EXHIBIT 10.49
CREDIT AGREEMENT dated as of November 20,
1996, among XXXXXXX FINANCIAL, LLC, a Delaware
limited liability company (the "Borrower"), the
Lenders (as defined in Article I), THE CHASE
MANHATTAN BANK, a New York banking corporation, as
administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the
Lenders, WESTDEUTSCHE LANDESBANK GIROZENTRALE as
collateral agent for the Lenders, THE BANK OF NOVA
SCOTIA, as documentation agent for the Lenders, and
BANKERS TRUST COMPANY, as syndication agent for the
Lenders.
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS........................................... 1
SECTION 1.01. Defined Terms............................. 1
SECTION 1.02. Terms Generally........................... 21
ARTICLE II. THE CREDITS.......................................... 21
SECTION 2.01. Commitments............................... 21
SECTION 2.02. Advances; Borrowings...................... 22
SECTION 2.03. Borrowing Procedure....................... 24
SECTION 2.04. Evidence of Debt; Repayment of Loans...... 24
SECTION 2.05. Fees...................................... 25
SECTION 2.06. Interest on the Loan...................... 26
SECTION 2.07. Default Interest; Late Payment Charge..... 26
SECTION 2.08. Mandatory Repayments of Principal......... 26
SECTION 2.09. Termination and Reduction of
Commitments.............................................. 28
SECTION 2.10. Optional Prepayment....................... 28
SECTION 2.11. Reserve Requirements; Change in
Circumstances............................................ 29
SECTION 2.12. Indemnity................................. 30
SECTION 2.13. Pro Rata Treatment........................ 31
SECTION 2.14. Sharing of Setoffs........................ 31
SECTION 2.15. Payments.................................. 32
SECTION 2.16. Taxes..................................... 32
SECTION 2.17. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate.......................... 35
ARTICLE III. REPRESENTATIONS AND WARRANTIES...................... 37
SECTION 3.01. Organization; Powers...................... 37
SECTION 3.02. Authorization............................. 37
SECTION 3.03. Enforceability............................ 38
SECTION 3.04. Governmental Approvals.................... 38
SECTION 3.05. Financial Statements...................... 38
SECTION 3.06. No Material Adverse Change................ 38
SECTION 3.07. Litigation; Compliance with Laws.......... 38
SECTION 3.08. Agreements................................ 38
SECTION 3.09. Federal Reserve Regulations............... 39
SECTION 3.10. Investment Company Act; Public Utility
Holding Company Act...................................... 39
SECTION 3.11. Use of Proceeds........................... 39
SECTION 3.12. No Material Misstatements................. 39
SECTION 3.13. Employee Benefit Plans.................... 39
SECTION 3.14. Security Documents........................ 40
SECTION 3.15. Solvency.................................. 40
ARTICLE IV. CONDITIONS OF LENDING................................ 41
SECTION 4.01. All Borrowings............................ 41
SECTION 4.02. First Borrowing........................... 42
SECTION 4.03. Initial Borrowings with Respect to
Approved Franchisee Loans................................ 46
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SECTION 4.04. Plan and Cost Review Items; Independent
Construction Loan Monitor.............................53
SECTION 4.05. Appraisals...............................55
SECTION 4.06. Servicer Fees............................55
SECTION 4.07. Waiver of Defenses.......................55
SECTION 4.08. General Provisions Regarding Approved
Franchisee Loans.........................55
SECTION 4.09. General Provisions Regarding the
Servicer................................................56
ARTICLE V. DEFAULTED FRANCHISEE LOANS...........................57
SECTION 5.01. Notice by the Borrower...................57
SECTION 5.02. No Further Loans.........................57
SECTION 5.03. Mandatory Payment of Loans...............57
SECTION 5.04. Option of the Borrower...................57
ARTICLE VI. AFFIRMATIVE COVENANTS...............................60
SECTION 6.01. Existence; Business and Capitalization...60
SECTION 6.02. Insurance................................62
SECTION 6.03. Obligations and Taxes....................62
SECTION 6.04. Financial Statements, Reports, etc.......62
SECTION 6.05. Default, Litigation and Other Notices....64
SECTION 6.06. Maintaining Records; Access to
Properties and Inspections...............64
SECTION 6.07. Use of Proceeds..........................64
SECTION 6.08. Compliance with Environmental Laws.......64
SECTION 6.09. Preparation of Environmental Reports.....65
SECTION 6.10. Approved Franchisee Loans................65
SECTION 6.11. Further Assurances.......................65
ARTICLE VII. NEGATIVE COVENANTS.................................66
SECTION 7.01. Indebtedness.............................66
SECTION 7.02. Liens....................................66
SECTION 7.03. Investments..............................66
SECTION 7.04. Mergers, Consolidations, Sales of Assets
and Acquisitions.........................67
SECTION 7.05. Dividends and Distributions..............67
SECTION 7.06. Transactions with Affiliates.............67
SECTION 7.07. Issuances of Capital Stock...............67
SECTION 7.08. Creation of Subsidiaries.................68
SECTION 7.09. Employee Benefits........................68
SECTION 7.10. Amendment of Approved Franchisee Loans
and Borrower Organizational Documents....68
SECTION 7.11. Waiver of Terms, Conditions and
Covenants of Approved Franchisee Loans..................68
SECTION 7.12. Waiver of Defaults Under Approved
Franchisee Loans........................................68
SECTION 7.13. Assignment of Approved Franchisee Loans..68
SECTION 7.14. Modification of Underlying Documents and
Support Agreement........................68
SECTION 7.15. Cost Review Items........................69
SECTION 7.16. Equipment Leases.........................69
SECTION 7.17. Servicing Agreement......................69
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ARTICLE VIII. EVENTS OF DEFAULT................................. 69
ARTICLE IX. THE ADMINISTRATIVE AGENT AND THE COLLATERAL
AGENT................................................... 73
SECTION 9.01. Appointment and Authority................ 73
SECTION 9.02. Limitation on Liability.................. 73
SECTION 9.03. Discretionary Actions.................... 74
SECTION 9.04. Resignation; Successor Agents............ 74
SECTION 9.05. Rights of Agents......................... 75
SECTION 9.06. Expenses; Indemnity...................... 75
SECTION 9.07. No Reliance.............................. 76
ARTICLE X. MISCELLANEOUS........................................ 76
SECTION 10.01. Notices................................. 76
SECTION 10.02. Survival of Agreement................... 77
SECTION 10.03. Binding Effect.......................... 77
SECTION 10.04. Successors and Assigns.................. 77
SECTION 10.05. Expenses; Indemnity..................... 81
SECTION 10.06. Right of Setoff......................... 82
SECTION 10.07. Applicable Law.......................... 83
SECTION 10.08. Waivers; Amendment...................... 83
SECTION 10.09. Interest Rate Limitation................ 84
SECTION 10.10. Entire Agreement........................ 84
SECTION 10.11. WAIVER OF JURY TRIAL.................... 84
SECTION 10.12. Severability............................ 85
SECTION 10.13. Counterparts............................ 85
SECTION 10.14. Headings................................ 85
SECTION 10.15. Jurisdiction; Consent to Service of
Process................................. 85
SECTION 10.16. Confidentiality......................... 86
SECTION 10.17. Full Recourse Obligation of the
Borrower................................ 87
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CREDIT AGREEMENT dated as of November 20,
1996, among XXXXXXX FINANCIAL, LLC, a Delaware
limited liability company (the "Borrower"), the
Lenders (as defined in Article I), THE CHASE
MANHATTAN BANK, a New York banking corporation, as
administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the
Lenders, WESTDEUTSCHE LANDESBANK GIROZENTRALE as
collateral agent for the Lenders, THE BANK OF NOVA
SCOTIA, as documentation agent for the Lenders, and
BANKERS TRUST COMPANY, as syndication agent for the
Lenders.
The Borrower has requested the Lenders to extend credit in
the form of a Loan (the "Loan") to be advanced from time to time in accordance
with the provisions of this Agreement but in any event prior to the third
(3rd) anniversary of the Closing Date (such term and each other capitalized
term used but not otherwise defined herein shall have the meaning given it in
Article I), in an aggregate principal amount not in excess of $60,000,000. The
proceeds of the Loan are to be used by the Borrower solely to make funds
available for Development Costs for Xxxxxxx Inn Hotels covered by Approved
Franchisee Loans, subject to and in accordance with the terms and conditions
of this Agreement.
The Lenders are willing to extend such credit to the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"Accounts" shall mean the Collection Account, the Borrowing
Account, the Imposition Escrow Account, the FF&E Reserve Account, the Initial
Equity Escrow Account, the Net Proceeds Account, the Restoration Award
Account, and any other account set up under the Servicing Agreement.
"Administrative Agent Fees" shall have the meaning assigned
to such term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit K.
"Advances" shall mean the advances of the Loan made by the
Lenders pursuant to Sections 2.01 and 2.02.
"Affiliate" shall mean, when used with respect to a
specified person, another person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the person specified.
"Aggregate Credit Exposure" shall mean the aggregate amount
of the Lenders' Credit Exposures.
"Applicable Interest Rate" shall mean a rate equal to (a)
the Base Rate in effect from time to time plus 1/2 of 1%, or (b) the maximum
rate permitted by law, whichever is less.
"Appraisal" shall mean an appraisal of a Xxxxxxx Inn Hotel,
prepared in conformity with FIRREA requirements by an independent property
appraisal firm that is a member of the Appraisal Institute (each, an
"Appraiser").
"Appraised Value" shall mean, as to any Xxxxxxx Inn Hotel
covered or to be covered by an Approved Franchisee Loan, the value established
in an Appraisal.
"Approved Construction Budget" shall mean, with respect to a
Xxxxxxx Inn Hotel covered by an Approved Franchisee Loan, a Construction
Budget as approved by the Independent Construction Loan Monitor and the
Administrative Agent.
"Approved Construction Schedule" shall mean, with respect to
a Xxxxxxx Inn Hotel covered by an Approved Franchisee Loan, a Construction
Schedule as approved by the Independent Construction Loan Monitor and the
Administrative Agent.
"Approved Franchisee Loan" shall mean a Franchisee Loan, the
terms and conditions of which are set forth in Exhibit N, that has been
approved in writing by the Administrative Agent, on or before the first
anniversary of the Closing Date, and is evidenced and secured by the
documentation required by this Agreement.
"Approved Plans" shall mean, with respect to a Xxxxxxx Inn
Hotel covered by an Approved Franchisee Loan, the Plans as approved by the
Independent Construction Loan Monitor and the Administrative Agent.
"Architect" shall mean, with respect to the construction of
any Xxxxxxx Inn Hotel which is to be financed by an Approved Franchisee Loan,
a reputable architect licensed in the state in which the applicable Property
is located, engaged by the applicable Franchisee Loan Borrower, subject to the
provisions of this Agreement, for the overall design of such Xxxxxxx Inn Hotel
and supervision of such construction.
"Arranger" shall mean Chase Securities Inc.
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"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit L or such other form as shall be
approved by the Administrative Agent.
"Assignment of Rents" shall have the meaning assigned to
such term in Section 4.03(e).
"Bank" shall mean The Chase Manhattan Bank.
"Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Base Rate shall be determined without
regard to clause (b) of the preceding sentence, until the circumstances giving
rise to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively. The term "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal office in
New York City; each change in the Prime Rate shall be effective on the date
such change is publicly announced as being effective. The term "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average of the quotations
for the day for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" shall mean Advances of the Loan made by the
Lenders on a single date.
"Borrowing Account" shall mean the Borrowing Account,
as such term is defined in the Servicing Agreement. The
Borrowing Account shall be maintained at The Chase Manhattan
Bank.
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"Borrowing Request" shall mean a request by the Borrower in
accordance with the terms of Section 2.03, in the form of Exhibit M, which
shall have annexed to it, among other supporting documentation, Requests for
Advance (together with all supporting documentation) from the Franchisee Loan
Borrowers whose Approved Franchisee Loans are to be funded by the applicable
Borrowing.
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which banks in New York City are authorized or required by
law to close.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof as
determined in accordance with GAAP.
A "Change in Ownership" shall be deemed to have occurred if
there is any transfer of any equity interest in the Borrower or any equity
interest in the Borrower is issued, in each case other than as specifically
permitted in Section 7.07.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.
"Collateral Account Agreement" shall have the meaning
assigned to such term in Section 4.02(s).
"Collateral Assignment" shall have the meaning assigned to
such term in Section 4.03(ff).
"Collateral Assignment Documents" shall mean, collectively,
the documents referred to in Sections 4.03(ff) through (mm) (as to each of the
Approved Franchisee Loans) and any other documents assigning or transferring
rights of the Borrower in and to Approved Franchisee Loans and the Franchisee
Loan Documents.
"Collateral Assignment of Servicing Agreement" shall have
the meaning assigned to such term in Section 4.02(q).
"Collection Account" shall mean the Collection Account, as
such term is defined in the Servicing Agreement.
"Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Advances hereunder in the
4
maximum amount set forth in Exhibit A, or in the Assignment and Acceptance
pursuant to which such Lender assumed its Commitment, as applicable, as the
same may be reduced from time to time pursuant to assignments by or to such
Lender pursuant to Section 10.04.
"Completion" shall mean, with respect to a Xxxxxxx Inn
Hotel, the occurrence of all of the following events:
(a) the completion of the applicable Xxxxxxx Inn Hotel in
substantial accordance with the Approved Plans and the Approved Construction
Budget, and in accordance with all Legal Requirements and the provisions of
the Franchisee Loan Building Loan Agreement, and the acceptance thereof by the
Franchisee Loan Borrower;
(b) the obtaining of a certificate of completion and
certificate of occupancy (or local equivalent) from the Governmental
Authorities having jurisdiction over such Xxxxxxx Inn Hotel;
(c) the delivery to the Administrative Agent of certificates
from the Architect and the Independent Construction Loan Monitor to the effect
that all of the work required to be performed to complete the Xxxxxxx Inn
Hotel has been performed in substantial accordance with the Approved Plans and
all Legal Requirements and to the reasonable satisfaction of the Architect and
the Independent Construction Loan Monitor, subject only to a "punch list" of
minor items to be completed by contractors and vendors that do not materially
interfere with the operation of the Xxxxxxx Inn Hotel;
(d) the receipt of all other approvals of Governmental
Authorities having jurisdiction over such Xxxxxxx Inn Hotel to the extent that
any such approval is a condition for the lawful use and occupancy thereof, or
necessary or desirable for the operation thereof in accordance with the
Franchise Agreement;
(e) a final survey inspection and survey update, with a
certification of the surveyor indicating that no encroachments exist by the
Xxxxxxx Inn Hotel or on the Property and that all set-back requirements have
been complied with, and indicating the location of access to the Property and
utility, water and other easements affecting the Property;
(f) the payment in full of all costs relating to the
development and construction of the Xxxxxxx Inn Hotel then incurred and
invoiced or contracted, less an agreed retention for the minor "punch list"
items referred to in clause (c) above, and the delivery to the Borrower's
title insurance company of such instruments as may be required to cause all
liens of record and claims of mechanics and materialmen to be waived, bonded
or insured by such title insurance company; and
5
(g) the satisfaction of the conditions set forth in
Section 3.3 of the Franchise Agreement.
"Completion Date" shall mean the date on which Completion of
a Xxxxxxx Inn Hotel occurs.
"Completion Guarantors" shall have the meaning assigned to
such term in Section 4.03(w).
"Completion Guaranty" shall have the meaning assigned to
such term in Section 4.03(w).
"Confirmation of Guaranty Agreement" shall mean an agreement
of the Guarantors in the form of Exhibit R.
"Construction Budget" shall have the meaning assigned to
such term in Section 4.04(d).
"Construction Period Interest" shall mean, with respect to a
Xxxxxxx Inn Hotel covered by an Approved Franchisee Loan, interest payable on
the Approved Franchisee Loan for the period prior to the Completion Date, as
itemized in the Approved Construction Budget.
"Construction Schedule" shall have the meaning assigned to
such term in Section 4.04(e).
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Advances of such Lender.
"Default" shall mean any event or condition which upon
notice, lapse of time or both would constitute an Event of Default.
"Default Rate" shall have the meaning assigned to such term
in Section 2.07(a).
"Defaulted Franchisee Loan" shall mean an Approved
Franchisee Loan under which a default has occurred (whether or not notice
thereof has been given to the Franchisee Loan Borrower) and has continued for
a period in excess of ninety (90) days.
"Development Costs" shall mean all costs incurred or to be
incurred in connection with the development and construction of a Xxxxxxx Inn
Hotel, as set forth in an Approved Construction
6
Budget. Development Costs shall include, Hard Costs, Soft Costs, Construction
Period Interest, and Monthly Operating Deficits. Development Costs for any
Xxxxxxx Inn Hotel may not exceed $7,500,000. Xxxxxxx Inn Hotels having
Development Costs in excess of $7,500,000 will be considered by the
Administrative Agent for eligibility for an Approved Franchisee Loan on an
exemption/case-by-case basis and must be so approved by the Administrative
Agent and Required Lenders in their sole discretion.
"Disbursement Account" shall have the meaning assigned to
such term in Section 2.02(b).
"dollars" or "$" shall mean lawful money of the United
States of America.
"environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation,
allegation, notice of violation, claim, demand, order, directive, cost
recovery action or other cause of action by, or on behalf of, any Governmental
Authority or any person for damages, injunctive or equitable relief, personal
injury (including sickness, disease or death), Remedial Action costs, tangible
or intangible property damage, natural resource damages, nuisance, pollution,
any adverse effect on the environment caused by any Hazardous Material, or for
fines, penalties or restrictions, resulting from or based upon: (a) the
existence, or the continuation of the existence, of a Release (including
sudden or nonsudden, accidental or non-accidental Releases); (b) exposure to
any Hazardous Material; (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material; or (d) the violation
or alleged violation of any Environmental Law or Environmental Permit.
"Environmental Indemnity" shall have the meaning assigned to
such term in Section 4.03(x).
"Environmental Law" shall mean any and all applicable
present and future treaties, laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to
health and safety matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. xx.xx. 9601 et seq., the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act
of 1976 and
7
Hazardous and Solid Amendments of 1984, 42 U.S.C. xx.xx. 6901 et seq., the
Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. xx.xx. 1251 et seq., the Clean Air Act of 1970, as amended 42
U.S.C. xx.xx. 7401 et seq., the Toxic Substances Control Act of 1976, 15
U.S.C. xx.xx. 2601 et seq., the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. xx.xx. 651 et seq., the Emergency Planning and Community
Right-to- Know Act of 1986, 42 U.S.C. xx.xx. 11001 et seq., the Safe Drinking
Water Act of 1974, as amended, 42 U.S.C. xx.xx. 300(f) et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. xx.xx. 5101 et seq., and any similar
or implementing state or local law, and all amendments or regulations
promulgated thereunder.
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required
by or from any Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan; (b) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code
or Section 307 of ERISA; (c) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (e) the
incurrence of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the
Borrower, any Loan Party, or any ERISA Affiliate of any of them, from any Plan
or Multiemployer Plan; (f) the receipt by the Borrower, any Loan Party, or any
ERISA Affiliate of any of them, from the PBGC or a plan administrator of any
notice relating to the intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (g) the receipt by the Borrower, any Loan
Party, or any ERISA Affiliate of any of them, of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; (h) the occurrence of a "prohibited transaction"
with
8
respect to which the Borrower, any Loan Party, or any ERISA Affiliate of any
of them is a "disqualified person" (within the meaning of Section 4975 of the
Code) or with respect to which the Borrower, any Loan Party, or any ERISA
Affiliate of any of them could otherwise be liable; and (i) any other event or
condition with respect to a Plan or Multiemployer Plan that could reasonably
be expected to result in material liability of the Borrower, any Loan Party,
or any ERISA Affiliate of any of them.
"Event of Default" shall have the meaning assigned to such
term in Article VIII.
"Fees" shall mean the Upfront Fee and the
Administrative Agent Fees.
"FF&E" shall mean the furniture, furnishings, fixtures and
equipment relating to a Xxxxxxx Inn Hotel.
"FF&E Reserve Account" shall mean the FF&E Reserve Account,
as such term is defined in the Servicing Agreement.
"Financial Officer" shall mean with respect to any
corporation or other entity, the chief financial officer, principal accounting
officer, treasurer or controller of such corporation or other entity.
"Formation" shall mean the formation of the Borrower.
"Franchise Agreement" shall mean an agreement between
Xxxxxxx and a Franchisee Loan Borrower, substantially in the form of Exhibit G
(subject to such changes as the Administrative Agent may, from time to time,
approve), pursuant to which the Franchisee Loan Borrower will construct and
operate a Xxxxxxx Inn Hotel.
"Franchisee Loan" shall mean a proposed construction/term
loan on the terms and conditions set forth in Exhibit N, made by the Borrower
to a Franchisee Loan Borrower.
"Franchisee Loan Borrower" shall mean a Single Purpose
Entity which shall be a franchisee of Xxxxxxx under a Franchise Agreement,
which has been approved by Required Lenders, and which is entering into an
Approved Franchisee Loan with the Borrower.
"Franchisee Loan Building Loan Agreements" shall mean
Building Loan Agreements with respect to each Approved Franchisee Loan, each
to be substantially in the form of Exhibit BB, with such modifications thereto
as may be necessary to reflect local law, and such other changes as may be
approved by the Administrative Agent to reflect the specific transaction.
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"Franchisee Loan Default Date" shall mean the date on which
an Approved Franchisee Loan first becomes a Defaulted Franchisee Loan.
"Franchisee Loan Documents" shall mean all documents
evidencing, securing and/or guaranteeing an Approved Franchisee Loan, or
otherwise delivered in connection therewith, including, without limitation,
the Franchisee Loan Building Loan Agreement, the Franchisee Loan Note, the
Mortgage, the Assignment of Rents, assignments of equipment leases, service
contracts, and other documents and property rights, the Security Agreement,
the Completion Guaranty, and the Environmental Indemnity.
"Franchisee Loan Note" shall have the meaning assigned to
such term in Section 4.03(c).
"GAAP" shall mean generally accepted accounting principles
applied on a consistent basis.
"General Contractor" shall mean, with respect to the
construction of any Xxxxxxx Inn Hotel which is to be financed by an Approved
Franchisee Loan, the general contractor or construction manager engaged by the
applicable Franchisee Loan Borrower, subject to the provisions of this
Agreement, for such construction.
"GFS" shall mean General Franchise Systems, Inc., the
general partner of Xxxxxxx.
"Governmental Authority" shall mean any Federal, state,
local or foreign court, governmental or quasi-governmental agency, authority,
instrumentality or regulatory body.
"Gross Revenues" shall have the meaning assigned to such
term in Exhibit O.
"Guarantee" shall mean with respect to any person, any
obligation, contingent or otherwise, of or by such person guaranteeing or
having the economic effect of guaranteeing any Indebtedness of any other
person (the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of the guaranteeing person, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Indebtedness, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness of the payment of such Indebtedness or (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided, however, that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business.
10
"Guarantee Agreement" shall mean the Guarantee Agreement,
substantially in the form of Exhibit C, made by the Guarantor in favor of the
Collateral Agent for the benefit of the Secured Parties.
"Guaranteed Amount" shall mean the Applicable Principal
Liability (as such term is defined in the Guarantee Agreement) from time to
time in effect.
"Guarantor" shall mean HFS and each other person that
becomes party to a Guarantee Agreement as a Guarantor, and the permitted
successors and assigns of each such person.
"Hard Costs" shall mean the costs and expenses in respect of
supplying goods, services, materials and labor for the construction of a
Xxxxxxx Inn Hotel, all as itemized in the applicable Approved Construction
Budget.
"Hazardous Materials" shall mean all explosive or
radioactive substances or wastes, hazardous or toxic substances or wastes,
pollutants, solid, liquid or gaseous wastes, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") or PCB- containing materials or equipment, radon gas,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
"HFS" shall mean HFS Incorporated.
"HFS Credit Agreement" shall mean, collectively, those two
bank credit agreements dated as of October 2, 1996 between HFS and The Chase
Manhattan Bank, as agent, as the same may, from time to time, have been, and
may, from time to time, hereafter be, modified, supplemented, renewed,
replaced or refinanced.
"Impositions" shall have the meaning assigned to such
term in Exhibit O.
"Imposition Escrow Account" shall mean the Imposition
Escrow Account, as defined in the Servicing Agreement.
"Indebtedness" of any person shall mean, without
duplication, (a) all obligations of such person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person upon which interest charges are customarily paid,
except contracts that require interest on late payments only, (d) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the
11
ordinary course of business) (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations of such person and (i) all obligations of such person as an
account party in respect of letters of credit and bankers' acceptances. The
Indebtedness of any person shall include the Indebtedness of any partnership
in which such person is a general partner.
"Indemnity, Subrogation and Subordination Agreement" shall
mean the Indemnity, Subrogation and Subordination Agreement, substantially in
the form of Exhibit D, among the Borrower, Xxxxxxx, the Guarantor and the
Collateral Agent.
"Independent Construction Loan Monitor" shall have the
meaning assigned to such term in Section 4.04.
"Independent Construction Loan Monitor's Certification"
shall mean, with respect to a Xxxxxxx Inn Hotel covered by an Approved
Franchisee Loan, a certification by the applicable Independent Construction
Loan Monitor, in form acceptable to the Administrative Agent, containing the
information set forth in Paragraph 16(b) and, if applicable, Paragraph 19 of
the applicable Franchisee Loan Building Loan Agreement.
"Initial Approved Franchisee Loan Borrowing" shall have the
meaning assigned to such term in Section 4.03.
"Initial Equity Investment Account" shall mean the Initial
Equity Investment Account, as such term is defined in the Servicing Agreement.
"Investments" shall mean, with respect to any period, as to
any person, (a) amounts paid or agreed to be paid by such person by way of
investment and/or purchase of stock, securities, liabilities, properties or
assets of, or contributed to, any other person during such period and (b)
capital and development expenditures made during such period by such person in
its own assets and businesses.
"Legal Requirements" shall mean (i) statutes, laws, rules,
rulings, orders, regulations, ordinances, judgments, decrees and injunctions
of any Governmental Authority (including, without limitation, Environmental
Laws, fire, health, handicapped access, sanitation, ecological, historic,
zoning, environmental protection, wetlands and building laws) in any way
applicable to a specific Franchisee Loan Borrower, specific Property, or
specific Xxxxxxx Inn Hotel, or to the ownership, use, occupancy, possession,
operation or maintenance of a Property or Xxxxxxx Inn Hotel; (ii) all
requirements of the local Board of Fire Under-
12
writers or other similar body acting in and for the locality in which a
Property or Xxxxxxx Inn Hotel is situated and all requirements of each
insurance policy covering or applicable to all or any part of a Property or
Xxxxxxx Inn Hotel or the use thereof and all requirements of the issuer of
each such policy, including any which may require repairs, modifications or
alterations (structural or otherwise) in or to such Property or Xxxxxxx Inn
Hotel or any part thereof; (iii) all requirements of each permit, license,
authorization and regulation relating to a Property or Xxxxxxx Inn Hotel, or
any portion thereof or to the ownership, use, occupancy, possession, operation
or maintenance thereof; and (iv) all covenants, agreements, regulations,
restrictions and other encumbrances contained in any instrument either of
record or known to a Franchisee Loan Borrower at any time in force affecting a
Franchisee Loan Borrower, Property, or Xxxxxxx Inn Hotel or any part thereof,
or the ownership, use, occupancy, possession, operation or maintenance
thereof, in each case, whether now or hereafter enacted or in force.
"Lenders" shall mean (a) the financial institutions listed
in Exhibit A (other than any such financial institution that has ceased to be
a party hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security
interest in or on such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Application" shall have the meaning assigned to such
term in Section 4.03(a).
"Loan Documents" shall mean this Agreement, the Note, the
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement,
the Security Documents, the Collateral Assignment Documents, Support
Agreements, and all other documents executed and delivered by the Borrower in
favor of the Administrative Agent, the Collateral Agent, and/or the Lenders in
connection with the Loan.
"Loan Parties" shall mean the Borrower, each member of the
Borrower, the Guarantor, Xxxxxxx and GFS.
"Major Subcontractors" shall mean the contractor or
subcontractors engaged by a Franchisee Loan Borrower under Major Subcontracts.
13
"Major Subcontracts" shall mean, with respect to the
construction of any Xxxxxxx Inn Hotel which is to be financed in part by an
Approved Franchisee Loan, any subcontract for electrical work, HVAC, plumbing,
concrete, masonry, dry wall/carpentry or any other subcontract having a
contract price, either initially or thereafter by virtue of change orders or
other amendments or modifications, equal to or in excess of $200,000,
including multiple contracts or subcontracts with a single contractor or
subcontractor.
"Managing Member" shall mean GFS, the managing member
of the Borrower.
"Margin Stock" shall have the meaning assigned to such term
in Regulation U.
"Material Adverse Effect" shall mean a materially adverse
effect on (a) the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower, (b) the ability of the Borrower or
any other Loan Party to perform any of its obligations under any Loan Document
to which it is a party or (c) the rights of or benefits available to the
Lenders under any Loan Document.
"Maturity Date" shall mean the sixth (6th) anniversary of
the Closing Date, or such earlier date to which the maturity of the Loans may
be accelerated upon an Event of Default or otherwise in accordance with the
provisions of the Loan Documents.
"Maximum Franchisee Loan Amount" shall mean, for any
Approved Franchisee Loan, an amount equal to the lesser of (a) $5,625,000, or
(b) 75% of the lesser of (i) the Development Costs of the Xxxxxxx Inn Hotel
covered by such Approved Franchisee Loan, as set forth in the Approved
Construction Budget, or (ii) the Appraised Value of such Xxxxxxx Inn Hotel,
provided that if the Appraised Value is less than the Development Costs, the
Xxxxxxx Inn Hotel will be ineligible for funding as an Approved Franchisee
Loan unless otherwise approved by the Administrative Agent.
"Minimum Up-Front Equity" shall have the meaning assigned to
such term in Section 4.03(ss).
"Monthly Operating Deficit" shall mean, with respect to a
Xxxxxxx Inn Hotel, the monthly Operating Deficits from the Completion Date to
the Stabilization Date, as itemized in the Approved Construction Budget.
"Mortgage" shall have the meaning assigned to such term
in Section 4.03(d).
14
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds Account" shall mean the Net Proceeds Account,
as such term in defined in the Servicing Agreement.
"Note" shall have the meaning assigned to such term in
Section 2.01(c).
"Obligations" shall mean all obligations defined as
"Obligations" in the Guarantee Agreement and the Security Documents.
"Operating and Management Expenses" shall have the meaning
assigned to such term in Exhibit O.
"Operating Deficits" shall mean, for any given period with
respect to a Xxxxxxx Inn Hotel, the amount by which the sum of (without
duplication) (a) Operating and Management Expenses for the Xxxxxxx Inn Hotel,
(b) deposits or reserves for Impositions required under the applicable
Franchisee Loan Documents, (c) debt service payable under the applicable
Franchisee Loan Note, and (d) Required FF&E Deposits, exceeds Gross Revenues
for the Xxxxxxx Inn Hotel.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Permitted Investments" shall mean the investments
described in Exhibit S.
"person" shall mean any natural person, corporation,
business trust, limited liability company, joint venture, association,
company, partnership or government, or any agency or political subdivision
thereof.
"Phase I Environmental Site Assessment" shall have the
meaning assigned to such term in Section 4.03(y).
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 307 of ERISA, and in respect of which the
Borrower, any Loan Party, or any ERISA Affiliate or any of them is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be)
an "employer" as defined in Section 3(5) of ERISA.
"Plan and Cost Review Items" shall have the meaning assigned
to such term in Section 4.04.
"Plans" shall have the meaning assigned to such term in
Section 4.04(f).
15
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit E, between Xxxxxxx and GFS and the
Collateral Agent, for the benefit of the Secured Parties.
"Property" shall have the meaning assigned to such term
in Section 4.03(d).
"Register" shall have the meaning given such term in
Section 10.04(d).
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping into the environment.
"Request for Advance" shall have the meaning set forth in
the applicable Franchisee Loan Building Loan Agreement.
"Required FF&E Deposit" shall mean, with respect to a
Xxxxxxx Inn Hotel, a monthly deposit into the FF&E Reserve Account equal to
the product of (a) Gross Revenues for the preceding calendar month, and (b)
(i) 3% for the period commencing on the Completion Date of the Xxxxxxx Inn
Hotel and ending on the last day of the calendar month in which the second
(2nd) anniversary of the Completion Date occurs, (ii) 4% for the two (2) year
period next following the period described in clause (i), and (iii) 5%
thereafter.
"Required Lenders" shall mean, at any time, Lenders having
made Advances and having unused Commitments representing at least 51% of the
sum of the Loan outstanding and unused Commitments at such time.
"Reserve Accounts" shall mean, as to each Approved
Franchisee Loan, the FF&E Reserve Account and the Imposition
Escrow Account.
"Responsible Officer" shall mean with respect to any
corporation or other entity, any officer authorized to act as to a given
matter under a duly adopted resolution.
16
"Restoration Award Account" shall mean the Restoration Award
Account, as such term in defined in the Servicing Agreement.
"S&P" shall mean Standard & Poor's Ratings Group.
"Scheduled Completion Date" shall mean, with respect to a
Xxxxxxx Inn Hotel funded by an Approved Franchisee Loan, the date of
completion set forth in the Approved Construction Schedule.
"Secured Parties" shall mean (a) the Lenders, (b) the
Administrative Agent, (c) the Collateral Agent and (d) the successors and
assigns of the foregoing.
"Security Agreement" shall have the meaning assigned to such
term in Section 4.03(h).
"Security Documents" shall mean the Pledge Agreement and the
Collateral Assignment Documents, and each of the other security agreements and
other instruments and documents executed and delivered pursuant to any of the
foregoing.
"Servicer" shall mean AMRESCO Management, Inc., or such
successor servicer as may, from time to time, be approved by Required Lenders,
in their sole discretion.
"Servicer Consent" shall have the meaning assigned to such
term in Section 4.02(r).
"Servicing Agreement" shall the Interim Servicing Agreement,
substantially in the form of Exhibit W, entered into between the Borrower and
the Servicer, and any agreement for the monitoring and administration of
Approved Franchisee Loans entered into by the Borrower and a successor
servicer and approved by Required Lenders in their sole discretion (which
approval shall be subject, in any event, to the execution and delivery by such
successor servicer of a Servicer Consent dealing with the matters set forth in
the Servicer Consent annexed hereto as Exhibit Y, and in form and substance
satisfactory to Required Lenders, in their sole discretion).
"Single Purpose Entity" shall mean a person, other than an
individual, which is formed or organized under the laws of the United States
of America, or any state or political subdivision thereof, and (a) if the
Borrower, solely for the purpose of making Approved Franchisee Loans (and
entering into Franchisee Loan Building Loan Agreements and applicable
Franchisee Loan Documents) and consummating the transactions described
therein, or (b) if a Franchisee Loan Borrower, solely for the purpose of
owning the applicable Property and constructing and operating the applicable
Xxxxxxx Inn Hotel, and entering into a Approved Franchisee Loan and the
applicable Franchisee Loan Documents, and
17
in either case does not engage in any other business, does not have any other
assets other than (A) in the case of the Borrower, the Approved Franchisee
Loans and (B) in the case of a Franchisee Loan Borrower, the applicable
Property and Xxxxxxx Inn Hotel, and in either case, has its own separate books
and records and its own accounts, in each case which are separate and apart
from the books and records and accounts of any other person, and holds itself
out as being a person, separate and apart from any other person. If a Single
Purpose Entity is a limited partnership, (i) its partnership agreement must
provide that the partnership will dissolve upon the withdrawal or dissolution
of the last remaining general partner, unless the partners by majority vote
elect, within ninety (90) days, to continue the partnership and appoint a new
general partner, (ii) one general partner must own at least a one percent (1%)
interest in the partnership and must be a Single Purpose Entity (having, as
its sole business purpose, the ownership of the partnership interest), and
(iii) the partnership agreement must provide that the dissolution and winding
up or insolvency filing of such partnership requires the unanimous consent of
all partners. A Franchisee Loan Borrower may not own more than one Property or
Xxxxxxx Inn Hotel.
"Soft Costs" shall mean all costs relating to the
development and construction of a Xxxxxxx Inn Hotel, all as itemized in the
Approved Construction Budget, excluding Hard Costs, Construction Period
Interest, and Monthly Operating Deficits.
"Specified Franchisee Loan Defaults" shall mean, with
respect to an Approved Franchisee Loan, any of the defaults specified in
Exhibit O.
"Stabilization Date" shall mean, with respect to each
Xxxxxxx Inn Hotel financed with an Approved Franchisee Loan, the date defined
as such in the applicable Franchisee Loan Building Loan Agreement, as approved
by the Administrative Agent.
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, association or
other business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or more than 50% of the general partnership interests are, at the
time any determination is being made, owned, Controlled or held, directly or
indirectly or (b) that is, at the time any determination is made, otherwise
directly or indirectly Controlled, by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the parent.
"Support Agreements" shall mean the agreements set
forth in Exhibit F, and all modifications, amendments,
18
supplements or replacements thereto, and any other arrangements or agreements
between HFS and Xxxxxxx or HFS and franchisees of Xxxxxxx Inn Hotels.
"Total Commitment" shall mean, at any time, the aggregate
amount of the Commitments as in effect at such time.
"Transactions" shall have the meaning assigned to such
term in Section 3.02.
"Underlying Documents" shall have the meaning assigned to
such term in Section 7.14.
"Upfront Fee" shall have the meaning assigned to such term
in Section 2.05(a).
"Welfare Plan" shall mean an employee welfare benefit plan
as defined in Section 3(l) of ERISA.
"Xxxxxxx" shall mean Hotel Franchising Limited
Partnership, d/b/a Xxxxxxx Inns, L.P.
"Xxxxxxx Inn Chain" shall mean the chain of mid-market,
limited service hotels being developed by Xxxxxxx under the name "Xxxxxxx
Inn".
"Xxxxxxx Inn Hotel" shall mean a mid-market, limited service
hotel constructed and operated as a "Xxxxxxx Inn" as part of the Xxxxxxx Inn
Chain pursuant to a Franchise Agreement.
"Xxxxxxx Partnership Agreement" shall mean the Second
Amended and Restated Agreement of Limited Partnership of Xxxxxxx dated as of
November 20, 1996, a copy of which is annexed hereto as Exhibit J, as the same
may, from time to time, be modified,
amended, supplemented or replaced.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title
IV of ERISA.
"Workout Process" shall mean, with respect to a Defaulted
Franchisee Loan, the workout or restructuring of such Defaulted Franchisee
Loan, and/or the pursuit of remedies with respect thereto.
SECTION 1.02. Terms Generally. The definitions in Section
1.01 shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". All references herein to Articles, Sections,
19
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document shall mean such document as
amended, restated, supplemented or otherwise modified from time to time and
(b) all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that
for purposes of determining compliance with the covenants contained in Article
VII, all accounting terms herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as in effect on
the date of this Agreement and applied on a basis consistent with the
application used in the financial statements referred to in Section 3.05.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, to make Advances of the
Loan to the Borrower, at any time and from time to time on or after the date
hereof, and until the earlier of (A) the third (3rd) anniversary of the
Closing Date and (B) the termination of the Commitment of such Lender in
accordance with the terms hereof, in an aggregate principal amount that will
not result in such Lender's Credit Exposure exceeding such Lender's Commitment
(taking into account all Advances theretofore made by such Lender). Portions
of the Loan that have been repaid or prepaid may not be reborrowed.
(b) The proceeds of each Advance shall be used by the
Borrower (after the Franchisee Loan Borrower has applied the Minimum Up-Front
Equity to Development Costs and evidence of the same wholly satisfactory to
the Administrative Agent has been delivered to the Administrative Agent)
solely to fund Development Costs for Xxxxxxx Inn Hotels covered by Approved
Franchisee Loans (it being understood that the proceeds of a single Borrowing
may be used to fund one or more Approved Franchisee Loans), subject to and in
accordance with the provisions of this Agreement and each Franchisee Loan
Building Loan Agreement.
(c) The Loan shall (i) be evidenced by a promissory note
(the "Note") in the original principal amount of $60,000,000 (or so much
thereof as may be advanced or outstanding at any given time), in the form
annexed hereto as Exhibit B, (ii) secured by, among other things, (A)
collateral assignments of and an exclusive first priority security interest in
and to the Approved Franchisee Loans, including, without limitation, the
collateral securing the Approved Franchisee Loans and all other Franchisee
Loan Documents, title and other applicable insurance, the Franchise Agreement,
management and other operating
20
agreements and leases, rents and hotel receipts relating to the applicable
Xxxxxxx Inn Hotel, and guarantees of the Approved Franchisee Loans, (B) a
collateral assignment of the Servicing Agreement, (C) a pledge by Xxxxxxx and
the Managing Member of and an exclusive first priority interest in all of the
outstanding capital stock of or equity interests in the Borrower and the
Managing Member, and (D) the Collateral Account Agreement, and (iii)
guaranteed by the Guarantee Agreement.
SECTION 2.02. Advances; Borrowings. (a) Each Advance shall
be made as part of a Borrowing and shall represent each Lender's pro rata
share, in accordance with its Commitment, of such Borrowing; provided,
however, that the failure of any Lender to make any Advance shall not in
itself relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of
any other Lender to make any Advance required to be made by such other
Lender). The Advances comprising any Borrowing shall be (i) in an aggregate
principal amount that is not less than $250,000, unless otherwise approved by
the Administrative Agent, or (ii) equal to the remaining available balance of
the applicable Commitments, if the condition of clause (i) cannot be
satisfied.
(b) On not less than eighteen (18) hours' prior request
given by the Administrative Agent from time to time, which request may be
given in writing (including by facsimile transmission) or by telephone, each
Lender shall advance its pro rata share of a Borrowing on the proposed date
requested by the Administrative Agent, by wire transfer of immediately
available funds to such account in New York City as the Administrative Agent
may designate not later than 11:00 a.m., New York City time, and the
Administrative Agent shall by 12:00 (noon), New York City time, credit the
amounts so received to an account at the Bank in the name of the
Administrative Agent (the "Disbursement Account") or, if a Borrowing shall not
occur on such date (in whole or in part) because any condition precedent
herein specified shall not have been met, return the amounts so received (to
the extent not disbursed) to the respective Lenders, together with interest
thereon at the Federal Funds Effective Rate if not returned on such date.
(c) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender will make such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (b) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such
21
portion available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount, together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Administrative Agent at (i) in the case of the Borrower, the
Applicable Interest Rate in effect from time to time, and (ii) in the case of
such Lender, a rate determined by the Administrative Agent to represent its
cost of overnight or short-term funds (which determination shall be conclusive
absent manifest error). If such Lender shall repay to the Administrative Agent
such corresponding amount, such amount shall constitute such Lender's pro-rata
share of such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provisions of this Agreement
(i) the Borrower shall not be entitled to request, and the Lenders shall not
be required to fund, more than four (4) Borrowings in any given calendar
month, one of which will be used solely to fund Construction Period Interest
under the applicable Approved Franchisee Loan Building Loan Agreements, and
the remaining three of which will be used solely to fund Development Costs
other than Construction Period Interest under the applicable Approved
Franchisee Loan Building Loan Agreements (and if no Borrowing is made in a
calendar month in respect of Construction Period Interest, the number of
Borrowings in such calendar month shall be limited to three (3)), (ii) no
Borrowings will be advanced at any time after the third (3rd) anniversary of
the Closing Date, and (iii) no Borrowing will be made in respect of any
Franchisee Loan (A) which has not been approved by the Administrative Agent,
as an Approved Franchise Loan, on or before the first anniversary of the
Closing Date, and (B) under which the Initial Approved Franchisee Loan
Borrowing has not been funded on or before the first anniversary of the
Closing Date.
(e) The Borrower shall, as part of its Borrowing Request,
direct the Administrative Agent or the Servicer to disburse the proceeds of
each Borrowing directly from the Disbursement Account to the Borrowing
Account, it being understood that the same, when so disbursed, shall
constitute advances by the Borrower under the applicable Approved Franchisee
Loans.
SECTION 2.03. Borrowing Procedure. In order to request a
Borrowing, the Borrower shall deliver by hand, overnight courier, or telecopy
to the Administrative Agent a duly completed Borrowing Request not later than
12:00 noon, New York City time, at least four (4) Business Days before a
proposed Borrowing. Each Borrowing Request shall be irrevocable, shall be
signed by a Responsible Officer of the Borrower, shall specify the following
information: (i) the amount of such Borrowing; (ii) the Approved Franchisee
Loan or Loans to be funded with the proceeds of the Borrowing; (iii) the name
of the Franchisee Loan Borrower or Borrowers; (iv) the name and location of
the Xxxxxxx
22
Inn Hotel or Hotels covered by such Approved Franchisee Loans; (v) a schedule
setting forth the total amount of each such Approved Franchisee Loan and the
amounts previously funded; and (vi) the additional information required by the
form of Borrowing Request annexed hereto as Exhibit M, and shall be
accompanied by (A) the applicable Requests for Advance under the applicable
Approved Franchisee Loans; (B) the authorization and direction referred to in
Section 2.02(e); (C) the information specified in Article IV; and (D) an
Independent Construction Loan Monitor's Certification with respect to each
Approved Franchisee Loan to be funded with the proceeds of the Borrowing;
provided, however, that, notwithstanding any contrary specification in any
Borrowing Request, the amount of each requested Borrowing shall comply with
the requirements set forth in Section 2.02.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Borrowing on the Maturity Date, together with all accrued and unpaid interest
thereon and all other amounts due and owing under any of the Loan Documents.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Advance made by such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Advance made hereunder, (ii) the
amount of any principal or interest due and payable or to become due and
payable from the Borrower with regard to the Advances made by each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
Sections 2.04(b) and (c) shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligations of the
Borrower to repay the Loan in accordance with its terms.
(e) Notwithstanding any other provision of this Agreement,
in the event any Lender shall request and receive a promissory note payable to
such Lender and its registered assigns, the interests represented by such note
shall at all times (including after any assignment of all or part of such
interests pursuant to Section 10.4) be represented by one or more
23
promissory notes payable to the payee named therein or its
registered assigns.
SECTION 2.05. Fees.
(a) The Borrower agrees to pay to the Administrative
Agent, for the ratable benefit of the Lenders, an upfront fee on
the Closing Date in the amount of $600,000 (the "Upfront Fee")
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, an administrative fee, payable in equal monthly
installments in advance commencing with the Closing Date, in the amount of
$120,000.00 for each of the first two years of this Agreement, and $60,000.00
for each subsequent year of this Agreement (collectively, the "Administrative
Agent Fees").
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.06. Interest on the Loan. (a) Subject to the
provisions of Section 2.07, each Borrowing shall bear interest (computed on
the basis of a 360 day year for the actual number of days elapsed) at a rate
per annum equal to the Applicable Interest Rate in effect from time to time.
(b) Accrued interest on the Loan at the Applicable Interest
Rate in effect from time to time shall be payable in arrears in respect of
each calendar month during the term of the Loan on the tenth (10th) day of the
next following calendar month, and on the Maturity Date.
(c) The Applicable Interest Rate, as the same may be
adjusted from time to time, shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest; Late Payment Charge. (a) If
the Borrower shall default in the payment of the principal of or interest on
the Loan or any other amount becoming due hereunder, by acceleration or
otherwise, or under any other Loan Document, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount from the date such amount was due through and including the date of
actual payment (after as well as before judgment) at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the sum of the Applicable Interest Rate in effect from time to
time plus 2.00%. Such rate of interest is referred to herein as the "Default
Rate".
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(b) Any payments not made when due shall bear a late charge
equal to 4% of the unpaid amount. It is hereby expressly agreed that such late
charge is to compensate the Lenders for costs incurred in connection with the
administration of such default, and does not constitute a penalty.
(c) Interest payable at the Default Rate and late charges
shall be payable on demand of the Administrative Agent.
SECTION 2.08. Mandatory Repayments of Principal. (a)
The Borrower shall pay to the Administrative Agent, in reduction
of the outstanding principal balance of the Loan, any and all
amounts paid in reduction of the outstanding principal balance of
any Approved Franchisee Loans (whether by scheduled payment,
prepayment, application of casualty proceeds or condemnation
awards, or otherwise), such amounts to be payable to the
Administrative Agent as and when such payments are paid by the
applicable Franchisee Loan Borrower.
(b) On the Franchisee Loan Default Date with respect to an
Approved Franchisee Loan, the Borrower shall pay to the Administrative Agent,
in reduction of the outstanding principal balance of the Loan, an amount equal
to the then outstanding principal balance of such Approved Franchisee Loan.
(c) On the first date on which the long term senior
unsecured debt credit rating of HFS shall have been reduced to a level equal
to BBB- by S&P, the Borrower shall pay to the Administrative Agent, in
reduction of the outstanding principal balance of the Loan an amount equal to
50% of the Guaranteed Amount (calculated as of such date) and the Lenders'
commitments shall be reduced by the amount so paid.
(d) On the first date on which the long term senior
unsecured debt credit rating of HFS shall have been reduced to a level below
BBB- by S&P, or on the thirtieth (30th) consecutive day on which the long term
senior unsecured debt of HFS shall have been unrated, the Borrower shall pay
to the Administrative Agent, in reduction of the outstanding principal balance
of the Loan, an amount equal to 100% of the Guaranteed Amount (calculated as
of the applicable date on which such payment is required), less any amount
theretofore paid pursuant to the provisions of Section 2.08(c) and the
Lenders' commitments shall be reduced by the amount so paid.
(e) In the event of the termination of all the Commitments
(except pursuant to Section 2.09), the Borrower shall repay or prepay all its
outstanding Borrowings on the date of such termination, together with all
accrued interest thereon and all other amounts due and owing under the Loan
Documents. In the event of any partial reduction of the Commitments, then (i)
at or prior to the effective date of such reduction or termination, the
Administrative Agent shall notify the Borrower and the Lenders of
25
the Aggregate Credit Exposure after giving effect thereto and (ii) if the
Aggregate Credit Exposure would exceed the Total Commitment after giving
effect to such reduction or termination, then the Borrower shall, on the date
of such reduction or termination, repay or prepay Borrowings in an amount
sufficient to eliminate such excess.
(f) All payments under this Section 2.08 shall be
accompanied by payments of accrued interest on the principal amount being
paid, through and including the date of payment.
(g) The entire outstanding principal balance of the Loan,
together with all accrued interest thereon, and all other amounts due and
owing under the Loan Documents, shall be due and payable on the Maturity Date.
SECTION 2.09. Termination and Reduction of
Commitments. (a) The Commitments shall be automatically
terminated on the third (3rd) anniversary of the Closing Date.
(b) The Commitments shall be reduced, from time to time, by
the amounts of any Advances made by the Lenders under this Agreement.
(c) No further Advances shall be made at any time with
respect to a Defaulted Franchisee Loan, and the Commitments shall be reduced,
from time to time, in amounts equal to the difference between the maximum
principal amount of a Defaulted Franchisee Loan and the amount theretofore
advanced to the Borrower in respect of such Defaulted Franchisee Loan pursuant
to this Agreement.
(d) Each reduction in the Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective
Commitments.
(e) If an Approved Franchisee Loan is repaid by the
Franchisee Loan Borrower, no further Borrowings will be made with respect to
such Approved Franchisee Loan.
SECTION 2.10. Optional Prepayment. (a) The Borrower shall
have the right at any time and from time to time to prepay any Borrowing, in
whole or in part, upon at least three (3) Business Days' prior written or
telecopy notice (or telephone notice promptly confirmed by written or telecopy
notice) to the Administrative Agent before 11:00 a.m., New York City time;
provided, however, that each partial prepayment shall be in an amount of at
least $100,000.
(b) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated
26
therein on the date stated therein. All prepayments under this Section 2.10
shall be subject to Section 2.12 but otherwise without premium or penalty. All
prepayments under this Section 2.10 shall be accompanied by payments of
accrued interest on the principal amount being prepaid through and including
the date of payment.
SECTION 2.11. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision of this Agreement, if after the date
of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of any Fees or other amounts
payable hereunder (other than changes in respect of taxes imposed on the
overall net income of such Lender by the jurisdiction in which such Lender has
its principal office or by any political subdivision or taxing authority
therein), or shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender or shall impose on such Lender any
other condition affecting this Agreement, and the result of any of the
foregoing shall be to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender to be material, then the Borrower will pay to
such Lender upon demand such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption
after the date hereof of any law, rule, regulation, agreement or guideline
regarding capital adequacy, or any change after the date hereof in any such
law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any Governmental Authority has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement or the
Advances made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time the Borrower shall pay to such Lender such
additional amount or amounts as will compensate
27
such Lender or such Lender's holding company for any such
reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above shall be delivered to the Borrower
with a copy to the Administrative Agent, accompanied by a reasonable
explanation and accounting, and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
delivered by it within ten (10) days after its receipt of the same.
Notwithstanding the foregoing, no Lender shall have the right to collect
payments from the Borrower pursuant to this Section 2.11 unless it is the
policy of such Lender, at the time of such collection, to collect similar
payments from borrowers generally (if any) who are similarly situated as the
Borrower, including with respect to credit standing, in connection with credit
facilities similar to those made available pursuant to this Agreement, where
the documents governing such credit facilities either established the right of
such Lender to collect such payments or do not restrict or prevent such Lender
from demanding such payment.
(d) Failure or delay on the part of any Lender to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's right to demand such compensation. The protection of this
Section 2.11 shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
agreement, guideline or other change or condition that shall have occurred or
been imposed.
(e) If a Lender shall successfully challenge any such law,
rule, regulation, agreement or guideline, any amounts collected by such Lender
from the Borrower in respect of such law, rule, regulation, agreement or
guideline, less the costs to such Lender of such challenge (allocated, if
applicable, among other loans on an appropriate basis) shall be refunded to
the Borrower.
SECTION 2.12. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense that such Lender sustains or incurs as a
consequence of any default in the making of any payment or prepayment required
to be made by the Borrower hereunder. A certificate of any Lender setting
forth any amount or amounts which such Lender is entitled to receive pursuant
to this Section 2.12 shall be delivered to the Borrower, with a copy to the
Administrative Agent, and shall be conclusive absent manifest error.
SECTION 2.13. Pro Rata Treatment. Each Borrowing,
each payment or prepayment of principal of any Borrowing, each
28
payment of interest on the Loan, and each reduction of the Commitments shall
be allocated pro rata among the Lenders in accordance with their respective
applicable Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amount of the Loan).
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole dollar
amount.
SECTION 2.14. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of the Loan as a result of which the unpaid principal portion of its
Advances shall be proportionately less than the unpaid principal portion of
the Advances of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Advances of such
other Lender, so that the aggregate unpaid principal amount of the Advances
made by and participations in the Loan held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of the Loan then
outstanding as the principal amount of its Advances prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal
amount of the Loan outstanding prior to such exercise of banker's lien, setoff
or counterclaim or other event; provided, however, that if any such purchase
or purchases or adjustments shall be made pursuant to this Section 2.14 and
the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustment shall be rescinded to the extent of such recovery,
and the purchase price or prices or adjustment shall be restored without
interest. The Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in the Loan deemed to have been
so purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made an Advance
directly to the Borrower in the amount of such participation.
SECTION 2.15. Payments. (a) The Borrower shall make each
payment (including principal of or interest on any Borrowing or any Fees or
other amounts) hereunder and under any other Loan Document not later than
12:00 (noon), New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
shall be made to the
29
Administrative Agent at such place and in such manner as it may designate from
time to time.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under any other
Loan Document shall become due, on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of interest or Fees, if
applicable.
SECTION 2.16. Taxes. (a) Any and all payments made by or on
behalf of the Borrower or any other Loan Party hereunder and under any other
Loan Document shall be made, in accordance with Section 2.15, free and clear
of and without deduction for any and all current or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) income taxes imposed on the net income of the
Administrative Agent or any Lender (or any transferee or assignee thereof,
including a participation holder (any such entity, a "Transferee")) and (ii)
franchise taxes imposed on the net income of the Administrative Agent or any
Lender (or Transferee), in each case by the jurisdiction under the laws of
which the Administrative Agent or such Lender (or Transferee), is organized or
any political subdivision thereof (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities, collectively or
individually, being called "Taxes"). If the Borrower or any other Loan Party
shall be required to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Loan Document to the Administrative Agent or any
Lender (or any Transferee), (i) the sum payable shall be increased by the
amount (an "additional amount") necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.16) the Administrative Agent or such Lender (or Transferee), as
the case may be, shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or such other
Loan Party shall make such deductions and (iii) the Borrower or such other
Loan Party shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including, without limitation, mortgage recording taxes and
similar fees) that arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document ("Other Taxes").
30
(c) The Borrower will indemnify the Administrative Agent and
each Lender (or Transferee) for the full amount of Taxes and Other Taxes paid
by the Administrative Agent or such Lender (or Transferee), as the case may
be, and any liability (including penalties, interest and expenses (including
reasonable attorney's fees and expenses)) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability prepared by the Administrative Agent or a
Lender (or Transferee), or the Administrative Agent on its behalf, absent
manifest error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date the Administrative
Agent or any Lender (or Transferee), as the case may be, makes written demand
therefor. Notwithstanding the foregoing, no Lender shall have the right to
collect payments from the Borrower pursuant to this Section 2.16 unless it is
the policy of such Lender, at the time of such collection, to collect similar
payments from borrowers generally (if any) who are similarly situated as the
Borrower, including with respect to credit standing, in connection with credit
facilities similar to those made available pursuant to this Agreement, where
the documents governing such credit facilities established the right of such
Lender to collect such payments.
(d) If the Administrative Agent or a Lender (or Transferee)
receives a refund in respect of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower or any
other Loan Party has paid additional amounts pursuant to this Section 2.16, it
shall within 30 days from the date of such receipt pay over such refund to the
Borrower or such other Loan Party (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower or such other Loan
Party under this Section 2.16 with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender (or Transferee) and without interest (other than interest
paid by the relevant Governmental Authority with respect to such refund);
provided, however, that the Borrower or such other Loan Party, upon the
request of the Administrative Agent or such Lender (or Transferee), shall
repay the amount paid over to the Borrower or such other Loan Party (plus
penalties, interest or other charges, if any) to the Administrative Agent or
such Lender (or Transferee) in the event the Administrative Agent or such
Lender (or Transferee) is required to repay such refund to such Governmental
Authority.
(e) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Borrower or any other Loan Party to the relevant
Governmental Authority, the Borrower or such other Loan Party will deliver to
the Administrative Agent, at its address referred to in Section 10.01, the
original or a
31
certified copy of a receipt issued by such Governmental Authority evidencing
payment thereof.
(f) Each Lender (or Transferee) that is organized under the
laws of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Borrower and
the Administrative Agent two copies of either United States Internal Revenue
Service Form 1001 or Form 4224, as applicable, or, in the case of a Non- U.S.
Lender claiming exemption from U.S. Federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio interest",
a Form W-8, or any subsequent versions thereof or successors thereto (and, if
such Non-U.S. Lender delivers a Form W-8, a certificate representing that such
Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is
not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Borrower and is not a controlled foreign corporation related
to the Borrower (within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or reduced rate of, U.S. Federal withholding tax on payments
made by the Borrower under this Agreement and the other Loan Documents. Such
forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on or before the date such participation holder becomes
a Transferee hereunder) and on or before the date, if any, such Non-U.S.
Lender changes its applicable lending office by designating a different
lending office (a "New Lending Office"). In addition, each Non-U.S. Lender
shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by such Non-U.S. Lender. Notwithstanding any other
provision of this Section 2.16(f), a Non-U.S. Lender shall not be required to
deliver any form pursuant to this Section 2.16(f) that such Non-U.S. Lender is
not legally able to deliver.
(g) The Borrower shall not be required to indemnify any
Non-U.S. Lender or to pay any additional amounts to any Non- U.S. Lender, in
respect of United States Federal withholding tax pursuant to paragraph (a) or
(c) above to the extent that (i) the obligation to withhold amounts with
respect to United States Federal withholding tax existed on the date such
Non-U.S. Lender became a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on the date such participation
holder became a Transferee hereunder) or, with respect to payments to a New
Lending Office, the date such Non-U.S. Lender designated such New Lending
Office with respect to a Loan; provided, however, that this paragraph (g)
shall not apply (x) to any Transferee or New Lending Office that becomes a
Transferee or New Lending Office as a result of an assignment, participation,
transfer or designation made at the request of the Borrower and (y) to the
extent the indemnity payment or additional amounts any
32
Transferee, or any Lender (or Transferee), acting through a New Lending
Office, would be entitled to receive (without regard to this paragraph (g)) do
not exceed the indemnity payment or additional amounts that the person making
the assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (g) above.
(h) Nothing contained in this Section 2.16 shall require any
Lender (or any Transferee) or the Administrative Agent to make available any
of its tax returns (or any other information that it deems to be confidential
or proprietary).
SECTION 2.17. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate. (a) In the event (i) any Lender delivers a
certificate requesting compensation pursuant to Section 2.11, or (ii) the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority on account of any Lender pursuant to Section 2.16, the
Borrower may, at its sole expense and effort (including with respect to the
processing and recordation fee referred to in Section 10.04(b)), upon notice
to such Lender and the Administrative Agent, require such Lender to transfer
and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 10.04), all of its interests, rights and
obligations under this Agreement to an assignee that shall assume such
assigned obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (x) such assignment shall not conflict
with any law, rule or regulation or order of any court or other Governmental
Authority having jurisdiction, (y) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, delayed or conditioned, and (z) the Borrower or such
assignee shall have paid to the affected Lender in immediately available funds
an amount equal to the sum of the principal of and interest accrued to the
date of such payment on the outstanding Advances made by such Lender plus all
Fees and other amounts accrued for the account of such Lender hereunder
(including any amounts under Section 2.11 and Section 2.12); provided further
that, if prior to any such transfer and assignment the circumstances or event
that resulted in such Lender's claim for compensation under Section 2.11 or
the amounts paid pursuant to Section 2.16, as the case may be, cease to cause
such Lender to suffer increased costs or reductions in amounts received or
receivable or reduction in return on capital, or cease to result in amounts
being payable under Section 2.16, as the case may be (including as a result of
any action taken by such Lender pursuant to paragraph (b) below), or if such
Lender shall waive its right to claim further compensation under Section
33
2.11 in respect of such circumstances or event or shall waive its right to
further payments under Section 2.16 in respect of such circumstances or event,
as the case may be, then such Lender shall not thereafter be required to make
any such transfer and assignment hereunder.
(b) If (i) any Lender shall request compensation under
Section 2.11, or (ii) the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority on account of any Lender, pursuant to
Section 2.16, then such Lender shall use reasonable efforts (which shall not
require such Lender to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies
or legal or regulatory restrictions or suffer any disadvantage or burden
deemed by it to be significant) (x) to file any certificate or document
reasonably requested in writing by the Borrower in connection with such
request, or (y) to assign its rights and delegate and transfer its obligations
hereunder to another of its offices, branches or affiliates, if such filing or
assignment would reduce its claims for compensation under Section 2.11 or
would reduce amounts payable pursuant to Section 2.16, as the case may be, in
the future. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such filing or
assignment, delegation and transfer.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative
Agent, the Collateral Agent and each of the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower (a) is a
limited liability company duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where the failure so to qualify
could not reasonably be expected to result in a Material Adverse Effect, (d)
has the power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated hereby to which it is or will be a party and to borrow hereunder,
(e) has no subsidiaries, (f) is a Single Purpose Entity, (g) has the
organizational structure, equity interest and holders set forth in Exhibit U,
(h) since its inception has not entered into any agreements or obligations
other than the Loan Documents, (i) has not engaged in any business other than
the Loan, (j) has no subsidiaries, (k) has no employees, (l) has incurred no
Indebtedness other than the Loan, and (m) is not subject to any
34
United States federal income, unincorporated business, capital, franchise or
similar gross income or income based taxes.
SECTION 3.02. Authorization. The execution, delivery and
performance by each Loan Party of each of the Loan Documents and the
Borrowings hereunder (collectively, the "Transactions") (a) have been duly and
validly authorized by all requisite applicable corporate and, if required,
stockholder action and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of such Loan Party,
(B) any order of any Governmental Authority or (C) any provision of any
indenture, agreement or other instrument to which such Loan Party is a party
or by which any of them or any of their property is or may be bound, (ii) be
in conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by any Loan Party (other
than any Lien created under the Security Documents).
SECTION 3.03. Enforceability. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each other Loan
Document when executed and delivered by the each Loan Party thereto will
constitute, a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms, except that
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting creditors rights
generally, and by general principles of equity (regardless of whether
enforcement is sought in equity or at law).
SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority is or will be required in connection with the
Transactions, except for (a) the filing of Uniform Commercial Code financing
statements (b) recordation of the Mortgages and the Collateral Assignment
Documents and (c) such as have been made or obtained and are in full force and
effect.
SECTION 3.05. Financial Statements. The financial statements
of the Borrower annexed hereto as Exhibit V are true and correct in all
respects and fairly present the financial condition of the Borrower as of the
respective dates thereof.
SECTION 3.06. No Material Adverse Change. There has
been no material adverse change in the business, assets,
operations, prospects, condition (financial or otherwise), or
material agreements of the Borrower, Xxxxxxx since the respective
35
dates of the last financial statements submitted to the
Administrative Agent.
SECTION 3.07. Litigation; Compliance with Laws. Except as
set forth in Exhibit P, there are not any actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
business, property or rights of any such person (i) that involve any Loan
Document or the Transactions or (ii) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
SECTION 3.08. Agreements. (a) The Borrower is not a
party to any agreement or instrument or subject to any corporate
restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) The Borrower is not a party to any indenture or other
agreement or instrument evidencing Indebtedness, and is not in default in any
manner under any provision of any other agreement or instrument to which it is
a party or by which it or any of its properties or assets are or may be bound,
where such default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.09. Federal Reserve Regulations. (a) The
Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose
of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the Regulations of the Board, including
Regulation G, U or X.
SECTION 3.10. Investment Company Act; Public Utility Holding
Company Act. The Borrower is not (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended,
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.11. Use of Proceeds. The Borrower will use
the proceeds of the Loan only for the purposes specified in the
preamble to and Section 2.01(b) of this Agreement.
SECTION 3.12. No Material Misstatements. No
information, report, financial statement, exhibit or schedule
furnished by or on behalf of the Borrower or any other Loan Party
36
to the Administrative Agent or any Lender in connection with the negotiation
of any Loan Document or included therein or delivered pursuant thereto
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were,
are or will be made, not misleading; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon
or constitutes a forecast or projection, the Borrower represents only that it
or such other Loan Party acted in good faith and utilized reasonable
assumptions and due care in the preparation of such information, report,
financial statement, exhibit or schedule.
SECTION 3.13. Employee Benefit Plans. (a) Neither the
Borrower, any Loan Party, nor any ERISA Affiliate of any of them maintains,
sponsors, contributes to or is obligated to contribute to, or during the five
(5) years ending on the Closing Date has maintained, sponsored, contributed to
or was obligated to contribute to any Plan.
(b) The Borrower does not, and is not obligated to,
maintain, sponsor or contribute to any Welfare Plan.
(c) The assets of the Borrower are not nor are they deemed
"plan assets", whether by operation of law or under regulations promulgated
under ERISA.
SECTION 3.14. Security Documents. (a) The Pledge Agreement
is effective to create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) and, when the
Collateral is delivered to the Collateral Agent, the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgor thereunder in such Collateral, in
each case prior and superior in right to any other person.
(b) The Collateral Assignment Documents will, when executed
and delivered in connection with each Approved Franchisee Loan, be effective
to create in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
respective agreements and documents described therein, and when the steps are
taken as are described in clause (ii) of the opinion of counsel delivered
pursuant to Section 4.03(dd) shall constitute a fully perfected first priority
Lien on, and security interest in, all right, title and interest of the
Borrower thereunder in such collateral, in each case prior and superior in
right to any other person.
37
SECTION 3.15. Solvency. (a) Immediately after the
consummation of the Formation and the Transactions to occur on the Closing
Date and immediately following the making of any Borrowing made on the Closing
Date and after giving effect to the application of the proceeds of such
Borrowing, (i) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (ii) the present fair saleable value of the property of each Loan
Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute
and matured; (iii) each Loan Party will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) no Loan Party will have
unreasonably small capital with which to conduct the business in which it is
engaged, as such business is now conducted and is proposed to be conducted
following the Closing Date.
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Advances hereunder
are subject to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each
Borrowing:
(a) The Administrative Agent shall have timely
received a notice of such Borrowing and a Borrowing Request as
required by Section 2.03;
(b) The representations and warranties set forth in Article
III shall be true and correct in all material respects on and as of the date
of such Borrowings with the same effect as though made on and as of such date,
except (i) to the extent such representations and warranties expressly relate
to an earlier date and (ii) to the extent such representations and warranties
are no longer true as the result of a default under an Approved Franchisee
Loan, which default has occurred subsequent to the date of the date of the
immediately previous Borrowing, it being understood that (A) nothing contained
herein shall be deemed to affect the obligations of the Borrower under Article
V, and (B) no such Borrowing shall include any funds for the Approved
Franchisee Loan under which the default has occurred.
(c) The Borrower and each other Loan Party shall be in
compliance in all material respects with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or
performed, and at the time of and
38
immediately after such Borrowing, no Event of Default or Default
shall have occurred and be continuing;
(d) There shall be no default under any Approved Franchisee
Loan (including, without limitation, the Franchisee Loan Documents, the
Underlying Documents, and the applicable Servicing Agreement) which is to be
funded by all or a portion of the Borrowing, and the Franchisee Loan
Documents, Underlying Documents, and Servicing Agreement shall all be in full
force and effect;
(e) The Administrative Agent shall have received (i) an
Independent Construction Loan Monitor's Certification with respect to each
Approved Franchisee Loan being funded by the proceeds of such Borrowing from
the applicable Independent Construction Loan Monitor or Loan Monitors and (ii)
a statement from the Servicer that the Requests for Advance and supporting
documentation are in compliance with the requirements of the applicable
Franchisee Loan Building Loan Agreements (including, without limitation,
Paragraphs 14, 15, 16 and 19 thereof);
(f) The Administrative Agent shall have received, as to each
Approved Franchisee Loan being funded by the proceeds of such Borrowing, (i)
the title endorsements referred to in the applicable Franchisee Loan Building
Loan Agreement, and (ii) reasonable evidence of compliance by the Franchisee
Loan Borrower with all other conditions set forth in the applicable Franchisee
Loan Building Loan Agreement;
(g) The Administrative Agent shall have received an update
of the opinion of counsel provided for in Section 4.02(a)(i) to cover any new
Loan Documents not theretofore covered by such an opinion;
(h) The Borrower shall have paid or reimbursed to the
Administrative Agent, or caused the applicable Franchisee Loan Borrowers to
pay or reimburse to the Administrative Agent, all fees, costs and expenses
payable to the Administrative Agent by the Borrower or by the Franchisee Loan
Borrowers under this Agreement, the other Loan Documents, and the Franchisee
Loan Documents, including, without limitation, the fees, costs and expenses
referred to in Sections 4.04, 4.05, 4.06 and 10.05; and
(i) The Administrative Agent shall have received certified
copies of, and assignments of, all service contracts then in existence (and
not previously delivered the Administrative Agent and assigned to the
Collateral Agent), each such assignment to be substantially in the form of
Exhibit GG.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
Section 4.01(b) (except as aforesaid), Section 4.01(c) and Section 4.01(d).
39
SECTION 4.02. First Borrowing. As a condition to the
initial Borrowing hereunder:
(a) The Administrative Agent shall have received, on behalf
of itself and the Lenders, a favorable written opinion of (i) Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel for the Borrower and each of the other Loan
Parties as to the due authorization, execution and delivery, valid and binding
effect, and enforceability of the Loan Documents (to the extent then delivered
to the Administrative Agent or the Collateral Agent), and (ii) Skadden, Arps,
Slate, Xxxxxxx & Xxxx, satisfactory in form and substance to the
Administrative Agent, substantially to the effect that in the event a
proceeding under Title 11 of the United States Code shall be commenced by or
against a member of the Borrower, the general partner of such member, or any
entity owning an equity interest in such general partner, a court would not
substantively consolidate the assets and liabilities of the Borrower with the
bankruptcy estate of such member, general partner or entity owning an equity
interest in such general partner, and (iii) Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, satisfactory in form and substance to the Administrative Agent, to
the effect that no Loan Party is an "investment company", as such term is
defined in Section 3(a) of, or subject to regulation under, the Investment
Company Act of 1940, as amended, in each case (A) dated the Closing Date, (B)
addressed to the Administrative Agent, the Collateral Agent, and the Lenders,
and (C) covering such other matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request, and the
Borrower hereby requests such counsel to deliver such opinions;
(b) The Administrative Agent shall have received the Note
and a fully-executed copy of this Agreement, and all legal matters incident to
this Agreement, the Borrowings and extensions of credit hereunder and the
other Loan Documents shall be satisfactory to the Lenders and to Rosenman &
Colin LLP, counsel for the Administrative Agent;
(c) The Administrative Agent shall have received (i) a copy
of the certificate or articles of incorporation, including all amendments
thereto (or other organizational documents), of each Loan Party, certified as
of a recent date by the Secretary of State of the state of its organization,
and a certificate as to the good standing of each Loan Party as of a recent
date, from such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary or other Responsible Officer of each Loan Party dated the
Closing Date and certifying (A) that attached thereto is a true and complete
copy of the By-Laws, Operating Agreement, or Partnership Agreement of such
Loan Party as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by
the Board of Directors (or other governing body)
40
of such Loan Party authorizing the execution, delivery and performance of the
Loan Documents to which such person is a party and, in the case of the
Borrower, the Borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation or other organizational documents of
such Loan Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to clause
(i) above, and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in connection
herewith on behalf of such Loan Party; (iii) a certificate of another officer
as to the incumbency and specimen signature of the Secretary or Assistant
Secretary or other Responsible Officer executing the certificate pursuant to
(ii) above; and (iv) such other documents as the Lenders or counsel for the
Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Responsible Officer of the
Borrower, confirming compliance with the conditions precedent set forth in
Sections 4.01(b), (c) and (d);
(e) The Administrative Agent shall have received all Fees
and other amounts due and payable on or prior to the Closing Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder or under any other
Loan Document;
(f) The Pledge Agreement shall have been duly executed by
the parties thereto and delivered to the Collateral Agent and shall be in full
force and effect, and all of the interests of the Borrower have been duly and
validly pledged thereunder to the Collateral Agent for the ratable benefit of
the Secured Parties, and Uniform Commercial Code Financing Statements in
respect thereof shall have been duly filed;
(g) The Administrative Agent shall have received complete
copies of all Support Agreements, certified by Responsible Officers of each
party thereto to be true, correct and complete;
(h) The parties to the Support Agreements (other than the
Borrower) shall have entered into an agreement substantially in the form of
Exhibit I, pursuant to which they (i) certify that the Support Agreements are
unmodified and in full force and effect, and that no defaults exist
thereunder, (ii) agree that such Support Agreements will not be modified or
terminated without the prior written consent of the Administrative Agent, and
(iii) agree that they will perform under such agreements;
(i) The Administrative Agent shall have received a written
agreement from GFS, to the effect that it will not permit
41
the Xxxxxxx Partnership Agreement to be modified, amended,
supplemented or terminated without the prior written consent of
the Administrative Agent;
(j) The Administrative Agent shall have received a letter
from the Borrower, Xxxxxxx and HFS in the form annexed hereto as Exhibit T.
(k) The Administrative Agent shall have received the results
of a search of the Uniform Commercial Code filings (or equivalent filings)
made with respect to the Borrower in the states (or other jurisdictions) in
which the chief executive office of the Borrower is located, together with
copies of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the Administrative Agent
that the Liens indicated in any such financing statement (or similar document)
have been released;
(l) The Guarantee Agreement shall have been duly executed by
the parties thereto, shall have been delivered to the Collateral Agent, and
shall be in full force and effect;
(m) The Indemnity, Subrogation and Subordination Agreement
shall have been duly executed by the parties thereto, shall have been
delivered to the Collateral Agent, and shall be in full force and effect;
(n) The Formation shall have occurred, and the
Administrative Agent shall have received such evidence thereof as
it shall reasonably require;
(o) The Borrower shall have outstanding no
Indebtedness other than the Loan;
(p) The Servicing Agreement shall have been duly executed
and delivered by the parties thereto, and shall be in full force and effect;
(q) The Borrower shall have executed and delivered to the
Collateral Agent an assignment by the Borrower of its rights under the
Servicing Agreement (the "Collateral Assignment of Servicing Agreement"), such
assignment to be substantially in the form of Exhibit X;
(r) The Servicer and the Borrower shall have executed and
delivered to the Collateral Agent a Servicer Consent (the "Servicer Consent"),
substantially in the form of Exhibit Y;
(s) The Collateral Agent and the Borrower shall have
executed and delivered a Collateral Account Agreement (the "Collateral Account
Agreement") substantially in the form of Exhibit Z, creating a first priority
security interest in the Accounts; and
42
(t) The Accounts shall have been created, and a Collateral
Account Agreement with respect thereto in the form of Exhibit Z shall have
been entered into.
SECTION 4.03. Initial Borrowings with Respect to Approved
Franchisee Loans. Before any Borrowing shall be made, the proceeds of which
are to be used by the Borrower (in whole or in part) to fund an Approved
Franchisee Loan which has not theretofore been funded with the proceeds of a
Borrowing (each, an "Initial Approved Franchisee Borrowing"), the Borrower
shall provide, with respect to such Approved Franchisee Loan, the following
additional items, each in form and substance satisfactory to the
Administrative Agent:
(a) A Loan Application (each, a "Loan Application")
executed by the Franchisee Loan Borrower, each Loan Application
to be substantially in the form of Exhibit AA;
(b) A Franchisee Loan Building Loan Agreement between the
Borrower and the Franchisee Loan Borrower, each such Franchisee Loan Building
Loan Agreement to be substantially in the form of Exhibit BB;
(c) A promissory note from the Franchisee Loan Borrower to
the Borrower (each, a "Franchisee Loan Note"), each such Franchisee Loan Note
to be substantially in the form of Exhibit CC, with such modifications thereto
as may be necessary to reflect local law, and such changes as may be approved
by the Administrative Agent to reflect the specific transaction;
(d) A recorded, title insured first fee mortgage (or deed of
trust or security deed) on the real property (the "Property") securing such
Approved Franchisee Loan (each, a "Mortgage"), each such Mortgage to be
substantially in the form of Exhibit DD, with such modifications thereto as
may be necessary to reflect local law, and such changes as may be approved by
the Administrative Agent to reflect the specific transaction;
(e) A recorded assignment of rents and profits (each, an
"Assignment of Rents"), sufficient to provide the Borrower with, under local
law, a first priority security interest in the Borrower in all leases, rents,
income, profits and hotel receipts relating to the Property and the Xxxxxxx
Inn Hotel constructed thereon, each such Assignment of Rents to be
substantially in the form of Exhibit EE, with such modifications thereto as
may be necessary to reflect local law, and such changes as may be approved by
the Administrative Agent to reflect the specific transaction;
(f) Certified copies of, and assignments of, all equipment
leases relating to the Property and the Xxxxxxx Inn Hotel to be constructed
thereon (it being understood that, except
43
for leases of telephones, reservation systems, and security systems that are
entered into on an arms length basis with entities that are not Affiliates of
the Franchisee Loan Borrower, no equipment may be leased, and the Franchisee
Building Loan Agreement shall so provide, unless approved by the
Administrative Agent, in its sole discretion), each such assignment to be
substantially in the form of Exhibit FF;
(g) Certified copies of, and assignments of, all service
contracts then in existence relating to the Property and the Xxxxxxx Inn Hotel
to be constructed thereon, each such assignment to be substantially in the
form of Exhibit GG;
(h) A security agreement (each, a "Security Agreement")
providing the Borrower, as secured party, a first priority security interest
in all personal property relating to the Property and the Xxxxxxx Inn Hotel to
be constructed thereon, including FF&E, receivables, operating accounts,
inventory, and Reserve Accounts, each such Security Agreement to be
substantially in the form of Exhibit II;
(i) The Franchise Agreement between Xxxxxxx and the
Franchisee Loan Borrower, each such Franchise Agreement to be substantially in
the form of Exhibit G, subject to such changes as the Administrative Agent
may, from time to time, approve;
(j) An assignment and subordination of the Franchise
Agreement among the Borrower, Xxxxxxx and the Franchisee Loan Borrower, each
such assignment and subordination to be substantially in the form of Exhibit
MM;
(k) The management agreement (if any) relating to the
Xxxxxxx Inn Hotel, which management agreement shall be subject to the approval
of the Administrative Agent;
(l) An assignment and subordination of any management
agreement referred to in Section 4.03(k) among the Borrower, the manager, and
the Franchisee Loan Borrower, each such assignment and subordination to be
substantially in the form of Exhibit LL;
(m) Letters from the Architect and General Contractor and
Major Subcontractors for the Xxxxxxx Inn Hotel covered by the Approved
Franchisee Loan, agreeing, among other things, to complete their services with
respect to the Xxxxxxx Inn Hotel notwithstanding a default under the Approved
Franchisee Loan, such letters to be substantially in the form of Exhibits NN
and OO;
(n) Certified copies of, and assignments of, all architect
agreements, construction contracts, plans and specifications, material
contracts, and all other agreements with third parties relating to the
construction and completion of the
44
Xxxxxxx Inn Hotel, each such assignment to be substantially in the form of
Exhibit HH;
(o) [Intentionally omitted]
(p) [Intentionally omitted]
(q) Uniform Commercial Code Financing Statements necessary
to perfect security interests under the Mortgage, Assignment of Rents, the
assignments referred to in Sections 4.03(f), (g), (j), (l) and (n), and the
Security Agreement referred to in Section 4.03(h);
(r) Consents from all third parties to the documents
and agreements referred to in Sections 4.03(f), (g) and (n) to
the assignment thereof;
(s) Notices to any tenants under leases relating to
the Property to the extent the same are necessary or desirable
under local law;
(t) Certificates or binders of all insurance policies
covering the Property as required by the Franchisee Loan Documents (with
policies to be delivered as soon as possible thereafter), all as certified by
the applicable Franchisee Loan Borrower to be true, correct and complete;
(u) A certified copy of the title insurance policy
(and endorsements) and originals of the surveys required by the
Franchisee Loan Building Loan Agreement;
(v) Certified copies of all licenses, permits and
other documents required by the Franchisee Loan Building Loan
Agreement;
(w) A guaranty of completion of the Xxxxxxx Inn Hotel (each,
a "Completion Guaranty") from the principals of the Franchisee Loan Borrower
(collectively, the "Completion Guarantors"), each such Completion Guaranty to
be substantially
in the form of Exhibit JJ;
(x) An environmental guaranty and indemnity (each, an
"Environmental Indemnity") from the principals of the Franchisee Loan
Borrower, each such Environmental Indemnity to be substantially in the form of
Exhibit KK;
(y) A Phase I environmental site assessment of the Property
by a firm acceptable to and in accordance with the Administrative Agent's
environmental guidelines (together with any additional assessments or surveys
required by such Phase I environmental site assessment, the "Phase I
Environmental Site Assessment"), which Phase I Environmental Site Assessment
shall be addressed to the Borrower, the Lenders, and the Administrative
45
Agent (the review and approval of the Phase I Environmental Site Assessment
will be at the sole cost and expense of the Borrower, it being understood that
the Borrower may seek reimbursement for these costs from the applicable
Franchise Loan Borrower);
(z) The Plan and Cost Review Items, as approved by the
Independent Construction Loan Monitor;
(aa) An Appraisal of the applicable Xxxxxxx Inn Hotel;
(bb) An Addendum to the Servicing Agreement adding to the
obligations of the Servicer thereunder the obligation to monitor and
administer the Approved Franchisee Loan;
(cc) Such organizational documentation with respect to
the Franchisee Loan Borrower as the Administrative Agent may
reasonably request;
(dd) A satisfactory opinion of counsel licensed to practice
in the state where the Property is located, addressed to the Borrower and to
the Administrative Agent and the Collateral Agent on behalf of the Lenders, as
to (i) the due authorization, execution and delivery, valid and binding
effect, and enforceability of the Franchisee Loan Documents and other
documents executed by the Franchisee Loan Borrower and the Completion Loan
Guarantors in connection with the Approved Franchisee Loan, (ii) the steps
that must be taken to perfect a lien on, and security interest in, the
collateral described in the Collateral Assignment Documents (such opinion to
be given by Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP to the extent that the
Collateral Assignment Documents are governed by the laws of the State of New
York), (iii) the enforceability of the waiver referred to in Section 4.07 as
it relates to waivers of claims against the Borrower, Xxxxxxx, HFS or any
third party, and the enforceability of said waiver in all other respects, in
each case subject to such standard exclusions for bankruptcy and equitable
remedies as may be acceptable to the Administrative Agent, (iv) that the
making of the Loan and the assignment to the Collateral Agent, on behalf of
the Lenders, of collateral securing the Approved Franchisee Loan and the
pursuit of remedies with respect to the Loan (including, without limitation,
the pursuit of remedies under the collateral securing the Approved Franchisee
Loan), will not adversely impact the other collateral for the Loan or the
ability of the Collateral Agent or the Administrative Agent, on behalf of the
Lenders, to pursue its remedies against the Borrower, the Guarantor, or such
collateral, (v) the steps that must be taken by the Administrative Agent or
the Collateral Agent, on behalf of the Lenders, to successfully pursue its
remedies with respect to any collateral securing the Approved Franchisee Loan
(e.g. must the interest of the Borrower first be foreclosed), (vi) that any
"one action" rules will not prevent the Collateral Agent or the Administrative
Agent, on behalf of the Lenders, from realizing the material benefit of its
remedies
46
against the Borrower, the Guarantor, or the collateral for the Loan, as
contemplated by the Loan Documents, or prevent the Borrower from realizing the
material benefit of its remedies against the Franchisee Loan Borrower, the
Guarantors (as defined in the applicable Franchisee Loan Building Loan
Agreement), or the collateral for the Approved Franchisee Loan, as
contemplated by the Franchisee Loan Documents, (vii) the non-applicability of
any mortgage recording tax laws to the collateral assignment of any collateral
securing the Approved Franchisee Loan to the Administrative Agent or the
Collateral Agent (unless such taxes can legally be and are paid by the
applicable Franchisee Loan Borrower), and (viii) such other matters as the
Administrative Agent may reasonably request;
(ee) If a Franchisee Loan Borrower which, together with its
Affiliates, is the borrower under three (3) or more Approved Franchisee Loans,
an opinion of counsel satisfactory to the Administrative Agent, which opinion
shall be satisfactory in form and substance to the Administrative Agent, that
in the event a preceding under Title 11 of the United States Code shall be
commenced by or against any Affiliate of the Franchisee Loan Borrower or any
member or general partner thereof, the general partner of such member, or any
entity owning an equity interest in any such Affiliate, or member or general
partner, a court would not substantively consolidate the assets and
liabilities of the Franchisee Loan Borrower with the bankruptcy estate of such
member, general partner or entity owning an equity interest in such member or
general partner , such opinion to be subject to customary assumptions,
qualifications and exceptions which would be acceptable to S&P under their
then current guidelines;
(ff) A collateral assignment (the "Collateral Assignment")
in favor of the Collateral Agent of all of the Borrowers right, title and
interest in and to the Franchisee Loan Documents, substantially in the form of
Exhibit QQ, with such modifications thereto as may be necessary to reflect
local law and to permit the recordation of such document;
(gg) A collateral assignment in favor of the Collateral
Agent of all of the Borrower's right, title and interest in and to the
Mortgage, in recordable form;
(hh) A collateral assignment in favor of the Collateral
Agent of all of the Borrower's right, title and interest in and to the
Assignment of Rents, in recordable form;
(ii) Assignments of the Uniform Commercial Code Financing
Statements referred to in this Section 4.03, in proper form for filing in the
applicable jurisdictions;
(jj) The original Franchisee Loan Note, with an allonge
affixed thereto assigning all of the Borrower's right, title and interest
therein to the Collateral Agent;
47
(kk) The originals of the Mortgage, Assignment of Rents, and
other documents referred to in the Collateral Assignment;
(ll) A Loan Recognition Agreement, among the Collateral
Agent, the Borrower, the Franchisee Loan Borrower, and the parties to the
Completion Guaranty and the Environmental Indemnity, substantially in the form
of Exhibit PP;
(mm) A agreement signed by the Borrower, in form and
substance reasonably satisfactory to the Administrative Agent, to the effect
that the Collateral Assignment of Servicing Agreement is in full force and
effect and applies to the Servicing Agreement as modified by the Addendum
referred to in Section 4.03(bb).
(nn) A agreement signed by the Servicer and the Borrower, in
form and substance reasonably satisfactory to the Administrative Agent, to the
effect that the Servicer Consent is in full force and effect and applies to
the Servicing Agreement as modified by the Addendum referred to in Section
4.03(bb).
(oo) A consent by the Franchisee Loan Borrower to the
assignment referred to in Section 4.02(q);
(pp) An endorsement to the mortgagee title insurance policy
received by the Borrower in connection with the Approved Franchisee Loan
naming the Collateral Agent (on behalf of the Lenders) as an additional
insured;
(qq) Evidence of payment by the Franchisee Loan Borrower (to
the Borrower, the Administrative Agent, or third parties, as applicable) of
all fees, costs and expenses relating to the Approved Franchisee Loan and the
Franchisee Loan Documents (including, without limitation, the fees, costs and
expenses of the Administrative Agent and its counsel in reviewing the Loan
Application and the Franchisee Loan Documents and the collateral assignment of
the Franchisee Loan Documents and other documents to the Collateral Agent, and
the fees, costs and expenses referred to in Sections 4.04, 4.05 and 4.06;
(rr) The Plan and Cost Review Items, as approved by the
Independent Construction Loan Monitor and the Administrative Agent, and
certified copies of the bonds referred to in Section 4.04(g), naming the
Servicer and the Collateral Agent as additional obligees;
(ss) Evidence wholly satisfactory to the Administrative
Agent in its sole discretion that the Minimum Up- Front Equity (the "Minimum
Up-Front Equity") (as referred to in Exhibit N) has been invested by the
Franchisee Loan Borrower in Development Costs relating to the applicable
Xxxxxxx Inn Hotel (or alternatively, that all or a portion of the Minimum
Up-Front
48
Equity has been deposited into the Initial Equity Escrow Account, and
theretofore applied by the Servicer to Development Costs relating to the
applicable Xxxxxxx Inn Hotel); and
(tt) Such other information or documentation as may be
reasonably requested by the Administrative Agent.
In addition, each Initial Approved Franchisee Borrowing shall be conditioned
upon the following:
(A) Approval of the Franchisee Loan Borrower by
Required Lenders and the Independent Construction Loan Monitor (including,
without limitation, the professional liability insurance coverage referred to
in Section 4.04) and the Servicer by the Administrative Agent;
(B) Satisfaction of the criteria set forth in
Exhibit N; and
(C) Approval of all Franchisee Loan Documents by
the Administrative Agent and its counsel.
The Franchisee Loan Borrower and the Franchisee Loan Documents must satisfy
the criteria set forth in this Agreement and Exhibit N. The Borrower
understands and agrees that the Lenders shall have no obligation to advance
funds with respect to an Approved Franchisee Loan, notwithstanding the
approval of the Loan Application by the Administrative Agent and the approval
of the Franchisee Loan Borrower by Required Lenders, unless and until all
conditions thereto, as set forth in this Agreement and the other Loan
Documents, have been satisfied.
SECTION 4.04. Plan and Cost Review Items; Independent
Construction Loan Monitor. In addition to the items referred to in Section
4.03, the Borrower shall, as a condition to the funding of an Initial Approved
Franchisee Loan Borrowing, submit to the Administrative Agent for its
approval, the following (collectively, the "Plan and Cost Review Items") with
respect to the development and construction of the applicable Xxxxxxx Inn
Hotel, each of which must be acceptable to the Administrative Agent, in its
reasonable discretion:
(a) The name of the proposed General Contractor and
Major Subcontractors;
(b) The name of the proposed Architect;
(c) The proposed forms of agreements with the
General Contractor, the Major Subcontractors, and the Architect;
(d) A proposed development and construction budget
(the "Construction Budget") setting forth all Development Costs
49
for the Xxxxxxx Inn Hotel, which Construction Budget shall be in the form of
Exhibit VV;
(e) A proposed development and construction schedule (the
"Construction Schedule") setting forth the schedule for the completion of the
Xxxxxxx Inn Hotel, which Construction Schedule shall be in the form of a time
line or bar chart depicting by trade (e.g. carpentry, excavation, HVAC, etc.)
the construction time for the completion of the Xxxxxxx Inn Hotel;
(f) Plans and specifications, (which shall meet all of the
criteria specified in the Franchise Agreement and shall have been approved by
Xxxxxxx as provided in the Franchise Agreement), for the improvements to be
constructed on the Property (the "Plans");
(g) Proposed payment and performance bonds from the
General Contractor and the Major Subcontractors, substantially in
the form of Exhibit TT; and
(h) Such other information and documentation as the
Administrative Agent may request.
The Plan and Cost Review Items will be reviewed and must be approved by an
independent firm experienced in the review of real estate construction loans
(each, an "Independent Construction Loan Monitor") acceptable to the
Administrative Agent in its sole discretion, which Independent Construction
Loan Monitor must carry professional liability insurance in amounts and
coverage acceptable to the Administrative Agent. It is understood that there
may be different Independent Construction Loan Monitors for different Approved
Franchisee Loans. An Independent Construction Loan Monitor may, with the
approval of the Administrative Agent, be the applicable Servicer. The review
and approval of the Plan and Cost Review Items by the Independent Construction
Loan Monitor and the Administrative Agent will be at the sole cost and expense
of the Borrower, it being understood that the Borrower may seek reimbursement
for these costs from the applicable Franchisee Loan Borrower. In addition, the
Independent Construction Loan Monitor will review and approve monthly draw
requests (and make site visits in connection therewith) under the applicable
Franchisee Loan Building Loan Agreement, such review and site visits to be at
the sole cost and expense of the Borrower, it being understood that the
Borrower may seek reimbursement for these costs from the applicable Franchisee
Loan Borrower. The Borrower acknowledges that (i) each Independent
Construction Loan Monitor will be retained by the Borrower to act as a
consultant and only as a consultant to the Borrower in connection with the
construction of a Xxxxxxx Inn Hotel, (ii) no Independent Construction Loan
Monitor shall in any event or under any circumstance have any power or
authority to make any decision or to give any approval or consent or to do any
other act or thing which is binding upon the Administrative Agent or the
50
Lenders and any such purported decision, approval, consent, act or thing by an
Independent Construction Loan Monitor on behalf of the Administrative Agent or
the Lenders shall be void and of no force or effect, (iii) the Administrative
Agent (or Required Lenders, as the case may be) reserve the right to make any
and all decisions required or permitted to be made by them respectively
pursuant to this Agreement or any other Loan Document and to give or refrain
from giving any and all consents or approvals required or permitted to be
given by them pursuant to this Agreement or any other Loan Document and to
approve or or permitted not approve any matter or thing required to be
approved by them pursuant to this Agreement or any other Loan Document, in
each instance in its or their sole and absolute discretion, and without in any
instance being bound or limited in any manner or under any circumstance
whatsoever by any opinion expressed or not expressed, or advice given or not
given, or information, certificate or report provided or not provided, by an
Independent Construction Loan Monitor to the Borrower, the Administrative
Agent, or the Lenders or any other person or party with respect thereto, (iv)
the Administrative Agent reserves the right in its sole and absolute
discretion to disregard or disagree, in whole or in part, with any opinion
expressed, advice given or information, certificate or report furnished or
provided by an Independent Construction Loan Monitor to the Borrower, the
Administrative Agent, the Lenders, or any other person or party, and (v) the
Administrative Agent reserves the right in its sole and absolute discretion to
require the Borrower to replace an Independent Construction Loan Monitor with
another construction consultant acceptable to the Administrative Agent, in its
sole discretion, at any time upon notice to the Borrower, if the Independent
Construction Loan Monitor is in default under its obligations.
SECTION 4.05. Appraisals. Each Appraisal will be
commissioned and reviewed by the Administrative Agent at the sole cost and
expense of the Borrower, and will be addressed to the Administrative Agent,
the Lenders and the Borrower. Each Appraiser must undertake to make such
modifications as may be required by the Administrative Agent to conform to
FIRREA requirements.
SECTION 4.06. Servicer Fees. The fees and expenses of
the Servicer shall be the sole cost and expense of the Borrower.
SECTION 4.07. Waiver of Defenses. Any and all collateral
securing an Approved Franchisee Loan must include a waiver by the Franchisee
Loan Borrower (and, in the case of the Completion Guaranty and the
Environmental Indemnity, the parties thereto) of all defenses (other than
payment) and counterclaims, but the same shall not be deemed a waiver of the
Franchisee Loan Borrower's right to assert any claim against the Borrower or
other third party in any separate action or proceeding..
51
SECTION 4.08. General Provisions Regarding Approved
Franchisee Loans. Without limiting the above requirements of this Article IV
and the Exhibits referred to herein:
(a) Each Approved Franchisee Loan must be recourse to the
Franchisee Loan Borrower, but not to principals of the Franchisee Loan
Borrower (except for those matters specifically enumerated in the form of
Franchisee Loan Note annexed hereto as Exhibit CC).
(b) A Franchisee Loan Borrower must be a Single
Purpose Entity.
(c) A Franchisee Loan Borrower may not assign the Approved
Franchisee Loan, transfer or further encumber the Property, or permit a Change
in Ownership as to itself.
(d) The governing law of all documents evidencing and
securing each Approved Franchisee Loan will be governed by the internal laws
of the State of New York, except for the Mortgage and the Assignment of Rents,
which will be governed by the law of the state in which the Property is
located.
(e) All prospective Franchisee Loans are subject to review
and approval by the Administrative Agent for conformance with the requirements
of this Article IV prior to the funding of any Borrowing, the proceeds of
which are to be used (in whole or in part) to fund such Franchisee Loan.
SECTION 4.09. General Provisions Regarding the Servicer. The
Borrower acknowledges that (i) the Servicer will be retained by the Borrower
to act only in connection with the servicing of Approved Franchisee Loans,
pursuant to the Servicing Agreement, (ii) the Servicer shall not in any event
or under any circumstance have any power or authority to make any decision or
to give any approval or consent or to do any other act or thing which is
binding upon the Administrative Agent or the Lenders and any such purported
decision, approval, consent, act or thing by the Servicer on behalf of the
Administrative Agent or the Lenders shall be void and of no force or effect,
(iii) the Administrative Agent (or Required Lenders, as the case may be)
reserve the right to make any and all decisions required or permitted to be
made by them respectively pursuant to this Agreement or any other Loan
Document and to give or refrain from giving any and all consents or approvals
required or permitted to be given by them pursuant to this Agreement or any
other Loan Documents and to approve or not approve any matter or thing
required or permitted to be approved by them pursuant to this Agreement or any
other Loan Document, in each instance in its or their sole and absolute
discretion, and without in any instance being bound or limited in any manner
or under any circumstance whatsoever by any opinion expressed or not
expressed, or advice given or not given, or information, certificate or report
provided or not provided, by
52
the Servicer to the Borrower, the Administrative Agent, or the Lenders or any
other person or party with respect thereto, (iv) the Administrative Agent
reserves the right in its sole and absolute discretion to disregard or
disagree, in whole or in part, with any opinion expressed, advice given or
information, certificate or report furnished or provided by the Servicer to
the Borrower, the Administrative Agent, the Lenders, or any other person or
party, and (v) the Administrative Agent reserves the right in its sole and
absolute discretion to require the Borrower to replace the Servicer with
another servicer approved by the Administrative Agent, if the Servicer is in
default under the Servicing Agreement.
ARTICLE V. DEFAULTED FRANCHISEE LOANS
SECTION 5.01. Notice by the Borrower. The Borrower shall
promptly notify the Administrative Agent in writing (a) of the occurrence of
any default under an Approved Franchisee Loan or any Franchisee Loan Documents
whether or not the Borrower has given notice of such default to the Franchisee
Loan Borrower, and (b) if any Approved Franchisee Loan has become a Defaulted
Franchisee Loan.
SECTION 5.02. No Further Loans. Once an Approved Franchisee
Loan has become a Defaulted Franchisee Loan, the Approved Franchise Loan shall
no longer be an Approved Franchisee Loan. The Lenders shall have no obligation
to make Advances, the proceeds of which would be used to fund an Approved
Franchisee Loan upon the occurrence of and during the continuance of a default
under such Approved Franchisee Loan, and no further obligations to make
Advances, the proceeds of which would be used to fund an Approved Franchisee
Loan once an Event of Default has occurred under such Approved Franchisee Loan
nor once such Approved Franchisee Loan has become a Defaulted Franchisee Loan.
SECTION 5.03. Mandatory Payment of Loans. On the Franchisee
Loan Default Date, the Borrower shall make the payments required by Sections
2.08(b) and (e) in respect of such Approved Franchisee Loan.
SECTION 5.04. Option of the Borrower. (a) Within ninety (90)
days after a Franchisee Loan Default Date, the Borrower shall, by written
notice to the Administrative Agent, advise the Administrative Agent that (i)
it wants to control the Workout Process with respect to the Defaulted
Franchisee Loan, or (ii) it wants to cede control of the Workout Process with
respect to such Defaulted Franchisee Loan to the Administrative Agent.
(b) Notwithstanding anything to the contrary contained in
Section 5.04(a), the Borrower shall not have the right to elect the option set
forth in clause (ii) thereof unless on or before the Franchisee Loan Default
Date (A) the Completion of the Xxxxxxx Inn Hotel to be constructed on the
Property covered by
53
the applicable Defaulted Franchisee Loan has occurred, and (B) all licenses
and permits required for the operation of the Xxxxxxx Inn Hotel, and any other
licenses and permits required by the Franchise Agreement and any management
agreement relating to the Xxxxxxx Inn Hotel, have been obtained and are in
full force and effect. Should such conditions have not been satisfied on or
before the applicable Franchisee Loan Default Date, the Borrower shall not
have the right to elect the option set forth in clause (ii) of Section
5.04(a), and shall be deemed to have elected the option set forth in clause
(i) of Section 5.04(a).
(c) If the Borrower fails to elect the option set forth in
clauses (i) or (ii) of Section 5.04(a) on or before the applicable Franchisee
Loan Default Date, or if the Borrower elects the option set forth in clause
(ii) of Section 5.04(a) but fails, on the applicable Franchisee Loan Default
Date, to deliver the documents required by Section 5.04(e), it shall be deemed
to have elected the option set forth in clause (i) of Section 5.04(a).
(d) If the Borrower elects (or is deemed to have elected)
the option set forth in clause (i) of Section 5.04(a), then (i) on the
applicable Franchisee Loan Default Date, the Borrower shall make the payments
required by Sections 2.08(b) and (e) in respect of such applicable Franchisee
Loan; (ii) on the applicable Franchisee Loan Default Date, the Borrower shall
cause a Confirmation of Guaranty Agreement, in the form of Exhibit R, to be
delivered to the Collateral Agent by the Guarantor; (iii) on the applicable
Franchisee Loan Default Date the Borrower shall deliver a confirmation signed
by the Borrower and the Servicer, in form and substance reasonably
satisfactory to the Administrative Agent, to the effect that the Defaulted
Franchisee Loan is no longer covered by the Servicing Agreement, and that the
Collateral Assignment of Servicing Agreement and Servicer Consent are each in
full force and effect and apply to the Servicing Agreement as modified by its
termination as to the Defaulted Franchisee Loan; (iv) within thirty (30) days
following the Franchisee Loan Default Date and the receipt of the payments
required by Sections 2.08(b) and (e), the Collateral Agent and the Lenders
shall execute and deliver to the Borrower the documents referred to in
Sections 4.03(jj) and (kk) relating to such Defaulted Franchisee Loan,
together with such documents as may be reasonably necessary to release any and
all right, title and interest of the Lenders and the Collateral Agent in and
to such documents; and (v) upon satisfaction of the condition set forth in
clauses (i) and (ii) of this Section 5.04(d), the Borrower shall have the
right to control the Workout Process, and to retain any proceeds realized from
the Defaulted Franchisee Loan.
(e) If the Borrower elects the option set forth in clause
(ii) of Section 5.04(a), then on the applicable Franchisee Loan Default Date,
the Borrower shall (i) make the payments
54
required by Sections 2.08(b) and (e) in respect of such Approved Franchisee
Loan; (ii) cause a Confirmation of Guaranty Agreement, in the form of Exhibit
R to be delivered to the Collateral Agent by the Guarantor (setting forth any
appropriate reduction in the Guaranteed Amount); and (iii) execute and deliver
to the Administrative Agent the following with respect to the Defaulted
Franchisee Loan:
(A) Evidence reasonably satisfactory to the
Administrative Agent and the Independent Construction Loan Monitor that the
conditions set forth in clauses (A) and (B) of Section 5.04(b) have been
satisfied;
(B) A confirmation of the allonge annexed to the
original Franchisee Loan Note and such other documentation as the Collateral
Agent may request to evidence that the Borrower has no further right, title or
interest in and to the Franchisee Loan Note;
(C) Assignments to the Collateral Agent of all
right, title and interest of the Borrower in and to the Mortgage
and Assignment of Rents, each in recordable form;
(D) An assignment to the Collateral Agent of all
right, title and interest of the Borrower in and to the
Franchisee Loan Building Loan Agreement;
(E) Assignments to the Collateral Agent of all
right, title and interest of the Borrower in and to the documents referred to
in Sections 4.03(f), (g), (h), (j), (l), (m), (n), (o), (t), (u), (v), (w),
(x) and (bb), and any Franchisee Loan Documents relating to the Defaulted
Franchisee Loan;
(F) Such further assignments to the Collateral
Agent of Uniform Commercial Code Financing Statements, in proper form for
filing in the applicable jurisdictions, as the Collateral Agent may reasonably
request;
(G) The original mortgagee title insurance policy
(and endorsements) with respect to the Defaulted Franchisee Loan, together
with an endorsement naming the Collateral Agent as the sole beneficiary of
such policy;
(H) A satisfactory opinion of counsel licensed to
practice in the state where the Property is located, addressed to the
Administrative Agent and the Collateral Agent on behalf of the Lenders, as to
the due authorization, execution and delivery, valid and binding effect, and
enforceability of the various documents executed and delivered by the Borrower
under this Section 5.04(e);
55
(I) A confirmation signed by the Borrower and the
Servicer to the effect that the Defaulted Franchisee Loan is no
longer covered by the Servicing Agreement; and
(J) Such third party consents and other documents
as the Administrative Agent or the Collateral Agent may reasonably request in
order to transfer to the Collateral Agent all right, title and interest of the
Borrower in and to the Defaulted Franchisee Loan and the Franchisee Loan
Documents.
Upon satisfaction of the conditions set forth in this Section 5.04(e), the
Administrative Agent shall have the right to control the Workout Process, and
to retain any proceeds realized from the Defaulted Franchisee Loan and apply
the same to the repayment of the entire Loan and accrued interest thereon and
other charges relating thereto as provided for in this Agreement and the other
Loan Documents, all in such order of priority as the Administrative Agent may,
in its sole discretion, elect, and (provided no Event of Default shall have
occurred) after all such amounts and charges have been paid in full, any
balance remaining shall be remitted to the Borrower.
SECTION 5.05 Provided no Event of Default has occurred, the
Collateral Agent shall not exercise any remedies under the Franchisee Loan
Documents relating to a Defaulted Franchisee Loan until the earliest to occur
of (a) the exercise by the Borrower of the option set forth in clause (ii) of
Section 5.04(a), (b) the ninetieth (90th) day next following the applicable
Franchisee Loan Default Date (nor thereafter, if the Borrower timely elects
(or is deemed to have elected) the option set forth in clause (i) of Section
5.04(a)), or (c) the occurrence of an Event of Default.
SECTION 5.06 Upon the occurrence of an Event of Default, the
provisions of this Article V shall be of no further force or effect.
ARTICLE VI. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and
all other expenses or amounts payable under any Loan Document shall have been
paid in full, unless the Required Lenders and the Administrative Agent shall
otherwise consent in writing, the Borrower will:
SECTION 6.01. Existence; Business and Capitalization.
(a) Do all things necessary to keep in full force and effect its
valid and legal existence as a limited liability company;
56
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, patents, copyrights, trademarks
and trade names material to the conduct of its business; maintain and operate
such business in substantially the manner in which it is presently conducted
and operated; comply in all material respects with all applicable laws, rules,
regulations and decrees and orders of any Governmental Authority, whether now
in effect or hereafter enacted; and at all times maintain and preserve all
property material to the conduct of such business and keep such property in
good repair, working order and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times;
(c) Maintain itself at all times as a Single Purpose Entity
qualified to do business in each jurisdiction in which such qualification is
necessary to the conduct of its business or to protect the validity and
enforceability of the Loan Documents;
(d) Do all things necessary to enable it to comply
with all applicable legal, fiscal and accounting rules and
regulations;
(e) Take all reasonable actions necessary so that it is not
required to register as an investment company under the Investment Company Act
of 1940, as amended;
(f) Take all reasonable actions necessary so that it is not
required to register the Note under the Securities Act of 1933, as amended
from time to time (and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder) or under any applicable state
securities laws;
(g) Generally pay its debts as they become due;
(h) Pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all taxes, assessments and
governmental charges levied or imposed upon it or upon its income, profits or
property; and
(i) (i) Keep its own separate books and records, maintain
its own separate bank accounts, keep its funds or other assets separate from
the funds or other assets of all other persons, (ii) fund from its own assets
all of its activities, expenses and liabilities, (iii) pay its own operating
expenses and liabilities from its own funds, (iv) maintain adequate capital
for the normal obligations reasonably foreseeable in light of its contemplated
business operations, (v) file its own tax returns and maintain separate
financial statements, (vi) observe all limited liability company formalities,
(vii) pay the
57
salaries of its own employees, if any, (viii) not guarantee or become
obligated for the debts of any other person or hold out its credit as being
available to satisfy the obligations of others, (ix) allocate fairly and
reasonably any overhead for shared office space, (x) use separate stationery,
invoices, and checks, (xi) not pledge its assets for the benefit of any other
person and (xii) at all times identify itself, in all dealings with the
public, under its own name and as a separate and distinct entity and not
identify itself as being a division or a part of any other person.
SECTION 6.02. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses operating in the
same or similar locations, including public liability insurance against claims
for personal injury or death or property damage occurring upon, in, about or
in connection with the use of any properties owned, occupied or controlled by
it; and maintain such other insurance as may be required by law.
SECTION 6.03. Obligations and Taxes. Pay its Indebtedness
and other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Borrower shall have set aside on its books adequate
reserves with respect thereto in accordance with GAAP and such contest
operates to suspend collection of the contested obligation, tax, assessment or
charge and enforcement of a Lien.
SECTION 6.04. Financial Statements, Reports, etc.
Furnish to the Administrative Agent and each Lender with respect
to both the Borrower and Xxxxxxx:
(a) within 90 days after the end of each fiscal year,
consolidated balance sheets and related statements of operations,
stockholders' equity and cash flows showing the financial condition of the
Borrower and Xxxxxxx as of the close of such fiscal year and the results of
its operations during such year, all audited by a "Big Six" or other
nationally recognized accounting firm and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to the
58
effect that such consolidated financial statements fairly present the
financial condition and results of operations of the Borrower or Xxxxxxx, as
the case may be, in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, consolidated balance sheets and related
statements of operations, stockholders' equity and cash flows showing the
financial condition of the Borrower and Xxxxxxx as of the close of such fiscal
quarter and the results of its operations during such fiscal quarter and the
then elapsed portion of the fiscal year, all certified by one of its Financial
Officers as fairly presenting the financial condition and results of
operations of the Borrower and Xxxxxxx on a consolidated basis in accordance
with GAAP, subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under sub-paragraph (a) or (b) above, a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which certificate,
when furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) certifying that no Event of
Default or Default has occurred, or, if such an Event of Default or Default
has occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto;
(d) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by the Borrower, Xxxxxxx and the other Loan Parties with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national securities
exchange, or distributed to its shareholders, as the case may be;
(e) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of the
Borrower, or compliance with the terms of any Loan Document, as the
Administrative Agent at the request of any Lender may reasonably request; and
(f) within 30 days after the commencement of each fiscal
year, operating projections of the Borrower or Xxxxxxx for such fiscal year;
and
(g) promptly upon receipt, copies of all financial reports
and operating reports received from each Franchisee Loan Borrower, including,
without limitation, those referred to in Paragraph 21(e) of the Building Loan
Agreement.
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SECTION 6.05. Default, Litigation and Other Notices. Furnish
to the Administrative Agent and the Lenders prompt written notice of the
following:
(a) any Event of Default or Default, specifying the
nature and extent thereof and the corrective action (if any)
taken or proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice
of intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower or any Affiliate thereof that could reasonably
be expected to result in a Material Adverse Effect; and
(c) any other development that has resulted in, or
could reasonably be expected to result in, a Material Adverse
Effect.
SECTION 6.06. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made
of all dealings and transactions in relation to its business and activities.
Subject to the requirements of Section 10.16, the Borrower will permit any
representatives designated by the Administrative Agent and any Lender to visit
and inspect the financial records and the properties of the Borrower at
reasonable times and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by the Administrative Agent and any Lender to discuss the affairs,
finances and condition of the Borrower with the officers thereof and
independent accountants therefor.
SECTION 6.07. Use of Proceeds. Use the proceeds of
the Loan only for the purposes set forth in the preamble to this
Agreement and Section 2.01(b).
SECTION 6.08. Compliance with Environmental Laws. Use
commercially reasonable efforts to cause each Franchisee Loan Borrower to
comply in all material respects with all Environmental Laws and Environmental
Permits applicable to its operations and Property, and obtain and renew all
material Environmental Permits necessary for its operations and Property.
SECTION 6.09. Preparation of Environmental Reports. If a
Franchisee Loan Borrower shall default in its performance of the obligations
set forth in Section 6.08, at the written request of the Administrative Agent,
provide to the Lenders within forty-five (45) days after such request, at the
expense of the Borrower or the Franchisee Loan Borrower, an environmental site
assessment report for the applicable Property and Xxxxxxx Inn Hotel which are
the subject of such default prepared by an environmental
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consulting firm acceptable to the Administrative Agent and indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance with Environmental Laws in connection with such Property and
Xxxxxxx Inn Hotel.
SECTION 6.10. Approved Franchisee Loans.
(a) Comply with and enforce all terms, conditions,
covenants and provisions of the Approved Franchisee Loans and the
Franchisee Loan Documents;
(b) Forward to the Administrative Agent copies of all
financial statements received from each Franchisee Loan Borrower and
Completion Guarantor as and when received by the Borrower;
(c) (i) Provide the Administrative Agent upon the Completion
of each Xxxxxxx Inn Hotel financed by an Approved Franchisee Loan with the
documentation described under clauses (b), (c), (d) and (e) under the
definition of "Completion" in Section 1.01, and (ii) advise the Administrative
Agent of the opening of each Xxxxxxx Inn Hotel financed by an Approved
Franchisee Loan to the general public promptly upon the occurrence of such
event; and
(d) Notify the Administrative Agent of any principal
payment or intended principal payment of an Approved Franchisee
Loan.
SECTION 6.11. Further Assurances. Execute and, if
applicable, file or record any and all further documents, financing
statements, agreements and instruments, and take all further action (including
filing Uniform Commercial Code and other financing statements, mortgages and
deeds of trust) that may be required under applicable law, or that the
Administrative Agent or the Collateral Agent may reasonably request, in order
to effectuate the transactions contemplated by the Loan Documents and in order
to grant, preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Security
Documents. The Borrower agrees to provide such evidence as the Collateral
Agent shall reasonably request as to the perfection and priority status of
each such security interest and Lien.
ARTICLE VII. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and
all other expenses or amounts payable under any Loan Document have been paid
in full, unless the Required Lenders and the Administrative Agent (as to
Sections 7.01 through 7.14, and 7.17) or the Administrative Agent alone
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(as to Sections 7.15 through 7.16) shall otherwise consent in writing, the
Borrower will not:
SECTION 7.01. Indebtedness. Incur, create, assume or
permit to exist any Indebtedness, except:
(a) Indebtedness created under this Agreement; and
(b) Unsecured, fully subordinated loans from HFS (not to
exceed, in the aggregate, the difference between (A) the Guaranteed Amount
from time to time in effect, and (B) the capital invested in the Borrower by
HFS pursuant to Section 7.07), the entire proceeds of which are used by the
Borrower to make the payments of principal described in Sections 2.08(c) or
(d), and which loans (i) shall mature no earlier than one (1) year after the
Maturity Date, (ii) shall provide for no payments of principal or interest
prior to a date which shall be one (1) year after the Maturity Date, (iii)
shall provide for a rate of interest not to exceed the Base Rate plus 1/2 of
1%, (iv) shall not be guaranteed, and (v) shall otherwise be on terms
reasonably acceptable to the Administrative Agent.
SECTION 7.02. Liens. Create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other securities
of any person), now owned or hereafter acquired by it or on any income or
revenues or rights in respect of any thereof, except for any Lien created
under the Loan Documents.
SECTION 7.03. Investments. Make any Investments, other than
temporary short-term investments of cash in Permitted Investments, or engage
in any business or undertake any activity other than in connection with the
Loan and Approved Franchisee Loans.
SECTION 7.04. Mergers, Consolidations, Sales of Assets and
Acquisitions. Dissolve, liquidate, merge into or consolidate with any other
person, or permit any other person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or any substantial part of its assets (whether now
owned or hereafter acquired) or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other person, other than in connection with the foreclosure by
the Borrower of a Defaulted Franchisee Loan subject to and in accordance with
the provisions of Article V, or amend, supplement or otherwise modify its
governing instruments or permit its members to modify their governing
instruments in any way that would cause a breach of the covenants of the
Borrower contained in this Agreement.
SECTION 7.05. Dividends and Distributions. Declare or pay,
directly or indirectly, any dividend or make any other distribution (by
reduction of capital or otherwise) whether in
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cash, property, securities or a combination thereof, with respect to any
shares of its capital stock or directly or indirectly redeem, purchase, retire
or otherwise acquire for value any shares of any class of its capital stock or
set aside any amount for any such purpose.
SECTION 7.06. Transactions with Affiliates. Sell or transfer
any property or assets to, or purchase or acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates.
SECTION 7.07. Issuances of Capital Stock. Issue any capital
stock or other equity interests, except that the Borrower may issue shares of
its capital stock (or other equity interests) to HFS or Xxxxxxx in exchange
for capital contributions of HFS or Xxxxxxx to the Borrower (which capital
contributions shall not exceed, in the aggregate, the difference between (A)
the Guaranteed Amount from time to time in effect, and (B) loans made to the
Borrower by HFS pursuant to Section 7.01(b)) from HFS, and the entire proceeds
of which capital contributions are used by the Borrower to make the payments
of principal described in Sections 2.08(c) or (d)), which shares (i) shall
have no mandatory or optional redemptions or required offers to purchase by
the Borrower (or any of its Affiliates) whether through the lapse of time, the
occurrence of contingencies, or otherwise, until after payment in full of the
Loan and all accrued interest and other charges thereon, and (ii) shall
provide for no payment of dividends prior to one (1) year after the Maturity
Date, and which investment shall otherwise be on terms reasonably acceptable
to the Administrative Agent.
SECTION 7.08. Creation of Subsidiaries. Create any
subsidiaries.
SECTION 7.09. Employee Benefits. (a) Maintain, sponsor,
contribute to or become obligated to contribute to, or suffer or permit any
ERISA Affiliate of the Borrower to, maintain, sponsor, contribute to or become
obligated to contribute to, any Plan or any Welfare Plan, or (b) permit the
assets of the Borrower to become "plan assets", whether by operation of law or
under regulations promulgated under ERISA.
SECTION 7.10. Amendment of Approved Franchisee Loans and
Borrower Organizational Documents. Modify, amend or terminate any Approved
Franchisee Loan, the Franchisee Loan Documents, or any other documentation
evidencing or securing the same, or release any collateral relating thereto,
or modify, amend, supplement or terminate or agree to modify, amend,
supplement or terminate the Limited Liability Company Agreement of the
Borrower, the Certificate of Formation of the Borrower, or any other
origination document of the Borrower.
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SECTION 7.11. Waiver of Terms, Conditions and Covenants of
Approved Franchisee Loans. Waive any of the terms, conditions or covenants
contained in any Approved Franchisee Loan, or any of the documentation
evidencing or securing the same.
SECTION 7.12. Waiver of Defaults Under Approved Franchisee
Loans. Waive any default, or extend the time for payment or performance, under
any Approved Franchisee Loan, or any of the Franchisee Loan Documentation or
other documentation evidencing or securing the same.
SECTION 7.13. Assignment of Approved Franchisee Loans.
Assign all or any part of its interest in, or grant any
participation in, any Approved Franchisee Loan.
SECTION 7.14. Modification of Underlying Documents and
Support Agreement. Consent to the modification of (a) any documents assigned
(collaterally or otherwise) to the Borrower as security for an Approved
Franchisee Loan, including, without limitation, the Franchise Agreement, any
management agreement relating to a Xxxxxxx Inn Hotel, leases, equipment
leases, service contracts, and licenses and permits (collectively, the
"Underlying Documents"), and (b) the Support Agreements.
SECTION 7.15. Cost Review Items. Consent to the modification
of the Cost Review Items, as approved by the Independent Construction Loan
Monitor.
SECTION 7.16. Equipment Leases. Permit a Franchisee Loan
Borrower to enter into any equipment leases for personal property to be used
at or in connection with the operation of the applicable Xxxxxxx Inn Hotel,
except as otherwise provided in Section 4.03(f).
SECTION 7.17. Servicing Agreement. Modify, amend or
terminate the Servicing Agreement, waive any provisions of the Servicing
Agreement, grant any consent provided for under the Servicing Agreement, or
appoint any successor Servicer or enter into a Servicing Agreement with any
successor Servicer.
ARTICLE VIII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or
in connection with any Loan Document or the borrowings hereunder, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall prove to have been false or
64
misleading in any material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
the Loan when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on
the Loan or any Fee or any other amount (other than an amount referred to in
(b) above) due under any Loan Document, when and as the same shall become due
and payable;
(d) default shall be made in the due observance or
performance by the Borrower of any covenant, condition or
agreement contained in Section 6.01, 6.05 or 6.07 or in Article
VII;
(e) default shall be made in the due observance or
performance by the Borrower of any covenant, condition or agreement contained
in any Loan Document (other than those specified in (b), (c) or (d) above) and
such default shall continue unremedied for a period of fifteen (15) days after
notice thereof from the Administrative Agent to the Borrower;
(f) the Borrower shall incur any Indebtedness other than as
specifically permitted under Section 7.01.
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Borrower or any other Loan Party, or of a
substantial part of the property or assets of the Borrower or other Loan
Party, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or other Loan Party or for a substantial part of the property or
assets of the Borrower or other Loan Party or (iii) the winding-up or
liquidation of the Borrower or other Loan Party; and such proceeding or
petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any other Loan Party shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or the filing of any petition
described in (g) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator,
65
conservator or similar official for the Borrower or other Loan Party or for a
substantial part of the property or assets of the Borrower or other Loan
Party, other than the appointment of a receiver in respect of the workout
process for a Defaulted Franchisee Loan if the Borrower has properly exercised
the option set forth in Section 5.04(a)(i), (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi) become
unable, admit in writing its inability or fail generally to pay its debts as
they become due or (vii) take any action for the purpose of effecting any of
the foregoing;
(i) one or more judgments for the payment of money in the
aggregate amount of $25,000 or more shall be rendered against the Borrower and
the same shall be final and non-appealable or shall not be vacated, stayed,
bonded or discharged within thirty (30) days after the same becomes final and
non-appealable;
(j) an ERISA Event shall have occurred;
(k) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by the Borrower or
any other Loan Party not to be, a valid, perfected, first priority security
interest in the securities, assets or properties covered thereby;
(l) there shall have occurred a Change in Ownership as
to the Borrower or GFS;
(m) Specified Franchisee Loan Defaults shall have occurred
under Approved Franchisee Loans having, at any given time, an outstanding
principal balance in excess of 30% of the then outstanding principal balance
of the Loans (excluding, for purposes of this calculation, the outstanding
principal balance of any Defaulted Franchisee Loan if (i) the option set forth
in clause (i) Section 5.04(a) has been elected (or deemed to have been
elected) by the Borrower as to such Defaulted Franchisee Loan, and (ii) the
conditions set forth in clause (i) of Section 5.04(d) has been satisfied as to
said Defaulted Franchisee Loan));
(n) the Borrower shall have failed to satisfy the conditions
set forth in Section 5.04(d) or (e), as applicable, on or before the
applicable Franchisee Loan Default Date;
(o) HFS shall be in default, beyond any applicable
cure period, under the Guarantee Agreement or any of the Support
Agreements;
(p) HFS shall be in default, beyond any applicable cure
period, under the HFS Credit Agreement, provided that in the event Chemical
Bank or its successor(s) is no longer party to a bank credit agreement with
HFS, or if a bank credit agreement is
66
no longer utilized by HFS, the reference in this clause (p) to a default by
HFS under the HFS Credit Agreement shall be deemed to mean acts or omissions
by HFS that would constitute a default by HFS under provisions contained in
the last HFS Credit Agreement to which Chemical Bank (or its successor(s)) was
a party.
(q) Xxxxxxx shall be in default, beyond any applicable
cure period, under the Xxxxxxx Partnership Agreement or any of
the Support Agreements;
(r) A Disabling Event (as such term is defined in the
Xxxxxxx Partnership Agreement) shall have occurred;
(s) the Borrower shall no longer be a Single Purpose
Entity;
(t) any Support Agreement or the Xxxxxxx Partnership
Agreement shall be modified, amended, supplemented or terminated without the
prior written consent of the Administrative Agent; or
(u) The Borrower's existence is terminated, pursuant
to Section 7.1 of the Limited Liability Company Agreement of the
Borrower or otherwise;
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (g) or (h) above) and at any time thereafter
during the continuance of such event, subject to Section 9.01B, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate forthwith the Commitments and (ii)
declare the Loan to be forthwith due and payable in whole or in part,
whereupon the principal of the Loan, together with accrued interest thereon
and any unpaid accrued Fees and all other amounts accrued hereunder and under
any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding; and in any event with
respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loan then
outstanding, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrower accrued hereunder and under any
other Loan Document, shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding.
Without limiting the generality of the foregoing, following an Event of
Default, all interest payable by a Franchisee Loan
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Borrower under an Approved Franchisee Loan shall be paid directly to the
Administrative Agent and shall be applied by the Administrative Agent to
principal, interest, default interest, late charges, attorneys' fees,
collection charges, and all other amounts and charges payable under this
Agreement, the other Loan Documents, and the Loan in such order as the
Administrative Agent shall, in its sole discretion, elect, and after all such
amounts and charges have been paid in full, any balance remaining shall be
remitted to the Borrower.
No act or failure to act by the Servicer, whether or not in breach of the
Servicing Agreement, shall affect the obligations of the Borrower under this
Agreement or any of the other Loan Documents.
ARTICLE IX. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 9.01. Appointment and Authority. A. In order to
expedite the transactions contemplated by this Agreement, The Chase Manhattan
Bank is hereby appointed to act as Administrative Agent and Collateral Agent
on behalf of the Lenders (for purposes of this Article IX, the Administrative
Agent and the Collateral Agent are referred to collectively as the "Agents").
Each of the Lenders and each assignee of any such Lender, hereby irrevocably
authorizes the Agents to take such actions on behalf of such Lender or
assignee and to exercise such powers as are specifically delegated to the
Agents by the terms and provisions hereof and of the other Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The Administrative Agent is hereby expressly authorized by the Lenders,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders all payments of principal of and interest on the Loans and all Fees
and other amounts due to the Lenders hereunder, and promptly to distribute to
each Lender its proper share of each payment so received; (b) to give notice
on behalf of each of the Lenders to the Borrower of any Event of Default
specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all Borrowing Requests (but not the
supporting documentation attached thereto or the corresponding Requests for
Advances from Franchisee Loan Borrowers) promptly after a Borrowing. Without
limiting the generality of the foregoing, the Agents are hereby expressly
authorized to execute any and all documents (including releases) with respect
to all collateral for the Loan and the rights of the Secured Parties with
respect thereto, as contemplated by and in accordance with the provisions of
this Agreement and the Security Documents. All collateral for the Loan shall
be held in the name of The Chase Manhattan Bank, as Collateral Agent, on
behalf of the Lenders, and all actions and determinations with respect thereto
shall be taken by The Chase Manhattan Bank, as the Collateral Agent.
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B. Upon the occurrence of an Event of Default, the Agents shall
consult with the Lenders to determine a course of action which is acceptable
to Required Lenders. Subject to Section 10.08(b) hereof, the Agents shall
pursue any such course of action approved by the Required Lenders in respect
of any default or Event of Default, including, without limitation,
acceleration of the indebtedness, and commencement of any suit to foreclose
any security for the Loan and acquire title to the collateral for the Loan (or
any collateral securing such collateral) in connection with such foreclosure.
In the event that the Required Lenders cannot decide which remedies, if any,
are to be pursued, then, subject to Section 10.08(b), the Agents may take such
action as they deem advisable and in the best interests of the Lenders.
Notwithstanding anything to the contrary contained herein, without the prior
approval of all of the Lenders, none of the Agents or the Lenders shall become
the owner or holder of any Franchisee Loan Documents or take any other action
as a result of which any Lender would have any obligation, under Section 1 of
the related Mortgage Loan Recognition Agreement or otherwise, to make any
advance of any Franchisee Loan to any Franchisee Loan Borrower or to make any
advance to any person other than the Borrower pursuant to the terms and
conditions of this Agreement.
SECTION 9.02. Limitation on Liability. Neither the Agents
nor any of their respective directors, officers, employees or agents shall be
liable as such for any action taken or omitted by any of them except for its
or his own gross negligence or wilful misconduct, or be responsible for any
statement, warranty or representation herein or the contents of any document
delivered in connection herewith, or be required to ascertain or to make any
inquiry concerning the performance or observance by the Borrower or any other
Loan Party of any of the terms, conditions, covenants or agreements contained
in any Loan Document. The Agents shall not be responsible to the Lenders for
the due execution, genuineness, validity, enforceability or effectiveness of
this Agreement or any other Loan Documents, instruments or agreements. The
Agents shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required Lenders
and, except as otherwise specifically provided herein, such instructions and
any action or inaction pursuant thereto shall be binding on all the Lenders.
Each Agent shall, in the absence of knowledge to the contrary, be entitled to
rely on any instrument or document believed by it in good faith to be genuine
and correct and to have been signed or sent by the proper person or persons.
Neither the Agents nor any of their respective directors, officers, employees
or agents shall have any responsibility to the Borrower or any other Loan
Party on account of the failure of or delay in performance or breach by any
Lender of any of its obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other Lender or the
Borrower or any other Loan Party of any of their respective obligations
hereunder or under any other Loan Document
69
or in connection herewith or therewith. Each of the Agents may execute any and
all duties hereunder by or through agents or employees and shall be entitled
to rely upon the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
SECTION 9.03. Discretionary Actions. Each Lender hereby
acknowledges that neither Agent shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing to do so by the
Required Lenders. Notwithstanding anything to the contrary in Section 9.02 or
any other provision of any other Loan document, each of the Agents shall
exercise its respective powers, discretion and authorities and perform its
obligations under this Agreement and the other Loan Documents with the same
degree of care that it would employ in regard to a similar facility in which
it is the only lender.
SECTION 9.04. Resignation; Successor Agents. Subject to the
appointment and acceptance of a successor Agent as provided below, either
Agent may resign at any time by notifying the Lenders and the Borrower. Upon
any such resignation, the Required Lenders shall have the right to appoint a
successor. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a bank with
an office in New York, New York, having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of
appointment as Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligations hereunder. After the Agent's resignation hereunder,
the provisions of this Article IX and Section 10.05 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent.
SECTION 9.05. Rights of Agents. With respect to the Advances
made by it hereunder, each Agent in its individual capacity and not as Agent
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not an Agent, and the Agents and their Affiliates may
accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or Affiliate thereof as if it were not an Agent.
SECTION 9.06. Expenses; Indemnity. Each Lender agrees (a) to
reimburse the Agents, on demand, in the amount of its pro rata share (based on
its Commitment hereunder) of any expenses
70
incurred for the benefit of the Lenders by the Agents, including counsel fees
paid for services rendered on behalf of the Lenders, that shall not have been
reimbursed by the Borrower and (b) to indemnify and hold harmless each Agent
and any of its directors, officers, employees or agents, on demand, in the
amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against it in its capacity as Agent or any
of them in any way relating to or arising out of this Agreement or any other
Loan Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have
been reimbursed by the Borrower or any other Loan Party, provided that no
Lender shall be liable to an Agent or any such other indemnified person for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Agent or any
of its directors, officers, employees or agents.
SECTION 9.07. No Reliance. Each Lender acknowledges that it
has, independently and without reliance upon the Agents or any other Lender
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agents or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement or any other
Loan Document, any related agreement or any document furnished hereunder or
thereunder.
ARTICLE X. MISCELLANEOUS
SECTION 10.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail, as follows:
(a) if to the Borrower, to it at Six Xxxxxx Xxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000, Attention: Executive Vice President - General Counsel, with
a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxx, Esq.
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxx Xxxxxxxx,
Portfolio Management Officer, with a
71
copy to The Chase Manhattan Bank, at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx Xxxxx, Real Estate Counsel, and a copy to Rosenman &
Colin LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxx, Esq.
(c) if to a Lender, to it at its address set forth in
Exhibit A or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto, with copies to such additional parties as
are set forth therein.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on
the date of receipt if delivered by hand or overnight courier service or sent
by telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance
with the latest unrevoked direction from such party given in accordance with
this Section 10.01.
SECTION 10.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrower herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered
to have been relied upon by the Lenders and shall survive the making by the
Lenders of Advances of the Loan, regardless of any investigation made by the
Lenders or on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on the Loan or any Fee or any
other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid and so long as the Commitments have not been
terminated. The provisions of Sections 2.11, 2.12, 2.16 and 10.05 shall remain
operative and in full force and effect regardless of the expiration of the
term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of the Loan, the expiration of the Commitments, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent or any Lender.
SECTION 10.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors
and assigns.
SECTION 10.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and
72
assigns of such party; and all covenants, promises and agreements by or on
behalf of the Borrower, the Administrative Agent or the Lenders that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment and the portion of the Loan at
the time owing to it); provided, however, that (i) except in the case of an
assignment to another Lender or an Affiliate of the assigning Lender (x) the
Administrative Agent must give its prior written consent (which consent shall
not be unreasonably withheld) and (y), the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $5,000,000 (or, if less, the
entire remaining amount of such Lender's Commitment), (ii) the parties to each
such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$2,000.00 and (iii) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire. Upon acceptance
and recording pursuant to paragraph (e) of this Section 10.04, from and after
the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, (A) the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.11, 2.12, 2.16 and
10.05, as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder shall
be deemed to confirm to and agree with each other and the other parties hereto
as follows: (i) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim and that its Commitment, and the outstanding balance of the Loan
owed to such Lender, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in
73
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto,
or the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05 or delivered pursuant to
Section 6.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (vi) such assignee
appoints and authorizes the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent and the Collateral
Agent, respectively, by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for the purpose of this
Section 10.04(d) as an agent of the Borrower, shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitment of, and principal amount of the portion of
the Loan owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive and the
Borrower, the Administrative Agent, the Collateral Agent and the Lenders may
treat each person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Administrative Agent, the Collateral Agent and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), and the processing and recordation fee
referred to in Section 10.04(b) above and, if required, the written consent of
74
the Administrative Agent to such assignment, the Administrative Agent shall
(i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders. No assignment shall be effective unless it has been recorded in the
Register as provided in this Section 10.04(e).
(f) Each Lender may without the consent of the Borrower or
the Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the outstanding
balance of the portion of the Loan owing to it); provided, however, that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or other
entities shall be entitled to the benefit of the cost protection provisions
contained in Sections 2.11, 2.12 and 2.16 to the same extent as if they were
Lenders and (iv) the Borrower, the Administrative Agent and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to
the Loan and to approve any amendment, modification or waiver of any provision
of this Agreement (other than amendments, modifications or waivers (x)
decreasing any fees payable hereunder or the amount of principal of or the
rate at which interest is payable on the Loan, (y) extending any scheduled
principal payment date or date fixed for the payment of interest on the Loan
or increasing or extending the Commitments or (z) releasing any collateral for
the Loan or any Guarantor).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant
to this Section 10.04, disclose to the assignee or participant or proposed
assignee or participant any information relating to the Borrower furnished to
such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure of information designated by the Borrower as confidential, each
such assignee or participant or proposed assignee or participant shall execute
an agreement whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of such confidential
information on terms no less restrictive than those applicable to the Lenders
pursuant to Section 10.16.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank to secure extensions
of credit by such Federal Reserve Bank to such Lender; provided that no such
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Bank for such Lender as a party hereto. In order to
75
facilitate such an assignment to a Federal Reserve Bank, the Borrower shall,
at the request of the assigning Lender, duly execute and deliver to the
assigning Lender a promissory note or notes evidencing the portion of the Loan
made to the Borrower by the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its
rights or duties hereunder without the prior written consent of the
Administrative Agent and each Lender, and any attempted assignment without
such consent shall be null and void.
SECTION 10.05. Expenses; Indemnity. (a) The Borrower agrees
to pay all out-of-pocket expenses incurred by the Administrative Agent and the
Collateral Agent in connection with the syndication of the credit facilities
provided for herein and the preparation and administration of this Agreement
and the other Loan Documents or in connection with any amendments,
modifications, waivers or restructuring of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated), or incurred by the Administrative Agent or the Collateral Agent
in connection with the transactions described in this Agreement, including,
without limitation, all Borrowings, the review and approval of Franchisee
Loans (including, without limitation, the review of Plan and Cost Review
Items, Phase I Environmental Site Assessments, additional assessments or
surveys and Appraisals by the Administrative Agent) and the collateral
assignment of Approved Franchisee Loans to the Collateral Agent, and the
transactions described in Section 5.04, or incurred by the Administrative
Agent, the Collateral Agent or any Lender in connection with the enforcement
or protection of its rights in connection with this Agreement and the other
Loan Documents or in connection with the Loan made hereunder, including,
without limitation, the fees, charges and disbursements of Rosenman & Colin
LLP, counsel for the Administrative Agent and the Collateral Agent, and any
in-house counsel, and, in connection with any such enforcement or protection,
the fees, charges and disbursements of any other counsel for the
Administrative Agent, the Collateral Agent or any Lender, and the fees,
charges and disbursements of each Appraiser, Independent Construction Loan
Monitor and other third parties providing services under this Agreement, the
other Loan Documents, or any Franchisee Loan Documents.
(b) The Borrower agrees to indemnify the Administrative
Agent, the Collateral Agent and each Lender, each Affiliate of any of the
foregoing persons and each of their respective directors, officers, employees
and agents (each such person being called an "Indemnitee") against, and to
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, charges
and disbursements, incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the execution or delivery
of, or any ongoing
76
matters arising out of, this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loan, (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto, (iv) any and all lawful action that may be taken by the
Indemnitees in connection with the enforcement of the provisions of this
Agreement or any other Loan Document, whether or not suit is filed in
connection with the same, or in connection with the Borrower, the Guarantor,
any partner, joint venturer or shareholder thereof becoming a subject of a
voluntary or involuntary federal or state bankruptcy, insolvency or similar
proceeding, (v) any liability to brokers, finders or similar persons and/or
under any applicable securities or blue sky laws, or (vi) any actual or
alleged presence or Release of Hazardous Materials on any property owned or
operated by the Borrower or any of the Franchisee Loan Borrowers, or any
Environmental Claim related in any way to the Borrower or any Franchisee Loan
Borrower; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or
wilful misconduct of such Indemnitee. All sums expended by the Indemnitees on
account of any of the foregoing shall be reimbursable on demand, and until
reimbursed by the Borrower pursuant hereto, shall be deemed additional
principal evidenced by the Note and shall bear interest at the Default Rate.
The obligations of the Borrower under this Section 10.05(b) shall be secured
by the Collateral.
(c) The provisions of this Section 10.05 shall remain
operative and in full force and effect regardless of the expiration of the
term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of the Loan, the expiration of the Commitments, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent or any Lender. All amounts due
under this Section 10.05 shall be payable on written demand therefor together
with interest, at the Default Rate, from the date of demand to the date of
payment, both dates inclusive.
SECTION 10.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the
77
Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement and other Loan Documents held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such other Loan Document and although such obligations
may be unmatured. The rights of each Lender under this Section 10.06 are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.
SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN ANY OF THE OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
SECTION 10.08. Waivers; Amendment. (a) No failure or delay
of the Administrative Agent, the Collateral Agent or any Lender in exercising
any power or right hereunder or under any other Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the exercise
of any other right or power. The rights and remedies of the Administrative
Agent, the Collateral Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower or any other
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by Section 10.08(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No notice or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof nor any
of the other Loan Documents may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower and the
Required Lenders; provided, however, that no such agreement shall (i) decrease
the principal amount of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on the Loan, or waive or
excuse any such payment or any part thereof, or decrease the rate of interest
on the Loan, without the prior written consent of each Lender affected
thereby, (ii) change or extend the Commitment or decrease the Fees of any
Lender without the prior written consent of such Lender, or (iii) amend or
modify the provisions of Section 2.13 or 10.04(i), the provisions of this
Section, the definition of the term "Required Lenders" or release any
Guarantor or all or any substantial part of any collateral for the Loan,
without the prior written consent of each Lender; provided further that no
such agreement shall amend,
78
modify or otherwise affect the rights or duties of the Administrative Agent or
the Collateral Agent hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent or the Collateral Agent.
Additionally, subsequent to the acquisition of one or more Franchisee Loans,
without the prior approval of Required Lenders, the respective obligations of
the Franchisee Loan Borrowers and any other person under any Franchisee Loan
Document may not be waived, amended or modified and collateral securing a
Franchisee Loan may not be released except as otherwise provided in the
Franchisee Loan Documents.
SECTION 10.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable
to the Loan, together with all fees, charges and other amounts which are
treated as interest on the Loan under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which
may be contracted for, charged, taken, received or reserved by the Lenders
with respect to the Loan in accordance with applicable law, the rate of
interest payable in respect of the Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate.
SECTION 10.10. Entire Agreement. This Agreement and the
other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.
SECTION 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.
SECTION 10.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and
79
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic or other substantive effect of which comes as close as possible
to that of the invalid, illegal or unenforceable provisions.
SECTION 10.13. Counterparts. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts)
each of which shall constitute an original but all of which when taken
together shall constitute a single contract, and shall become effective as
provided in Section 10.03. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.
SECTION 10.14. Headings. Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.
SECTION 10.15. Jurisdiction; Consent to Service of Process.
(a) Each party to this Agreement hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting
in New York County, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Collateral
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Borrower or
its properties in the courts of any jurisdiction.
(b) Each party to this Agreement hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
or the other Loan Documents in any New York State or Federal court.
80
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 10.16. Confidentiality. The Administrative Agent,
the Collateral Agent and each of the Lenders agrees to keep confidential (and
to use its best efforts to cause its respective agents and representatives to
keep confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Collateral Agent or any Lender shall be
permitted to disclose Information (a) to such of its respective officers,
directors, employees, agents, affiliates and representatives as need to know
such Information, (b) to the extent requested by any regulatory authority, (c)
to the extent otherwise required by applicable laws and regulations or by any
subpoena or similar legal process, (d) in connection with any suit, action or
proceeding relating to the enforcement of its rights hereunder or under the
other Loan Documents or (e) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 10.16 or
(ii) becomes available to the Administrative Agent, any Lender or the
Collateral Agent on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section, "Information" shall mean all
financial statements, certificates, reports, agreements and information
(including all analyses, compilations and studies prepared by the
Administrative Agent, the Collateral Agent or any Lender based on any of the
foregoing) that are received from the Borrower and related to the Borrower,
any member of the Borrower or any employee, customer or supplier of the
Borrower, other than any of the foregoing that were available to the
Administrative Agent, the Collateral Agent or any Lender on a nonconfidential
basis prior to its disclosure thereto by the Borrower, and which are in the
case of Information provided after the date hereof, clearly identified at the
time of delivery as confidential. The provisions of this Section 10.16 shall
remain operative and in full force and effect regardless of the expiration and
term of this Agreement.
SECTION 10.17. Full Recourse Obligation of the Borrower.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the Borrower (but not the members of the Borrower, or their
respective officers, directors, shareholders, employees, agents or affiliates
or partners) shall be personally liable to pay and perform all obligations of
the Borrower under the terms of this Agreement and any other Loan
81
Document. Without limiting the foregoing, the personal liability of the
Borrower shall extend to any of its assets and to any amounts or claims or any
deficiency judgments based thereon or with respect thereto, and the Lenders
(or the Administrative Agent or Collateral Agent, on their behalf) shall not
be required to look first to any collateral security for the Loan before
making a claim against the Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
XXXXXXX FINANCIAL, LLC
By: General Franchise
Systems, Inc., Managing
Member
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
- Legal
THE CHASE MANHATTAN BANK, as
Administrative Agent and Collateral
Agent,
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, as collateral
agent
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA, as
documentation agent
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Senior Relationship
Manager
83
BANKERS TRUST COMPANY, as
syndication agent
By: /s/ Xxxxxxx XxXxxxxx
-----------------------------
Name: Xxxxxxx XxXxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as
Lender
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
THE BANK OF NOVA SCOTIA, as
Lender
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Senior Relationship
Manager
BANKERS TRUST COMPANY, as
Lender
By: /s/ Xxxxxxx XxXxxxxx
-----------------------------
Name: Xxxxxxx XxXxxxxx
Title: Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, as Lender
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Vice President
84
EXHIBITS
A - Lenders; Lender's Addresses; Attorneys Addresses; Maximum
Commitments
B - Note
C - Guarantee Agreement
D - Indemnity, Subrogation and Subordination Agreement
E - Pledge Agreement
F - Support Agreements
G - Xxxxxxx Inn Franchise Agreement (form)
H - [Intentionally omitted]
I - Agreement re: Support Agreements
J - Xxxxxxx Partnership Agreement
K - Administrative Questionnaire
L - Assignment and Acceptance
M - Borrowing Request
N - Criteria for Approved Franchisee Loans
O - Specified Franchisee Loan Defaults
P - Litigation
Q - [Intentionally omitted]
R - Confirmation of Guaranty Agreement (form)
S - Permitted Investments
T - Letter from the Borrower, Xxxxxxx and HFS (re: sharing of
information)
U - Organizational Structure of the Borrower
V - Financial Statements of Borrower
W - Servicing Agreement
X - Assignment of Servicing Agreement
1
Y - Consent to Assignment of Servicing Agreement
Z - Collateral Account Agreement
AA - Franchisee Loan Application (form)
BB - Franchisee Building Loan Agreement (form)
CC - Franchisee Loan Note (form)
DD - Mortgage (form)
EE - Assignment of Rents (form)
FF- Assignment of Equipment Leases (form)
GG - Assignment of Service Contracts (form)
HH - Assignment of Documents
II - Security Agreement (form)
JJ - Completion Guaranty (form)
KK - Environmental Indemnity (form)
LL - Subordination, Estoppel, Assignment and Consent (Management
Agreement) (form)
MM - Subordination, Estoppel, Assignment and Consent (Franchise
Agreement) (form)
NN - Architect's Letter
OO - General Contractor's Letter
PP - Loan Recognition Agreement
QQ - Collateral Assignment of Loan Documents
RR - [Intentionally omitted]
SS - [Intentionally omitted]
TT - Payment and Performance Bonds
UU - [Intentionally omitted]
VV - Construction Budget
2
