LOAN AGREEMENT Dated as of November 26, 2002 By and Among SOLOMONS BEACON INN LIMITED PARTNERSHIP (“Fee Borrower”) TRS SUBSIDIARY, LLC (“Leasehold Borrower”) together, Borrowers And GREENWICH CAPITAL FINANCIAL PRODUCTS, INC. as Lender
Exhibit 10.3
Dated as of November 26, 2002
By and Among
SOLOMONS BEACON INN LIMITED PARTNERSHIP
(“Fee Borrower”)
TRS SUBSIDIARY, LLC
(“Leasehold Borrower”)
together, Borrowers
And
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
as Lender
TABLE OF CONTENTS
Page | ||||||||
1. | DEFINITIONS; PRINCIPLES OF CONSTRUCTION | 1 | ||||||
1.1 | Specific Definitions |
1 | ||||||
1.2 | Index of Other Definitions | 11 | ||||||
1.3 | Principles of Construction | 13 | ||||||
2. | GENERAL LOAN TERMS | 13 | ||||||
2.1 | The Loan | 13 | ||||||
2.2 | Interest; Monthly Payments | 13 | ||||||
2.2.1 | Generally | 13 | ||||||
2.2.2 | Default Rate | 14 | ||||||
2.2.3 | Taxes | 14 | ||||||
2.2.4 | New Payment Date | 14 | ||||||
2.3 | Loan Repayment | 14 | ||||||
2.3.1 | Repayment | 14 | ||||||
2.3.2 | Mandatory Prepayments | 15 | ||||||
2.3.3 | Defeasance | 15 | ||||||
2.3.4 | Optional Prepayments | 18 | ||||||
2.4 | Release of Properties | 18 | ||||||
2.4.1 | Release on Defeasance | 18 | ||||||
2.4.2 | Sale of Properties | 18 | ||||||
2.4.3 | Release on Payment in Full | 19 | ||||||
2.5 | Substitution of Properties | 19 | ||||||
2.5.1 | Substitution of Collateral Properties | 19 | ||||||
2.5.2 | Substitution of Defeasance Collateral | 22 | ||||||
2.6 | Payments and Computations | 23 | ||||||
2.6.1 | Making of Payments | 23 | ||||||
2.6.2 | Computations | 23 | ||||||
2.6.3 | Late Payment Charge | 23 | ||||||
3. | CASH MANAGEMENT AND RESERVES | 23 | ||||||
3.1 | Cash Management Arrangements | 23 | ||||||
3.2 | Required Repairs | 24 | ||||||
3.2.1 | Completion of Required Repairs | 24 | ||||||
3.2.2 | Required Repairs Reserves | 24 | ||||||
3.2.3 | Required Repairs Letter of Credit | 24 | ||||||
3.2.4 | Environmental Remediation Reserves | 25 | ||||||
3.3 | Taxes and Insurance | 26 | ||||||
3.3.1 | Tax and Insurance Subaccount | 26 | ||||||
3.3.2 | Tax and Insurance Letter of Credit | 26 | ||||||
3.4 | Capital Expense Reserves | 27 | ||||||
3.4.1 | Capital Reserve Subaccount | 27 |
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3.4.2 | Capital Expenses Letter of Credit | 28 | ||||||
3.5 | Seasonal Working Capital Reserves | 29 | ||||||
3.5.1 | Seasonal Capital Reserve Subaccount | 29 | ||||||
3.5.2 | Seasonal Working Capital Letter of Credit | 29 | ||||||
3.6 | Operating Expense Subaccount | 30 | ||||||
3.7 | Casualty/Condemnation Subaccount | 30 | ||||||
3.8 | Ground Rent Subaccount | 30 | ||||||
3.9 | Security Deposits | 31 | ||||||
3.10 | Grant of Security Interest; Application of Funds | 31 | ||||||
3.11 | Property Cash Flow Allocation | 32 | ||||||
3.12 | Provisions Regarding Letters of Credit | 33 | ||||||
3.12.1 | Letters of Credit Generally | 33 | ||||||
3.12.2 | Security for Debt | 33 | ||||||
3.12.3 | Additional Rights of Lender | 33 | ||||||
4. | REPRESENTATIONS AND WARRANTIES | 34 | ||||||
4.1 | Organization; Special Purpose | 34 | ||||||
4.2 | Proceedings; Enforceability | 35 | ||||||
4.3 | No Conflicts | 35 | ||||||
4.4 | Litigation | 35 | ||||||
4.5 | Agreements | 35 | ||||||
4.6 | Title | 36 | ||||||
4.7 | No Bankruptcy Filing | 36 | ||||||
4.8 | Full and Accurate Disclosure | 36 | ||||||
4.9 | Tax Filings | 37 | ||||||
4.10 | No Plan Assets | 37 | ||||||
4.11 | Compliance | 37 | ||||||
4.12 | Contracts | 38 | ||||||
4.13 | Federal Reserve Regulations; Investment Company Act | 38 | ||||||
4.14 | Easements; Utilities and Public Access | 38 | ||||||
4.15 | Physical Condition | 38 | ||||||
4.16 | Leases | 39 | ||||||
4.17 | Fraudulent Transfer | 39 | ||||||
4.18 | Ownership of Borrower | 39 | ||||||
4.19 | Purchase Options | 40 | ||||||
4.20 | Management Agreement | 40 | ||||||
4.21 | Hazardous Substances | 40 | ||||||
4.22 | Name; Principal Place of Business | 40 | ||||||
4.23 | Other Debt | 41 | ||||||
4.24 | Franchise Agreements | 41 | ||||||
4.25 | Operating Lease | 41 | ||||||
4.26 | Ground Lease | 41 | ||||||
5. | COVENANTS | 41 | ||||||
5.1 | Existence | 41 | ||||||
5.2 | Taxes and Other Charges | 41 | ||||||
5.3 | Access to Properties | 42 |
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5.4 | Repairs; Maintenance and Compliance; Alterations. | 42 | ||||||
5.4.1 | Repairs; Maintenance and Compliance | 42 | ||||||
5.4.2 | Alterations | 42 | ||||||
5.5 | Performance of Other Agreements | 43 | ||||||
5.6 | Cooperate in Legal Proceedings | 43 | ||||||
5.7 | Further Assurances | 43 | ||||||
5.8 | Environmental Matters. | 43 | ||||||
5.8.1 | Hazardous Substances | 43 | ||||||
5.8.2 | Environmental Monitoring | 44 | ||||||
5.9 | Title to the Properties | 45 | ||||||
5.10 | Leases | 45 | ||||||
5.10.1 | Generally | 45 | ||||||
5.10.2 | Material Leases | 45 | ||||||
5.10.3 | Minor Leases | 46 | ||||||
5.10.4 | Additional Covenants with respect to Leases | 46 | ||||||
5.11 | Estoppel Statement | 47 | ||||||
5.12 | Property Management | 47 | ||||||
5.12.1 | Management Agreement | 47 | ||||||
5.12.2 | Termination of Manager | 47 | ||||||
5.13 | Special Purpose Bankruptcy Remote Entity | 48 | ||||||
5.14 | Assumption in Non-Consolidation Opinion | 48 | ||||||
5.15 | Change In Business or Operation of Properties | 48 | ||||||
5.16 | Debt Cancellation | 48 | ||||||
5.17 | Affiliate Transactions | 48 | ||||||
5.18 | Zoning | 48 | ||||||
5.19 | No Joint Assessment | 48 | ||||||
5.20 | Principal Place of Business | 48 | ||||||
5.21 | Change of Name, Identity or Structure | 49 | ||||||
5.22 | Indebtedness | 49 | ||||||
5.23 | Licenses | 49 | ||||||
5.24 | Compliance with Restrictive Covenants, Etc. | 49 | ||||||
5.25 | ERISA | 49 | ||||||
5.26 | Prohibited Transfers | 50 | ||||||
5.26.1 | Generally | 50 | ||||||
5.26.2 | Transfer and Assumption | 50 | ||||||
5.27 | Liens | 52 | ||||||
5.28 | Dissolution | 52 | ||||||
5.29 | Expenses | 52 | ||||||
5.30 | Indemnity | 52 | ||||||
5.31 | Franchise Agreements | 53 | ||||||
5.32 | Operating Lease | 54 | ||||||
5.33 | Ground Lease | 54 | ||||||
5.33.1 | 54 | |||||||
5.33.2 | 55 | |||||||
6. | NOTICES AND REPORTING | 55 | ||||||
6.1 | Notices | 55 |
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6.2 | Borrower Notices and Deliveries | 55 | ||||||
6.3 | Financial Reporting | 56 | ||||||
6.3.1 | Bookkeeping | 56 | ||||||
6.3.2 | Annual Reports | 56 | ||||||
6.3.3 | Monthly Reports | 57 | ||||||
6.3.4 | Other Reports | 57 | ||||||
6.3.5 | Annual Budget | 57 | ||||||
6.3.6 | Breach | 58 | ||||||
6.3.7 | Hotel Accounting | 58 | ||||||
7. | INSURANCE; CASUALTY; AND CONDEMNATION | 58 | ||||||
7.1 | Insurance | 58 | ||||||
7.1.1 | Coverage | 58 | ||||||
7.1.2 | Policies | 60 | ||||||
7.1.3 | Modification of Insurance Requirements | 61 | ||||||
7.2 | Casualty | 61 | ||||||
7.2.1 | Notice; Restoration | 61 | ||||||
7.2.2 | Settlement of Proceeds | 62 | ||||||
7.3 | Condemnation | 62 | ||||||
7.3.1 | Notice; Restoration | 62 | ||||||
7.3.2 | Collection of Award | 62 | ||||||
7.4 | Application of Proceeds or Award | 63 | ||||||
7.4.1 | Application to Restoration | 63 | ||||||
7.4.2 | Application to Debt | 63 | ||||||
7.4.3 | Procedure for Application to Restoration | 64 | ||||||
7.4.4 | Ground Lease | 64 | ||||||
8. | DEFAULTS | 64 | ||||||
8.1 | Events of Default | 64 | ||||||
8.2 | Remedies | 67 | ||||||
8.2.1 | Acceleration | 67 | ||||||
8.2.2 | Remedies Cumulative | 67 | ||||||
8.2.3 | Severance | 67 | ||||||
8.2.4 | Delay | 68 | ||||||
8.2.5 | Lender’s Right to Perform | 68 | ||||||
9. | SPECIAL PROVISIONS | 68 | ||||||
9.1 | Sale of Note and Secondary Market Transaction | 68 | ||||||
9.1.1 | General; Borrower Cooperation | 68 | ||||||
9.1.2 | Use of Information | 69 | ||||||
9.1.3 | Borrower Obligations Regarding Disclosure Documents | 69 | ||||||
9.1.4 | Borrower Indemnity Regarding Filings | 70 | ||||||
9.1.5 | Indemnification Procedure | 70 | ||||||
9.1.6 | Contribution | 71 | ||||||
9.1.7 | Rating Surveillance | 71 | ||||||
9.1.8 | Severance of Loan | 71 |
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10. | MISCELLANEOUS | 72 | ||||||
10.1 | Exculpation | 72 | ||||||
10.2 | Brokers and Financial Advisors | 73 | ||||||
10.3 | Retention of Servicer | 73 | ||||||
10.4 | Survival | 74 | ||||||
10.5 | Lender’s Discretion | 74 | ||||||
10.6 | Governing Law | 74 | ||||||
10.7 | Modification, Waiver in Writing | 75 | ||||||
10.8 | Trial by Jury | 75 | ||||||
10.9 | Headings/Exhibits | 76 | ||||||
10.10 | Severability | 76 | ||||||
10.11 | Preferences | 76 | ||||||
10.12 | Waiver of Notice | 76 | ||||||
10.13 | Remedies of Borrower | 76 | ||||||
10.14 | Prior Agreements | 77 | ||||||
10.15 | Offsets, Counterclaims and Defenses | 77 | ||||||
10.16 | Publicity | 77 | ||||||
10.17 | No Usury | 77 | ||||||
10.18 | Conflict; Construction of Documents | 78 | ||||||
10.19 | No Third Party Beneficiaries | 78 | ||||||
10.20 | Yield Maintenance Premium | 78 | ||||||
10.21 | Assignment | 78 | ||||||
10.22 | Cross Default; Cross Collateralization | 78 | ||||||
10.23 | Joint and Several | 79 | ||||||
10.24 | Set-Off | 79 | ||||||
10.25 | Counterparts | 79 |
Schedule 1 | - | Location of Properties/Allocated Loan Amounts | ||
Schedule 2 | - | Required Repairs | ||
Schedule 3 | - | Exceptions to Representations and Warranties | ||
Schedule 4 | - | Organization of Borrower | ||
Schedule 5 | - | Definition of Special Purpose Bankruptcy Remote Entity | ||
Schedule 6 | - | Seasonal Working Capital Reserve Subaccount Payments | ||
Schedule 7 | - | Franchise Agreements | ||
Schedule 8 | - | Approved Franchisors | ||
Schedule 9 | - | Approved Managers | ||
Schedule 10 | - | Existing Environmental Conditions |
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LOAN AGREEMENT dated as of November 26, 2002 (as the same may be modified, supplemented, amended or otherwise changed, this “Agreement”) by and among SOLOMONS BEACON INN LIMITED PARTNERSHIP, a Maryland limited partnership (“Fee Borrower”) and TRS SUBSIDIARY, LLC, a Delaware limited liability company (“Leasehold Borrower”, and together with Fee Borrower, each, a “Borrower” and, collectively together with their respective permitted successors and assigns, “Borrowers”), and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation (together with its successors and assigns, “Lender”).
1. | DEFINITIONS; PRINCIPLES OF CONSTRUCTION |
1.1 Specific Definitions. The following terms have the meanings set forth below:
Acceptable Appraisal: an appraisal of a Property or a proposed Substitute Property that is (i) dated not more than 120 days prior to the applicable Substitution Date, (ii) signed by a qualified, independent MAI appraiser engaged by Lender, with no interest, direct or indirect, in the Loan, any Property or the proposed Substitute Property, and whose compensation is not affected by the Appraised Value, (iii) addressed to Lender and its successors and assigns and (iv) made in compliance with the requirements of the Federal National Mortgage Association Company or Federal Home Loan Mortgage Corporation, or any successor thereto, and Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder.
Actual Debt Service Coverage Ratio: as of any date, the ratio calculated by Lender of (i) the Actual Net Operating Income for the 12-month period ending with the most recently completed calendar month to (ii) the Debt Service with respect to such period.
Actual Net Operating Income: for any period, the actual cash flow of the Properties determined on a cash basis of accounting, after deducting therefrom deposits to (but not withdrawals from) any reserves required under this Agreement, and without giving credit for non-recurring items of income.
Affiliate: as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.
Allocated Environmental Remediation Amount: with respect to each Property at which there is an Existing Environmental Condition, the amount set forth with respect to such Property on Schedule 10.
Allocated Loan Amount: with respect to each Property, the amount set forth with respect to such Property on Schedule 1.
Appraised Value: the fair market value of a Property or a proposed Substitute Property reflected in an Acceptable Appraisal.
Approved Bank shall mean a bank or other financial institution, the long term unsecured debt obligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” by Xxxxx’x, and, as of the date hereof, shall mean and include US Bank NA, so long as the long term unsecured debt obligations of US Bank NA are rated at least “A+” by S&P and Fitch and “Aa2” by Xxxxx’x.
Approved Capital Expenses: Capital Expenses incurred by a Borrower, provided that during a Cash Management Period, such Capital Expenses shall either be (i) included in the Approved Capital Budget for the Property owned or leased by such Borrower for the current calendar month or (ii) approved by Lender.
Approved Franchisor: shall mean a nationally recognized hotel franchisor with a net worth and financial rating equal to or greater than the net worth and financial rating of the hotel franchisor with respect to the applicable Property as of the Closing Date. Examples of hotel franchisors that would qualify on the date hereof (but provided that such franchisors are subject to review by Lender at the time of any proposed replacement) are listed on Schedule 8.
Approved Manager: shall mean a hotel management company (i) with a net worth and financial rating, as determined by Lender in its reasonable discretion, equal to or greater than the net worth and financial rating of the Manager of the applicable Property as of the Closing Date, (ii) having at least five (5) years’ experience in the management of hotels similar in size to the Property or the portfolio of Properties, as applicable, and (iii) not the subject of a bankruptcy or similar insolvency proceeding. Examples of hotel management companies that would qualify on the date hereof (but provided that such management companies are subject to review by Lender at the time of any proposed replacement) are listed on Schedule 9.
Approved Operating Expenses: during a Cash Management Period, operating expenses incurred by a Borrower which (i) are included in the Approved Operating Budget for the Property owned or leased by such Borrower for the current calendar month, (ii) are for real estate taxes, insurance premiums, electric, gas, oil, water, sewer or other utility service to such Property or (iii) have been approved by Lender.
Available Cash: the amount of Rents, if any, remaining in the Deposit Account after the application of all of the payments required under clauses (i) through (vii) of Section 3.11(a).
Borrower Representative: collectively, Fee Borrower Representative and Leasehold Borrower Representative.
Business Day: any day other than a Saturday, Sunday or any day on which commercial banks in New York, New York are authorized or required to close.
Calculation Date: the last day of each calendar quarter during the Term.
Capital Expenses: expenses that are capital in nature or required under GAAP to be capitalized.
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Cash Management Period: shall commence upon Lender giving notice to the Clearing Bank of the occurrence of any of the following: (i) the Stated Maturity Date, (ii) an Event of Default, or (iii) if, as of any Calculation Date, the Debt Service Coverage Ratio is less than 1.20:1; and shall end upon Lender giving notice to the Clearing Bank that the sweeping of funds into the Deposit Account may cease, which notice Lender shall only be required to give if (1) the Loan and all other obligations under the Loan Documents have been repaid in full or (2) the Stated Maturity Date has not occurred and (A) with respect for the matters described in clause (ii) above, such Event of Default has been cured and no other Event of Default has occurred and is continuing or (B) with respect to the matter described in clause (iii) above, Lender has determined that the Properties have achieved a Debt Service Coverage Ratio of at least 1.20:1 for two consecutive Calculation Dates.
Clearing Bank: US Bank National Association, or such other bank as selected by Borrowers and approved by Lender pursuant to the Clearing Account Agreement.
Code: the Internal Revenue Code of 1986, as amended and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.
Control: with respect to any Person, either (i) ownership directly or indirectly of 49% or more of all equity interests in such Person or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities, by contract or otherwise.
Debt: the unpaid Principal, all interest accrued and unpaid thereon, any Yield Maintenance Premium and all other sums due to Lender in respect of the Loan or under any Loan Document.
Debt Service: with respect to any particular period, the scheduled Principal and interest payments due under the Note in such period.
Debt Service Coverage Ratio: as of any date, the ratio calculated by Lender of (i) the Net Operating Income for the 12-month period ending with the most recently completed calendar month to (ii) the Debt Service with respect to such period.
Default: the occurrence of any event under any Loan Document which, with the giving of notice or passage of time, or both, would be an Event of Default.
Default Rate: a rate per annum equal to the lesser of (i) the maximum rate permitted by applicable law, or (ii) 5% above the Interest Rate, compounded monthly.
Defeasance Collateral: U.S. Obligations, which provide payments (i) on or prior to, but as close as possible to, all Payment Dates and other scheduled payment dates, if any, under the Note after the Defeasance Date and up to and including the Stated Maturity Date, and (ii) in amounts equal to or greater than the Scheduled Defeasance Payments.
Defeasance Percentage: the percentage derived by dividing, (i) in the case of an initial Partial Defeasance, the original principal amount of the Defeased Note by the original principal amount of the Note or (ii) in the case of a subsequent Defeasance, the amount of the subsequent Defeased Note by the original principal amount of its corresponding Undefeased Note.
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Deposit Bank: Wachovia Bank, National Association, or such other bank or depository selected by Lender in its discretion.
Eligible Institution: a depository institution insured by the Federal Deposit Insurance Corporation the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by S&P, P-1 by Xxxxx’x and F-1+ by Fitch. in the case of accounts in which funds are held for thirty (30) days or less or, in the case of Letters of Credit or accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “AA” by Fitch and S&P and “Aa2” by Xxxxx’x.
Environmental Report: each or collectively, the Coralville Environmental Report, the Morgantown Environmental Report and the Solomons Environmental Report
ERISA: the Employment Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.
ERISA Affiliate: all members of a controlled group of corporations and all trades and business (whether or not incorporated) under common control and all other entities which, together with Borrowers (or any Borrower), are treated as a single employer under any or all of Section 414(b), (c), (m) or (o) of the Code.
Existing Environmental Conditions: those certain environmental conditions at certain Properties, all as more particularly described on Schedule 10.
Fee Borrower Representative: Solomons GP, LLC, a Delaware limited liability company.
Franchise Agreements: The franchise agreements identified on Schedule 7, as the same may from time to time be amended, supplemented, replaced with the consent of the Lender or replaced in accordance with their Agreement, pursuant to which a Borrower has the right to operate the hotel on each Property under a name and hotel system controlled by the applicable franchisor.
GAAP: generally accepted accounting principles in the United States of America as of the date of the applicable financial report.
Governmental Authority: any court, board, agency, commission, office or authority of any nature whatsoever for any governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise) now or hereafter in existence.
Guarantor: Xxxxxxxx Hospitality Trust, Inc, a Virginia corporation.
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Ground Lease: the Lease dated November 23, 1992, between J. Xxxxxxxx Xxxxxxxx, Xxxxxx of the Roman Catholic Diocese of Lexington, as landlord, and Fee Borrower, as tenant.
Interest Period: (i) the period from the date hereof through the first day thereafter that is the last day of a calendar month and (ii) each period thereafter from the 1/st/ day of each calendar month through the last day of each such calendar month; except that the Interest Period, if any, that would otherwise commence before and end after the Maturity Date shall end on the Maturity Date.
Interest Rate: a rate of interest equal to 7.50% per annum (or, when applicable pursuant to this Note or any other Loan Document, the Default Rate).
Key Principal(s): Xxxxxxxx Hospitality Trust, Inc, a Virginia corporation.
Leases: all leases and other agreements or arrangements heretofore or hereafter entered into affecting the use, enjoyment or occupancy of, or the conduct of any activity upon or in, a Property or the Improvements relating thereto, including any guarantees, extensions, renewals, modifications or amendments thereof and all additional remainders, reversions and other rights and estates appurtenant thereunder.
Leasehold Borrower Representative: TRS Leasing, Inc., a Virginia corporation.
Legal Requirements: statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting any Borrower, any Loan Document or all or part of any Property or the construction, ownership, use, alteration or operation thereof, 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 instrument, either of record or known to any Borrower, at any time in force affecting all or part of any Property.
Letter of Credit: shall mean an irrevocable, unconditional, transferable, clean sight draft letter of credit acceptable to Lender and the Rating Agencies (either an evergreen letter of credit or one which does not expire until at least thirty (30) Business Days after the Maturity Date) in favor of Lender and entitling Lender to draw thereon in New York, New York, issued by a domestic Approved Bank or the U.S. agency or branch of a foreign Approved Bank.
Lien: any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, easement, restrictive covenant, preference, assignment, security interest or any other encumbrance, charge or transfer of, or any agreement to enter into or create any of the foregoing, on or affecting all or any part of any Property or any interest therein, or any direct or indirect interest in any Borrower or any Borrower Representative, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.
Loan Documents: this Agreement and all other documents, agreements and instruments now or hereafter evidencing, securing or delivered to Lender in connection with the Loan, including the following, each of which is dated as of the date hereof: (i) the Note or
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Notes made by Borrowers to Lender in the aggregate principal amount equal to the Loan (the “Note”), (ii) each Mortgage, Assignment of Leases and Rents and Security Agreement made by a Borrower (or the Deed of Trust, Assignment of Leases and Rents and Security Agreement made by a Borrower to a trustee, as the case may be) in favor of Lender which covers the Property owned or leased by such Borrower (collectively, the “Mortgages”), (iii) each Assignment of Leases and Rents from a Borrower to Lender, (iv) each Assignment of Agreements, Licenses, Permits and Contracts from a Borrower to Lender, (v) the Subordination and Security Agreement from Leasehold Borrower to Lender (the “Security Agreement”), (vi) the Consent, Subordination and Agreement of Manager among each Borrower, Manager and Lender (the “Manager Agreement”), (vii) the Blocked Account Control Agreement (the “Clearing Account Agreement”) among each Borrower, Lender, Manager and the Clearing Bank, (viii) the Deposit Account Agreement (the “Deposit Account Agreement”) among Borrowers, Lender, Manager and the Deposit Bank, (ix) the Guaranty of Recourse Obligations made by Guarantor and (x) the Pledge and Security Agreement made by any Borrower Representative in favor of Lender; as each of the foregoing may be (and each of the foregoing defined terms shall refer to such documents as they may be) amended, restated, replaced, supplemented or otherwise modified from time to time.
Management Agreement: the management agreement between a Borrower and Manager, pursuant to which Manager is to manage the Property owned by such Borrower, as same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with Section 5.12.
Manager: Xxxxxxxx Hospitality Management, Inc., a Maryland corporation, or any successor, assignee or replacement manager appointed by Borrower in accordance with Section 5.12.
Material Alteration: any alteration affecting structural elements of a Property the cost of which exceeds $250,000; provided, however, if such alteration is required pursuant to the applicable Franchise Agreement, such alteration shall not be a Material Alteration unless the cost of such alteration exceeds $500,000; provided further, that in no event shall (i) any Required Repairs, (ii) any tenant improvement work performed pursuant to any Lease existing on the date hereof or entered into hereafter in accordance with the provisions of this Agreement, or (iii) alterations performed as part of a Restoration, constitute a Material Alteration.
Material Lease: the Operating Lease and all Leases which individually or in the aggregate with respect to the same tenant and its Affiliates (i) cover more than 1,500 square feet of the Improvements at any Property, or (ii) constitute more than 5.0% of the total annual Rents for such Property.
Maturity Date: the date on which the final payment of principal of the Note (or the Defeased Note, if applicable) becomes due and payable as therein provided, whether at the Stated Maturity Date, by declaration of acceleration, or otherwise.
Minor Lease: any Lease that is not a Material Lease.
6
Net Operating Income: for any period, the underwritten net cash flow of the Properties determined by Lender in its sole and absolute discretion in accordance with Lender’s then current underwriting standards for loans of this type and the then current underwriting standards of the Rating Agencies. It is anticipated that such underwriting adjustments shall include, but not be limited to, capping occupancy at a maximum of 70% to 75%, assuming a minimum management fee equal to 5%, assuming minimum FF&E of 5%, assuming that the combination of franchise, management & marketing expenses equates to a minimum of 14% of total revenue, eliminating non-recurring income, adjusting occupancy and ADR to reflect any new competition and adjusting expenses for any known increases (for example, taxes and insurance).
Officer’s Certificate: a certificate delivered to Lender by Fee Borrower or Leasehold Borrower which is signed by a senior executive officer of Fee Borrower Representative or Leasehold Borrower Representative, respectively.
Operating Lease: the Master Lease Agreement dated as of November 26, 2002 between Fee Borrower, as landlord, and Leasehold Borrower, as tenant.
Other Charges: all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including vault charges and license fees for the use of vaults, chutes and similar areas adjoining any Property, now or hereafter levied or assessed or imposed against any Property or any part thereof.
Payment Date: the 1st day of each calendar month or, upon Lender’s exercise if its right to change the Payment Date in accordance with Section 2.2.4, the New Payment Date (in either case, if such day is not a Business Day, the Payment Date shall be the first Business Day thereafter). The first Payment Date hereunder shall be January 1, 2003.
Permitted Encumbrances: (i) the Liens created by the Loan Documents, (ii) all Liens and other matters disclosed in the Title Insurance Policies, (iii) Liens, if any, for Taxes or Other Charges not yet due and payable and not delinquent, (iv) any workers’, mechanics’ or other similar Liens on a Property provided that any such Lien is bonded or discharged within 30 days after a Borrower first receives notice of such Lien and (v) such other title and survey exceptions as Lender approves in writing in Lender’s discretion.
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shall continue to own at least 80% of all equity interests (direct or indirect) in Borrowers, (C) Borrowers shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer not less than 10 days prior to the date of such Transfer, and (D) the legal and financial structure of Borrowers and their members and the single purpose nature and bankruptcy remoteness of Borrowers and their members after such Transfer, shall satisfy Lender’s then current applicable underwriting criteria and requirements.
Person: any individual, corporation, partnership, limited liability company, joint venture, estate, trust, unincorporated association, any other person or entity, and any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.
Plan: (i) an employee benefit or other plan established or maintained by a Borrower or any ERISA Affiliate or to which a Borrower or any ERISA Affiliate makes or is obligated to make contributions and (ii) which is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code.
Properties: collectively, the parcels of real property and Improvements thereon owned or ground leased by the Fee Borrower and encumbered by the Mortgages or leased by Leasehold Borrower and secured by the Security Agreement; together with all rights pertaining to such real property and Improvements, and all other collateral for the Loan as more particularly described in (i) the Granting Clauses of the Mortgages and referred to therein as the Mortgaged Property or the Trust Property, as applicable or (ii) in the Security Agreement and referred to therein as the Collateral. The location of each Property is identified on Schedule 1.
Property Value: the value of a Property that Borrowers desire to be released from the Lien of the Loan Documents and substituted with a Mortgage encumbering a Substitute Property, which value shall be deemed to be equal to the greatest of (i) the Appraised Value of such Property, (ii) the Allocated Loan Amount for such Property or (iii) if such Property is being sold, the sale price of such Property pursuant to an arms’ length agreement to a third party not Affiliated with any Borrower or Guarantor, and in which no Borrower and no Affiliate of any Borrower and/or Guarantor has any beneficial interest.
Rating Agency: each of Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. (“S&P”), Xxxxx’x Investors Service, Inc. (“Xxxxx’x”), and Fitch IBCA Duff & Xxxxxx or any other nationally-recognized statistical rating organization to the extent any of the foregoing have been engaged by Lender or its designee in connection with or in anticipation of any Secondary Market Transaction.
Rating Comfort Letter: a letter issued by each of the applicable Rating Agencies which confirms that the taking of the action referenced to therein will not result in any qualification, withdrawal or downgrading of any existing ratings of Securities created in a Secondary Market Transaction.
Release Date: the earlier to occur of (i) the forty second (42/nd/) Payment Date of the Term and (ii) the date that is two (2) years from the “startup day” (within the meaning of Section 860G(a)(9) of the Code) of the REMIC Trust established in connection with a Securitization involving this Loan.
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REMIC Trust: a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note.
Release Amount: with respect to any Property released pursuant to Section 2.4.2, (i) $1,562,500 with respect to the Harlan, Kentucky Property, (ii) $500,000 with respect to the Pella, Iowa Property and (iii) 125% of the Allocated Loan Amount with respect to each Property other than the Harlan, Kentucky Property or the Pella, Iowa Property.
Rents: all rents, rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in a Bankruptcy Proceeding) or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral royalties and bonuses), income, fees, receivables, receipts, revenues, deposits (including security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other payment and consideration of whatever form or nature received by or paid to or for the account of or benefit of each Borrower, Manager or any of their agents or employees from any and all sources arising from or attributable to each Property and the Improvements, including, without limitation, all revenues and credit card receipts collected from guest rooms, restaurants, bars (other than, with respect to revenue collected from guest rooms, restaurants and bars, such revenue attributable to room service charges that Borrowers collect for the benefit of the tenant under any restaurant lease), meeting rooms, banquet rooms and recreational facilities, parking charges, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of each Property or rendering of services by a Borrower, Manager or any operator or manager of the hotel or the commercial space located in the Improvements or acquired from others (including, without limitation, from the rental of any office space, retail space, guest rooms or other space, halls, stores, and offices, and deposits securing reservations of such space), license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance.
Security Agreement: a security agreement in form and substance that would be satisfactory to Lender (in Lender’s sole but good faith discretion) pursuant to which Borrowers grant Lender a perfected, first priority security interest in the Defeasance Collateral Account and the Defeasance Collateral.
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Servicer: a servicer selected by Lender to service the Loan.
State: as to any Property, the state in which such Property is located.
Stated Maturity Date: December 1, 2012, as such date may be changed in accordance with Section 2.2.4.
Title Insurance Policies: the ALTA mortgagee title insurance policies in the form acceptable to Lender issued with respect to each Property and insuring the Liens of the Mortgages.
Transfer: any sale, conveyance, transfer, lease or assignment, or the entry into any agreement to sell, convey, transfer, lease or assign, whether by law or otherwise, of, on, in or affecting (i) all or part of any Property (including any legal or beneficial direct or indirect interest therein), (ii) any direct or indirect interest in any Borrower (including any profit interest), or (iii) any direct or indirect interest in any Borrower Representative.
UCC: the Uniform Commercial Code as in effect in the State or the state in which any of the Cash Management Accounts are located, as the case may be.
U.S. Obligations: direct full faith and credit obligations of the United States of America that are not subject to prepayment, call or early redemption.
Welfare Plan: an employee welfare benefit plan, as defined in Section 3(1) of ERISA.
Yield Maintenance Premium: an amount which, when added to the outstanding Principal, would be sufficient to purchase U.S. Obligations which provide payments (a) on or prior to, but as close as possible to, all successive scheduled payment dates under this Agreement through the Stated Maturity Date and (b) in amounts equal to the Monthly Debt Service Payment Amount required under this Agreement through the Stated Maturity Date together with the outstanding principal balance of the Note as of the Stated Maturity Date assuming all such Monthly Debt Service Payments are made (including any servicing costs associated therewith). In no event shall the Yield Maintenance Premium be less than zero.
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1.2 Index of Other Definitions. The following terms are defined in the sections or Loan Documents indicated below:
“Approved Annual Budget” – 6.3.5
“Annual Budget” – 6.3.5
“Applicable Subaccounts” – 3.12.1
“Approved Capital Budget” – 6.3.5
“Approved Operating Budget” – 6.3.5
“Applicable Taxes” – 2.2.3
“Award” – 7.3.2
“Bankruptcy Proceeding” – 4.7
“Borrower’s Recourse Liabilities” – 10.1
“Capital Expenses Letter of Credit” – 3.4.2
“Capital Reserve Subaccount” – 3.4.1
“Cash Management Accounts” – 3.11
“Casualty” – 7.2.1
“Casualty/Condemnation Prepayment” – 2.3.2
“Casualty/Condemnation Subaccount” – 3.7
“Clearing Account” – 3.1
“Clearing Account Agreement” – 1.1 (Definition of Loan Documents)
“Concentration Account” – 3.1
“Concentration Bank’– 3.1
“Condemnation” – 7.3.1
“Coralville Environmental Report” – Schedule 10
“Coralville Property Existing Environmental Condition” – Schedule 10
“Defeasance Collateral Account” – 2.3.3
“Defeasance “ – 2.3.3
“Defeasance Event” – 2.3.3
“Defeasance Date” – 2.3.3
“Defeased Note” – 2.3.3
“Deposit Account” – 3.1
“Deposit Account Agreement” – 1.1 (Definition of Loan Documents)
“Disclosure Document” – 9.1.2
“Easements” – 4.14
“Eligible Account” – Deposit Account Agreement
“Endorsement” – 5.26
“Environmental Laws” – 4.21
“Environmental Remediation Subaccount” – 3.2.4
“Equipment” – Mortgage
“Event of Default” – 8.1
“Exchange Act” – 9.1.2
“Full Defeasance “ – 2.3.3
“GCM Group” – 9.1.3
“Ground Rent Subaccount” – 3.8
“Hazardous Substances” – 4.21
“Improvements” – Mortgage
“Increased Capital Expenses Letter of Credit” – 3.4.2
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“Indemnified Liabilities” – 5.30
“Indemnified Party” – 5.30
“Independent Director” – Schedule 5
“Insurance Premiums” – 7.1.2
“Insurance Requirements” – 7.1.3
“Insured Casualty” – 7.2.2
“Issuer” – 9.1.3
“Late Payment Charge” – 2.6.3
“Lender’s Consultant” – 5.7.1
“Liabilities” – 9.1.3
“Licenses” – 4.11
“Loan” – 2.1
“LTV Ratio” – 2.5.1
“Monthly Debt Service Payment Amount” – 2.2.1
“Moody’s” – 1.1 (Definition of Rating Agency)
“Morgantown Environmental Report” – Schedule 10
“Morgantown Property Existing Environmental Condition” – Schedule 10
“Mortgage” – 1.1 (Definition of Loan Documents)
“New Payment Date” – 2.2.4
“Note” – 1.1 (Definition of Loan Documents)
“Notice” – 6.1
“Operating Expense Subaccount” – 3.6
“Partial Defeasance” – 2.3.3
“Permitted Indebtedness” – 5.22
“Permitted Investments” – Deposit Account Agreement
“Permitted Prepayment Date” – 2.3.4
“Policies” – 7.1.2
“Principal” – 2.1
“Proceeds” – 7.2.2
“Proposed Material Lease” – 5.10.2
“Provided Information” – 9.1.1
“Qualified Carrier” – 7.1.1
“Registration Statement” – 9.1.3
“Remedial Action” – 3.2.4
“Remedial Work” – 5.7.2
“Rent Roll” – 4.16
“Required Records” – 6.3.6
“Required Repairs” – 3.2.1
“Required Repairs Letter of Credit” – 3.2.3
“Required Repairs Subaccount” – 3.2.2
“Restoration” – 7.4.1
“S&P” – 1.1 (Definition of Rating Agency)
“Seasonal Working Capital Reserve Subaccount” – 3.5.1
“Seasonal Working Capital Reserve Letter of Credit” – 3.5.2
“Secondary Market Transaction” – 9.1.1
“Section 3.4.1 Shortfall” – 3.4.1
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“Section 3.4.2 Shortfall” – 3.4.2
“Securities” – 9.1.1
“Securities Act” – 9.1.2
“Security Deposit Account” – 3.9
“Security Deposit Subaccount” – 3.9
“Significant Casualty” – 7.2.2
“Solomons Environmental Report” – Schedule 10
“Solomons Property Existing Environmental Condition” – Schedule 10
“Special Purpose Bankruptcy Remote Entity” – 5.13
“Springing Recourse Event” – 10.1
“Subaccounts” – 3.1
“Substitute Property” – 2.5.1
“Substitution” – 2.5.1
“Substitution Date” – 2.5.1
“Successor Borrower” – 2.3.3
“Tax and Insurance Letter of Credit” – 3.3.2
“Tax and Insurance Subaccount” – 3.3
“Terrorism Insurance Cap” – 7.1.1
“Transfer and Assumption” – 5.26
“Transferee Borrower” – 5.26
“Undefeased Note “ – 2.3.3
“Underwriter Group” – 9.1.3
“Underwriters” – 9.1.3
1.3 Principles of Construction. Unless otherwise specified, (i) all references to sections and schedules are to those in this Agreement, (ii) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision, (iii) all definitions are equally applicable to the singular and plural forms of the terms defined, (iv) the word “including” means “including but not limited to,” and (v) accounting terms not specifically defined herein shall be construed in accordance with GAAP.
2. | GENERAL LOAN TERMS |
2.1 The Loan. Lender is making a loan (the “Loan”) to Borrowers on the date hereof, in the original principal amount (the “Principal”) of $40,000,000, which shall mature on the Stated Maturity Date. Each Borrower acknowledges receipt of the Loan, the proceeds of which are being and shall be used to (i) repay and discharge existing loans relating to the Properties, (ii) fund certain of the Subaccounts, and (iii) pay transaction costs. Any excess proceeds may be used for any lawful purpose. No amount repaid in respect of the Loan may be reborrowed.
2.2 Interest; Monthly Payments.
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(as such date may be changed pursuant to Section 2.2.4), the Principal and interest thereon at the Interest Rate shall be payable in equal monthly installments of $322,237.28 (the “Monthly Debt Service Payment Amount”); which is based on the Interest Rate and a 20 year amortization schedule. The Monthly Debt Service Payment Amount due on any Payment Date shall first be applied to the payment of interest accrued during the preceding Interest Period and the remainder of such Monthly Debt Service Payment Amount shall be applied to the reduction of the unpaid Principal. All accrued and unpaid interest shall be due and payable on the Maturity Date. If the Loan is repaid on any date other than on a Payment Date (whether prior to or after the Stated Maturity Date), Borrowers shall also pay interest that would have accrued on such repaid Principal to but not including the next Payment Date.
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(a) Conditions to Defeasance. Provided no Event of Default shall be continuing, Borrowers shall have the right on any Payment Date after the Release Date and prior to the Permitted Prepayment Date to voluntarily defease the entire amount of the Principal (a “Full Defeasance”) or a portion of the Principal (a “Partial Defeasance”) (any such Full Defeasance or Partial Defeasance, a “Defeasance”) by providing Lender with the Defeasance Collateral (a “Defeasance Event”), subject to the satisfaction of the following conditions precedent:
(1) Borrowers shall give Lender not less than thirty (30) days prior written notice specifying a Payment Date (the “Defeasance Date”) on which the Defeasance Event is to occur;
(2) Borrowers shall pay to Lender (A) all payments of Principal and interest due on the Loan to and including the Defeasance Date and (B) all other sums, then due under the Note, this Agreement and the other Loan Documents;
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(3) Borrowers shall deposit the Defeasance Collateral into the Defeasance Collateral Account and otherwise comply with the provisions of subsections (b) and (c) of this Section 2.3.3;
(4) Borrowers shall execute and deliver to Lender a Security Agreement in respect of the Defeasance Collateral Account and the Defeasance Collateral;
(5) Borrowers shall deliver to Lender an opinion of counsel for Borrowers that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (i) Lender has a legal and valid perfected first priority security interest in the Defeasance Collateral Account and the Defeasance Collateral, (ii) if a securitization has occurred, the REMIC Trust formed pursuant to such securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of a Defeasance Event pursuant to this Section 2.3.3, (iii) the Defeasance Event will not result in a deemed exchange for purposes of the Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes, (iv) delivery of the Defeasance Collateral and the grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law and (v) a non-consolidation opinion with respect to the Successor Borrower;
(6) In the case of a Partial Defeasance, the execution and delivery by Borrowers of all necessary documents to amend and restate the Note and issue two substitute notes: one having a principal balance equal to the defeased portion of the original Note (the “Defeased Note”) and the other having a principal balance equal to the undefeased portion of the original Note (the “Undefeased Note”). The Defeased Note and Undefeased Note shall have terms identical to the terms of the Note, except for the principal balance and a pro rata allocation of the Monthly Debt Service Payment Amount. (After a Partial Defeasance, all references hereunder and in the other Loan Documents to “Note” shall be deemed to mean the Undefeased Note, unless expressly provided to the contrary.) A Defeased Note cannot be the subject of any further Defeasance;
(7) Borrowers shall deliver to Lender a Rating Comfort Letter as to the Defeasance Event;
(8) Borrowers shall deliver an Officer’s Certificate certifying that the requirements set forth in this Section 2.3.3 have been satisfied;
(9) Borrowers shall deliver a certificate of a “big four” or other nationally recognized public accounting firm acceptable to Lender certifying that the Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(10) Borrowers shall deliver such other certificates, opinions, documents and instruments as Lender may reasonably request; and
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(11) Borrowers shall pay all costs and expenses of Lender incurred in connection with the Defeasance Event, including Lender’s reasonable attorneys’ fees and expenses and Rating Agency fees and expenses.
(b) Defeasance Collateral Account. On or before the date on which Borrowers deliver the Defeasance Collateral, Borrowers shall open at any Eligible Institution the defeasance collateral account (the “Defeasance Collateral Account”) which shall at all times be an Eligible Account. The Defeasance Collateral Account shall contain only (i) Defeasance Collateral, and (ii) cash from interest and principal paid on the Defeasance Collateral. All cash from interest and principal payments paid on the Defeasance Collateral shall be paid over to Lender on each Payment Date and applied first to accrued and unpaid interest and then to Principal. Any cash from interest and principal paid on the Defeasance Collateral not needed to pay accrued and unpaid interest or Principal shall be retained in the Defeasance Collateral Account as additional collateral for the Loan. Borrowers shall cause the Eligible Institution at which the Defeasance Collateral is deposited to enter an agreement with Borrowers and Lender, satisfactory to Lender in its sole discretion, pursuant to which such Eligible Institution shall agree to hold and distribute the Defeasance Collateral in accordance with this Agreement. The Successor Borrower shall be the owner of the Defeasance Collateral Account and shall report all income accrued on Defeasance Collateral for federal, state and local income tax purposes in its income tax return. Borrowers shall prepay all cost and expenses associated with opening and maintaining the Defeasance Collateral Account. Lender shall not in any way be liable by reason of any insufficiency in the Defeasance Collateral Account.
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(a) The sale of such Property is to a third party not Affiliated with any Borrower or Guarantor, and in which no Borrower and no Affiliate of any Borrower and/or Guarantor has any beneficial interest;
(b) Borrowers shall defease an amount of Principal equal to the Release Amount for the Property in question and Borrowers shall satisfy all of the requirements of Section 2.3.3 with respect to such Defeasance;
(c) Both immediately before such sale and immediately thereafter, no Default or Event of Default shall be continuing;
(d) Concurrently with such sale, each Borrower Representative shall remain a Special Purpose Bankruptcy Remote Entity;
(e) After giving effect to such release, each Borrower shall remain a Special Purpose Bankruptcy Remote Entity;
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(f) The representations and warranties made by Borrowers and/or Guarantor in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the date of such sale (and after giving effect to such sale);
(g) Borrowers shall have given Lender at least 20 days’ prior written notice of such sale, accompanied by a copy of the applicable contract of sale and all related documents, and drafts of any applicable release documents (which shall be subject to Lender’s approval);
(h) Borrowers shall have delivered to Lender a copy of the final closing settlement statement for such sale at least two Business Days prior to the closing of such sale;
(i) Borrowers shall have paid to Lender all costs and expenses (including reasonable attorneys’ fees) incurred by Lender in connection with such sale and the release of such Property from the Lien of the Loan Documents;
(j) Borrowers and Guarantor shall execute and deliver such documents as Lender may reasonably request to confirm the continued validity of the Loan Documents and the Liens thereof;
(k) after giving effect to such release and Defeasance, the Debt Service Coverage Ratio for all of the Properties then remaining subject to the Liens of the Mortgages shall be no less than the greater of (i) the Debt Service Coverage Ratio immediately preceding such release and (ii) 1.89:1 (which is the Debt Service Coverage Ratio as of the date hereof);
(l) Lender shall have received, at Borrowers’ cost and expense, a Rating Comfort Letter from the applicable Rating Agencies;
2.5 Substitution of Properties.
(a) Borrowers shall request such substitution by written notice to Lender given at least 45 days prior to the date on which the substitution is to occur (the “Substitution Date”);
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(b) Borrowers shall provide to Lender all industry standard property due diligence material similar to the due diligence material provided to Lender in connection with the origination of the Loan (e.g., title, survey, leases, engineering report, environmental report) with respect to each Substitute Property at least 30 days before the Substitution Date, and the same would be satisfactory to prudent lenders for loans with similar financing arrangements as those contained herein;
(c) Lender shall have received, at Borrowers’ cost and expense, a Rating Comfort Letter from the applicable Rating Agencies with respect to the proposed substitution;
(d) Lender shall have received an opinion of counsel for Borrowers stating that any securitization vehicle formed in connection with a securitization which includes the Loan which has elected to be treated as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Internal Revenue Code, as amended, will not fail to maintain such status as a result of such Substitution and that the Substitution does not constitute a “significant modification” of the Loan under Section 1001 of the Internal Revenue Code, as amended, or otherwise cause a tax to be imposed on a “prohibited transaction” by any securitization vehicle electing to be treated as a REMIC Trust;
(e) Borrowers shall provide evidence to Lender that the improvements constituting a part of the Substitute Property have a remaining useful life substantially equivalent to, or better than, that of the Improvements constituting a part of the Property to be released;
(f) if the Substitute Property is located in another state, Borrowers shall pay any increased costs by reason of a Substitution in such other jurisdiction;
(g) No Event of Default shall be continuing at the time that the Substitution request is made or on the Substitution Date;
(h) Borrowers and Guarantor shall execute and deliver such other consents, certificates, documents, agreements or instruments as Lender may reasonably request in order to encumber the Substitute Property and confirm the continued validity of the Loan Documents and the Liens thereof (including, without limitation, a mortgage or deed of trust and assignment of leases and rents granted by Borrowers to Lender with respect to the Substitute Property, any modifications to this Agreement or the other Loan Documents necessitated by the Substitution and a reaffirmation by Guarantor of the guaranty of recourse obligations delivered in connection with the Loan);
(i) Borrowers shall deliver an Officer’s Certificate certifying that all information delivered to Lender by or on behalf of Borrowers in connection with the Substitution is true, accurate and complete in all material respects;
(j) Borrowers shall have paid to Lender all reserves amounts required under Article III in connection with the Substitute Property;
(k) Borrowers shall have paid all costs and expenses incurred by Lender in connection with such Substitution, including attorneys’ fees and servicer fees;
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(l) after giving effect to such Substitution, (A) the Debt Service Coverage Ratio of all the Properties subject to the Liens of the Mortgages shall be no less than the greater of (i) the Debt Service Coverage Ratio immediately preceding such Substitution and (ii) 1.89:1 (which is the Debt Service Coverage Ratio as of the date hereof), or (B) if the Debt Service Coverage Ratio of all the Properties subject to the Liens of the Mortgages is greater than the Debt Service Coverage Ratio immediately preceding such Substitution but is less than 1.89:1, (i) the subject Substitute Property(ies) must generate Net Operating Income at least equal to 125% of the Net Operating Income of the Property(ies) being substituted and (ii) the subject Substitute Property(ies) must have an Appraised Value equal to or greater than 125% of the Appraised Value of the Property(ies) being substituted;
(m) Borrowers shall have delivered to Lender an Acceptable Appraisal for the Substitute Property, indicating an Appraised Value of the Substitute Property that is equal to or greater than the Property Value of the Property that is to be released;
(n) after giving effect to such Substitution, (A) the ratio of unpaid Principal to the Appraised Value of all of the Properties then subject to the Liens of the Mortgages (the “LTV Ratio”) shall be no more than the lesser of (i) the LTV Ratio immediately preceding such Substitution and (ii) 0.6381:1 (which is the LTV Ratio as of the date hereof), or (B) if the LTV Ratio is less than the LTV Ratio immediately preceding such Substitution but is greater than 0.6381:1, (i) the subject Substitute Property(ies) must generate Net Operating Income at least equal to 125% of the Net Operating Income of the Property(ies) being substituted and (ii) the subject Substitute Property(ies) must have an Appraised Value equal to or greater than 125% of the Appraised Value of the Property(ies) being substituted;
(o) any percentage decline in the Net Operating Income of the Substitute Property for the preceding three years is not greater than the lesser of (1) the percentage decline, if any, in the Net Operating Income during the same period of the Property being replaced and (2) the percentage decline, if any, in the Net Operating Income during the same period, of the Properties subject to the Liens of the Mortgages before giving effect to such Substitution;
(p) In no event shall a Substitution be permitted more than two times during any 12-month period (it being understood that a single Substitution may involve the Substitution of one or more Properties); and
(q) Substitution shall not be permitted if, after giving effect to such Substitution, the Substitute Properties (including all prior Substitute Properties), in the aggregate, represent more than the lesser of: (x) 20% of the Net Operating Income of the Properties subject to the Liens of the Mortgages, as of the date of any Substitution, for the 12-month period ending with the most recently completed calendar month or (y) $1,459,433 (which amount is 20% of the Net Operating Income of the Properties as of the date hereof for the immediately preceding 12-month period); and
(r) Substitution shall not be permitted if, after giving effect to such Substitution, the Substitute Properties (including all prior Substitute Properties), in the aggregate, represent more than the lesser of: (x) 20% of the aggregate Property Value of the Properties subject to the Liens of the Mortgages as of the date of any Substitution or (y) $12,538,000 (which amount is 20% of the aggregate Property Value of the Properties subject to the Liens of the Mortgages as of the date hereof).
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(a) All of the conditions set forth in Section 2.5.1 with respect to such Substitute Property shall have been satisfied;
(b) If a Successor Borrower was appointed pursuant to Section 2.3.3(c), then Borrowers shall assume all obligations of such Successor Borrower under the applicable Defeased Note (whereupon such Successor Borrower shall be relieved for all obligations thereunder);
(c) Borrowers shall execute and deliver such other consents, certificates, documents, agreements or instruments as Lender may reasonably request in order to amend, restate and consolidate the indebtedness evidenced by the applicable Defeased Note and the Undefeased Note and evidence the encumbrance of the Substitute Property thereby (including, without limitation, a mortgage or deed of trust and assignment of leases and rents granted by Borrowers to Lender with respect to the Substitute Property, any modifications to the Loan Documents necessitated by the Substitution);
(d) Borrowers shall have delivered to Lender an Acceptable Appraisal for the Substitute Property, indicating an Appraised Value of the Substitute Property that is equal to or greater than 125% of the Defeasance Collateral that Borrowers seek to have released; and
(e) The consummation of the Substitution shall occur no more than 180 days after the Partial Defeasance in question.
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2.6 Payments and Computations.
2.6.1 Making of Payments. Each payment by a Borrower or Borrowers shall be made in funds settled through the New York Clearing House Interbank Payments System or other funds immediately available to Lender by 11:00 a.m., New York City time, on the date such payment is due, to Lender by deposit to such account as Lender may designate by written notice to Borrowers. Whenever any such payment shall be stated to be due on a day that is not a Business Day, such payment shall be made on the first Business Day thereafter. All such payments shall be made irrespective of, and without any deduction, set-off or counterclaim whatsoever and are payable without relief from valuation and appraisement laws and with all costs and charges incurred in the collection or enforcement thereof, including attorneys’ fees and court costs.
3. | CASH MANAGEMENT AND RESERVES |
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3.2.4 Environmental Remediation Reserves.
(a) On the date hereof, Borrowers shall deposit with Lender the sum of $385,000.00 and Lender shall cause such amount to be transferred to a Subaccount (the “Environmental Remediation Subaccount “). Borrowers shall (i) with respect to the Solomons Existing Environmental Condition and the Morgantown Existing Environmental Condition, (A) promptly commence any Remedial Work, testing or other action (collectively, “Remedial Action”) recommended in the applicable Environmental Report and (B) if Lender determines that any such Remedial Action necessitates any further Remedial Action, Borrowers shall promptly commence any such additional Remedial Action; and (ii) with respect to the Coralville Existing Environmental Condition, (A) commence any Remedial Action recommended in the applicable Environmental Report promptly upon the re-opening in the spring of 2003 of the asphalt plants servicing the Coralville, Iowa Property and (B) if Lender determines that any such Remedial Action necessitates any further Remedial Action, Borrowers shall promptly commence any such additional Remedial Action; and (iii) in all cases, diligently prosecute to completion any such Remedial Action any undertaken pursuant to this subsection. Any such Remedial Action shall be performed by licensed contractors and, at Lender’s option, Lender shall have verified performance of the applicable Remedial Action by a consulting engineer engaged by or approved by Lender (in either case, at Borrowers’ sole cost and expense). Without in any way limiting the foregoing, Borrowers shall take all actions necessary and advisable to ensure that the each of the relevant Properties remains in compliance with all Environmental Laws or any voluntary cleanup program.
(b) Provided no Default or Event of Default shall have occurred and be continuing, Lender shall disburse the applicable Allocated Environmental Remediation Amount to Borrowers within 15 days after the delivery by Borrowers to Lender of a request therefor accompanied by the following items (which items shall be in form and substance satisfactory to Lender): (A) a certificate by the licensed contractor that has performed the subject Remedial Action (or by Lender’s consulting engineer) to the effect that the Remedial Action that is the subject of the requested disbursement has been completed in compliance with applicable Legal Requirements and no further Remedial Action is recommended by such licensed contractor (or Lender consulting engineer, if applicable); (B) copies of appropriate Lien waivers or other evidence of payment satisfactory to Lender (if applicable); (C) such other evidence as Lender shall reasonably request that the Remedial Action which are the subject of the requested disbursement have been completed and paid for or will be paid for concurrently with the requested disbursement; and (D) with respect to a disbursement relating to the Solomons Existing Environmental Condition, a “No Further Requirements” letter, a “Certificate of Completion” or a “no further action” designation has been issued by the applicable Governmental Authorities and, if necessary, recorded in the appropriate land records, to the effect that no Remedial Action is or will be required to be performed by any Borrower in connection with the Solomons Existing Environmental Condition. Notwithstanding the foregoing, however, Lender shall not be required to disburse, and shall be permitted to retain, $35,000 of the Allocated Environmental Remediation Amount with respect to the Morgantown, West Virginia Property until all necessary and appropriate Remedial Action has been performed in connection with the Solomons Existing Environmental Condition in accordance with this Section 3.2.4.
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At all times that the Tax and Insurance Letter of Credit is being held by Lender, Borrowers shall pay the Taxes and Insurance Premiums as the same become due and payable and furnish to Lender receipts for the payment thereof.
3.4.1 Capital Reserve Subaccount
(a) Borrowers shall pay to Lender on each Payment Date an amount equal to one-twelfth of 5% of the annual Rents for the Properties, based on the prior year. Lender will transfer such amounts into a Subaccount (the “Capital Reserve Subaccount”). Additionally, upon thirty (30) days’ prior notice to Borrowers, Lender may reassess the amount of the monthly payment required under this Section 3.4 from time to time if, in its determination one or more of the Properties is not being maintained in accordance with prudent hotel management standards for similar hotels in the same geographic area. Provided that no Default or Event of Default has occurred and is continuing, Lender shall disburse funds held in the Capital Reserve Subaccount to Borrowers, within 15 days after the delivery by Borrowers to Lender of a request therefor (but not more often than once per month), in increments of at least $5,000 provided that (i) such disbursement is for an Approved Capital Expense; (ii) if any individual disbursement is for $50,000 or more, Lender shall have (if it desires) verified (by an inspection conducted at Borrowers’ expense) performance of the work associated with such Approved Capital Expense; and (iii) the request for disbursement is accompanied by (A) an Officer’s Certificate certifying (1) that such funds will be used to pay or reimburse Borrowers for Approved Capital Expenses and a description thereof, (2) that all outstanding trade payables (other than those to be paid from the requested disbursement or those constituting Permitted Indebtedness) have been paid in full, (3) that the same has not been the subject of a previous disbursement, and (4) that all previous disbursements have been used to pay the previously identified Approved Capital Expenses, and (B) if any individual disbursement is for $50,000 or more, lien waivers or other evidence of payment satisfactory to Lender, (C) if any individual disbursement is for $50,000 or more, at Lender’s option, a title search for the applicable Property or Properties indicating that such Property or Properties are free from all Liens, claims and other encumbrances not previously approved by Lender and (D) such other evidence as Lender shall reasonably request that the Approved Capital Expenditures at the subject Property or Properties to be funded by the requested disbursement have been completed and are paid for or will be paid upon such disbursement to Borrowers. Any such disbursement of more than $50,000 to pay (rather than reimburse) Approved Capital Expenses may, at Lender’s option, be made by joint check payable to Borrowers and the payee on such Approved Capital Expenses.
(b) Notwithstanding anything to the contrary contained in this Section 3.4.1, if during any calendar year one or more property improvement plans are issued in connection with any Franchise Agreement, the cost of which (when taken together with the anticipated Capital Expenses set forth in the Approved Capital Budget for such calendar year) exceed 5% of the annual Rents for the Properties, based on the prior year (such amount being referred to herein as the “Section 3.4.1 Shortfall”), then Lender shall have the right to increase the monthly contribution required to be made by Borrowers to the Capital Reserve Subaccount on each Payment Date to account for such Section 3.4.1 Shortfall, and Borrowers shall pay such amount, as increased, for such time period as Lender determines such increase is necessary (based upon Lender’s determination of the period of time required to complete the items set
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forth in the applicable property improvement plan(s), the anticipated availability of Available Cash during such period and the amount of such Section 3.4.1 Shortfall).
3.4.2 Capital Expenses Letter of Credit
(a) At Borrowers’ option, in lieu of the requirements set forth in Section 3.4.1 with respect to Borrowers’ obligations to make monthly deposits into the Capital Reserve Subaccount, provided no Event of Default exists, Borrowers may at any time during the Term deliver to Lender a Letter of Credit in an amount equal to 5% of the annual Rents for the Properties for the preceding 12 month period (the “Capital Expenses Letter of Credit”), which Capital Expenses Letter of Credit shall be subject to the provisions of this Section 3.4.2 and Section 3.12.
(b) Upon the expiration of each calendar quarter subsequent to Borrowers’ delivery of the Capital Expenses Letter of Credit, Borrowers shall be entitled to reduce the face amount of the Capital Expenses Letter of Credit by an amount equal to the lesser of (i) the amount of Approved Capital Expenses paid for by Borrowers during such calendar quarter or (ii) 25% of the original face amount of the Capital Expenses Letter of Credit (as the same may be adjusted on each anniversary date as set forth in this clause (b)). Borrowers shall be entitled to reduce the face amount of the Capital Expenses Letter of Credit upon the delivery by Borrowers to Lender of an Officer’s Certificate identical to the Officer’s Certificate required before funds are disbursed from the Capital Reserve Subaccount as provided in Section 3.4.1 and such other evidence as Lender shall reasonably request demonstrating the amount of funds expended by Borrowers for Approved Capital Expenses during the applicable period and that the Approved Capital Expenses at the subject Property or Properties have been completed. On or prior to each anniversary date of the issuance of the Capital Expenses Letter of Credit, Borrowers shall increase the amount of the Capital Expenses Letter of Credit to an amount equal to 5% of the annual Rents for the Properties for the preceding 12 month period. If, as of any such anniversary date, Borrowers fail to increase the amount of the Capital Expenses Letter of Credit as required pursuant to the immediately preceding sentence, then (x) Lender shall be entitled to immediately draw upon the then remaining amount available under the Capital Expenses Letter of Credit (if any) and deposit such proceeds into the Capital Reserve Subaccount and (y) Borrowers’ option to deliver the Capital Expenses Letter of Credit pursuant to this Section 3.4.2 shall immediately cease and Borrowers’ obligations to make monthly contributions into the Capital Reserve Subaccount in accordance with Section 3.4.1 shall immediately resume.
(c) Notwithstanding anything to the contrary contained in this Section 3.4, if Borrowers have elected to deliver the Capital Expenses Letter of Credit pursuant to this Section 3.4.2, and during any calendar year one or more property improvement plans are issued in connection with any Franchise Agreement, the cost of which (when taken together with the anticipated Capital Expenses set forth in the Approved Capital Budget for such calendar year) exceed the face amount of the Capital Expenses Letter of Credit (determined as of each anniversary date of the issuance of the Capital Expenses Letter of Credit) (such amount being referred to herein as the “Section 3.4.2 Shortfall”), then at Borrowers’ election either (i) Borrowers shall immediately increase the face amount of the Capital Expenses Letter of Credit by an amount equal to the Section 3.4.2 Shortfall (the “Increased Capital Expenses Letter of Credit”) or (ii) Borrowers shall pay on each Payment Date all Available Cash into the Capital Reserve Subaccount until such
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Section 3.4.2 Shortfall has been deposited into the Capital Reserve Subaccount (whereupon, Borrowers’ rights to receive payments under clause (ix) of Section 3.11(a) shall resume). Notwithstanding the foregoing, Lender in its discretion may elect (based upon Lender’s determination of the period of time required to complete the items set forth in the applicable property improvement plan(s), the anticipated availability of Available Cash during such period and the amount of such Section 3.4.2 Shortfall) to have only a portion of the Available Cash on any Payment Date deposited into the Capital Reserve Subaccount, and any excess shall be made available to Borrowers pursuant to clause (ix) of Section 3.11(a). Should Borrowers elect to post the Increased Capital Expenses Letter of Credit, upon the expiration of each calendar quarter, Borrowers shall be entitled to reduce the face amount of the Increased Capital Expenses Letter of Credit as such property improvement plans are completed, in accordance with the requirements of Section 3.4.2(b).
(d) In the event that Borrowers deliver the Capital Expenses Letter of Credit to Lender, Borrowers shall be responsible for the payment of all Approved Capital Expenses and Lender shall not be responsible for disbursing funds to Borrowers therefor.
(e) Upon any failure of a Borrower to timely pay for Approved Capital Expenses, Lender shall have the right, but not the obligation, to draw on the Capital Expenses Letter of Credit for purposes of making such payment of Approved Capital Expenses on behalf of any Borrower, whereupon Borrowers’ obligation to make the monthly payments required under Section 3.4.1 shall be immediately reinstated.
3.5 Seasonal Working Capital Reserves.
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twelve (12) month period (the “Seasonal Working Capital Reserve Letter of Credit”), which Seasonal Working Capital Reserve Letter of Credit shall be subject to the provisions of Section 3.12 herein. Upon any failure of a Borrower to timely pay (i) for Approved Operating Expenses or (ii) Principal and interest payments due under the Note, Lender shall have the right, but not the obligation, to draw on the Seasonal Working Capital Reserve Letter of Credit for purposes of making such payments, whereupon Borrowers’ obligation to make the payments required under Section 3.5.1 shall be immediately reinstated.
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3.11 Property Cash Flow Allocation.
(a) During any Cash Management Period, all Rents deposited into the Deposit Account during the immediately preceding Interest Period shall be applied on each Payment Date as follows in the following order of priority: (i) First, to make payments into the Tax and Insurance Subaccount as required under Section 3.3; (ii) Second, to pay the monthly portion of the fees charged by the Deposit Bank in accordance with the Deposit Account Agreement; (iii) Third, to Lender to pay the Monthly Debt Service Payment Amount due on such Payment Date (plus, if applicable, interest at the Default Rate and all other amounts, other than those described under other clauses of this Section 3.11(a), then due to Lender under the Loan Documents); (iv) Fourth, to make payments into the Capital Reserve Subaccount as required under Section 3.4; (v) Fifth, to make payments into the Seasonal Working Capital Reserve Subaccount as required under Section 3.5; (vi) Sixth, to make payments for Approved Operating Expenses as required under Section 3.6; (vii) Seventh, after the consummation of a Secondary Market Transaction, to pay the pro rata portion of the expenses described in Section 9.1.7; (viii) Eighth, if required pursuant to Section 3.4.1(b) or Section 3.4.2(c), to make payments of all or a portion of Available Cash into the Capital Reserve Subaccount; and (ix) Lastly, payments to Borrowers of any remaining amounts.
(b) The failure of Borrowers to make all of the payments required under clauses (i) through (viii) of Section 3.11(a) in full on each Payment Date shall constitute an Event of Default under this Agreement; provided, however, if adequate funds are available in the Deposit Account for such payments, the failure by the Deposit Bank to allocate such funds into the appropriate Subaccounts shall not constitute an Event of Default.
(c) Notwithstanding anything to the contrary contained in this Section 3.11, after the occurrence of an Event of Default, Lender may apply all Rents deposited into the Deposit Account and other proceeds of repayment in such order and in such manner as Lender shall elect.
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3.12 Provisions Regarding Letters of Credit
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4. | REPRESENTATIONS AND WARRANTIES |
Borrowers represent and warrant to Lender as of the date hereof that, except to the extent (if any) disclosed on Schedule 3 with reference to a specific Section of this Article 4:
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conditions contained in any Permitted Encumbrance or any other agreement or instrument to which any Borrower is a party or by which any Borrower or any Property is bound.
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no material fact presently known to any Borrower that has not been disclosed to Lender which adversely affects, or, as far as any Borrower can foresee, might adversely affect, any Property or the business, operations or condition (financial or otherwise) of any Borrower. All financial data, including the statements of cash flow and income and operating expense, that have been delivered to Lender in respect of Borrowers and the Properties (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of each Borrower and each Property as of the date of such reports, and (iii) to the extent prepared by an independent certified public accounting firm, have been prepared in accordance with GAAP consistently applied throughout the periods covered, except as disclosed therein. No Borrower has any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments, unrealized or anticipated losses from any unfavorable commitments or any liabilities or obligations not expressly permitted by this Agreement. Since the date of such financial statements, there has been no materially adverse change in the financial condition, operations or business of any Borrower or any Property from that set forth in said financial statements.
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Properties (collectively, the “Licenses”), have been obtained and are in full force and effect. The use being made of each Property is in conformity with the certificate of occupancy issued for such Property and all other restrictions, covenants and conditions affecting such Property.
4.13 Federal Reserve Regulations; Investment Company Act. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose that would be inconsistent with such Regulation U or any other regulation of such Board of Governors, or for any purpose prohibited by Legal Requirements or any Loan Document. No Borrower is (i) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (ii) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (iii) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
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Liens, warrants, options and rights to purchase. The sole managing member of Leasehold Borrower is the Leasehold Borrower Representative. Guarantor is the owner of all of the issued and outstanding stock of the Leasehold Borrower Representative, all of which capital stock has been validly issued or fully paid and is nonassessable. There are no other members of Leasehold Borrower. The stock of Leasehold Borrower Representative and the membership interests in Leasehold Borrower are owned free and clean of all liens, warrants, options and rights to purchase. No Borrower has any obligation to any Person to purchase, repurchase or issue any ownership interest in it. The organizational chart attached hereto as Schedule 4 is complete and accurate and illustrates all Persons who have a direct or indirect ownership interest in each Borrower.
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All of the representations and warranties in this Article 4 and elsewhere in the Loan Documents (i) shall survive for so long as any portion of the Debt remains owing to Lender and (ii) shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf, provided, however, that the representations, warranties and covenants set forth in Section 4.21 shall survive in perpetuity.
5. | COVENANTS |
Until the end of the Term, Borrowers hereby covenant and agree with Lender that:
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furnish such receipts for payment of Taxes paid by Lender pursuant to Section 3.3). Borrowers shall not suffer and shall promptly cause to be paid and discharged any Lien against any Property, and shall promptly pay for all utility services provided to any Property. After prior notice to Lender, Borrowers, at their own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application of any Taxes or Other Charges, provided that (i) no Default or Event of Default has occurred and is continuing, (ii) such proceeding shall suspend the collection of the Taxes or such Other Charges, (iii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which any Borrower is subject and shall not constitute a default thereunder, (iv) no part of or interest in any Property will be in danger of being sold, forfeited, terminated, canceled or lost, (v) Borrowers shall have furnished such security as may be required in the proceeding, or as may be requested by Lender, to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon, which shall not be less than 125% of the Taxes and Other Charges being contested, and (vi) Borrowers shall promptly upon final determination thereof pay the amount of such Taxes or Other Charges, together with all costs, interest and penalties. Lender may pay over any such security or part thereof held by Lender to the claimant entitled thereto at any time when, in the judgment of Lender, the entitlement of such claimant is established.
5.4 Repairs; Maintenance and Compliance; Alterations.
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the Material Alteration as estimated by Lender. Upon substantial completion of the Material Alteration, Borrowers shall provide evidence satisfactory to Lender that (i) the Material Alteration was constructed in accordance with applicable Legal Requirements and the applicable Franchise Agreement and substantially in accordance with plans and specifications approved by Lender (which approval shall not be unreasonably withheld or delayed), (ii) all contractors, subcontractors, materialmen and professionals who provided work, materials or services in connection with the Material Alteration have been paid in full and have delivered unconditional releases of lien and (iii) all material Licenses necessary for the use, operation and occupancy of the Material Alteration (other than those which depend on the performance of tenant improvement work) have been issued. Borrowers shall reimburse Lender upon demand for all out-of-pocket costs and expenses (including the reasonable fees of any architect, engineer or other professional engaged by Lender) incurred by Lender in reviewing plans and specifications or in making any determinations necessary to implement the provisions of this Section 5.4.2.
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is in violation of any Environmental Laws or (C) any condition on or near such Property shall pose a threat to the health, safety or welfare of humans and (iii) remove such Hazardous Substances and/or cure such violations and/or remove such threats, as applicable, as required by law (or as shall be required by Lender in the case of removal which is not required by law, but in response to the opinion of a licensed hydrogeologist, licensed environmental engineer or other qualified environmental consulting firm engaged by Lender (“Lender’s Consultant”)), promptly after such Borrower becomes aware of same, at Borrowers’ sole expense. Nothing herein shall prevent such Borrower from recovering such expenses from any other party that may be liable for such removal or cure.
5.8.2 Environmental Monitoring.
(a) Borrowers shall give prompt written notice to Lender of (i) any proceeding or inquiry by any party (including any Governmental Authority) with respect to the presence of any Hazardous Substance on, under, from or about any Property, (ii) all claims made or threatened by any third party (including any Governmental Authority) against any Borrower or any Property or any party occupying any Property relating to any loss or injury resulting from any Hazardous Substance, and (iii) any Borrower’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of any Property that could cause such Property to be subject to any investigation or cleanup pursuant to any Environmental Law. Borrowers shall permit Lender to join and participate in, as a party if it so elects, any legal or administrative proceedings or other actions initiated with respect to any Property in connection with any Environmental Law or Hazardous Substance, and Borrowers shall pay all reasonable attorneys’ fees and disbursements incurred by Lender in connection therewith.
(b) Upon Lender’s request, at any time and from time to time, Borrowers shall provide an inspection or audit of one or more Properties designated by Lender prepared by a licensed hydrogeologist, licensed environmental engineer or qualified environmental consulting firm approved by Lender assessing the presence or absence of Hazardous Substances on, in or near such Property or Properties, and if Lender in its good faith judgment determines that reasonable cause exists for the performance of such environmental inspection or audit, then the cost and expense of such audit or inspection shall be paid by Borrowers (otherwise, such cost and expense shall be paid by Lender). Such inspections and audit may include soil bearings and ground water monitoring. If Borrowers fail to provide any such inspection or audit within 60 days after such request, Lender may order same, and Borrowers hereby grant to Lender and its employees and agents access to the Properties and a license to undertake such inspection or audit.
(c) If any environmental site assessment report prepared in connection with such inspection or audit recommends that an operations and maintenance plan be implemented for any Hazardous Substance, whether such Hazardous Substance existed prior to the ownership of the applicable Property by any Borrower, or presently exists or is reasonably suspected of existing, Borrowers shall cause such operations and maintenance plan to be prepared and implemented at their expense upon request of Lender. If any investigation, site monitoring, containment, cleanup, removal, restoration or other work of any kind is reasonably necessary under an applicable Environmental Law (“Remedial Work”), Borrowers shall commence all such Remedial Work within 30 days after written demand by Lender and thereafter diligently prosecute to completion all such Remedial Work within such period of time as may be
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required under applicable law). All Remedial Work shall be performed by licensed contractors approved in advance by Lender and under the supervision of a consulting engineer approved by Lender. All costs of such Remedial Work shall be paid by Borrowers, including Lender’s reasonable attorneys’ fees and disbursements incurred in connection with the monitoring or review of such Remedial Work. If Borrowers do not timely commence and diligently prosecute to completion the Remedial Work, Lender may (but shall not be obligated to) cause such Remedial Work to be performed at Borrowers’ expense. Notwithstanding the foregoing, Borrowers shall not be required to commence such Remedial Work within the above specified time period: (x) if prevented from doing so by any Governmental Authority, (y) if commencing such Remedial Work within such time period would result in any Borrower or such Remedial Work violating any Environmental Law, or (z) if Borrowers, at their expense and after prior written notice to Lender, are contesting by appropriate legal, administrative or other proceedings, conducted in good faith and with due diligence, the need to perform Remedial Work. Borrowers shall have the right to contest the need to perform such Remedial Work, provided that, (1) Borrowers are permitted by the applicable Environmental Laws to delay performance of the Remedial Work pending such proceedings, (2) neither any Property nor any part thereof or interest therein will be sold, forfeited or lost if a Borrower fails to promptly perform the Remedial Work being contested, and if such Borrower fails to prevail in contest such Borrower would thereafter have the opportunity to perform such Remedial Work, (3) Lender would not, by virtue of such permitted contest, be exposed to any risk of any civil liability for which Borrowers have not furnished additional security as provided in clause (4) below, or to any risk of criminal liability, and neither any Property nor any interest therein would be subject to the imposition of any Lien for which Borrowers have not furnished additional security as provided in clause (4) below, as a result of the failure to perform such Remedial Work and (4) Borrowers shall have furnished to Lender additional security in respect of the Remedial Work being contested and the loss or damage that may result from Borrowers’ failure to prevail in such contest in such amount as may be reasonably requested by Lender but in no event less than one hundred twenty-five percent (125%) of the cost of such Remedial Work as estimated by Lender or Lender’s Consultant and any loss or damage that may result from Borrowers’ failure to prevail in such contest.
(d) No Borrower shall install or permit to be installed on any Property any underground storage tank.
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payment of rent from Leasehold Borrower to Fee Borrower in the Operating Lease may be adjusted or modified without the prior consent of Lender, if such adjustment or modification does not effect the rights or obligations of either Borrower under the Loan or the Loan Documents.
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5.15 Change In Business or Operation of Properties. Borrowers shall not purchase or own any real property other than the Properties and shall not enter into any line of business other than the ownership and operation of the Properties, or make any material change in the scope or nature of their business objectives, purposes or operations, or undertake or participate in activities other than the continuance of its present business or otherwise cease to operate the Properties as hotel properties, or terminate such business for any reason whatsoever (other than temporary cessation in connection with renovations to a Property).
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5.21 Change of Name, Identity or Structure. No Borrower shall change its name, identity (including its trade name or names) or such Borrower’s corporate, partnership or other structure without notifying Lender of such change in writing at least thirty (30) days prior to the effective date of such change and, in the case of a change in such Borrower’s structure, without first obtaining the prior written consent of Lender. Each Borrower shall execute and deliver to Lender, prior to or contemporaneously with the effective date of any such change, any financing statement or financing statement change required by Lender to establish or maintain the validity, perfection and priority of the security interest granted herein. At the request of Lender, each Borrower shall execute a certificate in form satisfactory to Lender listing the trade names under which such Borrower intends to operate the Property or Properties owned by such Borrower, and representing and warranting that such Borrower does business under no other trade name with respect to the Property.
5.25.1.1 No Borrower shall engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA.
5.25.1.2 No Borrower shall maintain, sponsor, contribute to or become obligated to contribute to, or suffer or permit any ERISA Affiliate of such Borrower to, maintain, sponsor, contribute to or become obligated to contribute to, any Plan or any Welfare Plan or permit the assets of such Borrower to become “plan assets,” whether by operation of law or under regulations promulgated under ERISA.
5.25.1.3 Each Borrower shall deliver to Lender such certifications or other evidence from time to time throughout the Term, as requested by Lender in its sole discretion, that (A) such Borrower is not and does not maintain 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) such Borrower is not 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:
(1) Equity interests in such Borrower are publicly offered securities, within the meaning of 29 C.F.R. (S)2510.3-101(b)(2);
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(2) Less than twenty-five percent (25%) of each outstanding class of equity interests in such Borrower are held by “benefit plan investors” within the meaning of 29 C.F.R. (S)2510.3-101(f)(2); or
(3) such Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. (S)2510.3-101(c) or (e).
5.26.2 Transfer and Assumption.
(a) Notwithstanding the foregoing, but subject to the terms and satisfaction of all of the conditions precedent set forth in this Section 5.26.2, Borrowers shall have a one-time right to Transfer all (but not less than all) of the Properties (which have not theretofore been released pursuant to Section 2.4.2) to another party (the “Transferee Borrower”) and have the Transferee Borrower assume all of Borrowers’ obligations under the Loan Documents, and have replacement guarantors and indemnitors assume all of the obligations of the indemnitors and guarantors of the Loan Documents (collectively, a “Transfer and Assumption”). Borrowers may make a written application to Lender for Lender’s consent to the Transfer and Assumption, subject to the conditions set forth in paragraphs (b) and (c) of this Section 5.26.2. Together with such written application, Borrowers will pay to Lender the reasonable review fee then required by Lender. Borrowers also shall pay on demand all of the reasonable costs and expenses incurred by Lender, including reasonable attorneys’ fees and expenses, and including the fees and expenses of Rating Agencies and other outside entities, in connection with considering any proposed Transfer and Assumption, whether or not the same is permitted or occurs.
(b) Lender’s consent, which may be withheld in Lender’s sole and absolute discretion, to a Transfer and Assumption shall be subject to the following conditions:
(1) No Default or Event of Default has occurred and is continuing;
(2) Borrowers have submitted to Lender true, correct and complete copies of any and all information and documents of any kind requested by Lender concerning the Properties, Transferee Borrower, replacement guarantors and indemnitors and Borrowers;
(3) Evidence satisfactory to Lender has been provided showing that the Transferee Borrower and such of its Affiliates as shall be designated by Lender comply and will comply with Section 5.13 hereof, as those provisions may be modified by Lender taking into account the ownership structure of Transferee Borrower and its Affiliates;
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(4) If the Loan, by itself or together with other loans, has been the subject of a Secondary Market Transaction, then Lender shall have received a Rating Comfort Letter from the applicable Rating Agencies;
(5) If the Loan has not been the subject of a Secondary Market Transaction, then Lender shall have determined that no rating for any securities that would be issued in connection with such securitization will be diminished, qualified, or withheld by reason of the Transfer and Assumption;
(6) Borrowers shall have paid all of Lender’s reasonable costs and expenses in connection with considering the Transfer and Assumption, and shall have paid the amount requested by Lender as a deposit against Lender’s costs and expenses in connection with the effecting the Transfer and Assumption;
(7) Borrowers, the Transferee Borrower, and the replacement guarantors and indemnitors shall have indicated in writing in form and substance reasonably satisfactory to Lender their readiness and ability to satisfy the conditions set forth in subsection (c) below; and
(8) The identity, experience, and financial condition of the Transferee Borrower and the replacement guarantors and indemnitors shall be satisfactory to Lender.
(c) If Lender consents to the Transfer and Assumption, the Transferee Borrower and/or Borrower as the case may be, shall immediately deliver the following to Lender:
(1) Borrowers shall deliver to Lender an assumption fee in the amount of 1.00% of the then unpaid Principal;
(2) Borrowers, Transferee Borrower and the original and replacement guarantors and indemnitors shall execute and deliver to Lender any and all documents required by Lender, in form and substance required by Lender, in Lender’s sole discretion;
(3) Counsel to the Transferee Borrower and replacement guarantors and indemnitors shall deliver to Lender opinions in form and substance satisfactory to Lender as to such matters as Lender shall require, which may include opinions as to substantially the same matters and were required in connection with the origination of the Loan;
(4) Borrowers shall cause to be delivered to Lender, an endorsement (relating to the change in the identity of the vestee and execution and delivery of the Transfer and Assumption documents) to the Title Insurance Policies in form and substance acceptable to Lender, in Lender’s reasonable discretion (the “Endorsement”); and
(5) Borrowers shall deliver to Lender a payment in the amount of all remaining unpaid costs incurred by Lender in connection with the Transfer and Assumption, including but not limited to, Lender’s reasonable attorneys fees and expenses, all recording fees, and all fees payable to the title company for the delivery to Lender of the Endorsement.
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foregoing (each, an “Indemnified Party”), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for an Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not Lender shall be designated a party thereto, court costs and costs of appeal at all appellate levels, investigation and laboratory fees, consultant fees and litigation expenses), that may be imposed on, incurred by, or asserted against any Indemnified Party (collectively, the “Indemnified Liabilities”) in any manner, relating to or arising out of or by reason of the Loan, including: (i) any breach by any Borrower of its obligations under, or any misrepresentation by any Borrower contained in, any Loan Document; (ii) the use or intended use of the proceeds of the Loan; (iii) any information provided by or on behalf of any Borrower, or contained in any documentation approved by any Borrower; (iv) ownership of any Mortgage, any Property or any interest therein, or receipt of any Rents; (v) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about any Property or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (vi) any use, nonuse or condition in, on or about any Property or on adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (vii) performance of any labor or services or the furnishing of any materials or other property in respect of any Property; (viii) the presence, disposal, escape, seepage, leakage, spillage, discharge, emission, release, or threatened release of any Hazardous Substance on, from or affecting any Property; (ix) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Substance; (x) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Substance; (xi) any violation of the Environmental Laws which is based upon or in any way related to such Hazardous Substance, including the costs and expenses of any Remedial Work; (xii) any failure of any Property to comply with any Legal Requirement; (xiii) any claim by brokers, finders or similar persons claiming to be entitled to a commission in connection with any Lease or other transaction involving any Property or any part thereof, or any liability asserted against Lender with respect thereto; and (xiv) the claims of any lessee of any portion of any Property or any Person acting through or under any lessee or otherwise arising under or as a consequence of any Lease; provided, however, that Borrowers shall not have any obligation to any Indemnified Party hereunder to the extent that it is finally judicially determined that such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or willful misconduct of such Indemnified Party. Any amounts payable to any Indemnified Party by reason of the application of this paragraph shall be payable on demand and shall bear interest at the Default Rate from the date loss or damage is sustained by any Indemnified Party until paid. The obligations and liabilities of Borrowers under this Section 5.30 shall survive the Term and the exercise by Lender of any of its rights or remedies under the Loan Documents, including the acquisition of any Property by foreclosure or a conveyance in lieu of foreclosure.
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the Franchise Agreements; and (v) promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the material covenants required to be performed and observed by the franchisor under the Franchise Agreements. Without Lender’s prior consent, no Borrower shall (i) surrender, terminate or cancel any Franchise Agreement; (ii) reduce or consent to the reduction of the term of any Franchise Agreement; (iii) increase or consent to the increase of the amount of any charges under any Franchise Agreement; (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, any Franchise Agreement or (v) suffer or permit the occurrence of continuance a default beyond any applicable cure period under any Franchise Agreement (or any successor franchise agreement) if such default permits the franchisor to terminate or cancel such Franchise Agreement (or any successor franchise agreement). Notwithstanding anything to the contrary in this Section 5.31, Borrowers shall have the right to surrender, terminate or cancel one or more of the Franchise Agreements with respect to the applicable Property or Properties provided that (a) Borrower shall enter into a new Franchise Agreement with an Approved Franchisor which new agreement shall be on such Approved Franchisor’s then-current standard for or otherwise reasonably satisfactory to Lender and (B) such new agreement shall become effective immediately upon the expiration of Franchise Agreement which is being replaced and (C) Borrowers shall provide Lender with security to ensure the payment of any cancellation, termination or any other fees or costs fees payable in connection with the Franchise Agreement which is being replaced, together with any fees, expenses or costs (including PIP costs) incurred or payable in connection with the entry into the new Franchise Agreement, which security shall not be less than 125% of Lender’s reasonable estimate of all such fees, expenses or costs.
5.33.1
Borrower shall:
(a) pay when due any installment of fixed rent payable under the Ground Lease;
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(b) pay additional rent or other charge payable under the Ground Lease prior to the expiration of the applicable grace period, and
(c) observe and perform all other terms, covenants and conditions of the Ground Lease prior to the expiration of any applicable grace period provided therein.
5.33.2
Borrower shall not:
(a) cause or permit the occurrence of any event that would cause the Ground Lease to terminate without notice or action by the landlord thereunder or would entitle such landlord to terminate the Ground Lease and the term thereof by giving notice to Borrower;
(b) surrender the leasehold estate created by the Ground Lease;
(c) cause or permit the termination of Ground Lease; or
(d) cause or permit any term of the Ground Lease to be modified or supplemented without Lender’s consent.
6. | NOTICES AND REPORTING |
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business or any Property; (ii) any material adverse change in any Borrower’s or any Borrower Representative’s condition, financial or otherwise, or of the occurrence of any Default or Event of Default of which any Borrower has knowledge; and (b) furnish and provide to Lender: (i) any Securities and Exchange Commission or other public filings, if any, of any Borrower, any Borrower Representative, Manager, or any Affiliate of any of the foregoing within two (2) Business Days of such filing and (ii) all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications, appraisals, title and other insurance reports and agreements, reasonably requested, from time to time, by Lender. In addition, after request by Lender (but no more frequently than twice in any year), Borrowers shall furnish to Lender (x) within ten days, a certificate addressed to Lender, its successors and assigns reaffirming all representations and warranties of each Borrower set forth in the Loan Documents as of the date requested by Lender or, to the extent of any changes to any such representations and warranties, so stating such changes, and (y) within 30 days, tenant estoppel certificates addressed to Lender, its successors and assigns from each tenant at each Property in form and substance reasonably satisfactory to Lender.
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prepared in accordance with GAAP and (2) whether there exists a Default or Event of Default, and if so, the nature thereof, the period of time it has existed and the action then being taken to remedy it.
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Budget”), and (ii) a Capital Expense budget showing, on a month-by-month basis, in reasonable detail, each line item of anticipated Capital Expenses (and once such Annual Budget has been approved by Lender, such Capital Expense budget shall be referred to herein as the “Approved Capital Budget”). Until such time that any Annual Budget has been approved by Lender, the prior Approved Annual Budget shall apply for all purposes hereunder (with such adjustments as reasonably determined by Lender (including increases for any non-discretionary expenses)).
7. | INSURANCE; CASUALTY; AND CONDEMNATION |
(a) Property insurance insuring against loss or damage customarily included under so called “all risk” or “special form” policies including fire, lightning, flood, earthquake, vandalism, and malicious mischief, boiler and machinery and, if available and subject to subsection (j) below, coverage for damage or destruction caused by “War” or the acts of “Terrorists” (or such policies shall have no exclusion from coverage with respect thereto) and such other insurable hazards as, under good insurance practices, from time to time are insured against for other property and buildings similar to the premises in nature, use, location, height, and type of construction. Such insurance policy shall also insure costs of demolition and increased cost of construction (which insurance for demolition and increased cost of construction may contain a sub-limit satisfactory to Lender). Each such insurance policy shall (i) be in an amount equal to the greatest of (A) 100% of the then replacement cost of the Improvements without deduction for physical depreciation, (B) 125% of the Allocated Loan Amount for such Property, and (C) such amount as is necessary so that the insurer would not deem Borrower a co-insurer under such policies, (ii) have deductibles no greater than the lesser of $50,000 or 15% of the Allocated Loan Amount per occurrence (or, with respect to the Pella, Iowa Property, $50,000), (iii) be paid annually in advance and
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(iv) contain an agreed amount replacement cost endorsement with a waiver of depreciation, and shall cover, without limitation, all tenant improvements and betterments that Borrower is required to insure on a replacement cost basis. If the insurance required under this subparagraph is not obtained by blanket insurance policies, the insurance policy shall be endorsed to also provide guaranteed building replacement cost to the Improvements and such tenant improvements in an amount to be subject to the consent of Lender, which consent shall not be unreasonably withheld. Lender shall be named Loss Payee on a Standard Mortgagee Endorsement. Notwithstanding anything to the contrary in this clause (a), Lender confirms that the current property insurance policy with respect to the Key Largo, Florida Property is acceptable to Lender prior to the renewal date of such policy, provided that upon renewal such policy shall comply with the provisions of this clause (a).
(b) Flood insurance if such Property is in an area now or hereafter designated by the Federal Emergency Management Agency as a Zone “A” & “V” Special Hazard Area, or such other Special Hazard Area if Lender so requires in its sole discretion. Such policy shall (i) be in an amount equal to the greater of (A) 100% of the full replacement cost of the Improvements on such Property (without any deduction for depreciation) (B) the maximum limit of coverage available and (ii) have a maximum permissible deductible of $3,000.
(c) Public liability insurance, including (i) “Commercial General Liability Insurance”, (ii) “Owned”, “Hired” and “Non Owned Auto Liability”; and (iii) umbrella liability coverage for personal injury, bodily injury, death, accident and property damage, such insurance providing in combination no less than containing minimum limits per occurrence of $1,000,000 and $2,000,000 in the aggregate for any policy year; together with at least $50,000,000 excess and/or umbrella liability insurance for any and all claims with deductibles no greater than $5,000; provided, however, that, with respect to any Property subject to the Federal Employers Liability Act, such deductibles shall be no greater than $25,000. The policies described in this subsection shall also include coverage for elevators, escalators, independent contractors, “Contractual Liability” (covering, to the maximum extent permitted by law, Borrower’s obligation to indemnify Lender as required under this Agreement and the other Loan Documents), “Products” and “Completed Operations Liability” coverage.1
(d) Rental loss and/or business interruption insurance (i) with Lender being named as “Lender Loss Payee”, (ii) in an amount equal to one hundred percent (100%) of the projected Net Operating Income from such Property during the period of restoration; and (iii) containing an extended period of indemnity endorsement which provides that after the physical loss to such Property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of eighteen (18) months from the date that such Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period. The amount of such insurance shall be increased from time to time during the Term as and when the estimated or actual Rents increase. Notwithstanding anything to the contrary in this clause (d), Lender confirms that Borrower’s current rental loss and/or business interruption insurance policy is acceptable to Lender prior to the renewal date of such policy, provided that upon renewal such policy shall comply with the provisions of this clause (d).
/1/ | GC to advise re limits and deductible. |
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(e) Comprehensive boiler and machinery insurance covering all mechanical and electrical equipment against physical damage, rent loss and improvements loss and covering, without limitation, all tenant improvements and betterments that Borrower is required to insure pursuant to the lease on a replacement cost basis and in an amount equal to the greater of (i) $2,000,000. and (ii) 100% of the full replacement cost of the Improvements on such Property (without any deduction for depreciation).
(f) Worker’s compensation and disability insurance with respect to any employees of Borrower, as required by any Legal Requirement.
(g) During any period of repair or restoration, builder’s “all-risk” insurance in an amount equal to not less than the full insurable value of such Property, against such risks (including fire and extended coverage and collapse of the Improvements to agreed limits) as Lender may request, in form and substance acceptable to Lender.
(i) Such other insurance (including environmental liability insurance, earthquake insurance, mine subsidence insurance and windstorm insurance) as may from time to time be reasonably required by Lender in order to protect its interests.
(j) Notwithstanding anything in subsection (a) above to the contrary, Borrowers shall be required to obtain and maintain coverage in their respective property insurance Policy (or by a separate Policy) against loss or damage by terrorist acts provided that such coverage is commercially available. Borrowers shall obtain such coverage from a carrier which otherwise satisfies the rating criteria specified in Section 7.1.2 (a “Qualified Carrier”) or in the event that such coverage is not available from a Qualified Carrier, Borrowers shall obtain such coverage from the highest rated insurance company providing such coverage. If such coverage with respect to terrorist acts is available as aforesaid, Borrowers shall obtain and maintain such coverage in an amount equal to 100% of the “Full Replacement Cost” of such Borrower’s Property.
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interest, including (A) endorsements providing that neither any Borrower, Lender nor any other party shall be a co-insurer under the Policies, (B) that Lender shall receive at least 30 days’ prior written notice of any modification, reduction or cancellation of any of the Policies, (C) an agreement whereby the insurer waives any right to claim any premiums and commissions against Lender, provided that the policy need not waive the requirement that the premium be paid in order for a claim to be paid to the insured and (D) providing that Lender is permitted to make payments to effect the continuation of such policy upon notice of cancellation due to non-payment of premiums; (vii) in the event any insurance policy (except for general public and other liability and workers compensation insurance) shall contain breach of warranty provisions, such policy shall provide that with respect to the interest of Lender, such insurance policy shall not be invalidated by and shall insure Lender regardless of (A) any act, failure to act or negligence of or violation of warranties, declarations or conditions contained in such policy by any named insured, (B) the occupancy or use of the premises for purposes more hazardous than permitted by the terms thereof, or (C) any foreclosure or other action or proceeding taken by Lender pursuant to any provision of the Loan Documents; and (viii) be satisfactory in form and substance to Lender and approved by Lender as to amounts, form, risk coverage, deductibles, loss payees and insured. Borrowers shall pay the premiums for such Policies (the “Insurance Premiums”) as the same become due and payable and furnish to Lender evidence of the renewal of each of the Policies together with (unless such Insurance Premiums have been paid by Lender pursuant to Section 3.3) receipts for or other evidence of the payment of the Insurance Premiums reasonably satisfactory to Lender. If Borrowers do not furnish such evidence and receipts at least 30 days prior to the expiration of any expiring Policy, then Lender may, but shall not be obligated to, procure such insurance and pay the Insurance Premiums therefor, and Borrowers shall reimburse Lender for the cost of such Insurance Premiums promptly on demand, with interest accruing at the Default Rate. Borrowers shall deliver to Lender a certified copy of each Policy within 30 days after its effective date. Within 30 days after request by Lender, Borrowers shall obtain such increases in the amounts of coverage required hereunder as may be reasonably requested by Lender, taking into consideration changes in the value of money over time, changes in liability laws, changes in prudent customs and practices, and the like.
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Notwithstanding anything to the contrary in the immediately preceding sentence, Lender shall not execute any document as attorney-in-fact of Borrowers unless (x) Borrowers shall have failed or refused to execute the same within five (5) Business Days after Lender’s request therefor, or (y) in Lender’s good faith determination it would be materially prejudiced by the delay involved in making such a request. Notwithstanding any Condemnation (or any transfer made in lieu of or in anticipation of such Condemnation), Borrowers shall continue to pay the Debt at the time and in the manner provided for in the Loan Documents, and the Debt shall not be reduced unless and until any Award shall have been actually received and applied by Lender to expenses of collecting the Award and to discharge of the Debt. Lender shall not be limited to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided in the Note. If any Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of such Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall be recoverable or shall have been sought, recovered or denied, to receive all or a portion of the Award sufficient to pay the Debt. Borrowers shall cause any Award that is payable to Borrower to be paid directly to Lender. Subject to the Ground Lease, Lender shall hold such Award in the Casualty/Condemnation Subaccount and disburse such Award in accordance with the terms hereof.
7.4 Application of Proceeds or Award.
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and (iii) other charges due under the Note and/or any of the other Loan Documents, or applied to reimburse Borrowers for the cost of any Restoration, in the manner set forth in Section 7.4.3. Any such prepayment of the Loan shall be without any Yield Maintenance Premium, unless an Event of Default has occurred and is continuing at the time the Proceeds are received from the insurance company or the Award is received from the condemning authority, as the case may be, in which event Borrowers shall pay to Lender an additional amount equal to the Yield Maintenance Premium, if any, that may be required with respect to the amount of the Proceeds or Award applied to the unpaid Principal.
8. | DEFAULTS |
(a) any portion of the Debt is not paid when due or any other amount under Section 3.11(a)(i) through (viii) is not paid in full on each Payment Date (provided, however, if adequate funds are available in the Deposit Account for such payments, the failure by the Deposit Bank to allocate such funds into the appropriate Subaccounts shall not constitute an Event of Default);
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(b) any of the Taxes are not paid when due (unless Lender is paying such Taxes pursuant to Section 3.3), subject to Borrowers’ right to contest Taxes in accordance with Section 5.2;
(c) the Policies are not kept in full force and effect, or are not delivered to Lender upon request (unless Lender has failed to pay Insurance Premiums as provided in Section 3.3);
(d) a Transfer other than a Permitted Transfer occurs;
(e) any representation or warranty made by any Borrower or Guarantor or in any Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished by any Borrower or Guarantor in connection with any Loan Document, shall be false or misleading in any material respect as of the date the representation or warranty was made;
(f) any Borrower or any Borrower Representative or Guarantor shall make an assignment for the benefit of creditors, or shall generally not be paying its debts as they become due;
(g) a receiver, liquidator or trustee shall be appointed for any Borrower or any Borrower Representative or Guarantor; or any Borrower or any Borrower Representative or Guarantor shall be adjudicated a bankrupt or insolvent; or any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by, any Borrower or any Borrower Representative or Guarantor, as the case may be; or any proceeding for the dissolution or liquidation of any Borrower or any Borrower Representative or Guarantor shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by such Borrower or its respective Borrower Representative or Guarantor, as the case may be, only upon the same not being discharged, stayed or dismissed within 90 days;
(h) any Borrower breaches any covenant contained in Sections 5.12.1 (a)—(f), 5.13, 5.15, 5.22, 5.25 or 5.28;
(i) except as expressly permitted hereunder, the actual or threatened alteration, improvement, demolition or removal of all or any of portion of any of the Improvements without the prior written consent of Lender;
(j) an Event of Default as defined or described elsewhere in this Agreement or in any other Loan Document occurs; or any other event shall occur or condition shall exist, if the effect of such event or condition is to accelerate or to permit Lender to accelerate the maturity of any portion of the Debt;
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(k) a default occurs under any term, covenant or provision set forth herein or in any other Loan Document which specifically contains a notice requirement or grace period and such notice has been given and such grace period has expired;
(l) a default has occurred and continues beyond any applicable cure period under any Franchise Agreement (or any successor franchise agreement) if such default permits the Franchisor to terminate or cancel such Franchise Agreement (or any successor franchise agreement), unless Borrower has replaced such Franchise Agreement with a Franchise Agreement with an Approved Franchisor in accordance with the provisions of Section 5.31;
(m) a default has occurred and continues beyond any applicable cure period under any Operating Lease if such default permits any party thereto to terminate or cancel such Operating Lease;
(n) failure of Borrower or Manager to cause Rents to be deposited into the Clearing Account in accordance with Section 3.1;
(o) any of the assumptions contained in any substantive non-consolidation opinion, delivered to Lender by Borrowers’ counsel in connection with the Loan or otherwise hereunder, were not true and correct as of the date of such opinion or thereafter became untrue or incorrect;
(p) Borrower shall default in the observance or performance of any other term, covenant or condition of the Ground Lease and such default is not cured within 20 days prior to the expiration of any applicable grace period provided therein; or any event shall occur that would cause the Ground Lease to terminate without notice or action by the landlord thereunder or would entitle such landlord to terminate the Ground Lease and the term thereof by giving notice to Borrower; or the leasehold estate created by the Ground Lease shall be surrendered or the Ground Lease shall be terminated or cancelled for any reason or under any circumstance whatsoever; or any term of the Ground Lease shall be modified or supplemented without Lender’s consent;
(q) a default shall be continuing under any of the other terms, covenants or conditions of this Agreement or any other Loan Document not otherwise specified in this Section 8.1, for ten days after notice to Borrowers (and Guarantor, if applicable) from Lender, in the case of any default which can be cured by the payment of a sum of money, or for 30 days after notice from Lender in the case of any other default; provided, however, that if such non-monetary default is susceptible of cure but cannot reasonably be cured within such 30-day period, and Borrowers (or Guarantor, if applicable) shall have commenced to cure such default within such 30-day period and thereafter diligently and expeditiously proceeds to cure the same, such 30-day period shall be extended for an additional period of time as is reasonably necessary for Borrowers (or Guarantor, if applicable) in the exercise of due diligence to cure such default, such additional period not to exceed 90 days.
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and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect such severance, each Borrower ratifying all that such attorney shall do by virtue thereof. Notwithstanding anything to the contrary in the immediately preceding sentence, Lender shall not execute any document as attorney-in-fact of Borrowers unless (x) Borrowers shall have failed or refused to execute the same within five (5) Business Days after Lender’s request therefor, or (y) in Lender’s good faith determination it would be materially prejudiced by the delay involved in making such a request.
9. | SPECIAL PROVISIONS |
9.1 Sale of Note and Secondary Market Transaction.
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Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with any such Secondary Market Transactions, including: (a) to (i) provide such financial and other information with respect to the Properties, Borrowers and their Affiliates, Manager and any tenants of the Properties, (ii) provide business plans and budgets relating to the Properties and (iii) perform or permit or cause to be performed or permitted such site inspection, appraisals, surveys, market studies, environmental reviews and reports, engineering reports and other due diligence investigations of the Properties, as may be reasonably requested from time to time by Lender or the Rating Agencies or as may be necessary or appropriate in connection with a Secondary Market Transaction or Exchange Act requirements (the items provided to Lender pursuant to this paragraph (a) being called the “Provided Information”), together, if customary, with appropriate verification of and/or consents to the Provided Information through letters of auditors or opinions of counsel of independent attorneys acceptable to Lender and the Rating Agencies; (b) cause counsel to render opinions as to non-consolidation and any other opinion customary in securitization transactions with respect to the Properties, Borrowers and their Affiliates, which counsel and opinions shall be reasonably satisfactory to Lender and the Rating Agencies; (c) make such representations and warranties as of the closing date of any Secondary Market Transaction with respect to the Properties, Borrowers and the Loan Documents as are customarily provided in such transactions and as may be reasonably requested by Lender or the Rating Agencies and consistent with the facts covered by such representations and warranties as they exist on the date thereof, including the representations and warranties made in the Loan Documents; (d) provide current certificates of good standing and qualification with respect to Borrowers and each Borrower Representative from appropriate Governmental Authorities; and (e) execute such amendments to the Loan Documents and Borrowers’ organizational documents, as may be requested by Lender or the Rating Agencies or otherwise to effect a Secondary Market Transaction, provided that nothing contained in this subsection (e) shall result in a material economic change in the transaction. Borrowers shall not be required to incur any material cost or expense in connection with a Secondary Market Transaction. Borrowers’ cooperation obligations set forth herein shall continue until the Loan has been paid in full.
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Document, pertaining to Borrowers, the Properties, Manager and the Loan, and that such portions do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (b) indemnify (in a separate instrument of indemnity, if so requested by Lender) (i) any underwriter, syndicate member or placement agent (collectively, the “Underwriters”) retained by Lender or its issuing company affiliate (the “Issuer”) in connection with a Secondary Market Transaction, (ii) Lender and (iii) the Issuer that is named in the Disclosure Document or registration statement relating to a Secondary Market Transaction (the “Registration Statement”), and each of the Issuer’s directors, each of its officers who have signed the Registration Statement and each person or entity who controls the Issuer or the Lender within the meaning of Section 15 of the Securities Act or Section 30 of the Exchange Act (collectively within (iii), the “GCM Group”), and each of its directors and each person who controls each of the Underwriters, within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses, claims, damages or liabilities (the “Liabilities”) to which Lender, the GCM Group or the Underwriter Group may become subject (including reimbursing all of them for any legal or other expenses actually incurred in connection with investigating or defending the Liabilities) insofar as the Liabilities arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any of the Provided Information or in any of the applicable portions of such sections of the Disclosure Document applicable to Borrowers, Manager, the Properties or the Loan, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated in the applicable portions of such sections or necessary in order to make the statements in the applicable portions of such sections in light of the circumstances under which they were made, not misleading; provided, however, that Borrowers shall not be required to indemnify Lender for any Liabilities relating to untrue statements or omissions which Borrowers identified to Lender in writing at the time of Borrowers’ examination of such Disclosure Document.
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will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice of commencement, to assume the defense thereof with counsel satisfactory to such indemnified party in its discretion. After notice from Borrowers to such indemnified party under this Section 9.1.5, Borrowers shall not be responsible for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both Borrowers and an indemnified party, and any indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to Borrowers, then the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Borrowers shall not be liable for the expenses of more than one separate counsel unless there are legal defenses available to it that are different from or additional to those available to another indemnified party.
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whatever priority Lender determines; provided, however, in each such instance the outstanding principal balance of all the Notes evidencing the Loan (or components of such Notes) immediately after the effective date of such modification equals the outstanding principal balance of the Loan immediately prior to such modification and the weighted average of the interest rates for all such Notes (or components of such Notes) immediately after the effective date of such modification equals the interest rate of the original Note immediately prior to such modification. If requested by Lender, Borrowers (and Borrowers’ constituent members, if applicable, and Guarantor) shall execute within two (2) Business Days after such request, such documentation as Lender may reasonably request to evidence and/or effectuate any such modification or severance.
10. | MISCELLANEOUS |
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of any Property received or collected by or on behalf of any Borrower after an Event of Default and not applied to payment of Principal and interest due under the Note, and to the payment of actual and reasonable operating expenses of such Property, as they become due or payable (except to the extent that such application of such funds is prevented by bankruptcy, receivership, or similar judicial proceeding in which such Borrower is legally prevented from directing the disbursement of such sums); (e) misappropriation (including failure to turn over to Lender on demand following an Event of Default) of tenant security deposits and rents collected in advance, or of funds held by any Borrower for the benefit of another party; (f) the failure to pay Taxes, provided Borrowers shall not be liable to the extent funds to pay such amounts are available in the Tax and Insurance Subaccount and Lender failed to pay same; or (g) the breach of any representation, warranty, covenant or indemnification in any Loan Document concerning Environmental Laws or Hazardous Substances, including Sections 4.21 and 5.8, and clauses (viii) through (xi) of Section 5.30.
Notwithstanding anything to the contrary in this Agreement or any of the Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt in accordance with the Loan Documents, and (B) Lender’s agreement not to pursue personal liability of Borrowers as set forth above SHALL BECOME NULL AND VOID and shall be of no further force and effect, and the Debt shall be fully recourse to Borrowers in the event that one or more of the following occurs (each, a “Springing Recourse Event”): (i) an Event of Default described in Section 8.1(d) shall have occurred or (ii) a breach of the covenants set forth in Section 5.13, or (iii) the occurrence of any condition or event described in either Section 8.1(f) or Section 8.1(g) and, with respect to such condition or event described in Section 8.1(g), either any Borrower, any Borrower Representative, Guarantor or any Person owning an interest (directly or indirectly) in any Borrower, any Borrower Representative or Guarantor consents to, aids, solicits, supports, or otherwise cooperates or colludes to cause such condition or event or fails to contest such condition or event.
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(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE DEBT. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO ss. 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR ANY BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK COUNTY, NEW YORK AND EACH BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
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HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH BORROWER DOES HEREBY DESIGNATE AND APPOINT CT CORPORATION SYSTEM AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE OF SUCH BORROWER MAILED OR DELIVERED TO SUCH BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH BORROWER (UNLESS LOCAL LAW REQUIRES ANOTHER METHOD OF SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH BORROWER (i) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (iii) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
10.7 Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement or of any other Loan Document, nor consent to any departure by any Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to or demand on any Borrower shall entitle any Borrower to any other or future notice or demand in the same, similar or other circumstances. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under any other Loan Document, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under any Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under the Loan Documents, or to declare an Event of Default for failure to effect prompt payment of any such other amount.
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INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER.
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10.21 Assignment. The Loan, the Note, the Loan Documents and/or Lender’s rights, title, obligations and interests therein may be assigned by Lender and any of its successors and assigns to any Person at any time in its discretion, in whole or in part, whether by operation of law (pursuant to a merger or other successor in interest) or otherwise. Upon such assignment, all references to Lender in this Loan Agreement and in any Loan Document shall be deemed to refer to such assignee or successor in interest and such assignee or successor in interest shall thereafter stand in the place of Lender. No Borrower may assign its rights, title, interests or obligations under this Loan Agreement or under any of the Loan Documents.
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will be cross-collateralized and cross-defaulted with each other so that (i) an Event of Default under any of the Mortgages shall constitute an Event of Default under each of the other Mortgages which secure the Note; (ii) an Event of Default under the Note or this Agreement shall constitute an Event of Default under each Mortgage; and (iii) each Mortgage shall constitute security for the Note as if a single blanket lien were placed on all of the Properties as security for the Note.
10.24 Set-Off. In addition to any rights and remedies of Lender provided by this Loan Agreement and by law, Lender shall have the right, without prior notice to any Borrower, any such notice being expressly waived by each Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by any Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Lender or any Affiliate thereof to or for the credit or the account of Borrowers. Lender agrees promptly to notify Borrowers after any such set-off and application made by Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application.
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.
SOLOMONS BEACON INN LIMITED PARTNERSHIP, | ||||||
a Maryland limited partnership | ||||||
By: | Solomons GP, LLC, its general partner | |||||
By: | /s/ Xxxxxx X. Xxxxxxxxxx | |||||
Name: | Xxxxxx X. Xxxxxxxxxx | |||||
Title: | President | |||||
TRS SUBSIDIARY, LLC, a Delaware limited liability company | ||||||
By: | TRS Leasing, Inc., its sole member | |||||
By: | /s/ Xxxxxx X. Xxxxxxxxxx | |||||
Name: | Xxxxxx X. Xxxxxxxxxx | |||||
Title: | President | |||||
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation | ||||||
By: | /s/ Xxxxx X. Xxxxxx | |||||
Name: | Xxxxx X. Xxxxxx | |||||
Title: | Senior Vice President |
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