filed or legal
proceedings instituted, through all administrative, trial, and appellate levels)
with respect to the Loan, the Property or any part thereof, this Agreement or
any of the other Loan Documents or to protect, collect, lease, sell, take
possession of, or liquidate any of the Property, or to attempt to enforce any
security interest or lien on any of the Property, or to enforce any rights of
Lender or any of Borrower's obligations hereunder or those of any other person,
firm or corporation which may be obligated to Lender by virtue of this Agreement
or any other agreement, instrument or document heretofore or hereafter delivered
to Lender by or for the benefit of Borrower, then, in any such event, all of the
attorneys' fees and expenses, costs and charges relating thereto, shall be paid
by Borrower on demand and if Borrower fails to pay such fees, costs and
expenses, payment thereof by Lender shall constitute additional indebtedness of
Borrower, payable on demand and secured by the Mortgage and other Loan Documents
(whether or not the indebtedness evidenced by the Note after and including such
disbursement shall exceed the face amount of the Note).
12.13 Usury Limitation. All agreements between Borrower and Lender are
----------------
expressly limited so that in no contingency or event whatsoever, whether by
reason of: errors of fact or law, prepayment or advancement of the proceeds of
the Loan, acceleration of maturity of the unpaid balance of the Note, or
otherwise, shall the amount paid or agreed to be paid to Lender for the use,
forbearance or retention of the money to be advanced hereunder, including any
fees or
46
charges collected or made in connection with the Loan that may be treated as
interest under applicable law, if any, exceed the maximum legal limit (if any
such limit is applicable) under United States federal law or state law (to the
extent not preempted by federal law, if any), now or hereafter governing the
interest payable in connection with such agreements (the "Maximum Amount"). If,
from any circumstances whatsoever, fulfillment of any provision hereof or of any
of the other Loan Documents, at the time performance of such provision shall be
due, shall involve transcending the limit of validity (if any) prescribed by law
that a court of competent jurisdiction may deem applicable hereto, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any circumstances Lender shall ever receive as interest an
amount that would exceed the maximum legal limit (if any such limit is
applicable), such amount that would be excessive interest shall be applied to
the reduction of the unpaid principal balance due under the Note and not to the
payment of interest or, if necessary, rebated to Borrower. This provision shall
control every other provision of all agreements between Borrower and Lender.
12.14 Section Headings. Section headings are provided herein for
----------------
convenience only and shall not serve as a basis for interpretation or
construction of this Agreement, nor as evidence of the intention of the parties
hereto.
12.15 Notice of Future Proceedings or Events. During the term of the
--------------------------------------
Loan, Borrower shall promptly furnish to Lender written notice of any action,
suit, or proceeding or any event the existence or occurrence of which would make
the provisions of Section 5.1(g) hereof untrue as of the date of any such
action, suit, proceeding or event.
12.16 Amendment. No alteration or amendment of this Agreement or any of
---------
the other Loan Documents shall be effective unless in writing and signed by the
parties sought to be charged or bound thereby.
12.17 Assignment and Participations. This Agreement shall be binding
-----------------------------
upon, and shall inure to the benefit of, Borrower, Lender and their respective
successors and assigns, except that Borrower may not assign or transfer its
rights or obligations hereunder. Lender may assign or sell participations in
all or any part of the Loan to another bank or financial institution, in which
event in the case of an assignment, upon notice thereof by Lender to Borrower,
the assignee shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights, benefits and obligations as it would have if
it were Lender hereunder. All participants with respect to the Loan shall
furthermore be treated as if they were Lender and receive the benefits of Lender
under the Note in any circumstances in which Lender is entitled to receive such
benefits. Lender may furnish any information concerning Borrower in the
possession of Lender from time to time to assignees and participants (including
prospective assignees and participants); provided that Lender shall require any
such prospective assignee or such participant (prospective or otherwise) to
agree in writing to be bound by the provisions of Section 12.23 hereof.
47
12.18 Indemnity. Borrower shall indemnify and defend Lender against, and
---------
shall hold Lender harmless from, any and all losses, damages (whether general,
punitive or otherwise), liabilities, claims, causes of action (whether legal,
equitable or administrative), judgments, court costs and legal or other expenses
(including the fees, costs and expenses of all attorneys, paralegals and
consultants engaged by Lender) which Lender may suffer or incur as a direct or
indirect consequence of: (i) Lender's performance of this Agreement or any of
the other Loan Documents, including without limitation Lender's exercise or
failure to exercise any rights, remedies or powers in connection with this
Agreement or any of the other Loan Documents; (ii) Borrower's failure to perform
any of Borrower's obligations as and when required by this Agreement or any of
the other Loan Documents, including, without limitation, any failure of any
representation or warranty of Borrower to be true and correct and any failure by
Borrower to satisfy any condition; (iii) any claim or cause of action of any
kind by any person or entity to the effect that Lender is in any way responsible
or liable for any act or omission by Borrower, whether on account of any theory
of derivative liability or otherwise; (iv) any act or omission by Borrower, any
contractor, subcontractor or material supplier, engineer, architect or other
person or entity, except Lender, with respect to any of the Property or
Improvements; or (v) any claim or cause of action of any kind by any person or
entity which would have the effect of denying Lender the full benefit or
protection of any provision of this Agreement or any of the other Loan
Documents. Lender's rights of indemnity shall not be directly or indirectly
limited, prejudiced, impaired or eliminated in any way by any finding or
allegation that Lender's conduct is active, passive or subject to any other
classification or that Lender is directly or indirectly responsible under any
theory of any kind, character or nature for any act or omission by Borrower or
any other person or entity except Lender. Notwithstanding the foregoing,
Borrower shall not be obligated to indemnify Lender with respect to any
intentional tort or act of gross negligence which Lender is personally
determined by the judgment of a court of competent jurisdiction (sustained on
appeal, if any) to have committed. Borrower shall pay any indebtedness arising
under said indemnity to Lender immediately upon demand by Lender. This indemnity
shall survive the payment of all amounts payable pursuant to, and secured by,
the Loan Documents. Payment by Lender shall not be a condition precedent to the
obligations of Borrower under this indemnity.
12.19 Survival. This Agreement and the other Loan Documents shall survive
--------
until all amounts evidenced and secured by the Loan Documents have been paid
indefeasibly to Lender.
12.20 Environmental Matters.
---------------------
(a) Environmental Indemnification by Borrower.
-----------------------------------------
(i) Borrower agrees to indemnify, defend by counsel acceptable to
Lender, and hold harmless Lender, its subsidiaries, affiliates,
successors and assigns and their respective directors, officers,
employees, shareholders, representatives and agents, from and
against and in respect of any and all
48
Environmental Claims that may be imposed upon or incurred by Lender or
asserted against Lender by any other party or parties (including any
governmental entities), in connection with any Environmental
Conditions or the remediation of any Environmental Conditions, or in
connection with any Environmental Noncompliance arising out of,
resulting from, or attributable to, the Land, the Property or the
business or operations of Borrower or any successor in interest of
Borrower, including, without limitation, any Environmental Claims and
Environmental Expenses resulting from the alleged exposure of any
person to Environmental Conditions, regardless of whether or not such
Environmental Conditions or exposure resulted from activities of
Borrower or Borrower's successors in interest or the breach of any of
Borrower's covenants, representations and warranties set forth herein
relating to Environmental Conditions or Environmental Noncompliance
but excluding (i) any such Environmental Claims arising solely out of,
resulting solely from, or attributable solely to the acts or failures
to act of Lender at the Land or the Property as a successor in
interest of Borrower and (ii) any such Environmental Claims arising
solely out of, resulting solely from, or attributable solely to the
operations of Host Marriott or any predecessor in interest of Host
Marriott at the Land or the Property, but only (in the case of this
clause (ii)) to the extent that Host Marriott does not dispute Host
Marriott's obligations, under the Reaffirmation of Environmental
Indemnification Agreement or otherwise, to indemnify Lender and the
other parties named above in connection therewith. Borrower's
obligations pursuant to this Section 12.20(a) shall exist regardless
of whether Lender is alleged or held to be strictly or jointly and
severally liable; and
(ii) All costs incurred by Lender in connection with any
Environmental Claims or Environmental Expenses that are within the
indemnification set forth in Section 12.20(a)(i) shall be paid by
Borrower to Lender within 10 days after demand from Lender.
(b) Borrower's Covenants Regarding Environmental Matters.
----------------------------------------------------
(i) With respect to any Environmental Noncompliance or
Environmental Condition within the indemnification set forth in
Section 12.20(a), and without in any way limiting the scope of
Borrower's obligations under the provisions of this Section 12.20, as
between Lender and Borrower, Borrower will be responsible for all
investigations, studies, cleanup, corrective action or response or
remedial action with respect to the Land or the Property required by
any Environmental Laws or Environmental Claims.
(ii) As between Lender and Borrower, Borrower will pay all costs
in connection with any investigations, studies, cleanup, repair, and
remedial action
49
relating to any Environmental Noncompliance and any Environmental
Condition within the indemnification set forth in Section 12.20(a),
including, without limitation, all capital improvements, installation,
operation, maintenance, testing, monitoring, preparation of plans,
designs, applications, studies and reports by or for governmental
entities or other regulating agencies, the preparation of closure or
other required plans, the retention of legal counsel, engineers, and
other expert consultants.
(iii) As between Lender and Borrower, Borrower shall have the
responsibility, right and duty to participate in the management and
control of all investigations and any environmental cleanup,
remediation, or other similar activities relating to any Environmental
Noncompliance and any Environmental Condition within the
indemnification set forth in Section 12.20(a) hereof. Borrower,
however, shall provide written notice to Lender before fulfilling,
settling or contesting any requirements or Environmental Claims. If
Environmental Conditions are discovered at the Land or the Property
subsequent to the date hereof, Borrower shall promptly notify Lender
of such condition.
(iv) If any Environmental Noncompliance within the scope of the
indemnification set forth in Section 12.20(a) hereof is discovered to
exist at the Land or the Property subsequent to the date hereof,
Borrower will remedy as soon as practicable, at no cost or expense to
Lender, the conditions that constitute such Environmental
Noncompliance. If any Environmental Noncompliance that is not within
the scope of the indemnification set forth in Section 12.20(a) hereof
is discovered to exist at the Land or the Property subsequent to the
date hereof, Borrower shall be obligated hereunder to remedy the
conditions that constitute such Environmental Noncompliance only if
Host Marriott disputes in good faith Host Marriott's obligation to
effect such remedy whether pursuant to the Reaffirmation of
Environmental Indemnification Agreement or otherwise. Borrower shall
promptly provide written notice to Lender of any such Environmental
Noncompliance and a description of the resolution thereof.
12.21 Non-recourse.
------------
(a) Extent of Non-recourse. Anything in this Agreement to the
----------------------
contrary notwithstanding, Lender shall have no personal recourse against
either Borrower, the General Partner, any limited partner of Borrower, or
any Affiliated Party nor any officer, director, employee or agent of any of
the foregoing for the repayment of any of the principal of or interest on
the Loan or for any deficiency judgment that Lender may obtain after
foreclosure of the liens securing such repayment, or, subject to the
provisions of Section 12.21(b) hereof, for any deficiency, loss or damage
suffered by Lender as a result
50
of the failure by Borrower or the General Partner to comply with any of the
terms or conditions of this Agreement or any of the other Loan Documents
and, subject to the provisions of Section 12.21(b) hereof, Lender agrees not
to seek recourse against any of the foregoing for any such deficiency, loss
or damage. The foregoing limitations are limitations on Lender's right of
recourse against Borrower and shall not impair the validity or
enforceability of the indebtedness evidenced by the Note or any of the other
obligations of Borrower under the Loan Documents secured by the Property or
the lien of or security interest in or the right of Lender as mortgagee or
secured party to foreclose and/or enforce its rights in the Property after
default by Borrower or the General Partner.
(b) Borrower's Liability for Damages or Misapplication of Funds. The
-----------------------------------------------------------
provisions of Section 12.21(a) hereof to the contrary notwithstanding,
Borrower and the General Partner shall be fully liable (i) for any damages
attributable to fraud or material misrepresentation in any Loan Document or
in any written communication by Borrower in connection with the Loan or in
connection with the Original Loan; (ii) for the retention of any rental
income or other income arising with respect to all or any part of the
Property covered by the Mortgage after Lender has given to Borrower any
notice that Borrower is in default hereunder or under the other Loan
Documents and that Lender has exercised its option to accelerate maturity
of the Note, foreclose or require the foreclosure of the liens securing
payment thereof, receive or collect such rental income or other income or
exercise its rights under the Loan Documents (to the full extent of the
rental income or other income retained after the giving of any such
notice); (iii) for any Gross Revenues distributed to any partners in
Borrower subsequent to the date hereof; (iv) for any Gross Revenues, Net
House Profits or Excess Cash Flow not applied as required pursuant to
Article 8 hereof; (v) for the misapplication of (A) proceeds paid prior to
any such foreclosure under any insurance policies by reason of damage, loss
or destruction to any portion of the property covered by the Mortgage (to
the full extent of such proceeds), or (B) any proceeds or awards resulting
from the condemnation, prior to any such foreclosure, of all or any part of
the property covered by the Mortgage (to the full extent of such proceeds
or awards); and (v) for damages arising from the breach of any
representation, warranty, covenant or other obligation concerning
Environmental Claims, Environmental Conditions or Environmental
Noncompliance (except for matters set forth on Exhibit H hereto, including
without limitation the indemnification provisions of Section 12.20 hereof;
provided, however, that the recourse liability of the General Partner in
connection with the matters set forth in this clause (v) shall not extend
to conditions present in the Land prior to the date on which Borrower
acquired the leasehold interest under the Ground Lease, except to the
extent that such recourse liability is otherwise applicable to the General
Partner pursuant to clause (i) hereinabove.
(c) Liability of General Partners. To the extent of personal
-----------------------------
liability of Borrower under Section 12.21(b) hereof, the General Partner of
Borrower hereby agrees
51
to be liable therefor and waives any requirement of law that in the event
of a default hereunder Lender must proceed against Borrower or exhaust any
assets of Borrower before proceeding against the General Partner or the
General Partner's assets; provided, however, that in no event shall any
limited partner of Borrower, any Affiliated Party (other than the General
Partner) or any officer, director, employee or agent of any partner of
Borrower or of any Affiliated Party have any liability under Section
12.21(c) hereof, and Lender agrees that it shall not seek recovery from any
party that is excluded from liability pursuant to this sentence.
12.22 Consent to Jurisdiction and Service of Process; Waiver of Jury
--------------------------------------------------------------
Trial. All judicial proceedings brought against arising out of or relating to
-----
this Agreement, the Note or any other Loan Documents may be brought in any state
or federal court in the State of New York or the State of Illinois. Borrower
accepts for itself and its properties, generally and unconditionally, the
nonexclusive jurisdiction of such courts, waives any defense of forum non
conveniens, and irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement, the Note, or any other Loan Document. All
parties to this Agreement irrevocably waive all right to trial by jury in any
judicial proceeding arising out of or relating to this Agreement, the Note, or
any other Loan Document.
12.23 Confidentiality. Provided that no Event of Default has occurred,
---------------
Lender shall not disclose (and shall not permit any participant to disclose) to
any third party any information obtained solely from Borrower pursuant to this
Agreement or any of the Loan Documents and that has not otherwise been publicly
disclosed; provided, however, that nothing in this Section 12.23 shall prevent
Lender from disclosing such information (i) to any assignee or participant as
contemplated by Section 12.17 hereof, or to any employees, agents, attorneys, or
accountants of such assignee or participant; (ii) upon request or demand, to any
regulatory agency or authority having jurisdiction over the foregoing; (iii)
upon subpoena or order, to any court or administrative agency; or (iv) pursuant
to the ordinary course of Lender's business in providing credit references in
accordance with The Code of Ethics for the Exchange of Credit Information
published by The Xxxxxx Xxxxxx Associates.
12.24 Counterparts. This Agreement may be executed in any number of
------------
counterparts and each such counterpart shall be deemed to be an original; all
such counterparts shall constitute but one and the same instrument and shall be
enforceable against all parties hereto, notwithstanding that they are not all
signatories to the same counterpart.
52
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
MUTUAL BENEFIT CHICAGO MARRIOTT
SUITE HOTEL PARTNERS, L.P., a Rhode Island
limited partnership
By: MOHS CORPORATION, a Delaware
corporation, its sole General Partner
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
---------------------------------------
Title: Vice President
--------------------------------------
NATIONAL BANK OF CANADA
By: /s/ Xxxx Xxx Xxxxxx
-----------------------------------------------
Name: Xxxx Xxx Xxxxxx
---------------------------------------------
Title: Vice President
--------------------------------------------
53
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
PARCEL 1:
XXX 00 XX XXXXXXXX XXXXXXXXXXX-XXXXX XX, XXXXX A RESUBDIVISION IN THE WEST 1/2
OF SECTION 3, TOWNSHIP 40 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN,
ACCORDING TO THE PLAT RECORDED MARCH 11, 1992 AS DOCUMENT 92157888, IN XXXX
COUNTY, ILLINOIS.
PARCEL 2:
NON-EXCLUSIVE EASEMENTS IN FAVOR OF THE LEASEHOLD ESTATE DESCRIBED AS PARCEL 1
HEREIN FOR:
(A) INGRESS AND EGRESS FOR PEDESTRIAN AND VEHICULAR TRAFFIC IN, OVER AND THROUGH
THE COMMON AREAS LOCATED ON THE ADJACENT TRACT (AS DEFINED BELOW), AS CREATED BY
LEASE DATED JUNE 16, 1986, A MEMORANDUM OF WHICH WAS FILED APRIL 3, 1987 AS
DOCUMENT LR3604964, AND RECORDED NOVEMBER 18, 1988 AS DOCUMENT 88535338, MADE
BY AND BETWEEN SIMON-ROSEMONT DEVELOPERS AND MARRIOTT CORPORATION;
(B) INGRESS AND EGRESS FOR PEDESTRIAN TRAFFIC IN, OVER AND THROUGH THE ENCLOSED
WALKWAY ON THE ADJACENT TRACT (AS DEFINED BELOW), AS CREATED BY LEASE DATED JUNE
16, 1986, A MEMORANDUM OF WHICH WAS FILED APRIL 3, 1987 AS DOCUMENT LR3604964,
AND RECORDED NOVEMBER 18, 1988 DOCUMENT 88535338, MADE BY AND BETWEEN
SIMON-ROSEMONT DEVELOPERS AND MARRIOTT CORPORATION;
(C) THE LOCATION, INSTALLATION, MAINTENANCE AND REPAIR OF SATELLITE AND
TELECOMMUNICATIONS EQUIPMENT ON THE ADJACENT TRACT (AS DEFINED BELOW), ALL AS
CREATED BY LEASE DATED JUNE 16, 1986, A MEMORANDUM OF WHICH WAS FILED APRIL 3,
1987 AS DOCUMENT LR3604964, AND RECORDED NOVEMBER 18, 1988 AS DOCUMENT 88535338,
MADE BY AND BETWEEN SIMON-ROSEMONT DEVELOPERS AND MARRIOTT CORPORATION;
(D) MINOR ENCROACHMENTS OF TENANT'S IMPROVEMENTS ONTO THE ADJACENT TRACT (AS
DEFINED BELOW) DUE TO ENGINEERING ERRORS, ERRORS IN ORIGINAL CONSTRUCTION,
CONSTRUCTION, RECONSTRUCTION, REPAIR, SETTLEMENT OR SHIFTING OR MOVING OF THE
TENANT'S IMPROVEMENTS, AS CREATED BY FIRST AMENDMENT DATED MARCH 11, 1987 AND
FILED APRIL 3, 1987 AS DOCUMENT LR3604965, AND RECORDED NOVEMBER 18, 1988 AS
DOCUMENT 88535337, MADE BY AND BETWEEN SIMON-ROSEMONT DEVELOPERS AND MARRIOTT
CORPORATION; AND
(E) INGRESS AND EGRESS OVER THE ADJACENT TRACT AS REASONABLY NECESSARY FOR THE
RECONSTRUCTION, MAINTENANCE, OPERATION AND REPAIR OF TENANT'S IMPROVEMENTS, AS
CREATED BY FIRST AMENDMENT DATED MARCH 11, 1987 AND FILED APRIL 3, 1987 AS
DOCUMENT LR3604965, AND RECORDED NOVEMBER 18, 1988 AS DOCUMENT 88535337, MADE BY
AND BETWEEN SIMON-ROSEMONT DEVELOPERS AND MARRIOTT CORPORATION.
A-1
ADJACENT TRACT:
LOTS 1 TO 8 IN RIVERWAY SUBDIVISION-PHASE I, BEING A RESUBDIVISION IN THE WEST
1/2 OF SECTION 3, TOWNSHIP 40 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL
MERIDIAN, ACCORDING TO THE PLAT RECORDED JUNE 3, 1988 AS DOCUMENT 88241319 AND
FILED AS DOCUMENT LR3713139, IN XXXX COUNTY, ILLINOIS.
AND ALSO,
LOTS 9 TO 13 AND LOTS 15 TO 17 IN RIVERWAY SUBDIVISION-PHASE II, BEING A
RESUBDIVISION IN THE WEST 1/2 OF SECTION 3, TOWNSHIP 40 NORTH, RANGE 12, EAST OF
THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT RECORDED MARCH 11, 1992 AS
DOCUMENT 92157888, IN XXXX COUNTY, ILLINOIS.
PARCEL 3:
EASEMENT IN FAVOR OF THE LEASEHOLD ESTATE DESCRIBED AS PARCEL 1 HEREIN, AS
CREATED IN SECOND AMENDMENT TO LEASE RECORDED FEBRUARY 9, 1989 AS DOCUMENT
89063670, MADE BY AND BETWEEN LASALLE NATIONAL BANK, AS TRUSTEE UNDER TRUST
AGREEMENT DATED FEBRUARY 1, 1988 AND KNOWN AS TRUST NUMBER 11300, SIMON-ROSEMONT
DEVELOPERS, AN ILLINOIS LIMITED PARTNERSHIP, AND MARRIOTT CORPORATION, A
DELAWARE CORPORATION, FOR A 5 INCH AT-GRADE EASEMENT FOR ACCOMODATING THE
AS-BUILT CONDITION OF THE HOTEL GARDEN WALL, OVER THE FOLLOWING LEGAL
DESCRIPTION:
THAT PART OF THE WEST 1/2 OF SECTION 3, TOWNSHIP 40 NORTH, RANGE 12, EAST OF THE
THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTHWEST 1/4 OF SAID
SECTION 3 WITH THE EASTERLY LINE OF RIVER ROAD AS WIDENED BY CONDEMNATION IN
CASE NO. 59C16022 AND SHOWN ON PLAT RECORDED AS DOCUMENT NUMBER 19251267; THENCE
NORTH 05 DEGREES 11 MINUTES 36 SECONDS EAST ALONG SAID EASTERLY LINE OF RIVER
ROAD AS WIDENED, 395.35 FEET; THENCE NORTH 79 DEGREES 26 MINUTES 12 SECONDS
WEST, 0.91 FEET TO THE EASTERLY LINE OF RIVER ROAD, BEING A LINE 33.00 FEET, AS
MEASURED AT RIGHT ANGLES, EASTERLY OF AND PARALLEL WITH THE CENTER LINE OF SAID
ROAD; THENCE NORTH 10 DEGREES 38 MINUTES 35 SECONDS EAST ALONG SAID EASTERLY
LINE OF RIVER ROAD, 69.50 FEET; THENCE NORTH 68 DEGREES 08 MINUTES 35 SECONDS,
EAST 56.73 FEET; THENCE NORTH 85 DEGREES 38 MINUTES 35 SECONDS EAST, 47.90 FEET
TO A POINT OF CURVATURE; THENCE NORTHEASTERLY ALONG A CURVED LINE CONVEX
SOUTHEASTERLY, HAVING A RADIUS OF 300.00 FEET AND BEING TANGENT TO SAID LAST
DESCRIBED LINE AT SAID LAST DESCRIBED POINT, AN ARC DISTANCE OF 113.14 FEET TO A
POINT OF TANGENCY (THE CHORE OF SAID ARC BEARS NORTH 74 DEGREES 50 MINUTES 21
SECONDS EAST, 112.47 FEET); THENCE NORTH 64 DEGREES 02 MINUTES 07 SECONDS EAST
ALONG A LINE TANGENT TO SAID LAST DESCRIBED CURVED LINE AT SAID LAST DESCRIBED
POINT, 7.87 FEET; THENCE SOUTH 34 DEGREES 21 MINUTES 25 SECONDS EAST, 169.84
FEET; THENCE SOUTH 10 DEGREES 38 MINUTES 35 SECONDS WEST, 3.41 FEET; THENCE
SOUTH 79 DEGREES 21 MINUTES 25 SECONDS EAST, 25.00 FEET; THENCE SOUTH 10 DEGREES
38 MINUTES 35 SECONDS WEST, 3.50 FEET; THENCE SOUTH 79 DEGREES 21 MINUTES 25
SECONDS EAST, 24.58 FEET; THENCE SOUTH 10 DEGREES 38 MINUTES 35 SECONDS WEST,
14.00 FEET; THENCE SOUTH 79 DEGREES 21 MINUTES 25 SECONDS EAST, 15.00 FEET;
THENCE SOUTH 10 DEGREES 38 MINUTES 35 SECONDS WEST, 8.50 FEET TO A POINT FOR A
PLACE OF BEGINNING; THENCE CONTINUING SOUTH 10 DEGREES 38 MINUTES 35 SECONDS
WEST, 353.17 FEET; THENCE
X-0
XXXXX 00 DEGREES 21 MINUTES 25 SECONDS EAST, 0.40 FEET; THENCE NORTH 10 DEGREES
38 MINUTES 35 SECONDS EAST, 353.17 FEET; THENCE NORTH 79 DEGREES 21 MINUTES 25
SECONDS WEST, 0.40 FEET TO THE PLACE OF BEGINNING, LYING ABOVE A HORIZONTAL
PLANE OF ELEVATION 628.70 FEET ABOVE U.S.G.S. DATUM AND LYING BELOW A HORIZONTAL
PLANE OF ELEVATION 633.75 FEET ABOVE U.S.G.S. DATUM, IN XXXX COUNTY, ILLINOIS.
PARCEL 4:
EASEMENT IN FAVOR OF THE LEASEHOLD ESTATE DESCRIBED AS PARCEL 1 HEREIN, AS
CREATED IN SECOND AMENDMENT TO LEASE RECORDED FEBRUARY 9, 1989 AS DOCUMENT
89063670, MADE BY AND BETWEEN LASALLE NATIONAL BANK, AS TRUSTEE UNDER TRUST
AGREEMENT DATED FEBRUARY 1, 1988 AND KNOWN AS TRUST NUMBER 113000,
SIMON-ROSEMONT DEVELOPERS, AN ILLINOIS LIMITED PARTNERSHIP, AND MARRIOTT
CORPORATION, A DELAWARE CORPORATION, FOR AN 8 INCH BELOW-GRADE EASEMENT FOR
FOUNDATIONS OF THE GARDEN WALL, OVER THE FOLLOWING LEGAL DESCRIPTION:
THAT PART OF THE WEST 1/2 OF SECTION 3, TOWNSHIP 40 NORTH, RANGE 12, EAST OF THE
THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTHWEST 1/4 OF SAID
SECTION 3 WITH THE EASTERLY LINE OF RIVER ROAD AS WIDENED BY CONDEMNATION IN
CASE NO. 59C16022 AND SHOWN ON PLAT RECORDED AS DOCUMENT NUMBER 19251267; THENCE
NORTH 05 DEGREES 11 MINUTES 36 SECONDS EAST ALONG SAID EASTERLY LINE OF RIVER
ROAD AS WIDENED, 395.35 FEET; THENCE NORTH 79 DEGREES 26 MINUTES 12 SECONDS
WEST, 0.91 FEET TO THE EASTERLY LINE OF RIVER ROAD, BEING A LINE 33.00 FEET, AS
MEASURED AT RIGHT ANGLES, EASTERLY OF AND PARALLEL WITH THE CENTER LINE OF SAID
ROAD; THENCE NORTH 10 DEGREES 38 MINUTES 35 SECONDS EAST ALONG SAID EASTERLY
LINE OF RIVER ROAD, 69.50 FEET; THENCE NORTH 68 DEGREES 08 MINUTES 35 SECONDS
EAST, 56.73 FEET; THENCE NORTH 85 DEGREES 38 MINUTES 35 SECONDS EAST, 47.90 FEET
TO A POINT OF CURVATURE; THENCE NORTHEASTERLY ALONG A CURVED LINE CONVEX
SOUTHEASTERLY, HAVING A RADIUS OF 300.00 FEET AND BEING TANGENT TO SAID LAST
DESCRIBED LINE AT SAID LAST DESCRIBED POINT, AN ARC DISTANCE OF 113.14 FEET TO A
POINT OF TANGENCY (THE CHORD OF SAID ARC BEARS NORTH 74 DEGREES 50 MINUTES 21
SECONDS EAST, 112.47 FEET) THENCE NORTH 64 DEGREES 02 MINUTES 07 SECONDS EAST
ALONG A LINE TANGENT TO SAID LAST DESCRIBED CURVED LINE AT SAID LAST DESCRIBED
POINT, 7.87 FEET; THENCE SOUTH 34 DEGREES 21 MINUTES 25 SECONDS EAST, 169.84
FEET; THENCE SOUTH 10 DEGREES 38 MINUTES 35 SECONDS WEST, 3.41 FEET; THENCE
SOUTH 79 DEGREES 21 MINUTES 25 SECONDS EAST, 25.00 FEET; THENCE SOUTH 10 DEGREES
38 MINUTES 35 SECONDS WEST, 3.50 FEET; THENCE SOUTH 79 DEGREES 21 MINUTES 25
SECONDS EAST, 24.58 FEET; THENCE SOUTH 10 DEGREES 38 MINUTES 35 SECONDS WEST,
14.00 FEET; THENCE SOUTH 79 DEGREES 21 MINUTES 25 SECONDS EAST, 15.00 FEET;
THENCE SOUTH 10 DEGREES 38 MINUTES 35 SECONDS WEST, 8.50 FEET TO A POINT FOR A
PLACE OF BEGINNING; THENCE CONTINUING SOUTH 10 DEGREES 38 MINUTES 35 SECONDS
WEST, 353.17 FEET; THENCE SOUTH 79 DEGREES 21 MINUTES 25 SECONDS EAST, 0.67
FEET; THENCE NORTH 10 DEGREES 38 MINUTES 35 SECONDS EAST, 353.17 FEET; THENCE
NORTH 79 DEGREES 21 MINUTES 25 SECONDS WEST 0.67 FEET TO THE PLACE OF BEGINNING,
LYING BELOW A HORIZONTAL PLANE OF ELEVATION 628.70 FEET ABOVE U.S.G.S. DATUM, IN
XXXX COUNTY, ILLINOIS.
A-3
PARCEL 5:
NON-EXCLUSIVE EASEMENTS IN FAVOR OF THE LEASEHOLD ESTATE DESCRIBED AS PARCEL 1
HEREIN AS SHOWN ON PLAT OF RIVERWAY SUBDIVISION - PHASE I RECORDED JUNE 3, 1998
AS DOCUMENT 88241321 AND FILED JUNE 3, 1998 AS DOCUMENT LR 3713139.
PARCEL 6:
NON-EXCLUSIVE EASEMENTS IN FAVOR OF THE LEASEHOLD ESTATE DESCRIBED AS PARCEL 1
HEREIN AS SHOWN ON PLAT OF RIVERWAY SUBDIVISION - PHASE II RECORDED MARCH 11,
1992 AS DOCUMENT 92157888.
COMMON ADDRESS
--------------
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx
PIN
---
00-00-000-000
A-4
EXHIBIT B
---------
FORM OF NOTE
------------
Amended and Restated Secured Promissory Note dated September 24, 1996 made by
Mutual Benefit Chicago Marriott Suite Hotel Partners, L.P. in favor of National
Bank of Canada appears here.
B-1
EXHIBIT C
---------
FORM OF MORTGAGE
----------------
Amended and Restated Leasehold Mortgage dated September 24, 1996 from Mutual
Benefit Chicago Marriott Suite Hotel Partners, L.P. to National Bank of Canada
appears here.
C-1
EXHIBIT D
---------
FORM OF ASSIGNMENT OF RENTS
---------------------------
Assignment of Leases and Rents made as of September 24, 1996 from Mutual Benefit
Chicago Marriott Suite Hotel Partners, L.P. to National Bank of Canada appears
here.
D-1
EXHIBIT E
---------
FORM OF SECURITY AGREEMENT
--------------------------
Security Agreement made as of September 24, 1996 by Mutual Benefit Chicago
Marriott Suite Hotel Partners, L.P. and National Bank of Canada appears here.
E-1
EXHIBIT F
---------
FORM OF ASSIGNMENT OF MANAGEMENT AGREEMENT
------------------------------------------
Amended and Restated Assignment of Management Agreement made as of September 24,
1996 by and among Mutual Benefit Chicago Marriott Suite Hotel Partners, L.P. and
National Bank of Canada appears here.
F-1
EXHIBIT G-1
-----------
FORM OF PLEDGE AGREEMENT
------------------------
Deposit, Pledge and Security Agreement for General Investment Account appears
here.
G-1-1
EXHIBIT G-2
-----------
FORM OF PLEDGE AGREEMENT
------------------------
Deposit, Pledge and Security Agreement for FF&E Account appears here.
G-2-1
EXHIBIT G-3
-----------
FORM OF PLEDGE AGREEMENT
------------------------
Deposit, Pledge and Security Agreement for Operating Account appears here.
G-3-1
EXHIBIT G-4
-----------
FORM OF PLEDGE AGREEMENT
------------------------
Deposit, Pledge and Security Agreement for Main Disbursing Account appears here.
G-4-1
EXHIBIT H
---------
ENVIRONMENTAL REPORTS
---------------------
1. Report entitled "Hydraulic and Hydrologic Considerations of the
Office-Hotel Complex, Xxxxxxx-River Road Properties, Rosemont, Illinois",
prepared by Harza Engineering Company, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, dated July 18, 1985, prepared for Hawthorn Realty Group, Inc.
2. Report entitled "Report of Preliminary Geotechnical Investigation of
Marriott Suite Hotel Site, Xxxxxxx and Xxx Xxxxxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx", prepared by Xxxxxxxxxx Associates, P.C., Engineering and Geotechnic
Consultants, 0000 XxxXxxxxx Xxxxxxxxx, Xxx 00, Xxxxx Xxxx, Xxxxxxxx 00000-0000,
dated January 7, 1986, prepared for Marriott Corporation.
3. Report entitled "Site Contamination Assessment, Marriott Rosemont
Suites Hotel, Rosemont, Illinois", prepared by SCS Engineers, Xxxxxxx, Xxxxxx
and Xxxxxxx, Consulting Engineers, Inc., 00000 Xxxxx Xxxxx Xxxxx, Xxxxxx,
Xxxxxxxx 00000-0000, dated April 15, 1986, prepared for Hawthorn Realty Group.
4. Report entitled "Environmental Assessment of the Riverway Site,
Rosemont, Illinois", prepared by Xxx X. Xxxxxx, Inc., Designers/Consultants,
Bannockburn, Illinois, dated June, 1986, prepared for Marriott Corporation.
5. Letter dated February 19, 1987 from Xxxxxx Xxxxx, Vice President,
Hawthorn Realty Group to Xxxxx X. Xxxxxxx, Assistant General Counsel, Xxxxxx
Xxxxx & Associates (5 pages).
6. Letter dated December 11, 1986 from Xxxxxxx X. XxXxxxxxxx, Vice
President, SCS Engineers to Xxxxxxx X. Xxxxx, XX, Design Manager, Marriott
Corporation (3 pages).
7. Report entitled "Summary and Evaluation of Measures Taken to Mitigate
Environmental Concerns, Marriott Rosemont Suites Hotel", prepared by SCS
Engineers, 00000 Xxxxx Xxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, dated October 18,
1988 prepared for Mutual Benefit Chicago Marriott Suite Hotel Partners.
H-1
EXHIBIT I
---------
ANNUAL OPERATING PROJECTION AND REPAIRS AND
EQUIPMENT ESTIMATE FOR FISCAL YEAR 1996
---------------------------------------
I-1
EXHIBIT J
---------
FORM OF RENT LETTER
-------------------
J-1
EXHIBIT K
---------
EQUIPMENT LEASES
----------------
DEBTOR: MUTUAL BENEFIT CHICAGO MARRIOTT SUITE HOTEL PARTNERS, L.P.,
a Rhode Island limited partnership
SECURED PARTY: NATIONAL BANK OF CANADA
======================================================================
Total Remaining
Lessor Description Term Payments
======================================================================
Xxxxxxx Kodak Copier 6/93 - 5/98 $25,200.00
----------------------------------------------------------------------
GE Capital Two (2) Vans 12/95 - 11/99 $45,475.60
----------------------------------------------------------------------
GE Capital Two (2) Vans 9/94 - 8/98 $23,689.75
----------------------------------------------------------------------
GE Capital Two (2) Vans 10/92 - 9/96 $ 1,869.40
----------------------------------------------------------------------
GE Capital One (1) Van 11/92 - 10/96 $ 2,164.89
----------------------------------------------------------------------
GE Capital One (1) Van 10/96 - 9/00 $17,294.40
----------------------------------------------------------------------
GE Capital One (1) Van 10/96 - 9/00 $18,561.60
======================================================================
K-1
EXHIBIT L
---------
PERMITTED INVESTMENTS
---------------------
1. Direct obligations of the United States of America for the payment of
which the full faith and credit of the United States of America is pledged, or
obligations issued by a Person controlled or supervised by and acting as an
instrumentality of the United States of America, the payment of the principal
of, premium, if any, and interest on which is fully and unconditionally
guaranteed as full faith and credit obligations by the United States of America
(collectively, "Government Obligations"):
2. Certificates of deposit issued by the Lender;
3. Commerical Paper rated A1 by Standard & Poor's Corporation or P1 by
Xxxxx'x Investors Service, Inc. ("Commercial Paper");
4. Repurchase agreements of United States national or state banks having
capital reserves in excess of $500,000,000 having terms of one year or less or
any repurchase agreement that is collateralized to the extent of not less than
100% of the principal amount thereby by Government Obligations (collectively
"Repos");
5. Any money market or mutual fund purchased on behalf of the Borrower by
the Lender or any of its Affiliates and comprised entirely of Government
Obligations, Commercial Paper or Repos;
6. Any other investment purchased on behalf of the Borrower by the Lender
or any of its Affiliates having similar investment quality as any of the
foregoing investments in the reasonable judgement of the Lender; and
7. Such other investments as are acceptable to the Lender.
L-1
