EXHIBIT 10.19
$275,000,000
LOAN AGREEMENT
between
[PROJECT HOLDCO],
as Borrower
and
[LENDCO],
as Lender
Dated [ ] [ ], 2005
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "AGREEMENT") dated [ ] [ ], 2005, by
[PROJECT HOLDCO], a ____________________, with offices at
________________________________ ("BORROWER") and [LENDCO], a __________________
(together with its successors and assigns, hereinafter referred to as "LENDER"),
with offices at ____________________________________________.
RECITALS
Borrower has requested that Lender extend credit (the "FACILITY") to
Borrower in an aggregate amount of up to $275,000,000 for the purposes
hereinafter set forth, and the Lender is willing to do so on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants, conditions and agreements contained herein, Borrower and Lender agree
as follows:
SECTION 1
DEFINITIONS
1.1 GENERAL DEFINITIONS. In addition to any other terms defined in this
Agreement, the following terms shall have the following meanings:
"ACCOUNTING CHANGES" means (A) changes in accounting principles required
by the Accounting Rules, consistently applied and implemented by Borrower and
its Subsidiaries; and (B) changes in accounting principles recommended or
approved by Borrower's certified public accountant, with the approval of Lender,
which approval shall not be unreasonably withheld.
"ACCOUNTING RULES" means GAAP (a) as modified by, where applicable, the
Uniform System of Accounts and (b) with respect to determinations of the Net
Worth, as determined using the current methodology (consistent with past
practices) employed in the financial statements of JQH and the JQH Trust, as
compiled by BKD, Ltd. dated December 31, 2004, and as same may be verified using
the Net Worth Agreed-Upon Procedures, in each case, consistently applied.
"ACTION" means any action, suit, claim, litigation, proceeding,
arbitration, audit, investigation or hearing (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted or
heard by or before, any Governmental Authority.
"ADDITIONAL HOTEL PROJECT" means a Hotel Project (other than an Existing
Xxxxxxx Hotel Project) to be developed, constructed or renovated by a Project
Owner after the date of this Agreement and approved by Lender in accordance with
Section 3.3.
"AFFILIATE" means, with respect to any Person, any other Person: (A)
directly or indirectly controlling, controlled by, or under common control with,
such Person; (B) directly or indirectly owning or holding ten percent (10%) or
more of the voting stock or other Equity Interests in such Person; or (C) ten
percent (10%) or more of whose voting stock or other Equity
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Interest is directly or indirectly owned or held by such other Person. When used
with respect to Borrower, the term "Affiliate" shall also include the spouse,
ancestors, descendents and siblings of any Affiliate of Borrower (such Persons
being sometimes referred to as "FAMILY MEMBERS"), Affiliates of such Family
Members and trusts for the benefit of another Affiliate of Borrower.
"AGREEMENT" means this loan agreement (including all schedules, exhibits,
annexes and appendices hereto).
"ALTERNATE RATE" means, in the event the LIBOR Rate is no longer
published, as of any date of determination, (a) the "prime rate" (or "base
rate") reported in the Money Rates column or section of The Wall Street Journal
published on the second full Business Day preceding the first day of the
applicable Interest Period as having been the rate in effect for corporate loans
at large U.S. money center commercial banks (whether or not such rate has
actually been charged by any such bank) or, if The Wall Street Journal ceases
publication of such "prime rate" or "base rate," the annual rate of interest
announced by XX Xxxxxx Chase Bank (or another financial institution with a main
or branch office in New York, New York, selected, from time to time, by Lender)
from time to time as its "prime rate" or "base rate" in effect at its principal
office in New York, New York at 5:00 p.m., New York City time (in either case,
the "PRIME RATE"), for such date minus (b) two percent (2.00%). Such rate of
interest shall be computed on the basis of a 360-day year for the actual number
of days elapsed.
"APPRAISAL" means a written appraisal report of the Property as the term
"appraisal" is defined in the Code of Professional Ethics of the American
Institute of Appraisers, meeting the requirements of the FIRREA, prepared by a
state certified appraiser retained by Lender at Borrower's expense, who is a
member of the Appraisal Institute, addressed either to Lender or to the lender
of the Underlying Loan or accompanied by an agreement from the appraiser that it
may be relied upon by Lender and in form and scope satisfactory to Lender,
setting forth such appraiser's determination of the Appraised Value.
"APPRAISED VALUE" means the fair market value of the applicable Xxxxxxx
Hotel or any other Property owned by Guarantor constituting an asset used in
determining Net Worth, as completed and operating, that would be obtained in an
arms' length transaction between an informed and willing buyer and an informed
and willing seller, under no compulsion to buy or sell, respectively, on the
appraisal date of the Appraisal.
"AVAILABILITY PERIOD" means, with respect to the Loans, the period from
the Closing Date to the earliest of (a) the seventh (7th) anniversary of the
Closing Date, and (b) the date of termination of the commitment of Lender to
make Loans; provided, that, with respect to Loans the proceeds of which will be
used solely to pay interest payable under this Agreement and the Note, the
period described in clause (a) above shall extend to the eighth (8th)
anniversary of the Closing Date.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as amended from time to time and all rules and regulations
promulgated thereunder.
"BANKRUPTCY EVENT" means, with respect to any Person, the occurrence of
any of the following: (a) the entry of a decree or order for relief by a
Governmental Authority in an
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involuntary case under the Bankruptcy Code or any other applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or the appointment
by a Governmental Authority of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its property or the ordering of the winding up or
liquidation of its affairs by a Governmental Authority; or (b) the commencement
against such Person of an involuntary case under the Bankruptcy Code or any
other applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or of any Action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its property or for the winding up or liquidation
of its affairs, and such involuntary case or other Action shall not have been
dismissed within ninety (90) days, or the repossession or seizure by a creditor
of such Person of a substantial part of its property; or (c) the commencement by
such Person of a voluntary case under the Bankruptcy Code or any other
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment of or the taking possession by
a receiver, liquidator, assignee, creditor in possession, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its property or the making of any general assignment for the benefit of
creditors; or (d) such Person shall be unable to, or shall admit in writing its
inability to, pay its debts generally as they become due.
"BASE RATE" means, for each Interest Period, a variable rate per annum
equal to the sum of (a) the greater of (i) the LIBOR Rate or the Alternate Rate,
as the case may be for such Interest Period or (ii) 3.22% per annum, plus (b)
one percent (1.0%), increasing or decreasing with each increase or decrease in
the LIBOR Rate or the Alternate Rate, as the case may be (as and when the LIBOR
Rate or the Alternate Rate changes as described herein).
"BORROWER PLEDGE AGREEMENT" means each pledge agreement delivered by
Borrower in favor of Lender granting Lender a security interest in 100% of the
Equity Interests of the applicable Project Owner.
"BOTTOM GUARANTIES" means those certain guaranties given by JQH and listed
on SCHEDULE 1.1(A) and any similar guaranties (i.e. provided for tax purposes)
provided hereafter in support of Additional Hotel Projects.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other
day that is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are required or authorized
to close.
"CAPITAL LEASE" means any lease of any property (whether real, personal or
mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.
"CHANGE IN CONTROL" means the occurrence of any one or more of the
following: (i) JQH and the JQH Trust shall collectively cease to directly or
indirectly own greater than fifty percent (50%) of the Equity Interests in
Borrower or (ii) JQH or the JQH Trust shall cease to directly or indirectly
Control the business and affairs of Borrower.
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"CHARLEVOIX" means the proposed condominium/hotel addition to The Chateau
on the Lake in Branson, Missouri.
"CLOSING" means the execution and delivery of this Agreement, the
satisfaction or written waiver of all conditions for disbursement of the Initial
Loan to or for the benefit of Borrower and the disbursement of the Initial Loan
to, or upon the order of, Borrower.
"CLOSING DATE" means the date on which the Closing occurs.
"CODE" means the United States Internal Revenue Code of 1986, and any rule
or regulation promulgated thereunder from time to time.
"COLLATERAL" means the assets pledged to Lender as collateral security for
repayment of the Loans.
"COMMENCEMENT OF CONSTRUCTION" means, with respect to any Xxxxxxx Hotel,
commencement of construction of the applicable Improvements, excluding design,
demolition and site preparation.
"CONFIDENTIAL INFORMATION" is defined in Section 9.12.
"CONTINGENT OBLIGATION," as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (A) with respect to
any indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (B) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (C) under
any interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement or other similar agreement or arrangement designed to protect
the applicable Person against fluctuations in interest rates; or (D) under any
foreign exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect that Person against fluctuations in currency
values. Contingent Obligations shall include (1) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another, (2) the obligation to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement, and (3) any liability of such Person for
the obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not a fixed
and determined amount, the maximum amount so guaranteed.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument,
including without limitation, Franchise Agreements, whether written or oral, to
which that Person is a party or by which it or
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any of its properties is bound or to which it or any of its properties is
subject, including the Loan Documents.
"CONTROL" (including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with") means the possession directly
or indirectly of the right to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"DEFAULT" means a condition or event that, after notice or lapse of time
or both, would constitute an Event of Default if that condition or event were
not cured or removed within any applicable grace or cure period.
"DEFAULT INTEREST" is defined in Section 2.2(A)(ii).
"DEFAULT RATE" means a rate per annum equal to the Base Rate or Unapplied
Preferred Default Rate, as applicable, plus five percent (5.00%).
"DEMISE" means the death of JQH, a judicial determination of incompetency
of JQH or analogous judicial determination of JQH, or the physical or mental
incapacity of JQH to such an extent that he is prevented from performing his
executive functions on a full time basis.
"DOLLARS" and the sign "$" mean the lawful money of the United States of
America.
"EARLY REDEMPTION PRICE" has the meaning specified in the Partnership
Agreement.
"EMBARGOED PERSON" is defined in Section 4.7.
"EMPLOYEE BENEFIT PLAN" means an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Part 3 of Title I of ERISA or Section 412 of the Code and is either (a)
maintained by any Person or any member of a Controlled Group for employees of
such Person or any member of such Controlled Group or (b) maintained pursuant to
a collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which such Person or any member of a
Controlled Group is then making or has any obligation to make contributions or,
within the preceding five (5) plan years, has made or has had any obligation to
make contributions.
"ENVIRONMENTAL CLAIMS" is defined in Section 4.11.
"ENVIRONMENTAL LAWS" means all present and future Legal Requirements
imposing liability, standards of conduct or otherwise pertaining or relating to,
or for, the environment, industrial hygiene, the regulation of Hazardous
Materials, natural resources, pollution or waste management, including the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9601, et seq.); the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801, et seq.); the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901, et seq.); Sections 25117, 25281, 25316 or 25501 of the California
Health & Safety Code; any so-called "Superfund" or "Superlien" law; the Toxic
Substance Control Act of 1976 (15 U.S.C. Section 2601 et seq.); the Clean Water
Act (33 U.S.C. Section 1251 et seq.); and the Clean Air Act (42 U.S.C. Section
7901 et seq.).
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"ENVIRONMENTAL REPORT" means all Phase I Environmental Site Assessments,
Phase II Environmental Site Assessments or other environmental investigation or
assessment report obtained by or on behalf of Borrower or Affiliate with respect
to any Property.
"EQUITY INTERESTS" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, and all
rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any Person who is a member of a group which is
under common control with another Person, who together with such other Person is
treated as a single employer within the meaning of Sections 414(b), (c), (m) and
(o) of the IRC or Sections 4001 of ERISA. Carveout Guarantor shall be deemed to
be an ERISA Affiliate of Borrower for purposes of this Agreement, irrespective
of whether it and Borrower would be treated as a single employer.
"EVENT OF DEFAULT" is defined in Section 7.1.
"EXCESS INTEREST" is defined in Section 2.2(C).
"EXISTING XXXXXXX HOTEL PROJECT" means any Hotel Project owned directly or
indirectly by JQH and/or the JQH Trust as of the Closing Date and listed on
SCHEDULE 1.1(B) attached hereto.
"FACILITY" has the meaning given to such term in the Recitals to this
Agreement.
"FACILITY AVAILABILITY AMOUNT" means (a) the principal amount opposite
each applicable period below, with each "YEAR" meaning the period from the
Closing Date (for Year 1, or the applicable anniversary of the Closing Date for
subsequent years) to and including the day immediately preceding the next
subsequent anniversary of the Closing Date:
PERIOD AMOUNT
------ ------
Year 1 $ 75,000,000
Year 2 $175,000,000
Year 3 $225,000,000
Year 4 $250,000,000
Year 5 and later $275,000,000
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less, (b) (1) 100% of any amount required to be prepaid (but not yet prepaid)
pursuant to Section 2.4(D)(i), (ii), (iv) or (v), (2) 100% of any amount prepaid
pursuant to Section 2.4(D)(iii); provided that such deduction under this clause
(b)(2) shall be reduced to 50% of the amount prepaid under Section 2.4(d)(iii)
if, at the applicable date of determination, the Net Worth (as evidenced by the
latest Net Worth Certificate) is at least equal to the Minimum Net Worth Amount
and (3) 50% of the amount of the Unapplied Early Redemption Price.
"FINANCING STATEMENTS" mean the UCC-1 financing statements naming
Borrower, as debtor, and Lender, as secured party, indicating the Collateral as
collateral and filed with such filing offices as Lender may require.
"FIRREA" means The Financial Institutions Reform, Recovery and Enforcement
Act of 1989, Pub. L. No. 101-73 Stat. 183 (1989) and the regulations adopted
pursuant thereto, as the same may be amended from time to time.
"FRANCHISE AGREEMENT" means an agreement pursuant to which a Project Owner
or Manager is granted the right to operate the Land and Improvements as a
franchise.
"FRANCHISOR" means any franchisor under a Franchise Agreement, together
with its successors and assigns.
"GAAP" means generally accepted accounting principles in the United States
of America, consistently applied, as of the date in question.
"GOVERNMENTAL AUTHORITY" means any (i) federal, state, local, provincial,
municipal, foreign or other government, (ii) governmental or quasi-governmental
authority of any nature, or (iii) other body exercising any statutory
administrative, judicial, arbitrative, legislative, police, regulatory or taxing
authority or power.
"GUARANTORS" mean JQH, the JQH Trust and Xxxxxxx, Inc..
"GUARANTOR PLEDGE AGREEMENT" means the pledge agreement delivered by the
Guarantors in favor of Lender granting Lender a security interest in the
Preferred Equity Interests and 100% of the Equity Interests in Borrower. The
Guarantor Pledge Agreement will include consent rights with respect to notice
and approval rights granted to the Xxxxxxx Limited Partners which shall be
exercisable by Lender at all times prior to the payment of the Obligations in
full.
"GUARANTY" means that certain Guaranty of the Guarantors in favor of
Lender of even date herewith.
"XXXXXXX HOTELS" means, collectively, the Existing Xxxxxxx Hotel Projects
and the Additional Hotel Projects.
"HAZARDOUS MATERIALS" means (a) any pollutants, toxic substances, oil,
gasoline, petroleum products, asbestos, materials or substances containing
asbestos, explosives, chemical liquids or solids, radioactive materials,
polychlorinated biphenyls or related or similar materials, or any other solid,
liquid or other emission, substance, material, product or by-product defined,
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listed or regulated as a hazardous, noxious, toxic or solid substance, material
or waste or defined, listed or regulated as causing cancer or reproductive
toxicity, or otherwise defined, listed or regulated as hazardous or toxic in,
pursuant to, or by any Environmental Law, now or hereafter enacted, amended or
modified, (b) any substance which is or contains asbestos, radon,
polychlorinated biphenyl, urea formaldehyde foam insulation, explosive or
radioactive material, lead paint, motor fuel or other petroleum hydrocarbons,
(c) fungus, mold, mildew, or other biological agents the presence of which may
adversely affect the health of individuals or other animals or materially
adversely affect the value or utility of any Xxxxxxx Hotel, and/or (d) any other
substance which causes or poses a threat to cause a contamination with respect
to all or any portion of any Xxxxxxx Hotel or any adjacent property or a hazard
to the environment or to the health or safety of Persons.
"HOTEL PROJECT" means any full service or extended-stay hotel project,
including any adjacent convention facilities, condo/hotels, restaurants and
ancillary retail components.
"IMPOSITIONS" means all real estate and personal property taxes, and vault
charges and all other taxes, levies, assessments and other similar charges,
general and special, ordinary and extraordinary, foreseen and unforeseen, of
every kind and nature whatsoever, which at any time prior to, at or after the
execution of this Agreement may be assessed, levied or imposed by, in each case,
a Governmental Authority upon any Xxxxxxx Hotel or upon the ownership, use,
leasing, occupancy, operation or enjoyment thereof, and any interest, cost or
penalties imposed by such Governmental Authority with respect to any of the
foregoing. Impositions shall not include any sales or use taxes or any net
income taxes payable by Borrower.
"IMPROVEMENTS" means, with respect to any Xxxxxxx Hotel, all buildings,
improvements, alterations or appurtenances now, or at any time hereafter,
located upon, in, under or above the applicable Land or any part thereof.
Improvements also include all buildings, improvements, alterations or
appurtenances not located on, in, under or above the Land to the extent of the
applicable Project Owner's right, title and interest therein.
"INDEBTEDNESS" means, with respect to any Person, without duplication, (a)
any indebtedness of such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of any property or asset of
such Person to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such property from such Person), (b) any
obligations of such Person for the deferred purchase price of property or
services, (c) any obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) any obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) any obligations of
such Person as lessee under leases that have been or should be, in accordance
with GAAP, recorded as Capital Leases, (f) any obligations of such Person as a
result of any final judgment rendered against such Person or any settlement
agreement entered into by such Person with respect to any litigation unless such
obligations are stayed upon appeal (for so long as such appeal shall be
maintained) or are fully discharged or bonded within thirty (30) days after the
entry of such judgment or execution of such settlement agreement, (g) any
obligations, contingent or otherwise, of such Person in respect of acceptances,
letters of credit or similar extensions of credit, (h) any
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Contingent Obligations, (i) any Indebtedness of others referred to in clauses
(a) through (h) above or clause (j) below guaranteed directly or indirectly in
any manner by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (1) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (2) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Indebtedness or to assure the holder of such Indebtedness against loss, (3)
to supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered), or (4) otherwise to assure a
creditor against loss, and (j) any Indebtedness referred to in clauses (a)
through (i) above 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 (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness.
"INDEMNIFIED LIABILITIES" is defined in Section 9.3.
"INDEMNITEES" is defined in Section 9.3.
"INDEPENDENT PERSON" has the meaning ascribed to it in SCHEDULE 6.8.
"INITIAL LOAN" means the initial Loan made by Lender to Borrower pursuant
to this Agreement.
"INTEREST PERIOD" means the period commencing on a Payment Date and ending
on and including the day immediately prior to the next succeeding Payment Date.
"INTEREST RATE" means the applicable of the Base Rate, the Suspension
Default Rate, the Unapplied Preferred Default Rate or the Default Rate.
"INTERIM LINE OF CREDIT" means the line of credit in the principal amount
of up to $25,000,000 granted by Lender, as lender, to JQH, the JQH Trust, as
borrowers, pursuant to that certain Loan Agreement, dated as of June 14, 2005.
"INVESTMENT" means (A) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of any beneficial interest
in, including stock, partnership interest or other Equity Interests of, any
other Person or (B) any direct or indirect loan, advance or capital contribution
by Borrower or any of its Subsidiaries to any other Person, including all
Indebtedness and accounts receivable issued or incurred by that other Person
that are not current assets or did not arise from sales to that other Person in
the ordinary course of business.
"ISTAR" means iStar Financial Inc.
"JQH" means Xxxx X. Xxxxxxx, an individual.
"JQH TRUST" means the Xxxx X. Xxxxxxx Revocable Living Trust, dated
December 28, 1989, as amended and restated.
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"LAND" means, with respect to any Xxxxxxx Hotel, the land underlying the
Xxxxxxx Hotel and upon which the applicable improvements are or will be located,
including any easements or other appurtenances.
"LATE CHARGE" is defined in Section 2.2(D).
"LEGAL REQUIREMENTS" means all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting Borrower, any
Project Owner, any Xxxxxxx Hotel or any part thereof, the construction, use,
leasing, alteration or operation thereof, or any part thereof, or any or all of
the Collateral, whether now or hereafter enacted and in force, and all permits,
licenses and authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments of record
at any time in force affecting Borrower, any Project Owner, any Xxxxxxx Hotel,
or any part thereof, or any or all of the Collateral.
"LIBOR RATE" or "LONDON INTERBANK OFFERED RATE" means a floating interest
rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
the London Interbank Offered Rate (LIBOR) with a one month maturity as reported
in the "Money Rates" column or section of The Wall Street Journal published on
the second full Business Day preceding the first day of the applicable Interest
Period.
"LIEN" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary (including any
conditional sale or other title retention agreement, any lease, and any
agreement to give any security interest).
"LIQUIDATION EVENT" means, with respect to any Xxxxxxx Hotel (i) any
casualty or condemnation resulting in the payment of any insurance proceeds or
condemnation awards to the applicable Project Owner under the terms of the
related Underlying Loan for any purpose other than restoration of the applicable
Improvements, (ii) a Transfer of ownership interests in such Xxxxxxx Hotel
(other than granting a mortgage lien in connection with obtaining an Underlying
Loan in accordance with this Agreement), or (iii) any refinancing of the
Underlying Loan or any other Indebtedness secured by such Xxxxxxx Hotel or the
Equity Interests in the Project Owner.
"LOAN" and "LOANS" are defined in Section 2.1.
"LOAN DOCUMENTS" means this Agreement, the Note, the Pledge Agreements,
the Guaranty, the Financing Statements, the Subordination of Management
Agreement and all other documents, instruments, certificates and other
deliveries made by Borrower to Lender in accordance herewith or which otherwise
evidence, secure and/or govern the Loans.
"LOAN MONTH" means a calendar month.
"LOAN PARTIES" means Borrower and the Guarantors.
"LOAN QUARTER" means a calendar quarter.
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"LOAN REQUEST" means a written request for a Loan substantially in the
form of Exhibit A.
"MANAGEMENT AGREEMENT" means the _________________ [Management Agreement]
between a Project Owner and Manager.
"MANAGER" means Xxxx X. Xxxxxxx Hotels Management, LLC.
"MANDATORY PREPAYMENT DUE DATE" means the date that is five (5) days after
the event that gave rise to Borrower's obligation to repay (in whole or in part)
the applicable Loan or Loans except that with respect to prepayments due under
Sections 2.4(D)(i) and (iii), five (5) Business Days after written notice from
Lender.
"MATERIAL ADVERSE EFFECT" means (A) a material adverse effect upon the
business, operations, properties, assets or financial condition of Borrower or
(B) the impairment, in any material respect, of the ability of any Loan Party to
perform its obligations under any of the Loan Documents or of Lender to enforce
or collect any of the Obligations. In determining whether any individual event
would result in a Material Adverse Effect, notwithstanding that such event does
not of itself have such effect, a Material Adverse Effect shall be deemed to
have occurred if the cumulative effect of such event and all other events
occurring prior to such event would result in a Material Adverse Effect.
"MATERIAL CHANGE" means, with respect to any Xxxxxxx Hotel, any of the
following events occurring after the grant by Lender of a Project Approval or
delivery of the applicable Project File:
(A) a change in the plans and specifications for the applicable
Improvements that represents a material change in the scope or nature of
the applicable Xxxxxxx Hotel as reasonably determined by Lender, including
any such change that would require additional permits, approvals or
variances of a material nature from any applicable Governmental
Authorities;
(B) a material change to the applicable Project Budget, including
any change that would result in (i) the principal amount of the applicable
Underlying Loan exceeding 75% of the total budgeted cost, or (ii) the
actual or projected total budgeted cost of a Xxxxxxx Hotel exceeds the
approved Project Budget by 3% or more, unless the difference is
contributed by Borrower or the Project Owner as a cash equity
contribution;
(C) a change to the pro forma statements of operations for the
applicable Xxxxxxx Hotel that indicates that such Xxxxxxx Hotel will not
produce sufficient gross revenue to become a Stabilized Hotel plus fund
the debt service (as reasonably determined by Lender) on any Loans or
portions thereof, the proceeds of which would be used to finance such
Xxxxxxx Hotel;
(D) the termination of the commitment with respect to the applicable
Underlying Loan or the amendment or modification of the terms of such
commitment in a manner materially adverse to the applicable Project Owner;
11
(E) the discovery of any materially adverse environmental, seismic
or physical condition with respect to the applicable Property not
previously disclosed in the studies and reports furnished by Borrower to
Lender;
(F) the applicable Property shall become subject to any Lien other
than Permitted Encumbrances;
(G) any change in applicable Legal Requirements that materially
adversely affects the applicable Project Owner's ability to complete or
operate the applicable Xxxxxxx Hotel; or
(H) any other event that materially adversely affects the applicable
Xxxxxxx Hotel.
"MATURITY DATE" means [ ], 20[18] or such earlier date as the Loans are
prepaid in full or accelerated.
"MAXIMUM RATE" is defined in Section 2.2(C).
"MINIMUM NET WORTH AMOUNT" means an amount equal to $250,000,000.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate is making, or is
accruing an obligation to make, contributions or has made, or been obligated to
make, contributions within the preceding six (6) years, or for which Borrower or
any ERISA Affiliate has any liability, including contingent liability.
"NET LIQUIDATION PROCEEDS AFTER DEBT SERVICE" means, with respect to any
Liquidation Event, all amounts paid to or received by or on behalf of the
applicable Project Owner in connection with such Liquidation Event, including
proceeds of any sale, refinancing or other disposition or liquidation, less (a)
in the case of casualty or condemnation proceeds, the reasonable third party
out-of-pocket costs incurred by such Project Owner in connection with a
restoration of the Property made in accordance with the terms of the applicable
Underlying Loan, (b) amounts required to be paid pursuant to the terms of the
applicable Underlying Loan to the lender thereof, (c) the amount of all accrued
but unpaid interest on that portion of the Outstanding Amount that is required
by Section 2.4(D)(iv) to be prepaid following such Liquidation Event, and (d) in
the case of a refinancing of an Underlying Loan or a Transfer, the reasonable
and customary out-of-pocket costs and expenses actually incurred to third
parties in connection with such refinancing or Transfer, including brokerage
fees, transfer taxes, reasonable attorneys' fees and similar costs.
"NET WORTH" means at any time:
(a) the total assets of JQH and the JQH Trust that would be shown as
assets on a consolidated balance sheet of JQH and the JQH Trust as of such time
prepared in accordance with the Accounting Rules, (i) valuing such assets on a
current fair market value basis, except that until a Xxxxxxx Hotel is either
Substantially Completed and open for business or materially impaired as a result
of an occurrence that could prevent the Xxxxxxx Hotel from becoming
12
Substantially Completed within the originally contemplated time frame, the value
of the equity in such Xxxxxxx Hotel shall be considered equal to the principal
amount of the Loans advanced with respect to such Xxxxxxx Hotel, (ii) excluding
(A) the Preferred Equity Interest and any interest of JQH in JQH, Inc., and (B)
any Unapplied Early Redemption Price, and (iii) after eliminating all amounts
properly attributable to minority interests in any Subsidiary, minus
(b) the total liabilities of JQH and his Subsidiaries that would be shown
as liabilities on a consolidated balance sheet of JQH and his Subsidiaries as of
such time prepared in accordance with the Accounting Rules, (i) excluding the
Loans, (ii) including Contingent Obligations whether or not JQH is personally
liable therefor, but excluding any Contingent Obligations under the Bottom
Guaranties.
"NET WORTH AGREED-UPON PROCEDURES" means procedures acceptable to Lender
to be used to verify the Net Worth, such as, but not limited to the following:
________________. Borrower shall have the right to request modifications to the
Net Worth Agreed-Upon Procedures from time to time, subject to Lender's
approval, which approval shall not be unreasonably withheld. Prior to January 31
of any year Lender shall have the right to require reasonable changes to the Net
Worth Agreed-Upon Procedures from time to time following any material change in
the composition, nature or relative valuations of the assets of JQH and his
Subsidiaries. [TO BE COMPLETED PRIOR TO CLOSING.]
"NET WORTH CERTIFICATE" means a certificate from JQH delivered to Lender
certifying the Net Worth as of December 31 of the prior calendar year and
compiled by a nationally recognized firm of certified public accountants,
including BKD, LLP, a member of Xxxxxx Xxxxxxx International, in accordance with
the Accounting Rules and setting forth such additional information regarding the
assets and liabilities of JQH, the JQH Trust and their respective Subsidiaries
as shall be necessary to fully and fairly reflect the Net Worth.
"NOTE" means the Promissory Note, together with any Substitute Notes and
all future advances, extensions, renewals, substitutions, modifications and
amendments of the Promissory Note and any Substitute Notes.
"OBLIGATIONS" means, in the aggregate, all obligations, liabilities and
indebtedness of every nature of any Loan Party from time to time owed to Lender
under the Loan Documents, including the principal amount of the Loans, accrued
and unpaid interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
time to time hereafter owing, due or payable to Lender under the Loan Documents
whether before or after the filing of an Action under the Bankruptcy Code by or
against any Loan Party. The term "Obligations" shall also include any judgment
against any Loan Party with respect to such obligations, liabilities and
indebtedness of any Loan Party.
"OFAC" is defined in Section 4.7.
"OFAC LIST" is defined in Section 4.7.
"ORGANIZATIONAL DOCUMENTS" means, as applicable, for any Person, such
Person's articles or certificate of incorporation, by-laws, partnership
agreement, trust agreement, certificate of limited partnership, articles of
organization, certificate of formation, shareholder
13
agreement, voting trust agreement, operating agreement, limited liability
company agreement and/or analogous documents.
"OUTSTANDING AMOUNT" means with respect to the Loans, on any date of
determination, the aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments or repayments of the Loans, as the case
may be, occurring on such date.
"PARTNERSHIP " means [Xxxx X. Xxxxxxx Hotels, L.P.], a Delaware limited
partnership.
"PARTNERSHIP AGREEMENT" means the Fourth Amended and Restated Agreement of
Limited Partnership of [ ], L.P., dated as of [ ], 2005 among JQH,
the JQH Trust, Xxxxxxx, Inc. and others.
"PAYMENT DATE" means the first Business Day of each Loan Month.
"PERMITTED ENCUMBRANCES" means, collectively, (a) the Liens created by the
Loan Documents, (b) Liens securing the applicable Underlying Loan, (c) all Liens
and other matters disclosed in the title insurance policy issued to the lender
of the Underlying Loan and reasonably approved by Lender relating to the
applicable Xxxxxxx Hotel or any part thereof, (d) Liens, if any, for taxes
imposed by any Governmental Authority not yet delinquent or being contested in
good faith by appropriate proceedings, (e) other Liens that are being contested
in good faith, (f) the rights of the lessors or secured parties under any
equipment lease agreements, purchase money security agreements, capital leases
and other security agreements (i) incurred in the ordinary course of business
and consistent with past practices, which are described in the submissions to
Lender under Sections 3.1 or 3.3 and approved by Lender, such approval not to be
unreasonably withheld or delayed and (ii) which do not, when combined with the
Underlying Loan, exceed (y) prior to Substantial Completion, 75% of the project
cost shown on the Project Budget for the applicable Xxxxxxx Hotel and (z) if the
construction loan is refinanced following Substantial Completion, then the
greater of 75% of the project cost shown on the Project Budget or 70% of
Appraised Value (or if no Appraisal of the Xxxxxxx Hotel is available, Lender's
determination of fair market value), and any financing statements filed as
evidence of such lessors' or secured parties' rights, (g) the Sponsor Entity
Right of First Refusal Agreement dated the Closing Date, among JQH, the JQH
Trust, JD Holdings, LLC and others, and (h) such other title and survey
exceptions and other Liens as Lender has approved or may approve in writing in
Lender's sole discretion.
"PERMITTED INDEBTEDNESS" means (a) with respect to Borrower, (i) the
Indebtedness under the Loan Documents, and (ii) unsecured amounts not more than
ninety (90) days outstanding payable by or on behalf of Borrower for or in
respect of its customary corporate administration and customary administrative
overhead and which are incurred by Borrower in the ordinary course of its
ownership of each Project Owner and (b) with respect to each Project Owner, (i)
the Indebtedness under the applicable Underlying Loan, (ii) Indebtedness under
any refinancings of any Underlying Loan so long as the principal amount thereof
does not exceed (y) prior to Substantial Completion, 75% of the Appraised Value
of the applicable Xxxxxxx Hotel and (z) after Substantial Completion, 70% of the
Appraised Value of the applicable Xxxxxxx Hotel, (iii) the Contractual
Obligations in connection with construction of the applicable Improvements, (iv)
trade payables incurred in the ordinary course of such Project Owner's
14
ownership and operation of the Property and not more than ninety (90) days
outstanding, (v) guaranties by Borrower of the Underlying Loans, and (vi)
capital leases, purchase money security interests and other financing on the
condition that all of the Indebtedness described in clauses (b) (i), (ii) and
(vi) does not exceed (y) prior to Substantial Completion, 75% of the project
cost shown on the Project Budget for the applicable Xxxxxxx Hotel and (z) if the
construction loan is refinanced following Substantial Completion, then the
greater of 75% of the project cost shown on the Project Budget or 70% of
Appraised Value (or if no Appraisal of the Xxxxxxx Hotel is available, Lender's
determination of fair market value).
"PERSON" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and Governmental Authorities and their respective permitted
successors and assigns (or in the case of a Governmental Authority, the
successor functional equivalent of such Person).
"PLEDGE AGREEMENTS" means, collectively, the Borrower Pledge Agreement and
the Guarantor Pledge Agreement.
"PREFERRED EQUITY INTEREST" means the aggregate Xxxxxxx Preferred Units
(as defined in the Partnership Agreement) issued to the JQH Trust and their
Affiliates by the Partnership.
"PREFERRED REDEMPTION PRICE" has the meaning specified in the Partnership
Agreement.
"PRESCRIBED LAWS" means, collectively, (a) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), (b) Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001, and
relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism and implementing regulations
thereto, (c) the International Emergency Economic Power Act, 50 U.S.C. Section
1701 et. seq., (d) all other Legal Requirements administered by the Office of
Foreign Assets Control, and (e) all other Legal Requirements relating to money
laundering or terrorism.
"PROJECT APPROVAL" is defined in Section 3.3(A).
"PROJECT BUDGET" means a construction budget setting forth the projected
costs and expenses for the acquisition, construction and development of the
related Xxxxxxx Hotel.
"PROJECT FILE" means, collectively, the items specified in Section 3.4(A).
"PROJECT OWNER" means a Special Purpose Bankruptcy Remote Entity that is a
wholly-owned Subsidiary of Borrower and is formed to acquire, own, develop,
construct and operate Xxxxxxx Hotels or Land is acquired in contemplation of
construction of a Xxxxxxx Hotel.
"PROMISSORY NOTE" means the Promissory Note dated of even date herewith
made by Borrower to the order of Lender in the original principal amount of
$275,000,000.
15
"PROPERTY" means, collectively, with respect to any Xxxxxxx Hotel, the
Land and Improvements comprising such Xxxxxxx Hotel.
"PROPRIETARY RIGHTS" is defined in Section 4.9.
"SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY" is defined in SCHEDULE 6.8.
"STABILIZED HOTEL" means any Xxxxxxx Hotel (A) as to which all
construction, renovation or improvement contemplated by the applicable Project
Budget has been fully completed (including any so-called "punch list items") and
(B) that has demonstrated to the reasonable satisfaction of Lender (on the basis
of financial statements delivered to Lender in accordance with the terms of this
Agreement) the ability to generate annual operating revenue sufficient to pay as
and when due (i) all operating expenses incurred by the applicable Project Owner
over the course of an operating year for such Xxxxxxx Hotel and (ii) all
scheduled debt service on the applicable Underlying Loan during such period.
"SUBORDINATION OF MANAGEMENT AGREEMENT" means an agreement between Lender
and Manager providing for the subordination of Manager's rights under the
Management Agreement.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which Equity Interests representing more than fifty percent (50%) of the
Equity Interests or more than fifty percent (50%) of the ordinary voting power
or, in the case of a partnership, more than fifty percent (50%) of the general
partnership interests are, as of such date, owned, controlled or held, and (b)
that is, as of such date, otherwise Controlled, by the parent or one or more
Subsidiaries of the parent or by the parent and one or more Subsidiaries of the
parent.
"SUBSTANTIALLY COMPLETED" and "SUBSTANTIAL COMPLETION" mean (a) the
Improvements contemplated by the applicable Project Budget and plans and
specifications submitted to and approved by Lender as part of a Project Approval
have been completed in substantial accordance with such plans and specifications
and without any Material Change unless approved by Lender, (b) all material
permits and approvals required for the normal use and occupancy of the
applicable Property (including a certificate of occupancy if required for
occupancy under applicable Legal Requirements) shall have been issued by the
appropriate Governmental Authority and shall be in full force and effect, (c)
the applicable Improvements shall have been equipped with all furnishings,
fixtures, equipment and furniture required for the intended use and operation of
the Improvements, and (d) all material revenues generating components of the
Improvements are open for business to the public.
"SUBSTITUTE NOTE" means all notes given in substitution or exchange for
the Promissory Note or another Substitute Note.
"SUSPENSION DEFAULT RATE" means for each Interest Period following the
occurrence of a Suspension Event, a variable rate per annum equal to the sum of
the LIBOR Rate or the
16
Alternate Rate, as the case may be for such Interest Period, plus five percent
(5%) increasing or decreasing with each increase or decrease in the LIBOR Rate,
or the Alternate Rate, as the case may be (as and when the LIBOR Rate or the
Alternate Rate changes as described herein).
"SUSPENSION EVENT" is defined in Section 7.2(D).
"TAX LIABILITIES" is defined in Section 2.6.
"TRANSFER" means, (a) when used as a verb, to, directly or indirectly,
lease, sell, assign, convey, give, exchange, devise, mortgage, encumber, pledge,
hypothecate, alienate, grant a security interest, or otherwise create or suffer
to exist any Lien, transfer or otherwise dispose, or to contract or agree to do
any of the foregoing, whether by operation of law, voluntarily, involuntarily or
otherwise as well as any other action or omission which has the practical effect
of initiating or completing any of the foregoing and (b) when used as a noun, a
direct or indirect, lease, sale, assignment, conveyance, gift, exchange, devise,
mortgage, encumbrance, pledge, hypothecation, alienation, grant of a security
interest or other creation or sufferance of a Lien, transfer or other
disposition, or contract or agreement by which any of the foregoing may be
effected, whether by operation of law, voluntary or involuntary and any other
action or omission which has the practical effect of initiating or completing
any of the foregoing.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York.
"UNAPPLIED PREFERRED DEFAULT RATE" is defined in Section 2.2(A)(i).
"UNAPPLIED EARLY REDEMPTION PRICE" is defined in Section 2.4(D)(i).
"UNDERLYING LOAN" means, with respect to any Xxxxxxx Hotel, a loan or
loans made to a Project Owner by a lender that is not an Affiliate of Borrower
(a) which loan shall be secured by a first priority mortgage or deed of trust
encumbering the applicable Property, (b) the proceeds of which will be used to
finance a portion of the costs of acquisition, development, construction and
renovation of such Xxxxxxx Hotel in accordance with the applicable Project
Budget, and (c) the maximum aggregate principal amount of which shall not exceed
75% of the hard and soft costs set forth in the Project Budget.
"UNIFORM SYSTEM OF ACCOUNTS" means Uniform System of Accounts for Hotels,
9th Edition, International Association of Hospitality Accountants (19__), as
from time to time amended.
"UPDATED NET WORTH CERTIFICATE" means a Net Worth Certificate updated as
of the end of the applicable Loan Quarter and calculated in accordance with the
Accounting Rules.
"W&H AGREEMENTS" means the agreements between the applicable Project
Owners and Xxxxxxxxxxx and Xxxxxxx with respect to the provision of certain
accounting services for the Xxxxxxx Hotels.
1.2 TERMS; UTILIZATION OF ACCOUNTING RULES FOR PURPOSES OF FINANCIAL STATEMENTS
UNDER AGREEMENT. For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to such terms in
conformity with the Accounting Rules.
17
Financial statements and other information furnished to Lender pursuant to
Section 5.1 shall be prepared in accordance with the Accounting Rules as in
effect at the time of such preparation. No Accounting Changes shall affect
standards or terms in this Agreement; provided, that, Borrower shall prepare
footnotes to the financial statements required to be delivered hereunder that
describe any Accounting Changes impacting such financial statements.
1.3 OTHER DEFINITIONAL PROVISIONS. References to "SECTIONS," "SUBSECTIONS,"
"EXHIBITS" and "SCHEDULES" shall be to Sections, Subsections, Exhibits and
Schedules, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in Section 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference. In this Agreement, "HEREOF," "HEREIN," "HERETO," "HEREUNDER" and the
like mean and refer to this Agreement as a whole and not merely to the specific
section, paragraph or clause in which the respective word appears; words
importing any gender include the other genders; references to "WRITING" include
printing, typing, lithography and other means of reproducing words in a tangible
visible form; the words "INCLUDING," "INCLUDES" and "INCLUDE" shall be deemed to
be followed by the words "WITHOUT LIMITATION"; the phrase "AND/OR" shall mean
that either "and" or "or" may apply; the phrases "ATTORNEYS' FEES," "LEGAL FEES"
and "COUNSEL FEES" shall include any and all reasonable attorneys', paralegal
and law clerk fees and disbursements, including court costs, fees and
disbursements at the pre-trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Collateral and enforcing its rights
hereunder and/or the other Loan Documents; references to agreements and other
contractual instruments shall be deemed to include subsequent amendments,
assignments, and other modifications thereto, but only to the extent such
amendments, assignments and other modifications are not prohibited by the terms
of this Agreement or any other Loan Document; references to Persons include
their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons; references to a Person's "KNOWLEDGE" in this Agreement or the other
Loan Documents refers to the actual knowledge of the Person in question and such
knowledge as a reasonably prudent Person would have acquired by virtue of such
inquiry and due diligence as a reasonably prudent Person would have undertaken;
and all references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations. Where any
provision of this Agreement or any of the other Loan Documents refers to action
to be taken by any Person, or to an action which a Person is prohibited from
taking, such provisions shall be applicable whether such action is taken
directly by such Person or indirectly under the control of such Person.
SECTION 2
AMOUNTS AND TERMS OF THE LOAN
2.1 LOAN DISBURSEMENT AND NOTE.
(A) Upon the terms and subject to the conditions set forth in this
Agreement, Lender agrees to make loans (the "LOANS" and each such loan, a
"LOAN") to Borrower from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time
outstanding the Facility Availability Amount. Subject to the other terms
and conditions of this Agreement, Borrower may borrow under this Section
2.1, prepay under Section 2.4, and re-borrow under this Section 2.1. The
proceeds of the Loans shall be used to (i) fund equity investments in
Project Owners, which funds shall be used to pay
18
capital expenses (as classified under GAAP) relating to Existing Xxxxxxx
Hotel Projects and Additional Hotel Projects, (ii) make interest payments
under this Agreement and the Note, and (iii) repay in full the outstanding
amount of the Interim Line of Credit. The Loans shall be evidenced by the
Note. The Obligations of Borrower under this Agreement, the Note and the
other Loan Documents are secured by, among other things, the Liens created
or arising under this Agreement and the other Loan Documents.
(B) Each Loan shall be made upon Borrower's irrevocable delivery to
Lender of a Loan Request appropriately completed and signed by Borrower.
Each such Loan Request must be received by Lender not later than 11:00
a.m. ten (10) Business Days prior to the requested date of the applicable
Loan. Each Loan shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof (provided that a Loan requested
solely to fund interest may be in a lesser amount). Each Loan Request
shall specify (i) the requested date of the Loan, (which shall be a
Business Day and shall not be a day less than five (5) Business Days prior
to the last day of any Loan Month), (ii) the principal amount of the Loan
to be borrowed, and (iii) a detailed break-down of the proposed use of the
proceeds of the Loan, including designation of the applicable Xxxxxxx
Hotel(s). Borrower may not request more than one Loan per Loan Month
except that two (2) times in any calendar year, Borrower may request a
second Loan in a Loan Month.
(C) Upon satisfaction of the applicable conditions set forth in
Section 3, Lender shall make Loans available to Borrower by the wire
transfer of immediately available federal funds, in each case in
accordance with instructions provided to (and reasonably acceptable to)
Lender by Borrower. Lender hereby agrees that it shall make good faith
efforts to fund each Loan not later than 11:00 a.m. as of the requested
date of such Loan as set forth in the applicable Loan Request.
2.2 INTEREST.
(A) INTEREST RATE. The outstanding principal balance of the Loans
shall bear interest at the Base Rate from the date each such Loan is made
until such Loan is paid in full. The foregoing notwithstanding:
(i) if (1) Borrower has elected in accordance with Section
2.4(D)(i) not to apply all or any part of the Unapplied Early
Redemption Price to the repayment of the Outstanding Amount and (2) the
death of JQH occurs prior to the fifth (5th) anniversary of the Closing
Date, then from and after the first day of the first Interest Period
commencing after the first payment of the Early Redemption Price is
made, a portion of the Outstanding Amount equal to the amount of the
Unapplied Early Redemption Price shall bear interest at the LIBOR Rate
or the Alternate Rate, as the case may be, plus four percent (4.0%)
(the "UNAPPLIED PREFERRED DEFAULT RATE"), any subsequent mandatory
prepayment of the Outstanding Amount shall be applied first to the
portion of the Outstanding Amount bearing interest at the Base Rate
until all such amounts have been repaid and any subsequent optional
prepayment of the Outstanding Amount shall be applied first to the
portion of the Outstanding Amount bearing interest at the Unapplied
Preferred Default Rate until all such amounts have been repaid; and
19
(ii) (1) upon and during the continuance of any Default by
Borrower in the payment of any sum of principal, interest or other
Obligations of Borrower owing to Lender when due, (2) during the
existence of any Event of Default (unless but only for so long as such
Event of Default is deemed to be a Suspension Event under Section
7.2(D)), or (3) after the Maturity Date or earlier upon acceleration of
the Loans, the principal amount of each Loan shall bear interest
("DEFAULT INTEREST") at the Default Rate. With respect to any scheduled
payments of principal and interest (excluding the payment due on the
Maturity Date), Borrower will be entitled to a grace period of two (2)
days from the date on which such scheduled payment was due before
Default Interest is imposed by reason of such late payment; provided,
that such grace period will not be available more than twice in any
calendar year, and if Borrower fails to make the required payment
within said two (2) day period, Default Interest will be calculated
from the original due date. Except as set forth in the preceding
sentence, Default Interest shall commence, without notice, immediately
upon and from the occurrence of the events described in (1), (2) or (3)
above, as the case may be, and shall continue until all Defaults are
cured and all sums that have become due and payable under the Loan
Documents are paid in full. Default Interest shall be payable upon
demand, and, to the extent unpaid, shall be compounded monthly at the
Default Rate.
(iii) upon and during the continuance of any Suspension Event the
principal amount of each Loan shall bear interest at the Suspension
Default Rate.
(B) COMPUTATION AND PAYMENT OF INTEREST. Interest on the Loans and
all other Obligations owing to Lender shall be computed on the daily
Outstanding Amount on the basis of actual days elapsed and a 360-day year.
Interest on the Loans is payable in arrears on each Payment Date to Lender
as specified in Section 2.3. In addition, all accrued and unpaid interest
shall be paid to Lender on the earlier of the date of any prepayment (to
the extent prepayment is permitted or required under Section 2.4) and
maturity, whether by acceleration or otherwise.
(C) INTEREST LAWS. Notwithstanding any provision to the contrary
contained in this Agreement or the other Loan Documents, Borrower shall
not be required to pay, and Lender shall not be permitted to collect, any
amount of interest in excess of the maximum amount of interest permitted
by law ("EXCESS INTEREST"). If any Excess Interest is provided for or
determined by a court of competent jurisdiction to have been provided for
in this Agreement or in any other Loan Document, then in such event: (1)
the provisions of this Section shall govern and control; (2) Borrower
shall not be obligated to pay any Excess Interest; (3) any Excess Interest
that Lender may have received hereunder shall be, at Lender's option, (a)
applied as a credit against the outstanding principal balance of the
Obligations due and owing to Lender (without any prepayment penalty or
premium therefor) or for accrued and unpaid interest thereunder (not to
exceed the maximum amount permitted by law), (b) refunded to the payor
thereof, or (c) any combination of the foregoing; (4) the interest rate(s)
provided for herein shall be automatically reduced to the maximum lawful
rate allowed from time to time under applicable law (the "MAXIMUM RATE"),
and this Agreement and the other Loan Documents shall be deemed to have
been and shall be, reformed and modified to reflect such reduction; and
(5) Borrower shall not have any action against Lender for any damages
arising out of the payment or collection of any Excess
20
Interest. Notwithstanding the foregoing, if for any period of time
interest on any Obligation due and owing to Lender is calculated at the
Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the
rate of interest payable on such Obligations due and owing to Lender
shall, to the extent permitted by law, remain at the Maximum Rate until
Lender shall have received or accrued the amount of interest which Lender
would have received or accrued during such period on Obligations due and
owing to Lender had the rate of interest not been limited to the Maximum
Rate during such period.
(D) LATE CHARGES. If any scheduled payment of principal and/or
interest or other Obligation owing pursuant to this Agreement or the other
Loan Documents is not paid when due, Borrower shall pay to Lender, in
addition to all sums otherwise due and payable, a late charge ("LATE
CHARGE") in an amount equal to three percent (3%) of the unpaid amount.
With respect to regular monthly payments of interest (excluding the
payment due on the Maturity Date), Borrower will be entitled to a grace
period of two (2) days from the applicable date due before a Late Charge
is imposed by reason of such late payment; provided, that such grace
period will not be available more than twice in any calendar year. Any
unpaid Late Charge shall bear interest at the Default Rate until paid.
2.3 INTEREST PAYMENTS. On each Payment Date Borrower shall pay to Lender
interest on the Outstanding Amount accrued from and including the immediately
preceding Payment Date, to, but not including, the Payment Date on which such
payment is to be made.
2.4 PRINCIPAL PAYMENTS AND PREPAYMENTS ON THE LOANS.
(A) MANNER AND TIME OF PAYMENT. Borrower shall pay all of the
Obligations arising under this Agreement and the other Loan Documents
relating to the Loans as such amounts become due or are declared due
pursuant to the terms of this Agreement and the other Loan Documents. All
payments shall be made without deduction, defense, setoff or counterclaim,
by the wire transfer of immediately available funds to Lender's account at
XX Xxxxxx Xxxxx for the account of iStar Financial Inc., Account No.
9102757938, XX Xxxxxx Chase Bank ABA 000000000 Reference: JQH Lendco Loan,
or at such other place as Lender may direct from time to time by notice to
Borrower. Borrower shall receive credit for such funds on the date
received if such funds are received by Lender by 2:00 P.M. (New York time)
on such day. If such funds are received after 2:00 P.M. (New York time),
such funds shall be deemed to have been paid by Borrower on the following
Business Day. Whenever any payment to be made under the Loan Documents
shall be stated to be due on a day that is not a Business Day, or any time
period relating to a payment to be made hereunder is stated to expire on a
day that is not a Business Day, the payment may be made on the following
Business Day, the period will not expire until such following Business Day
and interest will continue to accrue during any such extended period.
(B) MATURITY. The entire outstanding principal balance of the Loans,
together with all accrued and unpaid interest thereon and all other
Obligations owing to Lender pursuant to the Loan Documents, shall be due
and payable on the Maturity Date.
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(C) OPTIONAL PREPAYMENTS. The Outstanding Amount may be prepaid, in
whole or in part (in increments of not less than $1,000,000), upon not
less than thirty (30) days irrevocable prior notice to Lender.
(D) MANDATORY PREPAYMENTS.
(i) Borrower shall be obligated to repay the Outstanding Amount,
in whole or in part, together with any accrued and unpaid interest on
the amount repaid, to the extent of any proceeds whenever received on
or with respect to Preferred Equity Interest (including, without
limitation, from the redemption, repurchase or liquidation of the
Preferred Equity Interest); provided, that, so long as (A) no Default
or Event of Default (including a Suspension Event) shall have occurred
and be continuing, (B) the Net Worth, as evidenced by the most recent
Net Worth Certificate delivered to Lender, is equal to or greater than
the Minimum Net Worth Amount, and (C) the unpaid Preferred Redemption
Price (after deduction of the Early Redemption Price) of the Preferred
Equity Interest is greater than the sum of the Outstanding Amount plus
the unfunded Facility Availability Amount, then JQH's estate may elect
by notice to Lender that the mandatory prepayment requirements of this
Section 2.4(D)(i) not apply to all or any portion of the proceeds of
the exercise of the Early Redemption Rights (as defined in the
Partnership Agreement) (any such proceeds being referred to herein as
the "UNAPPLIED EARLY REDEMPTION PRICE").
(ii) In the event of (A) a foreclosure of any Underlying Loan or
(B) a Bankruptcy Event shall occur with respect to any Project Owner,
Borrower shall be obligated to repay the portion of the Loans, together
with any accrued and unpaid interest on the amount repaid, made with
respect to the Xxxxxxx Hotel related to the Bankruptcy Event or the
Underlying Loan related to the Affected Project Owner.
(iii) Borrower shall be obligated to repay a portion of the
Outstanding Amount, together with any accrued and unpaid interest on
the Outstanding Amount, in the event that the Net Worth should, at any
time, be less than the Minimum Net Worth Amount, such that after such
prepayment the Outstanding Amount does not exceed the lesser of (A)
$100,000,000 and (B) forty percent (40%) of the Net Worth at such time.
(iv) Borrower shall be obligated to repay a portion of the
Outstanding Amount, together with any accrued and unpaid interest on
the amount repaid, to the extent of any Net Liquidation Proceeds After
Debt Service of any Xxxxxxx Hotel if the applicable Liquidation Event
occurs at any time (A) that the Net Worth is less than the Minimum Net
Worth Amount, or (B) a Default (unless such Default is cured within the
applicable cure period) or an Event of Default (including a Suspension
Event) has occurred and is continuing.
(v) In the event Borrower requests a disbursement of a Loan in
connection with the Charlevoix in accordance with Section 3.4 and such
Loan is greater than $20,000,000 as permitted under Section 3.4, then
Borrower shall be obligated to repay a portion of the Outstanding
Amount, together with any accrued and unpaid interest on the
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amount repaid, within three (3) years following Substantial Completion
of such project to the extent of the difference between such Loan and
$20,000,000.
(vi) Borrower shall be obligated to make a prepayment as required
by Section 3.5(C).
(E) PAYMENT OF PREPAYMENTS; COMPENSATION. Any mandatory prepayments
made pursuant to subsection (D) above shall be made on or before the
Mandatory Prepayment Due Date, unless otherwise provided herein. In the
event of (a) the payment of any principal of the Loans other than on a
Payment Date or the Mandatory Prepayment Due Date (including as a result
of an Event of Default) or (b) the failure to borrow or prepay the Loans
as specified in any notice delivered pursuant to this Agreement or the
other Loan Documents, then, in any such event and, in addition to the
payments to be made to Lender pursuant to this Section 2.4, Borrower
agrees to compensate Lender for all losses, costs, expenses and damages
Lender may incur attributable to such event. A reasonably detailed notice
by Lender setting forth any amount or amounts that Lender is entitled to
receive pursuant to this Section 2.4(E) shall be delivered to Borrower and
shall be conclusive absent manifest error. Borrower shall pay Lender the
amount shown as due on any such notice within ten (10) Business Days after
receipt thereof.
2.5 LENDER'S RECORDS; MUTILATED, DESTROYED OR LOST NOTES. The balance on
Lender's books and records shall be presumptive evidence (absent manifest error)
of the amounts due and owing to Lender by Borrower; provided, that, any failure
to so record or any error in so recording shall not limit or otherwise affect
Borrower's obligation to pay the Obligations. In case any Note shall become
mutilated or defaced, or be destroyed, lost or stolen, Borrower shall, upon
request from Lender, execute and deliver a Substitute Note of like principal
amount in exchange and substitution for the mutilated or defaced Note, or in
lieu of and in substitution for the destroyed, lost or stolen Note. In the case
of a mutilated or defaced Note, the mutilated or defaced Note shall be
surrendered to Borrower upon delivery to Lender of the Substitute Note. In the
case of any destroyed, lost or stolen Note, Lender shall furnish to Borrower,
upon delivery to Lender of the Substitute Note (i) certification of the
destruction, loss or theft of such Note and (ii) such security or indemnity as
may be reasonably required by Borrower to hold Borrower harmless.
2.6 TAXES. Any and all payments or reimbursements made under this Agreement, the
Note or the other Loan Documents shall be made free and clear of and without
deduction for any and all taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto arising out of or in
connection with the transactions contemplated by the Loan Documents; excluding,
however, the following: taxes imposed on the income of Lender by any
jurisdiction or any political subdivision thereof; taxes that are not directly
attributable to the Loans; and any "doing business" taxes, however denominated,
charged by any state or other jurisdiction (all such taxes, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto,
excluding such taxes imposed on income, taxes not directly attributable to the
Loans and any "doing business" taxes, herein "TAX LIABILITIES"). If Borrower
shall be required by law to deduct any such amounts from or in respect of any
sum payable hereunder to Lender, then the sum payable hereunder shall be
increased as may be necessary so that, after making all required deductions,
Lender receives an amount equal to the sum it would have
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received had no such deductions been made. In the event that, subsequent to the
Closing Date, (1) any changes in any existing law, regulation, treaty or
directive or in the interpretation (by the taxing authority) or application (by
the taxing authority) thereof, (2) any new law, regulation, treaty or directive
enacted or any interpretation (by the taxing authority) or application (by the
taxing authority) thereof, or (3) compliance by Lender with any new request or
directive (whether or not having the force of law) from any Governmental
Authority, does or shall subject Lender to any tax of any kind whatsoever with
respect to this Agreement, the other Loan Documents or the Loans, or change the
basis of taxation of payments to Lender of principal, fees, interest or any
other amount payable hereunder (except for income taxes, or franchise taxes
imposed in lieu of income taxes, imposed generally by federal, state or local
taxing authorities with respect to interest or commitment or other fees payable
hereunder or changes in the rate of interest or tax on the overall income of
Lender, taxes that are not directly attributable to the Loan and any "doing
business" taxes, however denominated, charged by any state or other
jurisdiction) and the result of any of the foregoing is to increase the cost to
Lender of making or continuing the Loans hereunder, as the case may be, or to
reduce any amount receivable hereunder, then, in any such case, Borrower shall
promptly pay to Lender, within thirty (30) days after its demand, any additional
amounts necessary to compensate Lender, on an after-tax basis, for such
additional cost or reduced amount receivable, as determined by Lender with
respect to this Agreement or the other Loan Documents. If Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.6, it shall
promptly notify Borrower of the event by reason of which Lender has become so
entitled.
2.7 APPLICATION OF PAYMENTS. Except as otherwise expressly provided in the last
sentence of this Section 2.7, all payments made hereunder shall be applied
first, to the payment of any Late Charges and other sums (other than principal
and interest) due from Borrower to Lender under the Loan Documents, second, to
any Default Interest (including interest at the Suspension Default Rate), third
to interest other than Default Interest, and last to the Outstanding Amount.
Following and during the continuance of an Event of Default, all sums collected
by Lender shall be applied in such order of priority to such items set forth
below as Lender shall determine, in its sole discretion: (i) to the costs and
expenses, including attorneys' fees incurred in the collection of any or all of
the Loans due or the realization of any Collateral and (ii) to any or all unpaid
amounts owing pursuant to the Loan Documents.
2.8 PLEDGE AGREEMENT. Pursuant to the Pledge Agreements, to secure the payment,
performance and discharge of the Obligations, the Loan Parties will grant,
assign, transfer, convey and set over unto Lender a continuing first priority,
perfected security interest in and Lien upon (i) the Preferred Equity Interest,
(ii) 100% of the Equity Interests in the Borrower, and (iii) Borrower's Equity
Interests in each Project Owner.
SECTION 3
CONDITIONS TO LOANS
3.1 CONDITIONS TO INITIAL LOAN. The obligation of Lender to make the Initial
Loan hereunder is subject to satisfaction of the following conditions precedent,
any or all of which may be waived in whole or in part by Lender, in its sole
discretion:
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(A) LOAN DOCUMENTS. On or before the Closing Date, each Loan Party
shall execute and deliver and cause to be executed and delivered, to
Lender each Loan Document (to which it is a party), each, unless otherwise
noted, dated the Closing Date, duly executed, in form and substance
satisfactory to Lender and in quantities designated by Lender (except for
the Promissory Note, of which only the original shall be executed).
Borrower hereby authorizes Lender to file the Financing Statements in such
filing offices as Lender elects.
(B) OPINION OF COUNSEL. Lender shall have received written opinions
of counsel for the Loan Parties in form and substance reasonably
satisfactory to Lender and its counsel, dated the Closing Date.
(C) ORGANIZATIONAL AND AUTHORIZATION DOCUMENTS. Lender shall have
received all documents reasonably requested by Lender, including all
corporate resolutions and Organizational Documents (if applicable), with
regard to the due organization, existence, internal governance, power and
authority, due authorization, execution and delivery, authorization to do
business and good standing of the Loan Parties, each Project Owner, the
Partnership and such other Persons as Lender may reasonably designate, the
validity and binding effect of the Loan Documents and other matters
relating thereto, in each case in form and substance satisfactory to
Lender.
(D) PARTNERSHIP AGREEMENT. Lender shall have approved the form and
substance of the Partnership Agreement and received a certificate,
duly-executed by Atrium GP, LLC, as general partner of the Partnership
attaching a copy of the Partnership Agreement and certifying to Lender
that (i) such attached copy is true and complete, (ii) the Partnership
Agreement is in full force and effect and has not been amended, modified
or supplemented, and (iii) neither JQH nor any other partner of the
Partnership is in default in the payment or performance of his or its
obligations under the Partnership Agreement.
(E) FINANCIAL STATEMENTS. Lender shall have received financial
statements of JQH and the JQH Trust, including pro forma balance sheets
dated December 31, 2004 giving effect to the making of the Initial Loan
and the other transactions occurring on the Closing Date.
(F) SEARCHES, PERFECTION AND PRIORITY. Lender shall have received
and approved copies of Financing Statement, judgment, tax lien, bankruptcy
and litigation search reports of such jurisdictions and offices as Lender
may reasonably designate with respect to the Loan Parties and such other
Persons as Lender may reasonably require. Lender shall have received such
other evidence as Lender may require confirming that Lender has a
continuing first priority, perfected security interest in and Lien upon
the Collateral, including all Financing Statements.
(G) INTERIM LINE OF CREDIT. Lender shall have received evidence, in
form and substance satisfactory to it, that the Interim Line of Credit has
been paid or, on the Closing Date, will be paid by Borrower, which payment
may be funded with the proceeds of the Initial Loan.
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(H) CONSENTS. Lender shall have received evidence that all
governmental, equity holder and third-party consents and approvals
necessary or desirable in connection with the consummation of the
transactions described herein have been obtained.
(I) CONSUMMATION OF MERGER. The merger between JQH, Inc. and a
Subsidiary of JD Holdings, LLC shall have been consummated as contemplated
by that certain merger agreement dated June 14, 2005.
(J) CERTIFIED COPY OF THE TRUST AGREEMENT. Lender shall have
received a certified copy of the Trust Agreement together with such
additional certifications and agreements as Lender may require.
(K) CLOSING STATEMENT. Lender shall have received a closing
statement executed by Borrower.
(L) RECOGNITION OF PLEDGE AND AGREEMENT. An agreement recognizing
the pledge of the Loan and all security therefor to iStar and containing
such agreements in connection therewith as iStar may reasonably require.
(M) MINIMUM COLLATERAL. The Pledge Agreements executed under Section
3.4(H) shall include a pledge of the Loan Parties' interest in the Chateau
on the Lake, Branson, Missouri. In addition to the pledge of the equity
interests in the Chateau on the Lake, the minimum cash equity investment
in the Existing Xxxxxxx Hotels that are owned indirectly by Borrower
through its ownership of the Project Owners will not be less than
$25,000,000.
(N) OTHER DOCUMENTS AND DELIVERIES. Borrower shall have delivered
such other documents and deliveries reasonably related to the Initial Loan
as Lender may reasonably request.
3.2 CONDITIONS TO ALL LOANS. The obligation of Lender to make any Loan
(including the Initial Loan) is subject to the following conditions precedent,
any or all of which may be waived in whole or in part by the Lender, in its sole
discretion:
(A) LOAN REQUEST. Lender shall have received a Loan Request in
accordance with the requirements hereof.
(B) FACILITY AVAILABILITY AMOUNT. The principal amount of such Loan,
when added to the Outstanding Amount, shall not exceed the Facility
Availability Amount.
(C) DEFAULTS; EVENTS OF DEFAULT; SUSPENSION EVENTS. No Default or
Event of Default (including a Suspension Event) shall exist or would
result from such proposed Loan.
(D) TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Loan Parties contained herein or in any other Loan
Document, or which are contained in any document furnished at any time
under or in connection herewith or therewith, shall be true and correct in
all material respects on the Closing Date and on and as of the date of
such Loan as if made on such date, except to the extent that such
26
representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct in all material respects as of
such earlier date.
(E) NO LITIGATION. No Legal Requirements shall have been adopted
which would have a Material Adverse Effect; no order, judgment or decree
of any Governmental Authority shall have been issued or entered, and no
Action shall be pending or threatened which, in the reasonable judgment of
Lender, would enjoin, prohibit or restrain, the making, borrowing or
repayment of the Loans or the execution, delivery or performance of the
Loan Documents; and no Action shall be pending or threatened which shall
impose or result in a Material Adverse Effect upon the making, borrowing
or repayment of the Loans or the execution, delivery or performance of the
Loan Documents.
(F) MATERIAL ADVERSE EFFECT. No event, circumstance, or condition
shall exist or shall have occurred and be continuing which has, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
(G) MAXIMUM NUMBER OF PROJECTS. There shall be (i) no more than
twelve (12) Xxxxxxx Hotels as to which the construction, renovation or
improvements contemplated by the applicable Project Budget and plans and
specifications approved by Lender have not been Substantially Completed
(no more than six (6) of which shall be full service Hotel Projects) and
(ii) no more than twenty (20) Xxxxxxx Hotels that are not Stabilized
Hotels (including the Xxxxxxx Hotels described in clause (i) above).
(H) MANAGEMENT AGREEMENTS. The Management Agreement shall be in
effect with respect to each Xxxxxxx Hotel.
(I) UNDERLYING LOAN CONDITIONS. No circumstance shall exist whereby
the applicable Project Owner would not satisfy the conditions set forth in
its Underlying Loan with respect to an advance under such Underlying Loan,
other than a condition relating to the funding by such Project Owner of
its required equity investment in such Project Owner.
(J) MATERIAL CHANGE. No Material Change shall have occurred with
respect to the applicable Xxxxxxx Hotel.
3.3 CONDITIONS TO LOANS FOR ADDITIONAL HOTEL PROJECTS. In addition to the
conditions set forth in Sections 3.1 and 3.2, the obligation of Lender to make
any Loan with respect to an Additional Hotel Project is subject to the following
conditions precedent, any or all of which may be waived in whole or in part by
the Lender, in its reasonable discretion:
(A) APPROVAL OF PROJECT. Lender shall have completed a due diligence
investigation of the applicable Additional Hotel Project and approved such
Additional Hotel Project in its reasonable business judgment (a "PROJECT
APPROVAL"), exercised in good faith, which approval shall not be
unreasonably delayed, which due diligence investigation may include,
without limitation, delivery by Borrower to Lender and review by Lender
of:
(i) a narrative description of the applicable Property including
local market analysis and description of the planned construction,
renovation or re-positioning;
27
(ii) preliminary plans and specifications or construction
drawings (to the extent then available) for the contemplated
construction, improvements or renovation;
(iii) a preliminary Project Budget;
(iv) pro forma statements of operations for the first five (5)
years of the proposed Additional Hotel Project;
(v) (x) a binding commitment from a chartered bank or other
institutional lender with respect to the applicable Underlying Loan,
which may be conditioned on funding of the Loan hereunder and on
satisfaction of typical funding conditions, and the Underlying Loan
shall be made pursuant to such commitment; or
(y) if Borrower or Project Owner does not have such a binding
commitment, a letter of intent from a chartered bank or other
institutional lender with respect to the applicable Underlying Loan on
the conditions that (1) in no event shall Lender be obligated to Loan
more than $5,000,000 on an Additional Hotel Project before satisfaction
of the condition in clause (v)(x) above; (2) in no event shall there be
more than $25,000,000, in the aggregate at any time, in Loans
outstanding with respect to Additional Hotel Projects which have not
satisfied the condition in clause (v)(x) above and under Section 3.5;
and (3) in no event shall there be more than 5 Additional Hotel
Projects, at any time, for which the condition in clause (v)(x) above
has not been satisfied;
(vi) an environmental assessment with respect to the applicable
Property;
(vii) an engineering/seismic study with respect to the applicable
Property to the extent obtained in connection with the Underlying Loan;
(viii) if the applicable Additional Hotel Project involves
acquisition of the applicable Land, a copy of the contract of sale or
other agreement by which the Project Owner will acquire its interest in
such Land and at closing of the acquisition, a copy of the buyer-seller
closing statement;
(ix) an owners title insurance policy or commitment with respect
to the applicable Property;
(x) an independent Appraisal of the Additional Hotel Project
indicating the Appraised Value of such Additional Hotel Project and
satisfactory to Lender in all respects;
(xi) evidence that the proposed Additional Hotel Project will,
when completed, comply with all applicable Legal Requirements, which
evidence may consist of an architect's certificate and a certificate of
Borrower listing all permits required to construct and complete the
Additional Hotel Project and attaching copies of all of such permits
that have been obtained so long as Lender is satisfied that Borrower,
at all times, has obtained permits required for the applicable stage of
construction; and
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(xii) evidence that the proposed Additional Hotel Project will be
adequately serviced by all necessary utilities.
(B) ORGANIZATIONAL AND AUTHORIZATION DOCUMENTS OF PROJECT OWNER.
Lender shall have received all documents reasonably requested by Lender,
including all resolutions and Organizational Documents, with regard to the
due organization, existence, internal governance, power and authority, due
authorization, execution and delivery, authorization to do business and
good standing of the applicable Project Owner, and other matters relating
thereto, in each case in form and substance satisfactory to Lender.
(C) MANAGEMENT AGREEMENT. Lender shall have received and approved
true, correct and complete certified copies (by Borrower) of the
Management Agreement.
(D) FRANCHISE AGREEMENT. Lender shall have received and approved a
true, correct and complete certified copy (by Borrower) of any applicable
Franchise Agreement.
(E) SEARCHES, PERFECTION AND PRIORITY. Lender shall have received
and approved a copy of Financing Statement, judgment, tax lien, bankruptcy
and litigation search reports of such jurisdictions and offices as Lender
may reasonably designate with respect to the applicable Project Owner.
(F) PLEDGE AGREEMENT. Borrower shall have duly executed and
delivered to Lender a Pledge Agreement in form and substance satisfactory
to Lender and pledging to Lender 100% of the Equity Interests in the
applicable Project Owner, as additional security for the Obligations.
Lender shall have received such other evidence as Lender may require
confirming that Lender has a continuing first priority, perfected security
interest in and Lien upon the Equity Interests in the applicable Project
Owner, including all Financing Statements.
(G) MAXIMUM AMOUNT. The principal amount of such Loan, when added to
the aggregate principal amount of all Loans (or portions thereof) made
with respect to such Additional Hotel Project, shall not exceed (i)
$20,000,000 for any Existing Xxxxxxx Hotel Project other than Charlevoix
and (ii) $30,000,000 for Charlevoix.
(H) OTHER DOCUMENTS AND DELIVERIES. Borrower shall have delivered
such other documents and deliveries reasonably related to the Additional
Hotel Project as Lender may reasonably request.
3.4 CONDITIONS TO LOANS FOR EXISTING XXXXXXX HOTEL PROJECTS. In addition to the
conditions set forth in Sections 3.1 and 3.2, the obligation of Lender to make
any Loan with respect to an Existing Xxxxxxx Hotel Project is subject to the
following conditions precedent, any or all of which may be waived in whole or in
part by the Lender, in its sole discretion:
(A) PROJECT FILE. Lender shall have received with respect to such
Existing Xxxxxxx Hotel Project copies of:
(i) the current plans and specifications or construction
drawings;
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(ii) the current Project Budget;
(iii) pro forma statements of operations;
(iv) all loan documents with respect to the applicable Underlying
Loan;
(v) all Environmental Reports with respect to the applicable
Property;
(vi) all engineering/seismic studies obtained by or on behalf of
Borrower or its Affiliates with respect to the applicable Property;
(vii) the title insurance policy for the applicable Property;
(viii) the most current survey available for the Property, which
may be a pre-construction survey for the Property or if the
improvements are completed, an "as built" survey; and
(ix) copies of all construction reports, if any, obtained by or
on behalf of Borrower or its Affiliates with respect to the applicable
Property.
(B) PROJECT OWNER. Title to the applicable Existing Xxxxxxx Hotel
Project shall have been transferred to a Project Owner.
(C) ORGANIZATIONAL AND AUTHORIZATION DOCUMENTS OF PROJECT OWNER.
Lender shall have received all documents reasonably requested by Lender,
including all resolutions and Organizational Documents, with regard to the
due organization, existence, internal governance, power and authority, due
authorization, execution and delivery, authorization to do business and
good standing of the applicable Project Owner, and other matters relating
thereto, in each case in form and substance satisfactory to Lender.
(D) MANAGEMENT AGREEMENT. Lender shall have received and approved
(such approval not to be unreasonably withheld) a true, correct and
complete certified copies of the Management Agreement.
(E) FRANCHISE AGREEMENT. Lender shall have received and approved
(such approval not to be unreasonably withheld) a true, correct and
complete certified copy of any applicable Franchise Agreement.
(F) SEARCHES, PERFECTION AND PRIORITY. Lender shall have received
and approved copies of Financing Statement, judgment, tax lien, bankruptcy
and litigation search reports of such jurisdictions and offices as Lender
may reasonably designate with respect to the applicable Project Owner.
(G) PLEDGE AGREEMENT. Borrower shall have duly executed and
delivered to Lender a Pledge Agreement in form and substance satisfactory
to Lender and pledging to Lender 100% of the Equity Interests in the
applicable Project Owner, as additional security for the Obligations.
Lender shall have received such other evidence as Lender may require
confirming that Lender has a continuing first priority, perfected security
interest in and Lien
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upon the Equity Interests in the applicable Project Owner, including all
Financing Statements.
(H) MAXIMUM AMOUNT. The principal amount of such Loan, when added to
the aggregate principal amount of all Loans made with respect to such
Existing Xxxxxxx Hotel Project, shall not exceed (i) $20,000,000 for any
Existing Xxxxxxx Hotel Project other than Charlevoix and (ii) $30,000,000
for Charlevoix.
(I) OTHER DOCUMENTS AND DELIVERIES. Borrower shall have delivered
such other documents and deliveries reasonably related to the Existing
Xxxxxxx Hotel Project as Lender may reasonably request.
3.5 CONDITIONS TO LOANS FOR LAND ACQUISITION FOR ADDITIONAL HOTEL PROJECTS. In
addition to the conditions set forth in Sections 3.1 and 3.2, the obligation of
Lender to make any Loan solely for Land acquisition costs for an Additional
Hotel Project is subject to the following conditions precedent, all or any of
which may be waived in whole or in party by Lender, in its reasonable judgment:
(A) LIMITATION ON LOANS. In no event shall the Loan, under this
Section 3.5, be in an amount greater than $3,000,000 with respect to any
parcel of Land or more than $15,000,000 in the aggregate.
(B) GENERAL CONDITIONS. Borrower shall have satisfied all of the
conditions of Sections 3.3(A)(i), (vi), (viii) and (ix), 3.3(B), 3.3(E),
3.3(F) and 3.3(H), which conditions are hereby incorporated by reference.
(C) REPAYMENT. Any Loan under this Section must be repaid within
twenty-four (24) months from the initial disbursement thereof if Borrower
has not satisfied all of the conditions under Section 3.3 with respect to
such Land to qualify it as an Additional Hotel Project.
3.6 ADVANCES AFTER THE DEMISE. In addition to the conditions set forth in
Section 3.1 through Section 3.4, no Loan shall be advanced to Borrower following
the Demise unless, subject to the other provisions of this Agreement, such Loan
relates to (a) an Existing Xxxxxxx Hotel Project or an Additional Hotel Project
with respect to which (i) a Project Approval was granted by Lender and (ii)
either (x) Commencement of Construction occurred prior to the Demise or (y) the
applicable Project Owner is contractually obligated by a written agreement with
a Person not Affiliated with Borrower to complete construction of the Xxxxxxx
Hotel, the breach of which would result in damages in excess of $3,000,000, or
(b) the funding of any installment of interest due hereunder and the Outstanding
Amount (after taking into account any Loan being requested as of the applicable
date of determination) is less than $200,000,000.
3.7 ADVANCES TO PAY INTEREST, FEES AND OTHER AMOUNTS. Borrower hereby
irrevocably authorizes Lender to make Loans to pay interest accrued on the Note
as it comes due and to pay any fees or other amounts payable by Borrower under
this Agreement or the other Loan Documents (other than the principal of any
Loan) as and when such amounts are due and payable in accordance with the terms
of the Loan Documents. Lender shall have the right, but not the obligation to
make such Loans without notice to Borrower whether or not Lender shall have
31
received a Loan Request with respect thereto and regardless of whether any of
the conditions set forth in Section 3.2, 3.3, 3.4 or Section 3.5, as applicable,
shall have been satisfied or waived.
SECTION 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that, after giving effect to
the Loans, as of the Closing Date:
4.1 ORGANIZATION, POWERS, QUALIFICATION AND ORGANIZATION CHART. Borrower is a
[limited liability company] duly organized, validly existing and in good
standing under the laws of Missouri. Each Project Owner is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of Missouri. Each of Borrower and each Project Owner has all
requisite power and authority to own and operate its properties and to carry on
its business as now conducted and proposed to be conducted. The organization
chart attached hereto as SCHEDULE 4.1 (as updated from time to time by notice to
Lender pursuant to Section 5.1(J) and, upon request by Lender no more often than
quarterly) correctly identifies each Affiliate of JQH and the JQH Trust,
including Borrower and each Project Owner.
4.2 AUTHORIZATION OF BORROWING; NO CONFLICTS; GOVERNMENTAL CONSENTS; BINDING
OBLIGATIONS AND SECURITY INTERESTS IN COLLATERAL. Borrower has all requisite
power and authority to incur the Obligations evidenced by the Note and other
Loan Documents, to execute and deliver the Loan Documents and to perform the
terms thereof, to own the Xxxxxxx Hotels (whether directly or indirectly) and to
continue its businesses and affairs as presently conducted. The incurring of the
Obligations and the execution, delivery and performance by Borrower of each of
the Loan Documents to which it is a party and the consummation of the
transactions contemplated thereby have been duly authorized by all necessary
action. The incurring of the Obligations and the execution, delivery and
performance by Borrower of the Loan Documents to which it is a party and the
consummation of the transactions contemplated thereby do not and will not: (1)
violate any Legal Requirements applicable to Borrower, the Organizational
Documents of, or applicable to, Borrower, or any order, judgment or decree of
any Governmental Authority binding on Borrower or its properties; (2) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material Contractual Obligation to which Borrower is a
party or by which Borrower or its property may be bound; (3) result in or
require the creation or imposition of any Lien upon the assets of Borrower
(other than the Liens of Lender); or (4) require any registration with, approval
or consent of, or notice to, or other action to, with or by any Person,
including under any material Contractual Obligation to which Borrower is a party
or by which Borrower or its property may be bound (except to the extent such
registrations, approvals or consents and notices have been unconditionally given
or obtained on or before the Closing Date). The Loan Documents, when executed
and delivered by Borrower, will be the legally valid and binding obligations of
Borrower enforceable against Borrower, subject to bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors' rights
generally and to the application of general equitable principles in connection
with the enforcement thereof. The Pledge Agreements, together with the Financing
Statements to be filed in connection therewith, create a valid, enforceable and
perfected first priority lien and security interest in the Collateral, subject
to no other Liens.
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4.3 FINANCIAL STATEMENTS. All financial statements concerning Borrower and any
Project Owner which have been or will hereafter be furnished by Borrower to
Lender pursuant to this Agreement have been or will be prepared in accordance
with the Accounting Rules and do or will, in all material respects, present
fairly the financial condition of the Persons covered thereby as at the dates
thereof and the results of their operations for the periods then ended.
4.4 TITLE TO PROPERTY; LIENS; ZONING; CONTRACTUAL OBLIGATIONS.
(A) Each Project Owner has good and marketable fee simple or
leasehold title to the Land, the Improvements and the other components of
the applicable Xxxxxxx Hotel, subject only to the Permitted Encumbrances.
Each Project Owner owns or leases all real and personal property necessary
for the operation of the applicable Xxxxxxx Hotel, subject only to the
Permitted Encumbrances. Except for the Permitted Encumbrances, the Xxxxxxx
Hotels are free and clear of any Liens. No Improvements lie outside the
boundaries and building restriction lines of the Land or encroach onto any
easements, and no improvements on adjoining properties encroach upon the
Land to any extent which would materially impair the related Xxxxxxx
Hotel. The Permitted Encumbrances do not and will not materially interfere
with the use or operation of any Xxxxxxx Hotel, or the marketability or
fair market value of any Xxxxxxx Hotel.
(B) Each Xxxxxxx Hotel complies with all applicable zoning, land use
and Legal Requirements. No Actions are pending or, to Borrower's
knowledge, threatened, with respect to the compliance of any Xxxxxxx Hotel
with Legal Requirements. Neither the zoning nor any other right to
construct, use or operate each Xxxxxxx Hotel is in any way dependent upon
any real estate other than the related Property. In the event that all or
any part of the Improvements are destroyed or damaged, said Improvements
can be legally reconstructed to their condition prior to such damage or
destruction, and thereafter exist for the same use without violating any
zoning or other Legal Requirements applicable thereto and without the
necessity of obtaining any variances or special permits (i.e. other than
those customarily obtained in the ordinary course of construction). Each
Xxxxxxx Hotel contains, or will contain, enough permanent parking spaces
on the Land, or pursuant to perpetual easements or shared parking
agreements, to satisfy all requirements imposed by applicable Legal
Requirements with respect to parking.
(C) Borrower has provided Lender with true and complete copies of
all material Contractual Obligations affecting each Xxxxxxx Hotel, all of
which are listed on SCHEDULE 4.4, which may be updated from time to time
by Borrower pursuant to written notice to Lender. Neither Borrower nor any
Project Owner is a party to and neither Borrower nor any Project Owner is
bound by any material agreement, document or instrument which affects a
Xxxxxxx Hotel, other than the Loan Documents, the Permitted Encumbrances,
the other material Contractual Obligations required to be listed on
SCHEDULE 4.4, if any, and such Person's Organizational Documents, true,
correct and complete copies of which have been delivered to Lender. Except
for the Loan Documents, no Loan Party or any Project Owner is a party to
or bound by, and no Loan Party's or any Project Owner's property is
subject to or bound by, any Contractual Obligation which restricts its
ability to conduct its business in the ordinary course or, either
individually or in the aggregate, has a Material Adverse Effect or could
reasonably be expected to have a Material Adverse Effect. No Loan Party or
any
33
Project Owner is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
material Contractual Obligation which could have a Material Adverse
Effect.
4.5 LITIGATION. Except as set forth on SCHEDULE 4.5, there are no judgments
outstanding against Borrower or any Project Owner or affecting any Xxxxxxx
Hotel, nor is there any Action pending or, to Borrower's knowledge, threatened,
against Borrower or any Project Owner or affecting any Xxxxxxx Hotel. The
Actions and judgments set forth on SCHEDULE 4.5 will not result, if adversely
determined, and could not reasonably be expected to result, either individually
or in the aggregate, in any Material Adverse Effect and do not relate to and
will not affect the consummation of the transactions contemplated hereby. No
petition in bankruptcy, whether voluntary or involuntary, or assignment for the
benefit of creditors, or any other Action involving debtors' and creditors'
rights has ever been filed under the laws of the United States of America or any
state thereof, or threatened, by or against, Borrower or any Project Owner or
affecting any Xxxxxxx Hotel. Other than inchoate mechanics liens, there are no
mechanics' or materialmen's liens, alienable bills or other claims constituting
or that may constitute a Lien on any Property or any part thereof, and no work
for which any such Lien could be asserted has been performed which has not been
fully paid for. Borrower has not received any notice from any Governmental
Authority or from any other Person with respect to (and Borrower does not know
of) any actual or threatened taking of the Land or Improvements, or any portion
thereof, for any public or quasi-public purpose or of any moratorium which may
affect the use, leasing, operation or ownership of any Xxxxxxx Hotel.
4.6 PAYMENT OF TAXES. All tax returns and reports of Borrower and each Project
Owner required to be filed by such Persons have been timely filed, and all
taxes, assessments, fees and other governmental charges upon such Person and
upon any Xxxxxxx Hotel, assets, income and franchises which are due and payable
have been paid in full. To Borrower's knowledge, Borrower has delivered written
notice to Lender of each tax return of Borrower or any Project Owner that is
under audit. No tax liens have been filed and, to Borrower's knowledge, no
claims are being asserted with respect to any such taxes. The charges, accruals
and reserves on the books of Borrower and each Project Owner in respect of any
taxes or other governmental charges are in accordance with the Accounting Rules.
SCHEDULE 4.6 contains a complete and accurate list of all audits of all tax
returns that were filed by Borrower and each Project Owner since January 1,
1999, including a reasonably detailed description of the nature and outcome (if
any) of each audit. All deficiencies proposed as a result of such audits have
been paid, reserved against, settled, or, as described in SCHEDULE 4.6, are
being contested in good faith by appropriate proceedings. SCHEDULE 4.6 describes
all adjustments to the United States federal income tax returns filed by
Borrower and each Project Owner for all taxable years since 1998, and the
resulting deficiencies proposed by the Internal Revenue Service. Except as
described in SCHEDULE 4.6, none of Borrower or any Project Owner has given or
been requested to give waivers or extensions (or is or would be subject to a
waiver or extension given by any other Person) of any statute of limitations
relating to the payment of taxes of Borrower and any Project Owner or for which
Borrower and any Project Owner may be liable. All taxes that Borrower and each
Project Owner is or was required by Legal Requirements to withhold or collect
have been duly withheld or collected and, to the extent required, have been paid
to the applicable Governmental Authority. All tax returns filed by (or that
include on a consolidated basis) Borrower and each Project Owner are true,
correct and complete. There is no tax sharing
34
agreement that will require any payment by Borrower or any Project Owner after
the Closing Date.
4.7 GOVERNMENTAL REGULATION; MARGIN LOAN. Borrower and each Project Owner are or
none of them after giving effect to the Loans, will be, subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940 or to any other Legal Requirement limiting
its ability to incur indebtedness for borrowed money. Borrower shall use the
proceeds of the Loans only for the purposes set forth in this Agreement and
consistent with all Legal Requirements. No portion of the proceeds of the Loans
shall be used by Borrower in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation U, Regulation T or Regulation
X or any other regulation of the Board of Governors of the Federal Reserve
System or to violate the Exchange Act or any other Legal Requirements. The Loans
are an exempt transaction under the Truth-in-Lending Act (15 U.S.C.A. Sections
1601 et seq.). Borrower is not a non-resident alien for purposes of U.S. income
taxation and none of Borrower or any Project Owner is a foreign corporation,
partnership, foreign trust or foreign estate (as said terms are defined in the
Code). Borrower and each Project Owner and their respective Affiliates are not,
and shall not become, a Person with whom Lender is restricted from doing
business with under regulations of the Office of Foreign Asset Control ("OFAC")
of the Department of the Treasury (including, but not limited to, those named on
OFAC's Specially Designated and Blocked Persons list (the "OFAC LIST")) or under
any statute, executive order (including, but not limited to, the September 24,
2001 Executive Order Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism) or other governmental
action relating to terrorism financing, terrorism support and/or otherwise
relating to terrorism and are not and shall not engage in any dealings or
transactions or otherwise be associated with Persons named on the OFAC List. At
all times throughout the term of the Facility, including after giving effect to
any Transfers, (a) none of the funds or other assets of Borrower or any Project
Owner constitute property of, or are beneficially owned, directly or indirectly,
by any Governmental Authority or other Person subject to trade restrictions
under U.S. law including, but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. Sections 1701 et. seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder or any other laws, regulations or executive orders
administered by the Office of Foreign Assets Control with the result that an
investment in Borrower or any Project Owner, as applicable (whether directly or
indirectly), is prohibited by law or the Loans made by the Lender are in
violation of law ("EMBARGOED PERSON"); (b) no Embargoed Person has any interest
of any nature whatsoever in Borrower or any Project Owner, as applicable, with
the result that the investment in Borrower or any Project Owner, as applicable
(whether directly or indirectly), is prohibited by law or the Loans are in
violation of law; and (c) none of the funds of Borrower or any Project Owner, as
applicable, have been derived from any unlawful activity with result that the
investment in Borrower or any Project Owner, as applicable (whether directly or
indirectly), is prohibited by law or the Loans are in violation of law.
4.8 EMPLOYEE BENEFIT PLANS; ERISA; EMPLOYEES. Except for the Employee Benefit
Plans set forth on SCHEDULE 4.8, neither Borrower nor any ERISA Affiliate of
Borrower maintains or contributes to, or has any obligation under, any Employee
Benefit Plans. None of Borrower or any Project Owner is an "employee benefit
plan" (within the meaning of section 3(3) of ERISA) to which ERISA applies, and
the Xxxxxxx Hotels and assets of Borrower and the Project
35
Owners do not constitute plan assets. No actions, suits or claims under any laws
and regulations promulgated pursuant to ERISA are pending or, to Borrower's
knowledge, threatened, against Borrower or any Project Owner. Borrower has no
knowledge of any material liability incurred by Borrower or any Project Owner
which remains unsatisfied for any taxes or penalties with respect to any
employee benefit plan or any Multiemployer Plan, or of any lien which has been
imposed on the assets of Borrower and the Project Owners pursuant to section 412
of the Code or section 302 or 4068 of ERISA. The Loans, the execution, delivery
and performance of the Loan Documents and the transactions contemplated by this
Agreement are not a non-exempt prohibited transaction under ERISA.
4.9 INTELLECTUAL PROPERTY. Borrower and each Project Owner possesses, owns or
has valid licenses, permits, certificates of public convenience, service marks,
authorizations, licenses, patents, patent rights or licenses and trademarks
(collectively, together with the goodwill associated therewith, "PROPRIETARY
RIGHTS") presently required or necessary to own or lease, as the case may be,
and to operate, its respective properties and to carry on its business as now
conducted or proposed to be conducted, except where the failure to obtain same
would not, individually or in the aggregate, have a Material Adverse Effect.
Borrower and each Project Owner has fulfilled and performed all of its
respective obligations with respect to such permits, and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or could result in any other material impairment of the
rights of the holder of any such permit; and none of Borrower or any Project
Owner has received any notice of any proceeding relating to unenforceability,
invalidity, revocation or modification of any Proprietary Rights, except where
such revocation, unenforceability, invalidity, or modification would not,
individually or in the aggregate, have a Material Adverse Effect. None of
Borrower or any Project Owner has received any notice that any Proprietary
Rights have been declared unenforceable or otherwise invalid by any Governmental
Authority other than notices relating to Proprietary Rights the loss of which
would not, individually or in the aggregate, have a Material Adverse Effect.
None of Borrower or any Project Owner has received any notice of infringement
of, or conflict with, and Borrower does not know of any such infringement of or
conflict with, asserted rights of others with respect to any Proprietary Rights
which, if such assertion of infringement or conflict were sustained, would have
a Material Adverse Effect.
4.10 BROKER'S FEES. No broker's or finder's fee, commission or similar
compensation will be payable by Borrower or any Affiliate of Borrower with
respect to the Facility, the issuance of the Note or any of the other
transactions contemplated hereby or by any Loan Document other than as indicated
on SCHEDULE 4.10.
4.11 ENVIRONMENTAL COMPLIANCE. There are no Actions, whether pending or, to
Borrower's knowledge, threatened, or judgments or orders relating to any
Hazardous Materials (collectively, "ENVIRONMENTAL CLAIMS") asserted or
threatened against Borrower or any Project Owner or any predecessor owner,
tenant or operator or relating to any Xxxxxxx Hotel. Except as disclosed in the
environmental reports furnished to Lender, to Borrower's knowledge, neither
Borrower nor any other Person has caused or permitted any Hazardous Material to
be used, generated, reclaimed, transported, released, treated, stored or
disposed of in a manner which could form the basis for an Environmental Claim
against Borrower or any Project Owner. Except as disclosed in the Environmental
Reports, to Borrower's knowledge, no Hazardous Materials in violation of
applicable Environmental Laws are or were stored or otherwise located, and no
underground
36
storage tanks or surface impoundments are or were located on any Land, or to the
knowledge of Borrower, on adjacent parcels of real property, and no part of such
real property or, to the knowledge of Borrower, no part of such adjacent parcels
of real property, including the groundwater located thereon, is presently
contaminated by Hazardous Materials in violation of applicable Environmental
Laws or to any extent which has, or might reasonably be expected to have, a
Material Adverse Effect. Except as disclosed in the Environmental Reports, to
Borrower's knowledge, Borrower, each Project Owner and each Xxxxxxx Hotel have
been and are currently in compliance with all applicable Environmental Laws,
including obtaining and maintaining in effect all permits, licenses or other
authorizations required by applicable Environmental Laws.
4.12 SOLVENCY. As of the date of this Agreement and after giving effect to the
consummation of the transactions contemplated by the Loan Documents, each Loan
Party: (A) owns and will own assets the fair saleable value of which are (1)
greater than the total amount of liabilities (including Contingent Obligations)
of such Loan Party, and (2) greater than the amount that will be required to pay
the probable liabilities of such Loan Party's then debts as they become absolute
and matured considering all financing alternatives and potential asset sales
reasonably available to such Loan Party; (B) has capital that is not
insufficient in relation to its business as presently conducted or any
contemplated or undertaken transaction; and (C) does not intend to incur and
does not believe that it will incur debts beyond its ability to pay such debts
as they become due. No Loan Party has entered into the Loan Documents (to which
it is a party) or the transactions contemplated under the Loan Documents with
the actual intent to hinder, delay, or defraud any creditor. After giving effect
to the transactions occurring on the Closing Date, no Default or Event of
Default exists.
4.13 DISCLOSURE. The representations and warranties of Borrower contained in the
Loan Documents, the financial statements referred to in Section 5.1(A), and any
other documents, certificates or written statements furnished to Lender by or on
behalf of Borrower for use in connection with the Facility do not contain any
untrue statement of a material fact or omit or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. There is
no material fact known to Borrower that has had or will have a Material Adverse
Effect that has not been disclosed in this Agreement or in such other documents,
certificates and statements furnished to Lender by or, on behalf of, Borrower
for use in connection with the Facility.
4.14 INSURANCE. SCHEDULE 4.14 sets forth a complete and accurate description of
all policies of insurance that will be in effect as of the Closing Date for
Borrower and each Project Owner and such policies of insurance satisfy all of
the requirements of Section 5.3. All premiums thereon have been paid in full
through the first anniversary of the policy date or if not paid annually, are
current in the payment of premiums. No notice of cancellation has been received
with respect to such policies and Borrower and each Project Owner is in
compliance, in all material respects, with all conditions contained in such
policies.
4.15 MANAGEMENT AGREEMENT. Other than in connection with, and pursuant to, the
Management Agreement and the W&H Agreements, neither Borrower nor any Affiliate
of Borrower has contracted with any managing agent to assist in the management
and operation of any Xxxxxxx Hotel. The Management Agreement is in full force
and effect and there is no
37
material default, breach or violation existing thereunder by any party thereto
and, to Borrower's knowledge, no event has occurred, that, with the passage of
time or the giving of notice, or both, would constitute a material default,
breach or violation by any party thereunder. Neither the incurring of the
Obligations, the execution and delivery of the Loan Documents, nor the exercise
of any remedies by Lender, will materially adversely affect Borrower's or its
Affiliate's rights under the Management Agreement.
4.16 SPECIAL ASSESSMENTS; TAXES. There are no pending or, to the knowledge of
Borrower, proposed, special or other assessments for public improvements or
otherwise affecting any Xxxxxxx Hotel, nor, to Borrower's knowledge, are there
any contemplated Improvements to any Xxxxxxx Hotel that may result in such
special or other assessments. Borrower has provided Lender with true, correct
and complete copies of all bills and invoices for Impositions which have been
levied or assessed against or are outstanding with respect to any Xxxxxxx Hotel.
To the knowledge of Borrower, no portion of any Xxxxxxx Hotel constitutes an
"omitted" tax parcel. No Impositions are currently delinquent or outstanding
with respect to any Xxxxxxx Hotel. No tax contests of any Impositions or
assessments are currently pending. The Land and Improvements constitute a
separate tax lot or lots, with a separate tax assessment or assessments,
independent of any other land or improvements not constituting a part of the
Xxxxxxx Hotels and no other land or improvements is assessed and taxed together
with any portion of the Xxxxxxx Hotels.
4.17 REPRESENTATIONS REMADE. Borrower warrants and covenants that the foregoing
representations and warranties will be true and correct and shall be deemed
remade as of the Closing Date and as of the date of each other Loan pursuant to
this Agreement. All representations and warranties made in the other Loan
Documents or in any certificate or other document delivered to Lender by or on
behalf of Borrower pursuant to the Loan Documents shall be deemed to have been
relied upon by Lender, notwithstanding any investigation made by or on behalf of
Lender. All such representations and warranties shall survive the making of the
Loans and shall continue in full force and effect until such time as the Loans
have been paid in full.
SECTION 5
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as this Agreement shall remain
in effect or the Note shall remain outstanding, Borrower shall perform and
comply with all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Borrower will maintain or cause to
be maintained a system of accounting in accordance with sound business practices
to permit preparation of financial statements in conformity with the Accounting
Rules and proper and accurate books, records and accounts reflecting all of the
financial affairs of Borrower and each Project Owner with respect to all items
of income and expense in connection with the operation of the Xxxxxxx Hotels.
(A) FINANCIAL STATEMENTS. Within one hundred twenty (120) days after
the end of each calendar year, Borrower shall provide to Lender true and
complete annual audited consolidated financial statements for Borrower and
each Project Owner prepared in
38
accordance with the Accounting Rules. Such financial statements shall (x)
be audited by a so-called "Big-4" accounting firm or another independent
certified public accounting firm reasonably satisfactory to Lender (BKD,
LLP, a member of Xxxxxx Xxxxxxx International, being acceptable to Lender)
and (y) include a balance sheet as of the end of such year, profit and
loss statements for such year and a statement of cash flow for such year,
with such detailed supporting schedules (which need not be separately
audited) covering the operation of each Xxxxxxx Hotel as Lender shall
reasonably require including a reconciliation to the monthly reports and
statements delivered to Lender. As soon as reasonably practicable (but in
any event within forty-five (45) days) after the end of each Loan Quarter
(other than each fourth Loan Quarter), Borrower shall provide to Lender a
true and complete quarterly cash flow and operating statement for each
Project Owner of a completed Xxxxxxx Hotel, and a true and complete
balance sheet for each Project Owner of a Xxxxxxx Hotel prior to
completion, certified by the chief financial officer (or similar position)
of Borrower which quarterly statements shall be in form reasonably
satisfactory to Lender. Such quarterly statements shall be compared to the
prior year's quarter and year-to-date. As soon as reasonably practicable
(but in any event within twenty (20) days) after the end of each Loan
Month, Borrower shall provide to Lender a true and complete monthly cash
flow and operating statement for each Project Owner certified by the chief
financial officer (or similar position) of Borrower. Such monthly
statements shall also be in form reasonably satisfactory to Lender and
include a comparison to the prior year's month and year-to-date. Borrower
shall also provide (and cause each Project Owner to provide), such other
financial information as Lender may, from time to time, reasonably request
certified (if requested by Lender) by the applicable chief financial
officer (or similar position). Borrower will deliver, concurrently with
the annual and quarterly statements, a certificate certifying that no
Default or Event of Default has occurred. As soon as available, and in any
event within twenty (20) days after the end of each Loan Month, Borrower
will deliver to Lender a copy of the monthly reporting package, if any,
required to be delivered to Borrower by Manager pursuant to the Management
Agreement.
(B) ACCOUNTANTS' CERTIFICATION. Together with each delivery of
annual financial statements pursuant to subsection 5.1(A), Borrower shall
deliver a written statement by its independent certified public
accountants (1) stating that the examination has included a review of the
terms of this Agreement as such terms relate to accounting matters, (2)
stating whether, in connection with the examination, any condition or
event that constitutes a Default or an Event of Default (of which said
accountants may be aware from said review, and without obligation to
review other aspects of this Agreement or to review any of the other Loan
Documents) has come to their attention, and (3) if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof.
(C) ACCOUNTANTS' REPORTS. Promptly upon receipt thereof, Borrower
shall deliver copies of all significant reports submitted to Borrower or
any Project Owner, as applicable, by independent public accountants in
connection with each annual, interim or special audit of its financial
statements, as applicable, made by such accountants, including any comment
letters submitted by such accountants to management in connection with
their annual audit.
39
(D) BUDGETS. Together with each delivery of annual financial
statements pursuant to subsection 5.1(A), Borrower shall deliver to Lender
an annual plan (which shall include an operating budget for the succeeding
year) and for each Xxxxxxx Hotel that has been Substantially Completed. As
soon as practicable and in any event within ten (10) Business Days after
any revision to any Project Budget, operating budget or marketing plan
with respect to any Xxxxxxx Hotel, Borrower shall deliver to Lender a copy
of the revised Project Budget, operating budget or marketing plan.
(E) NOTICES, EVENTS OF DEFAULT AND LITIGATION. Borrower shall
promptly deliver, or cause to be delivered, copies of all notices,
demands, reports or requests given to, or received by, Borrower or any
Project Owner from, (i) any Governmental Authorities with respect to
failure to comply with any material Legal Requirements, (ii) with respect
to the acceleration of or default with respect to any Indebtedness of a
Project Owner involving a liability on account of a default in the amount
of $100,000 or more, (iii) any Franchisor with respect to any termination
of a Franchise Agreement or delivery of a "property improvement plan," or
(iv) any other Person with respect to default under any material
Contractual Obligations, and shall notify Lender within two (2) Business
Days after Borrower receives notice or acquires knowledge of any material
violation of Legal Requirements, investigation, subpoena or audit by any
Governmental Authority or any default with respect to such Indebtedness
involving a liability on account of a default in the amount of $100,000 or
more or Franchise Agreement or any material default of any Contractual
Obligation. Promptly upon Borrower obtaining knowledge of any of the
following events or conditions, Borrower shall deliver a certificate of
such Person's chief financial officer or similar officer specifying the
nature and period of existence of such condition or event and what action
Borrower has taken, is taking and proposes to take with respect thereto:
(1) any condition or event that constitutes an Event of Default or
Default; (2) receipt by Borrower of any "property improvement plan" from
any Franchisor under any Franchise Agreement; (3) any Material Change,
and/or (4) any fact, circumstance, event or condition which has, or would
reasonably be expected to have or cause, a Material Adverse Effect.
Promptly upon Borrower obtaining knowledge of (1) the institution of any
Action against or affecting Borrower or any Project Owner or (2) any
material development in any Action at any time pending against or
affecting Borrower or any Project Owner, Borrower shall give notice
thereof to Lender and provide such other information as may be available
to it to enable Lender and its counsel to evaluate such matters.
(F) ERISA. Borrower shall deliver to Lender such certifications or
other evidence from time to time throughout the term of the Facility, as
Lender, in its sole discretion, may request, that (A) none of Borrower or
any Project Owner is and none of them maintains an "employee benefit plan"
as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a "governmental plan" within the meaning of Section 3(3) of ERISA; (B)
none of Borrower or any Project Owner is subject to state statutes
regulating investments and fiduciary obligations with respect to
governmental plans; and (C) one or more of the following circumstances is
true: (i) Equity Interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2); (ii) less than
twenty-five percent (25%) of each outstanding class of Equity Interests in
Borrower are held by "benefit plan investors" within the meaning of 29
C.F.R. Section 2510.3-101(f)(2); or (iii) Borrower
40
qualifies as an "operating company" or a "real estate operating company"
within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e).
(G) TAX RETURNS. Borrower shall deliver to Lender copies of all
federal and state income and other tax returns, schedules, statements and
reports relating to Borrower and each Project Owner within ten (10) days
after the earlier of filing or delivery of such tax returns or other items
with the Internal Revenue Service or the applicable Governmental
Authority.
(H) ESTOPPEL CERTIFICATES. Within ten (10) Business Days following a
request by Lender, which shall be made not more frequently than once per
Loan Quarter (unless an Event of Default has occurred and is continuing)
Borrower shall provide to Lender, a duly acknowledged written statement
confirming the amount of the outstanding Obligations, the terms of payment
and maturity date of the Note, the date to which interest has been paid,
the existence of any Event of Default, the existence of any default under
Indebtedness of a Project Owner involving a liability on account of a
default in the amount of $100,000 or more, and whether, to Borrower's
knowledge, any offsets or defenses exist against the Obligations, and if
any such offsets or defenses are alleged to exist, the nature thereof
shall be set forth in detail.
(I) NET WORTH CERTIFICATE. No later than April 30 following the end
of each calendar year, Borrower shall cause JQH and the JQH Trust to
deliver to Lender a Net Worth Certificate which shall, among other things,
show that JQH and the JQH Trust continue to maintain a Net Worth no less
than the Minimum Net Worth Amount. In addition, if either (i) (x) sales
having a gross consideration and (y) gifts or other Transfers of assets
having a gross value exceed $200,000,000, in the aggregate, over the life
of the Loan, or (ii) for any period the Net Worth is less than
$750,000,000, then within thirty (30) days following the end of each Loan
Quarter, Borrower shall cause JQH and the JQH Trust to deliver to Lender
the Updated Net Worth Certificate. In the event that Lender does not agree
with the Net Worth as reflected in a Net Worth Certificate or in an
Updated Net Worth Certificate, Lender shall be entitled to obtain from an
independent appraiser Appraisals of any or all of the assets of JQH and
the JQH Trust, and to engage an independent auditor, to recalculate the
Net Worth. The cost of such appraisers and the auditor will be borne by
Lender, unless the Net Worth is determined to be materially less than
reported on the Net Worth Certificate or the Updated Net Worth
Certificate, in which case the cost of the appraisers and the auditor will
be borne by Borrower.
(J) OTHER. With reasonable promptness, Borrower shall deliver such
other information and data with respect to Borrower or any Project Owner
as from time to time may be reasonably requested by Lender. In addition,
Borrower shall deliver, or cause to be delivered to Lender, to the extent
not included in the matters described above in Section 5.1, a copy
(certified as correct and complete by the chief financial officer (or
similar officer) of Borrower) of all tax returns and tax schedules
relating to each Project Owner as such items are prepared. Borrower shall
also provide, or cause to be provided, to Lender a copy (certified as
correct and complete by the chief financial officer (or similar officer)
of Borrower) of each report or statement filed by Borrower with any
Governmental Authority including the United States Securities and Exchange
Commission and the United States Internal Revenue Service not later than
five (5) Business Days after filing thereof. Borrower
41
shall, promptly after it obtains knowledge of such change, notify Lender
of any change in the information set forth in SCHEDULE 4.1 and, upon
request from Lender from time to time, will, within five (5) Business Days
after such request is given to Borrower, provide Lender with either an
updated SCHEDULE 4.1 certified by Borrower as true and complete or a
certificate of Borrower to the effect that the information set forth on
SCHEDULE 4.1 has not changed except as previously expressly disclosed in
writing to Lender.
(K) ELECTRONIC FORMAT. To the extent Borrower maintains such items
in electronic format, Borrower shall provide to Lender a copy of any
reports, notices, statements or other deliveries required pursuant to this
Section 5.1 in an electronic format reasonably satisfactory to Lender.
5.2 EXISTENCE; QUALIFICATION. Borrower shall and shall cause each Project Owner
to, at all times preserve and keep in full force and effect its existence, and
all rights and franchises material to its respective businesses. Borrower shall
continue, and shall cause each Project Owner to continue, to be qualified in all
jurisdictions in which failure to qualify will have a Material Adverse Effect.
5.3 INSURANCE. Borrower shall maintain in full force and effect insurance with
respect to its assets and operations and of each Project Owner in such amounts,
covering such risks and liabilities and with such deductibles or self retentions
as are customarily carried by companies engaged in similar businesses and owning
similar properties and, in any event, in compliance with the requirements set
forth in SCHEDULE 5.3 attached hereto.
5.4 MAINTENANCE OF XXXXXXX HOTELS. Borrower will maintain or cause the Xxxxxxx
Hotels to be maintained in compliance with all contractual obligations and
material Legal Requirements and in good repair, working order and condition and
will make or cause to be made all appropriate repairs, renewals and replacements
thereof.
5.5 INSPECTION; LENDER MEETING. Borrower shall, upon request from Lender, permit
(and cause to be permitted) Lender's designated representatives to (a) visit,
examine, audit, photograph and inspect any Xxxxxxx Hotel, (b) examine, audit,
inspect, copy, duplicate and abstract the financial, accounting and other books
and records of Borrower and each Project Owner relating to any Xxxxxxx Hotel,
(c) discuss the affairs, finances and business of Borrower and each Project
Owner with officers, senior management, representatives, independent public
accountants and agents (including the Manager) of Borrower and each Project
Owner. Borrower shall cause the books and records of Borrower and each Project
Owner to be maintained at Xxxxxxxxxxx and Xxxxxxx, Inc. in Cincinnati, Ohio.
Borrower will not change the location where such books and records are kept
without giving at least thirty (30) days' advance notice to Lender. Borrower
shall pay Lender's costs and expenses incurred in connection with such audit if
an Event of Default has occurred or if any audit reveals any material
discrepancy in the financial information provided by Borrower. All audits,
inspections and reports shall be made for the sole benefit of Lender. Neither
Lender nor Lender's auditors, inspectors, representatives, agents or contractors
assumes any responsibility or liability (except to Lender) by reason of such
audits, inspections or reports. Borrower will not rely upon any of such audits,
inspections or reports. The performance of such audits, inspections and reports
will not constitute a waiver of any of the provisions of the Loan Documents.
Neither Lender nor any other of Lender's
42
inspectors, representatives, agents or contractors, shall be responsible for any
matters related to design or construction of any Improvements. Borrower shall
cooperate, from time to time, with Lender and use reasonable efforts to assist
Lender in obtaining an Appraisal of any Xxxxxxx Hotels. Such cooperation and
assistance from Borrower shall include reasonable access to each Xxxxxxx Hotel
and books and records pertaining to each Xxxxxxx Hotel for Lender and its
appraiser. The appraiser performing any such Appraisal shall be engaged by
Lender. Borrower shall not be responsible for the expenses of any such Appraisal
performed under the provisions of this Section; provided, that Borrower shall
pay the fees of such appraiser in connection with one Appraisal of the Xxxxxxx
Hotels during the term of the Loan and any Appraisal when conducted following
the occurrence of an Event of Default. Borrower shall cooperate with Lender with
respect to any Actions which may in any way affect the rights of Lender under
any of the Loan Documents and, in connection therewith, not prohibit Lender, at
its election, from participating in any such Actions.
5.6 ENVIRONMENTAL COMPLIANCE. Borrower shall: (a) comply (or cause compliance)
at all times with all applicable Environmental Laws in all material respects,
and (b) promptly take, or cause to be taken, any and all necessary remedial
actions upon obtaining knowledge of the presence, storage, use, disposal,
transportation, release or discharge of any Hazardous Materials on, under or
about any Property which could be reasonably anticipated to have a Material
Adverse Effect or is in violation of any Environmental Laws. Borrower shall
cause all remedial action with respect to Hazardous Material on, under or about
any Property, to comply with all applicable Environmental Laws and the
applicable policies, orders and directives of all Governmental Authorities. If
Lender at any time has a reasonable basis to believe that there may be a
violation of any Environmental Law by, or any liability arising thereunder of,
Borrower, any Project Owner or related to any Property, Borrower shall, upon
request from Lender, provide Lender with a copy of any existing reports,
certificates, engineering studies and other written material or data as Lender
may reasonably require to confirm compliance by Borrower and each Project Owner
with all applicable Environmental Laws. Borrower shall permit Lender, its
authorized representatives, consultants or other Persons retained by Lender to
enter upon, examine, test and inspect any Xxxxxxx Hotel with regard to
compliance with Environmental Laws, the presence of Hazardous Materials and the
environmental condition of each Xxxxxxx Hotel. Such entry, examination, testing
and inspecting and reporting shall be at the expense of Borrower if (x) an Event
of Default has occurred or (y) a violation of Environmental Law or any liability
arising under Environmental Law has occurred, which expense shall be paid by
Borrower to Lender upon demand.
5.7 ENVIRONMENTAL DISCLOSURE. Borrower shall immediately upon becoming aware
thereof advise Lender in writing and in reasonable detail of: (1) any release,
disposal or discharge of any Hazardous Material at any Property required to be
reported to any Governmental Authority under all applicable Environmental Laws;
(2) any and all written communications sent or received by Borrower or any
Project Owner or their agents with respect to any Environmental Claims or any
release, disposal or discharge of Hazardous Material required to be reported to
any Governmental Authority; (3) any remedial action taken by Borrower or any
other Person in response to any Hazardous Material on, under or about any real
property owned, leased or operated by Borrower or any Project Owner or their
agents, the existence of which could result in an Environmental Claim; (4) the
discovery by Borrower or any Project Owner or their agents of any occurrence or
condition on any real property adjoining or in the vicinity of any Property
43
could cause such real property or any part thereof to be classified as
"border-zone property" or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use thereof under any Environmental
Laws; and (5) any request for information from any Governmental Authority that
indicates such Governmental Authority is investigating whether Borrower or any
Project Owner or another present or former occupant of any Property may be
potentially responsible for a release, disposal or discharge of Hazardous
Materials from any Property. Borrower shall promptly notify Lender of any
proposed action to be taken by Borrower or any Project Owner to commence any
operations that could reasonably be expected to subject Borrower or any Project
Owner to additional Legal Requirements, including Legal Requirements requiring
additional or amended environmental permits or licenses. Borrower shall, at its
own expense, provide copies of such documents or information as Lender may
reasonably request in relation to any matters disclosed pursuant to this Section
5.7.
5.8 COMPLIANCE WITH LAWS, EMPLOYEE BENEFIT PLANS AND CONTRACTUAL OBLIGATIONS.
Borrower will promptly and faithfully (A) comply and cause each Project Owner to
comply, in all material respects, with the requirements of all Legal
Requirements including the Prescribed Laws, and the orders and requirements of
any Governmental Authority in all jurisdictions in which they are now doing
business or may hereafter be doing business and of every board of fire
underwriters or similar body exercising similar functions and (B) maintain all
licenses, certificates of occupancy, permits and Proprietary Rights now held or
hereafter acquired by them or with respect to which a Material Adverse Effect
will result if same are not existing and held by Borrower or any Project Owner.
None of Borrower or any Project Owner is a party to, and will not establish, any
Employee Benefit Plan. Borrower will not commence making contributions to (or
obligate itself to make contributions to) any Employee Benefit Plan.
5.9 FURTHER ASSURANCES. Borrower shall, from time to time, at its sole cost and
expense, execute and/or deliver, or cause execution and/or delivery of, such
documents, agreements and reports, and perform such acts as Lender at any time
may reasonably request to implement the terms and provisions provided for in the
Loan Documents. Borrower shall execute any documents and take any other actions
necessary to provide Lender with a first priority, perfected security interest
in the Collateral, subject to the Permitted Exceptions. Borrower shall, at
Borrower's sole cost and expense: (i) upon Lender's request therefore given from
time to time (but not more frequently than once per calendar year unless an
Event of Default then exists) pay for (a) current reports of Uniform Commercial
Code, federal tax lien, state tax lien, judgment and pending litigation searches
with respect to Borrower and any Project Owner and (b) current good standing and
existence certificates with respect to Borrower and each Project Owner; and (ii)
execute and deliver to Lender such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary, to evidence,
preserve and/or protect the Collateral at any time securing or intended to
secure the Obligations, as Lender may require in Lender's reasonable discretion.
Borrower shall promptly execute, acknowledge, deliver, file or do, at its sole
cost and expense, all acts, assignments, notices, agreements or other
instruments as Lender may require in order to effectuate, assure, convey,
secure, assign, transfer and convey unto Lender any of the rights granted by
this Agreement and to more fully perfect and protect any assignment, pledge,
lien and security interest confirmed or purported to be created under the Loan
Documents or to enable Lender to exercise and enforce its rights and remedies
hereunder, in respect of the Collateral.
44
SECTION 6
NEGATIVE COVENANTS
Borrower covenants and agrees that from the date hereof and so long as
this Agreement shall remain in effect or the Note remains outstanding, Borrower
shall comply with all covenants and agreements in this Section 6.
6.1 INDEBTEDNESS. Borrower will not, and will not cause or permit any Project
Owner, directly or indirectly, to create, incur, assume, guaranty, or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness,
except Permitted Indebtedness.
6.2 LIENS AND RELATED MATTERS. Borrower will not directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to the Collateral
whether now owned or hereafter acquired, or any income or profits therefrom,
except as provided in this Agreement and the other Loan Documents. Borrower will
not Transfer any of the Collateral in violation of the Loan Documents.
6.3 RESTRICTION ON FUNDAMENTAL CHANGES. Borrower will not, and will not cause or
permit any Project Owner to: (1) amend, modify or waive in any material respect
any term or provision of its Organizational Documents, (2) liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution) until after it no
longer owns a Xxxxxxx Hotel and has satisfied all of its obligations with
respect thereto, including repayment of all indebtedness related thereto; or (3)
acquire by purchase or otherwise all or any part of the business or assets of,
or stock or other evidence of beneficial ownership of, any Person; provided,
however, that each Project Owner may, from time to time, buy Land and
Improvements that will be a Xxxxxxx Hotel. Borrower will not permit any Project
Owner to issue, sell, assign, pledge, convey, dispose or otherwise encumber any
partnership, stock, membership, beneficial or other ownership interests or grant
any options, warrants, purchase rights or other similar agreements or
understandings with respect thereto, except as provided in this Agreement and
the other Loan Documents; provided, however, Borrower may issue or sell
membership interests so long as (A) such Transfer will not result in a Change in
Control, and (B) no such additional membership interest shall be issued or sold
to any Person on the OFAC List. Borrower will not permit any Project Owner to
establish any Subsidiaries or make any Investments in any other Person.
6.4 TRANSACTIONS WITH AFFILIATES. Other than as contemplated hereunder,
including the execution and delivery of the Management Agreement and the W&H
Agreements, Borrower shall not permit to exist any transaction by any Project
Owner (including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any director, officer, employee or Affiliate of
Borrower, except transactions in the ordinary course of and pursuant to the
reasonable requirements of the business of Borrower and Borrower's Affiliates
and upon fair and reasonable terms which are fully disclosed to Lender and are
no less favorable to Borrower and Borrower's Affiliates than would be obtained
in a comparable arm's length transaction with a Person that is not an Affiliate,
director, officer or employee of Borrower or Borrower's Affiliates. Each such
agreement with any Affiliate, director, officer or employee of Borrower or
Borrower's Affiliates shall provide that the same may be terminated by Lender at
its option if an Event of Default exists. Other than pursuant to the Management
Agreement and the W&H
45
Agreements approved by Lender, Borrower shall not permit the payment of any
management, consulting, director or similar fees to any director, officer,
employee or Affiliate of Borrower.
6.5 CONDUCT OF BUSINESS. From and after the Closing Date, Borrower will not
permit any Project Owner to engage in any business other than the ownership and
operation of the Xxxxxxx Hotels. Borrower shall not permit use of the Xxxxxxx
Hotels or any part thereof, or allow the same to be used or occupied, for any
purpose other than for the purposes of a full service or extended-stay hotel and
related amenities, or for any unlawful purpose, or in violation of any
certificate of occupancy or other permit or certificate, or any Legal
Requirement. Borrower will not permit the sufferance of any act to be done or
any condition to exist on the Xxxxxxx Hotels or any part thereof or any article
to be brought thereon, or which may void or make voidable any insurance then in
force with respect thereto.
6.6 USE OF LENDER'S NAME. Borrower shall not use the names of Lender or any of
Lender's Subsidiaries or Affiliates in connection with the development,
marketing, leasing, use and operation of the Xxxxxxx Hotels. Borrower shall not
disclose or permit any Affiliate, officer, director, partner, manager, member or
employee of Borrower to disclose any of the terms and conditions of the Facility
to any Person, except (a) to the extent disclosed in the Financing Statements,
(b) to the extent such disclosure is required pursuant to the Loan Documents or
applicable legal process, or (c) to the extent Lender consents to such
disclosure. Lender hereby consents to Borrower disclosing the terms of the Loan
Agreement if requested by the Underlying Lender in connection with the
development and construction of a Xxxxxxx Hotel.
6.7 COMPLIANCE WITH ERISA. Borrower shall not adopt, modify or terminate any
Employee Benefit Plans except as described in SCHEDULE 4.8. Borrower shall not
fail to maintain and operate each existing Employee Benefit Plan in compliance
in all material respects with the provisions of ERISA, the Code and all other
applicable laws and the regulations and interpretations thereof. Borrower shall
not engage in any transaction which would cause the Obligations or any action
taken or to be taken under this Agreement or the other Loan Documents or
otherwise (or the exercise by Lender of any of its rights under the Loan
Documents) to be a non-exempt prohibited transaction under ERISA. Borrower shall
not become an "employee benefit plan" (within the meaning of Section 3(3) of
ERISA) to which ERISA applies and Borrower shall not permit its assets to be
plan assets.
6.8 SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITIES. Borrower hereby represents,
warrants, agrees and covenants that Borrower and each Project Owner have, at all
times, from their formation, been, and, at all times will be, a Special Purpose
Bankruptcy Remote Entity and, in the case of Borrower but not the Project
Owners, will have one (1) Independent Persons. Borrower will not, directly or
indirectly, make any change, amendment or modification to its Organizational
Documents or the Organizational Documents of any Project Owner or otherwise take
any action which could result in it or any Project Owner not being a Special
Purpose Bankruptcy Remote Entity.
6.9 MANAGEMENT. The Management Agreement shall not be materially modified,
amended or terminated without Lender's prior written consent. Borrower shall
provide Lender with written notice of the occurrence of any event of default or
condition which with the giving of notice or passage of time, or both, would
constitute an event of default under the Management
46
Agreement or which would entitle the Manager to terminate the Management
Agreement. Borrower shall cause the Xxxxxxx Hotels to be managed pursuant to the
Management Agreement or another management agreement reasonably satisfactory to
Lender, with Manager or another experienced, reputable hotel management company
reasonably satisfactory to Lender.
SECTION 7
DEFAULT, RIGHTS AND REMEDIES
7.1 EVENT OF DEFAULT. "EVENT OF DEFAULT" means the occurrence or existence of
any one or more of the following:
(A) PAYMENT. Failure of Borrower to pay (i) on the Maturity Date,
the outstanding principal of, accrued interest in, and other Indebtedness
owing pursuant to this Agreement, the Note and the other Loan Documents,
(ii) on the applicable Mandatory Prepayment Due Date the portion of the
Outstanding Amount required to be paid in accordance with Section 2.4(D),
(iii) within two (2) Business Days after the due date, any installment of
interest due under the Note; provided, however, the aforesaid two (2)
Business Day grace period may be utilized by Borrower no more than twice
in any calendar year, or (iv) within two (2) Business Days after the
respective due date, any other amount due under the Loan Documents;
provided, however, the aforesaid two (2) Business Day grace period may be
utilized by Borrower no more than twice in any calendar year.
(B) BREACH OF CERTAIN PROVISIONS. Failure of Borrower to perform or
comply with any term, agreement, covenant, representation, warranty or
condition contained in (i) Sections 5.3 or 6, or (ii) Section 5.1 (other
than Section 5.1(I) of this Agreement to the extent it requires
maintenance of the Minimum Net Worth Amount) within five (5) Business Days
after notice from Lender.
(C) BREACH OF REPRESENTATION AND WARRANTY. Any representation,
warranty, certification or other statement made by Borrower in any Loan
Document or in any statement or certificate at any time given in writing
pursuant to or in connection with any Loan Document (other than
occurrences described in other provisions of this Section 7.1 for which a
different grace or cure period is specified or which constitute immediate
Events of Default) is false in any material respect on the date made which
remains uncured for two (2) Business Days after notice, but no grace or
cure period will apply if the representation, warranty, certification or
other statement was known by Borrower to be false when made or deemed
made.
(D) OTHER DEFAULTS UNDER LOAN DOCUMENTS. A default by any Loan Party
shall occur in the performance of or compliance with any term contained in
this Agreement (other than Section 5.1(I) of this Agreement to the extent
it requires maintenance of the Minimum Net Worth Amount) or the other Loan
Documents and such default is not remedied or waived within thirty (30)
days after receipt by such Loan Party of notice from Lender of such
default (other than occurrences described in other provisions of this
Section 7.1 or in the applicable Loan Document, as to which such different
grace or cure period shall apply, for which a different grace or cure
period is specified or which constitute immediate Events of Default);
provided, however, that (i) if such default cannot be remedied with
reasonably
47
diligent effort within a period of thirty (30) days, but is susceptible to
cure within a period of one hundred twenty (120) days and (ii) the
continued default in performance will not have a Material Adverse Effect,
such longer period, not to exceed ninety (90) additional days, as such
Loan Party may need to remedy such default, if Borrower is proceeding with
diligent effort to remedy such default throughout said one hundred twenty
(120)-day period. The rights to notice and cure periods granted herein
shall not be cumulative with any other rights to notice or a cure period
in any other Loan Document and the giving of notice or a cure period
pursuant to this section shall satisfy any and all obligations of Lender
to grant any such notice or cure period pursuant to any of the Loan
Documents. [subject to revision to integrate with defaults in Loan
Documents]
(E) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (1) A
court enters a decree or order for relief with respect to any Loan Party
or three (3) or more Project Owners (at any time during the term of the
Facility and not necessarily at the same time with respect to such Project
Owners) in an involuntary case under the Bankruptcy Code or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
which decree or order is not stayed or other similar relief is not granted
under any applicable federal or state law; or (2) the continuance of any
of the following events for sixty (60) days unless dismissed, bonded or
discharged: (a) an involuntary case is commenced against any Loan Party or
three (3) or more Project Owners (at any time during the term of the
Facility and not necessarily at the same time with respect to such Project
Owners) under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or (b) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any Loan Party or such Project
Owners or over all or a substantial part of their property, is entered; or
(c) an interim receiver, trustee or other custodian is appointed without
the consent of such Loan Party or such Project Owners for all or a
substantial part of the property of Borrower or such Project Owners.
(F) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (1) An order
for relief is entered with respect to any Loan Party or three (3) or more
Project Owners or any Loan Party or three (3) or more Project Owners (at
any time during the term of the Facility and not necessarily at the same
time with respect to such Project Owners) commence a voluntary case under
the Bankruptcy Code or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case or to the conversion of an
involuntary case to a voluntary case under any such law or consents to the
appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or (2) any Loan
Party or three (3) or more Project Owners (at any time during the term of
the Facility and not necessarily at the same time with respect to such
Project Owners) make any assignment for the benefit of creditors; or (3)
partners, shareholders, or members in any Loan Party or three (3) or more
Project Owners (at any time during the term of the Facility and not
necessarily at the same time with respect to such Project Owners) adopt
any resolution or otherwise authorizes action to approve any of the
actions referred to in this Section 7.1(F).
(G) JUDGMENT AND ATTACHMENTS. Any money judgment, writ or warrant of
attachment, or similar process involving (1) an amount in any individual
case in excess of $250,000 or (2) an amount in the aggregate at any time
in excess of $1,000,000 (in either
48
case not adequately covered by insurance as to which the insurance company
has acknowledged coverage) is entered or filed against Borrower or any
Project Owner and remains undischarged, unvacated, unbonded, uninsured or
unstayed for a period of thirty (30) days or in any event later than five
(5) days prior to the date of any proposed sale thereunder.
(H) DISSOLUTION. Any order, judgment or decree is entered against
Borrower decreeing the dissolution or split up of Borrower and such order
remains undischarged or unstayed for a period in excess of twenty (20)
days.
(I) INJUNCTION. Either (i) Borrower is enjoined, restrained or in
any way prevented by the order of any court or any administrative or
regulatory agency from conducting all or any material part of its business
relating to the Xxxxxxx Hotels and such order continues for more than
thirty (30) days; or (ii) any order or decree is entered by any court of
competent jurisdiction directly or indirectly enjoining or prohibiting
Lender or Borrower from performing any of their material obligations under
this Agreement or any of the other Loan Documents.
(J) INVALIDITY OF LOAN DOCUMENTS. Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
of the Loan Documents, ceases to be in full force and effect or is
declared to be null and void by a court of competent jurisdiction, or
Borrower denies that it has any further liability under any Loan Documents
to which it is party, or gives notice to such effect.
(K) EVENT OF DEFAULT. The occurrence of an Event of Default
specified in any of the other Loan Documents which constitutes an
immediate default thereunder. [subject to revision to integrate with
defaults in Loan Documents]
(L) CROSS-DEFAULT. The acceleration of the Underlying Loan of three
(3) or more Project Owners (at any time during the term of the Facility
and not necessarily at the same time) or the loss or termination of any
Proprietary Rights which, in Lender's reasonable judgment, could have a
Material Adverse Effect.
(M) INDEPENDENT PERSON. Borrower shall at any time cease to have at
least one (1) Independent Person for more than ten (10) consecutive
Business Days.
(N) PRESCRIBED LAWS. If any Loan Party or any Project Owner fails to
comply with any covenants, with respect to Prescribed Laws as provided in
Section 5.9.
(O) CHANGE IN CONTROL. The occurrence of any Change in Control.
(P) JQH. The indictment or conviction of JQH of any crime for which
incarceration is an allowable penalty.
7.2 ACCELERATION AND REMEDIES. Upon the occurrence of any Event of Default
specified in Sections 7.1(E) and 7.1(F), payment of all Obligations shall be
accelerated without notice, presentment, demand, protest or notice of protest
and shall be immediately due and payable and, in addition, Lender may in
addition to any other rights and remedies available to Lender at law or in
equity or under any other Loan Documents, exercise one of more of the rights and
remedies
49
set forth below as it, in its sole discretion, deems necessary or advisable.
Upon the occurrence of any Event of Default (other than Events of Default
specified in Sections 7.1(E) and 7.1(F)), Lender, in addition to any other
rights or remedies available to Lender at law or in equity, or under any of the
other Loan Documents, may exercise any one or more of the following rights and
remedies as it, in its sole discretion, deems necessary or desirable:
(A) ACCELERATION. Declare immediately due and payable, without
further notice, protest, presentment, notice of protest or demand, all
Obligations including all monies advanced under this Agreement, the Note
and/or any of the Loan Documents which are then unpaid, together with all
interest then accrued thereon and all other amounts then owing (including
any Default Interest owed as a result of such acceleration). If payment of
the Obligations is accelerated, Lender may, in its sole discretion,
exercise all rights and remedies hereunder and under the Note and/or any
of the other Loan Documents at law, in equity or otherwise.
(B) NO FURTHER OBLIGATIONS. Terminate Lender's obligations under
this Agreement.
(C) INJUNCTIVE RELIEF. Institute appropriate proceedings for
injunctive relief (including specific performance of the obligations of
Borrower).
(D) SUSPENSION EVENT. Notwithstanding the foregoing, Lender may not
accelerate this Loan or exercise the other remedies described in this
Section 7.2 upon the occurrence of an Event of Default under (i) Section
7.1(B) (with respect to Sections 6.6, 6.7, 6.8, 6.9 and 5.1), (ii) Section
7.1(C), unless the representation, warranty, certification or other
statement was known by Borrower to be false when made or deemed made,
(iii) Section 7.1(G), (iv) Section 7.1(I), [(v) SECTION 5.1(K)], or (vi)
Section 7.1(M), each a "SUSPENSION EVENT") until the first to occur of (i)
the death of JQH, or (ii) Lender's determination, in its sole judgment,
that the Suspension Event is likely to have a Material Adverse Effect or
that the value of the Preferred Equity Interest is less than the stated
amount thereof, at which time the suspension of such rights and remedies
shall cease and Lender shall be immediately entitled to exercise all of
its rights and remedies under this Agreement and the Loan Documents. [TO
BE RESOLVED PRIOR TO CLOSING.]
7.3 REMEDIES CUMULATIVE; WAIVERS; REASONABLE CHARGES. All of the remedies given
to Lender in the Loan Documents or otherwise available at law or in equity to
Lender shall be cumulative and may be exercised separately, successively or
concurrently. Failure to exercise any one of the remedies herein provided shall
not constitute a waiver thereof by Lender, nor shall the use of any such
remedies prevent the subsequent or concurrent resort to any other remedy or
remedies vested in Lender by the Loan Documents or at law or in equity. To be
effective, any waiver by Lender must be in writing and such waiver shall be
limited in its effect to the condition or default specified therein, and no such
waiver shall extend to any subsequent condition or default. It is agreed that
(i) the actual costs and damages that Lender would suffer by reason of an Event
of Default (exclusive of the attorneys' fees and other costs incurred in
connection with enforcement of Lender's rights under the Loan Documents) or a
prepayment would be difficult and needlessly expensive to calculate and
establish, and (ii) the amounts of the Default Rate, the Unapplied Preferred
Default Rate, the Suspension Default Rate, the Late
50
Charge and payments to be made pursuant to Section 2.4(E) are reasonable, taking
into consideration the circumstances known to the parties at this time, and
(iii) the Default Rate, the Unapplied Preferred Default Rate, the Suspension
Default Rate, the Late Charges and Lender's reasonable attorneys' fees and other
costs and expenses incurred in connection with enforcement of Lender's rights
under the Loan Documents shall be due and payable as provided herein, and (iv)
the Default Rate, the Unapplied Preferred Default Rate, the Suspension Default
Rate, Late Charges, the payments to be made pursuant to Section 2.4(E) and the
obligation to pay Lender's reasonable attorneys' fees and other enforcement
costs do not, individually or collectively, constitute a penalty.
SECTION 8
ASSIGNMENT BY LENDER
8.1 ASSIGNMENT BY LENDER. So long as no Event of Default exists and is
continuing, Lender, during the Availability Period, shall not assign its rights
or obligations hereunder, unless Lender agrees in writing to continue to be
bound by its obligations to provide Loans under this Agreement. In either event,
any assignee shall acknowledge, in writing, its assumption of all obligations of
Lender under the Loan Documents. Upon the expiration of the Availability Period
or if an Event of Default exists and is continuing, Lender may assign its rights
and/or its obligations hereunder without the consent of Borrower. In connection
with any permitted assignment, Borrower shall, upon request from Lender,
cooperate, and Borrower shall, cause its Affiliates to cooperate, in all
reasonable respects in connection with any such assignment. Borrower will not be
required to incur more than de minimis expenses or costs pursuant to this
Section 8.1. Any assignee of Lender's interest in the Facility shall take the
same free and clear of all offsets, counterclaims or defenses which are
unrelated to the Facility which Borrower may otherwise have against any assignor
of the Facility.
SECTION 9
MISCELLANEOUS
9.1 FEES AND EXPENSES.
(A) Borrower agrees to promptly pay all fees, costs and expenses
(including attorneys' fees, court costs, cost of appeal and the reasonable
fees, costs and expenses of other professionals retained by Lender and
travel costs and expenses) incurred by Lender in connection with the
following, and all such fees, costs and expenses shall be part of the
Obligations, payable on demand: (i) the giving or withholding of any
consents, approvals, or permissions, disbursements of the Loan (except
that attorneys fees and costs shall not be payable in connection with
disbursements) and in connection with any amendments, modifications and
waivers relating to the Loan Documents requested by Borrower, or (ii)
enforcement of this Agreement or the other Loan Documents, the collection
of any payments due from any Loan Party under the Loan Documents or any
refinancing or restructuring of the credit arrangements provided under the
Loan Documents, whether in the nature of a "workout" or in connection with
any insolvency or bankruptcy proceedings or otherwise.
(B) Each of Borrower and Lender agree to pay, without right of
reimbursement from the other, all costs and expenses incurred by Borrower
or Lender incident to the
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performance of their obligations hereunder, including, without limitation,
the fees and disbursements of counsel, accountants, financial advisors,
experts and consultants employed by the respective parties in connection
with the transactions contemplated hereby, except as otherwise provided in
this Agreement.
9.2 CERTAIN LENDER MATTERS. Lender may, in accordance with Lender's customary
practices, destroy or otherwise dispose of all documents, schedules, invoices or
other papers, delivered by Borrower to Lender unless Borrower requests, at the
time of delivery, in writing that same be returned. Borrower and Lender intend
that the relationships created hereunder and under the other Loan Documents be
solely that of borrower and lender. Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender nor to grant Lender any interest in the
Xxxxxxx Hotels. No provision in this Agreement or in any of the other Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty by Lender to Borrower or any other Person. All attorneys,
accountants, appraisers, and other professional Persons and consultants retained
by Lender shall have the right to act exclusively in the interest of Lender and
shall have no duty of loyalty, duty of care or any other duty to Borrower or any
of its Affiliates or any other Person. By accepting or approving anything
required to be observed, performed or fulfilled or to be given to Lender
pursuant to the Loan Documents, Lender shall not be deemed to have warranted or
represented the sufficiency, legality, effectiveness or legal effect of the
same, or of any term, provision or condition thereof, and such acceptance or
approval thereof shall not be or constitute any warranty or representation with
respect hereto or thereto by Lender. Borrower shall rely solely on its own
judgment and advisors in entering into this Agreement without relying in any
manner on any statements, representations or recommendations of Lender or any
parent, Subsidiary or Affiliate of Lender or their respective attorneys,
advisors, accountants, officers, representatives, directors, employees,
partners, shareholders, trustees, members or managers. Lender shall not be
subject to any limitation whatsoever in the exercise of any rights or remedies
available to it under any of the Loan Documents or any other agreements or
instruments which govern the Facility by virtue of the ownership by it or any
parent, Subsidiary or Affiliate of Lender of any equity interest any of them may
acquire in an Affiliate of Borrower, and Borrower hereby irrevocably waives the
right to raise any defense or take any action on the basis of the foregoing with
respect to Lender's exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates. LENDER SHALL
HAVE NO LIABILITY HEREUNDER FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE OR INDIRECT
DAMAGES. In the case of any receivership, insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition or other proceedings
affecting Borrower, or its respective creditors or property, Lender, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of
Lender allowed in such proceedings for the entire secured Obligations at the
date of the institution of such proceedings and for any additional amount which
may become due and payable by Borrower after such date. Lender shall have the
right from time to time to designate, appoint and replace one or more servicers
and to allow servicer to exercise any and all rights of Lender under the Loan
Documents. All documents and other matters required by any of the provisions of
this Agreement to be submitted or provided to Lender shall be in form and
substance reasonably satisfactory to Lender, unless a different standard of
review is specified in
52
a particular section. Borrower shall not be entitled to (and does hereby waive
any and all rights to receive) any notices of any nature whatsoever from Lender
except with respect to matters for which the Loan Documents expressly provide
for the giving of notice by Lender to Borrower. In any action or proceeding
brought by Borrower against Lender claiming or based upon an allegation that
Lender unreasonably withheld its consent to or approval of a proposed act by
Borrower which requires Lender's consent hereunder, Borrower's sole and
exclusive remedy in said action or proceeding shall be injunctive relief or
specific performance requiring Lender to grant such consent or approval.
9.3 INDEMNITY. In addition to the payment of expenses pursuant to Section 9.1
and the indemnification obligations set forth in other portions of this
Agreement or the other Loan Documents, whether or not the transactions
contemplated hereby shall be consummated, Borrower agrees to indemnify, pay,
defend and hold Lender, its officers, directors, members, partners,
shareholders, participants, beneficiaries, trustees, employees, agents,
successors and assigns, any subsequent holder of the Note, any trustee, fiscal
agent, servicer, underwriter and placement agent, (collectively, the
"INDEMNITEES") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, causes of action, suits, claims,
tax liabilities, broker's or finder's fees, costs, expenses and disbursements of
any kind or nature whatsoever (including the fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may be imposed on, incurred by, or
asserted against that Indemnitee, based upon any third-party claims against such
Indemnitees in any manner related to or arising out of (A) any breach by any
Loan Party of any representation, warranty, covenant, or other agreement
contained in any of the Loan Documents, (B) the actual or threatened presence,
release, disposal, spill, escape, leakage, transportation, migration, seepage,
discharge, removal, or cleanup of any Hazardous Material located on, about,
within, under, affecting, from or onto any Xxxxxxx Hotel or any violation of any
applicable Environmental Law by Borrower or any Project Owner, or (C) the use or
intended use of the proceeds of any of the Loans (the foregoing liabilities
herein collectively referred to as the "INDEMNIFIED LIABILITIES"); provided,
that Borrower shall have no obligation to an Indemnitee hereunder with respect
to Indemnified Liabilities arising from the gross negligence or willful
misconduct of that Indemnitee as determined in a final order by a court of
competent jurisdiction. To the extent that the undertaking to indemnify, pay,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. If any such action or
other proceeding shall be brought against Lender, upon written notice from
Borrower to Lender (given reasonably promptly following Lender's notice to
Borrower of such action or proceeding), Borrower shall be entitled to assume the
defense thereof, at Borrower's expense, with counsel reasonably acceptable to
Lender and Borrower; provided, however, Lender may, at its own expense, retain
separate counsel to participate in such defense, but such participation shall
not be deemed to give Lender a right to control such defense, which right
Borrower expressly retains. Notwithstanding the foregoing, each Indemnitee
shall, following notice to and consultation with Borrower, have the right to
employ separate counsel at Borrower's expense if, in the reasonable opinion of
independent legal counsel, a conflict or potential conflict exists between the
Indemnitee and Borrower that would make such separate representation advisable.
Borrower shall have no obligation to indemnify an
53
Indemnitee for damage or loss resulting from such Indemnitee's gross negligence
or willful misconduct.
9.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein, no amendment,
modification, termination or waiver of any provision of this Agreement, the Note
or any other Loan Document, or consent to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender
(and, with respect to any amendment or modification, unless also signed by
Borrower). Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on Borrower in any case shall entitle
Borrower, or any other Person to any other or further notice or demand in
similar or other circumstances. Borrower hereby waives the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by Lender or its agents. No failure or delay on the part of
Lender or any holder of any Note in the exercise of any power, right or
privilege hereunder or under the Note or any other Loan Document shall impair
such power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege. All rights and remedies existing under this
Agreement, the Note and the other Loan Documents are cumulative to, and not
exclusive of, any rights or remedies otherwise available. Lender shall not be
under any obligation to marshal any assets in favor of any Person or against or
in payment of any or all of the Obligations. To the extent that any Person makes
a payment or payments to Lender, or Lender enforces its remedies or exercise its
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of such recovery, the
Obligations or part thereof originally intended to be satisfied, and all Liens,
if any, rights and remedies therefore, shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement or
setoff had not occurred. Borrower agrees (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive Borrower from paying all or any portion
of the principal of, premium, if any, or interest on the Loans contemplated
herein or in any of the other Loan Documents or which may affect the covenants
or the performance of this Agreement; and Borrower (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the holders, but will suffer and permit the execution of
every such power as though no such law had been enacted.
9.5 NOTICES. All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed given or delivered (i) when delivered
personally or by private courier, (ii) when actually delivered by registered or
certified United States mail, return receipt requested, or (iii) when sent by
facsimile transmission (provided, that it is confirmed by a means specified in
clause (i) or (ii)), addressed as specified on SCHEDULE 9.5 or to other address
as such party may indicate by a notice delivered to the other parties hereto.
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9.6 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans hereunder and the execution
and delivery of the Notes. Notwithstanding anything in this Agreement or implied
by law to the contrary, the provisions of Sections 2.6, 5.7, 9.1, 9.2, 9.3 and
9.14 shall survive the payment of the Loans and the termination of this
Agreement. Subject to this Section 9.6, all other representations, warranties
and agreements of Borrower and Lender set forth in this Agreement shall
terminate upon indefeasible payment in full of the Loans and the termination of
this Agreement.
9.7 MISCELLANEOUS. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect. All covenants and
agreements hereunder shall be given in any jurisdiction independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Agreement, the Note or
other Loan Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement,
the Note or other Loan Documents or of such provision or obligation in any other
jurisdiction. This Agreement is made for the sole benefit of Borrower and
Lender, and no other Person shall be deemed to have any privity of contract
hereunder nor any right to rely hereon to any extent or for any purpose
whatsoever, nor shall any other person have any right of action of any kind
hereon or be deemed to be a third party beneficiary hereunder. This Agreement,
the Note, and the other Loan Documents referred to herein embody the final,
entire agreement among the parties hereto and supersede any and all prior
commitments, agreements, representations, and understandings, whether written or
oral, relating to the subject matter hereof and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto. There are no oral agreements among the
parties hereto. Borrower and Lender acknowledge that each of them has had the
benefit of legal counsel of its own choice and has been afforded an opportunity
to review this Agreement and the other Loan Documents with its legal counsel and
that this Agreement and the other Loan Documents shall be construed as if
jointly drafted by Borrower and Lender. If any term, condition or provision of
this Agreement shall be inconsistent with any term, condition or provision of
any other Loan Document, this Agreement shall control. This Agreement and any
amendments, waivers, consents, or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one and the same instrument.
This Agreement shall become effective upon the execution of a counterpart hereof
by each of the parties hereto. Upon indefeasible payment and performance in full
of the Borrower's Obligations, the Lender shall, at the sole cost and expense of
the Borrower, release the Liens securing the Borrower's Obligations.
9.8 APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
THIS AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER
TO THIS AGREEMENT (WHETHER IN CONTRACT, TORT OR OTHERWISE) SHALL BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
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9.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, except that Borrower may not assign its rights or obligations hereunder
or under any of the other Loan Documents without the prior written consent of
Lender. Lender may assign its rights and obligations hereunder in accordance
with Section 8.1.
9.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. BORROWER AND LENDER HEREBY
CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF XXXX, STATE OF ILLINOIS AND IRREVOCABLY AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. BORROWER AND LENDER EACH ACCEPTS
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE NOTE, SUCH OTHER LOAN
DOCUMENTS OR SUCH OBLIGATION. BORROWER AND LENDER EACH DESIGNATES AND APPOINTS
CT CORPORATION SYSTEM AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY
BORROWER, AS APPLICABLE, WITH LENDER'S APPROVAL OR BY LENDER WITH BORROWER'S
APPROVAL WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE
ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED
BY REGISTERED MAIL TO BORROWER OR LENDER, AS APPLICABLE, AT ITS ADDRESS PROVIDED
IN SUBSECTION 9.5 EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY
FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.
IF ANY AGENT APPOINTED BY BORROWER OR LENDER, AS APPLICABLE, AS ITS AGENT FOR
SERVICE OF PROCESS REFUSES TO ACCEPT SERVICE OF PROCESS, BORROWER AND LENDER, AS
APPLICABLE, HEREBY AGREE THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE
SUFFICIENT SERVICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW.
9.11 WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED. BORROWER AND LENDER ALSO WAIVE ANY BOND
OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF BORROWER OR LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.
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BORROWER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER
IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE
WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND LENDER FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
FACILITY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
9.12 PUBLICITY. Upon Borrower's written consent (not to be unreasonably withheld
or delayed) with respect to any advertising using the "Xxxxxxx" name, but not
otherwise, Lender (and Lender's Affiliates) may and Borrower does hereby
authorize Lender (and its Affiliates) to, refer, in its sole discretion, to the
Facility from time to time, in connection with any proposed transfer of any
interest in the Facility, press releases and other releases of information to
members of the public, reports to investors and in other media, which
references, may include use of photographs, drawings and other depictions and
images of the Land and other components of any Xxxxxxx Hotel, a description of
the Facility (including the stated principal amount), use of Borrower's name,
the address of any Xxxxxxx Hotel and the logo of Borrower and/or its Affiliates
and which references may be reproduced and distributed, electronically or
otherwise, from time to time. Borrower shall cause the owner of such "logo"
rights to consent to such use upon request from Lender. Lender hereby agrees
that, without the prior consent of Borrower, any written information relating to
Borrower which is provided to Lender in connection with the making of the Loans
which is either confidential, proprietary, or otherwise not generally available
to the public (but excluding information Lender has obtained independently from
third-party sources without Lender's knowledge that the source has violated any
fiduciary or other duty not to disclose such information) (the "CONFIDENTIAL
INFORMATION"), will be kept confidential by Lender, using the same standard of
care in safeguarding the Confidential Information as Lender employs in
protecting its own proprietary information which Lender desires not to
disseminate or publish. Notwithstanding the foregoing, Confidential Information
may be disseminated (a) pursuant to the requirements of applicable law or stock
exchanges, (b) pursuant to judicial process, administrative agency process or
order of Governmental Authority, (c) in connection with litigation, arbitration
proceedings or administrative proceedings before or by any Governmental
Authority, (d) to Lender's attorneys, accountants, advisors and actual or
prospective financing sources who will be instructed to comply with this Section
9.12, (e) upon prior written notice to Borrower, to actual or prospective
assignees, pledgees, participants or agents, (f) pursuant to the requirements or
rules of a stock exchange or stock trading system on which the securities of
Lender or its Affiliates may be listed or traded and (g) to any rating agency in
connection with the rating of iStar Financial Inc. In addition, notwithstanding
any other provision, any party (and its employee, representative or other agent)
may disclose to any and all Persons, without limitation of any kind, any
information with respect to the tax treatment and tax structure of the
transactions contemplated hereby and all materials of any kind (including
57
opinions or other tax analyses) that are provided to such party relating to such
tax treatment and tax structure. Borrower authorizes Lender to obtain, reproduce
and distribute photographs of any Xxxxxxx Hotel. For purposes of this Section
9.12, Confidential Information will not be deemed to include the amount of the
Loans and the other terms, conditions and provisions of the Loan Documents, the
street address and common name, if any, of the Land and Improvements, the name
of Borrower and the logo of Borrower and/or its Affiliates, and photographs,
images or other depictions of any Xxxxxxx Hotel.
9.13 PERFORMANCE BY LENDER/ATTORNEY-IN-FACT. In the event that Borrower shall at
any time fail to duly and punctually pay, perform, observe or comply with any of
its covenants and agreements hereunder or under the other Loan Documents or if
any Event of Default hereunder shall exist, then Lender may (but shall in no
event be required to) make any such payment or perform any such term, provision,
condition, covenant or agreement or cure any such Event of Default. Lender shall
not take action under this Section 9.13 prior to the occurrence of an Event of
Default unless in Lender's good faith judgment reasonably exercised, such action
is necessary or appropriate in order to preserve the value of the Collateral, to
protect Persons or property, or Borrower has abandoned any Xxxxxxx Hotel or any
portion thereof. Lender shall not be obligated to continue any such action
having commenced the same and may cease the same without notice to Borrower. Any
amounts expended by Lender in connection with such action shall constitute
additional Loans hereunder, the payment of which is additional Indebtedness,
secured by the Loan Documents and shall become due and payable upon demand by
Lender, with interest at the Default Rate from the date of disbursement thereof
until fully paid. No further direction or authorization from Borrower shall be
necessary for such disbursements. The execution of this Agreement by Borrower
shall and hereby does constitute an irrevocable direction and authorization to
Lender to so disburse such funds. Borrower hereby irrevocably appoints Lender,
as its attorney-in-fact, coupled with an interest, with full authority in the
place and stead of Borrower and in the name of Borrower or otherwise in the
reasonable discretion of Lender, to take any action and to execute any
instrument which Lender may deem reasonably necessary to accomplish the terms
and conditions of this Agreement or any other Loan Document, including the
following: (i) to execute and/or file, without the signature of Borrower any
Financing Statements, continuation statements, or other filing, and any
amendment thereof, relating to the Collateral; (ii) to give notice to any third
parties which may be required to perfect Lender's security interest in the
Collateral; and (iii) during the existence of an Event of Default, to register,
purchase, sell, assign, transfer, pledge or take any other action with respect
to any Collateral in accordance with this Agreement or any Loan Document. Lender
shall notify Borrower of Lender's taking of any action as attorney-in-fact, or
otherwise in Borrower's name, pursuant to the provisions of this Section 9.13.
9.14 BROKERAGE CLAIMS. Borrower shall protect, defend, indemnify and hold Lender
harmless from and against all loss, cost, liability and expense incurred as a
result of any claim for a broker's or finder's fee against Lender or any Person,
in connection with the transaction herein contemplated, including any such
claims by Banc of America Securities or any affiliate, provided such claim is
made by or arises through or under Borrower or is based in whole or in part upon
alleged acts or omissions of Borrower. Lender shall protect, defend, indemnify
and hold Borrower harmless from and against all loss, cost, liability and
expense incurred as a result of any claim for a broker's or finder's fee against
Borrower or any other Person in connection
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with the transaction herein contemplated, provided such claim is made by or
arises through or under Lender or is based in whole or in part upon alleged acts
or omissions of Lender.
9.15 AGREEMENT. THE RIGHTS AND OBLIGATIONS OF BORROWER AND LENDER SHALL BE
DETERMINED SOLELY FROM THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND
ANY PRIOR ORAL OR WRITTEN AGREEMENTS BETWEEN LENDER AND BORROWER CONCERNING THE
SUBJECT MATTER HEREOF AND OF THE OTHER LOAN DOCUMENTS ARE SUPERSEDED BY AND
MERGED INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS MAY NOT BE VARIED BY ANY ORAL AGREEMENTS OR DISCUSSIONS
THAT OCCUR BEFORE, CONTEMPORANEOUSLY WITH, OR SUBSEQUENT TO THE EXECUTION OF
THIS AGREEMENT OR THE LOAN DOCUMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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Witness the due execution hereof by the undersigned as of the date first
written above.
BORROWER:
[PROJECT HOLDCO]
By: ___________________________________
Name: _________________________________
Its: __________________________________
LENDER:
[LENDCO]
By: ___________________________________
Name: _________________________________
Its: __________________________________