Exhibit 10-18
BUILDING LOAN AGREEMENT
THIS BUILDING LOAN AGREEMENT (this "Agreement") is made and entered into
this 31st day of December, 1997, by and between KEYBANK NATIONAL ASSOCIATION, a
national banking association with an office for the transaction of business at
00 Xxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000 (hereinafter referred to as
"Lender"), and Erie Hotel LLC, a New York limited liability company with an
office for the transaction of business at 000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 (hereinafter referred to as "Borrower").
WITNESSETH:
In consideration of the mutual covenants and agreements hereinafter set
forth, Lender agrees to make and Borrower agrees to accept a loan in accordance
with and subject to the terms and conditions hereinafter set forth.
ARTICLE I
TERMS AND DEFINITIONS
In addition to the other terms hereinafter defined, the following terms
shall have the meanings set forth in this Article. References to documents and
other materials shall include those documents and materials as they may be
revised, amended and modified, from time to time, with the prior written
approval of Lender.
1.1 ADVANCE. "Advance" means any disbursement of the proceeds of the Loan
by Lender pursuant to the terms of this Agreement.
1.2 APPROVAL. "Approval", "Approved", "approval" or "approved" means, as
the context so determines, an approval in writing given to the party seeking
approval after full and fair disclosure to the party giving approval of all
material facts necessary in order to determine whether approval should be
granted.
1.3 ARCHITECT'S CONTRACT. "Architects Contract" means the contract, dated
September 5, 1996, between Borrower and Borrower's Architect.
1.4 BORROWER'S ARCHITECT. "Borrower's Architect" means Xxxxx & Xxxxxxx
Architects, Inc., whose address is 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxx 00000.
1.5 COMPLETION DATE. "Completion Date" means December 31, 1998.
1.6 COMMITMENT. "Commitment" means the commitment letter for the Loan
issued by Lender to Borrower dated December 3, 1997, and accepted by Borrower on
December 12, 1997, as amended by amendment letter from Borrower dated December
12, 1997.
1.7 CONSTRUCTION BUDGET. "Construction Budget" means the budget for total
estimated Property Costs, submitted by Borrower, approved by Lender, and
attached hereto as I i A, which includes: (a) a line item cost breakdown for
construction of the Improvements by trades, jobs and subcontractors (the "Direct
Cost Breakdown"); (b) a line item cost breakdown for Indirect Costs (the
"Indirect Cost Breakdown"); and (c) a schedule of the sources of funds to pay
Property Costs, indicating by item the portion of Property Costs to be funded
through the Loan and Required Equity Funds (the "Source of Funds Schedule").
1.8 CONSTRUCTION CONTRACT. "Construction Contract" means the contract,
dated December 11, 1997, between Borrower and Contractor and providing for the
construction of the Improvements on the Land.
1.9 CONSTRUCTION INSPECTOR. "Construction Inspector" means Construction
Monitoring Consultants, Inc. or at Lender's option either an officer or employee
of Lender or consulting architects, engineers or inspectors appointed by Lender.
1.10 CONSTRUCTION SCHEDULE. "Construction Schedule" means the schedule,
broken down by trade, of the estimated dates of commencement and completion of
the Improvements, submitted by Borrower, approved by Lender and attached hereto
as EXHIBIT B.
1.11 CONTINGENCY RESERVE. "Contingency Reserve" means the amount(s)
allocated as contingency reserve(s) in the Construction Budget.
1.12 CONTRACTOR. "Contractor" means XxXxxxx Constructors Corp., whose
address is 0000 Xxxxxxxx Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000.
1.13 [INTENTIONALLY OMITTED].
1.14 DISBURSEMENT SCHEDULE. "Disbursement Schedule" means the schedule of
the amounts of Advances anticipated to be requisitioned by Borrower each month
during the term of construction of the Improvements (including an itemization of
direct costs and Indirect Costs to be included in each such requisition),
approved by Lender and attached hereto as EXHIBIT C.
1.15 DRAW REQUEST. "Draw Request" means, with respect to each Advance,
Borrower's request for such Advance, and documents required by this Agreement to
be furnished to Lender as a condition to such Advance.
1.16 EVENT OF DEFAULT. "Event of Default" means any condition or event
described herein as such.
1.17 GOVERNMENTAL APPROVALS. "Governmental Approvals" means all approvals,
consents, waivers, orders, acknowledgments, authorizations, permits and licenses
required under applicable Requirements to be obtained from any Governmental
Authority for the construction of
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the Improvements and the use, occupancy and operation of the Property following
completion of construction of the Improvements.
1.18 GOVERNMENTAL AUTHORITY. "Governmental Authority" means the United
States of America, the states in which the Land is located and Borrower and
Guarantor are located or organized, any political subdivision thereof,
municipalities in which the Land is located, and any agency, authority,
department, commission, board, bureau, or instrumentality of any of them.
1.19 GUARANTOR. "Guarantor" means Essex Partners Inc., with a business
address of 000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
1.20 IMPROVEMENTS' "Improvements" means a 54,000 square foot, 101 room,
four story Hampton Inn to be constructed on the Land substantially in accordance
with the Plans and Specifications.
1.21 INDIRECT COSTS. "Indirect Costs" mean and include title insurance
premiums, survey charges, engineering fees, architectural fees, real estate
taxes during the period of construction, commitment fees and interest payable to
Lender under the Loan, premiums for insurance, appraisal fees, commitment and
other fees payable to Permanent Lender, legal fees and all other expenses which
are, in accordance with sound accounting practices, capital expenditures
relating to the Property.
1.22 LAND. "Land" means the real property described in Exhibit D attached
hereto.
1.23 [INTENTIONALLY OMITTED].
1.24 LOAN. "Loan" means the construction loan which is the subject of this
Agreement.
1.25 LOAN AMOUNT. "Loan Amount" means $4,700,000.00.
1.26 LOAN DOCUMENTS. "Loan Documents" means collectively, this Agreement,
all documents referred to in Article 2 hereof, and all other agreements,
documents and instruments now or hereafter evidencing, securing or otherwise
relating to the Loan.
1.27 [INTENTIONALLY OMITTED].
1.28 PERMANENT COMMITMENT. "Permanent Commitment" means the commitment
letter for the Permanent Loan issued by Permanent Lender to Borrower.
1.29 PERMANENT LENDER. "Permanent Lender" means GMAC Commercial Mortgage
Corporation, whose address is 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxx
00000.
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1.30 PERMANENT LOAN. "Permanent Loan" means the loan from Permanent Lender
to Borrower in the amount of $4,700,000.00 to finance the Property after
completion of construction of the Improvements in accordance with the Permanent
Commitment.
1.31 PERSONAL PROPERTY. "Personal Property" means materials, furnishings,
fixtures, machinery, equipment and all items of tangible and intangible personal
property now or hereafter owned by Borrower, wherever located, and either (i) to
be incorporated into the Improvements, (ii) used in connection with the
construction of the Improvements or (iii) to be used in connection with the
operation of the Land or Improvements or both.
1.32 PLANS AND SPECIFICATIONS. "Plans and Specifications" means the plans
and specifications for the Improvements prepared by Borrower's Architect and
more particularly identified on EXHIBIT E attached hereto.
1.33 PROPERTY. "Property" means the Land, Improvements and Personal
Property.
1.34 PROPERTY COSTS. "Property Costs" shall mean and include all costs that
will be incurred by Borrower in connection with the acquisition of the Land, the
construction of the Improvements, the marketing and leasing of leasable space in
the Improvements, and the operation and carrying of the Property through the
maturity date of the Loan, including without limitation all Indirect Costs.
1.35 REQUIRED EQUITY FUNDS. "Required Equity Funds" means the sums, if any,
required of Borrower by Lender, to be available to pay the difference between
Property Costs and the amount of the Loan.
1.36 REQUIRED LEASES. "Required Leases" means the leases, if any, which
Lender has specified in the Commitment must be in effect in a manner
satisfactory to Lender.
1.37 REQUIREMENTS. "Requirements" means any law, ordinance, order, rule or
regulation of any Governmental Authority relating in any way to the Property,
Borrower or Guarantor.
1.38 TAKING. "Taking" shall mean any condemnation for public use of, or
damage by reason of, the action of any Governmental Authority, or any transfer
by private sale in lieu thereof, either temporarily or permanently.
1.39 TERMINATION DATE. "Termination Date" means the earlier of December 31,
1998, or such other date as may be set forth herein which fixes the termination
of Lender's obligations to make Advances.
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ARTICLE 2
LOAN DOCUMENTS
The following documents have been duly authorized, executed and delivered
to Lender by the parties thereto:
2.1 NOTE. The Promissory Note (hereinafter referred to as the "Note") from
Borrower to Lender, dated as of even date herewith, in the Loan Amount.
2.2 OPEN-END MORTGAGE AND SECURITY AGREEMENT. The Open-End Mortgage And
Security Agreement (hereinafter referred to as the "Mortgage") from Borrower in
favor of Lender, dated of even date herewith, encumbering the Property as
security for the Note and any sums in addition to the Loan Amount advanced by
Lender under the other Loan Documents, together with any assignment of revenues
and a security agreement (whether or not a part thereof) encumbering any
materials, furnishings, fixtures, machinery, equipment, or other articles of
personal property incorporated or to be incorporated in the Improvements or used
in the operation of the Property and all income, profit and revenues derived
from the Property; which Mortgage is to be recorded in the appropriate public
records on or about the date hereof
2.3 FINANCING STATEMENTS. Uniform Commercial Code, Form 1 Financing
Statement(s) (hereinafter referred to as the "Financing Statements") in favor of
Lender giving notice of a security interest; which Financing Statement(s) are to
be filed in the appropriate public records on or about the date hereof
2.4 ASSIGNMENT OF CONTRACT DOCUMENTS. The Assignment of Contract Documents
(hereinafter referred to as the "Assignment of Contract Documents") from
Borrower in favor of Lender dated of even date herewith.
2.5 ASSIGNMENT OF Leases. The Assignment of Rents and Leases (hereinafter
referred to as the "Assignment") from Borrower in favor of Lender dated of even
date herewith which is to be recorded in the appropriate public records on or
about the date hereof
2.6 GUARANTY. The Guaranty of Payment and Performance and Guaranty of
Completion (hereinafter collectively referred to as the "Guaranty") from
Guarantor in favor of Lender dated of even date herewith.
INDEMNITY AGREEMENT. The Hazardous Substances Indemnity Agreement
(hereinafter referred to as the "Indemnity Agreement") from Borrower and
Guarantor in favor of Lender dated of even date herewith.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower hereby represents and warrants to Lender as follows:
3.1 VALIDITY OF LOAN DOCUMENTS. That the Loan Documents are in all respects
valid and legally binding obligations, enforceable in accordance with their
respective terms, and grant to Lender a direct, valid and enforceable first
mortgage lien on and security interest in and to the Property, including any and
all Personal Property acquired by Borrower after the date of this Agreement.
3.2 TITLE TO PROPERTY. That Borrower has good clear record and marketable
fee simple absolute title to the Land, subject to no liens, security interests,
charges or encumbrances in favor of any person other than Lender, and that no
conditional sale contract, chattel mortgage, security agreement, lease,
financing statement or other title retention agreement has been or will be
executed in favor of any person other than Lender with respect to any of the
Personal Property.
3.3 ABSENCE OF CONFLICTS. That the execution and delivery of the Loan
Documents by Borrower and any Guarantor do not, and the performance and
observance by Borrower and any Guarantor of their obligations thereunder will
not, contravene or result in a breach of (a) if Borrower or any Guarantor
purports to be a limited liability company or a corporation, any provision of
Borrower's or any Guarantor's articles of organization, operating agreement or
corporate charter or by-laws, or, if Borrower or any Guarantor purports to be
partnership, any provision of Borrower's or any Guarantor's partnership
agreement or certificate, or (b) any Requirements, or (c) any decree or judgment
binding on Borrower or any Guarantor, or (d) any agreement or instrument binding
on Borrower or any Guarantor or any of their respective properties, nor will the
same result in the creation of any lien or security interest under any such
agreement or instrument.
3.4 PENDING LITIGATION. That there are no actions, suits, investigations or
proceedings pending, or, to the knowledge of Borrower, threatened against or
affecting Borrower (or any general partner of Borrower), any Guarantor or the
Property, or involving the validity or enforceability of any of the Loan
Documents or the priority of the lien thereof, or which will affect Borrower's
ability to repay the Loan, at law or in equity or before or by any Governmental
Authority.
3.5 VIOLATIONS OF REQUIREMENTS. That Borrower has no knowledge of any
violations or notices of violations of any Requirements.
3.6 COMPLIANCE WITH REQUIREMENTS. That the Plans and Specifications and
construction of the Improvements pursuant thereto and the use of the Property
contemplated thereby will comply with all Requirements.
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3.7 ORGANIZATION, STATUS AND AUTHORITY.
(a) If Borrower purports to be a limited liability company or a
corporation, that (i) it is a limited liability company or a corporation
duly organized, validly existing and in good standing under the laws of the
state in which it is organized or incorporated, (ii) if required by the
laws of the state in which the Land is located, it is duly qualified to do
business and is in good standing therein, (iii) it has the power, authority
and legal right to own and operate its properties and assets, carry on the
business now being conducted and proposed to be conducted by it, and to
engage in the transactions contemplated by the Loan Documents, and (iv) the
execution and delivery of the Loan Documents to which it is a party and the
performance and observance of the provisions thereof have been duly
authorized by all necessary actions.
3.8 AVAILABILITY OF UTILITIES. That all utility services necessary and
sufficient for the construction, Development and operation of the Property for
its intended purposes are presently available to the boundaries of the Land
through dedicated public rights of way or through perpetual private easements,
approved by Lender, with respect to which the Mortgage creates a valid, binding
and enforceable first lien, including, but not limited to, water supply, storm
and sanitary sewer, gas, electric and telephone facilities, and drainage.
3.9 CONDITION OF PROPERTY. That neither the Property nor any portion
thereof is now damaged or injured as result of any fire, explosion, accident,
flood or other casualty or has been the subject of any Taking, and to the
knowledge of Borrower, no Taking is pending or contemplated.
3.10 BROKERAGE COMMISSIONS. That any brokerage commissions due in
connection with the transactions contemplated hereby have been paid in full and
that any such commissions coming due in the future will be promptly paid by
Borrower. Borrower agrees to and shall indemnify Lender from any liability,
claims or losses arising by reason of any such brokerage commissions. This
provision shall survive the repayment of the Loan and shall continue in full
force and effect so long as the possibility of such liability, claims or losses
exists.
3.11 FINANCIAL STATEMENTS. That the financial statements of Borrower and
any Guarantor previously delivered to Lender are true and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles consistently applied, and fairly present the respective
financial conditions of Borrower and any Guarantor as of the respective dates
thereof and the results of their operations for the periods covered thereby;
that no material adverse change has occurred in the assets, liabilities, or
financial conditions reflected therein since the respective dates thereof-, and
that no additional borrowings have been made by Borrower or any Guarantor since
the date thereof other than the borrowing contemplated hereby.
3.12 TAXES. That all federal, state and other tax returns of Borrower and
any Guarantor required by law to be filed have been filed, that all federal,
state and other taxes, assessments and other governmental charges upon Borrower
and any Guarantor or their respective properties which are due and payable have
been paid, and that Borrower and any Guarantor have set aside on their
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books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods for which such returns have been filed.
3.13 OTHER CONTRACTS. That Borrower has made no contract or arrangement of
any kind or type whatsoever (whether oral or written, formal or informal), the
performance of which by the other party thereto could give RISE to a lien or
encumbrance on the Property, except for contracts (all of which have been
disclosed in writing to Lender).
3.14 CONSTRUCTION CONTRACT. That (i) the Construction Contract is in full
force and effect; (ii) both Borrower and Contractor are in full compliance with
their respective obligations under the Construction Contract; (iii) the work to
be performed by Contractor under the Construction Contract is the work called
for by the Plans and Specifications and all work required to complete the
Improvements in accordance with the Plans and Specifications is provided for
under the Construction Contract; and (iv) all work on the Improvements shall be
completed substantially in accordance with the Plans and Specifications in a
good and workmanlike manner and shall be free of any defects.
3.15 ACCESS. That the rights of way for all roads necessary for the full
utilization of the Improvements for their intended purposes have either been
acquired by the Borrower, the appropriate Governmental Authority or have been
dedicated to public use and accepted by such Governmental Authority, and all
such roads shall have been completed, or all necessary steps shall have been
taken by Borrower and such Governmental Authority to assure the complete
construction and installation thereof prior to the date upon which access to the
Property via such roads will be necessary. Allcurb cuts, driveway permits and
traffic signals shown on the Plans and Specifications or otherwise necessary for
access to the Property are existing or have been fully approved by the
appropriate Governmental Authority.
3.16 NO DEFAULT. That no Event of Default exists and no event which but for
the passage of time, the giving of notice or both would constitute an Event of
Default has occurred.
3.17 ARCHITECT'S CONTRACT. That (i) the Architect's Contract is in full
force and effect; and (ii) both Borrower and Borrower's Architect are in full
compliance with their respective obligations under the Architect's Contract.
Borrower shall from time to time, upon request by Lender, cause Borrower's
Architect to provide Lender with reports in regard to the status of construction
of the Improvements, in such form and detail as reasonably requested by Lender.
3.18 PLANS AND SPECIFICATIONS. That Borrower has furnished Lender true and
complete sets of the Plans and Specifications which comply with all
Requirements, all Governmental Approvals, and all restrictions, covenants and
easements affecting the Property, and which have been approved by the
Contractor, Borrower's Architect, Permanent Lender, and such Governmental
Authority as is required for construction of the Improvements.
3.19 GOVERNMENTAL APPROVALS. That Borrower has obtained all Governmental
Approvals from, and has given all such notices to, and has taken all such other
actions with respect to such
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Governmental Authority as may be required under applicable Requirements for the
construction of the Improvements.
3.20 CONSTRUCTION BUDGET. That the Construction Budget accurately reflects
all Property Costs of Construction.
3.21 FEASIBILITY. That each of the Construction Schedule and the
Disbursement Schedule is realistic and feasible, and is accurate to date.
3.22 EFFECT OF DRAW REQUEST. That each Draw Request submitted to Lender as
provided in Article 6 hereof shall constitute an affirmation that the
representations and warranties contained in Article 3 of this Agreement (other
than the representations made in the last clause of Section 3.11 as it relates
to the indebtedness of any guarantor) and in the other Loan Documents remain
true and correct as of the date thereof, and unless Lender is notified to the
contrary, in writing, prior to the disbursement of the requested Advance or any
portion thereof, shall constitute an affirmation that the same remain true and
correct on the date of such disbursement.
ARTICLE 4
COVENANTS OF BORROWER
Borrower hereby covenants and agrees with Lender as follows:
4.1 COMMITMENTS. To permit no default under the terms of the Commitment.
4.2 CONSTRUCTION CONTRACT. (i) To permit no default under the terms of the
Construction Contract, (ii) to waive none of the obligations of Contractor
thereunder, (iii) to do no act which would relieve Contractor from its
obligations to construct the Improvements according to the Plans and
Specifications, and (iv) to make no amendments to or change orders under the
Construction Contract without the prior approval of Lender; provided, however,
that the Borrower shall be permitted to make a proposed change order without the
prior approval of the Lender if (a) any such change order results in a reduction
in the cost of the Improvements, or (b) any such change order is for an increase
in the cost of the Improvements in an amount less than $25,000.00 unless the
aggregate amount of all change orders that increase the cost of the Improvements
(inclusive of the proposed change order) between the date of this Agreement and
the date of the proposed change order is greater than $100,000.00.
4.3 ARCHITECT'S CONTRACT. (i) To permit no default under the terms of the
Architect's Contract, (fi) to waive none of the obligations of Borrower's
Architect thereunder, (iii) to do no act which would relieve Borrower's
Architect from its obligations under the Architect's Contract, and (iv) to make
no amendments to the Architect's Contract without the prior approval of Lender;
provided, however, that the Borrower shall be permitted to make a proposed
change order without the prior approval of the Lender if (a) any such change
order results in a reduction in the cost of the Improvements, or (b) any such
change order is for an increase in the cost of the Improvements in
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an amount less than $25,000.00 unless the aggregate amount of all change orders
that increase the cost of the Improvements (inclusive of the proposed change
order) between the date of this Agreement and the date of the proposed change
order is greater than $100,000.00.
4.4 INSURANCE. To obtain insurance or evidence of insurance as Lender may
reasonably require, including, but not limited to, the following:
(a) TITLE INSURANCE. A mortgagee title insurance policy (the "Title
Insurance Policy") in an amount, and issued by a title insurance company
(the "Title Insurer") and through a title agent as shall be approved by
Lender, insuring a valid first lien upon and security interest in and to
the Property by virtue of the Mortgage, with such reinsurance or
co-insurance agreements as may be required by Lender. The Title Insurance
Policy shall contain no exceptions other than those specifically approved
in writing by Lender, contain a pending disbursements clause or endorsement
and such other endorsements as Lender may reasonably require, and such
affirmative insurance as Lender may reasonably require. The Title Insurance
Policy, together with evidence of payment of premiums thereon, shall be
delivered to Lender on or before the date of this Agreement.
(b) INSURANCE REQUIRED BY MORTGAGE. Such insurance as may be required
by the Mortgage. If any hazard insurance required by the Mortgage is
obtained as to all or part of the Property before completion of
construction then such policy shall contain an endorsement recognizing that
construction is in progress and agreeing that such shall not adversely
affect the coverage or be asserted as a defense on any claim under such
policy.
(c) PROFESSIONAL LIABILITY INSURANCE. Evidence or certificates from
insurance companies indicating that Borrower's Architect, the Contractor
and all other architects, engineers, contractors and subcontractors
responsible for the design or construction of the Improvements are covered
by professional liability insurance to the satisfaction of Lender; such
evidence or certificates to be delivered to Lender on or before the date of
this Agreement.
4.5 APPLICATION OF LOAN PROCEEDS. To use the proceeds of the Loan solely
for the purpose of paying for the cost of the construction of the Improvements
in accordance with the terms of this Agreement.
4.6 PROPERTY COSTS AND EXPENSES. To pay all Property Costs, regardless of
the amount, and to pay all costs and expenses of Lender with respect to the
financing, acquisition and construction of the Property, including but not
limited to, appraisal fees, inspection fees, surveying costs, legal
fees(including legal fees incurred by Lender subsequent to the closing of the
Loan in connection with the disbursement, administration, collection or transfer
of the Loan), advances, recording expenses, surveys, intangible taxes, expenses
of foreclosure (including attorney's fees) and similar items.
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4.7 COMMENCEMENT AND COMPLETION OF CONSTRUCTION. To diligently pursue
construction to completion prior to the Completion Date substantially in
accordance with the Plans and Specifications, in full compliance with all
restrictions, covenants and easements affecting the Property, all Requirements,
and all Governmental Approvals, and with all terms and conditions of the Loan
Documents without deviation from the Plans and Specifications unless with the
prior approval of Lender or otherwise permitted by this Agreement; to pay all
sums and to perform such duties as may be necessary to complete such
construction of the Improvements in accordance with the Plans and Specifications
and in full compliance with all restrictions, covenants and easements affecting
the Property, all Requirements and all Governmental Approvals, and with all
terms and conditions of the Loan Documents, all of which shall be accomplished
on or before the Completion Date, free from any liens, claims or assessments
(actual or contingent) asserted against the Property for any material, labor or
other items furnished in connection therewith. Evidence of satisfactory
compliance with the foregoing shall be furnished by Borrower to Lender on or
before the Completion Date.
4.8 RIGHT OF LENDER TO INSPECT PROPERTY. To permit Lender and its
representatives and agents to enter upon the Property and to inspect the
Improvements and all materials to be used in the construction thereof upon
reasonable notice and to cooperate and cause Contractor to cooperate with Lender
and its representatives and agents during such inspections (including making
available to Lender working copies of the Plans and Specifications together with
all related supplementary materials); provided, however, that this provision
shall not be deemed to impose upon Lender any obligation to undertake such
inspections.
4.9 CORRECTION OF DEFECTS. Unless Borrower demonstrates to Lender that such
corrective work is inappropriate or inconsistent with the Plans and
Specifications, to promptly correct all defects in the Improvements or any
material departure from the Plans and Specifications not previously approved by
Lender or otherwise permitted under this Agreement. Borrower agrees that the
advance of any proceeds of the Loan whether before or after such defects or
departures from the Plans and Specifications are discovered by, or brought to
the attention, of Lender, shall not constitute a waiver of Lender's right to
require compliance with this covenant.
4.10 SIGN REGARDING CONSTRUCTION FINANCING. At Lender's option, to erect
promptly and maintain on a suitable site on the Land a sign indicating that
construction financing is being provided by Lender, all to the satisfaction of
Lender; and to prevent the destruction or removal of said sign without the prior
approval of Lender.
4.11 APPROVAL OF CHANGE ORDERS. To permit no deviations from the Plans and
Specifications during construction without the prior approval of Lender and
Permanent Lender, except as permitted in Section 4.2 of this Agreement, or in
the Permanent Commitment, or in the Tri-Party Agreement.
4.12 [INTENTIONALLY OMITTED].
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4.13 BOOKS AND RECORDS. To keep and maintain complete proper and accurate
books, records and accounts reflecting all items of income and expense of
Borrower in connection with the Property and the construction of the
Improvements and the results of the operation thereof, and, upon the reasonable
request of Lender, to make such books, records and accounts immediately
available to Lender for inspection or independent audit.
4.14 FINANCIAL STATEMENTS AND OTHER INFORMATION. To furnish to Lender such
financial statements and information as Borrower has agreed to provide elsewhere
in the Loan Documents.
4.15 CONSTRUCTION INSPECTOR. To permit Lender to retain the Construction
Inspector at the cost of Borrower to perform the following services on behalf of
Lender:
(a) To review and advise Lender whether, in the opinion of the
Construction Inspector, the Plans and Specifications are satisfactory;
(b) To review Draw Requests and change orders;
(c) To make periodic inspections (approximately at the date of each
Draw Request) for the purpose of assuring that construction of the
Improvements to date is substantially in accordance with the Plans and
Specifications and to approve Borrower's then current Draw Request as being
consistent with Borrower's obligations under this Agreement, including
INTER ALIA, an opinion as to Borrower's continued compliance with the
provisions of Section 6.1 (g) (4) hereof.
The fees of the Construction Inspector shall be paid by Borrower forthwith
upon billing therefor and expenses incurred by Lender on account thereof shall
be reimbursed to Lender forthwith upon request therefor, but neither Lender nor
the Construction Inspector shall have any liability to Borrower on account of
(i) the services performed by the Construction Inspector, (ii) any neglect or
failure on the part of the Construction Inspector to properly perform its
services, or (iii) any approval by the Construction Inspector of construction of
the Improvements. Neither Lender nor the Construction Inspector assumes any
obligation to Borrower or any other person concerning the quality of
construction of the Improvements or the absence therefrom of defects.
4.16 SOIL TESTS. To provide promptly to Lender at Borrower's expense such
soil tests and environmental assessments of the Land as Lender may require from
time to time.
4.17 [INTENTIONALLY OMITTED].
4.18 INSUFFICIENCY OF LOAN PROCEEDS. To deposit funds with Lender as
follows: If at any time or from time to time during the terms of this Agreement,
in Lender's judgment and opinion, the remaining undisbursed portion of the Loan,
together with the Required Equity Funds, is or will be insufficient to fully
complete the Improvements substantially in accordance with the Plans and
Specifications, to operate and carry the Property after completion of the
Improvements until payment in full of the Loan by Borrower, to pay all other
Property Costs, to pay all interest accrued
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or to accrue on the Loan during the term of the Loan from and after the date
hereof, and to pay all other sums due or to become due under the Loan Documents,
regardless of how such condition may be caused, Borrower shall, within seven (7)
days after written notice thereof from Lender, deposit with Lender such sums of
money in cash as Lender may require, in an amount sufficient to remedy such
condition, and sufficient to pay any liens for services and materials alleged to
be due and payable at that time in connection with the Improvements, and, at
Lender's option; no further Advances of the Loan shall be made by Lender until
the provisions of this Paragraph have been fully complied with. All such
deposited sums shall stand as additional security for Borrower's obligations
under this Agreement and shall be disbursed by Lender in the same manner as
Advances under this Agreement before any further Advances of the Loan proceeds
shall be made. Lender shall have no obligation to pay Borrower any interest with
respect to such deposited funds.
4.19 ADDITIONAL DOCUMENTS. To perform hereunder as follows:
(a) REGARDING CONSTRUCTION. To furnish to Lender all instruments,
documents, boundary surveys, footing or foundation surveys, certificates,
plans and specifications, appraisals, title and other insurance, reports
and agreements and each and every other document and instrument required to
be furnished by, the terms of the Commitment or this Agreement or the other
Loan Documents, all at Borrower's expense.
(b) REGARDING PRESERVATION OF SECURITY. To execute and deliver to
Lender such documents, instrument, assignments and other writings, and to
do such other acts necessary or desirable, to preserve and protect the
collateral at any time securing or intended to secure the Loan, as Lender
may require.
(c) REGARDING THIS AGREEMENT. To do and execute all and such further
lawful and reasonable acts, conveyances and assurances in the law for the
better and more effective carrying out of the intents and purposes of this
Agreement as Lender shall require from time to time.
4.20 FINANCING PUBLICITY. To permit Lender to obtain publicity in
connection with the construction of the Improvements through press releases and
participation in such events as ground breaking and opening ceremonies; and to
give Lender ample advance notice of such events and to give Lender as much
assistance as possible in connection with obtaining such publicity as Lender may
request.
4.21 EASEMENTS AND RESTRICTIONS. To submit to Lender for Lender's approval
prior to the execution thereof by Borrower all proposed easements, restrictions,
covenants, permits, licenses, and other instruments which would or might affect
the title to the Property, accompanied by a survey showing the exact proposed
location thereof and such other information as Lender shall reasonably require.
Borrower shall not subject the Property or any part thereof to any easement,
restriction or covenant (including any restriction or exclusive use provision in
any lease or other occupancy agreement) without the prior approval of Lender,
which shall not be unreasonably withheld.
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4.22 COMPLIANCE WITH REQUIREMENTS. To comply promptly with all requirements
and governmental approvals and to furnish Lender, on demand, with independent
evidence of such compliance.
4.23 LEASES. To enter into no leases or occupancy agreements affecting the
Property without the prior approval of Lender and Permanent Lender. Borrower
shall deliver to Lender executed counterparts of all leases and occupancy
agreements affecting the Property whether executed before or after the date of
this Agreement, and shall not amend any provision thereof or waive any
obligations of tenants under any leases or occupancy agreements affecting the
Property without the prior approval of Lender.
4.24 COMPLIANCE WITH RESTRICTIONS, COVENANTS AND EASEMENTS. To comply with
all restrictions, covenants and easements affecting the Property.
4.25 LABORERS, SUBCONTRACTORS AND MATERIALMEN. To furnish to Lender, upon
request at anytime, and from time to time, affidavits listing all laborers,
subcontractors, materialmen, and any other parties who might or could claim
statutory or common law liens and are furnishing or have furnished labor or
material to the Property or any portion thereof, together with affidavits, or
other evidence satisfactory to Lender, showing that such parties have been paid
all amounts then due for labor and materials furnished to the Property. In
addition, Borrower will notify Lender immediately, and in writing, if Borrower
receives any notice, written or oral, from any laborer, subcontractor or
materialmen to the effect that said laborer, subcontractor or materialmen has
not been paid when due for any labor or materials furnished in connection with
the construction of the Improvements. Borrower will also furnish to Lender, at
any time and from time to time upon demand by Lender, lien waivers bearing a
then current date from Contractor and such subcontractors or materialmen as
Lender may designate.
4.26 FURTHER ASSURANCE OF TITLE. To further assure title as follows: If at
any time Lender or Lender's counsel has reason to believe that any Advance is
not secured or will or may not be secured by the Mortgage as a first lien or
security interest on the Property, then Borrower shall, within ten (10) days
after written notice from Lender, do all things and matters necessary, to assure
to the satisfaction of Lender and Lender's counsel that any Advance previously
made hereunder or to be made hereunder is secured or will be secured by the
Mortgage as a first lien or first security interest on the Property, and Lender,
at its option, may decline to make further Advances hereunder until lender has
received such assurance.
4.27 [INTENTIONALLY OMITTED].
4.28 COMPLIANCE WITH PERMANENT COMMITMENT. (i) To permit no default under
the terms of the Permanent Commitment, (ii) to waive none of the obligations of
the Permanent Lender thereunder, (iii) to do no act which would relieve
Permanent Lender from its obligations to fund the Permanent Loan or entitle
Permanent Lender to cancel or terminate the Permanent Commitment, (iv) to take
all actions necessary or appropriate in order to close on the Permanent Loan
prior to the expiration of the Permanent Commitment, (v) to complete
construction of the Improvements, and
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each and every part thereof, and to satisfy all conditions to closing of the
Permanent Loan not later than sixty (60) days prior to the expiration of the
Permanent Commitment, (vi) to make no amendments to the Permanent Commitment
without the prior approval of Lender, (vii) to the maximum extent permitted by
law and under the terms of the Permanent Commitment, to assign to Lender, in
such form as Lender may reasonably require, Borrower's right to receive proceeds
of the Permanent Loan (to the extent of Borrower's indebtedness to Lender),
(viii) to direct Permanent Lender to disburse the proceeds of the Permanent Loan
(to the extent of Borrower's indebtedness to Lender) directly to Lender at the
time of closing of the Permanent Loan, and (ix) to provide Lender with copies of
any communications given to or received from Permanent Lender.
4.29 NO TRANSFERS OR ENCUMBRANCES. To cause or permit no sale, conveyance,
transfer, assignment or encumbering of the Property or any interest therein
without the prior approval of Lender; provided, however, that transfers of
limited partnership interests in Essex Hospitality Associates IV L.P. may be
made without the prior approval of the Lender.
ARTICLE 5
AGREEMENT TO LEND
Subject to the terms and conditions set forth in this Agreement, Lender
agrees to make Advances of the Loan to Borrower from time to time during the
period from the date hereof to the Termination Date in an aggregate principal
amount of up to and including the Loan Amount to pay Property Costs actually
incurred in connection with the acquisition of the Land and construction of the
Improvements (including Indirect Costs) if and to the extent such Property Costs
are reflected in the Construction Budget as being funded by Lender.
5.1 NOTE. The obligation of Borrower to pay the principal amount of all
Advances made by Lender to Borrower under this Agreement, plus all interest
accrued thereon at the rate or rates set forth in the Note, shall be evidenced
by the Note.
5.2 ADVANCES. The Construction Budget reflects, by category and line items,
the purposes and the amounts for which funds to be advanced by Lender under this
Agreement are to be used. Except to the extent that reallocations are permitted
under, or approved by the Lender pursuant to Section 5.4, Lender shall not be
required to disburse for any category or line item more than the amount
specified therefor in the Construction Budget.
5.3 COST OVERRUNS. If Borrower becomes aware of any change in Property
Costs which will increase a category or line item of Property Costs reflected on
the Construction Budget (as the Construction Budget is revised from time to time
and approved by Lender), Borrower shall immediately notify Lender in writing and
promptly submit to Lender for its approval a revised Construction Budget. No
further Advances need be made by Lender unless and until the revised
Construction Budget so submitted by Borrower is approved by Lender, and Lender
reserves the right to approve or disapprove any revised Construction Budget
which approval will not be unreasonably withheld. If Lender approves the revised
Construction Budget, and such revised Construction
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Budget reflects Project Costs to be funded by Lender in excess of the Loan
Amount, the amount of such excess shall be added to the Loan Amount, and
Borrower's obligation to repay the same, together with interest thereon at the
rate or rates provided in the Note, shall be deemed to be evidenced by the Note
and secured by the Loan Documents.
5.4 CONTINGENCY RESERVE. Any amount allocated as Contingency Reserve in the
Construction Budget is not intended to be disbursed and will only be disbursed
upon the prior approval of Lender, which approval can be withheld for any reason
or for no reason; provided, however, that the Borrower may request that funds be
reallocated from the Contingency Reserve to a category or line item for which
funds are insufficient, and the Lender shall authorize such reallocation for
Property Costs if it determines in its reasonable discretion (taking into
account the extent of completion of the Improvements) that, after such
reallocation, the aggregate amount of undisbursed proceeds of the Building Loan
and the Borrower's remaining Required Equity Funds will be sufficient to pay in
full all Property Costs required to complete construction of the Improvements.
The disbursement of a portion of the Contingency Reserve shall in no way
prejudice Lender from withholding disbursement of any further portion of the
Contingency Reserve.
5.5 STORED MATERIALS. Lender shall disburse funds for any materials,
furnishings, fixtures, machinery or equipment not yet incorporated into Land or
Improvements (the "Stored Materials"), contingent upon Lender receiving
satisfactory evidence that:
(a) The Stored Materials are components in a form ready for
incorporation into the Improvements;
(b) The Stored Materials are stored at the Land, in a bonded warehouse,
at a site controlled by Borrower, or at such other site as Lender shall
approve, and are protected against theft and damage;
(c) The Stored Materials have been paid for in full or will be paid for
with the funds to be disbursed and all lien rights or claims of the
supplier have been released or will be released upon payment with disbursed
funds;
(d) Lender has or will have upon payment with disbursed funds a
perfected, first priority security interest in the Stored Materials; and
(e) The Stored Materials are insured for an amount equal to their
replacement costs.
5.6 AMOUNT OF ADVANCES. In no event shall any Advance exceed the full
amount of Indirect Costs approved by Lender and theretofore paid or to be paid
with the proceeds of such Advance plus ninety (90%) percent of all costs for
construction of Improvements approved by Lender and incurred by Borrower through
the date of the Draw Request for such Advance less the aggregate amount of any
Advances previously made by Lender. It is further understood that the retainage
described above is intended to provide a contingency fund protecting Lender
against
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failure of Borrower or any Guarantor to fulfill any obligations under the Loan
Documents, and that Lender may charge amounts against such retainage in the
event Lender is required or elects to expend its own funds to cure any Default
or Event of Default.
Anything herein to the contrary notwithstanding, it is understood, stated
and agreed that at such time as the Improvements are fifty percent (50%)
complete, that all Advance amounts shall be made without any retainage by
Lender.
5.7 QUALITY OF WORK. No Advance shall be due unless all work done at the
date the Draw Request for such Advance is submitted is done in a good and
workmanlike manner and without defects, as confirmed by the report of the
Construction Inspector, but Lender may disburse all or part of any Advance
before the sum shall become due if Lender believes it advisable to do so, and
all such Advances or parts thereof shall be deemed to have been made pursuant to
this Agreement.
5.8 REQUIRED EQUITY FUNDS. Required Equity Funds shall be used by Borrower
for Property Costs before any Advances of the Loan proceeds in excess of
$100,000.00 shall be made. Required Equity Funds will be disbursed by Borrower
and not deposited with or disbursed by Lender.
ARTICLE 6
CONDITIONS PRECEDENT TO
DISBURSEMENT OF LOAN PROCEEDS
6.1 CONDITIONS OF INITIAL Advance. The obligation of Lender to make the
initial Advance, which shall be limited to $100,000.00 for soft cost items only,
shall be subject to the following conditions precedent:
(a) COMMITMENT. All items required by the Commitment or letter of
instructions from Lender to Borrower regarding the Loan shall have been
delivered to the proper parties as required therein, and all conditions set
forth in the Commitment or such letter of instructions shall have been
satisfied.
(b) LOAN DOCUMENTS. The Loan Documents, in form and substance
satisfactory to Lender, shall have been duly executed and delivered by the
parties thereto and shall be in full force and effect, and Lender shall
have received the original or a fully executed counterpart thereof All Loan
Documents to be filed or recorded in the public records shall have been so
filed or recorded in the appropriate public records.
(c) CONSTRUCTION DOCUMENTS. The Architect's Contract and Construction
Contract, in form and substance satisfactory to Lender, shall have been
duly executed and delivered by the parties thereto, shall be in full force
and effect, and Lender shall have received a certified or a fully executed
counterpart thereof borrower's Architect and the Contractor shall have duly
executed and delivered to Lender a consent to the assignment of
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the Architect's Contract and Construction Contract, in form and substance
satisfactory to Lender, and Lender shall have received the original or a
fully executed counterpart thereof.
(d) SUBCONTRACTS. Borrower shall have delivered to Lender, and Lender
shall have approved, a list of all subcontractors and materialmen who have
been or, to the extent identified by Borrower, will be supplying labor or
materials for the Property, a copy of the standard form of subcontract to
be used by the Contractor, and correct and complete photocopies of all
executed subcontracts and contracts.
(e) OTHER CONTRACTS. Borrower shall have delivered to Lender correct
and complete photocopies of all other executed contracts with contractors,
engineers or consultants for the Property, and of all development,
management, brokerage, sales or leasing agreements for the Property.
(f) REQUIRED LEASES. The Required Leases, if any, in form and substance
satisfactory to Lender, shall have been duly executed by the parties
thereto and shall be in full force and effect, and Lender shall have
received a certified or fully executed counterpart thereof Lender, Borrower
and each tenant under a Required Lease shall have duly executed an Estoppel
Certificate and Non-Disturbance, Attornment and Subordination Agreement, in
form and substance satisfactory to Lender, and Lender shall have received
the original or a fully executed counterpart thereof.
(g) DELIVERIES. The following items or documents shall have been
delivered to Lender:
(1) PLANS AND SPECIFICATIONS. One complete set of the Plans and
Specifications and approval thereof by any necessary Governmental
Authority, with a certification from Borrower's Architect that the
Improvements to be constructed comply with all Requirements and
Governmental Approvals and that the Construction Contract
satisfactorily provides for the construction of the Improvements.
(2) TITLE INSURANCE POLICY. A paid Title Insurance Policy or
report in all respects satisfactory to Lender and its counsel.
(3) OTHER INSURANCE. Policies (or, if permitted, certificates or
other evidence of) all insurance required by this Agreement or any
other Loan Document.
(4) EVIDENCE OF SUFFICIENCY OF FUNDS. Evidence satisfactory to
Lender that the proceeds of the Loan, together with Required Equity
Funds, will be sufficient to cover all Property Costs reasonably
anticipated to be incurred, to satisfy the requirements of the Required
Leases and Permanent Commitment and to satisfy the obligations of
Borrower to Lender under this Agreement.
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(5) EVIDENCE OF ACCESS, AVAILABILITY OF UTILITIES, GOVERNMENTAL
APPROVALS. Evidence satisfactory to Lender as to:
(A) the methods of access to and egress from the Property,
and nearby or adjoining public ways, meeting the reasonable
requirements of property of the type contemplated to be completed
under this Agreement and the status of completion of any required
improvements to such access;
(B) the availability of storm and sanitary sewer facilities
meeting the reasonable requirements of the Property;
(C) the availability of all other required utilities, in
location and capacity sufficient to meet the reasonable needs of
the Property; and
(D) the securing of all Governmental Approvals from the
applicable Governmental Authority which are required under
applicable Requirements for the construction of the Improvements,
together with copies of all such Governmental Approvals.
(6) ENVIRONMENTAL REPORT. An environmental assessment report or
reports of one or more qualified environmental engineering or similar
inspection firms approved by Lender in form, scope and substance
satisfactory to Lender, which report or reports shall indicate a
condition of the Land in all respects satisfactory to Lender in its
sole discretion and upon which report or reports Lender is expressly
entitled to rely.
(7) SOIL REPORT. A soil report for the Land prepared by a soil
engineer approved by Lender in form and substance satisfactory to
Lender, containing recommendations for the design of foundations, paved
areas and underground utilities.
(8) SURVEY. A survey prepared in accordance with Lender's survey
requirements, certified by a land surveyor registered as such in the
state in which the Land is located, which survey shall be in form and
substance satisfactory to Lender.
(9) DRAW REQUEST. A Draw Request complying with the provisions of
this Agreement.
(10) GMAC DOCUMENTS. Lender shall have received an executed
application letter and a "comfort letter" from the Permanent Lender
evidencing the Permanent Commitment, or the Permanent Commitment.
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(h) LEGAL OPINIONS. Lender shall have received opinions in form and
substance satisfactory to Lender and Lender's counsel from counsel
satisfactory to Lender as to such matters as Lender shall reasonably
request.
(i) CERTIFICATION REGARDING CHATTELS. Lender shall have received a
certification from the Title Insurer or counsel satisfactory to Lender
(which shall be updated from time to time at Borrower's expense upon
request by Lender) that a search of the public records disclosed no
conditional sales contracts, chattel mortgages, leases of personality,
financing statements or title retention agreements which affect the
Property.
(j) NOTICES. All notices required by any Governmental Authority or by
any applicable Requirement to be filed prior to commencement of
construction of the Improvements shall have been filed.
(k) APPRAISAL. Any appraisal requirements set forth in the Commitment
shall have been satisfied.
(1) PERFORMANCE; NO DEFAULT. Borrower shall have performed and complied
with all terms and conditions herein required to be performed or complied
with by it at or prior to the date of the initial Advance, and on the date
of the initial Advance, there shall exist no Default or Event of Default.
(m) REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Borrower and any Guarantor in the Loan Documents or otherwise made
by or on behalf of Borrower or any Guarantor in connection therewith or
after the date thereof shall have been true and correct in all material
respects on the date on which made and shall also be true and correct in
all material respects on the date of the initial Advance.
(n) OTHER DOCUMENTS. Such other documents, opinions and certificates as
Lender or its counsel may reasonably require.
(o) PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be satisfactory to Lender and Lender's counsel in form and substance,
and Lender shall have received all information and such counterpart
originals on certified copies of such documents and such other
certificates, opinions or documents as Lender and Lender's counsel may
reasonably require.
6.2 CONDITIONS OF SUBSEQUENT ADVANCES. The obligation of Lender to make any
Advance after the initial Advance shall be subject to the following conditions
precedent:
(a) PRIOR CONDITIONS SATISFIED. All conditions precedent to the initial
Advance and any prior Advance shall continue to be satisfied as of the date
of such subsequent Advance.
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(b) PERFORMANCE; NO DEFAULT. Borrower shall have performed and complied
with all terms and conditions herein required to be performed or complied
with by it at or prior to the date of such advance, and on the date of such
Advance there shall exist no Default or Event of Default.
(c) REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Borrower and any Guarantor in the Loan Documents or otherwise made
by or on behalf of Borrower or any Guarantor in connection therewith after
the date thereof shall have been true and correct in all material respects
on the date on which made and shall also be true and correct in all
material respects on the date of such Advance.
(d) NO DAMAGE. The Improvements shall not have been injured or damaged
by fire, explosion, accident flood or other casualty, unless Lender shall
have received insurance proceeds sufficient in the judgment of Lender to
effect the satisfactory restoration of the Improvements and to permit the
completion thereof prior to the Completion Date.
(e) RECEIPT BY LENDER. Lender shall have received:
(1) DRAW REQUEST. A Draw Request complying with the requirements
hereof.
(2) ENDORSEMENT TO TITLE INSURANCE POLICY. A "run down"
endorsement to the Title Insurance Policy or report indicating no
change in the state of title and containing no survey exceptions not
approved by Lender, which endorsement shall, expressly or by virtue of
a proper "pending disbursements" clause or endorsement in the policy,
increase the coverage of the policy to the aggregate amount of all
proceeds of the Loan advanced on or before the effective date of such
endorsement.
(3) CERTIFICATES. Certificates from Borrower, Borrower's Architect
and the Construction Inspector to the effect that in their opinion,
based upon on-site observations and submissions by the Contractor, the
construction of the Improvements to the date thereof was performed in a
good and workmanlike manner and substantially in accordance with the
Plans and Specifications, stating the estimated total cost of
construction of the Improvements, stating the percentage of the
in-place construction of the Improvements and stating that the
remaining non-disbursed portion of the Loan allocated for such purpose
is adequate, together with such Required Equity Funds to complete the
construction of the Improvements.
Anything herein to the contrary notwithstanding, the Certificates
from the Borrower's Architect will be required at the following times:
(a) at the time of every other monthly Loan Advance; (b) at the time of
all change orders in excess of $25,000.00; and, (c) at the time of the
final Loan Advance.
(4) APPROVAL BY PERMANENT LENDER. If Lender shall have reasonable
cause to doubt such compliance as set forth in the foregoing
certificates, then, at the option
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of Lender, Lender shall require inspection of work in place and
approval of such work by Permanent Lender as being in compliance with
the terms of the Permanent Commitment.
(5) CONTRACTS. Evidence that one hundred percent (100%) of the
cost of the remaining construction work is covered by firm contracts or
subcontracts, or orders for the supplying of materials, with
contractors, subcontractors, materialmen or suppliers satisfactory to
Lender.
(6) PERMANENT COMMITMENT. Delivery of a copy of the fully executed
Permanent Commitment.
(7) FRANCHISE AGREEMENT. Delivery of an amended Franchise
Agreement between Promus Hotels, Inc. and Essex Partners, Inc.
reflecting a construction completion date of no earlier than December,
1998 and approval to build 101 guest rooms, which Franchise Agreement
shall be assigned to Lender.
(8) PERMANENT LENDER APPROVALS. Evidence satisfactory to Lender
that Permanent Lender has approved and acknowledged satisfaction with
the following:
(A) the survey showing the Property, subject to required
updating to show the as-built location of the Improvements upon
construction thereof,
(B) the Title Insurance Policy or report and all exceptions
therein, subject to required updating or issuance of a new policy
as and when the Permanent Loan is closed;
(9) TRI-PARTY AGREEMENT. Lender, Borrower and Permanent Lender
shall have executed a tri-party agreement (the "Tri-Party Agreement"),
satisfactory to Lender, providing for the closing of the Permanent
Loan, substantially in the form of Exhibit G.
(f) OTHER DOCUMENTS. Such other documents, opinions and certificates as
Lender or its counsel may reasonably require.
6.3 CONDITIONS OF FINAL ADVANCE. In addition to the conditions set forth in
Paragraph 6.2 above, Lender's obligation to advance sums retained pursuant to
this Agreement shall be subject to receipt by Lender of the following:
(a) APPROVAL OF IMPROVEMENTS. Evidence of the approval by all
appropriate Governmental Authority of the Improvements in their entirety
for permanent occupancy to the extent any such approval is or will be a
condition of lawful use and occupancy of the Improvements, and evidence of
approval by all appropriate Governmental Authority of the contemplated uses
thereof.
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(b) APPROVAL BY CONSTRUCTION INSPECTOR. Notification from the
Construction Inspector to the effect that the Improvements have been
completed in a good and workmanlike manner substantially in accordance with
the Plans and Specifications.
(c) FINAL SURVEY. A final survey acceptable to Lender showing the
as-built location of the completed Improvements and evidence that Permanent
Lender HAS approved such survey.
(d) [INTENTIONALLY OMITTED].
(e) INSPECTION BY PERMANENT UNDER. Evidence satisfactory to Lender that
any and all final inspection requirements of the Permanent Commitment have
been satisfied.
(f) CERTIFICATE OF BORROWER'S ARCHITECT. Certificate of Borrower's
Architect that the Improvements have been completed substantially in
accordance with the Plans and Specifications and that the Improvements
comply with all applicable Requirements and Governmental Approvals and are
in all respects (except for work to be performed by tenants) ready for
occupancy.
(g) PAYMENT OF COSTS. Evidence satisfactory to Lender that all sums due
in connection with the construction of the Improvements have been paid in
full (or will be paid out of the funds requested to be advanced) and that
no party claims or has a right to claim any statutory or common law firm
arising out of the construction of the Improvements or the supplying of
labor, material, and/or services in connection therewith.
ARTICLE 7
METHOD OF DISBURSEMENT OF LOAN PROCEEDS
Lender agrees to make Advances in accordance with the Construction Budget
and subject to the following procedures.
7.1 DRAW REQUEST TO BE SUBMITTED TO LENDER. At such time as Borrower shall
desire to obtain an Advance, Borrower shall complete, execute and deliver to
Lender a Borrower's Requisition in the form attached hereto as EXHIBIT F
(hereinafter referred to as "Borrower's Requisition"). Each Borrower's
Requisition shall be accompanied by:
(a) if Borrower's Requisition includes amounts to be paid to the
Contractor under the Construction Contract, it shall be accompanied by a
completed and itemized Application and Certificate for payment (AIA
Document No. G702) or similar form approved by Lender, containing the
certification of Contractor, Borrower's Architect and the Construction
Inspector as to the accuracy of same, together with invoices relating to
all items of direct cost covered thereby. All such applications for payment
shall show the sum of all subcontracts by trade, the total amount
theretofore paid to all subcontractors as of the date
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of such application, and the total amount to be paid from the proceeds of
the Advance to all subcontractors;
Anything herein to the contrary notwithstanding, the Certificates from
the Borrower's Architect will be required at the following times: (a) at
the time of every other monthly Loan Advance; (b) at the time of all change
orders in excess of $25,000.00; and, (c) at the time of the final Loan
Advance.
(b) if Borrower's Requisition includes payments for Indirect Costs, it
shall be accompanied by a completed and itemized Indirect Cost statement
executed by Borrower, together with invoices for all items of Indirect
Costs covered thereby;
(c) written lien waivers from the Contractor and such laborers,
subcontractors and materialmen for work done and materials supplied by them
which were paid for pursuant to any prior Draw Request;
(d) a written request of Borrower for any necessary changes in the
Plans and Specifications, the Construction Budget the Disbursement Schedule
or the Construction Schedule for which the Lender's approval is required
under this Agreement;
(e) copies of all change orders and subcontracts, and, to the extent
requested by Lender, of all inspection or test reports and other documents
relating to the construction of the Improvements, not previously delivered
to Lender; and
(f) such other information, documentation and certification as Lender
shall reasonably request.
7.2 NOTICE AND FREQUENCY OF ADVANCES. Each Draw Request shall be submitted
to Lender at least five (5) business days prior to the date of the requested
Advance, and no more frequently than monthly and submission of all required
documentation.
7.3 DEPOSIT OF FUNDS ADVANCED. Borrower shall open and maintain a
non-interest bearing loan checking account with Lender into which Lender shall
deposit the proceeds of each Advance. Lender is hereby irrevocably authorized to
make an Advance to and/or charge any account of Borrower with Lender, including
such loan checking account, without the further approval of Borrower, for (i)
any installment of interest due under the Note, (ii) any expenses incurred by
Lender (including without limiting the generality of the foregoing, reasonable
attorneys' fees and other fees incurred by Lender), or (iii) any other sums due
to Lender under the Note, this Agreement or any of the other Loan Documents, all
to the extent that the same are not paid by the respective due dates thereof out
of Advances of the Loan proceeds.
7.4 ADVANCES TO CONTRACTOR. At its option and upon notice to Borrower,
Lender may make any or all Advances for construction expenses directly to
Contractor for deposit in an appropriately designated special bank account, and
the execution of this Agreement by Borrower shall, and hereby does, constitute
an irrevocable authorization so to advance the proceeds of the
- 24 -
Loan. No further authorization from Borrower shall be necessary to warrant such
direct Advances to Contractor and all such Advances shall satisfy PRO TANTO the
obligations of Lender hereunder and shall be secured by the Mortgage and the
other Loan Documents as fully as if made directly to Borrower.
7.5 ADVANCES TO TITLE INSURER OR TO OTHERS. At its option and upon notice
to Borrower, Lender may make any or all Advances through the Title Insurer and
any portion of the Loan so disbursed by Lender shall be deemed disbursed as of
the date on which such Title Insurer receives such disbursement. At its option,
Lender may make Advances of portions of the proceeds of the Loan to any person
to whom Lender in good faith determines payment is due and any portion of the
Loan so disbursed by Lender shall be deemed disbursed as of the date on which
the person to whom payment is made receives the same. The execution of this
Agreement by Borrower shall, and hereby does, constitute an irrevocable
authorization to Advance the proceeds of the Loan. No further authorization from
Borrower shall be necessary to warrant such direct Advances and all such
Advances shall satisfy PRO TANTO the obligations of Lender hereunder and shall
be secured by the Mortgage and the other Loan Documents as fully as if made
directly to Borrower.
7.6 ADVANCES DO NOT CONSTITUTE A WAIVER. No Advance shall constitute a
waiver of any of the conditions of Lender's obligation to make further Advances
nor, in the event Borrower is unable to satisfy any such condition, shall any
Advance have the effect of precluding Lender from thereafter declaring such
inability to be an Event of Default hereunder.
ARTICLE 8
EVENTS OF DEFAULTS
The occurrence of any one or more of the following conditions or events
(each an "Event of Default") shall constitute a default under and breach of this
Agreement:
(a) any failure by Borrower to pay as and when due and payable any
interest on or principal of or other sum payable under the Note (and
subject to any grace or cure periods that may be applicable); or
(b) any failure by Borrower to deposit with Lender any funds required
by this Agreement to be deposited with Lender within ten (10) days after
notice to the Borrower;
(c) any failure by Borrower to pay as and when due and payable any
other sums to be paid by Borrower to Lender under this Agreement and
continuance of such failure for a period of ten (10) days after written
notice thereof from Lender; or
(d) title to the Property is or becomes unsatisfactory to Lender by
reason of any lien, charge, encumbrance, title condition or exception
(including without limitation, any mechanic's, materialman's or similar
statutory or common law lien or notice thereof), and
- 25 -
such matter causing title to be or become unsatisfactory is not cured or
removed (including by bonding) within twenty (20) days after notice thereof
from Lender to Borrower; or
(e) any refusal by the Title Insurer to insure any Advance as being
secured by the Mortgage as a valid first lien on the Property and
continuance of such refusal for a period of twenty (20) days after notice
thereof by Lender to Borrower; or
(f) the Improvements are not completed by the Completion Date or, in
the reasonable estimation of Lender, construction of the Improvements will
not be completed by the Completion Date; or
(g) the Property or any portion thereof is injured by fire, explosion,
accident, flood or other casualty, unless Lender shall have received
insurance proceeds sufficient in the reasonable estimation of Lender to
effect the satisfactory restoration of the Property and to permit the
completion of the Improvements prior to the Completion Date; or
(h) the Property is subject to any Taking, or the Property or any
portion thereof is subject to any Taking which will prevent, in the
reasonable estimation of Lender, the completion of the Improvements prior
to the Completion Date; or
(i) any voucher or invoice is submitted at any time which Borrower
knows has not been earned by the payee for services performed or for
materials used in or furnished for the Property; or
(j) any cessation at any time in construction of the Improvements for
more than twenty (20) consecutive days except for strikes, acts of God,
fire or other casualty, or other causes entirely beyond Borrower's control;
or
(k) any failure by Borrower to duly observe or perform any term
covenant, condition or agreement requiring Borrower to maintain insurance
or to comply with the terms of a Permanent Commitment or not to encumber or
transfer the Property; or
(l) Borrower requests a termination of the Loan, or confesses inability
to continue or complete construction of the Improvements in accordance with
this Agreement; or
(m) any Guarantor denies that said Guarantor has any liability or
obligation under the Guaranty or any other agreement to which any Guarantor
is a party, or shall notify Lender of the Guarantor's intention to attempt
to cancel or terminate the Guaranty or any other agreement to which said
Guarantor is a party; or
(n) any representation or warranty made or deemed to be made by or on
behalf of Borrower or any Guarantor in this Agreement or in any other Loan
Document, or in any report, certificate, financial statement, Draw Request
or other instrument furnished in
- 26 -
connection with this Agreement, any Advance or any other Loan Document,
shall prove to have been false or incorrect in any material respect as at
the date of which made or deemed to be made; or
(o) any dissolution, termination, partial or complete liquidation,
merger or consolidation of Borrower, any general partner of Borrower, or
any Guarantor, or any sale, transfer or other disposition of all or
substantially all of the assets of Borrower, any general partner of
Borrower, or any Guarantor, other than with the prior approval of Lender;
or
(p) any condition occurs which would allow Permanent Lender to
terminate the Permanent Commitment, or Permanent Lender shall fail to
comply with any of the terms, covenants, conditions or agreements of the
Permanent Commitment or any Buy-Sell Agreement, or, in the reasonable
estimation of Lender, the terms of the Permanent Commitment or any Buy-Sell
Agreement cannot be satisfied; or
(q) any suit or proceeding shall be filed against Borrower, any
Guarantor or the Property which, if adversely determined, would have a
materially adverse affect on the ability of Borrower and any Guarantor to
perform each and every one of their respective obligations under and by
virtue of the Loan Documents; or
(r) any failure by Borrower to obtain any Governmental Approvals, or
the revocation or other invalidation of any Governmental Approvals
previously issued; or
(s) the death or mental incapacity of Borrower, any general partner of
Borrower, or any Guarantor; or
(t) any change in the legal or beneficial ownership of Borrower, any
general partner of Borrower or any Guarantor, other than as permitted in
Section 4.29 or with the prior approval of Lender; or
(u) any one or more of the obligations of Borrower or any Guarantor
under the Loan Documents shall at any time and for any reason cease to be
in full force and effect; or
(v) any default in the payment of money shall occur under or in respect
of any loan agreement, credit agreement, promissory note, bond, trust deed,
indenture, mortgage, pledge, security agreement, indemnity or guaranty to
which Borrower, any general partner of Borrower is a party (whether as
principal or guarantor or other surety), or any other default shall occur
thereunder which would entitle the holder thereof to declare all amounts
payable with respect thereto to be immediately due and payable; or
(w) Borrower, any member of Borrower, any Guarantor or any tenant under
a Required Lease shall be involved in financial difficulties as evidenced
by: (1) its commencement of a voluntary case under Title 11 of the United
States Code as from time to time in effect, or its authorizing, by
appropriate proceedings of partners, directors or other
- 27 -
governing body, the commencement of such a voluntary case; (2) its filing
an answer or other pleading admitting or failing to deny the material
allegations of a petition filed against it commencing an involuntary case
under said Title 11, or seeking, consenting to or acquiescing in the relief
therein provided, or by its failing to controvert timely the material
allegations of any such petition; (3) the entry of an order for relief in
any involuntary case commenced under said Title 11; (4) its seeking relief
as a debtor under any applicable law, other than said Title II, of any
jurisdiction relating to the liquidation or reorganization of debtors or to
the modification or alteration of the rights of creditors, or by its
consenting to or acquiescing in such relief-, (5) the entry of an order by
a court of competent jurisdiction which is not withdrawn, reversed or
rescinded within sixty (60) days after its entry (i) finding it to be
bankrupt or insolvent, (ii) ordering or approving its liquidation,
reorganization or any modification or alteration of the rights of its
creditors, or (ii) assuming custody of, or appointing a receiver or other
custodian for, all or a substantial part of its property; (6) by its making
an assignment for the benefit of, or entering into a composition with, its
creditors, or appointing or consenting to the appointment of a receiver or
other custodian for all or a substantial part of its property; or (7)
generally, its failure to pay its debts as such debts become due; or
(x) any failure by Borrower to duly observe or perform any other term,
covenant, condition or agreement under this Agreement and continuance of
such failure for a period of thirty (30) days after written notice thereof
from Lender; PROVIDED, HOWEVER, that if such failure is not susceptible of
cure during such thirty (30) day period (but is susceptible of cure) and
Borrower promptly commences and diligently pursues cure of such failure
during such thirty (30) day period, then such thirty (30) day period shall
be extended for an additional consecutive period of thirty (30) days; or
(y) any "default" or "event of default" shall occur under any of the
other Loan Documents.
ARTICLE 9
RIGHTS AND REMEDIES OF LENDER
9.1 REMEDIES. Upon the occurrence and continuance of any Event of Default,
Lender may at any time thereafter, at its option, exercise any or all of the
following rights and remedies:
(a) Lender may declare its obligations to make Advances hereunder to be
terminated, whereupon the same shall terminate, and/or declare all unpaid
principal of and accrued interest on the Note, together with all other sums
payable under the Loan Documents, to be immediately due and payable,
whereupon same shall become and be immediately due and payable, anything in
the Loan Documents to the contrary notwithstanding, and without
presentation, protest or further demand or notice of any kind, all of which
are expressly hereby waived by Borrower; provided, however, that Lender may
make Advances or parts of Advances thereafter without thereby waiving the
right to demand
- 28 -
payment of the Note, without becoming liable to make any other or further
Advances, and without affecting the validity of or enforceability of the
Loan Documents. Notwithstanding and without limiting the generality of the
foregoing, upon the occurrence of an Event of Default under paragraph (w)
of Article 8, or if any event has occurred which but for the passage of
time, the giving of notice or both would constitute an Event of Default,
Lender's obligations to make Advances hereunder automatically shall so
terminate and, in addition, upon the occurrence of an Event of Default
under paragraph (w) of Article 8, all unpaid principal of and accrued
interest on the Note, together with all sums payable under the Loan
Documents, automatically shall become and be immediately so due and
payable, with any declaration or other act on the part of the Lender.
(b) Following acceleration of the Building Loan, Lender may cause the
Property to be completed and may enter upon the Land and construct, equip
and complete the Property in accordance with the Plans and Specifications,
with such changes therein as Lender may, from time to time, and in its sole
discretion, deem appropriate. In connection with any construction of the
Property undertaken by Lender pursuant to the provisions of this
subparagraph, Lender may:
(1) use any funds of Borrower, including any balance which may be
held by Lender as security or in escrow, and any funds remaining
unadvanced under the Loan;
(2) employ existing contractors, subcontractors, agents,
architects, engineers, and the like, or terminate the same and employ
others;
(3) employ security watchmen to protect the Property;
(4) make such additions, changes and corrections in the Plans and
Specifications as shall, in the judgment of Lender, be necessary or
desirable;
(5) take over and use any and all Personal Property contracted for
or purchased by Borrower, if appropriate, or dispose of the same as
Lender sees fit;
(6) execute all applications and certificates on behalf of
Borrower which may be required by any Governmental Authority or
Requirement or contract documents or agreements;
(7) pay, settle or compromise all existing or future bills and
claims which are or may be liens against the Property, or may be
necessary for the completion of the Improvements or the clearance of
title to the Property;
(8) complete the marketing and leasing of leasable space in the
Improvements, enter into new leases and occupancy agreements, and
modify or amend existing leases and occupancy agreements, all as Lender
shall deem to be necessary or desirable;
- 29 -
(9) prosecute and defend all actions and proceedings in connection
with the construction of the Improvements or in any other way affecting
the Land or the Improvements and take such action and require such
performance as Lender deems necessary under any Payment and Performance
Bonds; and
(10) take such action hereunder, or refrain from acting hereunder,
as Lender may, in its sole and absolute discretion, from time to time
determine, and without any limitation whatsoever, to carry out the
intent of this subparagraph. Borrower shall be liable to Lender for all
costs paid or incurred for the construction, completion and equipping
of the Property, whether the same shall be paid or incurred pursuant to
the provisions of this subparagraph or otherwise, and all payments made
or liabilities incurred by Lender hereunder of any kind whatsoever
shall be deemed advances made to Borrower under this Agreement and
shall be secured by the Mortgage and the other Loan Documents.
To the extent that any costs so paid or incurred by Lender, together with
an other Advances made by Lender hereunder, exceed the Loan Amount, such excess
costs shall be paid by Borrower to Lender on demand, with interest thereon at
the Default Rate, if any, set forth in the Note or, in the absence of a Default
Rate, at the Interest Rate, until paid; and Borrower shall execute such notes or
amendments to the Note as may be requested by Lender to evidence Borrower's
obligation to pay such excess costs and until such notes or amendments are so
executed by Borrower, Borrower's obligation to pay such excess costs shall be
deemed to be evidenced by this Agreement. In the event Lender takes possession
of the Property and assumes control of such construction as aforesaid, it shall
not be obligated to continue such construction longer than it shall see fit and
may thereafter, at any time, change any course of action undertaken by it or
abandon such construction and decline to make further payments for the account
of Borrower whether or not the Property shall have been completed. For the
purpose of this subparagraph, the construction, equipping and completion of the
Property shall be deemed to include any action necessary to cure any Event of
Default by Borrower under any of the terms and provisions of any of the Loan
Documents.
(c) Lender may to the extent permitted by applicable law, at any time
and from time to time, without notice (any such notice being expressly
waived), without regard to the adequacy of any collateral, set off and
apply any and all deposits (general or specific, time on demand,
provisional or final, regardless of currency, maturity, or the branch of
Lender where the deposits are held) at any time held or other sums credited
by or due from Lender to Borrower against any and all liabilities, direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising of Borrower to Lender.
(d) Lender may exercise any or all of the rights and remedies set forth
in the other Loan Documents.
9.2 POWER OF ATTORNEY. For the purposes of carrying out the provisions and
exercising the fights, powers and privileges granted by or referred to in this
Agreement, Borrower hereby
- 30 -
irrevocably constitutes and appoints Lender its true and lawful
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and do and perform any acts which are referred to in
this Agreement, in the name and on behalf of Borrower. The power vested in such
attorney-in-fact is, and shall be deemed to be, coupled with an interest and
irrevocable.
9.3 REMEDIES CUMULATIVE. Upon the occurrence of any Event of Default the
rights, powers and privileges provided in this Article 9 and all other remedies
available to Lender under this Agreement or under any of the other Loan
Documents or at law or in equity may be exercised by Lender at any time and from
time to time and shall not constitute a waiver of any of Lender's other rights
or remedies thereunder, whether or not the Loan shall be due and payable, and
whether or not Lender shall have instituted any foreclosure proceedings or other
action for the enforcement of its rights under the Loan Documents.
9.4 ANNULMENT OF Defaults. An Event of Default shall not be deemed to be in
existence for any purpose of this Agreement or any Loan Document if Lender shall
have waived such Event of Default in writing or stated that the same has been
cured to its reasonable satisfaction, but no such waiver shall extend to or
affect any subsequent Event of Default or impair any of the rights of Lender
upon the occurrence thereof.
9.5 WAIVERS. Borrower hereby waives to the extent not prohibited by
applicable law (a) all presentments, demands for payment or performance, notices
of nonperformance (except to the extent required by the provisions hereof or of
any other Loan Documents), protests and notices of dishonor, (b) any requirement
of diligence or promptness on Lender's part in the enforcement of its rights
(but not fulfillment of its obligations) under the provisions of this Agreement
or any other Loan Document, and (c) any and all notices of every kind and
description which may be required to be given by any statute or rule of law and
any defense of any kind which Borrower may now or hereafter have with respect to
its liability under this Agreement or under any other Loan Document.
9.6 COURSE OF DEALING, ETC. No course of dealing between Borrower and
Lender shall operate as a waiver of any of Lender's rights under this Agreement
or any Loan Document. No delay or omission on Lender's part in exercising any
right under this Agreement or any Loan Document shall operate as a waiver of
such right or any other right hereunder. A waiver on any one occasion shall not
be construed as a bar to or waiver of any right or remedy on any future occasion
No waiver or consent shall be binding upon Lender unless it is in writing and
signed by Lender. The making of an Advance hereunder during the existence of an
Event of Default shall not constitute a waiver thereof.
ARTICLE 10
GENERAL CONDMONS
The following conditions shall be applicable throughout the term of this
Agreement:
- 31 -
10.1 RIGHTS OF THIRD PARTIES. All conditions of the obligations of Lender
hereunder, including the obligation to make Advances, are imposed solely and
exclusively for the benefit of Lender and its successors and assigns and no
other person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will make
Advances in the absence of strict compliance with any or all thereof and no
other person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any and all of which may be freely waived in whole or in part
by Lender at any time if in its sole discretion it deems it desirable to do so.
In particular, Lender makes no representations and assumes no obligations as to
third parties concerning the quality of the construction by Borrower of the
Improvements or the absence therefrom of defects. In this connection Borrower
agrees to and shall indemnify Lender from any liability, claims or losses
resulting from the disbursement of the Loan proceeds or from the condition of
the Property whether related to the quality of construction or otherwise and
whether arising during or after the term of the Loan made by Lender to Borrower
in connection herewith. This provision shall survive the repayment of the Loan
and shall continue in full force and effect so long as the possibility of such
liability, claims or losses exists.
10.2 RELATIONSHIP. The relationship between Lender and Borrower is solely
that of a lender and borrower, and nothing contained herein or in any of the
other Loan Documents shall in any manner be construed as making the parties
hereto partners, joint venturers or any other relationship other than lender and
borrower.
EVIDENCE OF SATISFACTION OF CONDITIONS. Any condition of this Agreement
which requires the submission of evidence of the existence or non-existence of a
specified fact or facts implies as a condition the existence or non-existence,
as the case may be, of such fact or facts and Lender shall, at all times, be
free independently to establish to its satisfaction and in its absolute
discretion such existence or non-existence.
10.4 NOTICES. Any notices required or permitted to be given hereunder shall
be: (i) personally delivered or (ii) given by registered or certified mail,
postage prepaid, return receipt requested, or (iii) forwarded by overnight
courier service, in each instance addressed to the addresses set forth at the
head of this Agreement, or such other addresses as the parties may for
themselves designate in writing as provided herein for the purpose of receiving
notices hereunder. All notices shall be in writing and shall be deemed given, in
the case of notice by personal delivery, upon actual delivery, and in the case
of appropriate mail or courier service, upon deposit with the U.S. Postal
Service or delivery to the courier service.
10.5 ASSIGNMENT. Borrower may not assign this Agreement or any of its
rights or obligations hereunder without the prior approval of Lender.
10.6 SUCCESSORS AND ASSIGNS INCLUDED IN PARTIES. Whenever in this Agreement
one of the parties hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such parties shall be included and
all covenants and agreements contained in this Agreement by or on behalf of
Borrower or by or on behalf of Lender shall bind and inure to the benefit of
their respective heirs, legal representatives, successors and assigns, whether
so expressed or not.
- 32 -
10.7 HEADINGS. The headings of the Articles, Paragraphs and subparagraphs
of this Agreement are for the convenience of reference only, are not to be
considered a part hereof and shall not limit or otherwise affect any of the
terms hereof
10.8 INVALID PROVISIONS TO AFFECT NO OTHERS. If fulfillment of any
provision hereof or any transaction related hereto at the time performance of
such provisions shall be due, shall involve transcending the limit of validity
presently prescribed by law, with regard to obligations of like character and
amount, then IPSO FACTO, the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision herein contained operates
or would prospectively operate to invalidate this Agreement in whole or in part,
then such clause or provision only shall be held for naught, as though not
herein contained, and the remainder of this Agreement shall remain operative and
in full force and effect.
10.9 NUMBER AND GENDER. Whenever the singular or plural number, or the
masculine, feminine or neuter gender is used herein, it shall equally include
the other.
10.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with laws of the State of New York.
10.11 CONSENT TO JURISDICTION. Borrower hereby irrevocably and
unconditionally (a) submits to personal jurisdiction in the State of New York
over any suit, action or proceeding arising out of or relating to this
Agreement, and (b) waives any and all personal rights under the laws of any
state (i) to the right, if any, to trial by jury, or (ii) to object to
jurisdiction within the State of New York or venue in any particular forum
within the State of New York. Nothing contained herein, however, shall prevent
Lender from bringing any suit, action or proceeding or exercising any rights
against any security and against Borrower, and against any property of Borrower,
in any other state. Initiating such suit, action or proceeding or taking such
action in any state shall in no event constitute a waiver of the agreement
contained herein that the laws of the State of New York shall govern the rights
and obligations of Borrower and Lender hereunder or the submission herein by
Borrower to personal jurisdiction within the State of New York.
10.12 AMENDMENTS. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
- 33 -
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
under seal on the date first above written.
ERIE HOTEL LLC
BY: ESSEX HOTELS II LLC
its Managing Member
BY: ESSEX HOSPITALITY ASSOCIATES IV L.P.,
its Managing Member
BY: Essex Partners Inc.,
its General Partner
BY: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
KEYBANK NATIONAL ASSOCIATION
BY: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxx
Vice-President
STATE OF NEW YORK )
COUNTY OF MONROE ) ss.:
On this 31st day of December, 1997, before me personally came Xxxxxxx X.
Xxxxxx, to me personally known, who, being by me duly sworn, did depose and say
that she is a Senior Vice President of Essex Partners Inc., a New York
corporation and the general partner of Essex Hospitality Associates IV L.P., a
New York limited partnership and the managing member of Essex Hotels H LLC, a
New York limited liability company and the managing member of Erie Hotel LLC,
the limited liability company described in and on whose behalf she executed the
within Instrument; and she duly acknowledged to me that she signed her name
thereto as the act and deed of said limited liability company.
/s/ Xxxx X. Xxxxxxxx
------------------------------
Notary Public
XXXX X. XXXXXXXX
Notary Public in the State of New York
MONROE COUNTY
Commission Expires May 31, 0000
- 00 -
XXXXX XX XXX XXXX )
COUNTY OF ERIE ) ss.:
On the 31st day of December, 1997, before me personally came Xxxxx X.
Xxxxxxxx, to me known who, being by me duly sworn, did depose and say that she
resides in the Town of Amherst; that she is a Vice-President of KeyBank National
Association, the corporation described in and which executed the foregoing
instrument; and that she signed her name thereto by order of the Board of
Directors of said corporation.
/s/ Xxxxx X. Xxxxxxx
------------------------------
Notary Public
XXXXX X. XXXXXXX
Notary Public State of New York
Qualified in Erie County
My Commission Expires Aug. 31, 1999
- 35 -
EXHIBIT A
CONSTRUCTION BUDGET
Society National Bank
"A Key Corp Bank"
Essex - Hampton Inn Erie, PA
Enter amounts in the "Total Cost" column first. Then enter amounts in the
"Equity $" column. The "Loan $" column will calculate automatically.
DEVELOPMENT BUDGET Total rooms 98
DESCRIPTION TOTAL COST % OF TOTAL
LOAN $ EOUITY $ COST PSF COST
LAND $0 $793,600 $793,600 $8,097.96 10.4%
SITE IMPROVEMENTS $0 $550,150 550,150 5,613.78 7.2%
----------------- --------- ---------- ---------- ----------- ------
TOTAL LAND & SITE WORK $0 $1,343,750 $1,343,750 $13,711.73 17.6%
HARD COSTS SQ. FT.
Construction costs 0 2,613,887 1,120,373 3,734,260 $38,104.69 48.9%
tech and develop services 0 250,000 0 250,000 $2,551.02 3.3%
Performance Bond 0 0 0
Furniture, Fixtures & Equipment 0 842,100 0 842,100 $8,592.86 11.0%
CONTINGENCY (HARD COSTS) 186,713 0 186,713 $1,905.23 2.4%
------------------------ --------- --------- ------- ---------- ------
TOTAL HARD COSTS 3,892,700 1,120,373 5,013,073 $51,153.81 65.5%
SOFT COSTS
ARCHITECTURE/ENGINEERING 108,400 0 108,400 $1,106.12 1.4%
CONSTRUCTION MANAGEMENT 0 0 0 $0.00 0.0%
Note Securities - financing cost 0 190,177 190,177 $1,940.58 2.5%
Permits 106,000 0 106,000 $1,081.63 1.4%
LEGAL FEES 245,000 0 245,000 $2,500.00 3.2%
Recording Fees 47,000 0 47,000 $479.59 0.6%
REAL ESTATE TAXES/Insurance 15,000 0 15,000 $153.06 0.2%
Pre-opening costs 3,800 76,200 80,000 $816.33 1.0%
APPRAISALS 0 12,006 12,000 $122.45 0.2%
ENVIRONMENTAL 0 10,000 10,000 $102.04 0.1%
Franchise Fee 0 45,000 45,000 $459.18 0.6%
TITLE INSURANCE 0 16,000 16,000 $163.27 0.2%
Key BANK FEE 23,500 0 23,500 $239.80 0.3%
PERMANENT LOAN FEE 47,000 0 47,000 $479.59 0.6%
Note Interest 0 112,000 112,000
Travel & other costs 0 24,500 24,500
CONSTRUCTION INTERST 185,180 0 185,180 $1,889.59 2.4%
CONTINGENCY (WORKING CAPITAL) 26,420 0 26,420 $269.59 0.3%
----------------------------- --------- --------- ---------- ---------- ------
TOTAL SOFT COST $807,300 $485,877 $1,293,177 $11,802.83 15.1%
========= ========= ========== ========== ======
TOTAL DEVELOPMENT COSTS $4,700,000 $2,950,000 $7,650,000 $78,061.22
PERCENT OF TOTAL COSTS 61.44% 38.56% 100.00%
LOAN PER SQUARE FOOT $47,959.18
CONTINGENCY:
HARD $186,713
SOFT $26,420
--------
TOTAL $213,133
COMMENTS
EXHIBIT C
DISBURSEMENT SCHEDULE
EXHIBIT D
DESCRIPTION OF LAND
ALL THAT CERTAIN piece or parcel of land situate in Tract 373 in the
Township of Summit, County of Erie and Commonwealth of Pennsylvania, being Lot I
as shown on a map entitled "Subdivision of Land of Xxxxx X. Xxxxxxx, Xxxxxxx X.
and Xxxx X. Xxxx and Xxxxxx X. Xxxxx", made by Xxxxx X. Xxxxx Associates, dated
August 22, 1996, revised September 4, 1996 and May 19, 1997, and recorded in
Erie County Map No. 1997-133, and being more particularly bounded and described
as follows, to wit:
BEGINNING at the most southerly xxxxx of the piece herein described, at a
point in the centerline of Old Xxxxxx Road (50 foot right-of-way); thence North
27(degree) 25' 40" West, a distance of 408.58 feet to a point; thence North
69(degree) 0I' 12" East, a distance of 397.38 feet to an iron survey pin; thence
North 72(degree) 03' 09" East, a distance of 37.77 feet to a point; thence South
54(degree) 11' 20" East, a distance of 124.85 feet to a PK. nail in the
centerline of Old Xxxxxx Road; thence South 35(degree) 48' 40" West, along the
centerline of Old Xxxxxx Road, a distance of 546.91 feet to the point of
beginning. CONTAINING 2.819 acres of land to the centerline of Old Xxxxxx Road;
CONTAINING 2.509 acres of land to the northerly right-of-way line of Old Xxxxxx
Road.
EXCEPTING therefrom a 400 square foot parcel of land conveyed to the Summit
Township Sewer Authority in Erie County Record Book 70 page 635, bearing Erie
County Index No. (40) 17-73-2.09.
EXHIBIT E
Descriptions of Plans and Specifications
Drawings and specifications for the Erie Hampton Inn, Erie, Pennsylvania
prepared by Xxxxx & Xxxxxx Architects (Project No. 96066) dated August 27, 1997,
as amended by Addendum No. 1 dated September 9, 1997, and Addendum No. 2 dated
September 16, 1997.
EXHIBIT F
BORROWER'S REQUISITION
BORROWER: ERIE HOTEL LLC
REQUISITION NO.:
DATE:
PROJECT: Erie Hampton Inn, Summit Township, Pennsylvania
Pursuant to the Building Loan Agreement (the "Agreement") between Borrower
and Lender, Borrower hereby authorizes and requests an Advance for the following
purpose(s) and in the following amounts:
Amount Purpose(s) Attributable to
---------------------------
$
Total: $
IN CONNECTION WITH AND IN ORDER TO INDUCE LENDER TO ADVANCE THE AMOUNT
REQUESTED ABOVE, THE BORROWER HEREBY REPRESENTS, WARRANTS AND STIPULATES AS
FOLLOWS:
1 . There is existing no Event of Default (as defined in the Agreement) and
no event which but for the passage of time, the giving of notice or both would
constitute an Event of Default. The undersigned has duly complied with and
observed all of the terms, covenants and conditions of each of said instruments
required to be performed by the undersigned to the date of this Requisition, and
unless the Lender is notified to the contrary prior to the disbursement of the
Advance requested above, will be so on the date hereof.
2. The amounts herein are true and correct to the best of the Borrower's
knowledge and after the honoring of this Requisition, the Loan amount not yet
advanced, less the retainage held, if any, shall be sufficient to pay for the
completion of the costs of construction of the Improvements not yet paid.
3. All sums previously requisitioned have been applied to the payment of
the costs of construction of the Improvements heretofore incurred and the
proceeds of any Advance made in accordance with this Requisition will be applied
to, and solely to, payment of the foregoing items.
4. All work has been performed fully in accordance with the Plans and
Specifications as defined in the Agreement.
"BORROWER"
---------------------------------
EXHIBIT G
KM&Z Draft
10/21/97
TRI-PARTY AGREEMENT
THIS TRI-PARTY AGREEMENT (the "AGREEMENT") is being executed as of
__________________, 199_____, by and between _____________________, a
_______________(together with any subsequent holder of the Note as defined
below, the GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation
(together with any subsequent holder of the note evidencing the Bridge Loan as
defined below, the "BRIDGE LENDER"),___________________________________________,
a _____________________ (the "Borrower") and _____________________________, a
__________________________ ("Franchisor").
RECITALS:
A. The Borrower is (or will be upon funding of the Loan as defined below)
the owner of certain real property (the "PROPERTY") located in the City of
_________, _________County, ____________, and more particularly described in
EXHIBIT A attached hereto and made a part of this Agreement The Borrower intends
to construct upon the Property certain improvements and appurtenances to consist
generally of a _____________ -story, approximately ________________ square foot
hotel to be operated as a _____ -room _____________ Hotel (the "IMPROVEMENTS);
B. The Bank has agreed to make a loan to the Borrower in the principal sum
of $_________ (the "LOAN") to assist Borrower in financing the acquisition of
the Property, site development of the Property and the construction of the
Improvements. The Loan will be advanced to the Borrower under the terms of a
certain Loan Agreement entered or to be entered into by the Bank and the
Borrower (the "LOAN AGREEMENT"), and is or will be evidenced by a promissory
note in the maximum principal amount of $____________ (the, "NOTE") that is or
will be secured by, among other things, a Construction Deed of Trust, Security
Agreement, Assignment, Assignment of Rents and Leases and Fixture Filing (the
"MORTGAGE") encumbering the Property, the Improvements and certain related
personal property of the Borrower. The Loan Agreement the Note, the Mortgage and
all other documents evidencing or securing the Loan are referred to herein as
the "LOAN DOCUMENTS".
C. The Borrower has obtained from Bridge Lender a conditional loan
commitment (the "COMMITMENT") from the Bridge Lender for a five-year bridge
mortgage loan on the Property and Improvements in the amount of $ ___________
(the "BRIDGE LOAN"). The Commitment is evidenced by a letter from Bridge Lender
to the Borrower dated __________________, 199______ and agreed to by the
Borrower on ________________, 199_________. The Bank and Franchisor acknowledge
that they have received and reviewed the Commitment, a copy of which is attached
hereto as EXHIBIT B.
- 1 -
D. The Agreement is being executed to coordinate the financing agreements
between the Bank and the Bridge Lender.
IN ORDER TO IMPLEMENT the above facts and understandings, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, covenant
and agree as follows:
1 . ASSIGNMENT. In consideration of the making of the Loan by the Bank to
the Borrower, the Borrower hereby collaterally assigns to the Bank as security
for the Loan, all of Borrower's rights and interests in and to the Commitment
The Bridge Lender hereby consents to such assignment. The Bank, in the event of
any Event of Default as defined in the Loan Agreement, is hereby authorized at
the Bank's election to take any and all actions the Bank deems necessary or
appropriate under the Commitment to close the Bridge Loan in the name of the
Bank, including without limitation, the execution of the Bridge Loan Documents
(as defined herein) as well as any and all other documents required by the
Commitment or documents which may be convenient or appropriate for the closing
of the Bridge Loan for and on behalf of the Bank. Notwithstanding any of the
foregoing, the Bank shall have no obligation to close the Bridge Loan. Bridge
Lender consents to the Bank closing the Bridge Loan in its own name and agrees
to accept the Bridge Loan Documents executed and delivered by the Bank;
PROVIDED, THAT , (i) the Bank delivers a legal opinion, acceptable to Bridge
Lender, regarding the enforceability of the Bridge Loan Documents, and (ii) all
conditions set forth in the Commitment are satisfied in accordance with the
terms and provisions set forth therein.
2. FUNDING OF BRIDGE LOAN. Unless all amounts owing pursuant to the Loan
are otherwise paid in full and the Bank released from all obligations to make
further advances thereunder, the Borrower shall timely comply with the terms and
conditions of the Commitment and timely close the Bridge Loan. The Commitment
shall not be modified or amended without the prior written consent of the Bank
except changes that may be required by applicable law. Upon timely and full
compliance with the terms and conditions of the Commitment, the Bridge Loan
shall be closed by the execution and delivery of the Bridge Loan Documents. The
proceeds of the Bridge Loan (but no amounts in excess thereof) shall be advanced
directly by the Bridge Lender to the Bank or through title company escrow to the
Bank, in an amount not exceeding the sum required to pay in full and satisfy the
Loan. The Borrower shall provide any additional funds required to fully pay the
Loan and all sums then owing to the Bank and secured by the Mortgage and to pay
all fees and expenses of closing the Bridge Loan.
3. THE CLOSING DATE.
(a) Unless all amounts owing pursuant to the Loan are otherwise paid in
full by Borrower, the Borrower shall satisfy all closing conditions set forth in
the Commitment and shall cause the funding of the Bridge Loan on or before
_____________, 199______ or on such earlier date as shall be mutually agreed to
by Borrower and Bridge Lender (the CLOSING DATE"); PROVIDED, HOWEVER, if there
has occurred an Event of Default under any of the Loan Documents, then Bank
- 2 -
and Bridge Lender may mutually select the Closing Date so long as such closing
date is not later than the end of the term of the Commitment
(b) The Closing Date may be extended by written agreement between the Bank,
Bridge Lender and Borrower, PROVIDED, HOWEVER, that if there has been an Event
of Default under any of the Loan Documents such written agreement may be between
the Bank and the Bridge Lender only, and any such agreement between the Bank and
the Bridge Lender will bind the Borrower as if it were a party to that
agreement. Bank and Borrower acknowledge that Bridge Lender has no obligation to
extend the Closing Date, and that any such agreed extension may be conditioned
upon further conditions and requirements not currently set forth in the
Commitment. Any agreed extension of the Closing Date beyond the term of the
Commitment pursuant to the provisions of this paragraph 3(b) will automatically
extend the expiration date of the Commitment and of this Agreement for an equal
period of time. Any reference in this Agreement to the "Closing Date" will be
construed to mean the Closing Date as it may be extended pursuant to the
provisions of this Agreement.
4. EFFECTIVENESS OF COMMITMENT, NO DEFAULT. Bridge Lender and Borrower
hereby warrant and represent to Bank that (i) the Commitment has been accepted
by Borrower prior to the required acceptance date set out in the Commitment and
all fees due for acceptance of the Commitment have been paid in full; (ii) the
Commitment is in full force and effect and has not been amended, except as
described herein; (iii) to the best of Bridge Lender's knowledge, no default,
nor any condition or event which with the giving of notice or the passage of
time or both would constitute a default currently exists under the Commitment;
and (iv) the Commitment is a binding contract currently entitling Borrower to
the benefits thereof (subject to equitable principles, bankruptcy, insolvency
and other similar creditor's rights laws) and, upon execution of this Agreement
and subject to the provisions of Section 1 of this Agreement, the Bank will be
entitled to such benefits, in each case subject to the satisfaction of all
conditions set forth in the Commitment.
5. BRIDGE LOAN DOCUMENTS. Borrower and Bridge Lender shall agree on the
form of loan documents evidencing, guaranteeing, governing and securing the
Bridge Loan (collectively, the "BRIDGE LOAN DOCUMENTS") prior to the Closing
Date. The Bridge Loan Documents shall be in the same form in all materials
respects as those form loan documents typically used in transactions similar to
the Bridge Loan where Franchisor is providing credit enhancement to the Bridge
Lender, which form documents have previously been provided by Bridge Lender to
Borrower and Bank, as modified to reflect (i) changes in such form loan
documents as are made after today's date at the request of Franchisor or as are
otherwise acceptable to Franchisor, (ii) the business terms and conditions set
forth in the Commitment and (iii) the requirements of local law. Bridge Lender
warrants and represents to Bank that the Bridge Loan Documents are the only loan
documents required as a condition precedent to the rending of the Bridge Loan.
Borrower agrees to execute and deliver the Bridge Loan Documents in the form
agreed to as provided above. Upon Borrower's satisfaction of all Commitment
requirements and conditions, Bridge Lender agrees to execute any Bridge Loan
Documents requiring Bridge Lender's
- 3 -
signature. Bank acknowledges that Franchisor must also execute certain Bridge
Loan Documents, including, a certain guaranty agreement providing credit
enhancement to Bridge Lender and a "comfort letter" or other instrument
providing certain information to Bridge Lender regarding the status of the
Management Agreement (as hereinafter defined).
6. MANAGEMENT AGREEMENT. Borrower and Bridge Lender acknowledge that the
Management Agreement (the "MANAGEMENT AGREEMENT") dated . 1997 between Borrower
and Franchisor is acceptable to Borrower and Bridge Lender. The Management
Agreement shall not be modified or amended without the prior written approval of
Bank or Bridge Lender.
7. COMPLETION OF CONSTRUCTION. Upon completion of the construction of the
Improvements in substantial accordance with the Plans, the Bank and the Borrower
agree to deliver to the Bridge Lender written notice of such completion and of a
proposed date for the closing of the Bridge Loan, which proposed date shall be
not later than ten (1 0) days prior to expiration of the Commitment. On the date
specified in the notice, or on any earlier or later date agreed to by the
parties, the Bridge Loan will be funded as contemplated by this Agreement so
long as all conditions of such funding set forth in the Commitment have been
fulfilled.
8. SUBSTITUTION OF GENERAL PARTNER. Bridge Lender acknowledges and agrees
that the limited partners of Borrower may remove the general partner of Borrower
and admit a new general partner of Borrower pursuant to the terms of Borrower's
partnership agreement and that the same shall not affect or impair Bridge
Lender's obligations to fund the Bridge Loan in accordance with the Commitment
and this Agreement so long as such new general partner is an affiliate of
____________________ and so long as Borrower continues to satisfy the
"single-purpose, bankruptcy-remote" requirements set forth in the Commitment and
in such event Bridge Lender agrees to a substitution of the organizational
documents and resolution of such substitute general partner in the place of
those of the current general partner.
9. DEFAULT BY BORROWER, The Bridge Lender agrees to give the Bank and the
Borrower prompt written notice of any default of the Borrower under this
Agreement or the Commitment to the extent the Bridge Lender becomes aware of
such default. Failure of the Bridge Lender to become aware of any such default
or to provide such notice shall not be a default under this Agreement or affect
Bridge Lender's rights under the Commitment The Bank and/or the Borrower will
have thirty (30) days after receipt of any such notice of default to cure all
defaults, or if such default is not reasonably capable of being cured within
such period of time, the Bank and/or Borrower shall have the right to commence
remedying such default and shall proceed diligently to cure the same, except
that no such period for notice or cure will extend the Closing Date without the
prior written consent of the Bridge Lender, PROVIDED, HOWEVER, nothing contained
herein shall obligate Bank to cure any such default. Failure of the Borrower and
the Bridge Lender to agree on the terms of the Bridge Loan Documents shall
constitute a default on the part of Borrower which the Bank shall have the
right, but not the obligation, to attempt to cure. No notice and/or cure periods
set forth herein shall extend the term of the
- 4 -
Commitment as set forth therein. If all defaults are not cured within such
period, then, in addition to pursing its available rights and remedies under
applicable law, the Bridge Lender may, at its option, and by prompt written
notice to the Bank and Borrower either terminate the Commitment and its
obligations under this Agreement or waive the defaults that have not yet been
cured and extend the time for cure of those defaults. 'Me Bank and Borrower
acknowledge that upon any such termination of the Commitment, certain fees,
including without Stations the Deferred Financing Fee, will remain payable under
the Commitment, and Borrower and bank hereby agree that the Bank shall not
release the lien of its Mortgage without first obtaining written confirmation
from the Bridge Lender that payment of any such fees arising under the
Commitment have been paid in full or waived.
Without in any way limiting any rights or remedies which the Bank may have
against Borrower, in the event of any default by Borrower under any of the Loan
Documents, the Bank (a) shall promptly notify the Bridge Lender of such default
by Borrower and (b) may elect in its discretion to terminate this Agreement, or
to promptly notify the Bridge Lender in writing that Bank elects to assume the
obligations of the Borrower to the Bridge Lender under the terms and conditions
of the Commitment and this Agreement, in which event (i) the Bridge Lender
agrees not to terminate the Commitment and to make the Bridge Loan directly to
the Bank upon completion of construction of the Improvements in accordance with
the Commitment and satisfaction of all other conditions of the Commitment and
this Agreement, and (ii) Bank shall assume Borrower's obligations under the
Management Agreement and Franchisor hereby acknowledg6s that it shall consent to
such assumption. Nothing in this Section 1 0 shall extend the term of the
Commitment as set forth therein.
10. ADDITIONAL BANK COVENANTS. Prior to expiration of the Commitment, Bank
hereby agrees (a) not to release any part of the Property required to secured
the Bridge Loan, (b) not to accept payment or prepayment of principal under the
Note (except to the extent required to reduce the unpaid balance of the Note to
au amount equal to the amount of the Bridge Loan), (c) not to assign or transfer
the Note and other Loan Documents, without the prior written consent of the
Bridge Lender. not to be unreasonably withhold or delayed, (d) not to release
the lien of the Mortgage without first obtaining written confirmation from the
Bridge Lender that it has received or waived payment of the Deferred Financing
Fee described in the Commitment, and (e) not to accelerate the maturity of the
Note unless an event of default has arisen under the Loan Documents and within
twenty (20) days after receipt of written notice of such default from the Bank,
the Bridge Lender does not either (i) cure or cause to be cured such default or
(ii) notify the Bank of Bridge Lender's willingness to purchase the Loan from
the Bank by payment of any outstanding balance of principal and interest
thereunder within ten (1O) business days after expiration of such twenty-day
period and does so purchase the Loan within such period.
11. AMENDMENTS. Except as otherwise provided herein, no amendment or
modification of the Commitment after the date of this Agreement will affect any
obligations of the parties under this Agreement, unless that amendment or
modification is approved in writing by all parties to this Agreement.
- 5 -
12. NOTICES. All notices and requests for visits and confirmations of
compliance under this Agreement must be given in writing and will be considered
to have been duly and properly served upon personal delivery to the party or an
officer of the party being served, or if mailed, upon the first to occur of (i)
actual receipt (ii) the expiration of four (4) business days after deposit in
United States registered or certified mail postage prepaid, or (iii) the
expiration of twenty-four (24) hours after deposit for overnight delivery with
Federal Express or another nationally recognized express delivery company,
addressed to the parties as follows:
BANK:
-----------------------------
-----------------------------
-----------------------------
BORROWER:
-----------------------------
-----------------------------
-----------------------------
Attn:
BRIDGE LENDER::
GMAC Commercial Mortgage Corporation
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx, XX
Senior Vice President
FRANCHISOR:
-----------------------------
-----------------------------
-----------------------------
Attn:
- 6 -
Such addresses may be changed by notice to the other parties given in the same
manner as provided above, such changes in address to be effective only upon
receipt.
14. TERMINATION. This Agreement will terminate upon:
(a) Funding of the Bridge Loan by the Bridge Lender, or
(b) Termination of this Agreement under Section 9 above.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts by the parties. Each of the counterparts will be considered an
original and all counterparts will constitute but one and the same Instrument.
16. CONSENTS. Except as expressly provided otherwise herein, whenever the
consent or approval of the Bank or the Bridge Lender is required under the
Commitment or under this Agreement, the Bank and the Bridge Lender agrees that
such consent or approval will not be unreasonably withhold, conditioned or
delayed. The foregoing provisions of this Section notwithstanding, the Bridge
Lender shall have no obligation to extend the term of the Commitment, or to
increase the Bridge Loan amount, or to delete or limit the provisions
customarily included in the Bridge Loan Documents.
17. WAIVER, No waiver of any of the terms or conditions of this Agreement,
and no waiver of any default or compliance, shall be effective unless in
writing, and no waiver furnished in writing shall be deemed to be a waiver of
any other term or provision or any future condition of this Agreement.
18. MISCELLANEOUS, This Agreement will be governed by_____________ law. The
invalidity or unenforceability of any provision of this Agreement will not
affect any other provision. The captions of the Paragraphs of this Agreement are
for convenience only and do not limit any terms or provisions.
19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, including without limitation, any person or entity obligated by
operation of law upon the reorganization, merger, consolidation or other change
in the organizational structure of any of the parties hereto. Notwithstanding
the foregoing, Banks right to assign the Loan and this Agreement are restricted
pursuant to Section 10 above, and Bank's right under Section 9 above to elect to
assume Borrower's obligations to Bridge Lender under the terms and conditions of
the Commitment and this Agreement upon a default by Borrower under any of the
Loan Documents is not assignable without the prior written consent of Bridge
Lender.
- 7 -
IN WITTNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
BORROWER:
_____________________, a __________________
By: _____________________, a _______________
_____________________, its __________________
By:_______________________________
Name:_____________________________
Its:______________________________
BRIDGE LENDER:
GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation
By:____________________________________
Xxxxxx X. Xxxxxxx, XX, Senior Vice President
FRANCHISOR:
_____________________, a __________________
_____________________
By:_______________________________
Name:_____________________________
Its:______________________________
BANK:
_____________________, a __________________
By:_______________________________
Name:_____________________________
Its:______________________________
- 8 -
