1
Exhibit 10.7
TERM LOAN AGREEMENT
BY AND BETWEEN
NATIONSBANK OF TEXAS, N.A.
"LENDER"
AND
CANDLEWOOD WICHITA NORTHEAST, L.L.C.
"BORROWER"
OCTOBER 15, 1996
2
TERM LOAN AGREEMENT
BY AND BETWEEN
NATIONSBANK OF TEXAS, N.A.
AND
CANDLEWOOD WICHITA NORTHEAST, L.L.C.
ARTICLE 1 - DEFINITIONS AND USE OF TERMS . . . . . . . . . . . . . . . . . 1
Section 1.1. Certain Definitions . . . . . . . . . . . . . . . 1
Section 1.2. Number and Gender of Words . . . . . . . . . . . 8
Section 1.3. Money . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.4. Articles, Sections and Exhibits . . . . . . . . . 8
ARTICLE 2 - THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.1. Commitment to Lend . . . . . . . . . . . . . . . 9
Section 2.2. The Note . . . . . . . . . . . . . . . . . . . . 9
Section 2.3. Funding . . . . . . . . . . . . . . . . . . . . . 9
Section 2.4. Renewal Option. . . . . . . . . . . . . . . . . . 9
Section 2.5. Loan-To-Value Requirement. . . . . . . . . . . . 10
ARTICLE 3 - GENERAL TERMS OF ADVANCE . . . . . . . . . . . . . . . . . . . 10
Section 3.1. Conditions to Advance . . . . . . . . . . . . . . 10
Section 3.2. Use of Insurance and Condemnation Proceeds . . . 10
Section 3.3. No Waiver . . . . . . . . . . . . . . . . . . . . 11
Section 3.4. Conditions Precedent for the Benefit of Lender . 11
Section 3.5. Subordination . . . . . . . . . . . . . . . . . . 11
ARTICLE 4 - LEASING AND TENANT MATTERS . . . . . . . . . . . . . . . . . . 11
Section 4.1. Approved Leases . . . . . . . . . . . . . . . . . 11
Section 4.2. Approved Lease Modifications . . . . . . . . . . 11
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BORROWER . . . . . . . . . . 11
Section 5.1. Financial Statements . . . . . . . . . . . . . . 11
Section 5.2. Suits, Actions, Etc . . . . . . . . . . . . . . . 11
Section 5.3. Status of Borrower; Valid and Binding Obligation 12
Section 5.4. Title to the Property . . . . . . . . . . . . . . 12
Section 5.5. Disclosure . . . . . . . . . . . . . . . . . . . 12
Section 5.6. System Compliance . . . . . . . . . . . . . . . . 12
Section 5.7. Submittals . . . . . . . . . . . . . . . . . . . 12
Section 5.8. Utility and Access Availability . . . . . . . . . 12
Section 5.9. Taxes . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.10. Plans . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.11. Labor Controversies . . . . . . . . . . . . . . . 13
Section 5.12. Violations . . . . . . . . . . . . . . . . . . . 13
Section 5.13. Environmental . . . . . . . . . . . . . . . . . . 13
Section 5.14. Compliance with Restrictions and Agreements . . . 13
Section 5.15. Other Lands . . . . . . . . . . . . . . . . . . . 14
Section 5.16. Development Rights . . . . . . . . . . . . . . . 14
Section 5.17. Leases . . . . . . . . . . . . . . . . . . . . . 14
Section 5.18. Regulation U . . . . . . . . . . . . . . . . . . 14
Section 5.19. ERISA . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.20. Insider . . . . . . . . . . . . . . . . . . . . . 14
Section 5.21. Principal Office, Etc . . . . . . . . . . . . . . 14
Section 5.22. Business Loan . . . . . . . . . . . . . . . . . . 14
(i)
3
Section 5.23. Not a Foreign Person . . . . . . . . . . . . . . . 14
Section 5.24. Certain Approvals . . . . . . . . . . . . . . . . . 15
Section 5.25. Management Agreement . . . . . . . . . . . . . . . 15
Section 5.28. Inducement to Lender . . . . . . . . . . . . . . . 15
ARTICLE 6 - COVENANTS AND AGREEMENTS OF BORROWER . . . . . . . . . . . . . 15
Section 6.1. Compliance with Governmental Requirements . . . . 15
Section 6.2. Contracts . . . . . . . . . . . . . . . . . . . . . 15
Section 6.3. Correction of Defects . . . . . . . . . . . . . . . 16
Section 6.4. Inspection of the Property . . . . . . . . . . . . 16
Section 6.5. Insurance . . . . . . . . . . . . . . . . . . . . . 16
Section 6.6. Existence, Franchises and Permits . . . . . . . . . 16
Section 6.7. Notice to Lender . . . . . . . . . . . . . . . . . 16
Section 6.8. Costs and Expenses . . . . . . . . . . . . . . . . 17
Section 6.9. Further Assurances . . . . . . . . . . . . . . . . 17
Section 6.10. Inspection of Books and Records . . . . . . . . . . 17
Section 6.11. No Liability of Lender . . . . . . . . . . . . . . 17
Section 6.12. No Conditional Sale Contracts, Etc. . . . . . . . . 18
Section 6.13. Defense of Actions . . . . . . . . . . . . . . . . 18
Section 6.14. Assignment of Permanent Commitment . . . . . . . . 18
Section 6.15. Prohibition on Assignment of Borrower's Interest. . 18
Section 6.16. Payment of Claims . . . . . . . . . . . . . . . . . 18
Section 6.17. Restrictions and Annexation . . . . . . . . . . . . 18
Section 6.18. Current Financial Statements . . . . . . . . . . . 18
Section 6.19. Tax Receipts . . . . . . . . . . . . . . . . . . . 19
Section 6.20. Loan Participations . . . . . . . . . . . . . . . . 19
Section 6.21. Indemnification . . . . . . . . . . . . . . . . . . 19
Section 6.22. Disclaimer of Permanent Financing . . . . . . . . . 20
Section 6.23. Appraisals . . . . . . . . . . . . . . . . . . . . 20
Section 6.24. Estoppel Certificate . . . . . . . . . . . . . . . 20
Section 6.25. Vouchers . . . . . . . . . . . . . . . . . . . . . 20
Section 6.26. Security Deposits . . . . . . . . . . . . . . . . . 20
Section 6.27. Environmental . . . . . . . . . . . . . . . . . . . 20
Section 6.28. Maintenance of the Property . . . . . . . . . . . . 21
Section 6.29. Management Agreement . . . . . . . . . . . . . . . 21
Section 6.30. Operating Deficit Reserve Account . . . . . . . . . 21
Section 6.31. Reserve Account. . . . . . . . . . . . . . . . . . 22
Section 6.32. Reservation System . . . . . . . . . . . . . . . . 22
ARTICLE 7 - DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.1. Events of Default . . . . . . . . . . . . . . . . . 23
(a) Failure to Pay Indebtedness . . . . . . . . . . . . 23
(b) Nonperformance of Covenants . . . . . . . . . . . . 23
(c) Representations . . . . . . . . . . . . . . . . . . 23
(d) Injunction . . . . . . . . . . . . . . . . . . . . 23
(e) Bankruptcy or Insolvency . . . . . . . . . . . . . 23
(f) Transfer of the Property . . . . . . . . . . . . . 24
(g) Transfer or Encumbrance of Ownership of Borrower. . 24
(h) Grant of Easement, Etc . . . . . . . . . . . . . . 24
(i) Default Under Other Lien . . . . . . . . . . . . . 24
(j) Destruction . . . . . . . . . . . . . . . . . . . . 24
(k) Condemnation . . . . . . . . . . . . . . . . . . . 24
(l) Liquidation, Etc . . . . . . . . . . . . . . . . . 25
(m) Material Adverse Change . . . . . . . . . . . . . . 25
(n) Enforceability; Priority . . . . . . . . . . . . . 25
(o) Other Loan Documents . . . . . . . . . . . . . . . 25
(p) Abandonment . . . . . . . . . . . . . . . . . . . . 25
(q) Encumbrance of the Property . . . . . . . . . . . . 25
Section 7.2. Notice and Cure . . . . . . . . . . . . . . . . . . 25
(ii)
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ARTICLE 8 - RIGHTS AND REMEDIES OF LENDER . . . . . . . . . . . . . . . . . 26
Section 8.1. Certain Remedies . . . . . . . . . . . . . . . . 26
Section 8.2. Other Rights, etc . . . . . . . . . . . . . . . . 26
Section 8.3. Performance by Lender on Borrower's Behalf . . . 26
Section 8.4. Remedies Cumulative . . . . . . . . . . . . . . . 26
ARTICLE 9 - GENERAL TERMS AND CONDITIONS . . . . . . . . . . . . . . . . . 27
Section 9.1. Loan Documents . . . . . . . . . . . . . . . . . 27
Section 9.2. Conditions for the Benefit of Lender . . . . . . 27
Section 9.3. Borrower in Control . . . . . . . . . . . . . . . 27
Section 9.4. Waiver by Lender . . . . . . . . . . . . . . . . 27
Section 9.5. Acts Not Constituting Waiver by Lender . . . . . 28
Section 9.6. Place of Payment; Forum . . . . . . . . . . . . . 28
Section 9.7. Compliance with Usury Laws . . . . . . . . . . . 28
Section 9.8. Notices . . . . . . . . . . . . . . . . . . . . . 29
Section 9.9. Invalidity of Certain Provisions . . . . . . . . 29
Section 9.10. Lender's Consent . . . . . . . . . . . . . . . . 29
Section 9.11. Execution; Counterparts . . . . . . . . . . . . . 29
Section 9.12. Successors and Assigns . . . . . . . . . . . . . 29
Section 9.13. Modification or Termination . . . . . . . . . . . 29
Section 9.14. No Partnership, etc . . . . . . . . . . . . . . . 29
Section 9.15. Time of Essence . . . . . . . . . . . . . . . . . 30
Section 9.16. Applicable Law . . . . . . . . . . . . . . . . . 30
Section 9.17. Capital Requirements and Yield Maintenance . . . 30
Section 9.18. Arbitration. . . . . . . . . . . . . . . . . . . 30
Section 9.19. Loan Agreement Governs . . . . . . . . . . . . . 31
Section 9.20. Payments Set Aside . . . . . . . . . . . . . . . 31
Section 9.21. Disclaimer of Financing . . . . . . . . . . . . . 31
Section 9.22. Evidence of Satisfaction . . . . . . . . . . . . 31
Section 9.23. Jointly Drafted . . . . . . . . . . . . . . . . . 31
Section 9.24. Entire Agreement . . . . . . . . . . . . . . . . 32
EXHIBITS
EXHIBIT "A" - Legal Description of Land
EXHIBIT "B" - Conditions to Advance
EXHIBIT "C" - Certified Budget
EXHIBIT "D" - Various Requirements
(iii)
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TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT, dated October 15, 1996, is made by and
between NationsBank of Texas, N.A., a national banking association ("Lender"),
and Candlewood Wichita Northeast, L.L.C., a Kansas limited liability company
("Borrower"), in respect of a loan in the principal amount of THREE MILLION AND
NO/100 DOLLARS ($3,000,000.00). For good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1 - DEFINITIONS AND USE OF TERMS
Section 1.1. Certain Definitions. For purposes of this Loan Agreement,
the following terms shall have the respective meanings assigned to them.
"Advance" means the advance of the proceeds of the Loan on the Closing
Date made by Lender to Borrower pursuant to the terms and conditions of this
Agreement.
"Affiliate" of any person means any person which, directly or
indirectly, controls, is controlled by, or is under common control with, such
person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any person, shall mean the possession, directly
or indirectly, of the power (a) to vote more than fifty percent (50%) of the
securities having ordinary voting power for the election of directors of the
controlled person, or (b) to direct or cause the direction of the management and
policies of the controlled person, whether through the ownership of voting
shares or by contract or otherwise.
"Agreement" means this Loan Agreement, as from time to time amended or
supplemented.
"Amortization Date" means June 1, 1997.
"Approved Lease" means any tenant lease of space in the Improvements
approved by Lender under Section 4.1.
"Borrower" means Candlewood Wichita Northeast, L.L.C., a Kansas limited
liability company.
"Business Day" means (a) for all purposes other than as covered by
clause (b) of this definition, any day of the week, other than Saturday, Sunday
or other day on which national banks in Dallas, Texas, are authorized or
required to be closed, or Lender is required or authorized by law or executive
order to close, and (b) with respect to all requests, notices and determinations
in connection with LIBOR Rate Portions (as defined in the Note), a day which is
a Business Day described in clause (a) of this definition and which is a day for
trading by and between banks for Dollar deposits in the London interbank market.
"Candlewood" has the meaning set forth in the definition of "Guarantor"
contained in this Section 1.1.
"Candlewood, Inc." has the meaning set forth in the definition of
"Guarantor" contained in this Section 1.1.
"Closing Date" means the date of this Agreement.
"Commitment Fee" means the $30,000 nonrefundable Commitment Fee, to be
paid to Lender in consideration of the commitment of Lender to make the proceeds
of the Loan available to Borrower from time to time during the term of, and as
provided in, this Agreement. Borrower and Lender acknowledge and agree that the
Commitment Fee is a bona fide commitment fee and is intended as reasonable
compensation to Lender for committing to make funds available to Borrower as
described herein and for no other purpose.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 1
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"Current Date" means a date within thirty (30) days prior to the
Closing Date.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization, or similar
laws, domestic or foreign, including but not limited to those in Title 11 of the
United States Code, affecting the rights or remedies of creditors generally, as
in effect from time to time.
"Default" has the meaning set forth in Article 7, whether or not used
herein with its initial letter capitalized.
"Development Documents" means, collectively, all plats, instruments
granting, creating or otherwise containing restrictive covenants, easements or
similar encumbrances and all other documents, instruments and agreements
recorded in the real property records in the county in which the Land is
located.
"Doubletree Agreement" means a written agreement with Doubletree
Corporation, ("Doubletree"), whereby Doubletree has agreed to provide the
reservation system for the operation of the Property, which agreement is subject
to Lender's prior approval.
"Englewood" has the meaning set forth in the definition of "Guarantor"
contained in this Section 1.1.
"Englewood Hard Costs" means Hard Costs for the construction of the
improvements on the Englewood Property as defined in the Construction Loan
Agreement which evidences the Englewood Loan.
"Englewood Loan" means the $4,029,500.00 loan by Lender to Englewood
for the construction of improvements on the Englewood Property which loan is to
be evidenced by a Construction Loan Agreement (the "Englewood Loan Agreement")
in form and substance satisfactory to Lender.
"Englewood Loan Agreement" has the meaning as set forth in the
definition of Englewood Loan contained in this Section 1.1.
"Englewood Property" means the land, together with all improvements to
be constructed thereon with the proceeds of the Englewood Loan, which is located
in Englewood, Colorado, which is owned by Englewood and which is to secure the
Englewood Loan, the Omaha Loan and this Loan.
"Environmental Claim" means any investigative, enforcement, cleanup,
removal, containment, remedial or other private or governmental or regulatory
action at any time threatened, instituted or completed pursuant to any
applicable Environmental Requirement, against Borrower or against or with
respect to the Property or any condition, use or activity on the Property,
whether past or present (including any such action against Lender), and any
claim at any time threatened or made by any person against Borrower or against
or with respect to the Property or any condition, use or activity on the
Property (including any such claim against Lender), relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or in
any way arising in connection with any Hazardous Material or any Environmental
Requirement.
"Environmental Damages" means all claims, demands, liabilities
(including strict liability), losses, damages (including consequential damages),
causes of action, judgments, penalties, fines, costs and expenses (including
fees, costs and expenses of attorneys, consultants, contractors, experts and
laboratories), of any and every kind or character, contingent or otherwise,
matured or unmatured, known or unknown, foreseeable or unforeseeable, made,
incurred, suffered, brought, or imposed at any time and from time to time,
whether before or after the Release Date, caused by or related to any Hazardous
Material or the violation of any Environmental Requirement, and regardless of
whether any of the foregoing was caused by Borrower or Borrower's tenant or
subtenant, or a prior owner of the Property or its tenant or subtenant, or any
third party, including but not limited to (a) injury or damage to any person,
property or natural resource occurring on or off of the Property, including but
not limited to the cost of demolition and rebuilding of any improvements on real
property; (b) the investigation
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 2
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or remediation of any such Hazardous Material or violation of Environmental
Requirement; (c) the investigation and defense of any claim, whether or not such
claim is ultimately defeated; and (d) the settlement of any claim or judgment.
"Environmental Requirement" means any agreement or restriction
pertaining to any Hazardous Material or the environment or any federal, state or
local law, statute, ordinance, code, rule, regulation, license, authorization,
decision, order, injunction, decree, or rule of common law, and any judicial
interpretation of any of the foregoing, which pertains to any Hazardous
Material, or the environment (including but not limited to ground or air or
water or noise pollution or contamination, and underground or above ground
tanks) and shall include without limitation, the Solid Waste Disposal Act, 42
U.S.C. Section 6901 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Clean
Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f
et seq.; and any other state or federal environmental statutes, and all rules,
regulations, orders and decrees now or hereafter promulgated under any of the
foregoing, as any of the foregoing now exist or may be changed or amended or
come into effect in the future.
"Extended Maturity Date" means April 15, 2000.
"Financial Statements" means such balance sheets (including disclosure
of all contingent liabilities), profit and loss statements, reconciliations of
capital and surplus, changes in financial condition, schedules of sources and
uses of funds, statements of cash flow, operating statements with respect to the
Property, pro forma schedules of sources and uses of funds for ensuing
twelve-month periods, and other financial information of Borrower and each
Guarantor as shall be required by Lender, from time to time, or as required
under any Loan Document, which statements shall be certified as true and correct
in all material respects by the party submitting such statements or, if required
under any Loan Document or if reasonably required by Lender, including, without
limitation, as a result of a request made by an auditor or examiner in
connection with an audit or examination of Lender (but not more than once in
each year), such statements of Borrower (if Borrower owns any assets other than
the Property) and each Guarantor shall be audited and/or certified by an
independent certified public accountant.
"Financing Statements" means the financing statements perfecting the
security interests securing the Loan, to be filed with the appropriate offices
for the perfection of a security interest in any of the Property.
"Future Borrower" means any Person whether now existing or hereafter
organized which is a wholly owned subsidiary of Candlewood, Inc. formed for the
purpose of constructing and operating an extended stay hotel comparable to the
Project.
"Future Loan" means any loan by Lender to a Future Borrower for the
construction of an extended-stay hotel; provided, that, nothing herein is
intended to, nor shall it, obligate Lender to provide a commitment for, or agree
to fund, any such Future Loan.
"Governmental Authority" means the United States of America, the state,
the county, the city, or any other political subdivision in which the Property
is located, and any court or political subdivision, agency, or instrumentality
having or exercising jurisdiction over Borrower, any Guarantor or the Property,
including, without limitation, any of the foregoing whose consent or approval is
required as a prerequisite to the operation and occupancy of the Improvements or
the Project or to the performance of any act or obligation or the observance of
any agreement, provision or condition contained in this Agreement.
"Governmental Requirements" means all laws, ordinances, codes, rules,
regulations, orders, writs, injunctions or decrees of any Governmental Authority
applicable to Borrower, any Guarantor, or the Property.
"Guarantor" means, collectively, Candlewood Hotel Company, Inc., a
Delaware corporation ("Candlewood, Inc."), Candlewood Hotel Company, L.L.C., a
Delaware limited liability company ("Candlewood"), Candlewood Omaha, L.L.C., a
Delaware limited liability
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 3
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company ("Omaha"), Candlewood Englewood, L.L.C., a Delaware limited liability
company ("Englewood"), and any other person now or hereafter liable for payment
of any Indebtedness or performance of any obligations of Borrower under the Loan
Documents, whether one or more, and if more than one, each one individually.
"Guaranty" means a continuing guaranty (whether one or more) of payment
of the Loan principal, interest and expenses under and pursuant to the Loan
Documents (subject to any limitations or reductions in liability therein
contained), executed by each Guarantor in favor of Lender, as it may from time
to time be renewed, extended, amended or restated.
"Hazardous Material" means any substance, whether solid, liquid or
gaseous: which is listed, defined or regulated as a "hazardous substance",
"hazardous waste" or "solid waste", or otherwise classified as hazardous or
toxic, in or pursuant to any Environmental Requirement; or which is or contains
asbestos, radon, any polychlorinated biphenyl, urea formaldehyde foam
insulation, explosive or radioactive material, or motor fuel or other petroleum
hydrocarbons; or which causes or poses a threat to cause a contamination or
nuisance on the Property or any adjacent property or a hazard to the environment
or to the health or safety of persons on the Property.
"Improvements" means the improvements which were constructed on the
Land as described in the Plans and the Development Documents submitted to and
approved by Lender, which include an extended stay hotel which has been
constructed on approximately 3.109 acres of land located at K-96 and Xxxx Road
in Northeast Wichita, Sedgwick County, Kansas, and consisting of 107 units
averaging 338 square feet each. The Project includes approximately 107 parking
spaces, but in no event less than the number required under applicable law.
"Indebtedness" means any and all of the indebtedness to Lender
evidenced, governed or secured by or arising under the Note, the Mortgage, this
Agreement, or any other Loan Document.
"Indemnified Matters" means:
(a) any and all claims, demands, liabilities (including strict
liability), losses, damages (including consequential damages), causes of action,
judgments, penalties, fines, costs and expenses (including without limitation,
reasonable fees and expenses of attorneys and other professional consultants and
experts, and of the investigation and defense of any claim, whether or not such
claim is ultimately defeated, and the settlement of any claim or judgment
including all value paid or given in settlement) of every kind, known or
unknown, foreseeable or unforeseeable, which may be imposed upon, asserted
against or incurred or paid by Lender or any other Indemnified Party at any time
and from time to time, whenever imposed, asserted or incurred, because of,
resulting from, in connection with, or arising out of any transaction, act,
omission, event or circumstance in any way connected with (i) the Project or the
Property and occurring or arising at any time on or before the Release Date or
(ii) this Agreement or any other Loan Document, including, without limitation,
(1) disbursement of the Loan proceeds, (2) the condition of the Property, (3)
any bodily injury or death or property damage occurring in or upon or in the
vicinity of the Property through any cause whatsoever at any time on or before
the Release Date, (4) any act performed or omitted to be performed hereunder or
under any other Loan Document, (5) any Default or Potential Default, and (6) any
claim under or with respect to any lease; and
(b) to the extent not covered in clause (a) immediately above, Environmental
Damages.
"Indemnified Party" has the meaning set forth in Section 6.21.
"Initial Appraisal" means an appraisal of the Property prepared at
Borrower's expense, to be received by Lender prior to the Closing Date. Such
appraisal shall (a) be prepared by a third-party appraiser satisfactory to
Lender, (b) indicate a fair market value of the Property upon stabilization of
at least $4,285,715.00, as approved by Lender and (c) be otherwise satisfactory
to Lender.
"Insurance Policies" means:
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 4
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(a) All-risk insurance as determined by Lender, in the amount of at
least one hundred percent (100%) of the replacement cost of such
Improvements or in such additional amounts as Lender may reasonably
require, providing all-risk coverage on the Improvements, and including
the perils of collapse, damage resulting from error in design or faulty
workmanship or materials, water damage, to include business
interruption (covering loss of income by reason of any hazard covered
under such insurance, covering loss from use of the Property due to
loss or damage to insured property on-site, off-site or in transit, in
an amount sufficient to avoid any coinsurance penalty but in any event
an amount equal to the sum of the following for a period of not less
than six (6) months from the date business is first interrupted: (i)
required installments of principal (if any) and interest on the Loan
(assuming an annual Loan interest rate equal to 9.0%), (ii) real estate
taxes, special assessments and utility charges for the Property, and
(iii) premiums for all required insurance, whether payable by Borrower
hereunder or by Borrower and tenants under any lease of the Property),
and, if requested by Lender, to include the perils of flood,
earthquake, boiler/machinery coverage and other risks;
(b) Comprehensive General Liability Insurance for owners and
contractors, including blanket contractual liability, products and
completed operations, personal injury (including employees),
independent contractors, explosion, collapse and underground hazards
for not less than Two Million Dollars ($2,000,000), together with
umbrella coverage for not less than Ten Million Dollars ($10,000,000),
arising out of any one occurrence or in any increased amount reasonably
required by Lender; and
(c) Such other insurance as is required by the Mortgage or as Lender
may otherwise require.
All Insurance Policies shall be "occurrence" based policies, issued on
forms and by companies satisfactory to Lender and shall be delivered to Lender
at the following address: NationsBank Plaza, 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxx 00000, Attn: Real Estate Loan Administration. All-risk Insurance
Policies shall have a standard mortgagee clause (without contribution)
satisfactory to Lender. Comprehensive General Liability, Comprehensive
Automobile Liability and Workers' Compensation coverages shall have a provision
giving Lender thirty (30) days' prior notice of cancellation or material change
of the coverage.
"IRC" has the meaning set forth in Section 5.23.
"JAMS" has the meaning set forth in Section 9.18.
"Land" means the real estate described in Exhibit "A".
"Lender" means NationsBank of Texas, N.A., a national banking
association, and its successors and assigns, in whole or in part.
"Loan" means the loan by Lender to Borrower, in the maximum amount set
forth in the first paragraph of this Agreement.
"Loan Documents" means this Agreement, the Mortgage, the Note, the
Security Agreement, the Guaranty, the Financing Statements, and such other
documents evidencing, securing or pertaining to the Loan, the Omaha Loan or the
Englewood Loan as shall, from time to time, be executed and delivered by
Borrower, any Guarantor, or any other party to Lender pursuant to this
Agreement, and any future modifications, amendments, restatements or supplements
to any of the foregoing.
"Management Agreement" means that certain Management Agreement dated
November 20, 1995, by and between Borrower and Manager, which Management
Agreement is subject to Lender's prior approval and which shall provide for
termination by Borrower or its assigns without cause upon not more than thirty
(30) days notice.
"Manager" means Candlewood.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 5
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"Material Adverse Effect" means an effect resulting from any
circumstance or event of whatever nature (including but not limited to the
filing of, or any adverse determination or development in, any litigation,
arbitration or governmental investigation or proceeding) which (a) could have
any adverse effect whatsoever upon the validity or enforceability of any Loan
Document, (b) in the reasonable judgment of Lender is considered to be material
and adverse to the Property or the financial condition of Borrower or any
Guarantor and could impair the ability of Borrower or any Guarantor to fulfill
any material obligation under the Loan Documents, or (c) causes a default or any
event which, with notice or lapse of time, or both, could become a default.
"Maturity Date" means either (a) the Original Maturity Date, or (b) the
Extended Maturity Date, if the Renewal Option has been exercised.
"Mortgage" means the Mortgage, Assignment, Security Agreement and
Financing Statement of even date herewith, executed by Borrower in favor of
Lender, securing the payment of the Indebtedness, the Omaha Loan, the Englewood
Loan and the payment and performance of all obligations specified in the
Mortgage, the Security Agreement, this Agreement and the other Loan Documents,
and evidencing a valid and enforceable first priority lien, security interest
and assignment of rents and proceeds covering the Property, as it may from time
to time be renewed, extended, amended or supplemented.
"Net Insurance or Condemnation Proceeds" has the meaning set forth in
Section 3.2.
"Note" means the Promissory Note of even date herewith made by Borrower
payable to the order of Lender in the principal amount of and evidencing the
Loan, and all renewals, amendments and replacements thereof.
"Omaha" has the meaning set forth in the definition of Guarantor
contained in this Section 1.1.
"Omaha Hard Costs" means Hard Costs for the construction of the
Improvements on the Omaha Property as is defined in the Construction Loan
Agreement which evidences the Omaha Loan.
"Omaha Loan" means the $4,075,000.00 loan by Lender to Omaha for the
construction of improvements on the Omaha Property which loan is to be evidenced
by a Construction Loan Agreement (the "Omaha Loan Agreement") in form and
substance satisfactory to Lender.
"Omaha Loan Agreement" has the meaning as set forth in the definition
of Omaha Loan contained in this Section 1.1.
"Omaha Property" means the land, together with all improvements to be
constructed thereon with the proceeds of the Omaha Loan, which is located in
Omaha, Nebraska, which is owned by Omaha and which is to secure the Omaha Loan,
the Englewood Loan and this Loan.
"Operating Deficit" means the difference between (a) the revenue
generated from the applicable property from whatever source during a defined
period minus (b) the actual expenses incurred in connection with such property
during such period, including, without limitation, payments of principal and
interest under either this Loan, the Omaha Loan, the Englewood Loan, or any
Future Loan, as applicable, if such difference is a negative number.
"Operating Deficit Reserve Account" means a joint demand deposit
account with Lender in the name of Borrower, Omaha and Englewood and, if
applicable, any Future Borrower into which the amounts indicated in Section 6.30
are to be deposited.
"Original Maturity Date" means April 15, 1999.
"Permanent Commitment" has the meaning set forth in Section 6.14.
"Plans" means the final plans and specifications submitted to and
approved by Lender related to the construction of the Improvements.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 6
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"Potential Default" means any event or circumstance of which Borrower
has been notified by Lender and which event or circumstance shall constitute a
default if not cured pursuant to Section 7.1(b), whether or not used with its
initial letters capitalized.
"Prime Rate" means the variable rate of interest established from time
to time by Lender, or its successors, as its "prime rate" of interest, which
rate is not necessarily the lowest or best rate of interest that Lender charges
to any customer or a favored rate, each change in the Lender's Prime Rate to
become effective without notice to Borrower on the effective date of each such
change.
"Project" means the acquisition of the Land and the operation of the
Improvements.
"Project NOI" means (a) the actual cash income derived from the
Property, which amount shall be adjusted, if necessary, to reflect a thirty
percent (30%) vacancy and collection loss if the actual vacancy and collection
loss for the Project is less than thirty percent (30%) (room rental income plus
ancillary income but excluding income other than rental income in excess of one
percent (1%) of gross room rental receipts, security deposits, and other charges
deemed by Lender to be of a non-recurring nature)(hereinafter "Actual Income")
less (b) the greater of (x) $7,100 per room (on an annual basis) or (y) the
actual cash operating expenses relating to the Property, other than payments of
principal and interest hereunder. The cash operating expenses will be adjusted
to include (i) a management fee of not less than 5% of gross room rental income,
(ii) appropriate accruals for one time annual operating expenses such as
property taxes and insurance, (iii) reserves equal to the greater of (A) four
percent (4%) of gross rental income or (B) $500 per room (on an annual basis)
for customary repairs and replacements relating to ordinary wear and tear such
as carpeting, painting and equipment replacement, and (iv) the costs related to
a national marketing and reservation system fee of not less than four percent
(4%) of gross rental income.
"Property" means the Land, the Improvements and all other property
constituting the "Mortgaged Property," as defined in the Mortgage, or subject to
a right, lien or security interest to secure the Loan pursuant to any other Loan
Document.
"Reduction Rate" means an interest rate per annum equal to the greatest
of (a) 9.0%, (b) 3.25% plus the rate of interest per annum (as of the date of
determination) on U.S. Treasury Notes having a maturity of seven (7) years as
shown in the seven-year listing in the "this week" column under the heading
"Treasury Constant Maturities" of the Federal Reserve statistical release Form
H.15 or, if such published rate of interest is not available for any reason at
least ten (10) Business Days prior to the date of determination, such other
comparable rate of interest determined by Lender, in its reasonable discretion,
or (c) the Prime Rate on the day which is ten (10) Business Days prior to the
Original Maturity Date plus one-half of one percent (0.5%).
"Release Date" means the earlier of: (a) the date on which the
Indebtedness has been paid in full and the Mortgage has been released, or (b)
the date on which the lien of the Mortgage is fully and finally foreclosed or a
conveyance by deed in lieu of such foreclosure is fully and finally effective,
and possession of the Property has been given to the purchaser or grantee free
of occupancy and claims to occupancy by Borrower and Borrower's heirs, devisees,
representatives, successors and assigns (other than tenants); provided, that if
such payment, performance, release, foreclosure or conveyance is challenged, in
bankruptcy proceedings or otherwise, the Release Date shall be deemed not to
have occurred until such challenge is rejected, dismissed or withdrawn with
prejudice.
"Renewal Option" has the meaning set forth in Section 2.4.
"Reserve Account" means a demand deposit account with Lender in the
name of Borrower into which the amounts indicated in Section 6.31 are to be
deposited.
"Required Debt Service Coverage" means, at the time of determination,
that for a period of twelve (12) consecutive calendar months preceding the
Original Maturity Date, the annualized Project NOI, as verified by Lender, is
not less than 150% of (i) the annual payments of principal and interest which
would be required if the Loan were amortized in level payments of principal and
interest over twenty-five (25) years at the Reduction Rate, and (ii) the actual
payments of
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 7
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principal and interest paid under the Loan for the twelve (12) month period
immediately preceding the Original Maturity Date.
"Security Agreement" means the Security Agreement of even date herewith
executed by Borrower in favor of Lender, securing the payment of the
Indebtedness and the payment and performance of all obligations specified in the
Security Agreement, the Mortgage, this Agreement, and the other Loan Documents,
and evidencing a valid and enforceable first priority lien and security interest
covering the collateral described therein, as it may from time to time be
renewed, extended, amended or supplemented.
"Special Rules" has the meaning set forth in Section 9.18.
"Survey" means a current certified "as-built" survey of the Property
satisfying the requirements set forth in Exhibit "D".
"Title Company" means The Security Abstract & Title Company, Inc.,
acting as agent for Title Insurer.
"Title Insurance" means one or more title insurance commitments and
policies, as Lender may require, issued by Title Insurer in the maximum amount
of the Loan, insuring or committing to insure that the Mortgage constitutes a
valid lien covering the Land and all improvements thereon having the priority
required by Lender and subject only to those exceptions and encumbrances which
Lender may approve in writing, together with such endorsements as Lender may
require.
"Title Insurer" means Chicago Title Insurance Company.
"UCC" means the Uniform Commercial Code of the State of Texas or of any
other state having jurisdiction with respect to any of the rights of Lender
under the Loan Documents.
"Upfront Equity" means the sum of $1,184,339.00, which amount
represents funds to be advanced by persons other than Lender, for the purposes
of acquisition of the Land and construction of the Improvements, the funding of
which is a condition to the Advance.
Section 1.2. Number and Gender of Words. Whenever herein the singular
number is used, the same shall include the plural where appropriate, and words
of any gender shall include each other gender where appropriate. Reference
herein to Borrower or to any Guarantor shall mean, jointly and severally, each
person comprising same. Words used herein importing persons shall include firms,
associations, partnerships (including limited partnerships), joint ventures,
trusts, corporations and other legal entities, including public or governmental
bodies, agencies or instrumentalities, as well as natural persons.
Section 1.3. Money. Unless stipulated otherwise, all references herein
or in any of the Loan Documents to "Dollars," "$," "money," "payments" or other
similar financial or monetary terms are references to lawful money of the United
States of America.
Section 1.4. Articles, Sections and Exhibits. All references herein to
Articles and Sections are, unless specified otherwise, references to articles
and sections of this Agreement. All references herein to an "Exhibit," "Annex"
or "Schedule" are references to exhibits, annexes or schedules attached hereto,
all of which are made a part hereof for all purposes, the same as if set forth
herein verbatim, it being understood that if any exhibit, annex or schedule
attached hereto which is to be executed and delivered contains blanks, the same
shall be completed correctly and in accordance with this Agreement prior to or
at the time of the execution and delivery thereof. The words "herein," "hereof,"
"hereunder" and other similar compounds of the word "here" when used in this
Agreement shall refer to the entire Agreement and not to any particular
provision or section.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 8
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ARTICLE 2 - THE LOAN
Section 2.1. Commitment to Lend. Subject to and upon the terms,
covenants and conditions of this Agreement, Lender will make the Loan in one
Advance on the Closing Date to Borrower in accordance with this Agreement in an
aggregate amount not to exceed the principal face amount of the Note. Lender's
commitment to make the Advance hereunder (a) shall expire and terminate
automatically on the Original Maturity Date; (b) may be terminated by Lender by
notice to Borrower if all conditions to the Advance have not been satisfied on
or before the thirtieth (30th) day after the Closing Date; and (c) shall
automatically terminate if the Note is prepaid in full. The Loan is not
revolving and an amount repaid may not be reborrowed.
Section 2.2. The Note. The Loan is and shall be evidenced by the Note.
Interest on the Loan, at the rate or rates specified in the Note, shall be
computed on the unpaid principal balance which exists from time to time. The
outstanding principal balance of the Note shall be due and payable in monthly
installments as provided in the Note commencing on the Amortization Date, and
continuing on the first day of each successive month thereafter, until the
Maturity Date, when any remaining outstanding principal balance of the Loan,
together with all accrued and unpaid interest, shall be due and payable in full.
The unpaid amount of the Loan as set forth on the books and records of the
holder of the Note maintained in the ordinary course of its business shall be
presumptive evidence of the principal amount thereof owing and unpaid, but the
failure to record any such amount on the books and records shall not limit or
affect the obligations of Borrower hereunder or under the Note to make payments
of principal and interest on the Loan when due.
Section 2.3. Funding. The Advance shall be funded by Lender into a
special account established by Borrower with Lender.
Section 2.4. Renewal Option. Borrower shall have the option to extend
the maturity of the Loan (the "Renewal Option") from the Original Maturity Date
to the Extended Maturity Date. The Renewal Option is exercisable only as
provided below and subject to satisfaction of the following conditions:
(a) Lender shall have received written notice of the exercise
of the Renewal Option at least thirty (30) days, but not more than ninety (90)
days, prior to the Original Maturity Date;
(b) At the time of such written notice from Borrower and at the
commencement of each such extension, (i) the maturity of the Loan has not been
accelerated and there is under the Loan Documents no Default or potential
default which has occurred and is continuing, (ii) no Material Adverse Effect
has occurred, (iii) none of Borrower nor any Guarantor shall be party to any
litigation against Lender or any Affiliate of Lender and (iv) Lender shall be
reasonably satisfied with the financial condition of Borrower and each
Guarantor;
(c) The outstanding principal balance of, and all other amounts
owed with respect to, the Loan, including, without limitation, any amounts which
have been expended by Lender pursuant to Section 8.3 or any other similar
provision of any Loan Document which has not been repaid by Borrower shall not
exceed 70% of the then appraised value of the Property as determined pursuant to
an appraisal in form acceptable to Lender and prepared by a third party
appraiser selected by Lender;
(d) Prior to the commencement of such extension, (i) Borrower
shall pay to Lender a fee in an amount equal to one-fourth of one percent (.25%)
of the then outstanding balance of the Loan, and all costs and expenses incurred
by Lender in connection therewith, including without limitation the fees of
Lender's counsel, (ii) if requested by Lender, Borrower and each Guarantor shall
execute, deliver and record a renewal, extension and modification agreement
containing terms and provisions consistent with this Section 2.4 and
satisfactory to Lender in form, substance and content, and (iii) if requested by
Lender, Borrower shall cause to be delivered to Lender at Borrower's expense any
endorsements to the Title Insurance
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 9
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requested by Lender insuring the continuing first priority of the Mortgage
subject only to such exceptions as Lender has approved in writing; and
(e) Prior to such extension, (i) the Project shall have
achieved at a minimum the Required Debt Service Coverage for the twelve-month
period ending on the Original Maturity Date, or (ii) the outstanding principal
balance of, and all other amounts owed with respect to, the Loan including,
without limitation, any amounts which have been expended by Lender pursuant to
Section 8.3 or any other similar provision of any Loan Document which has not
been repaid by Borrower, shall be reduced to an amount which would permit the
Project to have achieved the Required Debt Service Coverage if such reduction
had been made at the commencement of the twelve-month period; and
(f) Such extension shall be governed by the same terms,
covenants and conditions contained in the Loan Documents which remain in effect,
including but not limited to monthly principal amortization pursuant to Section
2.2 and monthly payments of accrued interest, with the unpaid principal due and
payable in full at the Extended Maturity Date.
Section 2.5. Loan-To-Value Requirement. In the event that at any time
during the term of the Loan the then outstanding principal amount of the Loan is
more than 70% of the value of the Property, as indicated in any appraisal of the
Property performed pursuant to Section 6.23, Borrower shall within fifteen (15)
Business Days after the written request of Lender cause such then outstanding
principal amount, to be less than or equal to 70% of such value by effectuating
one or a combination of the following actions: (i) reducing the outstanding
principal amount of the Loan; or (ii) granting to Lender a lien and/or security
interest in additional collateral acceptable to Lender and of sufficient value,
in Lender's sole discretion, the grant of such additional collateral to be
evidenced by such documents, instruments and agreements as Lender shall require
in its sole discretion (each of which documents, instruments and agreements
shall be acceptable to Lender and shall constitute a "Loan Document", as that
term is used and defined in this Agreement).
ARTICLE 3 - GENERAL TERMS OF ADVANCE
Section 3.1. Conditions to Advance. As conditions precedent to the
Advance hereunder: (a) there shall then exist no default nor shall there have
occurred any event which with the giving of notice or the lapse of time, or
both, could become a default; (b) the representations and warranties made in the
Loan Documents shall be true and correct on and as of the date of such Advance,
with the same effect as if made on that date; and (c) Borrower must satisfy the
conditions required hereby and execute and deliver to, procure for and deposit
with, and pay to Lender and, if appropriate, record in the proper records with
all filing and recording fees paid, the documents, certificates, agreements and
other items listed in Exhibit "B" that are noted by "(X)", together with such
other documents, certificates, agreements and other items as Lender may
reasonably require. Except as otherwise specifically provided in Exhibit "B" or
elsewhere herein or agreed in writing by Lender, all such documents,
certificates, agreements and other items shall bear a Current Date.
Section 3.2. Use of Insurance and Condemnation Proceeds. In the event
that the Improvements, or any portion thereof, are ever demolished, destroyed or
damaged by fire or other casualty, or in the event that all or any portion of
the Property is ever taken by an action in eminent domain or sold in lieu
thereof, or in the event that any Property is ever damaged by public works or
construction on or near the Property, then Borrower shall promptly give Lender
written notice of such destruction, taking, sale or damage, and Lender shall be
entitled at its election either to cause such proceeds to be applied against the
Loan or to require Borrower to repair and restore the Improvements. In the event
that Lender elects to require Borrower to repair and restore the Improvements,
any amounts that may become payable or awarded to Borrower with respect thereto,
less reasonable expenses incurred in collecting such sums (referred to herein as
"Net Insurance or Condemnation Proceeds") shall be delivered to Lender, to be
applied to such repair, rebuilding or restoration in accordance with the plans
and specifications therefor approved by Lender, such amounts to be disbursed as
determined by Lender in its sole and absolute discretion. Net Insurance or
Condemnation Proceeds held by Lender after the payment of all costs and expenses
incurred in repairing, rebuilding and restoring
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 10
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the Property in accordance with this Section 3.2 shall be applied to the
reduction of the Indebtedness in such order and manner as Lender shall
determine.
In the event that the Net Insurance or Condemnation Proceeds are not
applied to the repair, rebuilding or restoration of the Property pursuant to the
provisions of this Section 3.2, then such Net Insurance or Condemnation Proceeds
shall be applied to the reduction of the Indebtedness in such order and manner
as Lender shall determine and, to the extent that any portion of the
Indebtedness then remains unpaid, Lender may, at its option, declare the
outstanding Indebtedness to be immediately due and payable.
Section 3.3. No Waiver. The Advance shall not constitute an approval or
acceptance by Lender of any construction work or a waiver of any condition
precedent to the obligation of Lender to make the Advance or preclude Lender
from thereafter declaring the failure of Borrower to satisfy such condition
precedent to be a default. No waiver by Lender of any condition precedent to the
Advance shall preclude Lender from thereafter declaring the failure of Borrower
to satisfy such condition precedent to be a default hereunder, unless the
written waiver by Lender of any such condition precedent specifically provides
otherwise.
Section 3.4. Conditions Precedent for the Benefit of Lender. All
conditions precedent to the obligation of Lender to make the Advance are imposed
hereby solely for the benefit of Lender, and no other party may require
satisfaction of any such condition precedent or be entitled to assume that
Lender will refuse to make the Advance in the absence of strict compliance with
such conditions precedent. Any requirement of this Agreement may be waived, in
whole or in part, in a specific written waiver intended for that purpose and
signed by Lender. Any requirement herein of submission of evidence of the
existence or nonexistence of a fact means that the fact shall exist or not
exist, as the case may be, and without waiving any condition or any obligation
of Borrower, Lender may at all times independently establish to its satisfaction
such existence or nonexistence.
Section 3.5. Subordination. Lender shall not be obligated to make, nor
shall Borrower be entitled to, the Advance until such time as Lender shall have
received final lien waivers, to the extent requested by Lender, from all persons
who furnished labor, materials or services for the design or construction of the
Improvements.
ARTICLE 4 - LEASING AND TENANT MATTERS
Section 4.1. Approved Leases. In the event there exists leasable space
in the Improvements, Borrower shall lease such space only pursuant to a lease
that is approved by Lender from time to time (an "Approved Lease").
Section 4.2. Approved Lease Modifications. Borrower shall not modify or
amend any Approved Lease without the prior written consent of Lender, which
Lender may grant or withhold in its sole discretion.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BORROWER
To induce Lender to make the Loan, Borrower hereby represents and
warrants as follows:
Section 5.1. Financial Statements. The Financial Statements are true,
correct, and complete in all material respects as of the dates specified therein
and fully and accurately present, in all material respects, the financial
condition of Borrower and of each Guarantor as of the dates specified. No
Material Adverse Effect has occurred in the financial condition of Borrower or
any Guarantor since the dates of the most recent Financial Statements, nor,
except as heretofore disclosed in writing to Lender, has Borrower or any
Guarantor incurred any material liability, direct or indirect, fixed or
contingent. Borrower and each Guarantor are solvent after giving effect to all
borrowings contemplated in this Agreement.
Section 5.2. Suits, Actions, Etc. There are no actions, suits,
investigations or proceedings pending or to the knowledge of Borrower threatened
in any court or before or by
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any Governmental Authority against or affecting the Property, or involving the
validity, enforceability, or priority of any of the Loan Documents, at law or in
equity nor, except as heretofore disclosed in writing to Lender, any such
action, suit, investigation or proceeding which would result in a Material
Adverse Effect. The consummation of the transactions contemplated hereby, and
the performance of any of the terms and conditions hereof and of the other Loan
Documents, will not cause Borrower or any Guarantor to be in violation of or in
default with respect to any Governmental Requirement, or result in a breach of,
or constitute a default (or provide cause for acceleration of indebtedness)
under any mortgage, deed of trust, lease, promissory note, loan agreement,
credit agreement, partnership agreement, or other agreement or restriction to
which Borrower or any Guarantor is a party or by which Borrower or any Guarantor
may be bound or affected. Neither Borrower nor any Guarantor is in default under
the terms of any order of any court or any requirement of any Governmental
Authority or under the terms of any material indebtedness or obligation.
Section 5.3. Status of Borrower; Valid and Binding Obligation. If
Borrower is a corporation, partnership or other legal entity, Borrower is and
shall until the Indebtedness is fully paid continue to be (a) duly organized and
validly existing and in good standing under the laws of the state of its
organization, and in good standing under Texas law; (b) in compliance with all
conditions prerequisite to its lawfully doing business in Texas; and (c)
possessed of all power and authority necessary to own the Property, to construct
and operate the Improvements, to enter into and perform Borrower's obligations
under the Loan Documents and to make the borrowings contemplated hereby. All of
the Loan Documents, and all other documents referred to herein to which Borrower
or any Guarantor is a party, upon execution and delivery will constitute valid
and binding obligations of Borrower or any Guarantor, as the case may be,
enforceable in accordance with their terms except as the enforcement thereof may
be limited by Debtor Relief Laws.
Section 5.4. Title to the Property. Borrower holds full legal and
equitable title to the Property in fee simple absolute, subject only to the
Permitted Encumbrances specified in the Mortgage.
Section 5.5. Disclosure. There is no material fact (excluding
conditions of the economy or the real estate industry in general) of which
Borrower has knowledge and that Borrower has not disclosed to Lender in writing
that could materially adversely affect the Property or the property, business or
financial condition of Borrower or any Guarantor.
Section 5.6. System Compliance. To the best of Borrower's knowledge,
after due investigation, the storm and sanitary sewer system, water system, all
mechanical systems of the Property and other parts of the Improvements do (or
when constructed will) comply with all applicable environmental, pollution
control and ecological laws, ordinances, rules and regulations, and all
Governmental Authorities having jurisdiction of the Property have issued (or if
not issued are subject to being issued with only payment of the applicable fees
being required) all permits, licenses or other authorizations for the
construction, occupancy, operation, and use of the Improvements (specifically
including the named systems) which are required by such Governmental Authorities
to be issued prior to or for the construction of the Improvements.
Section 5.7. Submittals. The Loan Documents and all Financial
Statements, Plans, budgets, schedules, opinions, certificates, confirmations,
contractor's statements, applications, rent rolls, affidavits, agreements, and
all other materials submitted to Lender by or on behalf of Borrower or any
Guarantor in connection with the Loan Documents fairly state the matters with
which they purport to deal, and neither misstate any material fact, nor,
separately or in the aggregate, fail to state any material fact necessary to
make the statements made not misleading.
Section 5.8. Utility and Access Availability. All utility and municipal
services required for the occupancy and operation of the Improvements,
including, but not limited to, water supply, storm and sanitary sewer systems,
gas, electric and telephone facilities, are connected to the Improvements and
are available in sufficient amounts for the normal and intended use of the
Improvements. All rights-of-way for streets, alleys and easements necessary to
serve the Project for the uses represented by Borrower to Lender have been
dedicated to and accepted by the applicable Governmental Authorities.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 12
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Section 5.9. Taxes. To the extent required by applicable law, Borrower
has filed all necessary tax returns and reports and has paid all taxes and
governmental charges thereby shown to be owing except any such taxes or charges
that are being contested in good faith by appropriate proceedings which have
been disclosed to Lender in writing and for which adequate reserves have been
set aside on its books in accordance with generally accepted accounting
principles, consistently applied.
Section 5.10. Plans. The Improvements have been constructed in strict
compliance with the Plans. To the best of Borrower's knowledge, after due
investigation, the Plans comply with all applicable restrictive covenants
(including, without limitation, those described on Exhibit B to the Mortgage),
Governmental Requirements and all standards and regulations of appropriate
supervising boards of fire underwriters and similar agencies, and the
engineering specifications are within applicable environmental standards.
Section 5.11. Labor Controversies. To Borrower's knowledge there are no
labor controversies pending or threatened against Borrower involved in the
operation of the Improvements which have not been disclosed in writing to Lender
and which would constitute or result in a Material Adverse Effect.
Section 5.12. Violations. Borrower has no knowledge of and has received
no notices of any material violations of any Governmental Requirement, which
violations in any way relate to or affect the Property and which remain
unresolved.
Section 5.13. Environmental. During the period of Borrower's ownership
of the Property, the Property has not been used for industrial or manufacturing
purposes, for landfill, dumping or other waste disposal activities or
operations, for generation, storage, use, sale, treatment, processing, recycling
or disposal of any Hazardous Material (except for any such Hazardous Material of
a type and only in a quantity used in the normal course of the business of
Borrower or in the normal course of household use by any tenant under an
Approved Lease, which Hazardous Material is being held, stored, and used in
strict compliance with Environmental Requirements), for underground or
aboveground storage tanks, or for any other use that could give rise to the
release of any Hazardous Material on the Property; to the best of Borrower's
knowledge, no such use of the Property (except for any such Hazardous Material
of a type and only in a quantity used in the normal course of the business of
Borrower or in the normal course of household use by any tenant under an
Approved Lease, which Hazardous Material is being held, stored, and used in
strict compliance with Environmental Requirements) occurred at any time prior to
the period of Borrower's ownership of the Property; and to the best of
Borrower's knowledge, no such use (except for any such Hazardous Material of a
type and only in a quantity used in the normal course of the business of
Borrower or in the normal course of household use by any tenant under an
Approved Lease, which Hazardous Material is being held, stored, and used in
strict compliance with Environmental Requirements) on any adjacent property
occurred at any time prior to the date hereof. To the best of Borrower's
knowledge, there is no Hazardous Material (except for any such Hazardous
Material of a type and only in a quantity used in the normal course of the
business of Borrower or in the normal course of household use by any tenant
under an Approved Lease, which Hazardous Material is being held, stored, and
used in strict compliance with Environmental Requirements), storage tank (or
similar vessel) whether underground or otherwise, sump or well currently on the
Property; and, Borrower has received no notice and has no knowledge of any
Environmental Claim regarding the Property or any adjacent property. The use of
the Property which Borrower makes and intends to make (and which each tenant and
subtenant, if any, is allowed to make under an Approved Lease) complies and will
comply with all applicable Environmental Requirements; and neither Borrower, nor
to Borrower's knowledge, any tenant or subtenant, has obtained or is required to
obtain any permit or other authorization to construct, occupy, operate, use or
conduct any activity on any of the Property by reason of any Environmental
Requirement. The Property does not appear on the National Priorities List or, to
Borrower's best knowledge, any other list or database of properties maintained
by any local, state or federal agency or department showing properties which are
known to contain or which are suspected of containing a Hazardous Material.
Borrower has never applied for and been denied environmental impairment
liability insurance coverage relating to the Property.
Section 5.14. Compliance with Restrictions and Agreements. To the best
of Borrower's knowledge, after due investigation, the use of the Property by
Borrower complies with all
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 13
18
applicable easements, restrictive covenants (including, without limitation,
those described on Exhibit B to the Mortgage), Governmental Requirements and all
standards and regulations of appropriate supervising boards of fire underwriters
and similar agencies and with the terms of all agreements affecting the
Property.
Section 5.15. Other Lands. The Land is not part of a larger tract of
land owned by Borrower or its Affiliate or any Guarantor and is not otherwise
included under any unity of title or similar covenant with other lands not
encumbered by the Mortgage, or if so, then Borrower has obtained all
authorizations, variances, releases and consents required for the conveyance and
development of the Land separately from such other lands. Borrower has obtained
(or is diligently pursuing the obtaining of) a separate tax lot or lots with a
separate tax assessment or assessments for the Land and Improvements,
independent of any other lands or improvements. The Land and Improvements comply
with all subdivision and platting requirements and would so comply if the Land
and Improvements were conveyed as a separate parcel.
Section 5.16. Development Rights. Borrower has not directly or
indirectly conveyed, assigned or otherwise disposed of or transferred (or agreed
to do so) any development rights, air rights or other similar rights, privileges
or attributes with respect to the Property, including those arising under any
zoning or land use ordinance or other Governmental Requirement.
Section 5.17. Leases. Borrower has delivered to Lender true and correct
copies of all leases which Lender has requested be delivered, together with an
accurate and complete rent roll for the Project, and no such lease contains any
option to purchase all or any portion of the Property or any interest therein or
contains any right of first refusal relating to any sale of the Property or any
portion thereof or interest therein.
Section 5.18. Regulation U. The proceeds of the Loan are not being used
and shall not be used to purchase or carry any "margin stock" within the meaning
of Regulation "U" of the Board of Governors of the Federal Reserve System, nor
to extend credit to others for that purpose.
Section 5.19. ERISA. Borrower and each Guarantor is in compliance in
all material respects with all applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, and neither Borrower nor any Guarantor
has incurred any liability to the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions thereunder.
Section 5.20. Insider. Neither Borrower nor any Guarantor is, nor is
any Person having "control" (as that term is defined in 12 U.S.C Section 375b
(5) or in regulations promulgated pursuant thereto) of Borrower or any Guarantor
is, or is a "related interest" of an "executive officer", "director", or person
who "directly or indirectly, or acting through or in concert with one or more
persons, owns, controls, or has the power to vote more than 10 percent of any
class of voting securities" or other "insider" (as those terms are defined in 12
U.S.C. Section 375b (5) or in regulations promulgated pursuant thereto) of (a)
Lender, (b) a bank holding company of which Lender is a subsidiary, (c) any
subsidiary of a bank holding company of which Lender is a subsidiary, (d) any
bank at which Lender maintains a correspondent account, or (e) any bank which
maintains a correspondent account with Lender.
Section 5.21. Principal Office, Etc. The principal office, chief
executive office and principal place of business of Borrower, and the place
where Borrower maintains its principal records and books, is at Borrower's
address for notices as specified in this Agreement.
Section 5.22. Business Loan. The Loan is solely for business purposes,
and is not for personal, family, household or agricultural purposes. The Loan is
a "business loan" within the meaning of K.S.A. 16-207(f).
Section 5.23. Not a Foreign Person. Neither Borrower nor any Guarantor
is a "foreign person" within the meaning of the Internal Revenue Code of 1986,
as amended ("IRC"), Sections 1445 and 7701 (i.e. Borrower and each Guarantor is
not a non-resident alien, foreign corporation, foreign partnership, foreign
trust or foreign estate as those terms are defined in the IRC and any
regulations promulgated thereunder).
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 14
19
Section 5.24. Certain Approvals. All approvals required under the
Development Documents and/or Borrower's formation agreement as of the Closing
Date, including, without limitation, approval of the Plans, have been obtained
from the appropriate persons and written evidence thereof has been delivered to
Lender.
Section 5.25. Management Agreement. The copy of the Management
Agreement delivered by Borrower to Lender is a true and correct copy thereof,
together with all amendments or modifications thereto. The Management Agreement
is in full force and effect and there has not occurred a default by Borrower or
Manager thereunder.
Section 5.26. Ownership of Affiliates. The owners, ownership
percentages and all other rights and obligations of all persons that own an
interest in Borrower are identical to that of Omaha and Englewood.
Section 5.27. Cost Breakdown. The cost breakdown contained in the
budget for the construction of the Improvements which is attached hereto as
Exhibit "C" is true and correct and represents the actual amounts expended by or
on behalf of Borrower in the construction of the Improvements.
Section 5.28. Inducement to Lender. The representations and warranties
contained in the Loan Documents are made by Borrower as an inducement to Lender
to make the Loan. Borrower understands that Lender is relying on such
representations and warranties and that such representations and warranties
shall survive any (a) bankruptcy proceedings involving Borrower, any Guarantor
or the Property, or (b) foreclosure of the Mortgage, or (c) conveyance of title
to the Property in lieu of foreclosure of the Mortgage. Acceptance of the
Advance constitutes reaffirmation, as of the date of such acceptance, of the
representations and warranties of Borrower in the Loan Documents, on which
Lender shall rely in making such Advance.
ARTICLE 6 - COVENANTS AND AGREEMENTS OF BORROWER
Borrower hereby covenants and agrees as follows:
Section 6.1. Compliance with Governmental Requirements. Borrower shall
timely comply with all Governmental Requirements and promptly deliver to Lender
evidence thereof, including, without limitation, copies of all permits, licenses
or other authorizations required by any Governmental Authority having
jurisdiction over the Property. Borrower assumes full responsibility for the
compliance of the Plans and the Property with the Development Documents, all
Governmental Requirements and with sound building and engineering practices,
and, notwithstanding any approvals by Lender, Lender shall have no obligation or
responsibility whatsoever for the Plans or any other matter incident to the
Property or the construction of the Improvements. Immediately upon Borrower's
receipt of any notice from a Governmental Authority of noncompliance with any
Governmental Requirements, Borrower shall provide Lender with written notice
thereof.
Section 6.2. Contracts. Borrower shall become party to no contract, for
the performance of any work on the Property or for the supplying of any labor,
materials, or services for the continued full ownership, operation, maintenance
and enjoyment of the Property for amounts in excess of $25,000 and the term of
which is longer than one year, except upon such terms and with such parties as
shall be approved in writing by Lender. Borrower shall not suffer or permit any
breach or default to occur in any of the obligations of Borrower under any
contract necessary for the continued full ownership, operation, maintenance and
enjoyment of the Property, nor shall Borrower suffer or permit the same to
terminate by reason of any failure of Borrower to meet any requirements thereof
whatsoever. Without Lender's prior written consent, Borrower shall not enter
into any such contract that is not unconditionally terminable by Borrower or any
successor owner without penalty on not more than thirty (30) days notice to the
other party thereunder. Borrower shall execute all documents reasonably
necessary for the consummation of the transactions contemplated thereby, shall
promptly notify Lender of any material default thereunder, and shall not
terminate or cancel any such contract except in good faith after default by the
other party thereto.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 15
20
Section 6.3. Correction of Defects. Borrower shall correct or cause to
be corrected promptly (a) any material defect in the Improvements; (b) any
material departure in the construction of the Improvements from the Plans, the
Development Documents, Governmental Requirements, or the requirements of any
lease, if applicable; or (c) any encroachment by any part of the Improvements,
or any structure located on the Property, on any building setback line,
easement, property line or restricted area. In addition to the above, within
ninety (90) days after the Closing Date, Borrower shall do the following and
provide evidence satisfactory to Lender that the following actions have been
completed: (i) have the elevators located on the Property repaired or adjusted
to eliminate vibrations; (ii) have the parking lot at the Property properly
graded to eliminate the occurrence of standing water thereon, and (iii) have the
exterior wall of the Improvements repaired to remedy reinforcing fabric which
was not adequately covered.
Section 6.4. Inspection of the Property. Borrower shall permit Lender,
any Governmental Authority, and their agents and representatives, to enter upon
the Property for the purpose of inspection of the Property at all reasonable
times. Any inspection or audit of the Property or the books and records of
Borrower, or the procuring of documents and financial and other information, by
or on behalf of Lender shall be for Lender's protection only, and shall not
constitute any assumption of responsibility to Borrower or anyone else with
regard to the condition, maintenance or operation of the Property nor Lender's
approval of any certification given to Lender nor relieve Borrower of any of
Borrower's obligations. Lender shall have no duty of care to Borrower or any
other person to protect against, or inform Borrower or any other person of the
existence of negligent, faulty, inadequate or defective design or construction
of the Improvements. Inspection not followed by notice of default shall not
constitute a waiver of any default then existing; nor shall it constitute an
acknowledgment or representation by Lender that there has been or will be
compliance with the Plans, the Development Documents, and Governmental
Requirements or that the construction is free from defective materials or
workmanship or a waiver of Lender's right thereafter to insist that the
Improvements be constructed in accordance with the Plans, the Development
Documents, and Governmental Requirements. Lender's failure to inspect shall not
constitute a waiver of any of Lender's rights.
Section 6.5. Insurance. Borrower shall maintain or cause to be
maintained in force insurance coverage at the times and to the extent required
by the Loan Documents including, without limitation, the Insurance Policies and
shall furnish to Lender upon request at reasonable intervals a certificate or
certificates from the respective insurer(s) setting forth the nature and extent
of all insurance maintained by Borrower in accordance with the Loan Documents
including, without limitation, the Insurance Policies. Borrower shall comply or
cause compliance at all times with the provisions of any insurance policy
covering or applicable to Borrower or the Property or any portion thereof, with
all requirements of the issuer of any such policy, and with all orders, rules,
regulations and other requirements of the National Board of Fire Underwriters
(or any body exercising similar functions) applicable to or affecting any part
of the Property or any use or condition thereof.
Section 6.6. Existence, Franchises and Permits. Borrower shall do or
cause to be done at all times all things necessary to maintain and preserve its
existence under the laws of its jurisdiction of organization, and to preserve,
protect, renew and extend any and all franchises, permits, licenses, privileges,
concessions and other material rights (including those relating to land use and
development, construction, access, water rights and use, noise, waste disposal
and pollution control) that are or may be applicable from time to time to
Borrower or that have been or may be granted for the Property.
Section 6.7. Notice to Lender. Borrower shall promptly notify Lender in
writing of any of the following occurrences or events as the same become known
to Borrower, specifying in each case the action Borrower has taken or caused to
be taken, or proposes to take or cause to be taken, with respect thereto: (a)
the occurrence of any default or any event which with the giving of notice or
the lapse of time, or both, could become a default; (b) any material default by
Borrower under any Governmental Requirement or in the payment of any
indebtedness (or in the performance of any obligation related thereto); (c) the
occurrence of any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by Borrower to Lender which has been
instituted or (to the knowledge of Borrower) is threatened against Borrower, any
Guarantor or the Property or the occurrence of any material development in any
of the foregoing that has been previously disclosed; (d) any actual or
threatened condemnation or other taking of any material portion of the Property,
whether for a temporary or permanent
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 16
21
use, or any negotiations with respect to any such taking, or any loss of or
substantial damage to any portion of the Property; (e) the occurrence of any
labor controversy not previously disclosed to Lender in writing which is pending
or (to the knowledge of Borrower) threatened against Borrower or any Guarantor,
or the occurrence of any material development in any such labor controversy
previously disclosed to Lender, which in either case would reasonably be
expected to have a Material Adverse Effect if adversely determined; and (f) any
notice received by Borrower with respect to the cancellation, material adverse
alteration or non-renewal of any insurance coverage maintained or required to be
maintained with respect to the Property.
Section 6.8. Costs and Expenses. Borrower shall pay when due all costs
and expenses required by this Agreement, including, without limitation, (a) all
intangible taxes, documentary stamp taxes and all other taxes and assessments
applicable to the Property; (b) all appraisal fees; (c) all fees for filing or
recording the Loan Documents; (d) all fees and commissions lawfully due to
brokers, salesmen, and agents in connection with the Loan or the Property; (e)
all reasonable fees and expenses of counsel to Lender in connection with the
negotiation, preparation, amendment, enforcement or defense of the Loan
Documents or the making of the Advance; (f) all title insurance and title
examination charges, including premiums for the Title Insurance and any
endorsements, and escrow fees and UCC search fees; (g) all survey costs and
expenses, including the cost of each Survey; (h) all premiums for the Insurance
Policies; (i) all environmental site assessments and related costs and expenses;
(j) all costs of any architects, engineers or consultants hired by Lender to
inspect the Property; and (k) all other costs and expenses payable to third
parties incurred by Lender in connection with the investigation, consummation,
enforcement or defense of the transactions contemplated by this Agreement.
Section 6.9. Further Assurances. Borrower will, on request of Lender,
(a) promptly correct any defect, error or omission which may be discovered in
the contents of this Agreement, or in any other Loan Document, or in the
execution or acknowledgment of any Loan Document; (b) execute, acknowledge,
deliver, procure and record and/or file such further instruments (including,
without limitation, further deeds of trust, security agreements, financing
statements, continuation statements, assignments of rents or leases), and do
such further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of the Loan Documents and to more fully identify and
subject to the liens and security interests of the Mortgage any property
intended to be covered thereby, including specifically, but without limitation,
any renewals, additions, substitutions, replacements, or appurtenances to the
Property; (c) execute, acknowledge, deliver, procure and file and/or record any
document or instrument (including specifically any financing statement) deemed
advisable by Lender to protect the lien or the security interest under the
Mortgage against the rights or interests of third persons; and (d) provide such
certificates, documents, reports, information, affidavits and other instruments
and do such further acts as may be necessary, desirable or proper in the
reasonable determination of Lender to enable Lender to comply with the
requirements or requests of any agency having jurisdiction over Lender or any
examiners of such agencies with respect to the indebtedness secured hereby,
Borrower or the Property. Borrower shall pay all costs connected with any of the
foregoing.
Section 6.10. Inspection of Books and Records. Borrower will keep
accurate books and records in accordance with generally accepted accounting
principles in which full, true and correct entries shall be promptly made with
respect to the Property and the operation thereof. Borrower shall permit Lender,
at all reasonable times, to examine and copy the books and records of Borrower
pertaining to the Loan and the Property, and all contracts, statements,
invoices, bills, and claims for labor, materials and services supplied for the
construction of the Improvements.
Section 6.11. No Liability of Lender. Lender shall not be obligated to
inspect the Property or the Improvements, nor be liable or responsible for any
defect in the Property or the Improvements by reason of inspecting same, nor be
liable for the performance or default of Borrower, or any other party, or for
any failure to construct, complete, protect, or insure the Improvements, or for
the payment of costs of labor, materials, or services supplied for the
construction of the Improvements, or for the performance of any obligation of
Borrower whatsoever. Nothing, including without limitation the Advance or
acceptance of any document or instrument, shall be construed as a representation
or warranty, express or implied, to any party by Lender.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 17
22
Section 6.12. No Conditional Sale Contracts, Etc. Other than with
respect to the telephone and cable television systems, and for furnishings for
offices and common areas, no materials, equipment, or fixtures shall be
supplied, purchased, or installed for the construction or operation of the
Improvements pursuant to security agreements, conditional sale contracts, lease
agreements, or other arrangements or understandings whereby a security interest
or title is retained by any party or the right is reserved or accrues to any
party to remove or repossess any materials, equipment, or fixtures intended to
be utilized in the construction or operation of the Improvements.
Section 6.13. Defense of Actions. Lender may (but shall not be
obligated to) commence, appear in, or defend any action or proceeding purporting
to affect the Loan, the Property, or the respective rights and obligations of
Lender and Borrower pursuant to this Agreement. Lender may (but shall not be
obligated to) pay all necessary expenses, including attorneys' fees and expenses
incurred in connection with such proceedings or actions, which Borrower agrees
to repay to Lender on demand.
Section 6.14. Assignment of Permanent Commitment. Borrower shall
deliver to Lender a true and correct copy of any commitment (a "Permanent
Commitment") to purchase or refinance the Loan or to make any equity
contribution, the proceeds of which will be used to pay the Loan in full or in
part. As additional security for payment of the Loan, Borrower hereby transfers
and assigns to Lender, to the extent assignable, the full interest of Borrower
in (but not its liability for any breach under) any Permanent Commitment (even
though such Permanent Commitment does not create any benefits under the Note or
the Guaranty) if and when any Permanent Commitment is entered into by Borrower,
including all refundable deposits made thereunder.
Section 6.15. Prohibition on Assignment of Borrower's Interest. No
Person shall assign or encumber any interest in Borrower or any Guarantor
without Lender's prior written consent.
Section 6.16. Payment of Claims. Borrower shall promptly pay or cause
to be paid when due all costs and expenses incurred in connection with the
Property and Borrower shall keep the Property free and clear of any lien,
charge, or claim other than the encumbrances of the Mortgage and other liens, if
any, approved in writing by Lender. Notwithstanding anything to the contrary
contained in this Agreement, Borrower may contest, to the extent and in the
manner permitted by law, the validity or amount of any claim of any contractor,
consultant, architect or other person providing labor, materials, or services
with respect to the Property, or any tax or special assessment levied by any
Governmental Authority, and such contest on the part of Borrower shall not be a
default hereunder if and so long as Borrower shall have satisfied all of the
conditions of the Mortgage with respect to such contest.
Section 6.17. Restrictions and Annexation. Borrower shall not impose
any restrictive covenants, easements or other encumbrances upon the Property,
execute or file any subdivision plat affecting the Property, or consent to or
permit the annexation of the Property to any municipality without the prior
written consent of Lender, which consent will not be unreasonably withheld.
Section 6.18. Current Financial Statements. Without limitation of any
requirements of the Mortgage or of any other Loan Document, Borrower shall
deliver, or cause to be delivered, to Lender:
(a) current operating statements itemizing all income and expenses of
the Property, for each month (and for the fiscal year through the end of such
month) as soon as reasonably practicable but in any event within thirty (30)
days after the end of such month and for each fiscal year of Borrower within one
hundred twenty (120) days after the end thereof including also a projection of
such operations for the next fiscal year; such statements to include, if and as
required by Lender, rent schedules showing tenants' names, occupied tenant
space, lease terms, rents and vacant space;
(b) Financial Statements of Borrower and each Guarantor, for each
fiscal year of Borrower and each Guarantor, respectively, as soon as reasonably
practicable, but in any event within one hundred twenty (120) days after the end
thereof. The annual Financial Statements of Guarantors shall be consolidated
Financial Statements of Borrower, such Guarantors, all
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 18
23
Future Borrowers and all Affiliates of any of them and shall be audited by an
independent certified public accountant. Each Guarantor shall also provide
annual Financial Statements which shall be certified in writing as true and
correct in all material respects by such Guarantor (or if such Guarantor is a
legal entity, by a shareholder or other representative of such Guarantor
acceptable to Lender). Candlewood, Inc. shall also provide to Lender, as soon as
reasonably practicable, but in any event within thirty (30) days after the
filing thereof with the Securities Exchange Commission, its 10-Q and 10-K
financial reports. With respect to the annual Financial Statements of Borrower,
such financial statements shall be certified in writing as true and correct in
all material respects by Borrower (or if Borrower is a legal entity, by a
shareholder or other representative of Borrower acceptable to Lender). With
respect to Borrower and each Guarantor, Financial Statements shall include, at a
minimum: a balance sheet, an income and expense statement, a statement showing
contingent liabilities, detailed cash flow statements for each project and/or
entity in which Borrower or any Guarantor has an interest, and any supporting
schedules or documentation which Lender may require. Detailed cash flow
statements shall include, as applicable: the project name, location, percentage
of Borrower's or any Guarantor's ownership interest, leasing status, net
operating income, current loan balance, debt service, source of any operating
deficit, amount of and beneficiary of any cash distributions, and the amount of
cash invested in or received from that enterprise. If requested by Lender,
Financial Statements shall include detailed cash flow projections for the next
fiscal year (twelve-month period) for each project and/or entity in which
Borrower or any Guarantor has an interest; and
(c) from time to time, as Lender may request, additional Financial
Statements of Borrower and each Guarantor.
Section 6.19. Tax Receipts. Subject to the provisions of Section 5.9,
Borrower shall furnish Lender with receipts or tax statements marked "Paid" to
evidence the payment of all taxes levied on the Property prior to delinquency
within thirty (30) days following the date on which such taxes are paid.
Section 6.20. Loan Participations. Borrower acknowledges and agrees
that Lender may, from time to time, sell or offer to sell interests in the Loan
to one or more assignees or participants. Borrower authorizes Lender to
disseminate any information it now has or hereafter obtains pertaining to the
Loan (including, without limitation, any security for the Loan and credit or
other information on Borrower, any of its principals, any Guarantor or any of
their principals or the Project) to any such participant, prospective
participant or assignee, any of Lender's Affiliates, including NationsBanc
Capital Markets, Inc., any regulatory body having jurisdiction over Lender and
to any other parties as necessary or appropriate in Lender's reasonable
judgment. Lender will endeavor to obtain a confidentiality agreement from each
such person to whom it gives any such information regarding the use of any such
information but Lender shall have no liability to Borrower or any Guarantor for
its failure to comply with the agreement contained in this sentence, and such
failure shall not give rise to any rights, remedies, defenses or offsets to
Borrowers or any Guarantor's obligations under the Loan Documents. Borrower
shall execute, acknowledge and deliver any and all instruments reasonably
requested by Lender in connection therewith and to the extent, if any, specified
in any such assignment or participation, such companies, assignees or
participants shall have the rights and benefits with respect to the Loan
Documents as such person would have if such person were Lender hereunder. Lender
agrees to notify Borrower in the event it assigns or participates the Note.
Section 6.21. Indemnification. Borrower shall indemnify and hold
harmless (a) Lender, (b) any Affiliate of Lender, (c) any participants in the
Loan, (d) the directors, officers, partners, employees and agents of Lender,
and/or such persons or entities, and (f) the heirs, personal representatives,
successors and assigns of each of the foregoing persons or entities in their
capacities as such (each an "Indemnified Party") from and against, and reimburse
them on demand for, any and all Indemnified Matters. WITHOUT LIMITATION, THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO
MATTERS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE
OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY. However, such indemnities shall
not apply to a particular Indemnified Party to the extent that the subject of
the indemnification is caused by or arises out of the gross negligence or
willful misconduct of that Indemnified Party. Any amount to be paid under this
Section by Borrower to an Indemnified Party shall be a demand obligation owing
by Borrower (which
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 19
24
Borrower hereby promises to pay) to Lender, as part of the Indebtedness, even if
in excess of the amount committed by Lender under Section 2.1, and secured by
the Loan Documents. Nothing in this Section, elsewhere in this Agreement or in
any other Loan Document shall limit or impair any rights or remedies of Lender,
or any other Indemnified Party (including without limitation any rights of
contribution or indemnification), against Borrower or any other person under any
other provision of this Agreement, any other Loan Document, any other agreement
or any applicable Governmental Requirement. The liability of Borrower or any
other person under this indemnity shall not be limited or impaired in any way by
(i) the release, foreclosure or other termination of the Mortgage and shall
survive the Release Date, the payment in full of the Indebtedness, any
bankruptcy or other debtor relief proceeding, or any other event whatsoever, and
(ii) any provision in the Loan Documents or applicable law limiting Borrower's
or such other person's liability or Lender's recourse or rights to a deficiency
judgment, or by any change, extension, release, inaccuracy, breach or failure to
perform by any party under the Loan Documents, Borrower's (and, if applicable,
such other person's) liability hereunder being direct and primary and not as a
guarantor or surety.
Section 6.22. Disclaimer of Permanent Financing. Borrower acknowledges
and agrees that Lender has not made any commitments, either express or implied,
to extend the term of the Loan past its stated maturity date except as expressly
provided herein.
Section 6.23. Appraisals. Prior to the Closing Date, Borrower shall
deliver to Lender the Initial Appraisal. Lender may at its option after the
occurrence of a default obtain at Borrower's expense as and when requested by
Lender (but in no event more often than once each year), appraisals of the
Property or any part thereof. Each such appraisal shall (a) be prepared in
accordance with written instructions from Lender by a third-party appraiser
selected by Lender, and (b) be otherwise satisfactory to Lender. The costs of
each such appraisal shall be payable by Borrower to Lender on demand (which
obligation Borrower hereby promises to pay) and shall be covered by the
provisions of Section 6.8.
Section 6.24. Estoppel Certificate. Borrower shall deliver to Lender,
promptly after a request therefor by Lender, an estoppel certificate, duly
executed and acknowledged by Borrower, stating the amount advanced to Borrower
under this Agreement, the amounts due on the Note and whether any offsets or
defenses exist under or against the Note. Lender agrees to deliver, promptly
after a request therefor by Borrower and the issuer of any Permanent Commitment,
an estoppel certificate, duly executed and acknowledged by Lender, stating the
amount advanced to Borrower under the Loan, the amounts due on the Note and
whether any default or potential default exists.
Section 6.25. Vouchers. Borrower shall deliver to Lender, on demand,
any contracts, bills of sale, statements, receipted vouchers or agreements under
which Borrower claims title to any materials, fixtures or articles incorporated
in the Improvements or otherwise subject to a lien or security interest in favor
of Lender.
Section 6.26. Security Deposits. Borrower shall deposit and maintain
all security deposits, if any, from the operation of the Project in a separate
account or accounts maintained with Lender exclusively for such security
deposits. Lender shall have the absolute right to monitor such account(s) and to
cause Borrower to contribute funds to such account(s) when in Lender's sole
discretion amounts in such account(s) are not adequate to cover all Approved
Leases.
Section 6.27. Environmental. Borrower will not cause, commit, permit or
allow to continue (a) any violation of any Environmental Requirement (i) by
Borrower or (ii) by or with respect to the Property or any use of or condition
or activity on the Property, or (b) the attachment of any environmental lien to
the Property. Borrower will not place, install, dispose of or release, or cause,
permit, or allow the placing, installation, disposal, spilling, leaking, dumping
or release of, any Hazardous Material (except for any such Hazardous Material of
a type and only in a quantity used in the normal course of the business of
Borrower or in the normal course of household use by any tenant under an
Approved Lease, which Hazardous Material is being held, stored, and used in
strict compliance with Environmental Requirements) or storage tank (or similar
vessel) on the Property and will keep the Property free of Hazardous Material
(except for any such Hazardous Material of a type and only in a quantity used in
the normal course of the business of Borrower or in the normal course of
household use by any
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 20
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tenant under an Approved Lease, which Hazardous Material is being held, stored,
and used in strict compliance with Environmental Requirements). Borrower shall
promptly deliver to Lender a copy of each report pertaining to the Property or
to Borrower prepared by or on behalf of Borrower pursuant to any Environmental
Requirement. Borrower shall immediately advise Lender in writing of any
Environmental Claim or of the discovery of any Hazardous Material on the
Property (except for any such Hazardous Material of a type and only in a
quantity used in the normal course of the business of Borrower or in the normal
course of household use by any tenant under an Approved Lease, which Hazardous
Material is being held, stored, and used in strict compliance with Environmental
Requirements), as soon as Borrower first obtains knowledge thereof, including a
full description of the nature and extent of the Environmental Claim and/or
Hazardous Material and all relevant circumstances.
If any Hazardous Material is discovered on the Property at any time and
regardless of the cause, Borrower shall promptly at Borrower's sole risk and
expense remove, treat, and dispose of the Hazardous Material in compliance with
all applicable Environmental Requirements and solely under Borrower's name (or
if removal is prohibited by any Environmental Requirement, take whatever action
is required by any Environmental Requirement), in addition to taking such other
action as is necessary to have the full use and benefit of the Property as
contemplated by the Loan Documents, and provide Lender with satisfactory
evidence of what action Borrower intends to take and that Borrower has
sufficient funds to take any such action. Borrower shall deliver to Lender as
soon as possible after such completion evidence satisfactory to Lender that all
required remedial action as stated above has been taken and successfully
completed. Lender may, but shall never be obligated to, remove or cause the
removal of any Hazardous Material from the Property (or if removal is prohibited
by any Environmental Requirement, take or cause the taking of such other action
as is required by any Environmental Requirement) if Borrower fails to promptly
commence such remedial actions following discovery and thereafter diligently
prosecute the same to the satisfaction of Lender (without limitation of Lender's
rights to declare a default under any of the Loan Documents and to exercise all
rights and remedies available by reason thereof); and Lender and its designees
are hereby granted access to the Property at any time or times, upon reasonable
notice (which may be written or oral), and a license which is coupled with an
interest and irrevocable, to remove or cause such removal or to take or cause
the taking of any such other action.
If Lender shall ever have reason to believe that any Hazardous Material
affects the Property, or if any Environmental Claim is made or threatened, if
requested by Lender, Borrower will at its expense provide to Lender from time to
time, in each case within thirty (30) days after Lender's request, a report
dated after the date of Lender's requirement of an environmental assessment of
the Property of such scope as Lender may request, by a consulting firm
acceptable to Lender and made in accordance with Lender's established
guidelines.
Section 6.28. Maintenance of the Property. Borrower shall maintain the
Property in first-class order and condition and make all necessary repairs
thereto, interior and exterior, structural and nonstructural, ordinary and
extraordinary, foreseen and unforeseen and will not commit or suffer to be
committed any waste of the Property. The necessity for and adequacy of repairs
to the Property shall be measured by the standard which is appropriate to
maintain the Property in substantially the same condition as of the date hereof,
such repairs to be made with new first-class materials and in a good and
workmanlike manner and shall be at least equal in quality and class to the
original work.
Section 6.29. Management Agreement. Borrower shall maintain the
Management Agreement in full force and effect for a term of not less than ten
(10) years and shall not modify, amend, terminate, or waive any terms of, or
rights of Borrower with respect to, the Management Agreement, without the prior
written consent of Lender.
Section 6.30. Operating Deficit Reserve Account. On or before the
Closing Date, Borrower shall deposit, or cause to be deposited into the
Operating Deficit Reserve Account an amount equal to $209,000.00. Upon
completion of the improvements to the Englewood Property in connection with the
Englewood Loan, Borrower shall deposit or cause to be deposited into the
Operating Deficit Reserve Account an amount equal to the greater of (i)
$64,000.00 or (ii) two percent (2%) of the actual construction costs of those
improvements to the Englewood Property in connection with the Englewood Loan
which are designated as Hard Costs in the Englewood Loan Agreement. Upon
completion of the improvements to the Omaha Property in
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 21
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connection with the Omaha Loan, Borrower shall deposit or cause to be deposited
into the Operating Deficit Reserve Account an amount equal to the greater of (i)
$65,500.00 or (ii) two percent (2%) of the actual construction costs of those
improvements to the Omaha Property in connection with the Omaha Loan which are
designated as Hard Costs in the Omaha Loan Agreement. Borrower understands and
acknowledges that, in the event Lender makes any of the Future Loans to any
Future Borrower, Lender will require such Person to become a joint owner of the
Operating Deficit Reserve Account and will require such Person to deposit funds
into the Operating Deficit Reserve Account based on the cost of construction of
the improvements in connection with such loan. The above referenced amounts are
collectively referred to herein as the "Minimum Deposit". In addition to the
Minimum Deposit, if Lender shall so require in its sole and absolute discretion,
at any time and from time to time, Borrower shall deposit or cause to be
deposited into the Operating Deficit Reserve Account an amount equal to the sum
of (i) the difference between the budgeted Englewood Hard Costs minus the actual
construction costs for constructing the improvements on the Englewood Property
in connection with the Englewood Loan and (ii) the difference between the
budgeted Omaha Hard Costs and the actual construction costs of the improvements
on the Omaha Property in connection with the Omaha Loan. If at any time any of
Borrower, Omaha, Englewood or any Future Borrower experiences an Operating
Deficit, such Person may apply to Lender to have a portion of the proceeds of
the Operating Deficit Reserve Account released for the payment of amounts owing
by such Person to Lender. Such application shall be in the form of a written
certificate, signed by such Person, which states the nature and amount of such
Operating Deficit together with such other documentation as may be required by
Lender. Lender may accept or reject such application in its sole and absolute
discretion. Borrower hereby acknowledges and agrees that Lender may at any time,
regardless of the existence of a Default or a potential default, use the
proceeds of the Operating Deficit Reserve Account to pay down any amounts owing
to Lender by Borrower, Omaha or Englewood, or any Affiliate of any of them
including without limitation, the principal amount and any other amounts
outstanding under the Loan, the Omaha Loan, the Englewood Loan or any Future
Loan. In the event Borrower, Englewood, Omaha or any Future Borrower seeks to
have the property securing its respective loan released pursuant to a sale
thereof or the refinance of such loan with a third-party lender, such Person
shall be entitled to withdraw from the Operating Deficit Reserve Account, upon
the payment in full of such Person's loan from Lender and provided that no
Default has occurred and is continuing, the difference between (a) the amount
deposited by such Person into the Operating Deficit Reserve Account and (b) any
amounts which have been withdrawn by or on behalf of such Person and paid to
Lender on account of an Operating Deficit; provided that the balance in the
Operating Deficit Reserve Account shall not, prior to the payment in full of all
obligations of Borrower, any Guarantor and any Future Borrower owing to Lender,
be less than $250,000.00.
Section 6.31. Reserve Account. Commencing on the Closing Date, and on
the 15th day of each successive calendar month thereafter until October 15,
1997, Borrower shall deposit into the Reserve Account the amount of $4,458.33.
Borrower shall, at all times thereafter maintain in the Reserve Account, an
amount equal to the greater of (i) $500.00 per room or (ii) four percent (4%) of
the gross rental income of the Property during any twelve (12) month period.
Borrower shall be entitled to withdraw proceeds from the Reserve Account for
capital improvements and replacement of furniture, fixtures and equipment upon
submission of a request therefor to Lender detailing such improvements and such
other information requested by Lender. Borrower shall only be entitled to
withdraw such amounts from the Reserve Account as are approved by Lender from
time to time in its sole and absolute discretion.
Section 6.32. Reservation System. Borrower shall, within ninety (90)
days of the Closing Date, deliver to Lender the Doubletree Agreement, executed
by all parties thereto in form and substance acceptable to Lender and shall not
modify, amend or terminate the Doubletree Agreement without the prior written
consent of Lender.
Section 6.33. Management of Property. Borrower shall not allow any
material change in the day-to-day leasing, management and operation of the
Property without the prior written consent of Lender.
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ARTICLE 7 - DEFAULT
Section 7.1. Events of Default. The occurrence of any one of the
following shall be a default under this Agreement ("default"):
(a) Failure to Pay Indebtedness. (i) Any of the Indebtedness arising
under the Note is not paid when due, whether by acceleration or
otherwise, including, without limitation, interest payments, the
principal payments required under Section 2.2 and any other principal
payments; or (ii) any of the other Indebtedness is not paid when due,
whether by acceleration or otherwise.
(b) Nonperformance of Covenants. Any covenant, agreement or condition
herein or in any other Loan Document is not fully and timely performed,
observed or kept.
(c) Representations. Any statement, representation or warranty to
Lender in any of the Loan Documents, or in any Financial Statement or
any other writing heretofore or hereafter delivered to Lender in
connection with the Indebtedness is false, fraudulent, misleading or
erroneous in any material respect on the Closing Date or on the date as
of which such statement, representation or warranty is made.
(d) Injunction. Any court of competent jurisdiction enjoins or
prohibits Borrower or Lender from performing this Agreement or any of
the other Loan Documents, and such injunction or order is not vacated
within forty-five (45) days after the granting thereof.
(e) Bankruptcy or Insolvency. The owner of the Property or any person
obligated to pay any part of the Indebtedness (or any general partner
or joint venturer of such owner or other person):
(1) (i) Executes an assignment for the benefit of creditors, or
takes any action in furtherance thereof; or (ii) admits in
writing its inability to pay, or fails to pay, its debts
generally as they become due; or (iii) as a debtor, files a
petition, case, proceeding or other action pursuant to, or
voluntarily seeks the benefit or benefits of any Debtor Relief
Law, or takes any action in furtherance thereof; or (iv) seeks
the appointment of a receiver, trustee, custodian or liquidator
of the Property or any part thereof or of any significant
portion of its other property; or
(2) Suffers the filing of a petition, case, proceeding or other
action against it as a debtor under any Debtor Relief Law or
seeking appointment of a receiver, trustee, custodian or
liquidator of the Property or any part thereof or of any
significant portion of its other property, and (i) admits,
acquiesces in or fails to contest diligently the material
allegations thereof, or (ii) the petition, case, proceeding or
other action results in entry of any order for relief or order
granting relief sought against it, or (iii) in a proceeding
under Title 11 of the United States Code, the case is converted
from one chapter to another, or (iv) fails to have the
petition, case, proceeding or other action permanently
dismissed or discharged on or before the earlier of trial
thereon or sixty (60) days next following the date of its
filing; or
(3) Conceals, removes, or permits to be concealed or removed,
any part of its property, with intent to hinder, delay or
defraud its creditors or any of them, or makes or suffers a
transfer of any of its property which may be fraudulent under
any bankruptcy, fraudulent conveyance or similar law; or makes
any transfer of its property to or for the benefit of a
creditor at a time when other creditors similarly situated have
not been paid; or suffers or permits, while insolvent, any
creditor to obtain a lien (other than as described in
subparagraph (4) below) upon any of its property through legal
proceedings which are not vacated and such lien discharged
prior to enforcement of such lien and in any event within sixty
(60) days from the date thereof; or
(4) Fails to have discharged within a period of ten (10) days
any attachment, sequestration, or similar writ levied upon any
of its property; or
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 23
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(5) Fails to pay immediately any final money judgment against
it.
(f) Transfer of the Property. Any sale, lease, conveyance, assignment
or transfer of all or any part of the Property or any interest therein
(except an interest under a purchase contract that conditions closing
on repayment of the Loan or issuance by Lender of consent to the sale),
whether by operation of law or otherwise, except: (i) sales or
transfers of items of the Accessories (as defined in the Mortgage)
which have become obsolete or worn beyond practical use and which have
been replaced by adequate substitutes, owned by Borrower, having a
value equal to or greater than the replaced items when new; and (ii)
the grant, in the ordinary course of business, of a leasehold interest
in a part of the Improvements to a tenant for occupancy, not containing
a right or option to purchase and not in contravention of any provision
of this Agreement, the Mortgage or of any other Loan Document. Lender
may, in its sole discretion, waive a default under this paragraph, but
it shall have no obligation to do so, and any waiver may be conditioned
upon such one or more of the following (if any) which Lender may
require: the grantee's integrity, reputation, character,
creditworthiness and management ability being satisfactory to Lender in
its sole judgment and grantee executing, prior to such sale or
transfer, a written assumption agreement containing such terms as
Lender may require, a principal paydown on the Note, an increase in the
rate of interest payable under the Note, a transfer fee, and any other
modification of the Loan Documents which Lender may require.
(g) Transfer or Encumbrance of Ownership of Borrower. The sale, pledge,
encumbrance, assignment or transfer, voluntarily or involuntarily, of
any interest in Borrower or any Guarantor or in any entity comprising
Borrower or any Guarantor (if Borrower or any such entity is not a
natural person but is a corporation, partnership, trust or other legal
entity), without the prior written consent of Lender (including,
without limitation, if Borrower or any entity comprising Borrower is a
partnership or joint venture, the withdrawal from or admission into it
of any general partner or joint venturer); provided that the transfers
of ownership interests in Borrower, Omaha, Englewood, and Candlewood to
Candlewood Hotel Company, Inc., a Delaware corporation, in connection
with the registered public offering of such company's shares of stock
shall not be a violation of this Section 7.1(g).
(h) Grant of Easement, Etc. Without the prior written consent of
Lender, Borrower grants any easement or dedication, files any plat,
condominium declaration, or restriction, or otherwise encumbers the
Property, or seeks or permits any zoning reclassification or variance,
unless such action is expressly permitted by the Loan Documents or does
not affect the Property.
(i) Default Under Other Lien. A default or event of default occurs
under any lien, security interest or assignment covering the Property
or any part thereof (whether or not Lender has consented to any such
lien, security interest or assignment and without hereby implying
Lender's consent to any such lien, security interest or assignment not
created under the Loan Documents), or the holder of any such lien,
security interest or assignment declares a default or institutes
foreclosure or other proceedings for the enforcement of its remedies
thereunder.
(j) Destruction. The Indebtedness has not been repaid in full following
an acceleration of the maturity of the Indebtedness pursuant to the
provisions of Section 3.2.
(k) Condemnation. (i) Any Governmental Authority shall require, or
commence any proceeding for, the demolition of any building or
structure comprising a part of the Property, or (ii) there is commenced
any proceeding to condemn or otherwise take pursuant to the power of
eminent domain, or a contract for sale or conveyance in lieu of such a
taking is executed which provides for the transfer of, a material
portion of the Property, including but not limited to the taking (or
transfer in lieu thereof) of any portion which would result in the
blockage or substantial impairment of access or utility service to the
Property or which would cause the Property to fail to comply with any
Governmental Requirement.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 24
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(l) Liquidation, Etc. The death, liquidation, termination, dissolution,
merger, consolidation or failure to maintain good standing in the state
in which the Property is located, the state of such person's
organization or any state where such person is required to qualify to
do business of the owner of the Property or any person obligated to pay
any part of the Indebtedness.
(m) Material Adverse Change. In Lender's reasonable opinion, there has
occurred or exists a fact or set of circumstances which constitutes a
Material Adverse Effect.
(n) Enforceability; Priority. Any Loan Document shall for any reason
without Lender's specific written consent cease to be in full force and
effect, or shall be declared null and void or unenforceable in whole or
in part, or the validity or enforceability thereof, in whole or in
part, shall be challenged or denied by any party thereto other than
Lender; or the liens, mortgages or security interests of Lender in any
of the Property become unenforceable in whole or in part, or cease to
be of the priority herein required, or the validity or enforceability
thereof, in whole or in part, shall be challenged or denied by Borrower
or any person obligated to pay any part of the Indebtedness.
(o) Other Loan Documents. A default or event of default occurs under
the Omaha Loan, the Englewood Loan or any Loan Document other than this
Agreement, or any document evidencing or executed in connection with
any Future Loan, and the same is not remedied within the applicable
period of grace (if any) provided herein or in such document.
(p) Abandonment. Borrower (or any other owner of the Property) abandons
any or all of the Property.
(q) Encumbrance of the Property. Without the prior written consent of
Lender, except as otherwise specifically permitted in any Loan Document
(including, without limitation Section 5.9 of this Agreement), Borrower
(or any other owner of the Property) creates, places or permits to be
created or placed, or through any act or failure to act voluntarily
acquiesces in the placing of, or allows to remain, by operation of law
or otherwise, any deed of trust, mortgage, voluntary or involuntary
lien (whether statutory, constitutional or contractual), encumbrance or
charge, security interest, financing statement, equipment lease,
chattel mortgage, conditional xxxx of sale, title retention contract,
or other security device or instrument, against or covering the
Property or any part thereof, whether by operation of law or otherwise
regardless of whether the same is expressly or otherwise subordinate to
the lien or security interest of the Mortgage; provided that if a
notice of lis pendens is filed against the Property, such filing shall
not constitute a default hereunder so long as the claim for which such
lis pendens has been filed is being contested in good faith by
appropriate proceedings which have been disclosed to Lender in writing,
and adequate reserves for the payment of such related claim have been
set aside on the books of Borrower in accordance with generally
accepted accounting principles, consistently applied.
Section 7.2. Notice and Cure. If any provision of this Agreement or any
other Loan Document provides for Lender to give to Borrower any notice regarding
a default or incipient default, then if Lender shall fail to give such notice to
Borrower as provided, the sole and exclusive remedy of Borrower for such failure
shall be to seek appropriate equitable relief to enforce the agreement to give
such notice and to have any acceleration of the maturity of the Note or other
Indebtedness postponed or revoked and foreclosure and other proceedings in
connection therewith delayed or terminated pending or upon the curing of such
default in the manner and during the period of time permitted by such agreement,
if any, and Borrower shall have no right to damages or any other type of relief
not herein specifically set out against Lender, all of which damages or other
relief are hereby waived by Borrower. Nothing herein or in any other Loan
Document shall operate or be construed to add on or make cumulative any cure or
grace periods specified in any of the Loan Documents.
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ARTICLE 8 - RIGHTS AND REMEDIES OF LENDER
Section 8.1. Certain Remedies. Should a default occur, Lender may, at
its election, do any one or more of the following without notice (unless notice
is required by applicable statute):
(a) Declare the Indebtedness, or any part thereof, immediately
due and payable, whereupon it shall be due and payable without
notice of any kind, including but not limited to notice of
intention to accelerate, all of which are waived by Borrower.
Without limitation of the foregoing, upon the occurrence of a
default described in clauses (i), (iii) or (iv) of Section
7.1(e)(1), but only by virtue of such an occurrence with
respect to Borrower, all of the Indebtedness shall thereupon be
immediately due and payable, without presentment, demand,
protest, notice of protest, declaration or notice of
acceleration or intention to accelerate, or any other notice or
declaration or act of any kind, all of which are hereby
expressly waived by Borrower.
(b) Terminate its commitment to lend and any obligation to
disburse any Borrower's Deposit hereunder.
(c) Reduce any claim to judgment.
(d) Exercise any and all rights and remedies afforded by any of
the Loan Documents, or by law or equity or otherwise, as Lender
shall deem appropriate.
Section 8.2. Other Rights, etc. Upon the occurrence of a default,
Lender shall have the right, in addition to any other right or remedy of Lender,
but not the obligation, in its own name or in the name of Borrower, to enter
into possession of the Property, and to employ watchmen and other safeguards to
protect the Property. Borrower hereby appoints Lender as the attorney-in-fact of
Borrower with full power of substitution, and in the name of Borrower, if Lender
elects to do so, upon the occurrence of a default, to (a) endorse the name of
Borrower on any checks or drafts representing proceeds of the Insurance
Policies, or other checks or instruments payable to Borrower with respect to the
Property; (b) prosecute or defend any action or proceeding incident to the
Property. The power of attorney granted hereby is a power coupled with an
interest, is irrevocable and shall not terminate on disability of the principal.
Lender shall have no obligation to undertake any of the foregoing actions, and,
if Lender should do so, it shall have no liability to Borrower for the
sufficiency or adequacy of any such actions taken by Lender.
Section 8.3. Performance by Lender on Borrower's Behalf. Borrower
agrees that, if Borrower fails to perform any act or to take any action which
under any Loan Document Borrower is required to perform or take, or to pay any
money which under any Loan Document Borrower is required to pay, and whether or
not the failure then constitutes a default hereunder or thereunder, but provided
that there exists a default, or potential default, Lender, in Borrower's name or
its own name, may, but shall not be obligated to, perform or cause to be
performed such act or take such action or pay such money, and any expenses so
incurred by Lender and any money so paid by Lender, shall be a demand obligation
owing by Borrower to Lender (which obligation Borrower hereby promises to pay)
and Lender, upon making such payment, shall be subrogated to all of the rights
of the person, entity or body politic receiving such payment. Lender shall have
the right to enter upon the Property for any such purposes. No such payment or
performance by Lender shall waive or cure any default or waive any right, remedy
or recourse of Lender. Any such payment may be made by Lender in reliance on any
statement, invoice or claim without inquiry into the validity or accuracy
thereof. Each amount due and owing by Borrower to Lender pursuant to this
Section shall bear interest each day, from the date of such expenditure or
payment until paid, at the same rate as is provided in the Note for interest on
past due principal owed on the Note; and all such amounts, together with such
interest thereon, shall be a part of the Indebtedness and shall be secured by
the Mortgage. The amount and nature of any such expense and the time when paid
shall be fully established by the certificate of Lender or any of Lender's
officers or agents.
Section 8.4. Remedies Cumulative. All remedies provided for herein and
in any other Loan Document are cumulative of each other and of any and all other
remedies existing at law
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 26
31
or in equity, and Lender shall, in addition to the remedies provided herein or
in any other Loan Document, be entitled to avail itself of all such other
remedies as may now or hereafter exist at law or in equity for the collection of
the Indebtedness and the enforcement of the covenants herein and the foreclosure
of the liens and security interests evidenced by the Mortgage or any other Loan
Document, and the resort to any remedy provided for hereunder or under any such
other Loan Document or provided for by law or in equity shall not prevent the
concurrent or subsequent employment of any other appropriate remedy or remedies.
ARTICLE 9 - GENERAL TERMS AND CONDITIONS
Section 9.1. Loan Documents. All documents, certificates, Insurance
Policies, and other items required under this Agreement to be executed and/or
delivered to Lender shall be in form and content satisfactory to Lender.
Section 9.2. Conditions for the Benefit of Lender. All conditions of
the obligations of Lender hereunder, including the obligation to make the
Advance, are imposed solely and exclusively for the benefit of Lender, and may
be freely waived in whole or in part by Lender at any time. No other person is a
beneficiary of such conditions, has standing to require satisfaction of such
conditions, or is entitled to assume that Lender will make the Advance or refuse
to make the Advance in the absence of strict compliance therewith.
Notwithstanding any approval, consent, inspection, verification, or receipt and
review of information or documents by Lender, Lender has no obligation or
responsibility whatsoever, and assumes no duty or obligation, for the adequacy,
form, or content of the Plans, any other contract, the Property or its
condition, the existence or non-existence of any facts related thereto, the
performance or quality of any work or workmanship regarding the Project or the
Property or the absence therefrom of defects, the financial condition, or the
reporting thereof, of Borrower, any Guarantor, or the Property, or the
compliance of any of the foregoing with any Governmental Requirement. Lender's
acceptance of an assignment of the Plans shall not constitute approval of the
Plans. Any inspection or audit of the Property or the books and records of
Borrower, or the procuring of documents and financial and other information, by
or on behalf of Lender shall be for Lender's protection only, and shall not
constitute any assumption of responsibility to Borrower or anyone else with
regard to the condition, construction, maintenance or operation of the Property,
or relieve Borrower of any of the Indebtedness or its obligations related
thereto. Lender has no duty to supervise or inspect any of the books and records
pertaining to the Property or the financial records of Borrower or any
Guarantor, or to inform Borrower or any other Person of the existence of any
defect, nor shall Lender have any liability for the performance or default of
Borrower, or any other person, or for any failure to construct, complete,
protect or insure the Improvements, or to pay any costs associated therewith, or
for the performance of any obligation of Borrower whatsoever. Failure by Lender
to inspect any work concerning the Project, or inspection not followed by notice
of default, shall not constitute a waiver of any of Lender's rights hereunder or
under any other Loan Document or otherwise or a representation that there has
been compliance with any Governmental Requirement or any other of Borrower's
obligations hereunder or that any such work is free from defects.
Section 9.3. Borrower in Control. In no event shall Lender's rights and
interests under the Loan Documents be construed to give Lender the right to
control, or be deemed to indicate that Lender is in control of, the business,
properties, management functions or operating decisions made by Borrower.
Section 9.4. Waiver by Lender. Lender may at any time and from time to
time in writing (a) waive compliance by Borrower with any covenant herein made
by Borrower to the extent and in the manner specified in such writing; (b)
consent to Borrower's doing any act which hereunder Borrower is prohibited from
doing, or to Borrower's failing to do any act which hereunder Borrower is
required to do, to the extent and in the manner specified in such writing; (c)
release any part of the Property or any interest therein from the lien and
security interest of the Mortgage; or (d) release any party liable, either
directly or indirectly, for the Indebtedness or for any covenant herein or in
any other Loan Document, without impairing or releasing the liability of any
other party. No such act shall in any way impair the rights or powers of Lender
except to the extent specifically agreed to by Lender in such writing.
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 27
32
Section 9.5. Acts Not Constituting Waiver by Lender. Lender may waive
any default without waiving any other prior or subsequent default. Lender may
remedy any default without waiving the default remedied. Neither failure by
Lender to exercise, nor delay by Lender in exercising, any right, power or
remedy upon any default shall be construed as a waiver of such default or as a
waiver of the right to exercise any such right, power or remedy at a later date.
No single or partial exercise by Lender of any right, power or remedy hereunder
shall exhaust the same or shall preclude any other or further exercise thereof,
and every such right, power or remedy hereunder may be exercised at any time and
from time to time. No modification or waiver of any provision hereof nor consent
to any departure by Borrower therefrom shall in any event be effective unless
the same shall be in writing and signed by Lender and then such waiver or
consent shall be effective only in the specific instance, for the purpose for
which given and to the extent therein specified. No notice to nor demand on
Borrower in any case shall of itself entitle Borrower to any other or further
notice or demand in similar or other circumstances.
Section 9.6. Place of Payment; Forum. All Indebtedness which may be
owing at any time by Borrower shall be payable at the place designated in the
Note or if no such designation is made, at the address of Lender stated at the
end of this Agreement. Borrower hereby irrevocably submits generally and
unconditionally for itself and in respect of its property to the non-exclusive
jurisdiction of any Texas state court, or any United States federal court,
sitting in the City of Dallas, Texas, and to the non-exclusive jurisdiction of
any state or United States federal court sitting in the state in which any of
the Property is located, over any suit, action or proceeding arising out of or
relating to this Agreement or the Indebtedness. Borrower hereby agrees and
consents that, in addition to any methods of service of process provided for
under applicable law, all service of process in any such suit, action or
proceeding in any Texas state court, or any United States federal court, sitting
in the City of Dallas, Texas may be made by certified or registered mail, return
receipt requested, directed to Borrower at its address stated at the end of this
Agreement, or at a subsequent address of which Lender received actual notice
from Borrower in accordance with this Agreement, and service so made shall be
complete five (5) days after the same shall have been so mailed.
Section 9.7. Compliance with Usury Laws. It is the intent of Borrower
and Lender and all other parties to the Loan Documents to conform to and
contract in strict compliance with applicable usury law from time to time in
effect. All agreements between Borrower and Lender (or any other party liable
with respect to any Indebtedness under the Loan Documents) are hereby limited by
the provisions of this Section which shall override and control all such
agreements, whether now existing or hereafter arising and whether written or
oral (however, reference to the term "oral" shall not be construed to modify or
negate any provisions hereof or of any other Loan Document regarding the absence
or ineffectiveness of oral agreements). In no way, nor in any event or
contingency (including but not limited to prepayment, default, demand for
payment, or acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged or received under this Agreement, the
Note or otherwise, exceed the maximum amount permissible under applicable law.
If, from any possible construction of any document, interest would otherwise be
payable in excess of the maximum lawful amount, any such construction shall be
subject to the provisions of this Section, and such document shall be
automatically reformed and the interest payable shall be automatically reduced
to the maximum amount permitted under applicable law, without the necessity of
execution of any amendment or new document. If Lender shall ever receive
anything of value which is characterized as interest under applicable law and
which would apart from this provision be in excess of the maximum lawful amount,
an amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Indebtedness in the inverse order of its maturity and not to the payment of
interest, or refunded to Borrower or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such unpaid
principal. The right to accelerate maturity of the Note or any other
Indebtedness does not include the right to accelerate any interest which has not
otherwise accrued on the date of such acceleration, and Lender does not intend
to charge or receive any unearned interest in the event of acceleration. All
interest paid or agreed to be paid to Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
stated term (including any renewal or extension) of such Indebtedness so that
the amount of interest on account of such Indebtedness does not exceed the
maximum permitted by applicable law. As used in this Section, the term
"applicable law" shall mean the laws of the State of Texas or the federal laws
of the United States, whichever laws
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 28
33
allow the greater interest, as such laws now exist or may be changed or amended
or come into effect in the future.
Section 9.8. Notices. All notices, requests, consents, demands and
other communications required or permitted to be given by or to any party
hereunder or under any other Loan Document shall be in writing and, unless
otherwise specifically provided in such other Loan Document, shall be deemed
sufficiently given or furnished if delivered by personal delivery, by reputable
courier or delivery service with proof of delivery, or by prepaid registered or
certified United States mail, addressed to the party to whom directed at the
address specified at the end of this Agreement (unless changed by similar notice
in writing given by the particular party whose address is to be changed) or by
telegram, telex, or facsimile. Any such notice or communication shall be deemed
to have been given either at the time of personal delivery or, in the case of
delivery service or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of telegram, telex,
or facsimile, upon receipt. Notwithstanding the foregoing, no notice of change
of address shall be effective except upon receipt, and service of a notice
required by Texas Property Code Section 51.002, as amended, to the extent
applicable, shall be considered complete when the requirements of that statute
are met. This Section shall not be construed in any way to affect or impair any
waiver of notice or demand provided in any Loan Document or to require giving of
notice or demand to or upon any person in any situation or for any reason.
Section 9.9. Invalidity of Certain Provisions. A determination that any
provision of this Agreement is unenforceable or invalid shall not affect the
enforceability or validity of any other provision, and the determination that
the application of any provision of this Agreement to any person or circumstance
is illegal or unenforceable shall not affect the enforceability or validity of
such provision as it may apply to other persons or circumstances.
Section 9.10. Lender's Consent. Except where otherwise expressly
provided herein, in any instance hereunder where the approval, consent or the
exercise of judgment of Lender is required, the granting or denial of such
approval or consent and the exercise of such judgment shall be within the sole
discretion of Lender, and Lender shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise such judgment in any
particular manner, regardless of the reasonableness of either the request or
Lender's judgment. In any instance when the approval or consent of Lender is
contemplated or required by the terms of this Agreement or any other Loan
Document, unless otherwise specifically provided no such approval or consent
shall be deemed to have been given except by a specific writing intended for
that purpose and executed by an authorized representative of Lender.
Section 9.11. Execution; Counterparts. This Agreement has been executed
in several counterparts, all of which are identical, and all of which
counterparts together shall constitute one and the same instrument. The date or
dates reflected in the acknowledgments of the Mortgage indicate the date or
dates of actual execution of this Agreement, but such execution is as of the
date shown on the first page hereof, and for purposes of identification and
reference the date of this Agreement shall be deemed to be the date reflected on
the first page hereof.
Section 9.12. Successors and Assigns. The terms, provisions, covenants
and conditions hereof shall be binding upon Borrower, and the heirs, devisees,
representatives, successors and assigns of Borrower, and shall inure to the
benefit of Lender and its successors and assigns. All references in this
Agreement to Borrower or Lender shall be deemed to include all such heirs,
devisees, representatives, successors and assigns.
Section 9.13. Modification or Termination. The Loan Documents may only
be modified or terminated by a written instrument or instruments intended for
that purpose and executed by the party against which enforcement of the
modification or termination is asserted. Any alleged modification or termination
which is not so documented shall not be effective as to any party. This
Agreement shall continue in full force and effect until the Indebtedness is paid
in full; and all provisions herein for indemnity of Lender (and any other
provisions herein specified to survive) shall survive payment in full of the
Indebtedness and any release or termination of this Agreement.
Section 9.14. No Partnership, etc. The relationship between Lender and
Borrower is solely that of lender and borrower. Lender has no fiduciary or other
special relationship with
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 29
34
Borrower. Nothing contained in the Loan Documents is intended to create any
partnership, joint venture or association between Borrower and Lender or in any
way make Lender a co-principal with Borrower with reference to the Property. Any
inferences to the contrary of any of the foregoing are hereby expressly negated.
Section 9.15. Time of Essence. Time shall be of the essence in this
Agreement with respect to all obligations hereunder.
Section 9.16. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS ARE CONTRACTS MADE IN, AND UNDER THE LAWS OF, THE STATE OF TEXAS, AND
THEIR VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL FOR ALL PURPOSES BE
GOVERNED ENTIRELY BY TEXAS LAW AND APPLICABLE UNITED STATES FEDERAL LAW. CHAPTER
15 OF SUBTITLE 3, TITLE 79, OF THE REVISED CIVIL STATUTES OF THE STATE OF TEXAS,
AS IN EFFECT ON THE DATE HEREOF AND AS THE SAME MAY HEREAFTER BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, SHALL NOT APPLY TO THE LOAN, THE ADVANCE OR ANY
LOAN DOCUMENT.
Section 9.17. Capital Requirements and Yield Maintenance. If at any
time after the date hereof, and from time to time, Lender determines that the
adoption or modification of any applicable law, rule or regulation regarding
taxation, Lender's required levels of reserves, deposits, insurance or capital
(including any allocation of capital requirements or conditions), or similar
requirements, or any interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation, administration or compliance of Lender with any of such
requirements, has or would have the effect of (i) increasing Lender's costs
relating to the obligations hereunder, or (ii) reducing the yield or rate of
return of Lender on the obligation hereunder, to a level below that which Lender
could have achieved but for the adoption or modification of any such
requirements, Lender shall give Borrower written notice of such fact and
Borrower shall, for the period commencing ninety (90) days from the date of any
written request by Lender (and the submission of reasonable evidence in support
thereof), pay to Lender on demand such additional amounts as (in Lender's sole
judgment, after good faith and reasonable computation, based upon any reasonable
averaging, attribution and allocation methods) will compensate Lender for such
increase in costs or reduction in yield or rate of return of Lender, except
taxes based on Lender's income and reductions in yield or rate of return based
on such taxes. No failure by Lender to demand payment of any additional amounts
payable hereunder shall constitute a waiver of Lender's right to demand payment
of such amounts at any subsequent time. Nothing herein contained shall be
construed or so operate as to require Borrower to pay any interest, fees, costs
or charges greater than is permitted by applicable law.
Section 9.18. Arbitration.
(a) Mandatory Arbitration. Any controversy or claim between or among
the parties hereto, including, without limitation, those arising out of or
relating to this Agreement or any other Loan Document, including, without
limitation, any claim based on or arising from an alleged tort, shall be
determined by binding arbitration in accordance with the Federal Arbitration Act
(or if not applicable, the applicable state law), the Rules of Practice and
Procedure for the Arbitration of Commercial Disputes of Endispute, Inc., doing
business as J.A.M.S./Endispute ("JAMS"), and the rules (the "Special Rules") set
forth in paragraph (b) of this Section. In the event of any inconsistency, the
Special Rules shall control. Judgment upon any arbitration award may be entered
in any court having jurisdiction. Any party to this Agreement may bring an
action, including, without limitation, a summary or expedited proceeding, to
compel arbitration of any controversy or claim to which this agreement applies
in any court having jurisdiction over such action. Each party to this Agreement
agrees to keep all of the foregoing matters and the related arbitration
proceedings strictly confidential, except for disclosures of information
required in the ordinary course of business of the parties or by any
Governmental Requirement.
(b) Special Rules. The arbitration shall be conducted in the city of
Borrower's domicile as of the Closing Date and shall be administered by JAMS who
will appoint an arbitrator; if JAMS is unable or legally precluded from
administering the arbitration, then the American Arbitration Association will
serve. All arbitration hearings will be commenced within
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 30
35
ninety (90) days of the demand for arbitration; further, the arbitrator shall
only, upon a showing of cause, be permitted to extend the commencement of such
hearing for up to an additional sixty (60) days. With respect to a controversy
or claim in which the claim or the amount of the controversy does not exceed
$2,000,000 in the aggregate, a single arbitrator (who shall have authority to
render a maximum award of $2,000,000, including all damages of any kind and
costs, fees and the like) shall be chosen and shall decide such controversy or
claim. With respect to a controversy or claim in which the claim or amount in
controversy exceeds $2,000,000 in the aggregate, such controversy or claim shall
be decided by a majority vote of three arbitrators. In all arbitration
proceedings in which the claim or amount in controversy exceeds $2,000,000 in
the aggregate, the arbitrators shall make specific, written findings of fact and
conclusions of law in the award.
(c) Reservations of Rights. Nothing in this Agreement shall be deemed
to (i) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Agreement; or (ii) be a
waiver by Lender of the protection afforded to it by 12 U.S.C. Sec. 91 or any
substantially equivalent state law; or (iii) limit the right of Lender (A) to
exercise self help remedies such as (but not limited to) setoff, or (B) to
foreclose against any real or personal property securing the Loan, or (C) to
obtain from a court provisional or ancillary remedies such as (but not limited
to) injunctive relief or the appointment of a receiver. Lender may exercise such
self help rights, foreclose upon such property, or obtain such provisional or
ancillary remedies before, during or after the pendency of any arbitration
proceeding brought pursuant to this Agreement. If Lender shall attempt to obtain
from a court such provisional or ancillary remedies, Borrower shall be entitled
to appear in such court and defend against same. At Lender's option, foreclosure
under a deed of trust, deed to secure debt or mortgage may be accomplished by
any of the following: the exercise of a power of sale under such deed of trust,
deed to secure debt or mortgage, or by judicial sale under such deed of trust,
deed to secure debt or mortgage, or by judicial foreclosure. Neither this
exercise of self help remedies nor the institution or maintenance of an action
for foreclosure or provisional or ancillary remedies shall constitute a waiver
of the right of any party, including the claimant in any such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies.
Section 9.19. Loan Agreement Governs. In the event of any conflict
between the terms of this Agreement and any terms of any other Loan Document,
the terms of this Agreement shall govern. All of the Loan Documents are by this
reference incorporated into this Agreement.
Section 9.20. Payments Set Aside. To the extent that Borrower or any
other person pays the Indebtedness or any part thereof to Lender, or Lender
enforces any of its rights under any Loan Document, and such payment or
enforcement or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside, and/or required to be repaid to Borrower
or such other person, its estate, a trustee, receiver, or any other person under
any Governmental Requirement, then to the extent of such repayment, the
Indebtedness or part thereof originally intended to be satisfied, together with
all Loan Documents (including all the terms thereof and all Lender's rights
thereunder), notwithstanding any prior termination and/or delivery of the Loan
Documents to Borrower (it being agreed that the provisions of this Section shall
survive any such termination and/or delivery), shall be revived and continued in
effect as if such payment had not been made or such enforcement had not
occurred.
Section 9.21. Disclaimer of Financing. Lender has not made any
commitment or agreement, express or implied, to extend the term of the Loan past
the Maturity Date or to provide Borrower with any financing except as expressly
described in this Agreement.
Section 9.22. Evidence of Satisfaction. As part of satisfying or
performing any condition or obligation under the Loan Documents, Borrower shall
deliver to Lender evidence of such satisfaction or performance satisfactory to
Lender.
Section 9.23. Jointly Drafted. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, there shall be no presumption or
burden of proof which arises favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
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Section 9.24. Entire Agreement. The Loan Documents constitute the
entire understanding and agreement between Borrower and Lender with respect to
the transactions arising in connection with the Loan and supersede all prior
written or oral understandings and agreements between Borrower and Lender with
respect to the matters addressed in the Loan Documents. Borrower hereby
acknowledges that, except as incorporated in writing in the Loan Documents,
there are not, and were not, and no persons are or were authorized by Lender to
make, any representations, understandings, stipulations, agreements or promises,
oral or written, with respect to the matters addressed in the Loan Documents.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. EACH PARTY HERETO FURTHER ACKNOWLEDGES THAT
SUFFICIENT SPACE HAS BEEN PROVIDED HEREIN, AND IN THE OTHER LOAN DOCUMENTS, FOR
THE PLACEMENT OF NONSTANDARD TERMS.
[INTENTIONALLY BLANK--SIGNATURES ON THE NEXT PAGE]
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EXECUTED and DELIVERED as of the date first recited.
The Address of Borrower is: BORROWER:
9432 East Central CANDLEWOOD WICHITA NORTHEAST, L.L.C.
Xxxxxxx, Xxxxxx 00000 a Kansas limited liability company
By: /s/Xxxxxx X. Fix
-------------------------------
Name: Xxxxxx X. Fix
Title: Executive Vice President
The Address of Lender is: LENDER:
NationsBank of Texas, N.A. NATIONSBANK OF TEXAS, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx a national banking association
Xxxxxx, Xxxxx 00000
Attn: Real Estate Loan Administration
By: /s/Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx,
Vice President
TERM LOAN AGREEMENT (Candlewood Wichita Northeast) Page 33
