1
EXHIBIT 10.10
================================================================================
LOAN AGREEMENT
Dated as of October 10, 1997
Among
BRISTOL LODGING COMPANY,
as Borrower
BRISTOL LODGING HOLDING COMPANY,
as Guarantor
NOMURA ASSET CAPITAL CORPORATION,
as Administrative Agent and Lender
BANKERS TRUST COMPANY,
as Co-Agent and Lender
================================================================================
2
TABLE OF CONTENTS
Page
----
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 PRINCIPLES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
II. GENERAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1.1 THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1.2 Disbursement to Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1.3 THE NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.2 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.3 LOAN PREPAYMENT AND DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3.1 REPAYMENT AND PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3.2 CASUALTY/CONDEMNATION PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3.3 VOLUNTARY DEFEASANCE OF THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.4 RELEASE OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.4.1 RELEASE OF ENTIRE PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.4.2 SUCCESSOR BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.4.3 RELEASE OF AN ASSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.4.4 SUBSTITUTION OF AN ASSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 2.5 ASSUMPTION OF LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.6 INTEREST AND PRINCIPAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.6.1 GENERALLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.6.2 DEFAULT RATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 2.7 PAYMENTS AND COMPUTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.7.1 MAKING OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.7.2 COMPUTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.7.3 LATE PAYMENT CHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.7.4 PAYMENTS RECEIVED IN THE DEPOSIT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.7.5 APPORTIONMENT OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.7.6 DISTRIBUTION TO LENDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
III. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 3.1 CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 3.2 CONDITIONS PRECEDENT TO ANY SUBSTITUTION EVENT . . . . . . . . . . . . . . . . . . . . . . . . 52
IV. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.1 REPRESENTATIONS OF BORROWER AND PARENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.2 SURVIVAL OF REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
i
3
V. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.1 BORROWER COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
VI. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 6.1 BORROWER'S NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
VII. CASUALTY; CONDEMNATION; ESCROWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 7.1 INSURANCE; CASUALTY AND CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.1.1 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.1.2 CASUALTY AND APPLICATION OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.1.3 CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 7.2 REQUIRED REPAIRS; REQUIRED REPAIR FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.2.1 REQUIRED REPAIRS; DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.2.2 RELEASE OF REQUIRED REPAIR FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.2.3 FAILURE TO PERFORM REQUIRED REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 7.3 TAX AND INSURANCE ESCROW FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 7.4 REPLACEMENTS AND REPLACEMENT RESERVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
7.4.1 REPLACEMENT RESERVE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
7.4.2 DISBURSEMENTS FROM REPLACEMENT RESERVE SUBACCOUNT . . . . . . . . . . . . . . . . . . . . . . 103
7.4.3 PERFORMANCE OF REPLACEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
7.4.4 FAILURE TO MAKE REPLACEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
7.4.5 BALANCE IN THE REPLACEMENT RESERVE SUBACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . 107
7.4.6 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 7.5 INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 7.6 GROUND RENT ESCROW FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
VIII. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 8.1 EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 8.2 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Section 8.3 REMEDIES CUMULATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
IX. SPECIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
SECTION 9.1 SALE OF NOTES AND SECURITIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
SECTION 9.2 SECURITIZATION INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
SECTION 9.3 RATING SURVEILLANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 9.4 INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SECTION 9.6 INDEMNIFICATION AGAINST TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 9.5 INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SECTION 9.7 SPLITTING THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
X. CENTRAL CASH MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
SECTION 10.1 SERVICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
ii
4
SECTION 10.2 ESTABLISHMENT OF ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
10.2.1 ESTABLISHMENT OF CLEARING ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
10.2.2 ESTABLISHMENT OF DEPOSIT ACCOUNT AND SUBACCOUNTS . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 10.3 DEPOSITS INTO CLEARING ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 10.4 TRANSFERS TO DEPOSIT ACCOUNT AND CLEARING ACCOUNT B . . . . . . . . . . . . . . . . . . . . . 123
10.4.1 TRANSFERS FROM CLEARING ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.4.2 INSUFFICIENT FUNDS IN THE DEPOSIT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . 124
SECTION 10.5 INITIAL DEPOSITS INTO THE SUBACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
SECTION 10.6 PLEDGE OF ACCOUNTS; EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
SECTION 10.7 INVESTMENT OF ACCOUNT FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
SECTION 10.8 REQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
10.8.1 SUBMISSION OF REQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
10.8.2 CONTENT OF REQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
SECTION 10.9 DISBURSEMENTS FROM THE DEPOSIT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.9.1 PRIOR TO THE OPTIONAL PREPAYMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.9.2 AFTER THE OPTIONAL PREPAYMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.9.3 UPON EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
SECTION 10.10 DISBURSEMENTS FROM CERTAIN SUBACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
10.10.1 DISBURSEMENTS FROM THE TAX AND INSURANCE ESCROW SUBACCOUNT . . . . . . . . . . . . . . . . 131
10.10.2 DISBURSEMENTS FROM THE REPLACEMENT RESERVE SUBACCOUNT . . . . . . . . . . . . . . . . . . . 131
10.10.3 DISBURSEMENTS FROM THE SECURITY DEPOSIT SUBACCOUNT . . . . . . . . . . . . . . . . . . . . 131
10.10.4 DISBURSEMENTS FROM THE LOSS PROCEEDS SUBACCOUNT . . . . . . . . . . . . . . . . . . . . . . 131
10.10.5 DISBURSEMENTS FROM THE REQUIRED REPAIR SUBACCOUNT . . . . . . . . . . . . . . . . . . . . . 132
10.10.6 DISBURSEMENTS FROM THE BORROWER REMAINDER SUBACCOUNT . . . . . . . . . . . . . . . . . . . 132
10.10.7 DISBURSEMENTS FROM THE MONTHLY DEBT SERVICE SUBACCOUNT . . . . . . . . . . . . . . . . . . 132
10.10.8 INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
10.10.9 DISBURSEMENTS FROM THE GROUND RENT SUBACCOUNT . . . . . . . . . . . . . . . . . . . . . . . 132
10.10.10 INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
SECTION 10.11 LOCK-BOX AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
SECTION 10.12 REQUIRED RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 11.1 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 11.2 INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 11.3 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 11.4 AMENDMENTS; WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
SECTION 11.5 DELAY NOT A WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
SECTION 11.6 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
SECTION 11.7 TRIAL BY JURY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
SECTION 11.8 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SECTION 11.9 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
iii
5
SECTION 11.10 PREFERENCES/MARSHALLING PREFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SECTION 11.11 WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SECTION 11.12 REMEDIES OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
SECTION 11.13 EXPENSES; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
SECTION 11.14 EXHIBITS AND SCHEDULES INCORPORATED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Section 11.15 SETOFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
SECTION 11.16 RATABLE SHARING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
SECTION 11.17 OFFSETS, COUNTERCLAIMS AND DEFENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Section 11.18 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY BENEFICIARIES; INDEPENDENT NATURE OF
LENDERS' RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Section 11.19 PUBLICITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
SECTION 11.20 WAIVER OF COUNTERCLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
SECTION 11.21 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE . . . . . . . . . . . . . . . . . . . . . . . 144
SECTION 11.22 BROKERS AND FINANCIAL ADVISORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
SECTION 11.23 PRIOR AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
SECTION 11.24 APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
SECTION 11.25 RELIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 11.26 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 11.27 ADMINISTRATIVE AGENT'S DISCRETION; SUCCESSOR AGENTS . . . . . . . . . . . . . . . . . . . . 146
SECTION 11.28 MAXIMUM AMOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
XII. AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
SECTION 12.1 APPOINTMENT OF THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT . . . . . . . . . . . . . . . . 147
SECTION 12.2 APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS . . . . . . . . . . . . . . . . . . . . . . . . 148
SECTION 12.3 POWERS; DUTIES SPECIFIED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
SECTION 12.4 NO RESPONSIBILITY FOR CERTAIN MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
SECTION 12.5 EXCULPATORY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Section 12.6 ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER . . . . . . . . . . . . . . . . . . . . . . . 150
Section 12.7 INDEPENDENT CREDIT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Section 12.8 DELIVERY OF CERTAIN DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Section 12.9 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Section 12.10 SUCCESSOR ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Section 12.11 SECURITY DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 12.12 PAYEE OF NOTE TREATED AS OWNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
iv
6
SCHEDULES
Schedule I - Initial Deposits on the Closing Date
Schedule II - Required Repairs
Schedule III - Rent Roll
Schedule IV - Allocated Loan Amount
Schedule V - Franchise Agreements
Schedule VI - Liquor Licenses, Liquor Agreements & Property
Management Agreements
Schedule VII - Assets
Schedule VIII - Intentionally Deleted
Schedule IX - Intentionally Deleted
Schedule X - Intentionally Deleted
Schedule XI - IP License Agreements
Schedule XII - Intellectual Property
Schedule XIII - Subsidiaries
Schedule XIV - Tenant Leases
Schedule XV - Existing Debt
Schedule XVI - Taxes and Assessments
Schedule XVII - Mortgage Caps
Schedule XVIII - Lender's Share
Schedule XIX - Principal Places of Business
Schedule XX - Intentionally Deleted
Schedule XXI - Prior Assignments of Collateral
Schedule XXII - Assets Located in Flood Zones
Schedule XXIII - Leasing Requirements
Schedule XXIV - Casualties
Schedule XXV - Tax and Insurance Amounts
Schedule XXVI - Insurance Variations
EXHIBITS
Exhibit A - Payment Direction Letter
Exhibit B - Credit Card Payor Payment Direction Letter
v
7
EXHIBIT 10.10
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of October 10, 1997 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
"AGREEMENT"), is among BRISTOL LODGING COMPANY, a Delaware corporation, having
an address at 00000 Xxxxxx Xxxx, Xxxxxx, Xxxxx 00000 ("BORROWER") and BRISTOL
LODGING HOLDING COMPANY, a Delaware corporation, having an address at 00000
Xxxxxx Xxxx, Xxxxxx, Xxxxx 00000 ("PARENT"), THE LENDERS LISTED ON THE
SIGNATURE PAGES HEREOF (individually referred to as "LENDER" and collectively
as "LENDERS"), NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation, having
an address at Two World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx 00000
as administrative agent and collateral agent for Lenders (in such capacity, the
"Administrative Agent") and BANKERS TRUST COMPANY, a New York banking
corporation, having an address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
as co-agent for Lenders, in such capacity, the "Co-Agent").
All capitalized terms used herein shall have the respective
meanings set forth in Article I hereof.
W I T N E S S E T H:
WHEREAS, Borrower desires to obtain the Loan from Lenders; and
WHEREAS, Lenders are willing to make the Loan to Borrower,
subject to and in accordance with the terms of this Agreement and the other
Loan Documents.
NOW, THEREFORE, in consideration of the making of the Loan by
Lenders to Borrower and the covenants, agreements, representations and
warranties set forth in this Agreement, the parties hereto hereby covenant,
agree, represent and warrant as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
"ABM" shall have the meaning set forth in Section 3.1(bb).
"ACCOUNT PROCEEDS" shall mean all Mortgaged Property Gross
Cash Flow and any and all other sums in any Clearing Account A or the Deposit
Account, as applicable, from time to time.
8
"ACCRUED INTEREST" shall have the meaning set forth in Section
2.6.1.
"ACH" shall have the meaning set forth in Section 10.4.1.
"ACQUISITION DOCUMENTS" shall mean the Acquisition Credit
Facility Agreement and those certain other documents executed in connection the
Acquisition Facility, each such document being in a form and substance as
approved by the Administrative Agent on or prior to the Closing Date, in each
case as such agreement and other documents shall be amended, restated,
supplemented or otherwise modified from time to time pursuant to the terms of
this Agreement.
"ACQUISITION FACILITY CREDIT AGREEMENT" shall mean that
certain Credit Agreement, dated as of October 10, 1997 among BHOC and Bristol
Hospitality Holding Company, as borrowers, the lenders party thereto, Bankers
Trust Company, as agent, and Bank One, Texas, N.A. and Xxxxx Fargo Bank,
National Association, as co-agents, as such agreement shall be amended,
restated, supplemented or otherwise modified from time to time pursuant to the
terms of this Agreement.
"ACQUISITION FACILITY" shall mean that certain credit facility
to be advanced pursuant to the Acquisition Credit Facility Agreement.
"ADJUSTED INTEREST RATE" shall mean a rate per annum equal to
the greater of (a) the Treasury Rate plus five percent (5%) and (b) the Initial
Interest Rate plus five percent (5%).
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person or
of an Affiliate of such Person.
"AFFILIATE GUARANTY" shall mean that certain Affiliate
Guaranty, dated the date hereof, executed by Parent and each Subsidiary as such
Affiliate Guaranty may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"AGGREGATE AMOUNTS DUE" shall have the meaning set forth in
Section 11.16.
"ALLOCATED LOAN AMOUNT" shall mean for a particular Asset the
dollar amount set forth on Schedule IV for such Asset or with respect to a
Substitution Added Asset, the dollar amount determined by Administrative Agent
in accordance with Section 3.2(d)(ii) hereof.
"ALTA" shall mean American Land Title Association, or any
successor thereto.
"ANNUAL OPERATING BUDGET" shall have the meaning specified in
Section 5.1(q).
2
9
"APPLICABLE INTEREST RATE" shall mean (a) from the date of
each Note to November 11, 2007, a rate equal to the Initial Interest Rate and
(b) from November 11, 2007 through but not including the date each Note is paid
in full, a rate equal to the Adjusted Interest Rate.
"APPROVED ANNUAL OPERATING BUDGET" shall have the meaning set
forth in Section 5.1(q).
"APPROVED PROPERTY MANAGER STANDARD" shall mean the standard
of business operations, practices and procedures customarily employed by
entities having a senior executive with at least ten (10) years' experience in
the management of hotels substantially similar to such Asset in the regions
where such Asset is located and that manages or has managed not less than ten
(10) such hotels.
"ASSET" shall mean individually, at any time, each real
property and hotel and other improvements thereon and FF&E and personal
property in connection therewith then owned by Borrower or in which Borrower
owns a Leasehold Estate now or hereafter encumbered by a Mortgage, together
with all rights pertaining thereto which collectively comprise the Asset as
more particularly described in each Mortgage and referred to therein as the
"Mortgaged Property".
"ASSIGNMENT OF LEASES" shall mean with respect to each of the
Assets, the certain first priority Assignment of Leases and Rents, dated as of
the date hereof (or with respect to a Substitution Added Asset, dated as of the
Substitution Date), from Borrower, as assignor, to Administrative Agent, as
assignee, assigning to Administrative Agent, as agent for Lenders, all of
Borrower's interest in and to the Tenant Leases and Rents of each such Asset as
security for the Loan, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"ASSUMPTION AGREEMENTS" shall have the meaning set forth in
Section 6.1(j)(vii)(F).
"AUTHORIZATION" means any authorization, approval, franchise,
license, variance, land use entitlement, sewer and waste water discharge
permit, storm water discharge permit, air pollution authorization to operate,
certificate of occupancy, municipal water and sewer connection permit, and any
like or similar permit now or hereafter required for the construction or
renovation of any Improvements located on any Asset or for the use, occupancy
or operation of any Asset and all amendments, modifications, supplements and
addenda thereto.
"AWARD" shall have the meaning set forth in Section 7.1.3(b).
"BANKRUPTCY CODE" shall mean Title 11 of the United States
Code, as amended.
3
10
"BASIC CARRYING COSTS" shall mean, with respect to each Asset,
the sum of the following costs associated with such Asset for the relevant
Fiscal Year or payment period: (i) real property taxes with respect to such
Asset and (ii) insurance premiums with respect to such Asset.
"BHAC" shall mean Bristol Hotel Asset Company, a Delaware
corporation.
"BHOC" shall mean Bristol Hotel Operating Company, a Delaware
corporation.
"BIG SIX ACCOUNTING FIRM" shall mean Ernst and Young, Coopers
and Xxxxxxx, Price Waterhouse, Deloitte & Touche, KPMG Peat Marwick or Xxxxxx
Xxxxxxxx & Co. or any successor entity.
"BORROWER" shall mean Bristol Lodging Company, a Delaware
corporation, together with its successors and assigns.
"BORROWER CONTRIBUTION DEPOSITS" shall have the meaning set
forth in Section 10.4.2.
"BORROWER NON-DEFEASANCE CONDITION" shall mean a material
adverse effect as determined by Administrative Agent on the ratings of a
proposed Securitization resulting from the occurrence (whether or not then
continuing) of a Default or Event of Default or the occurrence of a Material
Adverse Change. Administrative Agent shall promptly notify Borrower after it
has determined that a Borrower Non-Defeasance Condition, which has extended the
period during which Borrower is restricted from defeasing all or any part of
the Loan pursuant to Section 2.3.3 hereof, has occurred and no longer exists.
"BORROWER'S REMAINDER SUBACCOUNT" shall have the meaning set
forth in Section 10.2.2(a).
"BRISTOL" shall mean Bristol Hotel Company, a Delaware
corporation and the sole owner of the outstanding shares of capital stock of
BHOC.
"BRISTOL DEFAULT" shall occur if (i) Bristol or any direct or
indirect subsidiary of Bristol (including without limitation any Loan Party and
BHOC) shall fail to pay any principal of or premium or interest on any
indebtedness of such Person having a principal amount of $1,000,000 or more
(excluding Indebtedness evidenced by the Notes) when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise); (ii) any other event shall occur or condition shall
exist under any agreement or instrument relating to any such indebtedness, if
the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness; (iii) or any such
indebtedness shall become or be declared to be due and payable, or required to
be prepaid (other
4
11
than by a regularly scheduled required prepayment), or Bristol or any direct or
indirect subsidiary of Bristol (including without limitation any Loan Party or
BHOC) shall be required to repurchase or offer to repurchase such indebtedness
(unless such Person is not in default under such indebtedness), prior to the
stated maturity thereof. Notwithstanding the foregoing a Bristol Default shall
not occur if Bristol or any direct or indirect subsidiary of Bristol (other
than a Loan Party) shall be in default in connection with any indebtedness
which is not recourse (except with respect to an environmental indemnity or a
guaranty of recourse carveouts) to Bristol or any direct or indirect subsidiary
of Bristol; provided such non-recourse indebtedness and any other non-recourse
indebtedness of Bristol and any direct or indirect subsidiary of Bristol in
connection with which such Person has been or is in default shall not (x) in
the aggregate have a principal amount outstanding in excess of $100,000,000 and
(y) be secured by a lien, in the aggregate, on more than two hotels or other
similarly significant assets of such Person. For purposes of the foregoing,
recourse debt shall be considered non-recourse debt if the borrower of such
debt is a special purpose entity which would not be reasonably expected to be
consolidated with any of its Affiliates and no other Person is liable with
respect to such indebtedness (except with respect to an environmental indemnity
or a guaranty of recourse carveouts.)
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any other day on which national banks in New York, New York are not
open for business.
"CASH TRAP EVENT" shall mean each of (i) the occurrence of a
monetary Default, an Event of Default, or a Bristol Default or (ii) the
failure of Borrower or Parent to cause at least ninety percent (90%) of the sum
of (x) annual Mortgaged Property Gross Cash Flow of the Property and (y)
Security Deposits to be timely deposited into a Clearing Account A, as
evidenced by the audited financial statements delivered to Administrative Agent
pursuant to Section 5.1(j) hereof and in each case, notice to Borrower that
Administrative Agent is declaring a Cash Trap Event.
"CASH TRAP PERIOD" shall mean a date starting on the date of a
Cash Trap Event and ending on a date which is the later of the twelve (12)
month anniversary of the Cash Trap Event (or if later, the twelve month
anniversary of the occurrence of an event which would have caused a Cash Trap
Event to occur but for a prior event having already caused a Cash Trap Event)
and a date on which (i) no Default, Event of Default or Bristol Default is
continuing, (ii) Borrower shall have provided to Administrative Agent audited
financial statements (or in the case of a Cash Trap Event caused by a monetary
Default or an Event of Default or a Bristol Default, unaudited operating
statements) pursuant the Section 5.1(j) hereof evidencing that for the prior
twelve (12) month period at least ninety percent (90%) of the sum of Mortgaged
Property Gross Cash Flow of the Property and Security Deposits shall have been
timely deposited into a Clearing Account A and (iii) Borrower shall have
achieved, and provided evidence to Administrative Agent of the achievement, as
of the last day of the preceding calendar month, a Debt Service Coverage Ratio
for the Property for the preceding twelve (12) month period ending with such
calendar month of not less than 1.55 to 1.0
5
12
"CASUALTY" shall have the meaning specified in Section
7.1.1(d).
"CASUALTY/CONDEMNATION PREPAYMENTS" shall have the meaning set
forth in Section 2.3.2.
"CASUALTY RELEASE DATE" shall mean the date on which a
Casualty Release Event Occurs.
"CASUALTY RELEASE EVENT" shall have the meaning set forth in
Section 7.1.2
"CHANGE IN CONTROL" shall mean (i) a transfer, hypothecation,
conveyance, alienation, mortgage, encumbrance or pledge by which an aggregate
of more than 49% of the equity interest of a Person (including by way of the
transfer, hypothecation, conveyance, alienation, mortgage, encumbrance or
pledge of any direct or indirect legal or beneficial interest in any
constituent partner, member or shareholder of such Person) shall be vested in
or pledged to any other Person who does not, as of the Closing Date, own more
than 49% of such Person or (ii) a transfer of the power to direct or cause the
direction of management and policies of such Person through the direct or
indirect transfer of voting securities or other ownership interests, by
contract or otherwise. A Change in Control shall not include the resignation,
removal or replacement of the chief executive officer, chief financial officer,
other senior management or any director (other than an Independent Director) of
such Person.
"CLEARING ACCOUNT A" shall have the meaning set forth in
Section 10.2.1.
"CLEARING ACCOUNT B" shall have the meaning set forth in
Section 10.2.1.
"CLEARING AGREEMENTS" shall have the meaning set forth in
Section 10.11, each individually a Clearing Agreement.
"CLEARING BANK" shall mean those commercial or savings banks
selected by Borrower and approved by Administrative Agent in its reasonable
discretion in which a Clearing Account A is maintained.
"CLOSING DATE" shall mean the date of the funding of the Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.
"COLLATERAL" means, collectively, all property, whether real,
personal or mixed, tangible or intangible, owned or to be owned or leased or to
be leased or otherwise held or to be held by a Loan Party or in which a Loan
Party has or shall acquire an interest, to the extent of
6
13
the Loan Party's interest therein, now or hereafter granted, assigned,
transferred, mortgaged or pledged to the Secured Parties, or in which a Lien is
granted to the Secured Parties, to secure all or any part of the Obligations,
whether pursuant to the Loan Documents or otherwise, including, without
limitation, the Assets, the Tenant Leases and Rents and rights under the
Property Management Agreements, and any and all proceeds of the foregoing, but
excluding the Excluded Assets.
"COLLATERAL SECURITY AGREEMENT" means the Security and Pledge
Agreement dated as of the date hereof, executed and delivered by the Loan
Parties, Borrower and the Administrative Agent as security for the Loan made
to Borrower pursuant to which the Loan Parties will pledge and grant a security
interest in the collateral described therein to Administrative Agent, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
"COLLECTION PERIOD" shall mean, with respect to any
Disbursement Date, the period of time commencing on and including the eleventh
(11th) day of the calendar month preceding the calendar month in which such
Disbursement Date occurs to and including the tenth (10th) day of the calendar
month in which such Disbursement Date occurs, provided that the first
Collection Period shall commence on the Closing Date.
"COMMITMENT" means the commitment of each Lender to make or
maintain the Loan pursuant to Section 2.1.1, and "Commitments" mean such
commitments of all Lenders in the aggregate.
"CONDEMNATION" shall have the meaning set forth in Section
7.1.3(a).
"CONDEMNATION PROCEEDS" shall mean any Award in respect of any
Condemnation.
"CONDEMNATION RELEASE DATE" shall mean the date on which a
Condemnation Release Event Occurs.
"CONDEMNATION RELEASE EVENT" shall have the meaning set forth
in Section 7.1.3.
"CONDEMNATION RESTORATION" shall have the meaning set forth in
Section 7.1.3(c).
"CONSENT AND SUBORDINATION OF PROPERTY MANAGER" shall mean the
Consent and Agreement of Manager and Subordination of Management Agreement
dated as of the date hereof (or with respect to a Substitution Added Asset,
dated as of the Substitution Date), executed by the Property Manager, as
manager, in favor of Administrative Agent.
7
14
"CREDIT CARD RECEIVABLES" shall mean any receivable payable to
or for the benefit of Borrower (or any other Loan Party) by a Credit Card
Payor.
"CREDIT CARD PAYOR" shall mean American Express, Discover,
Diners Club and all other credit card issuers (or merchant banks acting on
behalf of Borrower with respect to credit cards issuers) whose credit cards are
accepted for payment at the Property.
"CREDIT CARD PAYOR PAYMENT DIRECTION LETTER" shall have the
meaning set forth in Section 10.3(a) hereof.
"DEBT" shall mean the outstanding principal amount set forth
in, and evidenced by, the Notes together with all interest accrued and unpaid
thereon and all other sums (including the Yield Maintenance Premium) due to
Lenders in respect of the Loan under the Notes, this Agreement, each Mortgage
or any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular
period of time, scheduled principal and interest payments due and payable under
the Notes.
"DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the
applicable period in which: (a) the numerator is the Net Operating Income for
such period as set forth in the statements required hereunder (except that in
the case of any Asset encumbered by a Mortgage which secures less than the
maximum amount of the Loan, the Net Operating Income included in the numerator
on account of such Asset shall be no greater than the lesser of (x) the Net
Operating Income for such Asset as determined by Lender on the Closing Date (or
Substitution Date in the case of an Asset which was or is a Substitution Added
Asset) for the same period preceding the Closing Date (or Substitution Date in
the case of a Substitution Added Asset) and (y) only in the case of an Asset
which was or is a Substitution Added Asset, the Net Operating Income for the
corresponding Substitution Removed Asset as determined by Lender on the Closing
Date for the same period preceding the Closing Date), and (b) the denominator
is the Debt Service for such period.
"DEFAULT" shall mean the occurrence of any event hereunder or
under any other Loan Document which, but for the giving of notice or the
passage of time, or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate
per annum equal to 500 basis points above the Applicable Interest Rate;
provided, however, in no event shall such rate exceed the maximum rate
permitted by applicable law.
"DEFEASANCE DATE" shall have the meaning set forth in Section
2.3.3(a).
8
15
"DEFEASANCE DEPOSIT" shall mean an amount equal to the sum of
(a) the amount necessary to purchase U.S. Obligations whose cash flows are in
an amount sufficient to make the Scheduled Defeasance Payments, (b) any out-of-
pocket costs and expenses incurred or to be incurred in the purchase of U.S.
Obligations necessary to meet the Scheduled Defeasance Payments, and (c) any
revenue, documentary stamp or intangible taxes or any other tax or charge due
in connection with the transfer of the Notes, the creation of the Defeased
Notes and the Undefeased Notes, as the case may be, any transfer of the
Defeased Notes or otherwise required to accomplish the agreements of Sections
2.3 and 2.4 hereof.
"DEFEASANCE EVENT" shall have the meaning set forth in Section
2.3.3(a) hereof.
"DEFEASANCE SECURITY AGREEMENT" shall have the meaning set
forth in Section 2.3.3(a)(vi).
"DEFEASED NOTE" shall have the meaning set forth in Section
2.3.3(a) hereof.
"DEPOSIT ACCOUNT" shall mean the account established and
maintained pursuant to Section 10.2.2(a) of this Agreement and the Deposit
Agreement for collecting and retaining all the Rents and other revenue and
income from the Property.
"DEPOSIT AGREEMENT" shall have the meaning set forth in
Section 10.11.
"DEPOSIT BANK" shall mean the commercial or savings bank in
which the Deposit Account is maintained.
"DEVELOPMENT" means the erection or other construction or
installation of Improvements on real property that is then substantially
unimproved or from which all or substantially all of the existing Improvements
thereon have been removed or will be removed in connection with such erection,
construction or installation. Development does not include restorations and
renovations provided, such restorations or renovations are permitted by the
terms of this Agreement.
"DISBURSEMENT DATE" shall mean the eleventh (11th) day of each
calendar month, or if such eleventh (11th) day is not a Business Day, the next
succeeding Business Day.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in
Section 9.2(a).
"DSCR DETERMINATION DATE" shall have the meaning set forth in
Section 10.12
"ELIGIBLE INVESTMENT" shall mean one or more of the following
obligations or securities payable on demand or having a scheduled maturity on
or before the Business Day preceding the day on which the amounts invested
pursuant hereto are required to be disbursed in
9
16
accordance herewith and having at all times the required ratings, if any,
provided for in this definition:
(a) obligations of, or obligations fully guaranteed as to
payment of principal and interest by, the United States or any agency
or instrumentality thereof provided such obligations are backed by the
full faith and credit of the United States of America, including,
without limitation, obligations of: the U.S. Treasury (all direct or
fully guaranteed obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business
Administration (guaranteed participation certificates and guaranteed
pool certificates), the U.S. Department of Housing and Urban
Development (local authority bonds) and the Washington Metropolitan
Area Transit Authority (guaranteed transit bonds); provided, however,
that the investments described in this clause (i) must have a
predetermined fixed dollar of principal due at maturity that cannot
vary or change, (ii) if rated by Standard & Poor's Ratings Services,
must not have an "r" highlighter affixed to their rating, (iii) must
have an interest rate tied to a single interest rate index plus a
fixed spread (if any) that moves proportionately with that index if
such investments have a variable rate of interest, and (iv) must not
be subject to liquidation prior to their maturity;
(b) Federal Housing Administration debentures;
(c) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt
obligations), the Farm Credit System (consolidated systemwide bonds
and notes), the Federal Home Loan Banks (consolidated debt
obligations), the Federal National Mortgage Association (debt
obligations), the Student Loan Marketing Association (debt
obligations), the Financing Corp. (debt obligations), and the
Resolution Funding Corp. (debt obligations); provided, however, that
the investments described in this clause (i) must have a predetermined
fixed dollar of principal due at maturity that cannot vary or change,
(ii) if rated by Standard & Poor's Ratings Services, must not have an
"r" highlighter affixed to their rating, (iii) must have an interest
rate tied to a single interest rate index plus a fixed spread (if any)
that moves proportionately with that index if such investments have a
variable rate of interest, and (iv) must not be subject to liquidation
prior to their maturity;
(d) federal funds, unsecured certificates of deposit,
time deposits, bankers' acceptances and repurchase agreements of any
bank, the short term obligations of which are rated in the highest
short term rating categories by at least two Rating Agencies (and if
any Securities are outstanding and are rated by Standard & Poor's
Ratings Services, one of such two Rating Agencies must be Standard &
Poor's Ratings Services); provided, however, that the investments
described in this clause (i) must have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (ii) if rated by
10
17
Standard & Poor's Ratings Services, must not have an "r" highlighter
affixed to their rating, (iii) must have an interest rate tied to a
single interest rate index plus a fixed spread (if any) that moves
proportionately with that index if such investments have a variable
rate of interest, and (iv) must not be subject to liquidation prior to
their maturity;
(e) fully Federal Deposit Insurance Corporation-insured
demand and time deposits in, or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and
loan association or savings bank; provided, however, that the
investments described in this clause (i) must have a predetermined
fixed dollar of principal due at maturity that cannot vary or change,
(ii) if rated by Standard & Poor's Ratings Services, must not have an
"r" highlighter affixed to their rating, (iii) must have an interest
rate tied to a single interest rate index plus a fixed spread (if any)
that moves proportionately with that index if such investments have a
variable rate of interest, and (iv) must not be subject to liquidation
prior to their maturity;
(f) debt obligations rated by at least two Rating
Agencies (and if any Securities are outstanding and are rated by
Standard & Poor's Ratings Services, one of such two Rating Agencies
must be Standard & Poor's Ratings Services) in their highest long-term
unsecured rating categories; provided, however, that the investments
described in this clause (i) must have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (ii) if rated by
Standard & Poor's Ratings Services, must not have an "r" highlighter
affixed to their rating, (iii) must have an interest rate tied to a
single interest rate index plus a fixed spread (if any) that moves
proportionately with that index if such investments have a variable
rate of interest, and (iv) must not be subject to liquidation prior to
their maturity;
(g) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than one year after the date of
issuance thereof) that is rated by at least two Rating Agencies (and
if any Securities are outstanding and are rated by Standard & Poor's
Ratings Services, one of such two Rating Agencies must be Standard &
Poor's Ratings Services) in their highest short-term unsecured debt
rating; provided, however, that the investments described in this
clause (i) must have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by Standard &
Poor's Ratings Services, must not have an "r" highlighter affixed to
their rating, (iii) must have an interest rate tied to a single
interest rate index plus a fixed spread (if any) that moves
proportionately with that index if such investments have a variable
rate of interest, and (iv) must not be subject to liquidation prior to
their maturity;
(h) the Federated Prime Obligation Money Market Fund (the
"Fund") so long as the Fund is rated "AAA" by each Rating Agency (or,
if not rated by any Rating Agency other than Standard & Poor's Rating
Service, otherwise acceptable to such
11
18
Rating Agency or Rating Agencies, as applicable, as confirmed in
writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings
assigned to the Securities issued in respect of, or secured by, such
pool of mortgage loans); and
(i) any other demand, money market or time deposit,
demand obligation or any other obligation, security or investment,
provided that each Rating Agency has confirmed in writing to
Administrative Agent, that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to the Securities issued in respect of, or
secured by such pool of mortgage loans;
provided, however, (i) that, in the judgment of Administrative Agent, such
obligation or security continues to qualify as a "cash flow investment"
pursuant to Code Section 860G(a)(6) earning a passive return in the nature of
interest and (ii) that no obligation or security shall be an Eligible
Investment if (x) the right to receive principal and interest payments derived
from the underlying investment provides a yield to maturity in excess of 120%
of the yield to maturity at par of such underlying investment or (y) such
investment has a maturity in excess of one year from the date of acquisition of
such investment or (z) such obligation or security evidences a right to receive
only interest payments.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which (i) is currently maintained or
contributed to by any Loan Party or any of their respective ERISA Affiliates,
or (ii) was at any time within the preceding five years maintained or
contributed to by any Loan Party or any of their respective ERISA Affiliates to
the extent any of them could reasonably be expected to incur liability with
respect to such employee benefit plan.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any other Person
for any damage, including, without limitation, personal injury (including
sickness, disease or death), tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, damage to natural resources, nuisance, pollution, contamination or
other adverse effects on the environment, or for fines, penalties or
restrictions, in each case relating to, resulting from or in connection with
any Hazardous Substance and relating to any Loan Party or any Asset.
"ENVIRONMENTAL INDEMNITY" shall mean the Environmental and
Hazardous Substance Indemnification Agreement dated as of the date hereof (or
with respect to a Substitution Added Asset, dated as of the Substitution Date),
executed by Borrower in connection with the Loan for the benefit of Lenders, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
12
19
"EQUIPMENT" means, with respect to any Asset, all machinery,
apparatus, equipment, fittings, fixtures, furniture, furnishings and articles
of personal property (including any such article constituting a fixture) of
every kind and nature whatsoever owned or leased now or in the future by
Borrower or any other Loan Party, and either located upon the real property
related to such Asset, or any part thereof, or used in connection with the
present use, maintenance, operation or occupancy of the related Improvements as
a hotel or motel or any other future occupancy or use of such Improvements,
including, without limitation, all heating, lighting, laundry, incinerating,
loading, unloading, swimming pool, landscaping, garage and power equipment and
supplies, engines, pipes, pumps, tanks, motors, conduits, switchboards,
plumbing, lifting, cleaning, fire prevention, fire extinguishing,
refrigerating, ventilating, and communications apparatus, luggage or food
carts, dollies, air cooling and air conditioning apparatus, elevators,
escalators, shades, awnings, screens, storm doors and windows, stoves,
freezers, refrigerators, cabinets, dressers, cooking utensils, dishes,
silverware, kitchen appliances and restaurant equipment and supplies,
computers, reservation systems, software, cash registers, card keys, telephone
switchboards, partitions, ducts and compressors, carpets, rugs, bed frames,
springs, mattresses, sheets, pillow cases, pillows, blankets, bed spreads,
stationery, tables, desks, chairs, sofas, bureaus, dressers, benches, window
curtains, telephones, televisions, radios, lamps, mirrors, paintings, wall
hangings, decorations, clothes hangers, bathroom fixtures, shower curtains,
towels, medicine cabinets, and hotel cleaning equipment and supplies, and all
additions, substitutions and replacements thereof, wherever located, together
with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto and all the present and future "goods",
"equipment" and "fixtures" (as such terms are defined in the Uniform
Commercial Code) and other personal property of Borrower or such other Loan
Party, including, without limitation, any such personal property and fixtures
which are leased, and all repairs, attachments, betterments, renewals,
replacements, substitutions and accessions thereof and thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA AFFILIATE" means, with respect to any Person, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of which such
Person is a member; (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control
within the meaning of Section 414(c) of the Code of which such Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Code of which such Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of any Loan Party shall continue
to be considered an ERISA Affiliate of such Loan Party, within the meaning of
this definition with respect to the period during which such entity was an
ERISA Affiliate of such Loan Party and with respect to liabilities arising
after such period for which such Loan Party could be liable under the Code or
ERISA.
13
20
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation), (ii) the failure to meet the
minimum funding standard of Section 412 of the Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Code) or
the failure to make by its due date a required installment under Section 412(m)
of the Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan, in the case of any such failure,
by a material amount, (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA, (iv)
the withdrawal by any Loan Party, or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or
4064 of ERISA, (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan, (vi) the imposition of liability on
any Loan Party or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA, (vii) the withdrawal by any Loan Party or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
material liability therefor, or the receipt by any Loan Party or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA,
(viii) the occurrence of an act or omission which could give rise to the
imposition on any Loan Party or any of their respective ERISA Affiliates of
material fines, penalties, taxes or related charges under Chapter 43 of the
Code or under Section 409 or Section 502(c)(2), (i) or (l), or Section 4071 of
ERISA in respect of any Employee Benefit Plan, (ix) the assertion of a material
claim (other than routine claims for benefits) against any Employee Benefit
Plan other than a Multiemployer Plan or the assets thereof, or against any Loan
Party or any of their respective ERISA Affiliates in connection with any such
Employee Benefit Plan, (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Code) to qualify under Section
401(a) of the Code, or the failure of any trust forming part of any Pension
Plan to qualify for exemption from taxation under Section 501(a) of the Code or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Code or pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
8.1(a).
"EXCHANGE ACT" shall have the meaning set forth in Section
9.2(a).
14
21
"EXCLUDED ASSETS" means the rights of the Borrower or any
other Loan Party under Property Management Agreements, liquor licenses,
Authorizations, service contracts, equipment leases, purchase agreements,
collective bargaining agreements and other agreements, but in each case only if
by their terms or by law they may not or cannot be pledged or assigned by
Borrower or such Loan Party to Administrative Agent or Lenders.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"FF&E" means, with respect to any Asset, any furniture,
fixtures and equipment located thereon or therein and owned or leased by
Borrower, including, without limitation, the Equipment.
"FF&E FINANCINGS" shall mean purchase money financing (and
refinancing thereof not to exceed the outstanding principal balance thereof nor
to be secured by additional FF&E) of FF&E located on and used in connection
with any Asset including but not limited to a lease of FF&E which would be
accounted for as a capital lease on a balance sheet prepared in conformity with
GAAP.
"FISCAL YEAR" shall mean each twelve month period commencing
on January 1 and ending on December 31 during the term of the Loan.
"FRANCHISE AGREEMENTS" means each of the franchise agreements
listed on Schedule V annexed hereto, together with the most recent related core
modernization plan or other property improvement plan required by the
respective franchisor, as each such agreement or property improvement plan may
be amended, restated, supplemented or otherwise modified or replaced from time
to time in accordance with the terms of this Agreement.
"FRANCHISE FEES" shall mean all fees payable by any franchisee
pursuant to any Franchise Agreements (including without limitation, marketing
fees).
"FUNCTION SPACE" shall mean with respect to any Asset, any
conference rooms, ballrooms, banquet facilities or other similar accommodations
at such Asset.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as of the date of the applicable financial report.
15
22
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever for any governmental
xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise) whether
now or hereafter in existence.
"GROSS INCOME FROM OPERATIONS" shall mean all income, computed
on an accrual basis in accordance with GAAP, derived from the ownership and
operation of the Property (or of each Asset, as applicable) from whatever
source, including, but not limited to, all Rent, utility charges, escalations,
forfeited security deposits, service fees or charges, license fees, parking
fees, rent concessions or credits, and any business interruption and rent loss
insurance proceeds, but excluding (a) sales, use and occupancy or other taxes
on receipts required to be accounted for by Borrower to any government or
governmental agency, (b) refunds and uncollectible accounts, (c) sales of
furniture, fixtures and equipment, (d) proceeds of casualty insurance and
condemnation awards, (e) interest on credit accounts, (f) proceeds of any
financing, (g) proceeds of any sale, exchange or transfer of the Property or
any part thereof or interest therein, (h) capital contributions or loans to
Borrower, and (i) any other non-operating or extraordinary nonrecurring
revenue.
"GROUND LEASE" shall, at any time, mean each lease pursuant to
which the Borrower has acquired a Leasehold Estate.
"GROUND LEASE EARLY RELEASE" shall have the meaning set forth
in Section 5.1(bb).
"GROUND LEASE EARLY REPAYMENT DATE" shall have the meaning set
forth in Section 5.1(bb).
"GROUND LESSOR" shall mean the Landlord under any Ground
Lease.
"GROUND RENT" shall mean all rents (including, without
limitation, fixed minimum rent and percentage rent), and rent equivalents and
other consideration of whatever form or nature payable to or for the account of
or benefit of the Ground Lessor under any Ground Lease.
"GROUND RENT ESCROW FUND" shall have the meaning set forth in
Section 7.6.
"GROUND RENT SUBACCOUNT" shall have the meaning set forth in
Section 10.2.2(a).
"GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation (for purposes of this definition only "primary obligations")
of any other Person (for purposes of this definition only "primary obligor") in
any manner including, without limitation, any obligation or arrangement
16
23
of such Person (a) to purchase or repurchase any such primary obligation, (b)
to advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) to indemnify the owner of such primary obligation
against loss in respect thereof.
"HAZARDOUS SUBSTANCE" shall have the meaning ascribed thereto
in the Environmental Indemnity.
"HOLIDAY INNS FRANCHISING" shall mean Holiday Inns
Franchising, Inc., a Delaware corporation or any Affiliate thereof.
"HOUSTON GROUND LEASE" shall mean that certain lease dated
July 5, 1962 among P.A. Xxxxx, A.M. Xxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxxx, Xxxxxxx
X. Xxxxxxxxxx, Xxxxxxx Xxxxxx and Studio Realty, Inc., as such lease has been
amended and assigned from time to time.
"HOUSTON EARLY RELEASE" shall have the meaning set forth in
Section 5.1(bb).
"HOUSTON HOTEL" shall mean that certain Asset in which
Borrower owns a Leasehold Estate pursuant to the Houston Ground Lease.
"IMPROVEMENTS" shall have the meaning, with respect to each
Asset, as set forth in the Mortgage with respect to such Asset.
"INDEMNITEE" shall have the meaning set forth in Section
11.13(b).
"INDEMNIFIED MATTERS" shall have the meaning set forth in
Section 11.13(b).
"INDEPENDENT" shall mean, when used with respect to any
Person, a Person who (a) is in fact independent, (b) does not have any direct
financial interest in Borrower, or in any Affiliate of Borrower or any
Affiliate of any constituent partner, shareholder, member or beneficiary of
Borrower (including without limitation any Loan Party), and (c) is not
connected with Borrower or any Affiliate of Borrower or any Affiliate of any
constituent partner, shareholder, member or beneficiary of Borrower as an
officer, employee, promoter, underwriter, trustee, partner, member, director or
person performing similar functions (including without limitation any Loan
Party). Notwithstanding the foregoing, Xxxx Xxxxxxxxxxxx shall not be deemed
to be not Independent solely by virtue of the fact that he is acting as an
"independent director" of any of Borrowers' Affiliates. Whenever it is herein
provided that any Independent Person's opinion or certificate shall be
provided, such opinion or certificate shall
17
24
state that the Person executing the same has read this definition and is
Independent within the meaning thereof.
"INDEPENDENT DIRECTOR" shall have the meaning set forth in
Section 4.1(dd)(xvi).
"INITIAL DEBT SERVICE COVERAGE RATIO" shall mean 1.65 to 1.
"INITIAL INTEREST RATE" shall mean a rate per annum equal to
seven and four hundred fifty-eight thousandths percent (7.458%).
"INSURANCE PREMIUMS" shall have the meaning set forth in
Section 7.1.1(c) hereof.
"INSURANCE PROCEEDS" shall mean all proceeds received,
damages, claims and rights of action, and rights thereto under insurance
policies required to be maintained by Borrower or relating to any Asset or any
portion thereof.
"INTEREST ACCRUAL PERIOD" means, with respect to a
Disbursement Date, the period commencing on and including the 11th day of the
month preceding the month in which such Disbursement Date occurs (or, in the
case of the first Disbursement Date, the Closing Date) and ending on and
including the 10th day of the month in which such Disbursement Date occurs,
except that the first Interest Accrual Period shall be the period commencing on
and including the Closing Date to and including the tenth (10th) day of the
first month immediately following the Closing Date; provided, however, that no
Interest Accrual Period shall extend beyond the Maturity Date.
"INTELLECTUAL PROPERTY" means, as of any date of
determination, all patents, trademarks, tradenames, copyrights, technology,
know-how and processes used in or necessary for the conduct of the business of
the Borrower as conducted on such date of determination that are material to
the business, operations or condition (financial or otherwise) of Borrower or
any other Loan Party including any of the foregoing licensed to any Loan Party
by other Persons.
"IP LICENSE AGREEMENTS" means, collectively, the agreements
(other than the Franchise Agreements) pursuant to which any Loan Party has
rights to use any Intellectual Property owned by any other Person.
"LEASING COMMISSIONS" shall mean any leasing commission
incurred by Borrower in connection with any new Tenant Lease or modification,
renewal or extension of an existing Tenant Lease.
"LEASEHOLD ESTATE" shall, at any time, mean any leasehold
estate of Borrower in real property and improvements now or hereafter
encumbered by a Mortgage together with all
18
25
right, title interest and privileges of Borrower in, to, under or otherwise by
nature of the lease creating such leasehold estate, as such lease may be
amended, restated, replaced, supplemented or modified from time to time.
"LEGAL REQUIREMENTS" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities
affecting any Asset or any part thereof or the construction, use, alteration or
operation thereof, or any part thereof, whether now or hereafter enacted and in
force, and all permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Borrower, at any time in force
affecting any Asset or any part thereof, including, without limitation, any
which may (i) require repairs, modifications or alterations in or to such Asset
or any part thereof, or (ii) in any way limit the use and enjoyment thereof.
"LIABILITIES" shall have the meaning set forth in Section
9.2(b).
"LICENSES" shall have the meaning set forth in Section 4.1(v).
"LIEN" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting any Asset or any portion thereof or any
interest therein, any Collateral or any portion thereof or any interest
therein, or Borrower or any other Loan Party, including, without limitation,
any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, the
filing of any financing statement, any option (including any purchase option,
call option or similar option), trust or other preferential arrangement having
the same economic effect of any of the foregoing, and mechanic's, materialmen's
and other similar liens and encumbrances.
"LIQUOR AGREEMENTS" means, collectively, the Liquor Operations
Servicing Agreements and the Liquor Leases listed on Schedule VI annexed
hereto, as any such agreement may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"LIQUOR COST EVIDENCE" shall have the meaning set forth in
Section 3.1(aa).
"LIQUOR LEASES" means each Tenant Lease entered into between a
Property Manager, as lessor, and the holder of a Liquor License in respect of
an Asset, in each case in connection with the sale of alcoholic beverages at
such Asset, substantially in the form approved by Administrative Agent on or
before the Closing Date or in such other form as may be reasonably acceptable
to Administrative Agent, as any such Tenant Lease may be amended,
19
26
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"LIQUOR LICENSES" means, collectively, the licenses set forth
on Schedule VI annexed hereto and each other license issued by the Department
of Alcoholic Beverage Control or similar state or local agency to Borrower or a
Subsidiary or in respect of any Asset, in each case in connection with the sale
of alcoholic beverages at such Asset.
"LIQUOR OPERATIONS SERVICING AGREEMENTS" means, collectively,
the sub-management agreements entered into between a Property Manager, as
sub-manager, and Borrower or a Subsidiary as a holder of a Liquor License,
substantially in the form approved by the Administrative Agent on or before
the Closing Date or in such other form as may be reasonably acceptable to
Administrative Agent, as any such sub-management agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"LOAN" shall mean the loan made by Lenders to Borrower in the
original aggregate principal amount set forth in, and evidenced by, the Notes
executed and delivered by Borrower and secured by the Mortgage and the other
Loan Documents executed and delivered by Borrower and/or other Loan Parties.
"LOAN PARTY" shall mean each of Borrower, each Subsidiary and
Parent.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Notes, each Mortgage, each Assignment of Leases, the Environmental Indemnity,
the Consent and Subordination of Property Manager, the Omnibus Management and
Liquor License Agreement, the Collateral Security Agreement, the Affiliate
Guaranty, the other Security Documents and any other document pertaining to the
Property or any of the Assets as well as all other documents executed and/or
delivered by Borrower or any other Loan Party in connection with the Loan.
"LOCK-BOX AGREEMENTS" shall have the meaning set forth in
Section 10.11.
"LOSS PROCEEDS" shall mean Insurance Proceeds or Condemnation
Proceeds.
"LOSS PROCEEDS SUBACCOUNT" shall have the meaning set forth in
Section 10.2.2(a).
"MANAGEMENT CO." means Bristol Hotel Management Corporation,
a Delaware corporation and a wholly owned subsidiary of BHOC.
"MANAGEMENT FEES" means, collectively, all hotel management
fees (however characterized, including base fees, trade name fees, incentive
fees, special incentive fees,
20
27
termination fees and all fees in respect of liquor license operations) and all
other fees or charges payable to the Property Manager for the management and
operation of an Asset, any other Collateral or any part thereof.
"MATERIAL ADVERSE CHANGE" shall mean a material adverse change
in or effect on (i) the assets, operations, or condition (financial or
otherwise) of the Borrower or the other Loan Parties, (ii) Borrower's ability
to pay the Debt in accordance with the terms hereof and otherwise comply with
the material terms of this Agreement, (iii) any Loan Party's ability to comply
with the material terms of any of the Loan Documents, (iv) any of the Assets or
the other material Collateral, or (v) the Secured Parties' Lien on any Asset or
the other material Collateral or the priority of such Lien.
"MATERIAL LEASE" means: (i) for any Tenant Lease entered into
prior to the Closing Date, each Tenant Lease determined by the Requisite
Lenders and Administrative Agent in their sole discretion to be material to
Borrower or the operation of Borrower's business; and (ii) for any Tenant Lease
entered into after the Closing Date, (w) any Tenant Lease which is not a lease
of retail or restaurant space or to a service provider (such as a lease to an
airline ticket agent or to an overnight courier) (x) any Tenant Lease necessary
for the operation of any Asset, (y) any Tenant Lease which individually
generates two percent (2%) or more, or together with previously existing Tenant
Leases generates more than five percent (5%) of the Mortgaged Property Gross
Cash Flow for such Asset or (z) any Tenant Lease which could reasonably be
expected to cause a Material Adverse Change.
"MATERIAL SECURITY DEPOSITS" shall mean a Security Deposit (x)
with respect to a Tenant Lease in an amount in excess of $5,000.00 and (y) with
respect to a Function Space in an amount in excess of $10,000.00.
"MATURITY DATE" shall mean the date on which the final payment
of principal of the Notes becomes due and payable as therein provided, whether
at the Stated Maturity, by declaration of acceleration, or otherwise.
"MAXIMUM MANAGEMENT FEE" shall mean an amount not greater than
the greater of (x) five percent (5%) per annum of Gross Income from Operations
for each Asset and (y) the fee generally charged by third party managers of
hotels substantially similar to such Asset (as reasonably determined by
Administrative Agent) in the same region as such Asset but in no event in
excess of seven percent (7%) per annum of Gross Income from Operations for each
Asset.
"MAXIMUM PERMITTED TRADE PAYABLES AND FF&E FINANCINGS" shall
mean (x) Permitted Trade Payables which are outstanding for more than sixty
(60) days and (y) FF&E Financings, in the aggregate for clause (x) and clause
(y) not to exceed $350,000 per Asset and $3,937,500 for the Property.
21
28
"MINIMUM BALANCE" shall have the meaning set forth in Section
10.4.1.
"MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean a constant
payment of $1,067,579.04.
"MONTHLY DEBT SERVICE SUBACCOUNT" shall have the meaning set
forth in Section 10.2.2(a).
"MORTGAGE" shall mean with respect to each of the Assets, that
certain first priority Mortgage, Assignment of Leases and Rents and Security
Agreement, or Deed of Trust, Assignment of Leases and Rents and Security
Agreement or Deed to Secure Debt, Assignment of Leases and Rents and Security
Agreement dated as of the date hereof (or with respect to a Substitution Added
Asset, dated as of the Substitution Date), executed and delivered by Borrower
as security for the Loan made to Borrower and encumbering such Asset, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
"MORTGAGED PROPERTY" shall have the same meaning as Asset.
"MORTGAGED PROPERTY GROSS CASH FLOW" shall mean, for any
period, all Rents and other income or revenue received with respect to the
Property, on a cash basis, including, without limitation, Loss Proceeds.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan", as defined in Section 3(37) of ERISA.
"NACC" shall have the meaning set forth in Section 2.4.2.
"NET OPERATING INCOME" shall mean, for any period, the Gross
Income From Operations, LESS the sum of:
(i) Operating Expenses in an amount equal to actual
Operating Expenses payable by Borrower for the consecutive
full twelve (12) months (or such other applicable period)
immediately preceding the date of determination (except real
property taxes and Insurance Premiums, which shall be included
only to the extent of the greater of (1) the actual amounts
payable and (2) the amounts payable in future periods as a
result of any reassessment actually made (with respect to real
estate taxes) or changes to Insurance Premiums). Operating
Expenses shall (a) exclude Franchise Fees, extraordinary
expenses (as reasonably determined by Administrative Agent in
accordance with the criteria established by any Rating Agency
rating the Securities), Management Fees and capital
expenditures, (b) be adjusted (as reasonably determined by
Administrative Agent in accordance with the criteria
established by any Rating Agency rating the
22
29
Securities) for any items that are non-recurring or not
supported by historical statements (as reasonably determined
by the Administrative Agent in accordance with the criteria
established by any Rating Agency rating the Securities) and
(c) be adjusted (as reasonably determined by Administrative
Agent in accordance with the criteria established by any
Rating Agency rating the Securities) if any Asset has been in
operation for less than the full twelve (12) months
immediately preceding the date of determination; plus
(ii) Franchise Fees in an amount equal to the
greater of (A) actual Franchise Fees for such period and (B)
an amount equal to the actual marketing fees to be paid under
Franchise Agreements for such period plus a per annum amount
equal to five percent (5%) of "revenues from room rentals" at
the Property (determined in accordance with the Uniform
System); plus
(iii) Management Fees in an amount equal to the
greater of (A) the per annum amount equal to 3.5% of the Gross
Income from Operations of the Property and (B) actual
management fees payable to the Property Manager for such
period; plus
(iv) a reserve for capital expenditures in an amount
equal to five percent (5%) of Gross Income from Operations;
plus
(v) such other deductions from and adjustments to
Gross Income from Operations and adjustments to Operations
Expenses consistent with the standards applied by Rating
Agencies including, without limitation, adjustments to actual
occupancy rates and expenses as the Rating Agency rating the
Securities (or if the Securitization has not occurred, a
Rating Agency selected by Administrative Agent) or
Administrative Agent, in its reasonable discretion, shall
require for other matters or factors that impact thereon.
"NEW ORLEANS GROUND LEASE" shall mean that certain lease dated
October 31, 1966 among Royal Banco, Inc., Xxxxxxx X. Xxxx and Xxxxxx X. Xxxxxx,
as such lease has been amended and assigned from time to time.
"NEW ORLEANS EARLY RELEASE" shall have the meaning set forth
in Section 5.1(bb).
"NEW ORLEANS HOTEL" shall mean that certain Asset in which
Borrower owns a Leasehold Estate pursuant to the New Orleans Ground Lease.
"NON-CONSOLIDATION OPINION" shall mean an opinion of counsel
to Borrower (reasonably satisfactory to Administrative Agent in form and
substance and from counsel
23
30
reasonably satisfactory to Administrative Agent and containing assumptions,
limitations and qualifications customary for opinions of such type) to the
effect that a court of competent jurisdiction in a proceeding under the
Bankruptcy Code would not consolidate the assets and liabilities of (x)
Borrower and any special purpose, bankruptcy remote general partner or member
of Borrower with those of a disclosed Person or Affiliate thereof (other than
another Loan Party) which became a debtor under the Bankruptcy Code or (y)
Parent with those of a disclosed Person or Affiliate thereof (other than
another Loan Party) which became a debtor under the Bankruptcy Code and, if
applicable.
"NOMURA" shall have the meaning set forth in Section 9.2(b).
"NOMURA GROUP" shall have the meaning set forth in Section
9.2(b).
"NOTE" shall mean each Promissory Note dated as of the date
hereof, made by Borrower in favor of each Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"OBLIGATIONS" shall mean any and all debt, liabilities and
obligations of Borrower to Lenders under the Loan Documents, including, without
limiting the generality of the foregoing, the Debt.
"OCCUPANCY/ROOM RATE STATISTICS" shall mean for any period, a
report, in a form and content reasonably acceptable to Administrative Agent,
setting forth on an Asset by Asset basis (x) average room rates for each Asset
during such period and (y) occupancy statistics for each Asset during such
period.
"OFFICERS' CERTIFICATE" shall mean a certificate delivered to
Administrative Agent by Borrower which is signed by an authorized senior
officer of Borrower.
"OMNIBUS MANAGEMENT AND LIQUOR LICENSE AGREEMENT" means the
Agreement regarding Liquor Leases, Servicing Agreements, Property Management
Agreements and Liquor Licenses dated as of the date hereof, executed and
delivered by Borrower and certain other Loan Parties as security for the Loan
made to Borrower, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
"O&M PLAN" shall have the meaning set forth in Section
3.1(bb).
"OPERATING EXPENSES" shall mean the total of all expenditures
of whatever kind, computed on an accrual basis in accordance with GAAP for all
purposes other than in connection with a Requisition which shall be computed on
the cash basis, relating to the operation, maintenance and management of the
Property, but excluding any non-cash charge or non-operating items such as
depreciation, debt service, income taxes and capital expenditures and
24
31
other expenses similar to those capitalized on or excluded from the Financial
Statements for the 12 months ending December 31, 1996 audited by Xxxxxx
Xxxxxxxx LLP which were delivered to Lenders in connection with the funding of
the Loan on the Closing Date.
"OPTIONAL PREPAYMENT DATE" shall mean November 11, 2007.
"OTHER CHARGES" shall mean all maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining any Asset, now or hereafter levied or assessed or
imposed against the Property or any part thereof and which may create a Lien
against any Asset or any part thereof.
"PARENT" shall mean Bristol Lodging Holding Company, a
Delaware corporation.
"PARTIAL RELEASE" shall mean, with respect to a particular
Asset, a discharge, release satisfaction or similar instrument necessary or
sufficient to release an Asset and the Collateral related to such Asset (other
than any substitute collateral pledged pursuant to Section 2.3.3 hereof) from
the Lien of the Mortgage encumbering such Asset and from the other Security
Documents encumbering such Collateral.
"PAYMENT DIRECTION LETTER" shall have the meaning set forth in
Section 10.3(a) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" shall mean, with respect to each
Asset, collectively: (a) the Liens created by or permitted under the Loan
Documents (including without limitation Liens securing FF&E Financings and
Permitted Trade Payables which in the aggregate do not exceed Maximum Permitted
Trade Payables and FF&E Financings), (b) all Liens, encumbrances and other
matters disclosed in the Title Insurance Policies relating to such Asset or any
part thereof, (c) Liens, if any, for Taxes imposed by any Governmental
Authority and Other Charges not yet delinquent, (d) statutory liens for labor
or materials securing sums not yet due and payable (or with respect to which
Borrower has removed any such lien within 60 days of such sum becoming due and
payable, by posting a bond or otherwise), (e) rights of tenants, as tenants
only, under Tenant Leases approved or deemed approved by Administrative Agent,
(f) judgments provided such judgments are being appealed by Borrower and a stay
of execution has been granted with respect thereto and Borrower has either
deposited 125% of the value of such judgments with Administrative Agent or
posted a bond reasonably satisfactory to Xxxxxxxxxxxxxx
00
00
Xxxxx, (x) rights of guests to occupy rooms of any Asset but only if permitted
by Section 5.1(t) and (h) mechanics, materialmen and other similar liens and
encumbrances that are bonded and thereby deemed released of record in a manner
reasonably satisfactory to Administrative Agent.
"PERMITTED PLEDGE" shall mean a pledge of the stock of BHOC
which pledge shall secure the Subordinate Notes and be in form and substance
acceptable to the Requisite Lenders and the Administrative Agent in their sole
discretion.
"PERMITTED TRADE PAYABLES" shall mean unsecured trade payables
which are customarily and actually required to be satisfied within thirty (30)
days.
"PERMITTED TRANSFER" shall mean a one-time dividend of the
capital stock of Parent by BHAC to BHOC, which dividend shall have occurred
subsequent to the date hereof and prior to the making of the Loan hereunder.
"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, estate, trust, unincorporated
association, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on
behalf of any of the foregoing.
"POLICIES" shall have the meaning specified in Section
7.1.1(c).
"POST OPTIONAL PREPAYMENT DATE REQUISITION" shall have the
meaning set forth in Section 10.8.2 hereof.
"PREMISES" shall have the meaning, with respect to each Asset,
as set forth in the Mortgage with respect to such Asset.
"PROPERTY" shall mean collectively, at any time, the real
properties, the hotel and other improvements thereon and FF&E and personal
property in connection therewith, then owned by Borrower or in which Borrower
owns a Leasehold Estate and now or hereafter encumbered by a Mortgage, together
with all rights pertaining to such properties and improvements, and Leasehold
Estate as each is more particularly described in the granting clauses of each
Mortgage and referred to therein as the "Mortgaged Property." The Assets
comprising the Property on the Closing Date (other than FF&E and personal
property) are listed on Schedule VII which Schedule may be revised from time to
time by Administrative Agent as existing Assets are released from the Lien of a
Mortgage and new Assets are encumbered by the Lien of a Mortgage in accordance
with Section 2.4 hereof.
"PROPERTY MANAGEMENT AGREEMENT" means, a property management
agreement which is reasonably acceptable to Administrative Agent, entered into
by and between Borrower and the Property Manager, pursuant to which the
Property Manager is to provide management
26
33
and other services with respect to each Asset, as any such management agreement
may be amended, restated, supplemented or otherwise modified from time to time
with the consent of Administrative Agent.
"PROPERTY MANAGER" shall mean any Person that manages an Asset
pursuant to a Property Management Agreement which unless otherwise reasonably
approved by Administrative Agent shall be Management Co.
"PROPERTY MANAGER CONTROL NOTICE" shall have the meaning set
forth in Section 5.1(v).
"PRO RATA SHARE" or "pro-rata" means, with respect to each
Lender, the quotient obtained by dividing the Commitment of such Lender by the
Commitments of all Lenders; provided, however, that if the Commitments have
been terminated or have expired, it means the quotient obtained by dividing the
outstanding principal amount of the Loan of such Lender by the outstanding
principal amount of all Loans of all Lenders.
"PROPERTY REQUIRED REPAIRS" shall have the meaning set forth
in Section 7.2.1.
"PROVIDED INFORMATION" shall have the meaning set forth in
Section 9.1(a).
"RATING AGENCY" shall mean each of Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Xxxxx'x Investors Service,
Inc., Duff & Xxxxxx Credit Rating Co. and Fitch Investors Service, Inc. or any
other nationally-recognized statistical rating agency which has been approved
by Administrative Agent.
"REGISTRATION STATEMENT" shall have the meaning set forth in
Section 9.2(b).
"RELEASE PRICE" for an Asset shall mean 125% (or in the case
of a Casualty Release Event, a Condemnation Release Event or a Ground Lease
Early Release, 100%) of the Allocated Loan Amount of such Asset, less insurance
proceeds and casualty awards applicable to such Asset which shall have been
applied in reduction of the principal amount of the Loan in accordance with
Section 2.3.2(a) hereof plus such additional sums necessary to satisfy the
conditions to release set forth in Section 2.4 hereof.
"REMAINING PROPERTY" shall mean the Property which is, at the
date of determination, subject to the lien of a Mortgage (including any
Substitution Added Asset in the case of a Substitution Event and excluding any
Assets in connection with which Borrower is requesting a Partial Release).
"REMAINING PROPERTY DSCR" shall mean the ratio of (i) Net
Operating Income of the Remaining Property for the twelve (12) full months
preceding the applicable Defeasance
27
34
Date or Substitution Date, as the case may be (except that in the case of any
Asset encumbered by a Mortgage which secures less than the maximum amount of
the Loan, the Net Operating Income included in the numerator on account of such
Asset shall be no greater than the lesser of (x) the Net Operating Income for
such Asset as determined by Lender on the Closing Date (or Substitution Date in
the case of an Asset which was or is a Substitution Added Asset) for the same
period preceding the Closing Date (or Substitution Date in the case of a
Substitution Added Asset) and (y) only in the case of an Asset which was or is
a Substitution Added Asset, the Net Operating Income for the corresponding
Substitution Removed Asset as determined by Lender on the Closing Date for the
same period preceding the Closing Date) to (ii) Debt Service for the twelve
(12) full months next following the applicable Defeasance Date or Substitution
Date as the case may be (using the balance of the Loan after payment of the
Release Price for the Assets in connection with which Borrower is requesting a
Partial Release and all Assets previously Partially Released).
"REMIC TRUST" shall have the meaning set forth in Section
2.3.3(a).
"RENT" shall mean all rents (including, without limitation,
fixed minimum rent and percentage rent), rent equivalents, moneys payable as
damages or in lieu of rent or rent equivalents, royalties (including, without
limitation, all oil and gas or other mineral royalties and bonuses), income,
issues, profits, royalties, room receipts, rack charges, vending machine
receipts, food and beverage receipts, concession fees and charges, public
assembly room receipts, receivables, receipts, expense reimbursements and
recoveries from tenants, guests and customers, revenues, deposits (including,
without limitation, security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other consideration of
whatever form or nature received by or paid to or for the account of or benefit
of Borrower or its agents or employees from any and all sources arising from or
attributable to the Property and proceeds, if any, from business interruption
or other loss of income insurance.
"RENT ROLL" shall have the meaning set forth in Section
5.1(t)(i).
"REPLACEMENT RESERVE FUND" shall have the meaning set forth in
Section 7.4.1.
"REPLACEMENT RESERVE SUBACCOUNT" shall have the meaning set
forth in Section 10.2.2(a).
"REPLACEMENTS" shall have the meaning set forth in Section
7.4.2(a).
"REQUIRED RATIO" shall have the meaning set forth in Section
10.12.
"REQUIRED RECORDS" shall mean the financial statements,
certificates, reports or information required to be delivered by Borrower
pursuant to Section 5.1(j).
28
35
"REQUIRED REPAIR FUND" shall have the meaning set forth in
Section 7.2.2.
"REQUIRED REPAIR SUBACCOUNT" shall have the meaning set forth
in Section 10.2.2(a).
"REQUISITE LENDERS" means Lenders having or holding more than
51% of the sum of the Commitments of all Lenders, or if such Commitments have
terminated or expired, Lenders having or holding more than 51% of the aggregate
principal amount of the outstanding Loan.
"REQUISITION" shall have the meaning set forth in Section
10.8.1.
"RESTORATION" shall have the meaning set forth in Section
7.1.2(b).
"RESIDUAL AMOUNT" shall mean any residual interest in the
REMIC Trust.
"SCHEDULED DEFEASANCE PAYMENTS" shall have the meaning set
forth in Section 2.3.3(b).
"SECONDARY MARKET TRANSACTION" shall mean any transaction,
including a Securitization, in which a Lender (i) sells the Loan, its Note and
the other Loan Documents to one or more investors as a whole loan, (ii)
participates the Loan to one or more investors, (iii) deposits the Loan, the
Mortgages, the Note and the other Loan Documents with a trust, which trust may
sell certificates to investors evidencing an ownership interest in the trust
assets, or (iv) otherwise sells the Loan or interest therein to investors.
"SECURED PARTIES" shall mean Lenders and Administrative Agent.
"SECURITIES" shall have the meaning set forth in Section 9.1.
"SECURITIES ACT" shall have the meaning set forth in Section
9.2(a).
"SECURITIZATION" shall have the meaning set forth in Section
9.1.
"SECURITIZATION EXPENSES" shall have the meaning set forth in
Section 9.1.
"SECURITY DEPOSIT SUBACCOUNT" shall have the meaning set forth
in Section 10.2.2(a).
"SECURITY DEPOSITS" shall mean all security (whether cash,
letter of credit or otherwise) given to Borrower or any agent or Person acting
on behalf of Borrower in connection with (x) the Tenant Leases or (y) Function
Space.
29
36
"SECURITY DOCUMENTS" shall mean, collectively, the Mortgages,
the Assignments of Leases, the Collateral Security Agreement, the Assumption
Agreements, the Lock-Box Agreement, the Omnibus Management and Liquor License
Agreement, and all deeds of trust, deeds to secure debt, mortgages, security
agreements, pledge agreements, assignments and all other instruments or
documents (including UCC-1 financing statements, fixture filings, amendments of
financing statements or similar documents required or advisable in order to
perfect or maintain the Liens created by the Security Documents) delivered by
any Person pursuant to this Agreement or any of the other Loan Documents, in
order to grant to the Secured Parties Liens in real, personal or mixed property
of such Person, and to maintain such Liens or as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"SENIOR NOTE CONSENT" shall mean that certain Indenture
Supplement No. 3, Consent and Amendment No.1 to Pledge Agreement dated on or
about the date hereof and executed by Bristol, BHAC, BHOC, and The Bank of New
York, as trustee.
"SERVICER" shall have the meaning set forth in Section 10.1.
"SERVICING FEES" shall have the meaning set forth in Section
10.1.
"SEVERED LOAN DOCUMENTS" shall have the meaning set forth in
Section 8.2(c).
"SPE MEMBER" shall have the meaning set forth in Section
4.1(dd)(xv).
"STATE" shall mean the State of New York.
"STATED MATURITY" shall mean November 11, 2022.
"SUBACCOUNTS" shall have the meaning set forth in Section
10.2.2(a).
"SUBORDINATE NOTE DOCUMENTS" shall mean those certain
documents executed in connection with the Subordinate Notes, each such document
being in a form and substance as approved by the Administrative Agent on or
prior to the Closing Date, in each case as such documents shall be amended,
restated, supplemented or otherwise modified from time to time pursuant to the
terms of this Agreement.
"SUBORDINATE NOTES" shall mean those notes issued by Bristol
pursuant to that certain Indenture, dated as of December 18, 1995, as amended,
among Bristol BHAC, BHOC and The Bank of New York, as trustee, in each case as
such documents shall be amended, restated, supplemented or otherwise modified
from time to time pursuant to the terms of this Agreement.
30
37
"SUBSIDIARY" shall mean those entities, wholly-owned by
Parent, which are named on Schedule XIII.
"SUBSTITUTION ADDED ASSET" shall have the meaning set forth in
Section 2.4.4.
"SUBSTITUTION DATE" the date on which any Substitution Event
occurs.
"SUBSTITUTION DILIGENCE PERIOD" shall mean the sixty (60) days
prior to any Substitution Date.
"SUBSTITUTION EVENT" shall have the meaning set forth in
Section 2.4.4.
"SUBSTITUTION NOTICE" shall have the meaning set forth in
Section 2.4.4.
"SUBSTITUTION REMOVED ASSET" shall have the meaning set forth
in Section 2.4.4.
"SUCCESSOR BORROWER" shall have the meaning set forth in
Section 2.4.2.
"SUPPLEMENTAL COLLATERAL AGENT" shall have the meaning set
forth in Section 12.2.1.
"SURVEY" shall mean a survey of each Asset prepared by a
surveyor licensed in the state where such Asset is located and satisfactory to
Administrative Agent and the company or companies issuing the Title Insurance
Policy applicable to such Asset, and containing a certification of such
surveyor satisfactory to Administrative Agent.
"TAX AND INSURANCE ESCROW FUND" shall have the meaning set
forth in Section 7.3.
"TAX AND INSURANCE ESCROW SUBACCOUNT" shall have the meaning
set forth in Section 10.2.2(a).
"TAXES" shall mean all real estate and personal property
taxes, assessments, water rates or sewer rents now or hereafter levied or
assessed or imposed against an Asset or any part thereof, including, but not
limited to, (a) any ad valorem real and tangible personal property taxes levied
against an Asset and (b) any intangible personal property tax levied or imposed
on any Lender with respect to its ownership in the Loan.
"TENANTS" shall have the meaning set forth in Section 10.3(a).
31
38
"TENANT LEASE" shall mean any lease (or, to the extent of the
interest therein of Borrower, any sublease or sub-sublease), letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any person is granted a possessory
interest (other than (x) as a guest who personally occupies a room in any Asset
which is a hotel for less than 30 days) or (y) Function Space for a period of
less than 7 days) in, or right to use or occupy all or any portion of, any
space in any Asset, and every modification, amendment or other agreement
relating to such lease, sublease, sub-sublease or other agreement entered into
in connection with such lease, sublease, sub-sublease or other agreement and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto.
"TERM" shall have the meaning set forth in Section 7.1.1(a).
"TITLE INSURANCE POLICY" shall mean the ALTA (or in the case
of any Asset located in Texas, the Texas equivalent) mortgagee title insurance
policy in the form (acceptable to Administrative Agent) issued with respect to
each Asset and insuring the lien of the Mortgage encumbering each such Asset.
"TOTAL RELEASE" shall mean a discharge, release, satisfaction
or similar instrument necessary and sufficient to release all of the Property
and the other Collateral (other than the substitute collateral pledged pursuant
to Section 2.3.3 hereof) from the Liens of all of the Mortgages encumbering the
Property and of all of the other Security Documents.
"TRANSFER" shall have the meaning set forth in Section
6.1(j)(ii).
"TRANSFEREE" shall have the meaning set forth in Section
6.1(j)(vii)(B).
"TREASURY RATE" shall mean, at the time of determination, the
sum of (x) the rate listed in the "Week Ending" column for securities having a
maturity most nearly approximating the Stated Maturity in the most current
Federal Reserve Statistical Release H.15-Selected Interest Rates (the "FEDERAL
RELEASE") under the heading "U.S. government securities", and the sub-heading
"Treasury constant maturities" plus (y) seven-eights of a percent (.875%). In
the event the Federal Release is no longer published, Administrative Agent
shall select a comparable publication to determine the Treasury Rate.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean, with respect to
any Asset, the Uniform Commercial Code as in effect in the applicable state or
commonwealth in which such Asset is located.
"UNDEFEASED NOTE" shall have the meaning set forth in Section
2.3.3(a) hereof.
"UNDERWRITER GROUP" shall have the meaning set forth in
Section 9.2(b).
32
39
"UNIFORM SYSTEM" shall mean the Uniform System of Accounts for
Hotels, 8th Revised Edition, 1986, as published by the Hotel Association of New
York City, as the same may be further revised from time to time.
"UNUSED REQUISITION AMOUNT" shall have the meaning set forth
in Section 10.8.2.
"U.S. OBLIGATIONS" shall mean direct non-callable United
States of America government securities as defined in Section 2(a)(16) of the
Investment Company Act of 1940 (15 U.S.C. 80a-1).
"YIELD MAINTENANCE PREMIUM" shall mean the amount (if any)
which, when added to the remaining unpaid principal amount of the Note or the
principal balance of the Defeased Note, as applicable, will be sufficient to
purchase U.S. Obligations providing the required Scheduled Defeasance Payments.
SECTION 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise
specified. Unless otherwise specified, the words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined. The terms "Lender" and "Administrative Agent" include
their respective successors and assigns who become a party hereto pursuant to
the terms of this Agreement.
II. GENERAL TERMS
SECTION 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.
2.1.1 THE LOAN. Subject to and upon the terms and conditions
set forth herein, each Lender hereby severally agrees to make its pro rata
portion of the Loan to Borrower on the Closing Date in the original principal
amount for each Lender set forth opposite its name on Schedule XVIII. The Loan
shall mature on the Maturity Date.
2.1.2 DISBURSEMENT TO BORROWER. Borrower may request and
receive only one borrowing hereunder in respect of the Loan. Any amount
borrowed and repaid hereunder in respect of the Loan may not be reborrowed.
Borrower shall, on the Closing Date, receive its Loan, subject to the direction
given by Borrower as to the application of the Loan proceeds to the items set
forth in Section 2.2.
33
40
2.1.3 THE NOTE. Each Lender's pro-rata portion of the Loan
shall be evidenced by a Note of Borrower in favor of such Lender, in the
original principal amount of such Lender's interest in the Loan. The Loan
shall bear interest as provided in the Notes and in Section 2.6 hereof and
shall be subject to repayment as provided in the Notes and in Section 2.3
hereof. The holder of each Note shall be entitled to the benefits of this
Agreement and the Loan shall be secured by the Mortgage, the Assignment of
Leases and the other Loan Documents.
SECTION 2.2 USE OF PROCEEDS. Borrower shall use, in the
following order of priority, the proceeds of the Loan disbursed to it pursuant
to Section 2.1 to (a) repay and discharge any existing loans relating to the
Property (other than Permitted Trade Payables and FF&E Financing which do not
in the aggregate exceed the Maximum Permitted Trade Payables and FF&E
Financings, to the extent Borrower elects in its sole discretion not to repay
such indebtedness from Loan proceeds), (b) pay all past-due Basic Carrying
Costs, if any, in respect of the Property, (c) fund the Tax and Insurance
Escrow Fund, the Replacement Reserve Fund, the Ground Rent Escrow Fund and the
Required Repair Fund to the extent required to be funded on the Closing Date
pursuant to the terms of this Agreement, (d) pay reasonable out-of- pocket
costs and expenses incurred in connection with the closing of the Loan, as
approved by Administrative Agent and (e) any other corporate purpose (including
payment of a dividend to Parent).
SECTION 2.3 LOAN PREPAYMENT AND DEFEASANCE.
2.3.1 REPAYMENT AND PREPAYMENT. Borrower shall repay any
outstanding principal indebtedness of the Loan in full on the Maturity Date of
the Loan, together with interest thereon to (but excluding) the date of
repayment. Other than as set forth in Sections 2.3.2, 7.1.2(c) and 7.1.3(d)
below, Borrower shall have no right to prepay all or any portion of the Loan
prior to the Optional Prepayment Date. On the Optional Prepayment Date or on
any scheduled payment date thereafter, Borrower may, at its option and upon at
least thirty (30) days, but not more than ninety (90) days prior written notice
from Borrower to Administrative Agent (which notice shall be irrevocable except
as hereinafter provided in this Section 2.3.1), who shall promptly notify the
Lenders thereof, prepay in whole or in part the Debt without payment of the
Yield Maintenance Premium or any other premium or penalty, provided however,
prior to the date which is twenty (20) days before the date for prepayment
specified by Borrower in such notice, Borrower shall be permitted to revoke
such notice and if so revoked such notice shall not accelerate the Maturity
Date. If prior to the Optional Prepayment Date and following the occurrence of
any Event of Default, Borrower shall tender payment of an amount sufficient to
satisfy the Debt, such tender by Borrower shall be deemed to be voluntary and
Borrower shall pay, in addition to the Debt, the Yield Maintenance Premium, if
any, that would be required under a Defeasance Event. Each voluntary
prepayment after the Optional Prepayment Date shall be made on a scheduled
payment date and include all accrued and unpaid interest up to but not
including such scheduled payment date or, if not paid on a
34
41
scheduled payment date, include interest that would have accrued on such
prepayment through the next regularly scheduled payment date.
2.3.2 CASUALTY/CONDEMNATION PREPAYMENTS. The Loan is subject
to mandatory and voluntary prepayment in certain instances of Casualty and
Condemnation (each, a "CASUALTY/CONDEMNATION PREPAYMENT"), in the manner and to
the extent set forth in Section 7.1.2 and Section 7.1.3 hereof. Each
Casualty/Condemnation Prepayment shall be made on a scheduled payment date and
include all accrued and unpaid interest up to but not including such scheduled
payment date or, if not paid on a scheduled payment date, include interest that
would have accrued on such prepayment through the next regularly scheduled
payment date.
2.3.3 VOLUNTARY DEFEASANCE OF THE LOAN. (a) At any time
prior to the Optional Prepayment Date and after the date which is the earlier
of (x) two (2) years from the "startup day" (within the meaning of Section
860G(a)(9) of the Code) of a "real estate mortgage investment conduit" (within
the meaning of Section 860D of the Code) which holds the Notes (the "REMIC
TRUST"), if applicable, or (y) the three year anniversary of the Closing Date
(as such three year anniversary may be extended by Administrative Agent as a
result of a Borrower Non-Defeasance Condition to a date that is five (5) days
after Administrative Agent has reasonably determined that no Borrower
Non-Defeasance Condition exists), Borrower may voluntarily defease all or any
portion of the Loan by pledging substitute collateral to the Secured Parties
that consists solely of U.S. Obligations that produce payments which replicate
the payment obligations of Borrower under the Note or that portion of the Note
which the Borrower wishes to defease (hereinafter, a "DEFEASANCE EVENT"). Each
Defeasance Event by Borrower shall be subject to the satisfaction of the
following conditions precedent:
(i) Borrower shall provide not less than thirty
(30) days prior written notice to Administrative Agent specifying a
regularly scheduled payment date (the "DEFEASANCE DATE") on which the
Defeasance Event is to occur; such Notice shall indicate the principal
amount of the Notes to be defeased, shall list the Assets, if any,
which Borrower wants the Secured Parties to release from the Lien of a
Mortgage pursuant to Section 2.4 hereof;
(ii) Borrower shall pay to each Lender all accrued
and unpaid interest on the principal balance of the Note held by such
Lender to but not including the Defeasance Date. If for any reason
the Defeasance Date is not a regularly scheduled payment date,
Borrower shall also pay interest that would have accrued on the Notes
through the next regularly scheduled payment date;
(iii) Borrower shall pay to each Lender all other
sums, not including scheduled interest or principal payments, due
under the Notes, this Agreement, the Mortgage and the other Loan
Documents;
35
42
(iv) Borrower shall pay to each Lender the
required Defeasance Deposit for the Defeasance Event;
(v) In the event only a portion of the Loan is
the subject of a Defeasance Event, Borrower shall prepare all
necessary documents to amend and restate the Notes and issue two
substitute notes for each Lender, one of such substitute notes having
a principal balance equal to the defeased portion of the original Note
held by such Lender (the "DEFEASED NOTE") and the other of such
substitute notes having a principal balance equal to the undefeased
portion of the Note held by such Lender (the "UNDEFEASED NOTE"). The
Defeased Note and Undefeased Note shall have identical terms as the
original Notes except for the principal balance.
(vi) Borrower shall execute and deliver a security
agreement, in form and substance satisfactory to Administrative Agent
creating a first priority lien on the Defeasance Deposit and the U.S.
Obligations purchased with the Defeasance Deposit in accordance with
the provisions of this Section 2.3.3 (the "DEFEASANCE SECURITY
AGREEMENT");
(vii) Borrower shall deliver an opinion of counsel
for Borrower in form satisfactory to the Requisite Lenders and
Administrative Agent in their sole discretion stating, among other
things, that (i) in the event of a Total Release under Section 2.4.1,
Borrower has legally and validly transferred and assigned the U.S.
Obligations and all obligations, rights and duties under and to the
Notes or the Defeased Notes, as applicable to the Successor Borrower,
(ii) the Secured Parties have a perfected first priority security
interest in the Defeasance Deposit and the U.S. Obligations delivered
by Borrower or Successor Borrower, as applicable, and (iii) if the
Loan is included in any REMIC formed pursuant to a Securitization,
after the Defeasance Event the Loan will continue to be a "qualified
mortgage" within the meaning of Section 860G of the Code and the REMIC
will not fail to maintain its status as a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code as
a result of such Defeasance Event;
(viii) If the Loan has been included in a
Securitization, evidence in writing from the applicable Rating
Agencies shall have been delivered to the effect that such release
will not result in a downgrade, withdrawal or qualification of the
respective ratings in effect immediately prior to such Defeasance
Event for the Securities issued in connection with the Securitization
which are then outstanding. If required by the applicable Rating
Agencies, Borrower shall also deliver or cause to be delivered a
Non-Consolidation Opinion with respect to the Successor Borrower in
form and substance reasonably satisfactory to Administrative Agent,
and the applicable Rating Agencies;
(ix) Borrower shall deliver an Officer's
Certificate certifying that the requirements set forth in this Section
2.3.3(a) have been satisfied;
36
43
(x) Borrower shall deliver such other
certificates, documents or instruments as Administrative Agent and
Lenders may reasonably request;
(xi) Borrower shall pay all reasonable
out-of-pocket costs and expenses of Administrative Agent and Lenders
incurred in connection with the Defeasance Event, including any costs
and expenses associated with a release of one or more Liens as
provided in Section 2.4 hereof as well as reasonable attorneys' fees
and expenses; and
(xii) No Event of Default may exist on the
Defeasance Date which is not cured by the occurrence of such
Defeasance Event.
(b) In connection with each Defeasance Event, Borrower
hereby appoints Administrative Agent as its agent and attorney-in-fact for the
purpose of using the Defeasance Deposit to purchase U.S. Obligations which
provide payments on or prior to, but as close as possible to, all successive
scheduled payment dates after the Defeasance Date upon which interest and
principal payments are required under the Notes (assuming that Borrower pays
the Notes in full on the Optional Prepayment Date), in the case of a Defeasance
Event for the entire outstanding principal balance of the Loan, or the Defeased
Notes (assuming that the Borrower pays the Defeased Note in full on the
Optional Prepayment Date), in the case of a Defeasance Event for only a portion
of the outstanding principal balance of the Loan, as the case may be (including
the amounts due on the Optional Prepayment Date, assuming that the Borrower
pays the Defeased Notes in full on the Optional Prepayment Date, of either the
Note or the Defeased Notes, as the case may be), and in amounts equal to the
regularly scheduled interest and principal payments and servicing fee due on
such dates under the Notes or the Defeased Notes, as the case may be, including
the principal payment due on the Optional Prepayment Date (assuming that the
Borrower pays the Defeased Notes in full on the Optional Prepayment Date) under
the Notes or the Defeased Notes, as the case may be (the "SCHEDULED DEFEASANCE
PAYMENTS"). Borrower, pursuant to the Defeasance Security Agreement or other
appropriate document, shall authorize and direct that the payments received
from the U.S. Obligations shall be made directly to the Deposit Account (unless
otherwise directed by Administrative Agent) and applied to satisfy the
obligations of Borrower under the Notes or the Defeased Notes, as the case may
be. Any portion of the Defeasance Deposit in excess of the amount necessary to
purchase the U.S. Obligations required by this Section 2.3 and satisfy
Borrower's obligation under this Section 2.3 and Section 2.4 shall be remitted
to Borrower.
SECTION 2.4 RELEASE OF PROPERTY/SUBSTITUTION OF PROPERTY.
Except as set forth in this Section 2.4, no repayment,
prepayment or defeasance of all or any portion of the Notes shall cause, give
rise to a right to require, or otherwise result in, the release of the Lien of
any of Mortgage on any Asset or of any other Security Document on any other
Collateral.
37
44
2.4.1 RELEASE OF ENTIRE PROPERTY. (a) If Borrower has
elected to defease the entire Notes and the requirements of Section 2.3.3 have
been satisfied, Administrative Agent shall provide Borrower with a Total
Release of the Lien of the Mortgages (and related Security Documents) with
respect to the Property and the other Collateral, whereupon the U.S.
Obligations pledged pursuant to the Defeasance Security Agreement shall be the
sole source of Collateral securing the Notes.
(b) In connection with the Total Release, Borrower shall
submit to Administrative Agent, not less than fourteen (14) days prior to the
Defeasance Date, a Total Release for the Property and the other Collateral for
execution by Administrative Agent. Such Total Release shall be in a form
appropriate in each of the jurisdictions in which the Property is located and
satisfactory to the Requisite Lenders and Administrative Agent in their sole
discretion. In addition, Borrower shall provide all other documentation
Administrative Agent reasonably requires to be delivered by Borrower in
connection with such Total Release, together with an Officer's Certificate
certifying that such documentation (i) is in compliance with all Legal
Requirements, and (ii) will effect such Total Release in accordance with the
terms of this Agreement.
(c) Borrower shall pay all reasonable out-of-pocket costs
and expenses incurred by Administrative Agent in connection with any Total
Release (including reasonable attorney's fees and costs).
(d) Any Total Release pursuant to this Section may only
occur on a day that a regularly scheduled payment of principal and interest is
due under the Notes.
2.4.2 SUCCESSOR BORROWER. In connection with any release of
a Lien under Section 2.4.1, Administrative Agent shall establish or designate a
successor single purpose bankruptcy remote entity (the "SUCCESSOR BORROWER")
and Borrower shall transfer and assign all obligations, rights and duties under
and to the Notes together with the pledged U.S. Obligations to such Successor
Borrower. The obligation of Administrative Agent to establish or designate a
Successor Borrower shall be retained by Administrative Agent notwithstanding
the sale or transfer of this Agreement unless such obligation is specifically
assumed by the transferee. Such Successor Borrower shall assume the
obligations under the Notes and the Defeasance Security Agreement and Borrower
shall be relieved of its obligations under such documents and all other Loan
Documents (except to the extent specifically set forth therein) from and after
the date of the assumption by the Successor Borrower. Borrower shall pay
$1,000 to any such Successor Borrower as consideration for assuming the
obligations under the Notes and the Defeasance Security Agreement.
Notwithstanding anything in this Agreement to the contrary, no other assumption
fee shall be payable upon a transfer of the Notes in accordance with this
Section 2.4.2, but Borrower shall pay all reasonable out-of-pocket costs, fees
and expenses, including, without limitation, attorneys' fees and expenses,
incurred by Administrative Agent in connection therewith.
38
45
2.4.3 RELEASE OF AN ASSET. (a) If Borrower has elected to
defease a portion of the Notes and the requirements of Section 2.3.3 have been
satisfied, or if Borrower has elected to replace one or more Assets with
substitute hotel properties and the requirements of Section 2.4.4 shall have
been satisfied, or Borrower has elected to repay a portion of the Notes
pursuant to Section 7.1.2(c) or 7.1.3(d) hereof and the requirements of such
sections have been satisfied, Administrative Agent shall provide Borrower with
a Partial Release of the Lien of the Mortgage (and related Security Documents)
with respect to one or more Assets (or in the case of Section 7.1.2(c) or
7.1.3(d) the Asset which is the subject of the Casualty or Condemnation)
provided Borrower is selling, making a dividend in kind (provided a Person
other than a Loan Party is the ultimate and immediate recipient of such Asset)
or otherwise disposing of such Assets and Borrower shall have satisfied or
cause to have satisfied the following conditions:
(i) there exists no Default (unless such
Default will be cured by the Defeasance Event, Substitution Event,
Casualty Release Event or Condemnation Release Event, as applicable)
or Event of Default;
(ii) the Remaining Property DSCR is not less
the Initial Debt Service Coverage Ratio;
(iii) Intentionally Deleted;
(iv) in the case of a Defeasance Event, a
Casualty Release Event or Condemnation Release Event with respect to a
portion of the Notes, the portion of the Notes which Borrower defeases
pursuant to Section 2.3.3 or repays pursuant to Section 7.1.2(c) or
7.1.3(d), in connection with such Partial Release is equal to or
greater than the aggregate Release Price for the Assets which Borrower
is requesting to be released;
(v) Borrower shall have paid all reasonable
out-of-pocket costs and expenses of Administrative Agent and Lenders
(including reasonable attorneys fees and expenses) arising in
connection with any partial releases, including, but not limited to,
reasonable legal fees of counsel, all title insurance premiums arising
as a result of endorsements reasonably required by Administrative
Agent in connection with such partial release, and all other costs
arising in connection with the execution and delivery of the Partial
Release;
(vi) Borrower shall have delivered to
Administrative Agent one or more endorsements, if available in the
applicable jurisdiction, to the Title Policies for each Asset, other
than the Asset in connection with which such Partial Release is being
provided, insuring that after giving effect to such Partial Release,
the liens created by the remaining Mortgages and insured by the
applicable Title Policies remain in full force and effect;
39
46
(vii) Borrower shall have provided to
Administrative Agent and Lenders such other documents and evidence as
Administrative Agent or such Lenders, as the case may be shall
reasonably require in order to establish compliance with the
provisions of this Section 2.4.3;
(viii) together with the sale, dividend in kind
or other disposition of the Asset in connection with which Borrower is
requesting a Partial Release, Borrower or the applicable Subsidiary is
also selling, dividend in kind (provided a Person other than a Loan
Party is the ultimate and immediate recipient of such Asset) or
otherwise disposing of the Collateral used in connection with such
Asset;
(ix) the sale, dividend in kind or other
disposition of such Asset and the related Collateral occurs on the
Defeasance Date, Substitution Date or Casualty Release Date or
Condemnation Release Date, as applicable; and
(x) Administrative Agent shall have received a
reaffirmation of the Affiliate Guaranty, executed by Parent and each
Subsidiary, in a form and substance acceptable to Administrative
Agent.
(b) In connection with the Partial Release, Borrower
shall submit to Administrative Agent, not less than fourteen (14) days prior to
the Defeasance Date, the Substitution Date, the Casualty Release Date or the
Condemnation Release Date, as applicable, a Partial Release for the Asset and
the related Collateral for execution by Administrative Agent. Such Partial
Release shall be in a form appropriate in the jurisdiction in which each such
Asset is located and satisfactory to the Requisite Lenders and Administrative
Agent in their sole discretion. In addition, Borrower (and any other Loan
Party requested by the Administrative Agent to do so) shall provide all other
documentation Administrative Agent reasonably requires to be delivered by
Borrower (or such Loan Party) in connection with such Partial Release, together
with an Officer's Certificate certifying as to the matters set forth in
Sections 2.4.3(i), (ii) and (iii) in reasonable detail and certifying that such
documentation (i) is in compliance with all Legal Requirements, and (ii) will
effect such Partial Release in accordance with the terms of this Agreement.
(c) Any Partial Release pursuant to this Section may only
occur on a day that a regularly scheduled payment of principal and interest is
due under the Notes.
(d) Upon a Partial Release of any Asset, or other item of
Collateral pursuant to this Section 2.4.3, such Asset shall cease to be an
Asset, a part of the Property and an item of Collateral for purposes of this
Agreement (other than for purposes of any indemnity applicable to such Asset).
40
47
SECTION 2.4.4 SUBSTITUTION OF AN ASSET. At the sole
discretion of Administrative Agent and the Requisite Lenders and provided there
exists no Default (unless such Default will be cured by the Substitution Event)
or Event of Default at any time after the Closing Date and prior to the
Optional Prepayment Date, Borrower may request Administrative Agent to agree
(which consent Administrative Agent may withhold in its sole and absolute
discretion) to replace one or more Assets and related Collateral (the
"Substitution Removed Assets") with substitute hotel properties and related
property ("Substitution Added Assets") provided each such substitution (a
"Substitution Event") shall be subject to the satisfaction of such conditions
as Administrative Agent shall require in its sole and absolute discretion
including without limitation the conditions precedent set forth in Sections
2.4.1 and 3.2 hereof and no less than sixty (60) days prior to the Substitution
Date, Borrower shall have delivered to Administrative Agent a notice of its
desire to substitute one or more Substitution Added Assets for one or more
Substitution Removed Assets (the "Substitution Notice") in form acceptable to
Administrative Agent specifying (i) a regularly scheduled payment date on which
the Substitution Event is to occur, (ii) the one or more proposed Substitution
Removed Assets which Borrower is requesting Administrative Agent, on behalf of
Lenders, to release from the Lien of one or more Mortgages and (iii) the one or
more proposed Substitution Added Assets Borrower is requesting to be added to
the Property and to be encumbered by one or more Mortgages and other Security
Documents. Notwithstanding anything to the contrary contained in this
Agreement (including but not limited to Section 3.2 hereof), a Substitution
Event shall not occur without the prior consent of Administrative Agent (and
then only with the consent of the Requisite Lenders) which consent may be
withheld by Administrative Agent in its sole and absolute discretion.
SECTION 2.5 ASSUMPTION OF LOAN.
Borrower acknowledges that each Lender, in agreeing to make
its pro-rata portion of the Loan available, has examined and relied on the
creditworthiness and experience of Borrower in owning and operating properties
such as the Property, and that each Lender will continue to rely on Borrower's
ownership and operation (subject to the Property Management Agreement) of the
Property as a means of maintaining the value of the Property as security for
repayment of the Debt. Borrower acknowledges that each Lender has a valid
interest in maintaining the value of the Property so as to ensure that, should
Borrower default in the repayment of the Debt, such Lender can recover the Debt
by a sale of the Property by Administrative Agent, as agent for Lenders.
Accordingly, except as otherwise expressly permitted in Section 6.1(j) of this
Agreement, Borrower shall not, without the prior written consent of each
Lender, transfer the Property, any Asset or any part thereof, or permit the
Property, any Asset or any part thereof to be transferred.
41
48
SECTION 2.6 INTEREST AND PRINCIPAL.
2.6.1 GENERALLY. Borrower shall repay the principal balance
of the Loan, with interest thereon to be computed for the applicable Interest
Accrual Period on the unpaid principal balance from time to time outstanding at
the Applicable Interest Rate, as follows: (i) one installment of interest only
on October 28, 1997, for the period commencing on (and including) October 28,
1997 and ending on (and including) November 10, 1997 and (ii) in installments
equal to the Monthly Debt Service Payment Amount on December 11, 1997 and on
the eleventh day of each calendar month thereafter (or if such eleventh day is
not a Business Day, the next day which is a Business Day). From and after the
Optional Prepayment Date, interest accrued monthly at the Adjusted Interest
Rate and not paid pursuant to the immediately preceding sentence shall be
deferred monthly and added to the unpaid principal amount of the Loan and shall
earn interest at the Adjusted Interest Rate to the extent permitted under
applicable law (such accrued interest, with interest thereon, the "ACCRUED
INTEREST"). Accrued Interest shall be paid after payment of the principal
balance of the Notes in full pursuant to Section 10.9.2 hereof. The balance of
the principal sum together with all accrued and unpaid interest thereon
(including unpaid Accrued Interest) shall be paid on the Maturity Date, all in
accordance with the terms and provisions set forth in the Notes. Funds
collected in the Deposit Account pursuant to this Agreement shall be disbursed
(including, without limitation, disbursements for the Monthly Debt Service
Payment Amount and Accrued Interest) in accordance with Section 10.9 hereof.
2.6.2 DEFAULT RATE. Borrower agrees that upon the occurrence
of an Event of Default: (a) Lenders shall be entitled to receive and Borrower
shall pay to Administrative Agent, for the account of Lenders' interest on the
entire unpaid principal sum of the Loan and any other amounts (including
interest to the extent permitted by applicable law and post-petition interest
in any proceeding under the Bankruptcy Code or other applicable bankruptcy or
insolvency laws) due at the Default Rate, and (b) on the eleventh day of each
month (or if such eleventh day is not a Business Day, the next day which is a
Business Day) during which such Event of Default shall continue, Administrative
Agent shall cause the Deposit Bank to distribute to Lenders, pro-rata, the
amounts then held as collected funds in the Deposit Account and the Subaccounts
(other than Security Deposits to the extent any Tenant may have any right to
the return of such Security Deposit), such amounts to be applied by
Administrative Agent as set forth in Section 10.9.3 hereof. Interest at the
Default Rate, to the extent not paid, shall be added to the Debt and shall be
secured by the Mortgage. This Section, however, shall not be construed as an
agreement or privilege to extend the date of payment of the Debt, nor as a
waiver of any other right or remedy accruing to Administrative Agent and
Lenders by reason of the occurrence of any Event of Default. The acceptance of
any payment of Mortgaged Property Gross Cash Flow shall not be deemed to cure
or constitute a waiver of any Event of Default. Administrative Agent, at the
direction of the Requisite Lenders, retains its rights under the Loan Documents
to accelerate and to continue to demand payment of the Debt upon the happening
of any Event of Default, despite any payment of Mortgaged Property Gross Cash
Flow.
42
49
SECTION 2.7 PAYMENTS AND COMPUTATIONS.
2.7.1 MAKING OF PAYMENTS. Each payment by Borrower hereunder
or under the Notes shall be made in funds settled through the New York Clearing
House Interbank Payments System or other funds immediately available to
Administrative Agent by 11:00 a.m., New York City time, on the date such
payment is due, to Administrative Agent by deposit to the Deposit Account.
Whenever any payment hereunder or under the Notes shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the first
Business Day thereafter.
2.7.2 COMPUTATIONS. Interest payable hereunder or under the
Notes by Borrower shall be computed on the basis of the actual number of days
elapsed in each year over a 360-day year.
2.7.3 LATE PAYMENT CHARGE. If any principal, interest or any
other sums due under the Loan Documents is not paid by Borrower on or before
the date which is five (5) days after the date on which it is due, Borrower
shall pay to Administrative Agent upon demand an amount, for distribution to
the Lenders pro-rata, equal to the lesser of three percent (3%) of such unpaid
sum or the maximum amount permitted by applicable law in order to defray the
expense incurred by Administrative Agent in handling and processing such
delinquent payment and to compensate Administrative Agent and each Lender for
the loss of the use of such delinquent payment. Any such amount shall be in
addition to any other amounts required under the Loan Documents (including,
without limitation, Section 2.6.2 hereof) and shall be secured by the Mortgage
and the other Loan Documents.
2.7.4 PAYMENTS RECEIVED IN THE DEPOSIT ACCOUNT.
Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, and provided no Event of Default has occurred and is
continuing, Borrower's obligations with respect to the monthly payment of
principal and interest and amounts due for the Tax and Insurance Escrow Fund,
the Replacement Reserve Fund and any other payment reserves established
pursuant to this Agreement or any other Loan Documents shall be deemed
satisfied to the extent sufficient amounts are deposited in the Deposit Account
to satisfy such obligations on the Business Day prior to the date each such
payment is required.
2.7.5 APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments, Yield Maintenance Premiums and late payment charges with
respect to the Loan shall be apportioned proportionately to Lenders' respective
Pro Rata Shares. Subject to Section 2.7.6, Administrative Agent shall promptly
distribute to each Lender, at its primary address set in Section 11.6 hereof or
at such other address as such Lender may request, its Pro Rata Share of all
such payments received by Administrative Agent when received by the Agent.
43
50
2.7.6 DISTRIBUTION TO LENDERS. Any payment received by
Administrative Agent for distribution to Lenders that is received by 2:00 P.M.
(New York time) on any day shall be paid to Lenders by the end of such day and,
if such amounts are not paid to Lenders on such date, shall bear interest,
payable on demand by Administrative Agent, until paid to Lenders at the Federal
Funds Rate.
III. CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING.
The obligation of each Lender to make its pro-rata portion of
the Loan available hereunder is subject to the fulfillment by Borrower and each
Loan Party or waiver by Administrative Agent and Lenders of the following
conditions precedent no later than the Closing Date:
(a) Representations and Warranties; Compliance with
Conditions. The representations and warranties of Borrower and Parent
contained in this Agreement and of Borrower and Parent and each other Loan
Party in the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and
as of such date, no Material Adverse Change has occurred and no Default or
Event of Default shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated by the Loan; and Borrower and each
Loan Party shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.
(b) Loan Agreement and Notes. Each Lender shall have
received a copy of this Agreement and its Note, in each case, duly executed and
delivered on behalf of Borrower.
(c) Delivery of Loan Documents; Title Insurance; Reports.
(i) Mortgage, Assignment of Leases, Assignments
of Agreements, UCC, Etc. Administrative Agent shall have received
from Borrower fully executed and acknowledged counterparts of the
Mortgage, the Assignment of Leases relating to each of the Assets and
evidence (reasonably satisfactory to Administrative Agent) that
counterparts of such Mortgages and such Assignments of Leases have
been delivered to the title company for recording, in the reasonable
judgment of Administrative Agent, so as to effectively create upon
such recording valid and enforceable Liens upon each of the Assets, of
the requisite priority, in favor of the Secured Parties, subject only
to the Permitted Encumbrances. Administrative Agent shall have also
received from Borrower (and each Loan Party, if applicable) fully
executed counterparts of the Environmental Indemnity, the Consent and
Subordination of Property Manager, and the Clearing Agreement
(together with a Payment Direction Letter or a Credit Card Payor
Payment
44
51
Direction Letter, as applicable, addressed to each tenant and Credit
Card Payor, respectively, postage prepaid, return receipt requested)
with respect to each Asset, the Deposit Agreement, the Omnibus
Management and Liquor License Agreement, the Affiliate Guaranty and
the Collateral Security Agreement. Administrative Agent shall have
also received from Borrower and each Loan Party (i) such financing
statements under the Uniform Commercial Code (or any similar or
equivalent legislation) as Administrative Agent shall require with
respect to the Assets and the other Collateral, executed by Borrower
and all other appropriate Persons and such financing statements shall
have been filed of record in the appropriate filing offices in each of
the appropriate jurisdictions or delivered to the title insurance
company issuing the Title Insurance Policy in connection with the
Assets for filing, in the reasonable judgment of Administrative Agent,
so as to effectively create upon such filing a valid and enforceable
Lien on the Assets of the requisite priority in favor of the Secured
Parties, subject only to the Permitted Encumbrances for such Asset and
(ii) a list of the principal places of business, tax identification
numbers, and doing business names for Borrower and each other Loan
Party, the partners, members or shareholders of Borrower or such Loan
Party, as applicable and the Property Manager, each as set forth on
Schedule XIX, and all other information as Administrative Agent
reasonably may require to properly file such UCC financing statement,
all certified by a managing member, general partner or authorized
officer of Borrower.
(ii) Title Insurance. Administrative Agent shall
have received the Title Insurance Policy with respect to each Asset
issued by a title company acceptable to Administrative Agent and dated
as of the Closing Date, with co-insurance and/or reinsurance and
direct access agreements acceptable to Administrative Agent. Such
Title Insurance Policy shall (A) provide coverage in amounts
satisfactory to Administrative Agent, (B) insure the Lenders that each
Mortgage creates a valid first lien on each Asset free and clear of
all exceptions from coverage other than Permitted Encumbrances and
standard exceptions and exclusions from coverage (as modified by the
terms of any endorsements), (C) contain such endorsements and
affirmative coverages as Administrative Agent may reasonably request
and are available in the state where each Asset is located, (D) show
good and marketable indefeasible title to each Leasehold Estate, if
any, and fee simple title to each other Asset vested in Borrower and
(E) name Administrative Agent, as agent of Lenders, as the insured.
Each Title Insurance Policy shall be assignable. Administrative Agent
also shall have received evidence that all premiums in respect of the
Title Insurance Policy have been paid. Borrower shall have paid to the
title company issuing the Title Insurance Policies or to the
appropriate Governmental Authority all recording and stamp taxes
(including mortgage recording, intangible and similar taxes) and fees
payable in connection with recording each Mortgage, each Assignment of
Leases and each financing statement in the appropriate state, county,
parish or municipal offices. Administrative Agent shall have received
satisfactory UCC financing statement, tax lien, judgment, bankruptcy
litigation and other
45
52
lien searches and reports conducted by a search firm acceptable to
Administrative Agent with respect to the Assets from the Borrower and
all other relevant Persons, such searches to be conducted in each of
the locations as shall be required by Administrative Agent.
(iii) Survey. Administrative Agent shall have
received a current title survey for each of the Assets certified to
the title company and Administrative Agent, as agent for Lenders, and
their successors and assigns in form and content satisfactory to
Administrative Agent and prepared by a professional and properly
licensed land surveyor satisfactory to Administrative Agent in
accordance with the 1992 Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys. The survey should meet the
classification of an "Urban Survey" and the following additional items
from the list of "Optional Survey Responsibilities and Specifications"
(Table A) should be added to the survey: 2, 3, 4, 6, 7, 8, 9, 10, 11
and 13. Such surveys shall reflect the same legal description
contained in the Title Insurance Policy referred to in clause (ii)
above relating to each of the Assets and shall include, among other
things, a metes and bounds description of the real property comprising
part of each such Asset reasonably satisfactory to Administrative
Agent. The surveyor's seal shall be affixed to the survey and the
surveyor shall provide a certification for the survey in form and
substance acceptable to Administrative Agent. The surveyor's
certification shall include a statement as to whether the applicable
Asset is in an area identified by the Federal Emergency Management
Agency as an area having special flood hazards.
(iv) Insurance. Administrative Agent shall have
received valid certificates of insurance for the Policies required
hereunder, and evidence of the payment of all premiums then due and
payable and evidence that the current Policies will be renewed on the
same terms and conditions (or other terms and conditions acceptable to
Administrative Agent), all of which terms and conditions shall be
satisfactory to Administrative Agent. To the extent permitted by law,
Borrower and Parent, for itself and on behalf of each other Loan
Party, hereby irrevocably waives, releases and discharges any and all
rights of action, demands and other claims of any kind or nature
against Administrative Agent arising from any failure of
Administrative Agent and Lenders to comply with the National Flood
Insurance Act of 1968 (42 U.S.C. Sections 4001, et seq.), the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform
Act of 1994, including any failure of Administrative Agent to provide
the Borrower with written notification within ten days prior to the
Closing Date of whether any Asset is in a special flood hazard area or
whether federal disaster relief assistance will be available in the
event of flood damage to any Asset.
(v) Zoning. Administrative Agent shall have
received a certificate of occupancy (or the equivalent) from the
applicable city or county agency allowing for occupancy and operation
of each of the Assets reflecting the use of such Assets on the
46
53
Closing Date as hotels and, at Administrative Agent's option, (A)
letters or other evidence with respect to each Asset from the
appropriate Governmental Authorities (or other Persons) concerning
applicable zoning, subdivision, building, environmental and other laws
applicable to the Assets, (B) an ALTA 3.1 zoning endorsement for the
Title Insurance Policy, or (C) a zoning opinion letter, in substance
reasonably satisfactory to Administrative Agent. Administrative Agent
shall have also received evidence satisfactory to it that each Asset
is independent of any other real property for taxing purposes.
(vi) Encumbrances. Borrower shall have taken or
caused to be taken such actions in such a manner so that the Secured
Parties have a valid and perfected Lien of first priority as of the
Closing Date with respect to the Mortgages (and Assignment of Leases)
encumbering each Asset, subject only to applicable Permitted
Encumbrances, and Administrative Agent shall have received
satisfactory evidence thereof.
(d) Related Documents. Each additional document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly authorized, executed and delivered by all parties
thereto and Administrative Agent shall have received and approved originals
thereof.
(e) Delivery of Organizational Documents/Consents. On or
before the Closing Date, Borrower and Parent shall have delivered or caused to
be delivered to Administrative Agent, in sufficient copies for each Lender,
certified copies of all organizational documentation related to Borrower, each
other Loan Party and each general partner or member of Borrower and each other
Loan Party as Administrative Agent may request in its sole discretion,
including, without limitation, good standing certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan, the execution and delivery of the Loan Documents, and
incumbency certificates as may be requested by Administrative Agent.
Administrative Agent shall have received copies of all consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by the Borrower or any other Loan Party and the validity and
enforceability of the Loan Documents, and such consents, licenses and approvals
shall be in full force and effect.
(f) Opinions of Borrower's Counsel. Administrative Agent
shall have received opinions of Borrower's counsel, and the other Loan Parties'
counsel (including with respect to clause (ii) below from counsel in each state
where each Asset is located), (i) with respect to non-consolidation and (ii)
with respect to due execution, authority, enforceability (including usury) of
the Loan Documents and such other matters as Administrative Agent may require,
all such opinions to be in form, scope and substance satisfactory to
Administrative Agent and its counsel in their reasonable discretion.
(g) Intentionally Deleted.
47
54
(h) Basic Carrying Costs. Borrower shall have paid all
Basic Carrying Costs relating to each of the Assets which are in arrears,
including, without limitation, (i) due but unpaid insurance premiums relating
to such Assets, (ii) currently due Taxes (including any in arrears) relating to
such Assets, (iii) currently due Other Charges relating to such Assets, (iv)
currently due Ground Rents with respect to such Assets and (v) currently due
Franchise Fees with respect to such Assets, which amounts may be funded with
proceeds of the Loan if such proceeds are sufficient therefor.
(i) Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and the other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to
Administrative Agent, and Administrative Agent shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
(j) Estoppel and Subordinations. Administrative Agent
shall have received an executed tenant estoppel letter and subordination
agreement, which shall be in form and substance satisfactory to Administrative
Agent in its sole but reasonable discretion, from each tenant under each Tenant
Lease listed on Schedule XIV at each Asset and such other estoppel letters as
Administrative Agent shall require in connection with each such Asset
(including from parties to reciprocal easement agreements, from Ground Lessors
and in connection with other documents affecting each such Asset).
(k) Payments. All payments, deposits or escrows required
to be made or established by Borrower under this Agreement, the Notes and the
other Loan Documents on or before the Closing Date shall have been paid
(including without limitation the transfer of all security deposits to the
Security Deposit Subaccount). Administrative Agent, shall have received (i) a
settlement statement setting forth the disbursement of the Loan in form and
content satisfactory to Administrative Agent and (ii) Schedule XXV which sets
forth all amounts payable with respect to the Property on account of tax and
insurance bills for the two calendar years prior to the applicable Closing Date
which Schedule XXV shall be true and correct.
(l) Third Party Reports. Administrative Agent shall have
received a current seismic report (prepared by a specialist acceptable to
Administrative Agent for all Assets, reasonably requested by Administrative
Agent which are located in areas where there is a risk of the occurrence of an
earthquake), an MAI appraisal report (prepared in compliance with all Legal
Requirements, including Title XI of the Financing Institutions Reform, Recovery
and Enforcement Act of 1989, 12 U.S.C. Sections 331, et seq., as amended, and
any successor statute thereto and the regulations promulgated thereunder
("FIRREA")), structural engineering report (identifying, among other things,
(a) deferred maintenance for any Assets and the cost thereof and (b) a 10 year
schedule of anticipated capital expenditures and the per annum cost thereof)
and environmental property condition report (Phase I environmental reports for
each Asset and Phase II reports and other environmental investigation in all
cases where environmental
48
55
consultants recommend such Phase II reports and/or further investigation or as
Administrative Agent otherwise determines are required); in respect of each of
the Assets, each addressed to Administrative Agent and Lenders and in form and
substance satisfactory to Administrative Agent and performed by an appraiser,
engineer or other professional satisfactory to Administrative Agent.
(m) Financial Statements. Administrative Agent shall
have received unaudited historical operating statements for each Asset for the
Fiscal Year ended December 31, 1996 and for the consecutive full twelve (12)
months immediately preceding the Closing Date Administrative Agent and Borrower
shall agree on procedures to be performed by Xxxxxx Xxxxxxxx LLP and reported
upon on an Asset by Asset basis on or before December 15, 1997.
(n) Payoff Letters; Assignments. Administrative Agent
shall have received a true and correct copy of the payoff letters for all of
the existing debt encumbering each Asset. In addition, for all of the existing
debt encumbering each Asset which is to be assigned to Lenders, Administrative
Agent shall have received the original promissory notes endorsed to the order
of Administrative Agent, as agent for Lenders, the original mortgages together
with an original assignment thereof to Administrative Agent in form and
substance acceptable to Administrative Agent and representations from the
lender holding such existing debt as to the outstanding principal balance
thereof, no defaults existing thereunder and such other matters as
Administrative Agent may reasonably require.
(o) Rent Roll. Administrative Agent shall have received
a Rent Roll dated as of October 15, 1997, together with occupancy statistics
for the 12 month periods ending December 31, 1996, and the twelve months ending
August 31, 1997, each in form and content acceptable to Administrative Agent
for each Asset and certified by Borrower as being true, correct, complete and
accurate.
(p) Leases, Contracts and Permits. Administrative Agent
shall have received copies of (or been provided the opportunity to review) all
leases (including equipment leases), permits, licenses, appraisals,
authorizations and contracts related to each of the Assets.
(q) Structuring Fee. Administrative Agent shall have
received an amount equal to three-eighths of one percent (.375%) of the Loan.
(r) Utilities. Administrative Agent shall have received
evidence that all utility services and parking required for each of the Assets
are available (which evidence may consist of the survey set forth in clause
(c)(iii) above for each of such Assets reflecting the utility and parking), and
evidence that each of such Assets is subject to tax assessment which is
separate from any other real property or improvements.
49
56
(s) Ground Lease Matters. No Asset shall be a Leasehold
Estate unless agreed to by Administrative Agent and Lenders in their sole
discretion; in which event (except with respect to the New Orleans Hotel and
the Houston Hotel but only for the period from the Closing Date to the Ground
Lease Early Repayment Date) (i) Administrative Agent shall have received from
Borrower (i) such estoppel certificates, subordination agreements and other
agreements in form and substance satisfactory to Administrative Agent (ii) the
Ground Lease shall expire no earlier than ten (10) years after the Stated
Maturity and shall otherwise be on terms acceptable to the Requisite Lenders
and Administrative Agent in their sole discretion, including the financeability
of such Ground Lease, (iii) Borrower shall have delivered to Administrative
Agent (in sufficient copies for each Lender) executed or conformed, certified
copies of each of the Ground Leases and all amendments and written waivers
thereto entered into on or prior to the Closing Date and (iv) the Ground Lease
shall not be subordinate to any lien and shall be the first lien against the
fee simple estate in the real property and improvements; which fee simple
estate shall not be encumbered by a mortgage unless agreed to by Administrative
Agent and the Requisite Lenders in their sole discretion.
(t) Property Management Agreements. Borrower shall have
delivered to Administrative Agent (in sufficient copies for each Lender)
executed or conformed, certified copies of each of the Property Management
Agreements and all amendments and written waivers thereto entered into on or
before the Closing Date, as listed on Schedule VI annexed hereto, which
Property Management Agreements shall be satisfactory in form and substance to
the Requisite Lenders and Administrative Agent in their sole discretion; such
Property Management Agreements, as so amended or waived, shall be in full
force and effect and no material term or condition thereof shall have been
further amended, modified or waived in any material respect after the execution
thereof (other than the waiver of any Management Fee previously due and
payable).
(u) Liquor Agreements. Borrower shall have delivered to
Administrative Agent (in sufficient copies for each Lender) executed or
conformed, certified copies of each of the Liquor Agreements and all amendments
and written waivers thereto entered into on or before the Closing Date, as
listed on Schedule VI annexed hereto, which Liquor Agreements shall be
satisfactory in form and substance to the Requisite Lenders and Administrative
Agent in their sole discretion; such Liquor Agreements, as so amended or
waived, shall be in full force and effect and no material term or condition
thereof shall have been further amended, modified or waived after the execution
thereof; and no Person shall have failed in any material respect to perform any
material obligation or covenant or satisfy any material condition required by
such Liquor Agreements to be performed or complied with on or before the
Closing Date.
50
57
(v) Franchise Agreements; Franchisor Comfort Letters.
Borrower shall have delivered to Administrative Agent (in sufficient copies for
each Lender) executed or conformed, certified copies of each of the Franchise
Agreements and all amendments and written waivers thereto entered into on or
before the Closing Date, as listed on Schedule V annexed hereto, which
Franchise Agreements shall be reasonably satisfactory in form and substance to
Administrative Agent in all material respects; such Franchise Agreements, as so
amended or waived, shall be in full force and effect and no material term or
condition thereof shall have been further amended, modified or waived after the
execution thereof; and no Person shall have failed in any material respect to
perform any material obligation or covenant or satisfy any material condition
required by such Franchise Agreements to be performed or complied with on or
before the Closing Date, including, without limitation (but only if the same
constitutes a material obligation, covenant or condition), obligations under
property improvement plans and quality control plans required by the respective
franchisors to be performed within specified periods. Borrower shall have
delivered to Administrative Agent original counterparts of a franchisor's
comfort letter with respect to each Franchise Agreement in respect of each
Asset acceptable in form and substance to Administrative Agent, and duly
executed by each franchisor under such Franchise Agreement.
(w) Senior Note Consent. Borrower shall have delivered
to Administrative Agent an executed or conformed, certified copy of the Senior
Note Consent and such documents, as so amended, shall be in full force and
effect and no term or condition thereof shall have been further amended,
modified or waived after the execution thereof; and no Person shall have failed
in any material respect to perform any material obligation or covenant or
satisfy any material obligation or covenant or satisfy any material condition
required thereunder to be performed or complied with on or before the Closing
Date.
(x) IP License Agreements. Borrower shall have delivered
to Administrative Agent (in sufficient copies for each Lender) executed or
conformed, certified copies of every IP License Agreement and all amendments
and written waivers thereto entered into on or before the Closing Date, as
listed on Schedule XI annexed hereto, which IP License Agreements shall be
reasonably satisfactory in form and substance to Administrative Agent in all
material respects; such IP License Agreements, as so amended or waived, shall
be in full force and effect and no material term or condition thereof shall
have been further amended, modified or waived after the execution thereof; and
no Person shall have failed in any material respect to perform any material
obligation or covenant or satisfy any material condition required by such IP
License Agreements to be performed or complied with on or before the Closing
Date; the Loan Parties shall have delivered evidence reasonably satisfactory in
form and substance to Administrative Agent that there is no material
Intellectual Property.
(y) Room Rates. Administrative Agent shall have received
Occupancy/Room Rate Statistics for each Asset for the twelve (12) ending
December 31, 1996 and the twelve months ending August 31, 1997.
51
58
(z) Stock Pledges. The Loan Parties shall have
delivered to Administrative Agent pursuant to the Collateral Security Agreement
the stock certificates (which certificates shall be accompanied by irrevocable
undated stock powers duly endorsed in blank and irrevocable proxies, all
satisfactory in form and substance to Administrative Agent), certificated
partnership interests, certificated limited liability company membership
interests, promissory notes and other instruments, (in each case duly endorsed
to the order of Administrative Agent, as Agent for Lenders, as secured party),
representing the capital stock, partnership interests, limited liability
company membership interests, promissory notes and other instruments to be
pledged on the Closing Date pursuant to the Collateral Security Agreement.
(aa) Liquor Cost Evidence. Borrowers have delivered
to Administrative Agent, in a form and substance satisfactory to Administrative
Agent, evidence that expenses incurred by each Subsidiary in connection with
each Liquor Agreement generally equal or exceed 50% of the revenue collected by
such Subsidiary in connection with each such Liquor Agreement ("LIQUOR COST
EVIDENCE").
(bb) O&M Plan. Borrower shall have implemented an
operations and maintenance plan ("O&M PLAN") which shall be reasonably
satisfactory to Administrative Agent, for asbestos-bearing materials ("ABM")
that is consistent with the recommendations in the Environmental Protection
Agency's "Managing Asbestos in Place, A Building Owner's Guide to Operations
and Maintenance Programs for Asbestos-Containing Materials" (or any successor
to such guide) and which shall include, without limitation, a plan for
complying with all applicable laws with respect to ABM and (to the extent
required by such guide) the following program elements: (i) notification (a
program to tell workers, tenants and building occupants where ABM is located,
and how and why to avoid disturbing the ABMs); (ii) surveillance (regular ABM
surveillance to note, assess, and document changes in the ABM's condition);
(iii) controls (work control/permit system to control activities which might
disturb ABMs); (iv) work practices (operations and maintenance work practices
to avoid or minimize fiber release during activities affecting ABM); (v)
recordkeeping (to document operations and maintenance activities); (vi) worker
protection (medical and respiratory protection programs, as applicable); and
(vii) training (asbestos program manager and custodial and maintenance staff
training). A copy of each such O&M Plan shall have been delivered to
Administrative Agent.
52
59
SECTION 3.2 CONDITIONS PRECEDENT TO ANY SUBSTITUTION EVENT.
The obligation of Administrative Agent to provide Borrower a
Partial Release for any proposed Substitution Removed Asset pursuant to Section
2.4.1 hereof is subject to fulfillment by Borrower or waiver by Lenders of the
following conditions precedent no later than the date required therefore as
hereinafter provided:
(a) Information Deliveries. Borrower shall have
delivered to Administrative Agent, pursuant to Section 2.4.4 hereof, the
following in form and substance satisfactory to the Requisite Lenders and
Administrative Agent in their sole discretion:
(i) Section 3.1 Deliveries. All of the
deliveries required to be delivered by Borrower pursuant to Sections
3.1(c)(iii), (c)(iv), (c)(v); (e), (f), (j), (l), (m), (o), (p), (r)
and (s) on or prior to the Closing Date shall be delivered to
Administrative Agent with respect to the Substitution Added Asset;
(ii) Title. A preliminary title report consistent
with the provisions of Section 3.1(c)(ii) hereof for the Substitution
Added Asset; and
(iii) Other Documents. Such other certificates and
documentation relating to the Substitution Event as may have been
reasonably requested by Administrative Agent (including, without
limitation, all corporate and other proceedings), all other documents
(including, without limitation, all documents referred to herein and
not appearing as exhibits hereto) and all legal matters in connection
with the Substitution Event shall be reasonably satisfactory in form
and substance to Administrative Agent.
(iv) Budgets. Borrower shall have delivered, and
Administrative Agent shall have approved, the Approved Annual
Operating Budget (relating to each Substitution Added Asset) for the
remainder of the current Fiscal Year, amended in form and substance
satisfactory to the Requisite Lenders and Administrative Agent in
their sole discretion (which shall include a budget for Replacements
and Leasing Commissions) to reflect the Substitution Event.
(b) Value. Borrower shall have provided to
Administrative Agent such evidence as Administrative Agent shall require and
Administrative Agent shall have determined in its sole and absolute discretion
that (i) the market value of the Substitution Added Assets as determined
pursuant to the appraisals delivered pursuant to Section 3.2(a)(i) hereof
exceeds the market value of the Substitution Removed Assets as determined
pursuant to Section 2.4.3(iii), and (ii) the Net Operating Income which will be
generated from the Substitution Added Assets shall equal or exceed the Net
Operating Income for the Substitution Removed Assets.
53
60
(c) Representations and Warranties; Compliance with
Conditions. The representations and warranties of all Loan Parties contained
in this Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the Substitution Date after giving effect to the
Substitution Event with the same effect as if made on and as of the
Substitution Date, no Material Adverse Change shall have occurred, and no
Default or Event of Default shall have occurred and be continuing (x) on the
Substitution Date which will not be cured by the Substitution Event or (y)
after giving effect to the Substitution Event.
(d) Document Deliveries. On or prior to the Substitution
Date, all of the conditions set forth in Section 3.1 with respect to the Loan
shall have been fulfilled and the Borrower shall, at its sole cost and expense,
deliver to Administrative Agent the following, in form and content acceptable
to the Requisite Lenders and Administrative Agent, in their sole discretion,
with respect to the Substitution Added Asset:
(i) Section 3.1 Deliveries. All of the
deliveries, payments and actions required to be delivered, paid or
performed by Borrower or any other Loan Party pursuant to Sections
3.1(c)(i), (c)(vi), (d), (f), (h), (i), (k), (n), (t), (u), (v), (x),
(y) and (z) on or prior to the Closing Date shall be delivered, paid
or performed with respect to the Substitution Added Asset on or prior
to the Substitution Date;
(ii) Substitution Certificate. A certificate
executed and delivered by an authorized officer, director, general
partner or managing member of Borrower, as applicable certifying, as
of the Substitution Date, (v) as to the matters set forth in Section
3.2(b) and (c), (w) as to the principal amount outstanding under the
Notes, (x) as to the allocation of the Allocated Loan Amounts for the
Substitution Removed Assets among the Substitution Added Assets, as
determined by the Requisite Lenders and Administrative Agent in their
sole discretion and (y) as to the amount of the initial deposits or
monthly deposits, as determined by Administrative Agent, if required
to be made in connection with such Substitution Event pursuant to
Article 7 hereof;
(iii) Title Policy. A Title Policy and the other
deliveries consistent with Section 3.1(c)(ii) for the Substitution
Added Assets.
(iv) Recording Charges. Evidence of payment of
all mortgage, mortgage recording, stamp, intangible and other similar
taxes, recording charges and filing fees, if any, incurred in
connection with each Mortgage, Assignment of Leases and other Loan
Document executed and delivered in connection with the Substitution
Event;
(v) Expenses. Payment of all reasonable
out-of-pocket expenses of the transactions to be consummated on the
Substitution Date, including without limitation, all reasonable
attorneys' fees, appraisal fees, accounting fee, consultant fees, and
other expenses of Administrative Agent and any Lender;
54
61
(vi) Updates to Schedules. To the extent required
by Administrative Agent, updates to all schedules and exhibits to this
Agreement;
(vii) Acquisition Documents. If Borrower is
purchasing the Substitution Added Asset from a third party, copies of
all documents with respect to such purchase (including but not limited
to copies of purchase contracts, deeds and title policies).
(e) Site Inspection. Administrative Agent on behalf of
Lenders, shall have performed, or caused to be performed on its behalf, an
on-site due diligence review of the Substitution Added Asset and the results
thereof shall have been satisfactory to the Requisite Lenders and
Administrative Agent in their sole discretion;
(f) No Injunction. On the Substitution Date, no law or
regulation shall have been adopted, no order, judgment or decree of any
Governmental Authority shall have been issued and no litigation shall be
pending or threatened, which in the good faith judgment of Administrative Agent
would enjoin, prohibit or restrain, or impose or result in the imposition of
any material adverse condition upon, the making or repayment of the Loan or the
consummation of the transactions contemplated by this Agreement or the other
Loan Document.
(g) Form of Loan Documents and Related Matters. The
certificates, agreements, legal opinions and other documents and papers
referred to in this Section 3.2 shall be delivered to Administrative Agent, and
shall be reasonably satisfactory in form and substance to Administrative Agent
and the Lenders (unless the form thereof is prescribed herein and except that
the Mortgages, Assignment of Leases, Environmental Indemnities, Clearing
Account Agreement and Consent and Subordination of Property Manager, shall be
consistent with the form of such document, delivered in connection with the
Closing except as may be required by Administrative Agent or its counsel to
take into account the particular Substitution Added Asset which is being
encumbered or circumstances in connection therewith (such as conforming the
documents to the requirements of local law and of Administrative Agent and
Lenders in the state where the Substitution Added Asset is located)).
IV. REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS OF BORROWER AND PARENT.
To induce Lenders and the Administrative Agent to enter into
this Agreement, Borrower and Parent represent and warrant as of the Closing
Date that:
(a) Organization. Borrower and each other Loan Party has
been duly organized and is validly existing and in good standing with requisite
power and authority to own its properties and to transact the businesses in
which it is now engaged. Borrower and each other Loan Party is duly qualified
to do business and is in good standing in each jurisdiction
55
62
where it is required to be so qualified in connection with its properties,
businesses and operations, except where such failure could not reasonably be
expected to cause, either individually or in the aggregate, a Material Adverse
Change. Borrower and each other Loan Party possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it
to own its properties and to transact the businesses in which it is now engaged
(except where such failure could not reasonably be expected to cause, either
individually or in the aggregate, a Material Adverse Change), and the sole
business of Borrower and each other Loan Party is the ownership, management and
operation of the Property and the other Collateral, respectively. All issued
and outstanding common stock of Borrower and each Loan Party which is a
corporation is duly and validly issued, fully paid and nonassessable.
(b) Proceedings. Borrower and each other Loan Party has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement and the other Loan Documents. This Agreement and such other
Loan Documents have been duly executed and delivered by or on behalf of
Borrower and each other Loan Party and constitute legal, valid and binding
obligations of Borrower and such Loan Parties to which it is a party
enforceable against Borrower and each other Loan Party in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization
and similar laws affecting rights of creditors generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(c) No Conflicts. The execution, delivery and
performance of this Agreement and the other Loan Documents by Borrower and each
other Loan Party which is a party thereto will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance (other
than pursuant to the Loan Documents) upon any of the property or assets of
Borrower or any other Loan Party pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, partnership agreement, operating
agreement, certificate of incorporation, by-laws or other agreement or
instrument to which Borrower or any other Loan Party is a party or by which any
of Borrower's or any other Loan Party's property or assets is subject, nor will
such action result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over Borrower or any other Loan Party or any of Borrower's or any
other Loan Party's properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by Borrower or any other Loan Party of this
Agreement or any other Loan Documents to which it is a party has been obtained
and is in full force and effect, except where failure to so comply will not
then have caused and could not reasonably be expected to cause, either
individually or in the aggregate, a Material Adverse Change.
56
63
(d) Litigation. There are no actions, suits or
proceedings at law or in equity by or before any Governmental Authority or
other agency now pending or threatened against or affecting Borrower, any other
Loan Party or the Property or the other Collateral, which actions, suits or
proceedings, if determined against Borrower, any other Loan Party or the
Property or the other Collateral, could reasonably be expected to cause, either
individually or in the aggregate, a Material Adverse Change.
(e) Agreements. Neither Borrower nor any other Loan
Party nor any subsidiary of Bristol is a party to any agreement or instrument
or subject to any restriction which could reasonably be expected to cause a
Material Adverse Change. Neither Borrower nor any other Loan Party is in
default (and no condition exists that, with the giving of notice or the passage
of time or both, would constitute a default) in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party or by which Borrower, such Loan
Party or any Asset or other Collateral is bound which defaults, in the
aggregate, will not then have caused and could not reasonably be expected to
cause, either individually or in the aggregate, a Material Adverse Change.
Other than the Loan Documents, the Acquisition Documents and the Subordinate
Note Documents, no agreement, instrument or other restriction exists which
limits the ability or right of any Loan Party to (w) amend, restate or satisfy
the terms and conditions of this Agreement or the other Loan Documents, (x)
refinance, prepay or repay the Debt, (y) acquire, loan or dispose of any
property or other asset, or any interest therein, or acquire or enter into, or
provide any services under any Property Management Agreement or other
management agreement or (z) otherwise conduct such Loan Party's business.
(f) Title. Borrower has good, marketable and insurable
title to the Leasehold Estates comprising the Property, good marketable and
insurable title in fee simple to all of the other real property and
improvements comprising the Property and good title to the balance of the
Collateral, free and clear of all Liens whatsoever except the Permitted
Encumbrances. Each Mortgage, when properly recorded in the appropriate records
and each of the other Security Documents, together with any Uniform Commercial
Code financing statements required to be filed in connection therewith, will
create (i) a valid, perfected, legally enforceable first priority lien on the
appropriate Asset and on the other Collateral, subject only to the Permitted
Encumbrances and (ii) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Tenant Leases) and the
other Collateral, all in accordance with the terms thereof, in each case
subject only to any applicable Permitted Encumbrances. The Permitted
Encumbrances do not materially and adversely affect the value of any Asset, the
use of such Asset for the use being made thereof as of the date of this
Agreement, the operation of such Asset or Borrower's ability to repay the Loan
in full. There are no claims for payment for work, labor or materials
affecting any Asset which are or may become a Lien prior to, or of equal
priority with, the Liens created by the Loan Documents other than the Permitted
Encumbrances.
57
64
(g) No Bankruptcy Filing. Neither Borrower nor any Loan
Party is contemplating either the filing of a petition by it under any state or
federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of its assets or property, and neither Borrower nor Parent has
knowledge of any Person contemplating the filing of any such petition against
Borrower or any Loan Party.
(h) Full and Accurate Disclosure. No statement of fact
made by Borrower or any Loan Party in this Agreement or in any of the other
Loan Documents, nor any written materials relating to the business, operations
or condition (financial or otherwise) of Borrower, any Loan Party, the Property
or any other Collateral that were supplied to Lenders in connection with the
transactions contemplated by the Loan Documents (other than financial
projections in respect of which no representation is made) contains or will
contain (or, in the case of such written material, at the time supplied
contained) any untrue statement of a material fact or omits or will omit (or
omitted, as the case may be) to state any material fact necessary to make the
statements contained herein or therein not misleading. There is no material
fact presently known to Borrower or Parent which has not been disclosed to
Administrative Agent and Lenders in writing in connection with such due
diligence investigation which adversely affects, nor as far as Borrower or
Parent can foresee, might cause a Material Adverse Change.
(i) No Plan Assets. Neither Borrower nor any other Loan
Party is an "employee benefit plan" (as defined in Section 3(3) of ERISA),
subject to Title I of ERISA, and none of the assets of Borrower or any other
Loan Party constitutes or will constitute "plan assets" of one or more such
plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (i)
neither Borrower nor any other Loan Party is a "governmental plan" within the
meaning of Section 3(32) of ERISA and (ii) transactions by or with Borrower or
any other Loan Party are not subject to state statutes regulating investments
of, and fiduciary obligations with respect to, governmental plans.
(j) Compliance. Borrower, each other Loan Party, the
Property, the other Collateral and the use thereof comply with all applicable
Legal Requirements, including, without limitation, building and zoning
ordinances and codes and subdivision laws and regulations, except where failure
to so comply will not then have caused and could not reasonably be expected to
cause, either individually or in the aggregate, a Material Adverse Change.
Neither Borrower nor any Loan Party is in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority, except where
failure to so comply will not then have caused and could not reasonably be
expected to cause, either individually or in the aggregate, a Material Adverse
Change. There has not been and shall never be committed by Borrower any other
Loan Party or any other person in occupancy of or involved with the operation
or use of any Asset or any other Collateral any act or omission affording the
federal government or any state or local government the right of forfeiture as
against any Asset, any other Collateral or any part thereof or any monies paid
in performance of Borrower's obligations under any of the Loan
58
65
Documents. Borrower and Parent hereby covenant and agree not to commit, permit
or suffer to exist any act or omission affording such right of forfeiture.
(k) Financial Information.
(i) To Borrower's and Parent's best knowledge,
all financial data, including, without limitation, the statements of
cash flow and income and operating expense, that have been delivered
to Administrative Agent and Lenders in respect of the Property,
including those required under Section 3.1 hereof (A) are true,
complete and correct in all material respects, (B) accurately
represent the financial condition of the Property as of the date of
such reports, and (C) have been prepared in accordance with GAAP
consistently applied throughout the periods covered, except as
disclosed therein. Neither Borrower nor any other Loan Party has any
material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments that are known to Borrower and
reasonably likely to cause a Material Adverse Change except as
referred to or reflected in said financial statements. Since the date
of such financial statements, there has been no Material Adverse
Change in the financial condition, operations or business of Borrower
or any other Loan Party from that set forth in said financial
statements.
(ii) All federal, state and local income tax
returns have been filed by Borrower and the other Loan Parties and
there are no income taxes due and owing by Borrower or the other Loan
Parties.
(l) Condemnation/Casualty. No Condemnation or other
proceeding has been commenced or, to Borrower's best knowledge, is contemplated
with respect to all or any portion of any Asset or for the relocation of
roadways providing access to any Asset. Except as set forth on Schedule XXIV
no Casualty (which has not already been repaired) has occurred at any Asset
except for Casualties which would cost less than $100,000 to repair.
(m) Federal Reserve Regulations. No part of the proceeds
of the Loan will be used for the purpose of purchasing or acquiring any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent
with such Regulation U or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and
conditions of this Agreement or the other Loan Documents.
(n) Utilities and Public Access. Each of the Assets has
rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service each of the Assets for its
intended use. All public utilities necessary or convenient to the full use and
enjoyment of each of the Assets are located either in the public rights-of-way
abutting such Asset (which are connected so as to serve each of the Assets
without passing over
59
66
other property) or in recorded easements serving each of the Assets and such
easements are set forth in the Title Insurance Policy for such Asset. All
roads necessary for the use of the Property for its current purpose have been
completed and dedicated to public use and accepted by all Governmental
Authorities.
(o) Not a Foreign Person. Neither Borrower nor any other
Loan Parties is a "foreign person" within the meaning of Section 1445(f)(3) of
the Code.
(p) Separate Lot. Each of the Assets is comprised of one
(1) or more parcels which constitute a separate tax lot and does not constitute
a portion of any other tax lot not a part of such Asset.
(q) Assessments. Except as set forth on Schedule XX,
there are no pending or proposed special or other assessments for public
improvements or otherwise affecting any of the Assets, nor are there any
contemplated improvements to any of the Assets that may result in such special
or other assessments, and Borrower has no knowledge of any other facts or
circumstances (other than facts or circumstances which generally affect
properties located in the area where any Asset is located, such as a general
increase in Taxes for properties in such area) which would cause the Taxes for
Fiscal Year 1997 to be significantly higher than the Taxes assessed and imposed
for Fiscal Year 1996 except as set forth on Schedule XX.
(r) Enforceability. The Loan Documents are not subject
to any right of rescission, set-off, counterclaim or defense by Borrower or any
other Loan Party, including the defense of usury, nor would the operation of
any of the terms of the Loan Documents, or the exercise of any right
thereunder, render the Loan Documents unenforceable except to the extent such
unenforceability may be the result of bankruptcy, insolvency, reorganization or
similar laws affecting rights of creditors generally or general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity
or at law), and neither Borrower nor any other Loan Party has asserted any
right of rescission, set-off, counterclaim or defense with respect thereto.
(s) No Prior Assignment. There are no prior assignments
of (i) the Tenant Leases, (ii) any portion of the Rents due and payable or to
become due and payable or (iii) any other Collateral (except the assignments of
Collateral, set forth on Schedule XXI, which secure Permitted Trade Payables
and FF&E Financings which in the aggregate do not exceed the Maximum Permitted
Trade Payables and FF&E Financings and other Permitted Encumbrances), which
will be outstanding following the Closing Date.
(t) Insurance. Borrower has obtained and has delivered
to Administrative Agent certified copies of all Policies reflecting the
insurance coverages, amounts and other requirements set forth in this Agreement
and there have been no acts or omissions that would impair the coverage of any
such Policies or the benefits of the mortgagee endorsement and all
60
67
such insurance policies are in full force and effect and all premiums with
respect to each such insurance policy have been paid in accordance with the
requirements of Section 7.1 hereof.
(u) Use of Property. Each of the Assets is used
exclusively for hotel purposes and other appurtenant and related uses
(including retail stores and restaurants).
(v) Certificate of Occupancy; Licenses. All
certifications, permits, licenses and approvals, including, without limitation,
certificates of completion and occupancy permits required for the legal use,
occupancy and operation of each of the Assets as a hotel (collectively, the
"LICENSES"), have been obtained and are in full force and effect, except where
any failure to do so, in the aggregate, will not result in a Material Adverse
Change. Borrower shall and Parent shall cause each Loan Party to keep and
maintain all Licenses necessary for the operation of each of the Assets as a
hotel. The use being made of each of the Assets is in conformity with the
certificates of occupancy issued for the Property, except where failure to so
comply will not then have caused and could not reasonably be expected to cause,
either individually or in the aggregate, a Material Adverse Change.
(w) Flood Zone. Except as set forth on Schedule XXII,
none of the Improvements on each of the Assets are located in an area as
identified by the Federal Emergency Management Agency as an area having special
flood hazards. Flood insurance policies (meeting the requirements of Section
7) are in effect for all Assets listed on Schedule XXII. None of the
Improvements on any Asset are constructed on land designated by any
Governmental Authority as wetlands.
(x) Physical Condition. Except as shown on the reports
delivered pursuant to Section 3.1(l), each of the Assets and material
components thereof, including, without limitation, all buildings, improvements,
parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,
HVAC systems, fire protection systems, electrical systems, equipment,
elevators, exterior sidings and doors, landscaping, irrigation systems and all
structural components, is in good condition, order and repair in all material
respects, ordinary wear and tear excepted. There exists no structural or other
material defects or damages in any Asset, whether latent or otherwise, and
neither Borrower nor any other Loan Party has received notice from any
insurance company or bonding company of any defects or inadequacies in any
Asset, or any part thereof, which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon
or of any termination or threatened termination of any policy of insurance or
bond.
(y) Boundaries. All of the improvements which were
included in determining the appraised value of each Asset lie wholly within the
boundaries and building restriction lines of such Asset (other than immaterial
encroachments upon any building line, setback line, sideyard line or recorded
or visible easements, which in each case are described in the Title Insurance
Policy and survey for such Asset and provided (x) the same do not restrict the
61
68
maintenance and current use of the improvements included in the Asset and (y)
within thirty (30) days of the request of the Administrative Agent, Borrower
will request and use reasonable efforts (including but not limited to the
payment of fees and escrows) to cause the title company issuing the Title
Insurance Policy with respect to such Asset to provide affirmative insurance
acceptable to Administrative Agent with respect thereto), and no improvements
on adjoining properties encroach upon such Asset, and no easements or other
encumbrances upon such Asset encroach upon any of the improvements, so as to
affect the value or marketability of such Asset except those which are insured
against by title insurance or which are not likely to result in a Material
Adverse Change.
(z) Leases. No Asset is subject to any Tenant Leases
other than the Tenant Leases described in the Rent Roll delivered to
Administrative Agent in connection with this Agreement and set forth as
Schedule III attached hereto. Other than hotel guests in the ordinary course
of business, no person has any possessory interest in any Asset or right to
occupy the same except under and pursuant to the provisions of the Tenant
Leases. The current Material Leases are in full force and effect and there are
no defaults thereunder by either party and there are no conditions that, with
the passage of time or the giving of notice, or both, would constitute defaults
thereunder.
(aa) Survey. The Survey for each Asset delivered to
Administrative Agent in connection with this Agreement has been prepared in
accordance with the provisions of Section 3.1(c)(iii) hereof, and does not fail
to reflect any matter affecting such Asset or the title thereto which would
likely result in a Material Adverse Change.
(bb) Loan to Value. The Loan as of the Closing Date is
equal to no more than 75% of the fair market value of the Property based on the
appraisals, delivered in connection with the origination of the Loan.
(cc) Filing and Recording Taxes. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the transfer of the Property to Borrower have been
paid. All mortgage, mortgage recording, stamp, intangible or other similar
taxes required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, each Mortgage, have been paid, and, under
current Legal Requirements, each Mortgage is enforceable in accordance with its
terms by the Secured Parties (or any subsequent holder thereof).
(dd) Single-Purpose. Borrower and Parent hereby
represents and warrants to, and covenants with, Administrative Agent and
Lenders that as of the Closing Date and until such time as the Debt shall be
paid in full:
62
69
(i) Borrower does not own and will not own any
asset or property other than (A) the Property, (B) incidental personal
property necessary for the ownership or operation of the Property and
(C) the other Collateral.
(ii) Borrower will not engage in any business
other than the ownership, management and operation of the Property and
the Collateral in connection with the Property and Borrower will
conduct and operate its business as presently conducted and operated.
(iii) Borrower will not enter into any contract or
agreement with any Affiliate of Borrower (other than a Loan Party),
any constituent party of Borrower or any Affiliate of any constituent
party, except upon terms and conditions that are intrinsically fair
and substantially similar to those that would be available on an
arms-length basis with third parties other than any such party.
(iv) Borrower has not incurred and will not incur
any indebtedness (including without limitation Guaranteed
Indebtedness), secured or unsecured, direct or indirect, absolute or
contingent (including guaranteeing any obligation), other than the
Debt and the FF&E Financings. No indebtedness other than the Debt may
be secured (subordinate or pari passu) by the Property except that
FF&E Financings permitted hereunder may be secured by the furniture,
fixtures and equipment purchased in connection with such financings.
(v) Borrower has not made and will not make any
loans or advances to any third party (including any Affiliate or
constituent party), and shall not acquire obligations or securities of
its Affiliates.
(vi) Borrower is and will remain solvent and
Borrower will pay its debts and liabilities (including, as applicable,
shared personnel and overhead expenses) from its assets as the same
shall become due.
(vii) Borrower has done or caused to be done and
will do all things necessary to observe organizational formalities and
preserve its existence, and Borrower will not, nor will Borrower
permit any constituent party of Borrower to, amend, modify or
otherwise change the partnership agreement, partnership certificate,
articles of incorporation, bylaws, articles of organization, operating
agreement, trust or other organizational documents of Borrower or such
constituent party without the prior written consent of Administrative
Agent.
(viii) Borrower will maintain all of its books,
records, financial statements and bank accounts separate from those of
its Affiliates and any constituent
63
70
party. Borrower shall maintain its books, records, resolutions and
agreements as official records.
(ix) Borrower will be, and at all times will hold
itself out to the public as, a legal entity separate and distinct from
any other entity (including any Affiliate of Borrower or any
constituent party of Borrower), shall conduct business in its own
name, shall correct any known misunderstanding regarding its status as
a separate entity, shall not identify itself or any of its Affiliates
as a division or part of the others and shall maintain and utilize a
separate telephone number and separate stationery, invoices and
checks.
(x) Borrower will maintain adequate capital for
the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business
operations.
(xi) Neither Borrower nor any constituent party of
Borrower will seek or effect the liquidation, dissolution, winding up,
consolidation or merger, in whole or in part, of Borrower.
(xii) Borrower will neither commingle the funds and
other assets of Borrower with those of any Affiliate or constituent
party of Borrower or any other Person nor control the decisions with
respect to the daily affairs of any other Person.
(xiii) Borrower has and will maintain its assets in
such a manner that it will not be costly or difficult to segregate,
ascertain or identify its individual assets from those of any
Affiliate or constituent party of Borrower or any other Person.
(xiv) Borrower does not and will not hold itself
out to be responsible for the debts or obligations of any other Person
(other than any Loan Party).
(xv) If Borrower is a limited liability company or
a limited partnership, at least one member of Borrower and any member
owning a 49% or greater membership interest in Borrower (collectively
the "SPE MEMBER") and each general partner of Borrower, as applicable,
shall be a corporation whose sole asset is its interest in Borrower;
and each general partner, the SPE Member of Borrower, or each
shareholder of Borrower which owns a 49% or greater interest in
Borrower, as applicable, will at all times comply, and will cause
Borrower to comply, with each of the representations, warranties and
covenants contained in this Section 4.1(dd) as if such representation,
warranty or covenant was made directly by such general partner or SPE
Member or shareholder. Only the SPE Member may be designated as a
manager under the law where the Borrower is organized.
64
71
(xvi) Borrower shall at all times cause there to be
at least one duly appointed member of the board of directors (an
"INDEPENDENT DIRECTOR") of Borrower or of each general partner of
Borrower if Borrower is a limited partnership or of the SPE Member of
Borrower if Borrower is a limited liability company reasonably
satisfactory to Administrative Agent who shall not have been at the
time of such individual's initial appointment, and may not have been at
any time during the preceding five years, and shall not be at any time
while serving as a director of Borrower or the general partner (or
Member) either (A) a shareholder of, or an officer, director, partner
or employee of, Borrower or any of its shareholders, partners, members,
subsidiaries or Affiliates, (B) a customer of, or supplier to, Borrower
or any of its shareholders, partners, members, subsidiaries or
Affiliates, (C) a person or other entity controlling or under common
control with any such shareholder, officer, director, partner, member,
employee, supplier or customer, or (D) a member of the immediate family
of any such shareholder, officer, director, partner, member, employee,
supplier or customer. Notwithstanding the foregoing, Xxxx Xxxxxxxxxxxx
shall not be disapproved as an Independent Director solely by virtue of
the fact that he is acting as an "independent director" of any of
Borrowers' Affiliates. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policy of a person or entity, whether
through ownership of voting securities, by contract or otherwise.
(xvii) Borrower shall not cause or permit the board
of directors of Borrower or the general partner of Borrower if
Borrower is a limited partnership or of the SPE Member of Borrower if
Borrower is a limited liability company to take any action which,
under the terms of any certificate of incorporation, bylaws or any
voting trust agreement with respect to any common stock, requires a
vote of the board of directors of Borrower, the general partner of
Borrower or the SPE Member of Borrower unless at the time of such
action there shall be at least one member of the board of directors
who is an Independent Director.
(ee) Existing Debt. The total aggregate outstanding
principal amount of the existing debt and FF&E Financings, other than the Debt,
encumbering each of the Assets is as set forth on Schedule XV.
(ff) Taxes. The total Taxes (including special or other
assessments) payable with respect to each Asset for the calendar year 1996 is
as set forth in Schedule XVI, and neither Borrower nor any other Loan Party
knows of any reason, other than the renovations and improvements described on
Schedule XVI and general increases in Taxes for properties in the area where
any Asset is located, why the Taxes payable for the calendar year 1997 would be
higher.
65
72
(gg) Rent Roll and Occupancy/Room Rate Statistics. The
Rent Roll required to be delivered to Administrative Agent pursuant to Section
3.1(o) accurately states the amounts payable under the Tenant Leases and,
except as disclosed to Administrative Agent, all such tenants are occupying the
space and are open for business. Borrower is not aware of any pending closings
or Tenant Lease cancellations or nonrenewals. To the best of Borrower's
knowledge, no tenant has any existing set-off rights against rent currently
owed. The Occupancy/Room Rate statistics delivered to Administrative Agent
pursuant to Section 3.1(y) accurately state the average room rates and
occupancy for the period covered.
(hh) Property Management Agreements. Each of the Property
Management Agreements and all amendments thereto that have been or will be
entered into on or before the Closing Date are listed on Schedule VI annexed
hereto. The Property Management Agreements, as so amended, are in full force
and effect and no term or condition thereof has been further amended, modified
or waived after the execution thereof, except in each case in accordance with
this Agreement; and no Person will have failed in any respect to perform any
obligation or covenant or satisfy any condition required by the Property
Management Agreements to be performed or complied with, except where failure to
so comply will not then have caused and could not reasonably be expected to
cause, either individually or in the aggregate, a Material Adverse Change.
(ii) Liquor Agreements. The Liquor Agreements with
respect to each Asset, in each case with all amendments thereto that have been
or will be entered into on or before the Closing Date, are listed on Schedule
VI annexed hereto. The Liquor Agreements, as amended, are in full force and
effect and no term or condition thereof has been further amended, modified or
waived after the execution thereof, except in each case in accordance with this
Agreement; and no Person will have failed in any respect to perform any
obligation or covenant or satisfy any condition required by the Liquor
Agreements to be performed or complied with, except where failure to so comply
will not then have caused and could not reasonably be expected to cause, either
individually or in the aggregate, a Material Adverse Change. Each Liquor
Agreement provides that at least 45% of the revenue collected by each
Subsidiary which is a party to such Liquor Agreement is required to be paid to
Borrower and no more than 5% of the revenue collected by such Subsidiary with
respect to such Liquor Agreement is required to be paid to the Property
Manager. The Cost Evidence delivered to Administrative Agent accurately sets
forth the expenses incurred by each Subsidiary in connection with each Liquor
Agreement. Each Liquor Agreement with respect to each Asset is subordinate
(and will continue to be subordinate) to the Lien of the Mortgage encumbering
each such Asset.
(jj) Franchise Agreements. The Franchise Agreement with
respect to each Asset, if applicable, and all amendments thereto that have been
or will be entered into on or before the Closing Date, are listed on Schedule V
annexed hereto. The Franchise Agreements, as so amended, are in full force and
effect and no term or condition thereof has been further amended, modified or
waived after the execution thereof, except in each case in accordance with
66
73
this Agreement; and no Person will have failed in any respect to perform any
obligation or covenant or satisfy any condition required by the Franchise
Agreements to be performed or complied with, except where failure to so comply
will not then have caused and could not reasonably be expected to cause, either
individually or in the aggregate, a Material Adverse Change. Borrower has
satisfied the requirements of all core modernization plans or other property
improvement plan required by the terms of any Franchise Agreement.
(kk) Liquor Licenses. Each Liquor License issued in
connection with each Asset is set forth on Schedule VI annexed hereto, each
such Liquor License (i) is validly issued and in full force and effect or (ii)
as set forth on Schedule VI, has been applied for in accordance with the
procedures set forth on Schedule VI and the applicant has the legal right to
sell alcoholic beverages at the applicable Asset pending the issuance of the
Liquor License therefore (and Borrower has no reason to believe that such
license will not be timely issued), and the holder of each such Liquor License
or applicant, as the case may be is a party to the Omnibus Management and
Liquor License Agreement. The Borrower or its Subsidiaries has the legal right
to utilize each Liquor License required in connection with the operation of any
restaurant, bar or other alcoholic beverage service located at the applicable
Asset, except where the failure to have such right has not caused and could not
reasonably be expected to cause, either individually or in the aggregate, a
Material Adverse Change. All cash and other revenues and receipts from the
operation of any owner of a Liquor License of an alcoholic beverage service at
any Asset are collected either by the licensee thereof or the Borrower and are
then deposited directly into the Clearing Account A established for such Asset.
(ll) IP License Agreements.
(i) Each IP License Agreement, if any, and all
amendments thereto that have been or will be entered into on or before
the Closing Date are listed on Schedule XI annexed hereto. Such IP
License Agreements, as so amended, are in full force and effect and no
term or condition thereof has been further amended, modified or waived
after the execution thereof, except in each case in accordance with
this Agreement; and no Person will have failed in any respect to
perform any obligation or covenant or satisfy any condition required
by such IP License Agreements to be performed or complied with, except
where failure to so comply will not then have caused and could not
reasonably be expected to cause, either individually or in the
aggregate, a Material Adverse Change.
(ii) The Borrower and its Subsidiaries owns, or are
licensed to use or otherwise have the lawful right to use, the
material Intellectual Property. Except as set forth on Schedule XII
annexed hereto, all such material Intellectual Property (other than in
respect of rights under Franchise Agreements) is fully protected and
duly and properly registered, filed or issued in the appropriate
office and jurisdictions for such registrations, filing or issuances,
except where the lack of the lawful right to use such Intellectual
Property could not reasonably be expected, individually or in the
aggregate,
67
74
to result in a Material Adverse Change, and in each case the Person
holding rights therein, are identified in Schedule XIIannexed hereto.
(iii) No claim has been asserted with respect to the
use of any such Intellectual Property by the Borrower or any other
Loan Party by any other Person challenging or questioning the validity
or effectiveness of any such Intellectual Property, and neither
Borrower nor any other Loan Party knows of any valid basis for any
such claim which, in either case, has caused or could reasonably be
expected to cause, either individually or in the aggregate, a Material
Adverse Change; and the use of such Intellectual Property by Borrower
does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, give rise to any
liability on the part of Borrower or any other Loan Party that has
caused or could reasonably be expected to cause, either individually
or in the aggregate, a Material Adverse Change. The consummation of
the transactions contemplated by this Agreement will not in any manner
or to any extent impair the ownership of (or the license to use, as
the case may be) any of such Intellectual Property by Borrower.
(mm) Ground Leases. Each of the representations and
warranties set forth in Section 32 of the Mortgages which encumber Ground
Leases are herein incorporated by reference.
(nn) Subsidiaries. All of the capital stock or
partnership, limited liability company, joint venture, or other ownership
interests (however designated) of each Subsidiary (including all warrants, and
options to purchase) are directly or indirectly owned by Parent.
(oo) Borrower. All of the capital stock of Borrower is
owned by Parent and there are no warrants or options to purchase Borrower or
any stock of Borrower.
(pp) Parent. All of the capital stock of Parent is owned
by BHOC and there are no warrants or options to purchase Parent or any stock of
Parent.
SECTION 4.2 SURVIVAL OF REPRESENTATIONS.
Borrower and Parent agree that all of the representations and
warranties of Borrower (and the Loan Parties) set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall survive for
so long as any amount remains owing to any Lender under this Agreement or any
of the other Loan Documents by Borrower. All representations, warranties,
covenants and agreements made in this Agreement or in the other Loan Documents
by Borrower, Parent or any other Loan Party shall be deemed to have been relied
upon by Administrative Agent and each Lender notwithstanding any investigation
heretofore or hereafter made by Administrative Agent or such Lender.
68
75
V. AFFIRMATIVE COVENANTS
SECTION 5.1 BORROWER COVENANTS.
From the Closing Date and until payment and performance in
full of all obligations of Borrower under the Loan Documents or the earlier
Total Release of all the Liens of every Mortgage in accordance with the terms
of this Agreement and the other Loan Documents, Borrower hereby covenants and
agrees that unless the Requisite Lenders otherwise consent in writing:
(a) Existence; Compliance with Legal Requirements;
Insurance. Borrower and Parent shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect Borrower's and
the Loan Parties' existence, rights, licenses, Authorizations, permits and
franchises and Borrower shall comply and Parent shall cause each Loan Party to
comply with all Legal Requirements applicable to them, to every Asset and to
all other Collateral, except where failure to so comply will not then have
caused and could not reasonably be expected to cause, either individually or in
the aggregate, a Material Adverse Change. Borrower shall and Parent shall
cause all Loan Parties to at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of their property
used or useful in the conduct of their business and Borrower shall keep the
Property in good working order and repair (ordinary wear and tear excepted) and
from time to time make, or cause to be made, all reasonably necessary repairs,
renewals, replacements, betterments and improvements thereto, all as more fully
provided in each Mortgage or in this Agreement. Borrower shall keep the
Property insured at all times by financially sound and reputable insurers, to
such extent and against such risks, and maintain liability and such other
insurance, as is more fully provided in this Agreement.
(b) Taxes and Other Charges. Borrower shall pay all
Taxes and Other Charges now or hereafter levied or assessed or imposed against
the Property or any part thereof prior to the date the same become delinquent;
provided, however, Borrower's obligation to directly pay Taxes shall be
suspended for so long as Borrower complies with the terms and provisions of
Section 7.3 hereof. Borrower will deliver to Administrative Agent receipts for
payment or other evidence satisfactory to Administrative Agent that the Taxes
and Other Charges have been so paid or are not then delinquent no later than
thirty (30) days prior to the date on which the Taxes and/or Other Charges
would otherwise be delinquent if not paid (provided, however, that Borrower is
not required to furnish such receipts for payment of Taxes in the event that
such Taxes have been paid by Administrative Agent pursuant to Section 7.3
hereof). Borrower shall not suffer and shall promptly cause to be paid and
discharged any lien or charge whatsoever which may be or become a lien or
charge against any Asset, and shall promptly pay for all utility services
provided to each Asset. After prior written notice to Administrative Agent,
Borrower, at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (i) no
69
76
Event of Default has occurred and remains uncured, (ii) Borrower is permitted
to do so under the provisions of any mortgage or deed of trust superior in lien
to any Mortgage, (iii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
Borrower is subject and shall not constitute a default thereunder, and such
proceeding shall be conducted in accordance with all applicable statutes, laws
and ordinances, (iv) neither any Asset nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, cancelled or lost, and
(v) Borrower shall promptly upon final determination thereof pay the amount of
any such Taxes or Other Charges, together with all costs, interest and
penalties which may be payable in connection therewith. In addition, if the
Taxes or Other Charges are not paid in full when Borrower commences such
contest, then the following shall apply: (A) such proceeding shall suspend the
collection of Taxes or Other Charges from such Asset, and (B) Borrower shall
furnish such security as may be required in the proceeding, or as may be
reasonably requested by Administrative Agent, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon.
Administrative Agent may pay over any such cash deposit or part thereof held by
Administrative Agent to the claimant entitled thereto at any time when, in the
judgment of Administrative Agent, the entitlement of such claimant is
established.
(c) Litigation. Borrower and Parent shall give prompt
written notice to Administrative Agent of (i) any litigation or governmental
proceedings pending or threatened against Borrower or any other Loan Party
which might reasonably be expected to cause, either individually or in the
aggregate, a Material Adverse Change and (ii) any material development in any
litigation or proceeding that, in any case either (x) seeks to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated hereby or (y) threatens
the validity or priority of the Liens granted pursuant to the Loan Documents.
(d) Access to Premises. Borrower shall permit agents,
representatives and employees of Administrative Agent to inspect each Asset or
any part thereof at reasonable hours upon reasonable advance notice.
(e) Notice of Default. Borrower and Parent shall
promptly advise Administrative Agent of any Material Adverse Change of which
Borrower or Parent has knowledge.
(f) Cooperate in Legal Proceedings. Borrower shall and
Parent shall cause all Loan Parties to cooperate fully with Administrative
Agent with respect to any proceedings before any court, board or other
Governmental Authority which may in any way affect the rights of Administrative
Agent hereunder or any rights obtained by Administrative Agent under any of the
other Loan Documents and, in connection therewith, permit Administrative Agent,
at its election, to participate in any such proceedings.
70
77
(g) Perform Loan Documents. Borrower shall, and Parent
shall cause all Loan Parties to, observe, perform and satisfy all the terms,
provisions, covenants and conditions of, and shall pay when due all costs, fees
and expenses to the extent required under, the Loan Documents executed and
delivered by, or applicable to, Borrower or any other Loan Party.
(h) Insurance Benefits. Borrower shall cooperate with
Administrative Agent in obtaining for the Secured Parties the benefits of any
Insurance Proceeds lawfully or equitably payable in connection with any Asset,
and Administrative Agent shall be reimbursed for any reasonable out-of-pocket
expenses incurred in connection therewith (including, without limitation,
attorneys' fees and disbursements, and the payment by Borrower of the expense
of an appraisal on behalf of Administrative Agent in case of a fire or other
casualty affecting such Asset or any part thereof) out of such Insurance
Proceeds.
(i) Further Assurances; Supplemental Mortgage Affidavits.
Borrower shall and Parent shall cause each Loan Party to, as applicable, at
Borrower's or such Loan Party's sole cost and expense:
(i) furnish to Administrative Agent (with
sufficient copies for each of the Lenders) all instruments, documents,
boundary surveys, footing or foundation surveys, certificates, plans
and specifications, title and other insurance reports and agreements,
and each and every other document, certificate, agreement and
instrument required to be furnished by Borrower (or any other Loan
Party) pursuant to the terms of the Loan Documents or reasonably
requested by Administrative Agent in connection therewith;
(ii) furnish to Administrative Agent, with
reasonable promptness, (a) information and other data revised to
correct any material erroneous information and other data previously
delivered by any Loan Party to Administrative Agent pursuant to this
Section 5.1 or included in any statement, report or certificate
previously delivered by such Loan Party to Administrative Agent
pursuant to this Section 5.1, together with such statement, report or
certificate that shall have been revised to reflect such revised
information and data, and (b) such other information and data with
respect to the Loan Parties, the Assets, the Property, the Ground
Leases and Tenant Leases, the Property Management Agreements, the
other Collateral and the other assets and liabilities of the Loan
Parties, all in form consistent with any applicable requirements of
this Agreement and reasonably satisfactory to Administrative Agent, as
from time to time may be reasonably requested by Administrative Agent;
(iii) execute and deliver to Administrative
Agent such documents, instruments, certificates, assignments and other
writings, and do such other acts necessary or desirable, to evidence,
preserve and/or protect the collateral at any time
71
78
securing or intended to secure the obligations of Borrower under the
Loan Documents, as Administrative Agent may reasonably require; and
(iv) do and execute all and such further lawful
and reasonable acts, conveyances and assurances for the better and
more effective carrying out of the intents and purposes of this
Agreement and the other Loan Documents, as Administrative Agent shall
reasonably require from time to time.
(j) Financial Reporting.
(i) Borrower will keep and maintain or will cause
to be kept and maintained on a Fiscal Year basis, in accordance with
GAAP (or such other accounting basis reasonably acceptable to
Administrative Agent), proper and accurate books, records and accounts
reflecting all of the financial affairs of Borrower and all items of
income and expense in connection with the operation of the Property
(on an Asset by Asset basis). Administrative Agent shall have the
right from time to time at all times during normal business hours upon
reasonable notice to examine such books, records and accounts at the
office of Borrower or other Person maintaining such books, records and
accounts and to make such copies or extracts thereof as Administrative
Agent shall desire, and Borrower will authorize its independent
accountants to disclose to Administrative Agent or any Lender any and
all financial statements and other information of any kind as
Administrative Agent or any Lender may reasonably request. After the
occurrence of an Event of Default, Borrower shall pay any reasonable
out-of-pocket costs and expenses incurred by Administrative Agent to
examine Borrower's accounting records with respect to the Property, as
Administrative Agent shall determine to be necessary or appropriate in
the protection of Lenders' interests.
(ii) Borrower will furnish to Administrative
Agent annually, within forty-five (45) days following the end of each
Fiscal Year (beginning with Borrowers' 1998 Fiscal Year), a complete
copy of Borrower's annual unaudited operating statements setting forth
the income and expenses for each Asset for such Fiscal Year including
without limitation Net Operating Income, Gross Income from Operations,
Operating Expenses and Mortgaged Property Gross Cash Flow. Borrower
will furnish to Lenders annually, within ninety (90) days following
the end of each Fiscal Year (beginning with Borrower's 1998 Fiscal
Year), a complete copy of Borrower's financial statements audited by
one of the Big Six Accounting Firms (or by an independent certified
public accountant acceptable to the Requisite Lenders and the
Administrative Agent in their sole discretion) in accordance with
GAAP, covering the Property for such Fiscal Year and containing
consolidated statements of profit and loss and cash flow for Borrower
and a consolidated balance sheet for Borrower together with an
"unqualified opinion" of such certified public accountant. The profit
and loss statements (included in the annual audited financial
statements will be accompanied by a procedures report reasonably
acceptable to
72
79
Administrative Agent demonstrating how the Asset by Asset annual
unaudited operating statements correlate to the audited profit and
loss statements) and otherwise in a format reasonably acceptable to
Administrative Agent. Borrower's audited annual financial statements
shall be accompanied by a Rent Roll for each Asset in form and content
reasonably acceptable to Administrative Agent and a certificate
executed by the chief financial officer, treasurer or controller of
Borrower or the general partner or manager of Borrower, as applicable,
stating that to such officer's best knowledge such annual financial
statement presents fairly the financial condition of each Asset and
has been prepared in accordance with GAAP and that the financial
statement, and all information delivered in connection therewith are
true, accurate and complete. Together with Borrower's annual
financial statements, Borrower shall furnish to Administrative Agent
(i) an Officer's Certificate certifying as of the date thereof whether
there exists an event or circumstance which constitutes a Default or
an Event of Default under the Loan Documents executed and delivered
by, or applicable to, Borrower, and if any Default or Event of Default
exists, the nature thereof, the period of time it has existed and the
action then being taken to remedy the same and (ii) a written
statement by the accounting firm which prepared Borrower's financial
statements, stating (x) in substance that their audit examination has
included a review of the terms of this Agreement and the other Loan
Documents as they relate to accounting matters, and (y) whether, in
connection with their audit examination, any condition or event that
constitutes a Default or Event of Default has come to their attention
and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof; provided,
however, that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Default or Event of Default
that would not be disclosed in the course of their audit examination;
and (iii) (unless restricted by applicable professional standards),
copies of all reports submitted to any Loan Party by the accounting
firm which prepared Borrower's financial statements, including any
comment letter submitted by such accountants to management in
connection with their annual audit. If, as a result of any change in
accounting principles and policies the consolidated financial
statements of the Loan Parties delivered pursuant to this section
differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to this section had
no such change in accounting principles and policies been made,
Borrower shall furnish to Administrative Agent together with (x) the
first delivery of financial statements pursuant to this section
following such change, consolidated financial statements of the Loan
Parties for the current calendar year to the effective date of such
change and the two full calendar years immediately preceding the
calendar year in which such change is made, in each case prepared on a
pro forma basis as if such change had been in effect during such
periods, and (y) each delivery of financial statements pursuant to
this section following such change, a written statement of the chief
financial officer, treasurer or controller of Borrower setting forth
the differences which would have resulted in the financial statements,
if the financial statements had been prepared without giving effect to
such change.
73
80
(iii) Borrower will furnish, or cause to
be furnished, to Administrative Agent on or before (x) twenty (20)
days after the end of each calendar month, and (y) forty five (45)
days (or until a successful Securitization twenty (20) days) after
each calendar quarter, the following items on an Asset by Asset basis
accompanied by a certificate of the chief financial officer of
Borrower or the general partner or manager of Borrower, as applicable,
stating that to such officer's best knowledge such items are true,
correct, accurate and complete and fairly present the financial
condition and results of the operations of Borrower and each Asset
(subject to normal year-end adjustments) as applicable: (A)
Occupancy/Room Rate Statistics for the preceding month or quarter; (B)
monthly or quarterly and year to date operating statements prepared
for each calendar month or quarter, noting Net Operating Income, Gross
Income from Operations, Operating Expenses and other information
necessary and sufficient under GAAP to fairly represent the financial
position and results of operation of each Asset during such calendar
month or quarter, all in form reasonably satisfactory to
Administrative Agent; (C) a calculation reflecting the annual Debt
Service Coverage Ratio for each Asset individually (based upon the
Debt Service which would be payable if the Note was in the principal
amount of the Allocated Loan Amount for such Asset) and for the
Property collectively for the immediately preceding twelve (12) month
period as of the last day of each such month or quarter; (D) the
actual capital expenditure at each Asset with respect to each calendar
month or quarter. In addition, the above-referenced certificate shall
also be accompanied by an Officer's Certificate stating that the
representations and warranties of Borrower set forth in Section
4.1(dd)(iv) are true and correct as of the date of such certificate
and that there is no material amount of trade payables (including but
not limited to Permitted Trade Payables) outstanding for more than
thirty (30) days; and (E) at the end of each fiscal quarter only, a
list of all Material Security Deposits and to the extent all such
Material Security Deposits were not deposited into the Security
Deposit Subaccount during such quarter, evidence that Borrower has
deposited into the Security Deposit Subaccount an amount equal to all
such Material Security Deposits not previously deposited into such
account.
(iv) Borrower shall furnish to Administrative
Agent, within ten (10) Business Days after request (or as soon
thereafter as may be reasonably possible), such further detailed
information with respect to the operation of any Asset and the
financial affairs of Borrower as may be reasonably requested by
Administrative Agent or any Lender (through the Administrative Agent),
which shall include:
(A) evidence reasonably satisfactory to
Administrative Agent that all premiums (including all
installments payments) then due and payable with respect to
the insurance required to be maintained pursuant to Section 7
have been paid in accordance with the requirements of Section
7.1.1(a); provided that evidence previously delivered pursuant
to this clause (A) with respect to the prior payment of any
installment payments need not be redelivered;
74
81
(B) (I) promptly upon becoming aware of
the occurrence of or forthcoming occurrence of any ERISA
Event, a written notice specifying the nature thereof, what
action any Loan Party or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto; (II) with reasonable
promptness, copies of all notices received by any Loan Party
or any of its ERISA Affiliates from a Multiemployer Plan
sponsor concerning an ERISA Event; and (III) with reasonable
promptness following Administrative Agent's reasonable
request, (x) copies of any Schedule B (Actuarial Information)
filed by any Loan Party or any of its ERISA Affiliates with
the Internal Revenue Service with respect to any Pension Plan
and (y) copies of such other documents or governmental reports
or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(C) as soon as practicable following
receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of any Loan Party or by
independent consultants, with respect to material
environmental matters at any Asset or which relate to an
Environmental Claim which could reasonably be expected to
cause, either individually or in the aggregate, a Material
Adverse Change; and
(D) promptly upon request, copies of (a)
all financial statements, reports, notices and proxy
statements sent or made available generally by Bristol to its
security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Bristol or any
subsidiary of Bristol with the New York Stock Exchange, Inc.,
any other securities exchange or with the Securities and
Exchange Commission and all material filings with any
Governmental Authority or private regulatory authority, and
(c) all press releases made available generally by Bristol or
any of its subsidiaries to the public or to the security
holders of Bristol.
(k) Business and Operations. Borrower shall and Parent
shall cause each Loan Party to continue to engage in the businesses presently
conducted by it as, and to the extent the same, is necessary for the ownership,
maintenance, management and operation of the Property. Borrower will and
Parent will cause each Loan Party to qualify to do business and to remain in
good standing under the laws of each jurisdiction as and to the extent the same
is required for the ownership, maintenance, management and operation of the
Property or the other Collateral, except where failure to so qualify will not
then have caused and could not reasonably be expected to cause, either
individually or in the aggregate, a Material Adverse Change.
75
82
(l) Title to the Property. Borrower will warrant and
defend (i) the title to each Asset and every part thereof, subject only to
Liens permitted hereunder (including Permitted Encumbrances), and (ii) the
validity and priority of the Liens of the Mortgage and the Assignment of Leases
on such Asset, subject only to Liens permitted hereunder (including Permitted
Encumbrances), in each case against the claims of all Persons whomsoever.
Borrower shall reimburse Administrative Agent and Lenders for any losses,
damages or reasonable out-of-pocket costs or expenses (including reasonable
attorneys' fees and court costs) incurred by Administrative Agent and Lenders
if an interest in any Asset, other than as permitted hereunder, is claimed by
another Person. If in the reasonable judgment of Administrative Agent,
Borrower is not adequately defending title to the Assets or the validity of the
Liens of the Loan Documents then Administrative Agent may, upon at least five
days' prior notice to Borrower, (i) appear in and defend any action or
proceeding, in the name and on behalf of Administrative Agent, the Lenders or
any Loan Party in which the Administrative Agent or any Lender is named or
which the Administrative Agent in its reasonable discretion determines is
reasonably likely to materially adversely affect any Asset, any Property
Management Agreement or other Collateral, any Mortgage, the Lien thereof or any
other Loan Document and (ii) institute any action or proceeding which
Administrative Agent reasonably determines should be instituted to protect the
interest or rights of Administrative Agent and the Lenders in any Asset or
other Collateral or under this Agreement or any other Loan Document. Borrower
and Parent agree that all reasonable out of pocket costs and expenses expended
or otherwise incurred pursuant to this subsection (including reasonable
attorneys' fees and disbursements) by Administrative Agent shall be paid,
without duplication, by the Borrower or reimbursed to Administrative Agent, as
the case may be, promptly after demand.
(m) Costs of Enforcement. In the event (i) that any
Mortgage or other Security Document is foreclosed in whole or in part or that
any Mortgage or other Security Document is put into the hands of an attorney
for collection, suit, action or foreclosure, (ii) of the foreclosure of any
mortgage prior to or subsequent to any Mortgage in which proceeding any Lender
is made a party, or (iii) of the bankruptcy, insolvency, reorganization,
rehabilitation, liquidation or other similar proceeding in respect of Borrower
or any other Loan Party or an assignment by Borrower or any other Loan Party
for the benefit of its creditors, then Borrower, its successors or assigns,
shall be chargeable with and agree to pay all costs of collection and defense,
including, without limitation, attorneys' fees, in connection therewith and in
connection with any appellate proceeding or post-judgment action involved
therein, which shall be due and payable together with all required service or
use taxes on demand.
(n) Estoppel Statements.
(i) Within ten (10) Business Days after request
by Administrative Agent, Borrower shall furnish Administrative Agent
with a statement, duly acknowledged and certified, setting forth (A)
the amount of the original principal amount of the Notes, (B) the
unpaid principal amount of the Notes, (C) the Applicable Interest
76
83
Rate of the Notes, (D) the date installments of interest and principal
were last paid, (E) any offsets or defenses to the payment of the
Debt, if any, and (F) that the Notes, this Agreement, each Mortgage
and the other Loan Documents are valid, legal and binding obligations
and have not been modified or, if modified, giving particulars of such
modification.
(ii) Borrower shall use reasonable efforts to
deliver to Administrative Agent upon request, tenant estoppel
certificates from each Tenant under a Material Lease at any Asset in
form and substance reasonably satisfactory to Administrative Agent.
(o) Loan Proceeds. Borrower shall use the proceeds of
the Loan received by it on the Closing Date only for the purposes set forth in
Section 2.2 hereof.
(p) Performance by Borrower. Borrower shall, and Parent
shall cause each Loan Party to, in a timely manner observe, perform and fulfill
each and every covenant, term and provision of each Loan Document executed and
delivered by, or applicable to, Borrower or such Loan Party, and shall not
enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower or such Loan Party without the prior written
consent of Administrative Agent.
(q) Annual Operating Budget. Borrower shall prepare and
deliver to Administrative Agent (with sufficient copies for each of the
Lenders), on or before the beginning of each Fiscal Year of Borrower, an annual
operating budget for each Asset including all planned capital expenditures for
each Asset for such ensuing Fiscal Year (the "ANNUAL OPERATING BUDGET"). The
Annual Operating Budget shall be prepared and submitted in a form reasonably
acceptable to Administrative Agent and shall set forth in reasonable detail
budgeted monthly Gross Income from Operations and monthly capital and other
expenses for the Property. Each Annual Operating Budget shall contain, among
other things, limitations on management fees and third party service fees, as
required hereunder, and, on and after the Optional Prepayment Date, in no event
shall management fees be permitted to be paid to an Affiliate of Borrower
except as if the Property Manager Agreement is renewed in accordance with
Section 5.1(v). Administrative Agent shall have the right to approve each
proposed Annual Operating Budget, which approval for the period prior to the
Optional Prepayment Date and as long as no Event of Default is continuing (i)
shall not be unreasonably withheld and (ii) shall be deemed given in the event
Administrative Agent fails to respond to Borrower's written request to approve
a proposed Annual Operating Budget within thirty (30) days after receipt by
Administrative Agent of such request accompanied by the proposed Annual
Operating Budget and all information required in order to adequately review the
same, and Borrower sends an additional written request for approval and
Administrative Agent fails to respond to Borrower's second request within ten
(10) days thereof. In the event that Administrative Agent's approval is
required and Administrative Agent objects to the proposed Annual Operating
Budget submitted by Borrower, Administrative
77
84
Agent shall advise Borrower of such objections within fifteen (15) Business
Days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objection) and Borrower shall promptly revise such Annual
Operating Budget and resubmit the same to Administrative Agent. Administrative
Agent shall advise Borrower of any objections to such revised Annual Operating
Budget within fourteen (14) days after receipt thereof (and deliver to Borrower
a reasonably detailed description of such objection) and Borrower shall
promptly revise the same in accordance with the process described in this
sentence until Administrative Agent approves an Annual Operating Budget.
Notwithstanding anything to the contrary contained in this clause (q), any
Annual Operating Budget submitted prior to the Optional Prepayment Date at any
time other than during a Cash Trap Period shall not require the approval of
Administrative Agent, provided, however, that if Administrative Agent has not
approved the Annual Operating Budget in effect at the time a Cash Trap Event
occurs, Administrative Agent shall have the right to approve such Annual
Operating Budget. Each such Annual Operating Budget approved or not requiring
approval by Administrative Agent in accordance with terms hereof shall
hereinafter be referred to as an "APPROVED ANNUAL OPERATING BUDGET." Until
such time that Administrative Agent approves a proposed Annual Operating
Budget, the most recently Approved Annual Operating Budget shall apply;
provided that such Approved Annual Operating Budget shall be adjusted to
reflect actual increases in real estate taxes, insurance premiums and utilities
expenses.
(r) Confirmation of Representations. In addition to and
not in limitation of the covenants and agreements of Borrower and Parent
contained in this Agreement, Borrower shall and Parent shall cause each Loan
Party to deliver, in connection with any Secondary Market Transaction: (i) one
or more Officer's Certificates certifying as to the accuracy of all
representations and warranties made by Borrower or any other Loan Party in the
Loan Documents as of the date of the closing of such Secondary Market
Transaction in all relevant jurisdictions, and (ii) certificates of the
relevant Governmental Authorities in all relevant jurisdictions indicating the
good standing and qualification of Borrower, each other Loan Party and their
general partner or SPE Member as of the date of the Secondary Market
Transaction.
(s) No Joint Assessment. Borrower shall not suffer,
permit or initiate the joint assessment of any Asset (i) with any other real
property constituting a tax lot separate from such Asset, and (ii) with any
portion of such Asset which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to such Asset.
(t) Leasing Matters.
(i) Without the prior written approval of
Administrative Agent and the Requisite Lenders, which approval shall
not be unreasonably withheld, conditioned or delayed, the Borrower
shall not (i) enter into, or amend, restate, supplement or otherwise
modify, any Lease, (ii) enter into any advanced booking of more than
51% of the rooms
78
85
at any Asset for a period in excess of 30 days, provided, however,
Borrower shall have the right without obtaining the prior approval of
Administrative Agent, to enter into, amend, restate, supplement or
otherwise modify a Lease which is not a Material Lease provided or
such Tenant Lease (after giving effect to such modification,
amendment, restatement or supplement, if appropriate) complies with
the requirements set forth on Schedule XXIII. If any Tenant Lease
necessary to the operation of any Asset as a hotel is terminated,
Borrower shall either replace such Tenant Lease with a suitable
comparable Tenant Lease within a reasonable period of time following
such termination or shall itself provide the services intended to be
obtained under such Tenant Lease. All Tenant Leases and advanced
bookings, entered into after the date hereof, shall be subordinate to
the Mortgage and shall provide that the tenant under such Tenant Lease
or advance booking, as the case may be, agrees to (x) attorn to each
Lender and (y) provide Administrative Agent with an estoppel
certificate in form and substance satisfactory to Administrative
Agent, provided, however, if Administrative Agent shall have approved
a Tenant Lease and the Tenant shall have executed Administrative
Agent's form of subordination, non- disturbance and attornment
agreement and delivered same to Administrative Agent, Administrative
Agent agrees to execute and deliver the same with respect to such
Lease. All renewals of Tenant Leases and all proposed Tenant Leases
(other than the Liquor Leases) shall (AA) be on terms and conditions
which a senior executive, with at least ten (10) years experience in
the management of Assets substantially similar to the Assets in the
region where the Assets are located and that manages or has managed at
least 3 such Assets, would consider to be commercially reasonable,
constitute good and prudent business practice and be at prevailing
market rents and other terms and conditions, (BB) be arms-length
transactions, and (CC) not contain any terms which would adversely
affect the Administrative Agent and Lenders respective rights under
the Loan Documents. None of the Tenant Leases shall contain any
option to purchase, any right of first refusal to lease or purchase,
any non- disturbance or similar recognition agreement or any other
similar provisions which adversely affect the Property or which might
adversely affect the rights of any holder of the Loan, without the
prior written consent of Administrative Agent which consent shall not
be unreasonably withheld or delayed. Each Tenant shall conduct
business only in that portion of the Asset covered by its Tenant
Lease. Borrower shall furnish Administrative Agent with executed
copies of all Tenant Leases executed after the date hereof (regardless
of whether or not Administrative Agent's approval is required with
respect to any such Tenant Lease) and shall also deliver to
Administrative Agent, within 45 days of the end of each Fiscal Year, a
rent roll for each Asset certified to Administrative Agent as being
true and correct by Borrower and containing the name of each Tenant,
the term of each Tenant's Lease, the space occupied by each tenant,
the rentals or fees payable thereunder, the expiration date of each
Tenant Lease, occupancy statistics and such other information with
respect to the Tenant Leases as Administrative Agent shall reasonably
require (the "RENT ROLL"). To the extent Administrative Agent's
approval of any Tenant Lease or Material Lease, any tenant or an
alteration or
79
86
modification of a Material Lease or Tenant Lease is required under
this Section 5.1(t), in the event Administrative Agent fails to
respond to Borrower's written request for such approval within thirty
(30) days after Administrative Agent has received from Borrower such
written request and all information reasonably required in order to
adequately review such request, Borrower may send an additional
written request for approval and if Administrative Agent fails to
respond to Borrower's second request within fourteen (14) days
thereof, Administrative Agent shall be deemed to have approved such
Lease or such tenant, as the case may be.
(ii) Borrower: (A) shall duly and punctually
observe and perform all the obligations imposed upon the landlord
under each of the Tenant Leases and shall not do or permit to be done
anything to impair the value of the Tenant Leases as security for the
Debt; (B) shall promptly send copies to Administrative Agent (with
sufficient copies for each Lender) of all notices of default which
Borrower shall send or receive under any of the Material Leases; (C)
shall enforce all the terms, covenants and conditions contained in
each of the Tenant Leases on the part of the tenant thereunder to be
observed or performed; (D) exclusive of Security Deposits, shall not
collect any of the Rents more than one (1) month in advance; (E) shall
not execute any other assignment of, or further mortgage or encumber,
the landlord's interest in the Tenant Leases or the Rents; (F) shall
use reasonable efforts to deliver to Administrative Agent, upon
request, Tenant estoppel certificates from each Tenant under a
Material Lease at the Property addressed to such party or parties as
directed by Administrative Agent and in form and substance reasonably
satisfactory to Administrative Agent; and (G) shall execute and
deliver at the request of Administrative Agent all such further
assurances, confirmations and assignments in connection with the
Tenant Leases as Administrative Agent shall from time to time
reasonably require. Borrower: (AA) shall not convey or transfer or
suffer or permit a conveyance or transfer of any Asset or of any
interest therein so as to effect a merger of the estates and rights
of, or a termination or diminution of the obligations of, Tenants
under the Tenant Leases; (BB) shall not consent to any assignment of
or subletting under the Material Leases not in accordance with their
terms, without the prior written consent of Administrative not to be
unreasonably withheld or delayed; (CC) shall not permit any Tenant
Lease to become subordinate to any lien other than the lien of the
Mortgage without the prior written consent of Administrative Agent.
Lenders (through Administrative Agent) shall have the right, at
Borrower's expense, but shall not be obligated, to cure any default by
Borrower under any of the Material Leases which, (x) if such default
remains uncured, would give the Tenant the right to terminate such
Material Lease or exercise a right of offset against Rents and (y)
Borrower has not cured itself within five (5) days after having
received notice thereof. Such curing by Lenders of a default by
Borrower under any of the Tenant Leases shall not release Borrower in
any way from liability to Lenders for Borrower's failure to discharge
its duty to so cure that default itself. Any and all sums expended by
Lenders with respect to any such cure, together with interest thereon
at the Default Rate from the date paid by Administrative
80
87
Agent on behalf of Lenders until repaid by Borrower, shall immediately
be due and payable to Administrative Agent by Borrower on demand and
shall be secured by the Mortgage and by all of the other Loan
Documents securing all or any part of the Debt.
(u) Principal Place of Business. Borrower and Parent
shall not change their principal place of business as set forth on the first
page of this Agreement without first giving Administrative Agent thirty (30)
days prior written notice. Parent shall not permit any Subsidiary to change
its principal place of business without first giving Administrative Agent
thirty (30) days prior written notice.
(v) Property Manager. Borrower shall cause the Property
to be managed in a manner that is consistent with the Approved Property Manager
Standard. Borrower covenants and agrees with Administrative Agent that (i)
each Asset will be managed at all times by the Property Manager pursuant to a
Property Management Agreement which shall provide for a Management Fee of no
more than the Maximum Management Fee, that the payment of such Management Fee
shall be subordinate to the Lien of the Mortgage, that the Property Manager
shall not be permitted to receive any Management Fee or other payments at any
time that a monetary Default or an Event of Default is continuing (or after
giving effect to such payment would occur), that the payment of such Management
Fee shall be subordinate to all of the obligations of Borrower in connection
with the Property, including, without limitation, Debt Service, (ii) the
Management Fee shall be paid from the Mortgaged Property Gross Cash Flow, (iii)
after Borrower has knowledge of a Change in Control (other than a
hypothecation, mortgage, pledge or encumbrance of the capital stock of the
Property Manager) of the Property Manager, Borrower will promptly give
Administrative Agent written notice thereof (a "PROPERTY MANAGER CONTROL
NOTICE"), and (iv) the Property Management Agreement may be terminated by
Administrative Agent at any time for the Property Manager's gross negligence,
willful misconduct or fraud or at any time following either (A) the occurrence
and during the continuance of a monetary Event of Default, (B) the receipt of a
Property Manager Control Notice (or if Administrative Agent otherwise becomes
aware of a Change in Control (other than a hypothecation, mortgage, pledge or
encumbrance of the capital stock of the Property Manager) of the Property
Manager) if the Property Manager no longer meets the Approved Property Manager
Standard or is not otherwise approved by Lenders and Administrative Agent in
their sole discretion, (C) if any event shall have occurred which would allow
the Borrower to terminate the Property Management Agreement or (D) if any
portion of the Debt remains unpaid on the Optional Prepayment Date and Borrower
fails to renew the Property Management Agreement (with the consent of
Administrative Agent, not to be unreasonably withheld) under terms that are not
more favorable to the Property Manager than the Property Management Agreement
approved on the Closing Date in connection with the funding of this Loan, and
upon such termination, Borrower shall replace the terminated Property Manager
with a property manager selected by Borrower and approved by the Requisite
Lenders, Administrative Agent and the Rating Agencies rating the Securities in
their respective sole discretion or selected by the Requisite Lenders and
Administrative Agent in their sole discretion on terms and conditions
81
88
satisfactory to Administrative Agent and Lenders, except that the Management
Fee payable to the replacement property manager shall be at market rates not to
exceed the Maximum Management Fee. Borrower further covenants and agrees that
Borrower shall require the Property Manager to maintain, at all times that all
or any portion of the Debt remains outstanding, worker's compensation insurance
(as and to the extent required by this Agreement) in compliance with Legal
Requirements. If, pursuant to this clause (v) or otherwise in this Agreement,
a substitute property manager is appointed, then such substitute property
manager shall be Independent (unless such Property Manager is the entity listed
in the definition of Property Manager), shall be approved by Administrative
Agent and shall execute and deliver to Administrative Agent a Consent and
Subordination of Property Manager.
(w) Control of Borrower/Subsidiaries. Except in the
event of a Transfer permitted under Section 6.1(j)(vi) or (vii), the sole
shareholder of Borrower will continue to be Parent. The sole shareholder of
each Subsidiary will continue to be Parent. The sole shareholder of Parent
will continue to be BHOC, except as provided in Section 6.1(j) hereof.
(x) Appraisals. Upon the written request of
Administrative Agent with respect to each Asset, Borrower shall promptly
thereafter at Lenders' sole expense (or at Borrower's sole expense if (x) an
Event of Default shall have occurred and be continuing or (y) Borrower is
required to deliver an appraisal pursuant to Section 2.4) (i) cooperate with
Administrative Agent so that Administrative Agent may obtain, or, at the
request of Administrative Agent, cause the preparation and delivery to
Administrative Agent of, an appraisal (satisfying the conditions for delivery
of an appraisal in connection with the funding of the Loan on the Closing Date)
dated not more than 60 days prior to the date of such delivery; and (ii)
deliver to Administrative Agent (with sufficient copies for each Lender),
promptly after the receipt thereof, a copy of each appraisal, if any, obtained
by Borrower or such Subsidiary.
(y) O&M Requirements. Borrower shall comply with all the
terms and conditions contained in each O&M Plan. If any Assets at any time are
known to contain (or for which there is a reasonable basis to believe that such
Assets may contain) ABM, Borrower shall promptly implement an O&M Plan.
(z) Ground Leases. Borrower promptly shall pay all
Ground Rent and all other sums and charges mentioned in, and payable under, any
Ground Lease; Borrower promptly shall perform and observe all of the terms,
covenants and conditions required to be performed and observed by the lessee
under all Ground Leases, the breach of which could permit any party to any
Ground Lease to validly terminate such Ground Lease (including, but without
limiting the generality of the foregoing, any payment obligations), shall do
all things necessary to preserve and to keep unimpaired its rights under every
Ground Lease, shall not waive, excuse or discharge any of the obligations of
the landlord under any Ground Lease without Administrative Agent's prior
written consent in each instance (not to be unreasonably withheld)
82
89
and shall diligently and continuously enforce the obligations of such landlord
to the extent commercially reasonable;
(aa) intentionally deleted.
(bb) New Orleans Hotel and Houston Hotel. Borrower shall (i)
cause each of the New Orleans Ground Lease and the Houston Ground Lease to be a
financeable ground lease, as determined by the Requisite Lenders and the
Administrative Agent in their sole and absolute discretion and (ii) deliver to
Administrative Agent, with respect to both the New Orleans Hotel and the
Houston Hotel, all estoppel certificates, lease amendments, subordination
agreements and other agreements requested by Administrative Agent in the sole
and absolute discretion of the Requisite Lenders and Administrative Agent, in
each case on or prior to the earlier of December 31, 1997 and the date which is
thirty (30) days after Administrative Agent shall have given Borrower notice
that a securitization is expected to occur prior to December 31, 1997 (the
"GROUND LEASE EARLY REPAYMENT DATE"). It shall be an Event of Default
hereunder if prior to the Ground Lease Early Repayment Date Borrower has not
either: (i) satisfied clauses (i) and (ii) of the preceding sentence with
respect to both the New Orleans Hotel and the Houston Hotel; or (ii) if
Borrower failed to comply with clause (i) with respect to the (x) New Orleans
Hotel, repaid the Loan, in an amount equal to the Allocated Loan Amount for the
New Orleans Hotel, and obtained a Partial Release for the New Orleans Hotel (a
"NEW ORLEANS EARLY RELEASE"), in accordance with Section 2.4.3 other than
Section 2.4.3(ii) (except that instead of defeasing a portion of the Notes
equal to the Release Price of the New Orleans Hotel, Borrower shall be required
to prepay the Notes in an amount equal to the Allocated Loan Amount for the New
Orleans Hotel) and/or (y) Houston Hotel, repaid the Loan, in an amount equal to
the Allocated Loan Amount for the Houston Hotel, and obtained a Partial Release
for the Houston Hotel (a "HOUSTON EARLY RELEASE"; a New Orleans Early Release
and a Houston Early Release, collectively a "GROUND LEASE EARLY RELEASE"), in
accordance with Section 2.4.3 other than Section 2.4.3(ii) (except that instead
of defeasing a portion of the Notes equal to the Release Price of the Houston
Hotel, Borrower shall be required to prepay the Notes in an amount equal to the
Allocated Loan Amount for the Houston Hotel).
(cc) Agreements. For as long as the Obligations are
outstanding, other than the Loan Documents, the Acquisition Documents and the
Subordinate Note Documents no Loan Party will be a party to any agreement,
instrument or other restriction which limits the ability or right of any Loan
Party to (w) amend, restate or satisfy the terms and conditions of this
Agreement or the other Loan Documents, (x) refinance, prepay or repay the Debt,
(y) acquire, loan or dispose of any property or other asset, or any interest
therein, or acquire or enter into, or provide any services under any Property
Management Agreement or other management agreement or (z) otherwise conduct
such Loan Party's business, except in the case where the consequences, direct
or indirect, of any violation thereof could not reasonably be expected to,
either individually or in the aggregate, cause a Material Adverse Change.
83
90
VI. NEGATIVE COVENANTS
SECTION 6.1 BORROWER'S NEGATIVE COVENANTS.
From the Closing Date until payment and performance in full of
all obligations of Borrower under the Loan Documents or the earlier release of
the Lien of every Mortgage in accordance with the terms of this Agreement and
the other Loan Documents, Borrower and Parent covenant and agree with
Administrative Agent that they will not do and they will not permit any Loan
Party to do, directly or indirectly, any of the following unless the Requisite
Lenders otherwise consent in writing:
(a) Operation of Property. Borrower shall not: (i)
terminate any Property Management Agreement relating to the Property or
otherwise replace any Property Manager of any Asset or enter into any other
management agreements with respect to any Asset; provided, however, that
Borrower may terminate or cancel any Property Management Agreement in
accordance with the terms thereof so long as, prior to such termination or
cancellation, Borrower has selected a replacement property manager and such
replacement property manager is a direct or indirect wholly-owned subsidiary of
Bristol and satisfies the Approved Property Manager Standard or has been
approved by Administrative Agent in its reasonable discretion; (ii) engage in
any business other than (a) the ownership, renovation, restoration, management
and operation of the Assets as hotels located in the United States of America
excluding, without limitation, the Development of real property, and (b) any
business that is ancillary, in purpose and extent, to any business referred to
in the preceding clauses (a) (including, without limitation, operating and
leasing retail stores on the Assets owned or leased by the Borrower); and (iii)
enter into any Material Lease or other agreement, or take any other action, if
such Material Lease or such other action which would materially change the
business conducted at any Property or which could reasonably be expected to
cause, either individually or in the aggregate, a Material Adverse Change or
would convert or reposition any Asset into any use other than a full service
hotel without the prior written consent of the Administrative Agent and the
Requisite Lenders, such consent not to be unreasonably withheld. Borrower
shall not and Parent shall not permit any Loan Party to initiate or consent to
any change in any laws, requirements of Governmental Authorities or obligations
created by private contracts and Tenant Leases which now or hereafter could
reasonably be expected to cause, either individually or in the aggregate a
Material Adverse Change without the prior written consent of the Requisite
Lenders.
(b) Liens. Borrower shall not, create, incur, assume or
suffer to exist any Lien on any portion of the Property or permit any such
action to be taken, except: (i) Permitted Encumbrances; and (ii) Liens for
Taxes or Other Charges not yet due; provided, however, Borrower, upon prior
notice to Administrative Agent, shall have the right to contest in good faith
and at no cost or expense to the Secured Parties any such Lien so long as it
does so diligently, by appropriate proceedings and without prejudice to the
Secured Parties rights under the Loan Documents and provided that, (i) in
Administrative Agents's sole judgment, neither any Xxxxx
00
00
nor any interest therein would be in any danger of sale, loss or forfeiture as
a result of such proceeding or contest, (ii) no such contest or proceeding
shall subject Administrative Agent to any civil or criminal penalty or
prosecution, (iii) Borrower shall keep Administrative Agent advised as to the
status of any such contest or proceeding on a regular basis, and (iv) no such
contest or proceeding shall (A) subject the Property or any part thereof to a
Lien for which the enforcement thereof is not suspended, or (B) otherwise
affect the priority of the lien of the Mortgage.
(c) Dissolution. Borrower shall not, nor shall Parent
permit any Loan Party to dissolve, terminate, liquidate, merge with,
consolidate into or acquire another Person.
(d) Change In Business. Borrower shall not enter into
any line of business other than the ownership renovation, restoration,
management and operation of the Property, or make any material change in the
scope or nature of its business objectives, purposes or operations, or
undertake or participate in activities other than the continuance of its
present business. Parent shall not and Parent shall not permit any other Loan
Party to enter into any line of business other than (x) the ownership of
Borrower and of the Subsidiaries and (y) the ownership, renovation,
restoration, management and operation of the Collateral, respectively, or make
any material change in the scope or nature of its business objectives, purposes
or operations, or undertake or participate in activities other than the
continuance of its present business. Notwithstanding anything to the contrary
contained in this Section 6.1(d), Borrower may, without Administrative Agent's
or Lenders' consent, convert any Asset to a "Holiday Inn", "Holiday Inn
Select", "Crowne Plaza" or other flag licensed by Holiday Inns Franchising.
(e) Debt Cancellation. Borrower shall not and Parent
shall not permit any Loan Party to cancel or otherwise forgive or release any
claim or debt (other than termination of Tenant Leases in accordance herewith)
owed to Borrower or such Loan Party by any Person, except for adequate
consideration and in the ordinary course of Borrower's or such Loan Party's
business.
(f) Affiliate Transactions. Borrower shall not and
Parent shall not permit any Loan Party to enter into, or be a party to, any
transaction with an Affiliate of Borrower, Parent or such other Loan Party or
any of the partners or members of Borrower, Parent or such other Loan Party
except in the ordinary course of business and on terms which are fully
disclosed to and approved by Administrative Agent in advance and (other than
the Property Management Agreements, Liquor Leases and Liquor Operation
Servicing Agreements approved by Lenders on or prior to the Closing Date or a
Substitution Date, as applicable) are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm's-length transaction with
an unrelated third party.
(g) Zoning. Borrower shall not initiate or consent to
any zoning reclassification of any portion of any Asset or seek any variance
under any existing zoning
85
92
ordinance or use or permit the use of any portion of any Asset in any manner
that could result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, without the
prior written consent of the Requisite Lenders.
(h) Assets. Borrower shall not purchase or own any
properties other than the Property. Parent shall not (x) permit any Subsidiary
to purchase or own any properties other than the Collateral or (y) purchase or
own any assets other than the stock of Borrower or any Subsidiary.
(i) Debt. Other than the Debt, Borrower shall not
create, incur, guaranty or assume any debt (including without limitation
Guaranteed Indebtedness) other than (i) Permitted Trade Payables or (ii) FF&E
Financings, in an aggregate amount not to exceed the Maximum Permitted Trade
Payables/FF&E Financings. Borrower shall not allow any trade payables
(including but not limited to Permitted Trade Payables) to be outstanding for
more than sixty (60) days. Borrower shall make all payments due pursuant to
any FF&E Financings when same are due and payable. Parent shall not permit any
Loan Party to create, incur or assume any debt, except as set forth in this
Section 6.1(i). BHOC and Bristol shall not modify the terms of the Acquisition
Facility in any way which limits the ability or right of any Loan Party to (w)
amend, restate or satisfy the terms and conditions of this Agreement or the
other Loan Documents, (x) refinance, prepay or repay the Debt, (y) acquire,
loan or dispose of any property or other asset, or any interest therein, or
acquire or enter into, or provide any services under any Property Management
Agreement or other management agreement or (z) otherwise conduct such Loan
Party's business, except in the case where the consequences, direct or
indirect, of any violation of this covenant could not reasonably be expected
to, either individually or in the aggregate, cause a Material Adverse Change.
Notwithstanding the foregoing, without the consent of the Administrative Agent
and the Requisite Lenders, which consent may be withheld in their sole
discretion, the Permitted Pledge may not be amended, restated, supplemented or
otherwise modified. Borrowers shall and shall cause all other Loan Parties to
make all payments due pursuant to any FF&E Financings when same are due and
payable.
(j) Transfer or Encumbrance of the Property.
(i) Borrower acknowledges that each Lender, in
agreeing to make the Loan, has examined and relied on the
creditworthiness and experience of Borrower in owning and operating
properties such as the Property, and that such Lender will continue to
rely on Borrower's ownership and operation of the Property as a means
of maintaining the value of the Property as security for repayment of
the Debt. Borrower acknowledges that each Lender has a valid interest
in maintaining the value of the Property so as to ensure that, should
Borrower default in the repayment of the Debt, each Lender can recover
all or a portion of the Debt by a sale of the Property. Accordingly,
subject to the terms of Sections 6.1(i) and 6.1(j)(vi) and (vii)
hereof, Borrower shall not and Parent shall not permit any Loan Party
to, without the prior written consent of each Lender and
86
93
Administrative Agent, Transfer the Property, any other Collateral or
any part thereof or any interest therein, or permit the Property, or
any part thereof or any interest therein, to be Transferred other than
pursuant to the Permitted Pledge, the Permitted Transfer or a
Permitted Encumbrance.
(ii) As used herein, a "TRANSFER" shall mean any
sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer of the Property or the other Collateral or any part thereof
or interest therein including: (A) an installment sales agreement
wherein any Loan Party agrees to sell any Asset, any other Collateral
or any part thereof or any interest therein for a price to be paid in
installments; (B) an agreement by Borrower leasing all or a
substantial part of any Asset for other than actual occupancy by a
space tenant thereunder, or a sale, assignment or other transfer of,
or the grant of a security interest in, Borrower's right, title and
interest in and to any Tenant Leases or any Rents; (C) if any Loan
Party or any general partner or member of any Loan Party is a
corporation, the voluntary or involuntary sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of such
corporation's stock (or the stock of any corporation directly or
indirectly controlling such corporation by operation of law or
otherwise) or the creation or issuance of new stock to a party or
parties who are not now stockholders or any Change in Control of such
corporation; (D) if any Loan Party or any general partner or member of
any Loan Party is a limited or general partnership, joint venture or
limited liability company, the change, removal, resignation or
addition of a partner, joint venturer or member or the sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of
the partnership interest of any partner or the sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the interest
of any joint venturer or member; (E) if any Loan Party is a limited or
general partnership, joint venture, limited liability company, trust,
nominee trust, tenancy in common or other unincorporated form of
business association or form of ownership interest, the voluntary or
involuntary sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of any interest of Person having a direct legal or
beneficial ownership interest in any Loan Party, including any legal
or beneficial interest in any constituent partner or member of any
Loan Party; (F) any instrument subjecting any Asset to a condominium
regime or transferring ownership to a cooperative corporation; and (G)
the dissolution or termination of any Loan Party or any general
partner or member of any Loan Party or the merger or consolidation of
any Loan Party or any general partner or member of any Loan Party with
any other Person.
(iii) Administrative Agent shall not be required to
demonstrate any actual impairment of the Secured Parties' security or
any increased risk of default hereunder in order to declare the Debt
immediately due and payable upon any Loan Party's Transfer of any
Asset or other Collateral Lenders' consent (if such consent is
required under this Section 6.1(j)). This provision shall apply to
every Transfer of any
87
94
Asset or other Collateral regardless of whether voluntary or not, or
whether or not Lenders' have consented to any previous Transfer of any
Asset or other Collateral.
(iv) Lenders consent to one Transfer of any Asset
or other Collateral shall not be deemed to be a waiver of Lenders'
right to require such consent to any future occurrence of the same.
Any Transfer of any Asset or other Collateral made in contravention of
this Section shall be null and void and of no force and effect.
(v) Borrower agrees to bear and shall pay or
reimburse Administrative Agent and Lenders on demand for all
reasonable out-of-pocket costs and expenses (including, without
limitation, title search costs, title insurance endorsement premiums
and reasonable attorneys' fees and disbursements) incurred by
Administrative Agent and Lenders in connection with the review,
approval and documentation of any Transfer of any Asset.
(vi) Notwithstanding anything to the contrary
contained in this Section 6.1(j), the following transfers shall be
permitted without Lenders' consent:
(A) a sale or other disposition of FF&E
in the ordinary course of business provided, (x) such FF&E is
obsolete or is not useful for the operation of the Asset where
such FF&E is located or such FF&E is replaced with FF&E of
substantially similar value and utility and (y) the FF&E
Financing with respect to such FF&E has been paid off or
otherwise satisfied;
(B) a sale, conveyance, alienation,
hypothecation, encumbrance or transfer of the stock of
Bristol;
(C) a sale, conveyance, alienation,
hypothecation, encumbrance or transfer of the equity interest
of any shareholder of Bristol; and
(D) a sale, conveyance, alienation,
hypothecation, encumbrance or transfer of the stock of BHOC;
provided that in the case of clause (A) above no monetary Default or
Event of Default shall have occurred and remain uncured and in the
case of clauses (B), (C) and (D) above which results in a Change in
Control of Bristol or BHOC: (x) Borrower shall give Administrative
Agent written notice of such transfer together with copies of all
instruments effecting such transfer not less than seven (7) days prior
to the date of such transfer; (y) such transfer does not and will not
result in the termination or dissolution of Borrower, by operation of
law or otherwise; and (z) the single purpose nature and bankruptcy
remoteness of Borrower and each of its shareholders, general partners
or members after such transfer is satisfactory to Administrative Agent
and, at the request of
88
95
Lenders, Borrower shall have delivered to Administrative Agent a
Non-Consolidation Opinion, such other opinions and title insurance
endorsements as may be reasonably requested by Administrative Agent
and, if a Securitization has occurred or is expected to occur,
Administrative Agent shall have received written confirmation from the
Rating Agencies rating the Securities in the Securitization that such
sale or transfer will not result in a qualification, downgrade or
withdrawal of the ratings then applicable to such Securities, together
with evidence reasonably satisfactory to Administrative Agent that the
single purpose nature and bankruptcy remoteness of Borrower and each
of its shareholders, general partners or members following such
transfer is in accordance with the standards of the Rating Agencies
then rating, or expected or requested by Administrative Agent to rate,
the Securities in the Securitization;
(vii) Notwithstanding the prohibition contained in
Section 6.1(j)(i) above, Lenders' consent to the sale or transfer of
the Property in their entirety will not be unreasonably withheld after
consideration of all relevant factors, provided that the following
conditions are satisfied:
(A) no Event of Default or event which,
with the giving of notice or the passage of time or both,
would constitute an Event of Default shall have occurred and
remain uncured;
(B) the proposed transferee
("TRANSFEREE") shall be a reputable entity or person of good
character, creditworthy, with sufficient financial worth
considering the obligations assumed and undertaken, as
evidenced by financial statements and other information
reasonably requested by Lenders;
(C) the property manager selected by the
Transferee shall have sufficient experience in the ownership
and management of properties similar to the Property, and
Administrative Agent shall be provided with evidence thereof
satisfactory to Lenders in their reasonable discretion;
(D) Administrative Agent shall have
received a Non-Consolidation Opinion reasonably satisfactory
to Lenders in form and substance and from counsel reasonably
satisfactory to Administrative Agent and containing
assumptions, limitations and qualifications customary for
opinions of such type;
(E) if a Securitization has occurred,
Lenders shall have received written confirmation from the
Rating Agencies rating the Securities in the Securitization
that such sale or transfer will not result in a qualification,
downgrade or withdrawal of the ratings then applicable to such
Securities, together with evidence reasonably satisfactory to
Lenders that the single purpose nature and bankruptcy
remoteness of Borrower and its shareholders, partners or
89
96
members following such sale or transfer are in accordance with
the standards of such Rating Agencies; or if a Securitization
has not occurred, Administrative Agent shall have received
evidence reasonably satisfactory to Lenders that the single
purpose nature and bankruptcy remoteness of Borrower and its
shareholders, partners or members following such sale or
transfer are in accordance with the standards of two of the
Rating Agencies;
(F) In the case of a Transfer of the
Property by way of a sale or transfer of all of the Assets
only, Borrower and the Transferee shall have executed and
delivered to Administrative Agent an assumption agreement and
such other documents as Administrative Agent may request
(collectively, the "ASSUMPTION AGREEMENTS") under which the
Transferee shall assume and be obligated to each Lender for
the Debt and all obligations of Borrower under the Notes, this
Agreement, the Mortgage and the other Loan Documents, which
Assumption Agreements shall be in form and substance
acceptable to Lenders and the Rating Agencies referenced in
clause (E) above and shall state the Transferee's agreement to
abide by and be bound by the terms in the Notes, this
Agreement, the Mortgage and the other Loan Documents;
(G) Administrative Agent shall have
received such opinions and title insurance endorsements as may
be reasonably requested by Administrative Agent or any Lender;
(H) Borrower shall have submitted to
Administrative Agent, not less than thirty (30) days prior to
the date of such assumption, the Assumption Agreements. Such
documents shall be in a form appropriate in the jurisdiction
in which each Asset is located and satisfactory to Lenders in
their sole discretion. In addition, Borrower shall have
provided all other documentation Administrative Agent
reasonably requires to be delivered by Borrower in connection
with such assumption, together with an Officer's Certificate
certifying that such documentation (x) is in compliance with
all Legal Requirements, (y) will effect such assumption in
accordance with the terms of this Agreement, and (z) will not
impair or otherwise adversely affect the Liens and other
rights of each Lender under the Loan Documents;
(I) Borrower shall have paid all
reasonable out-of-pocket costs and expenses incurred by
Administrative Agent and each Lender in connection with such
assumption (including reasonable attorney's fees and costs);
(J) All Franchise Agreements, IP License
Agreements, Liquor Licenses, and Liquor Agreements will remain
in effect and be validly transferred to the Transferee or a
subsidiary of the Transferee (or alternative provisions shall
90
97
have been made that are reasonably satisfactory to
Administrative Agent and the Requisite Lenders).
(viii) Borrower hereby agrees to indemnify and
defend and hold Administrative Agent and each Lender harmless against
all taxes, filing fees and other amounts of the type set forth in
Section 4.1(cc) hereof, if any, imposed on Administrative Agent or any
Lender by virtue of its execution of the Assumption Agreements or by
reason of an assumption pursuant to this Section 6.1(l), including,
without limitation, any penalties, interest and attorneys' fees
incurred by Administrative Agent in connection therewith, and all such
charges shall be secured by the Lien of each Mortgage and bear
interest at the Default Rate until paid.
(k) Intellectual Property; Franchise Agreements.
(i) Intellectual Property. Borrower shall not,
and Parent shall not permit any Loan Party, to transfer (by way of
sale, conveyance, alienation, mortgage, encumbrance, pledge or
otherwise), in whole or in part, (other than transfers to each Lender
pursuant to the Loan Documents and non-exclusive licenses entered into
in the ordinary course of business of Borrower) any Intellectual
Property unless Borrower shall have reasonably determined that the
Intellectual Property so transferred is no longer material to the
business, operations, condition (financial or otherwise) or prospects
of Borrower.
(ii) License Agreements. Except under the
Property Management Agreements, the Borrower shall not and Parent
shall not permit any Loan Party to, enter into or otherwise become
obligated with respect to, any franchise agreement (as franchisor),
license agreement (as licensor) or similar agreement (in a similar
capacity) with respect to any Intellectual Property of Borrower or any
other Loan Party.
(iii) Franchise Agreements. Without the prior
written approval of the Requisite Lenders, which approval shall not be
unreasonably withheld, conditioned or delayed, the Borrower shall not,
and Parent shall not permit any Loan Party to, (i) take any action or
fail to take any action, in either case as may be required or
permitted by the terms of any Franchise Agreement with respect to any
Asset, with respect to the termination (by Borrower or such Loan
Party, the franchisor or any other Person, and for any reason),
renewal or extension thereof, (ii) amend, restate, supplement or
otherwise change, or waive or fail to enforce any provision of, any
Franchise Agreement with respect to any Asset in any material respect,
or (iii) enter into any new or replacement Franchise Agreement with
respect to any Asset (with the same franchisor or a different
franchisor); provided that (v) without the approval of the Requisite
Lenders, each Franchise Agreement in effect as of the date of this
Agreement or entered into, renewed, extended, amended, restated,
supplemented or otherwise changed pursuant to this
91
98
subsection may be renewed or extended on substantially the same or
better terms as in effect at the time of such renewal or extension,
(w) without the approval of the Requisite Lenders, if a Franchise
Agreement with respect to any Asset shall have expired, Borrower may
operate such Asset without a Franchise Agreement under the "Xxxxxx
Hotels", "Xxxxxx Suites", "Bristol Hotels" or "Bristol Suites"
flag, (x) without the approval of the Requisite Lenders, Borrower may
execute Franchise Agreements to convert any Asset to a "Holiday Inn",
"Holiday Inn Select", "Crowne Plaza" or other flag licensed by Holiday
Inns Franchising, (y) with respect to a replacement Franchise
Agreement referred to in the preceding clause (iii), any Lender's
approval may be granted, withheld, conditioned or delayed in the sole
discretion of such Lender if, in its opinion, the franchisor under
such replacement Franchise Agreement shall have a national standing
and reputation less favorable than the general standing and reputation
of the franchisors under Franchise Agreements then covering the Asset
and (z) with respect to each action referred to in the preceding
clauses (i) or (iii) for which any Lender may reasonably require a
franchisor's estoppel and consent agreement, in accordance of the
effectiveness of such action, Borrower shall deliver to Administrative
Agent a franchisor's estoppel and consent agreement in substantially
the form of the estoppel and consent agreement delivered to
Administrative Agent pursuant to this Agreement or otherwise in form
and substance satisfactory to the Requisite Lenders.
(l) Accounts Receivable. The Borrower shall not, and
Parent shall not permit any Loan Party to, directly or indirectly, sell with
recourse or, except in the ordinary course of business and consistent with past
practices, discount or otherwise sell for less than the face value thereof, any
of its notes or accounts receivable.
(m) Management of Assets. Borrower shall not and Parent
shall not permit any Loan Party to enter into any management agreement or
similar agreement (other than a Franchise Agreement) delegating to any Person
other than Management Co. or another wholly owned Subsidiary of Bristol
substantial authority over the management, maintenance or operation of any
Asset.
VII. CASUALTY; CONDEMNATION; ESCROWS
SECTION 7.1 INSURANCE; CASUALTY AND CONDEMNATION.
7.1.1 INSURANCE. (a) Borrower, at its sole cost and
expense, for the mutual benefit of Borrower and Lenders, shall keep each Asset
insured and obtain and maintain during all times that any sum is outstanding
under the Notes or the other Loan Documents (the "TERM") policies of insurance
insuring against loss or damage by fire and lightning and against loss or
damage by all other risks and hazards covered by a standard extended coverage
insurance policy, including, without limitation, riot and civil commotion,
vandalism, malicious mischief, burglary and theft. Such insurance shall be in
an amount equal to the greatest of (i) the then full
92
99
replacement cost of such Asset (except in the case of earthquake insurance),
without deduction for physical depreciation, including but not limited to the
replacement cost of FF&E on site at such Asset (ii) the outstanding principal
balance of the Loan, and (iii) such amount that the insurer would not deem
Borrower a co-insurer under said policies. The policies of insurance carried
in accordance with this paragraph shall (i) be paid annually in advance, unless
the insurance provider permits monthly payments, in which case such payments
shall be made on or prior to the date on which such payments are due and
payable and (ii) contain a "Replacement Cost Endorsement" with a waiver of
depreciation.
(b) Borrower, at its sole cost and expense, for the
mutual benefit of Borrower and Lenders, shall also obtain and maintain during
the Term the following policies of insurance:
(i) Flood insurance if any part of any Asset is
located in an area identified by the Federal Emergency Management
Agency as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance
Program in an amount at least equal to the Allocated Loan Amount for
such Asset or the maximum limit of coverage available with respect to
the Property under said program, whichever is less;
(ii) Comprehensive public liability insurance,
including broad form property damage, blanket contractual and personal
injuries (including death resulting therefrom) coverages and
containing minimum limits per Asset per occurrence of $1,000,000 and
$3,000,000 in the aggregate for any policy year. In addition, at
least $100,000,000 excess and/or umbrella liability insurance in the
aggregate for any policy year shall be obtained and maintained during
the Term for any and all claims, including all legal liability imposed
upon Borrower or any other Loan Party and all court costs and
attorneys' fees incurred in connection with the ownership, operation
and maintenance of each Asset;
(iii) Rental loss and/or business interruption
insurance in an amount equal to the greater of (A) the estimated Net
Operating Income for each Asset for the next succeeding eighteen (18)
month period or (B) the projected Operating Expenses (plus Debt
Service) for the maintenance and operation of such Asset for the next
succeeding eighteen (18) month period. The amount of such insurance
shall be increased from time to time during the Term as and when the
estimate of Net Operating Income or projected Operating Expenses, as
may be applicable, increases;
(iv) Insurance against loss or damage from (A)
leakage of sprinkler systems and (B) explosion of steam boilers, air
conditioning equipment, high pressure piping, machinery and equipment,
pressure vessels or similar apparatus now or hereafter installed in
any of the Improvements (without exclusion for explosions), in an
amount at least equal to $3,000,000 per Asset;
93
100
(v) Worker's compensation insurance with respect
to any employees of Borrower, as required by any Governmental
Authority or Legal Requirement except for Texas if Borrower elects not
to subscribe to the workers' compensation statute, in which case
Borrower shall have a benefit program and employers' legal liability
coverage reasonably acceptable to Administrative Agent to respond to
claims that would otherwise be covered by a standard policy of
employers' liability insurance;
(vi) During any period of repair or restoration,
builder's "all risk" insurance in an amount equal to not less than the
full insurable value of each Asset against such risks (including,
without limitation, fire and extended coverage and collapse of the
Improvements to agreed limits) as Administrative Agent may reasonably
request, in form and substance acceptable to Administrative Agent;
(vii) If any Asset is or becomes a "non-conforming
use" under applicable zoning and building ordinances, ordinance or law
coverage to compensate for the cost of demolition and the increased
cost of construction for such Asset;
(viii) Earthquake insurance, as reasonably
determined by Administrative Agent with respect to each Asset located
in California, or another area at high risk of earthquake, in an
amount equal to the probable maximum loss which could be sustained by
such Asset on account of an earthquake;
(ix) Liquor liability and dram shop insurance on
such basis and in such amounts as shall be reasonably required by
Administrative Agent in a minimum amount of $1,000,000 per occurrence
and $3,000,000 in the aggregate; and
(x) Such other insurance as may from time to time
be reasonably required by any Lender in order to protect its
interests, including, without limitation, earthquake and hurricane
insurance.
(c) All policies of insurance (the "POLICIES") required
pursuant to this Section 7.1.1 shall (i) be issued by companies approved by
Administrative Agent and licensed to do business in each state where an Asset
is located and, after the earlier of April 1, 1998 and the date that any policy
of insurance expires, with a claims paying ability rating of "AA" or better by
Standard & Poor's Ratings Services, unless Administrative Agent in its
reasonable discretion agrees to approve companies with a claims paying ability
rating of lower than "AA" and such companies are acceptable to the Rating
Agency which is, or is expected to, rate the Securities; (ii) name
Administrative Agent, as agent for Lenders, and its successors and/or assigns
as their interest may appear as the mortgagee; (iii) contain a non-
contributory standard mortgagee clause and a mortgagee's loss payable
endorsement, or their equivalents, naming Administrative Agent, as agent for
Lenders, as the person to which all payments made by such insurance company
shall be paid; (iv) contain a waiver of subrogation against Administrative
Agent and Lenders; (v) be
94
101
maintained throughout the Term without cost to Administrative Agent or Lenders;
(vi) be assigned and certified copies thereof delivered to Administrative
Agent; (vii) not contain a deductible clause in excess of $250,000 (except in
the case of earthquake insurance which may contain a deductible clause no
greater than five percent (5%) of the fair market value of such Asset); (viii)
contain such provisions as Administrative Agent deems reasonably necessary or
desirable to protect the interest of the Lenders, including, without
limitation, endorsements providing that neither Borrower, Administrative Agent
nor any other Person shall be a co-insurer under said Policies and that
Administrative Agent shall receive at least thirty (30) days prior written
notice of any modification, reduction or cancellation of any of the Policies;
and (ix) otherwise be approved by Administrative Agent in the exercise of its
reasonable judgment as to amounts, form, risk coverage, deductibles, loss
payees and insurers. Borrower shall pay the premiums for such Policies (the
"INSURANCE PREMIUMS") as the same become due and payable and shall furnish to
Administrative Agent evidence of the renewal of each of the Policies with
receipts for the payment of the Insurance Premiums or other evidence of such
payment reasonably satisfactory to Administrative Agent (provided, however,
that Borrower is not required to furnish such evidence of payment to
Administrative Agent in the event that such Insurance Premiums have been paid
by the Lenders pursuant to Section 7.3 hereof). If Borrower does not furnish
such evidence and receipts at least thirty (30) days prior to the expiration of
any expiring Policy, then Administrative Agent may procure, but shall not be
obligated to procure, such insurance and pay the Insurance Premiums therefor,
and Borrower agrees to reimburse the Lenders (through the Administrative Agent)
for the cost of such Insurance Premiums promptly on demand. Within thirty (30)
days after request by Administrative Agent, Borrower shall obtain such
increases in the amounts of coverage required hereunder as may be reasonably
requested by Administrative Agent, taking into consideration changes in the
value of money over time, changes in liability laws, changes in prudent customs
and practices, and the like. In the event Borrower satisfies the requirements
under this Section 7.1.1 through the use of a Policy covering more than one
Asset, Borrower shall provide evidence satisfactory to Administrative Agent
that the Insurance Premiums for each Asset covered by such Policy are
separately allocated under such Policy and payment of such allocation shall
continue such Policy as to such Asset notwithstanding any other payment of
premiums, or, if no such allocation is available at any time during the Term,
Administrative Agent shall have the right to increase the Tax and Insurance
Escrow in an amount sufficient to purchase a non-blanket Policy covering the
Property from insurance companies which qualify under this Agreement.
Notwithstanding anything contained in this Section 7.1 to the contrary,
Administrative Agent acknowledges that (i) Schedule XXVI sets forth the manner
in which the insurance maintained by Borrower (or such other Loan Party which
owns any Assets) deviates from the standards set forth in this Section 7.1 and
(ii) that so long as Borrower (or such Loan Party) maintains insurance meeting
the requirements of this Section, as amended by Schedule XXVI, same shall not
constitute a Default hereunder, provided however, that prior to March 31, 1998
Borrower must give notice to Administrative Agent of its (or such Loan Party's)
election to continue to maintain insurance meeting the requirements of this
Section 7.1, as amended by Schedule XXVI, if Borrower fails to give such notice
by March 31, 1998 thereafter Borrower will be required to and will cause
95
102
each other Loan Party to maintain insurance which meets the requirements of
this Section 7.1 without giving effect to Schedule XXVI.
(d) If any Asset is damaged or destroyed, in whole or in
part, by fire or other casualty (a "CASUALTY"), Borrower shall give prompt
written notice thereof to Administrative Agent. Following the occurrence of a
Casualty, Borrower, regardless of whether insurance proceeds are available,
shall, except as provided in Section 7.1.2(b), promptly proceed to restore,
repair, replace or rebuild the same to be of at least equal value and of
substantially the same character as prior to such damage or destruction, all to
be effected in accordance with applicable law. The reasonable out-of-pocket
expenses incurred by Administrative Agent in the adjustment and collection of
insurance proceeds shall become part of the Debt and be secured by the Mortgage
and shall be reimbursed by Borrower to Administrative Agent upon demand.
7.1.2 CASUALTY AND APPLICATION OF PROCEEDS. (a) In case of
loss or damages covered by any of the Policies, the following provisions shall
apply:
(i) In the event of a Casualty that is less than
$250,000 (not including any deductible permitted to be maintained
hereunder which is paid by Borrower), Borrower may settle and adjust
any claim without the consent of Administrative Agent, provided that
such adjustment is carried out in a competent and timely manner and
the proceeds of any such policy shall be due and payable solely to
Administrative Agent and held in escrow by Administrative Agent in the
Loss Proceeds Subaccount.
(ii) In the event a Casualty shall equal or exceed
$250,000 (not including any deductible permitted to be maintained
hereunder which is paid by Borrower), then and in that event,
Administrative Agent will consult with Borrower as to the settlement
and adjustment of the claim but may thereafter settle and adjust any
claim without the consent of Borrower if Borrower and Administrative
Agent are unable to agree as to such matters and agree with the
insurance company or companies on the amount to be paid on the loss
and the proceeds of any such policy shall be due and payable solely to
Administrative Agent, as agent for Lenders, and held in escrow by
Administrative Agent, as agent for Lenders, in the Loss Proceeds
Subaccount. Administrative Agent shall not be required to consult
with Borrower if an Event of Default is then continuing.
(b) In the event of a Casualty with respect to an Asset
where the loss is in an aggregate amount less than thirty percent (30%) of the
Allocated Loan Amount for such Asset and if, in the reasonable judgment of
Administrative Agent, the Asset can be restored within twelve (12) months after
the occurrence of the Casualty and prior to maturity of the Note to an economic
unit not less valuable (including an assessment of the impact of the
termination of any Tenant Leases due to such Casualty) and not less useful than
the same was prior to the Casualty, and after such restoration will adequately
secure the Allocated Loan Amount for such Asset,
96
103
then, if no Default or Event of Default shall have occurred and be then
continuing, the proceeds of insurance shall be deposited directly into the
Deposit Account, whereupon such insurance proceeds shall be transferred to the
Loss Proceeds Subaccount where, after reimbursement of any reasonable
out-of-pocket expenses incurred by Administrative Agent, such proceeds shall be
maintained and applied to pay for the cost of restoring, repairing, replacing
or rebuilding the Asset or part thereof subject to the Casualty (the
"RESTORATION"), in the manner set forth herein. Borrower hereby covenants and
agrees to commence and diligently to prosecute such Restoration; provided that:
(i) Borrower shall pay all costs (and if required by Administrative Agent, in
the event Administrative Agent determines in its reasonable discretion that
Borrower is likely not to have sufficient Mortgaged Property Gross Cash Flow in
excess of Operating Expenses therefore Borrower shall deposit the total thereof
with Administrative Agent, in advance) of such Restoration in excess of the net
proceeds of insurance made available pursuant to the terms hereof; (ii) the
Restoration shall be done in compliance with all applicable laws, rules and
regulations; and (iii) Administrative Agent shall have received evidence
reasonably satisfactory to it that, during the period of the Restoration, the
sum of (A) income derived from the Property, as reasonably determined by
Administrative Agent, plus (B) proceeds of rent loss insurance or business
interruption insurance, if any, to be paid, will equal or exceed the sum of (1)
expenses in connection with the operation of the Property, (2) the Debt Service
under the Loan, and (3) the other payments required pursuant to Section
10.9.1(a) hereof or Section 10.9.2(a) hereof, as applicable. Notwithstanding
anything to the contrary contained in this Section 7.1.2, Borrower may, in its
sole discretion, elect not to undertake the Restoration of an Asset and to
instead defease a portion of the Notes (in accordance with the terms of Section
2.3.3) and cause the Asset which suffered the Casualty to be Partially Released
in accordance with and subject to Section 2.4.
(c) Except as provided above, the proceeds of insurance
collected upon any Casualty and any other funds contributed by Borrower under
Section 7.1.2(b) shall be deposited directly into the Deposit Account and at
the option of the Requisite Lenders and Administrative Agent in their sole
discretion, be applied to the payment of the Debt (after reimbursement of any
expenses incurred by Administrative Agent) or transferred into the Loss
Proceeds Subaccount where (after reimbursement of any expenses incurred by
Administrative Agent) such proceeds and other funds shall be maintained and
applied to pay for the cost of any Restoration in the manner set forth herein.
If the proceeds of insurance collected upon a Casualty are applied by Lenders
to payment of the Debt pursuant to this Section 7.1.2, Borrower may elect to
prepay a portion of the Loan sufficient to obtain a Partial Release of the
Asset which is the subject of the Casualty pursuant to Section 2.4.3 hereof
provided Borrower shall have satisfied or caused to be satisfied the following
conditions (the "CASUALTY RELEASE EVENT"):
(i) such prepayment shall be made on the first
scheduled payment date occurring after Borrower shall have
provided Administrative Agent with thirty (30) days
irrevocable prior written notice of its intent to make such
repayment, which notice shall have been delivered to
Administrative Agent no later than
97
104
thirty (30) days after such proceeds of insurance are applied to
payment of the Debt; and
(ii) all of the requirements of Section 2.4.3 shall
have been satisfied.
Any such application to the Debt or repayment of the Debt pursuant to this
clause (c) shall be without any prepayment consideration or premium except that
if a Default or an Event of Default has occurred and is continuing, then
Borrower shall pay to Administrative Agent, an additional amount equal to the
Yield Maintenance Premium, if any, that would be required under Section 2.3.3
hereof if a Defeasance Deposit was to be made by Borrower. Any such
application to the Debt or repayment of the Debt pursuant to this clause (c)
shall be applied to those payments of principal and interest last due under the
Note but shall not postpone or reduce any payments otherwise required pursuant
to the Note other than such last due payments.
(d) In the event Borrower is entitled to reimbursement
out of insurance proceeds held by Administrative Agent, such proceeds shall be
disbursed from the Loss Proceeds Subaccount from time to time upon
Administrative Agent being furnished with: (i) evidence satisfactory to
Administrative Agent of the estimated cost of completion of the Restoration;
(ii) funds, or at Administrative Agent's option, assurances satisfactory to
Administrative Agent that such funds are or will become available, sufficient
in addition to the proceeds of insurance to complete the proposed Restoration;
(iii) evidence reasonably acceptable to Administrative Agent that all work in
connection with which the reimbursement is being requested has been performed
and paid for which shall include, if the estimated cost of the Restoration
exceeds the lesser of $250,000 and ten percent (10%) of the Allocated Loan
Amount with respect to such Asset, such architect's certificates, waivers of
lien, contractor's sworn statements, title insurance endorsements, bonds, plats
of survey and such other evidences of cost, payment and performance as
Administrative Agent may reasonably require and approve; and (iv) all plans and
specifications for such Restoration, such plans and specifications to be
delivered and approved by Administrative Agent (such approval not to be
unreasonably withheld) prior to commencement of any work if the estimated cost
of the Restoration exceeds the lesser of $250,000 and ten percent (10%) of the
Allocated Loan Amount with respect to such Asset. In addition, no payment made
prior to the final completion of the Restoration shall exceed ninety percent
(90%) of the value of the work performed from time to time; funds other than
proceeds of insurance shall be disbursed prior to disbursement of such
proceeds; and at all times, the undisbursed balance of such proceeds remaining
in the hands of Administrative Agent, together with funds deposited for that
purpose or irrevocably committed to the satisfaction of Administrative Agent by
or on behalf of Borrower for that purpose, shall be at least sufficient in the
reasonable judgment of Administrative Agent to pay for the cost of completion
of the Restoration, free and clear of all Liens or claims for Lien. Any
surplus which may remain out of insurance proceeds held by Administrative Agent
after payment of such costs of Restoration shall be paid to Borrower.
98
105
7.1.3 CONDEMNATION. (a) Borrower shall promptly give
Administrative Agent written notice of the actual or threatened commencement of
any condemnation or eminent domain proceeding against any of the Premises or
the Improvements or any part thereof (a "CONDEMNATION") and shall deliver to
Administrative Agent copies of any and all papers served in connection with
such Condemnation. Following the occurrence of a Condemnation, Borrower,
regardless of whether an Award (as hereinafter defined) is available, shall
promptly proceed to restore, repair, replace or rebuild the Property to the
extent practicable to be of at least equal value and of substantially the same
character as prior to such Condemnation, all to be effected in accordance with
applicable law.
(b) Administrative Agent, is hereby irrevocably appointed
as Borrower's attorney-in-fact, coupled with an interest, with exclusive power
to collect, receive and retain any award or payment ("AWARD") for any taking
accomplished through a Condemnation and (after consultation with Borrower as to
the compromise or settlement of a claim, if no Event of Default is then
continuing) to make any compromise or settlement in connection with such
Condemnation, subject to the provisions of this Section. Notwithstanding any
taking in connection with a Condemnation by any public or quasi-public
authority (including, without limitation, any transfer made in lieu of or in
anticipation of such a Condemnation), Borrower shall continue to pay the Debt
at the time and in the manner provided for in the Note, this Agreement, the
Mortgages and the other Loan Documents and the Debt shall not be reduced unless
and until any Award shall have been actually received and applied by
Administrative Agent to expenses of collecting the Award and to discharge of
the Debt. Lenders shall not be limited to the interest paid on the Award by
the condemning authority but shall be entitled to receive out of the Award
interest at the rate or rates provided in the Notes. Borrower shall cause any
Award that is payable to Borrower to be paid directly to Administrative Agent,
as agent for Lenders.
(c) In the event of any Condemnation with respect to an
Asset where the Award is in an aggregate amount less than twenty percent (20%)
of the Allocated Loan Amount for such Asset, and if, in the reasonable judgment
of Administrative Agent, the Asset can be restored within twelve (12) months
after the occurrence of the Condemnation and prior to maturity of the Notes to
an economic unit not less valuable (including an assessment of the impact of
the termination of any Tenant Leases due to such Condemnation) and not less
useful than the same was prior to the Condemnation, and after such restoration
will adequately secure the outstanding balance of the Notes, then, if no
Default or Event of Default shall have occurred and be then continuing, the
proceeds of the Award shall be deposited directly into the Deposit Account,
whereupon such proceeds shall be transferred to the Loss Proceeds Subaccount
where, after reimbursement of any reasonable out-of-pocket expenses incurred by
Administrative Agent, such proceeds shall be maintained and applied to
reimburse Borrower for the cost of restoring, repairing, replacing or
rebuilding the Asset or part thereof subject to Condemnation (the "CONDEMNATION
RESTORATION"), in the manner set forth herein. Borrower hereby covenants and
agrees to commence and diligently to prosecute such Condemnation Restoration;
provided that:
99
106
(i) Borrower shall pay all costs (and if required by Administrative Agent, in
the event Administrative Agent determines in its sole reasonable discretion
that Borrower is likely not to have sufficient Mortgaged Property Gross Cash
Flow in excess of Operating Expenses therefore, Borrower shall deposit the
total thereof with Administrative Agent in advance) of such Condemnation
Restoration in excess of the Award made available pursuant to the terms hereof;
(ii) the Condemnation Restoration shall be done in compliance with all
applicable laws, rules and regulations; and (iii) Administrative Agent shall
have received evidence reasonably satisfactory to it that, during the period of
the Condemnation Restoration, the sum of (A) income derived from the Property,
as reasonably determined by Administrative Agent, plus (B) proceeds of rent
loss insurance or business interruption insurance, if any, to be paid, will
equal or exceed the sum of (1) expenses in connection with the operation of the
Property, (2) the Debt Service under the Loan, and (3) any other payments
required pursuant to Section 10.9.1(a) hereof or Section 10.9.2(a) hereof, as
applicable. Notwithstanding anything to the contrary contained in this Section
7.1.2, Borrower may, in its sole discretion, elect not to undertake the
Condemnation Restoration of an Asset and to instead defease a portion of the
Notes (in accordance with the terms of Section 2.3.3) and cause the Asset which
has suffered the Condemnation to be Partially Released in accordance with and
subject to Section 2.4 hereof.
(d) Except as provided above, the proceeds of the Award
collected upon any Condemnation and any other funds contributed by Borrower
under Section 7.1.3(c) shall be deposited directly into the Deposit Account
and, at the option of the requisite Lenders and Administrative Agent, in their
sole discretion, be applied to the payment of the Debt, after reimbursement of
any expenses incurred by Administrative Agent, or transferred into the Loss
Proceeds Subaccount where, after reimbursement of any expenses incurred by
Administrative Agent, such proceeds and other funds shall be maintained and
applied to reimburse Borrower for the cost of the Condemnation Restoration in
the manner set forth herein. If the Award collected upon a Condemnation is
applied by Lenders to payment of the Debt pursuant to this Section 7.1.3
Borrower may elect to prepay a portion of the Loan sufficient to obtain a
Partial Release of the Asset which is the subject of the Condemnation pursuant
to Section 2.4.3 hereof provided Borrower shall have satisfied or caused to be
satisfied the following conditions (the "CONDEMNATION RELEASE EVENT"):
(i) such prepayment shall be made on the first
scheduled payment date occurring after Borrower shall have
provided Administrative Agent with thirty (30) days
irrevocable prior written notice of its intent to make such
repayment, which notice shall have been delivered to
Administrative Agent no later than thirty (30) days after such
proceeds of Award collected upon such Condemnation are applied
to payment of the Debt; and
(ii) all of the requirements of Section 2.4.3
shall have been satisfied.
100
107
Any such application to the Debt or repayment of the Debt pursuant to this
clause (d) shall be without any prepayment consideration or premium except that
if a Default or an Event of Default has occurred and is continuing, then
Borrower shall pay to Administrative Agent, an additional amount equal to the
Yield Maintenance Premium, if any, that would be required under Section 2.3.3
hereof if a Defeasance Deposit was to be made by Borrower. Any such
application to the Debt or repayment of the Debt pursuant to this clause (d)
shall be applied to those payments of principal and interest last due under the
Note but shall not postpone or reduce any payments otherwise required pursuant
to the Note other than such last due payments.
(e) In the event Borrower is entitled to reimbursement
out of the Award received by Administrative Agent, such proceeds shall be
disbursed from the Loss Proceeds Subaccount from time to time upon
Administrative Agent being furnished with: (i) evidence satisfactory to
Administrative Agent of the estimated cost of completion of the Condemnation
Restoration; (ii) funds, or at Administrative Agent's option, assurances
satisfactory to Administrative Agent that such funds are or will become
available, sufficient in addition to the proceeds of the Award to complete the
Condemnation Restoration; (iii) evidence reasonably acceptable to
Administrative Agent that all work in connection with which the reimbursement
is being requested has been performed and paid for which shall include, if the
estimated cost of the Condemnation Restoration exceeds the lessor of $250,000
and ten percent (10%) of the Allocated Loan Amount with respect to such Asset,
such architect's certificates, waivers of lien, contractor's sworn statements,
title insurance endorsements, bonds, plats of survey and such other evidences
of costs, payment and performance as Administrative Agent may reasonably
require and approve, if the estimated cost of the Restoration is less than the
lesser of $250,000 and ten percent (10%) of the Allocated Loan Amount with
respect to such Asset, an Officer's Certificate certifying that the Borrower
has obtained the foregoing; and (iv) all plans and specifications for such
Condemnation Restoration, such plans and specifications to be delivered and
approved by Administrative Agent (such approval not to be unreasonably
withheld) prior to commencement of work if the estimated cost of the
Condemnation Restoration exceeds the lessor of $250,000 and ten percent (10%)
of the Allocated Loan Amount with respect to such Asset. In addition, no
payment made prior to the final completion of the Condemnation Restoration
shall exceed ninety percent (90%) of the value of the work performed from time
to time; funds other than proceeds of the Award shall be disbursed prior to
disbursement of such proceeds; and at all times, the undisbursed balance of
such proceeds remaining in the hands of Administrative Agent, together with
funds deposited for that purpose or irrevocably committed to the satisfaction
of Administrative Agent by or on behalf of Borrower for that purpose, shall be
at least sufficient in the reasonable judgment of Administrative Agent to pay
for the costs of completion of the Condemnation Restoration, free and clear of
all Liens or claims for Lien. Any surplus which may remain out of the Award
received by Administrative Agent, after payment of such costs of Condemnation
Restoration shall, in the sole and absolute discretion of Administrative Agent,
be retained by Lenders and applied pro- rata to payment of the Debt.
101
108
SECTION 7.2 REQUIRED REPAIRS; REQUIRED REPAIR FUNDS.
7.2.1 REQUIRED REPAIRS; DEPOSITS. Borrower shall perform the
repairs at each Asset, as more particularly set forth on Schedule II attached
hereto (such repairs hereinafter referred to as "PROPERTY REQUIRED REPAIRS").
Borrower shall complete each of the Property Required Repairs on or before the
required deadline for each repair as set forth on Schedule II attached hereto.
7.2.2 RELEASE OF REQUIRED REPAIR FUNDS. Administrative Agent
shall disburse to Borrower the funds deposited in the Required Repair
Subaccount (the "REQUIRED REPAIR FUND") upon satisfaction by Borrower of each
of the following conditions: (i) Borrower shall submit a written request for
payment to Administrative Agent at least twenty (20) days prior to the date on
which Borrower requests such payment be made, specifying the Property Required
Repairs to be paid; (ii) on the date such request is received by Administrative
Agent and on the date such payment is to be made, no monetary Default or Event
of Default shall exist and remain uncured and will not be cured as a result of
such disbursement; (iii) Administrative Agent shall have received an Officers'
Certificate from Borrower (A) stating that all Property Required Repairs at the
Asset to be funded by the requested disbursement have been completed in a good
and workmanlike manner and in accordance with all applicable Legal
Requirements, such certificate to be accompanied by a copy of any license,
permit or other approval by any Governmental Authority required to commence
and/or complete such Property Required Repairs, (B) identifying each Person
that supplied materials or labor in connection with the Property Required
Repairs to be funded by the requested disbursement, and (C) stating that each
such Person has been paid in full or will be paid in full upon such
disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment reasonably satisfactory to Administrative Agent; (iv) at
Administrative Agent's option, a title search for the Asset indicating that the
Asset is free from all Liens not previously approved by Administrative Agent
(except for Permitted Encumbrances); and (v) Administrative Agent shall have
received such other evidence as Administrative Agent shall reasonably request
that the Property Required Repairs at the Asset to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such
disbursement to Borrower. Administrative Agent shall not be required to make
any disbursement from the Required Repair Subaccount with respect to any Asset
unless such requested disbursement is in an amount equal to or greater than
$25,000 (or a lesser amount if the total amount in the Required Repair
Subaccount is less than $25,000, in which case only one disbursement of the
amount remaining in the Required Repair Subaccount shall be made) and such
disbursement shall be made only upon satisfaction of each condition contained
in this Section 7.2.2. Provided no Default or Event of Default has occurred,
and remains uncured Administrative Agent shall cause the Deposit Bank to
deposit into Clearing Account B any amount remaining in the Required Repair
Fund after all Property Required Repairs have been completed and, from time to
time promptly after the request of Borrower, any amount in the Required Repair
Fund which is in excess of 125% of the aggregate cost to complete the Property
Required Repairs specified on Schedule II attached which have not been
102
109
completed, as reasonably determined by Administrative Agent, in accordance with
the requirements of this Section 7.2. Except as provided herein,
Administrative Agent shall cause the Deposit Bank to deposit into the
Replacement Reserve Subaccount any amounts remaining in the Required Repair
Fund after all Property Required Repairs have been completed.
7.2.3 FAILURE TO PERFORM REQUIRED REPAIRS. It shall be an
Event of Default under this Agreement if (i) Borrower does not complete the
Property Required Repairs at each Asset where such repairs are required within
thirty (30) days the of the required deadline for each repair as set forth on
Schedule II attached hereto and (ii) Borrower does not satisfy each condition
contained in Section 7.2.2 hereof.
SECTION 7.3 TAX AND INSURANCE ESCROW FUND.
Borrower shall pay to Administrative Agent, as agent for
Lenders, on the eleventh day of each calendar month (a) one-twelfth of the
Taxes that Administrative Agent estimates will be payable during the next
ensuing twelve (12) months in order to accumulate with Administrative Agent
sufficient funds to pay all such Taxes at least thirty (30) days prior to the
date such Taxes will become delinquent (it being agreed that Taxes will be
deemed delinquent on or before the date on which penalties or interest begin to
accrue thereon) and (b) one-twelfth of the Insurance Premiums that
Administrative Agent estimates will be payable for the renewal of the coverage
afforded by the Policies for the succeeding annual period upon the expiration
thereof in order to accumulate with Administrative Agent sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (said amounts in clauses (a) and (b) above
hereinafter called the "TAX AND INSURANCE ESCROW FUND"). The Tax and Insurance
Escrow Fund and the payments of interest or principal or both, payable pursuant
to the Notes shall be added together and shall be paid as an aggregate sum by
Borrower to Administrative Agent. Administrative Agent will apply the Tax and
Insurance Escrow Fund to payments of Taxes and Insurance Premiums required to
be made by Borrower pursuant to Section 5.1 hereof and under each Mortgage,
subject to Borrower's right to protest such taxes under Section 5.1(b) hereof.
In making any payment relating to the Tax and Insurance Escrow Fund,
Administrative Agent may do so according to any xxxx, statement or estimate
procured from the appropriate public office (with respect to Taxes) or insurer
or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the
amount of the Tax and Insurance Escrow Fund shall exceed the amounts due for
Taxes and Insurance Premiums pursuant to Section 5.1 hereof, Administrative
Agent shall, at the sole discretion of the Requisite Lenders, return any excess
to Borrower or credit such excess against future payments to be made to the Tax
and Insurance Escrow Fund. Any amount remaining in the Tax and Insurance
Escrow Fund after the Debt has been paid in full shall be returned to Borrower.
If at any time Administrative Agent reasonably determines that the Tax and
Insurance Escrow Fund is not or will not be sufficient to pay the items set
forth in clauses (a) and (b) above, Administrative Agent shall notify Borrower
of such determination and Borrower shall
103
110
increase its monthly payments to Administrative Agent by the amount that
Administrative Agent estimates is sufficient to make up the deficiency at least
thirty (30) days prior to delinquency of the Taxes and/or thirty (30) days
prior to expiration of the Policies, as the case may be.
SECTION 7.4 REPLACEMENTS AND REPLACEMENT RESERVE.
7.4.1 REPLACEMENT RESERVE FUND. On each date that a
regularly scheduled payment of principal or interest is due under the Notes,
Borrower shall deposit with Administrative Agent a monthly deposit in the
amount equal to one-twelfth of an amount equal to four percent (4%) of annual
Gross Income from Operations, until the third anniversary of the Closing Date
and thereafter five percent (5%) of annual Gross Income from Operations.
Amounts so deposited shall hereinafter be referred to as the "REPLACEMENT
RESERVE FUND." Administrative Agent may reassess its estimate of the amount
necessary for the Replacement Reserve Fund from time to time and may increase
the monthly amounts required to be deposited into the Replacement Reserve Fund
upon thirty (30) days written notice to Borrower if Administrative Agent
determines in its reasonable discretion after reviewing Borrower's capital
expenditure plans that an increase is necessary to maintain the proper
maintenance and operation of the Property in accordance with past practices.
7.4.2 DISBURSEMENTS FROM REPLACEMENT RESERVE SUBACCOUNT. (a)
Administrative Agent shall make disbursements from the Replacement Reserve
Subaccount to pay Borrower only for the cost of replacements to and maintenance
of the Property to the extent the same constitute capital expenditures in
accordance with GAAP (collectively, the "REPLACEMENTS") in the manner provided
in this Section 7.4.2. Administrative Agent shall not be obligated to make
disbursements, from the Replacement Reserve Fund for costs which are to be
reimbursed from the Required Repair Fund.
(b) Administrative Agent shall, upon written request from
Borrower and satisfaction of the requirements set forth in this Section 7.4.2
and Section 7.4.3 of this Agreement, disburse to Borrower (within twenty (20)
days of Borrower's satisfaction of the requirements of Section 7.4.2 and
Section 7.4.3 with respect thereto) amounts from the Replacement Reserve
Subaccount necessary to pay for the actual approved costs of Replacements or to
reimburse Borrower therefor, upon completion of such Replacements (or, upon
partial completion in the case of Replacements made pursuant to Section
7.4.2(e)) as determined by Administrative Agent. In no event shall
Administrative Agent be obligated to disburse funds from the Replacement
Reserve Subaccount if a monetary Default or an Event of Default exists and will
not be cured as a result of such disbursement.
(c) Each request for disbursement from the Replacement
Reserve Subaccount shall be in a form reasonably specified or approved by
Administrative Agent and shall specify (i) the specific Replacements for which
the disbursement is requested, (ii) the quantity and price of each item
purchased, if the Replacement includes the purchase or replacement of specific
104
111
items, (iii) the price of all materials (grouped by type or category) used in
any Replacement other than the purchase or Replacement of specific items, and
(iv) the cost of all contracted labor or other services applicable to each
Replacement for which such request for disbursement is made. With each
request, Borrower shall certify that all Replacements have been made in
accordance with all Legal Requirements of any Governmental Authority having
jurisdiction over the Property. Each request for disbursement shall include
copies of invoices for all items or materials purchased and all contracted
labor or services provided and each request shall include evidence satisfactory
to Administrative Agent of payment of all such amounts. Except as provided in
Section 7.4.2(e), each request for disbursement from the Replacement Reserve
Subaccount shall be made only after completion of the Replacement for which
disbursement is requested. Borrower shall provide Administrative Agent
evidence of completion satisfactory to Administrative Agent in its reasonable
judgment.
(d) Borrower shall pay all invoices in connection with
the Replacements with respect to which a disbursement is requested prior to
submitting such request for disbursement from the Replacement Reserve
Subaccount unless all such invoices do not exceed $25,000, in which case
Administrative Agent shall disburse the amount for such invoices directly to
Borrower and Borrower covenants and agrees to promptly pay such invoices. In
addition, as a condition to any disbursement, Administrative Agent may require
Borrower to obtain lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount equal to or greater
than $25,000 for completion of its work or delivery of its materials. Any lien
waiver delivered hereunder shall conform to the requirements of applicable law
and shall cover all work performed and materials supplied (including equipment
and fixtures) for any Asset by that contractor, supplier, subcontractor,
mechanic or materialman through the date covered by the current reimbursement
request.
(e) If (i) the cost of a Replacement exceeds $25,000 and
(ii) the contractor performing such Replacement requires periodic payments
pursuant to the terms of a written contract, a request for reimbursement from
the Replacement Reserve Subaccount may be made after completion of a portion of
the work under such contract, provided (A) such contract requires payment upon
completion of such portion of the work, (B) the materials for which the request
is made are on site at appropriate Asset and are properly secured or have been
installed in such Asset, (C) all other conditions in this Agreement for
disbursement have been satisfied, (D) funds remaining in the Replacement
Reserve Subaccount, together with deposits to be made into such account under
Section 7.4.1 are or will be, in Administrative Agent's judgment, sufficient to
complete such Replacement and other Replacements when required, and (E) if
required by Administrative Agent, each contractor or subcontractor receiving
payments under any contract exceeding $10,000, shall provide to Administrative
Agent a waiver of lien with respect to amounts which have been paid to that
contractor or subcontractor.
(f) Borrower shall not make a request for disbursement
from the Replacement Reserve Subaccount more frequently than once in any
calendar month and (except in connection
105
112
with the final disbursement) the total cost of all Replacements in any request
shall not be less than $10,000. Any amount remaining in the Replacement
Reserve Fund after the Debt has been paid in full shall be returned to
Borrower.
7.4.3 PERFORMANCE OF REPLACEMENTS. (a) Borrower shall make
Replacements when required in order to keep each Asset in condition and repair
consistent with other hotels of similar quality, in the same market segment and
in the metropolitan area in which such Asset is located, and to keep each Asset
or any portion thereof from deteriorating. Borrower shall complete all
Replacements in a good and workmanlike manner as soon as practicable following
the commencement of making each such Replacement.
(b) Administrative Agent, as agent for Lenders, reserves
the right, at its option, to approve all contracts or work orders, providing
for a contract sum of $250,000 or more, with materialmen, mechanics, suppliers,
subcontractors, contractors or other parties providing labor or materials in
connection with the Replacements, which approval will not be unreasonably
withheld. Upon Administrative Agent's request, Borrower shall assign any
contract or subcontract to the Secured Parties.
(c) In the event Administrative Agent determines in its
reasonable discretion that any Replacement is not being performed in a
workmanlike or timely manner or that any Replacement has not been completed in
a workmanlike or timely manner, Borrower shall be in Default hereunder and
Administrative Agent shall have the option to withhold disbursement for such
unsatisfactory Replacement and if an Event of Default shall occur,
Administrative Agent may proceed under existing contracts or contract with
third parties to complete such Replacement and to apply the Replacement Reserve
Fund toward the labor and materials necessary to complete such Replacement,
without providing any prior notice to Borrower, and to exercise any and all
other remedies available to Administrative Agent and Lenders upon an Event of
Default hereunder.
(d) In order to facilitate Administrative Agent's
completion or making of the Replacements pursuant to Section 7.4.3(c) above,
Borrower grants Administrative Agent the right to enter onto the Property and
perform any and all work and labor necessary to complete or make the
Replacements and/or employ watchmen to protect the Property from damage. All
sums so expended by Administrative Agent shall be deemed to have been advanced
under the Loan to Borrower and secured by each Mortgage. For this purpose,
Borrower constitutes and appoints Administrative Agent its true and lawful
attorney-in-fact with full power of substitution to complete or undertake the
Replacements in the name of Borrower, if and to the extent Administrative Agent
is entitled to do so under this Section 7.4. Such power of attorney shall be
deemed to be a power coupled with an interest and cannot be revoked. Borrower
empowers said attorney-in-fact as follows: (i) to use any funds in the
Replacement Reserve Subaccount for the purpose of making or completing the
Replacements; (ii) to make such additions, changes and corrections to the
Replacements as shall be necessary or desirable to complete the Replacements;
106
113
(iii) to employ such contractors, subcontractors, agents, architects and
inspectors as shall be required for such purposes; (iv) to pay, settle or
compromise all existing bills and claims which are or may become Liens against
such Asset, or as may be necessary or desirable for the completion of the
Replacements, or for clearance of title; (v) to execute all applications and
certificates in the name of Borrower which may be required by any of the
contract documents; (vi) in its reasonable discretion, to prosecute and defend
all actions or proceedings in connection with such Asset or the rehabilitation
and repair of such Asset; and (vii) to do any and every act which Borrower
might do in its own behalf to fulfill the terms of this Agreement.
(e) Nothing in this Section 7.4.3 shall: (i) make
Administrative Agent responsible for making or completing the Replacements;
(ii) require Administrative Agent to expend funds in addition to the
Replacement Reserve Fund to make or complete any Replacement; (iii) obligate
Administrative Agent to proceed with the Replacements; or (iv) obligate
Administrative Agent to demand from Borrower additional sums to make or
complete any Replacement.
(f) Borrower shall permit Administrative Agent and
Administrative Agent's agents and representatives (including, without
limitation, Administrative Agent's engineer, architect or inspector) or third
parties making Replacements pursuant to this Section 7.4.3 to enter onto such
Asset, after reasonable advance notice, during normal business hours (subject
to the rights of guests of the hotel and tenants under their Tenant Leases) to
inspect the progress of any Replacements and all materials being used in
connection therewith, to examine all plans and shop drawings relating to such
Replacements which are or may be kept at such Asset, and to complete any
Replacements made pursuant to this Section 7.4.3. Borrower shall cause all
contractors and subcontractors to cooperate with Administrative Agent or
Administrative Agent's representatives or such other persons described above in
connection with inspections described in this Section 7.4.3(f) or the
completion of Replacements pursuant to this Section 7.4.3.
(g) Administrative Agent may require an inspection of
such Asset (at Lenders, sole cost, except if (i) a Default or Event of Default
shall have occurred and be continuing or (ii) either (x) the amount of the
requested disbursement with respect to such Asset is greater than $100,000, (y)
the aggregate amount of all disbursements made with respect to such Asset in
any one year period exceeds $250,000 or (z) the total cost of the Replacement
(as determined by Administrative Agent in its reasonable discretion) in
connection with which Borrower is requesting a disbursement exceeds $250,000,
then in any such case such inspection shall be at Borrower's sole cost and
expense) prior to making a monthly disbursement from the Replacement Reserve
Subaccount in order to verify completion of the Replacements for which
reimbursement is sought. Administrative Agent may require that such inspection
be conducted by an appropriate independent qualified professional selected by
Administrative Agent and/or may require a copy of a certificate of completion
by an independent qualified professional acceptable to Administrative Agent
prior to the disbursement of any amounts from the Replacement Reserve
Subaccount. If Borrower is required to pay the expense of the inspection
107
114
as required hereunder, Borrower shall pay such expense whether such inspection
is conducted by Administrative Agent or by an independent qualified
professional.
(h) The Replacements and all materials, equipment,
fixtures, or any other item comprising a part of any Replacement shall be
constructed, installed or completed, as applicable, free and clear of all
mechanic's, materialman's or other liens (except for those Liens existing on
the date of this Agreement which have been approved in writing by
Administrative Agent and Permitted Encumbrances).
(i) Before each disbursement from the Replacement Reserve
Subaccount, Administrative Agent may require Borrower to provide Administrative
Agent with a search of title to such Asset effective to the date of the
disbursement, which search shows that no mechanic's or materialmen's liens or
other Liens of any nature (other than Permitted Encumbrances) have been placed
against such Asset since the date of recordation of the Mortgage and that title
to such Asset is free and clear of all Liens (other than the Lien of the
Mortgage, Permitted Encumbrances and any other Liens previously approved in
writing by Lenders, if any), provided, however, such title search shall not be
required with respect to any disbursement unless (x) the amount of the
requested disbursement with respect to such Asset is greater than $100,000, (y)
the aggregate amount of all disbursements made with respect to such Asset in
any one year period exceeds $250,000 or (z) the total cost of the Replacement
(as determined by Administrative Agent in its reasonable discretion) in
connection with which Borrower is requesting a disbursement exceeds $250,000.
(j) All Replacements shall comply with all applicable
Legal Requirements of all Governmental Authorities having jurisdiction over
such Asset and applicable insurance requirements, including, without
limitation, applicable building codes, special use permits, environmental
regulations and requirements of insurance underwriters.
(k) In addition to any insurance required under the Loan
Documents, Borrower shall provide or cause to be provided workmen's
compensation insurance (or alternative coverage permitted hereunder), builder's
risk, and public liability insurance and other insurance to the extent required
under applicable law in connection with a particular Replacement. All such
policies shall be in form and amount reasonably satisfactory to Administrative
Agent. All such policies which can be endorsed with standard mortgagee clauses
making loss payable to Administrative Agent or its assigns shall be so
endorsed. Certified copies of such policies shall be delivered to
Administrative Agent and Lenders.
7.4.4 FAILURE TO MAKE REPLACEMENTS. (a) Upon the occurrence
of an Event of Default Administrative Agent may use the Replacement Reserve
Fund (or any portion thereof) for any purpose, including, but not limited to,
completion of the Replacements as provided in Section 7.4.3, or for any other
repair or Replacement to the Property or toward payment of the Debt as provided
in Section 10.9.3. Administrative Agent's right to withdraw and apply the
108
115
Replacement Reserve Fund shall be in addition to all other rights and remedies
provided to Administrative Agent and Lenders under this Agreement and the other
Loan Documents.
(b) Except as set forth in Section 10.9.3, nothing in
this Agreement shall obligate Administrative Agent to apply all or any portion
of the Replacement Reserve Fund on account of an Event of Default to payment of
the Debt or in any specific order or priority.
7.4.5 BALANCE IN THE REPLACEMENT RESERVE SUBACCOUNT. The
insufficiency of any balance in the Replacement Reserve Subaccount shall not
relieve Borrower from its obligation to fulfill all preservation and
maintenance covenants in the Loan Documents. Any amount remaining in the
Replacement Reserve Subaccount after the Debt has been paid in full shall be
remitted to Borrower.
7.4.6 INDEMNIFICATION. Borrower shall indemnify
Administrative Agent and each Lender and hold Administrative Agent and each
Lender harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations, costs and expenses (including,
without limitation, litigation costs and reasonable attorneys fees and
expenses) arising from or in any way connected with the performance of the
Replacements unless due to Administrative Agent's (or any Lenders') wilful
misconduct or gross negligence. Borrower shall assign to Administrative Agent
all rights and claims Borrower may have against all Persons supplying labor or
materials in connection with the Replacements; provided, however, that
Administrative Agent may not pursue any such right or claim unless an Event of
Default has occurred and remains uncured.
SECTION 7.5 INTENTIONALLY DELETED
SECTION 7.6 GROUND RENT ESCROW FUND.
Borrower shall pay to Administrative Agent on the eleventh day
of each calendar month (a) one-twelfth of the Ground Rent that Administrative
Agent estimates will be payable during the next ensuing twelve (12) months in
order to accumulate with Administrative Agent sufficient funds to pay all such
Ground Rent at least thirty (30) days prior to their respective due dates (the
"GROUND RENT ESCROW FUND"). Administrative Agent will apply the Ground Rent
Escrow Fund to payments of Ground Rent when due as required to be made by
Borrower pursuant to Section 5.1 hereof. In making any payment relating to the
Ground Rent Fund, Administrative Agent may do so according to any xxxx,
statement or estimate procured from the Ground Lessor, without inquiry into the
accuracy of such xxxx, statement or estimate. If the amount of the Ground Rent
Escrow Fund shall exceed the amounts due for Ground Rent and pursuant to
Section 5.1 hereof, Administrative Agent shall, at the sole discretion of the
Requisite Lenders, return any excess to Borrower or credit such excess against
future payments to be made to the Ground Rent Escrow Fund. If at any time
Administrative Agent reasonably determines that the Ground Rent Escrow Fund is
not or will not be sufficient to pay the Ground Rent,
109
116
Administrative Agent shall notify Borrower of such determination and Borrower
shall increase its monthly payments to Administrative Agent by the amount that
Administrative Agent estimates is sufficient to make up the deficiency at least
thirty (30) days prior to its due date. Notwithstanding anything to the
contrary contained in this Section 7.6, provided (x) there is on deposit in the
Deposit Account sufficient funds to pay one months Ground Rent due in
connection with all Assets and (ii) no Cash Trap Period exists, Borrower shall
not be required to deposit funds into the Ground Rent Escrow Fund as required
by this Section 7.6. Any amount remaining in the Ground Rent Escrow Fund after
the Debt has been paid in full shall be returned to Borrower.
VIII. DEFAULTS
SECTION 8.1 EVENT OF DEFAULT.
(a) Each of the following events shall constitute an
event of default hereunder (an "EVENT OF DEFAULT"):
(i) any portion of the Debt is not paid when due;
(ii) subject to Borrower's right to contest Taxes
and Other Charges pursuant to Section 5.1, any of the Taxes or Other
Charges are not paid when the same become delinquent;
(iii) the Policies are not kept in full force and
effect, or certified copies of the Policies are not delivered to
Administrative Agent within ten (10) Business Days of request;
(iv) except as permitted in Section 6.1(j) hereof,
Borrower or any Loan Party transfers or encumbers any portion of any
Asset or other Collateral without the Requisite Lenders' and the
Administrative Agent's prior written consent;
(v) any representation or warranty made by
Borrower or any other Loan Party herein or in any other Loan Document,
or in any report, certificate, financial statement or other
instrument, agreement or document furnished hereunder or thereunder,
shall have been false or misleading in any material respect as of the
date the representation or warranty was made, provided, however if
such false or misleading representation or warranty is susceptible of
being cured within thirty (30) Business days, the same shall be an
Event of Default hereunder only if the same is not cured within a
reasonable time not to exceed sixty (60) Business Days after notice
from Administrative Agent;
110
117
(vi) Borrower or any other Loan Party shall make
an assignment for the benefit of creditors;
(vii) a receiver, liquidator or trustee shall be
appointed for Borrower (or any other Loan Party) or Borrower (or any
other Loan Party) shall be adjudicated a bankrupt or insolvent, or any
petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be
filed by or against, consented to or acquiesced in by Borrower (or
such Loan Party), or any proceeding for the dissolution or liquidation
of Borrower or any other Loan Party shall be instituted; provided,
however, that if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower or such
Loan Party, then the same shall be an Event of Default hereunder only
if the same is not discharged, stayed or dismissed within sixty (60)
days after the date of such appointment or adjudication, the date such
petition is first filed or the date such proceeding is instituted, as
the case may be;
(viii) Borrower or any other Loan Party attempts to
assign its rights under this Agreement or any of the other Loan
Documents or any interest herein or therein in contravention of the
Loan Documents;
(ix) Borrower breaches any of its negative
covenants contained in Section 6.1 (except with respect to Sections
6.1(a), 6.1(b), 6.1(g), and 6.1(k), only if Borrower fails to cure any
default thereunder within ten (10) days after any Loan Party becomes
aware of or receives notice of such default) or any covenant contained
in Section 4.1(dd) or 5.1(bb) hereof; any other Loan Party fails to
include in their certificate of incorporation or other organizational
documents the covenants, representations or warranties set forth in
Section 4.1(dd) hereof as if directly made by it, or breaches or
alters any of such covenants, representations or warranties; or any of
the partners, members or shareholders of such Loan Parties which owns
a 49% or greater interest therein alters or breaches any of the
separateness covenants contained in such Loan Party's certificate of
incorporation;
(x) with respect to any term, covenant or
provision set forth herein which specifically contains a notice
requirement or grace period, Borrower or any other Loan Party shall be
in default under such term, covenant or condition after the giving of
such notice or the expiration of such grace period;
(xi) any of the assumptions contained in that
certain Non-Consolidation Opinion delivered to Administrative Agent in
connection with the Loan, or in any other Non-Consolidation Opinion
delivered subsequent to the closing of the Loan, is or shall become
untrue in any material respect;
111
118
(xii) Borrower or Parent shall continue to be in
Default under any of the other terms, covenants or conditions of this
Agreement not specified in subsections (i) to (xi) above, or (xiv),
(xv), (xvi), (xvii) or (xviii) below, for ten (10) days after notice
to Borrower or Parent from Administrative Agent, in the case of any
Default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice to Borrower or Parent from
Administrative Agent in the case of any other Default; provided,
however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided
further that Borrower shall have commenced to cure such Default within
such 30-day period and thereafter diligently and expeditiously
proceeds to cure the same, such 30-day period shall be extended for
such time as is reasonably necessary for Borrower in the exercise of
due diligence to cure such Default, such additional period not to
exceed sixty (60) days;
(xiii) there shall be default under any Mortgage or
any of the other Loan Documents beyond any applicable cure periods
contained in such documents, whether as to Borrower, any other Loan
Party, any Asset or any other Collateral, or any other such event
shall occur or condition shall exist, if the effect of such event or
condition is to accelerate the maturity of any portion of the Debt or
to permit Administrative Agent to accelerate the maturity of all or
any portion of the Debt;
(xiv) except as may be permitted otherwise by this
Agreement, (x) any Franchise Agreement with respect to any Asset or
any consent or comfort letter delivered by any franchisor under any
such Franchise Agreement shall cease to be in full force and effect or
(y) any party thereto shall deny or disaffirm its obligations
thereunder or shall default in the due performance or observance of
any material term, covenant or agreement on its part to be performed
or observed pursuant thereto and any applicable cure period shall have
expired, and in any such event the Borrower shall have failed to
either (a) replace such Franchise Agreement within 60 days of such
default (after the expiration of any such applicable cure period) or
disaffirmation, as the case may be, with a franchise agreement
approved in writing by Administrative Agent or (b) operate the
applicable Asset under a tradename owned by Bristol and referred to in
clause (w) of subsection 6.1(k)(iii);
(xv) if any representation contained in Section
4.1(mm), (nn) and (oo) shall become untrue;
(xvi) (a) failure of any Loan Party to pay when due
any monetary obligation contained in any Ground Lease, in each case
beyond the end of any grace or cure period provided therefor (but in
no event longer than five days, without extension); (b) occurrence of
any other event or condition which, with the giving of notice or lapse
of time or both, would cause, or would permit any lessor under any
Ground Lease to cause, an acceleration, a cancellation or a
termination, as against any Loan Party thereto,
112
119
of such Ground Lease, in each case after giving effect to any grace or
cure period therefor (but in no event longer than five days without
any extension); or (c) failure by any Loan Party to permit
Administrative Agent and/or its representatives at all reasonable
times upon reasonable prior written notice to make investigation or
examination concerning such Loan Party's performance and observance of
the terms, covenants and conditions of a Ground Lease;
(xvii) at any time after the execution and delivery
thereof, (x) any Loan Document or any material provision thereof shall
cease to be in full force and effect (other than in accordance with
its terms) or shall be declared null and void or the Secured Parties
shall not have or shall cease to have a valid and perfected first
priority Lien or security interest in any Collateral or Asset
purported to be covered, in each case other than with respect to
Permitted Encumbrances, other than as a result of the failure of
Administrative Agent to take any action within its control, or (y) any
Loan Party shall contest in writing the validity or enforceability of
any Loan Document in writing or deny in writing that it has any
further liability under any Loan Document to which it is a party; or
(xviii) any money judgment, writ or warrant of
attachment or similar process involving individually or in the
aggregate at any time an amount in excess of $2,500,000 (in either
case to the extent not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against Borrower or any other Loan Party or
any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any
event later than five days prior to the date of any proposed sale
thereunder); or
(xix) any Loan Party shall fail to pay any principal
of or premium or interest on any indebtedness of such Person having a
principal amount of $250,000 or more (excluding indebtedness evidenced
by the Notes) when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise); or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such indebtedness,
if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such indebtedness; or any
such indebtedness shall become or be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled
required prepayment), or any Loan Party shall be required to
repurchase or offer to repurchase such indebtedness, prior to the
stated maturity thereof; or
(xx) a default has occurred and continues beyond
any applicable cure period under any Property Management Agreement (or
any successor property management agreement) if such default permits
the property manager to terminate or
113
120
cancel such Property Management Agreement (or any successor property
management agreement) unless a replacement property Manager is
appointed pursuant to Section 6.1(v) hereof.
(b) Upon the occurrence of an Event of Default (other
than an Event of Default described in clauses (vi), (vii) or (viii) above) and
at any time thereafter, Administrative Agent may (or at the request of the
Requisite Lenders, shall) in addition to any other rights or remedies available
to it pursuant to this Agreement and the other Loan Documents or at law or in
equity, take such action, without notice or demand, that Administrative Agent
(or such Requisite Lenders) deems advisable to protect and enforce its rights
against Borrower or any other Loan Party and in and to the Property or any
other Collateral, including, without limitation, declaring the Debt to be
immediately due and payable, and Administrative Agent may enforce or avail
itself of any or all rights or remedies provided in the Loan Documents against
Borrower or any other Loan Party and the Property or any other Collateral,
including, without limitation, all rights or remedies available at law or in
equity; and upon any Event of Default described in clauses (vi), (vii) or
(viii) above, the Debt and all other obligations of Borrower or any other Loan
Party hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and, to the
extent allowed by applicable law, Borrower hereby expressly waives any such
notice or demand, anything contained herein or in any other Loan Document to
the contrary notwithstanding.
SECTION 8.2 REMEDIES.
(a) Upon the occurrence of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available
to Administrative Agent against Borrower (or any other Loan Party) under this
Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower (or any other Loan Party) or at law or in equity may
(or at the request of the Requisite Lenders, shall) be exercised by
Administrative Agent at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not
Administrative Agent shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents with respect to the Property or any other Collateral. Any such
actions taken by Administrative Agent shall be cumulative and concurrent and
may be pursued independently, singly, successively, together or otherwise, at
such time and in such order as the Requisite Lenders and Administrative Agent
may determine in their sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of
Administrative Agent and Lenders permitted by law, equity or contract or as set
forth herein or in the other Loan Documents. Without limiting the generality
of the foregoing, Borrower agrees that, to the extent permitted by applicable
law, if an Event of Default is continuing (i) Administrative Agent is not
subject to any "one action" or "election of remedies" law or rule, and (ii) all
Liens and other rights, remedies or privileges provided to the Secured Parties
shall remain in full force and effect until Administrative Agent has exhausted
all of its remedies
114
121
against each Asset and the Mortgage has been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Debt or the Debt has been paid in full.
(b) Administrative Agent shall have the right from time
to time to partially foreclose any Mortgage or combination of Mortgages in any
manner and for any amounts secured by such Mortgages then due and payable as
determined by the Requisite Lenders and Administrative Agent in their sole
discretion, including, without limitation, in the event: (i) Borrower defaults
beyond any applicable grace period in the payment of one or more scheduled
payments of principal and interest, Administrative Agent may (or at the request
of the Requisite Lenders, shall) foreclose any Mortgage or combination of
Mortgages to recover such delinquent payments or (ii) Administrative Agent
elects, or is directed by the Requisite Lenders, to accelerate less than the
entire outstanding principal balance of the Loan, Administrative Agent may
foreclose any Mortgage or combination of Mortgages to recover so much of the
principal balance of the Loan as Administrative Agent may accelerate and such
other sums secured by such Mortgage or Mortgages as Administrative Agent or the
Requisite Lenders may elect. Notwithstanding one or more partial foreclosures,
each Asset shall remain subject to the applicable Mortgage to secure payment of
sums secured by such Mortgage and not previously recovered.
(c) Administrative Agent shall have the right from time
to time to sever the Notes and the other Loan Documents into more separate
notes, mortgages and other security documents (the "SEVERED LOAN DOCUMENTS"),
in such denominations as the Requisite Lenders and Administrative Agent shall
determine in their sole discretion for purposes of evidencing and enforcing the
rights and remedies of the Lenders provided hereunder (provided Administrative
Agent may not increase the principal balance of the Debt or otherwise adversely
affect (except to a de-minimis extent) the rights or interest of Borrower,
Parent or any other Loan Party under this Agreement or any other Loan
Document). Borrower shall and Parent shall cause each Loan Party to execute
and deliver to Administrative Agent from time to time, promptly after its
request, a severance agreement and such other documents as Administrative shall
request in order to effect the severance described in the preceding sentence,
all in form and substance reasonably satisfactory to Administrative Agent and
the Requisite Lenders. Borrower and Parent each hereby absolutely and
irrevocably appoint Administrative Agent as their true and lawful attorney,
coupled with an interest, in their name and xxxxx to make and execute all
documents necessary or desirable to effect the aforesaid severance, Borrower
and Parent each ratifying all that its said attorney shall do by virtue
thereof; provided, however, that Administrative Agent shall not make or execute
any such documents under such power until three (3) days after notice has been
given to Borrower by Administrative Agent of its intent to exercise its rights
under such power.
115
122
SECTION 8.3 REMEDIES CUMULATIVE.
The rights, powers and remedies of Administrative Agent and
Lenders under this Agreement shall be cumulative and not exclusive of any other
right, power or remedy which Lenders may have against Borrower or any other
Loan Party pursuant to this Agreement or the other Loan Documents, or existing
at law or in equity or otherwise. Such rights, powers and remedies may be
pursued singly, concurrently or otherwise, at such time and in such order as
Lenders and Administrative Agent, may determine in their sole discretion. No
delay or omission to exercise any remedy, right or power accruing upon an Event
of Default shall impair any such remedy, right or power or shall be construed
as a waiver thereof, but any such remedy, right or power may be exercised from
time to time and as often as may be deemed expedient. A waiver of one Default
or Event of Default with respect to Borrower or any other Loan Party shall not
be construed to be a waiver of any subsequent Default or Event of Default by
Borrower or such Loan Party or to impair any remedy, right or power consequent
thereon. Any and all amounts collected or retained by Lenders or
Administrative Agent after an Event of Default has occurred, including, but not
limited to, interest at the Default Rate, late charges or any escrowed amount,
may be applied by Lenders or Administrative Agent to payment of the Debt as set
forth in Section 10.9.3.
IX. SPECIAL PROVISIONS
SECTION 9.1 SALE OF NOTES AND SECURITIZATION.
At the request of the holder of the Notes, Borrower shall and
Parent shall cause each Loan Party to use reasonable efforts to facilitate the
consummation of the sale of the Notes or participation therein or the
securitization (such sale and/or securitization, the "SECURITIZATION") of rated
single or multi-class securities (the "SECURITIES") secured by or evidencing
ownership interests in the Notes and each Mortgage, and shall cooperate with
and, to the extent not already required to be provided by Borrower under this
Agreement, provide Administrative Agent and Lenders with all information and
materials obtainable by Borrower or any Loan Party which may be required in the
marketplace or by the Rating Agencies in connection with the Securitization,
including, without limitation, to:
(a) (i) provide such financial and other information with
respect to the Property, the other Collateral, Borrower, the other Loan Parties
and the Property Manager, (ii) provide budgets relating to each Asset or the
Property, and (iii) to perform or permit or cause to be performed or permitted
such site inspection, appraisals, market studies, environmental reviews and
reports (Phase I's and, if appropriate, Phase II's), engineering reports and
other due diligence investigations of each Asset, as may be requested by the
holders of the Notes or the Rating Agencies or as may be necessary or
appropriate in connection with the Securitization (the "PROVIDED INFORMATION"),
together with appropriate verification and/or
116
123
consents of the Provided Information through letters of auditors or opinions of
counsel of independent attorneys acceptable to Administrative Agent, Lenders
and the Rating Agencies;
(b) at Borrower's expense, cause counsel to render or
update opinions (which may be relied upon by the Rating Agencies) as to
non-consolidation, or any other opinion customary in securitization
transactions with respect to the Property and Borrower and its Affiliates
(including without limitation the other Loan Parties), which counsel and
opinions shall be reasonably satisfactory to the holders of the Notes and the
Rating Agencies;
(c) make such representations and warranties as of the
closing date of the Securitization with respect to the Property, the other
Collateral, Borrower, the other Loan Parties and the Loan Documents as are
customarily provided in securitization transactions and as may be reasonably
requested by the holders of the Notes or the Rating Agencies and consistent
with the facts covered by such representations and warranties as they exist on
the date thereof, including the representations and warranties made in the Loan
Documents but excluding any representations or warranties, if any, which were
made solely as of the Closing Date; and
(d) execute such amendments to the Loan Documents and
organizational documents, enter into a lockbox or similar arrangement with
respect to the Rents and establish and fund such reserve funds (including,
without limitation, reserve funds for deferred maintenance and capital
improvements) as may be reasonably requested by the holders of the Notes or the
Rating Agencies or otherwise to effect the Securitization; provided, however,
that Borrower shall not be required to modify or amend any Loan Document if
such modification or amendment would (i) change the interest rate, the stated
maturity or the amortization of principal set forth in the Notes or (ii) modify
or amend any other material economic terms or conditions of the Loan or rights
or interests or Borrower, Parent or any other Loan Party under the Loan
Documents, except to a de-minimis extent.
All reasonable third party costs and expenses incurred by Administrative Agent
and Lenders in connection with the Securitization which are attributable to
Borrower (or any other Loan Party), the Loan Documents, the Property or the
other Collateral or this Section 9.1, including, without limitation, fees
charged by any Rating Agency (other than rating surveillance fees), shall be
paid by Borrower within ten (10) days after demand of Administrative Agent (the
"SECURITIZATION EXPENSES"); provided, however, that in no event shall such
costs and expenses exceed one half of one percent (.5%) of the original
principal balance of the Loan. The Securitization Expenses shall be used by
Administrative Agent to pay its costs and expenses as set forth above and any
portion of the Securitization Expenses not expended in connection with the
Securitization shall be promptly returned to Borrower. Thirty (30) days prior
to any Securitization, Borrower may require Administrative Agent to provide an
accounting as to the amount and itemization of the Securitization Expense
Administrative Agent and Lenders have already spent, any additional amount
required to be expended in connection with such Securitization and the identity
of the purchaser of the Residual Amount.
117
124
SECTION 9.2 SECURITIZATION INDEMNIFICATION.
(a) Borrower understands that certain of the Provided
Information and the Required Records may be included in disclosure documents in
connection with the Securitization, including, without limitation, a prospectus
or private placement memorandum (each, a "DISCLOSURE DOCUMENT") and may also be
included in filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "SECURITIES ACT"), or the Securities
and Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or provided or made
available to investors or prospective investors in the Securities, the Rating
Agencies, and service providers relating to the Securitization. In the event
that the Disclosure Document is required to be revised prior to the sale of all
Securities, Borrower will and Parent will cause each Loan Party to cooperate
with the holders of the Notes in updating the Disclosure Document by providing
all current information necessary to keep the Disclosure Document accurate and
complete in all material respects.
(b) Borrower agrees to, and Parent shall cause each Loan
Party to, provide in connection with each of (i) a preliminary and a private
placement memorandum or (ii) a preliminary and final prospectus, as applicable,
an indemnification certificate (A) certifying that Borrower and each other Loan
Party has carefully examined such memorandum or prospectus, as applicable,
including, without limitation, the sections entitled "Special Considerations,"
"Description of the Mortgages," "Description of the Mortgage Loans and
Mortgaged Properties," "The Manager," "The Borrower" and "Certain Legal Aspects
of the Mortgage Loan," and such sections (and any other sections reasonably
requested) do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading, (B)
indemnifying Administrative Agent and Lenders (and for purposes of this Section
9.2, Administrative Agent and Lenders hereunder shall include its officers and
directors), the Affiliate of Nomura Securities International, Inc. ("NOMURA")
that has filed the registration statement relating to the Securitization (the
"REGISTRATION STATEMENT"), each of its directors, each of its officers who have
signed the Registration Statement and each person or entity who controls the
Affiliate within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (collectively, the "NOMURA GROUP"), and each of Nomura, BT
Alex. Xxxxx Incorporated, each of its directors and each person who controls
Nomura or BT Alex. Xxxxx Incorporated, as the case may be, within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act
(collectively, the "UNDERWRITER GROUP") for any losses, claims, damages or
liabilities (the "LIABILITIES") to which any Lender, Administrative Agent, the
Nomura Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such sections or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated in such sections or necessary in order to
make the statements in such sections, in light of the circumstances under which
they were made, not misleading, and (C) agreeing to reimburse Administrative
Agent, Lenders, the Nomura Group
118
125
and the Underwriter Group for any reasonable legal or other out-of-pocket
expenses reasonably incurred by Administrative Agent, Lenders and the Nomura
Group and the Underwriting Group in connection with investigating or defending
the Liabilities; provided, however, that Borrower (or such Loan Party) will be
liable in any such case under clauses (B) or (C) above only to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or omission made therein in reliance upon and in
conformity with information furnished to Administrative Agent (or any Lender)
by or on behalf of Borrower or any Loan Party in connection with the
preparation of the memorandum or prospectus or in connection with the
underwriting of the Debt, including, without limitation, financial statements
of Borrower or any Loan Party and operating statements, Rent Rolls,
environmental site assessment reports and property condition reports with
respect to each Asset. This indemnity agreement will be in addition to any
liability which Borrower may otherwise have.
(c) In connection with filings under the Exchange Act,
Borrower agrees to indemnify (i) Administrative Agent, Lenders, the Nomura
Group and the Underwriter Group for Liabilities to which Administrative Agent,
Lenders, the Nomura Group or the Underwriter Group may become subject insofar
as the Liabilities arise out of or are based upon the omission or alleged
omission to state in the Provided Information or Required Records a material
fact required to be stated in the Provided Information or Required Records in
order to make the statements in the Provided Information or Required Records,
in light of the circumstances under which they were made, not misleading and
(ii) reimburse Administrative Agent, Lenders, the Nomura Group or the
Underwriter Group for any reasonable legal or other out-of-pocket expenses
reasonably incurred by Administrative Agent, the Nomura Group or the
Underwriter Group in connection with defending or investigating the
Liabilities.
(d) Promptly after receipt by an indemnified party under
this Section 9.2 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9.2, notify the indemnifying party in
writing of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying party from any liability
which the indemnifying party may have to any indemnified party hereunder except
to the extent that failure to notify causes prejudice to the indemnifying
party. In the event that any action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled, jointly with any other indemnifying party,
to participate therein and, to the extent that it (or they) may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. After notice
from the indemnifying party to such indemnified party under this Section 9.2
and the assumption by the indemnifying party of the defense thereof, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and the
119
126
indemnifying party and the indemnified party shall have reasonably concluded
that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. The indemnifying party shall not be liable for the expenses of
more than one separate counsel unless an indemnified party shall have
reasonably concluded that there may be legal defenses available to it that are
different from or additional to those available to another indemnified party.
(e) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 9.2(b), (c) or (d) is for any reason held to be unenforceable by an
indemnified party in respect of any losses, claims, damages or liabilities (or
action in respect thereof) referred to therein which would otherwise be
indemnifiable under Section 9.2(b), (c) or (d), the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of such losses, claims, damages or liabilities (or action in respect thereof);
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, the following factors shall be considered:
(i) Nomura's and Borrower's relative knowledge and access to information
concerning the matter with respect to which claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances. Nomura and
Borrower hereby agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
(f) The liabilities and obligations of Borrower, Parent,
Lenders and Administrative Agent under this Section 9.2 shall survive the
termination of this Agreement and the satisfaction and discharge of the Debt.
(g) Notwithstanding anything to the contrary in this
Section 9.2, no Person shall be entitled to be indemnified hereunder with
respect to any liabilities that arise from the bad faith, recklessness or
wilful violation of law of such Person.
SECTION 9.3 RATING SURVEILLANCE.
Administrative Agent or its Affiliates will retain the Rating
Agencies to provide rating surveillance services on any certificates issued in
a Securitization. Such rating surveillance will be at the expense of Lenders.
SECTION 9.4 INTENTIONALLY DELETED
SECTION 9.5 INTENTIONALLY DELETED
120
127
SECTION 9.6 INDEMNIFICATION AGAINST TAX.
Borrower indemnifies and agrees to defend and hold
Administrative Agent and each Lender harmless against all real estate transfer,
mortgage recording, documentary stamp and intangible taxes and other amounts
(other than income taxes) imposed on Administrative Agent or such Lender by
virtue of such party's execution of any of the Loan Documents or by reason of
the Loan, including any penalties, interest and attorneys' fees incurred by
Lenders in connection therewith, and all such charges shall be secured by the
Lien of each Mortgage and bear interest at the Default Rate until paid.
SECTION 9.7 SPLITTING THE LOAN.
Administrative Agent shall have the right from time to time to
sever the Notes and the other Loan Documents into one or more separate notes,
mortgages and other security documents (the "SEVERED LOAN DOCUMENTS") in such
denominations as the requisite Lenders and Administrative Agent shall determine
in their sole discretion for purposes of evidencing and enforcing its rights
and remedies provided hereunder, provided, however, that the terms, provisions
and clauses of the Severed Loan Documents shall be no more adverse to Borrower
than those contained in the Notes, this Agreement, the Security Deed and the
other Loan Documents. Borrower shall and Parent shall cause each Loan Party to
execute and deliver to Administrative Agent from time to time, promptly after
the request of Administrative Agent, a severance agreement and such other
documents as Administrative Agent shall reasonably request in order to effect
the severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Administrative Agent. Borrower and Parent each
hereby absolutely and irrevocably appoint Administrative Agent as their true
and lawful attorney, coupled with an interest, in its name and stead to make
and execute all documents necessary or desirable to effect the aforesaid
severance, Borrower and Parent each ratifying all that its said attorney shall
do by virtue thereof; provided, however, that Administrative Agent shall not
make or execute any such documents under such power until three (3) days after
notice has been given to Borrower by Administrative Agent of Lenders' intent to
exercise its rights under such power.
X. CENTRAL CASH MANAGEMENT
SECTION 10.1 SERVICER.
At the option of Administrative Agent, as agent for Lenders,
the Loan may be serviced by a servicer/trustee (the "SERVICER") selected by
Administrative Agent and Administrative Agent may delegate all or any portion
of its responsibilities under this Agreement and the other Loan Documents to
the Servicer. The cost of the Servicer (the "SERVICING FEES") shall not exceed
0% of the original principal amount of the Notes per annum and shall be due and
payable monthly by Borrower at the same time that the monthly scheduled
payments on Debt are due and payable.
121
128
SECTION 10.2 ESTABLISHMENT OF ACCOUNTS.
10.2.1 ESTABLISHMENT OF CLEARING ACCOUNT. In order to
further secure the performance by Borrower of the Obligations and as a material
inducement for Lenders to make the Loan in accordance with terms of this
Agreement, the Notes and the Mortgages, Borrower hereby acknowledges, confirms
and covenants that: (i) Borrower has established separate accounts (each
individually a "CLEARING ACCOUNT A") in the name of Administrative Agent
Lenders or Lenders' designee; (ii) Borrower has established a separate account
("CLEARING ACCOUNT B") in the name of Borrower or Borrower's designee in a bank
to be designated by Borrower; (iii) each Clearing Account A will be subject to
the sole dominion, control and discretion of Administrative Agent, as agent for
Lenders or its designee, subject to the terms, covenants and conditions of this
Agreement; (iv) Clearing Account B will be subject to the sole dominion,
control and discretion of Borrower or its designee, subject to the terms,
covenants and conditions of this Agreement; (v) Administrative Agent, as agent
for Lenders or its designee shall have the sole right to make withdrawals from
each Clearing Account A; (vi) Borrower or its designee shall have the sole
right to make withdrawals from Clearing Account B; and (vii) neither Borrower
nor any other Person claiming on behalf of or through Borrower shall have any
right or authority, whether express or implied, to close or to make use of, or
withdraw any Account Proceeds from any Clearing Account A. Each Clearing
Account A and Clearing Account B shall be assigned the federal tax
identification number of Borrower, which number is 00-0000000.
10.2.2 ESTABLISHMENT OF DEPOSIT ACCOUNT AND SUBACCOUNTS. (a)
Administrative Agent has established a separate account, in the name of
Administrative Agent, as agent for Lenders, entitled the "Deposit Account for
Nomura Asset Capital Corporation as Mortgagee of "Bristol Lodging Company" (the
"DEPOSIT ACCOUNT"). Administrative Agent shall or shall cause the Deposit Bank
to maintain on a ledger entry basis the following subaccounts (the
"SUBACCOUNTS") entitled:
(i) Tax and Insurance Escrow Subaccount (the "TAX
AND INSURANCE ESCROW SUBACCOUNT");
(ii) Monthly Debt Service Subaccount (the "MONTHLY
DEBT SERVICE SUBACCOUNT");
(iii) Replacement Reserve Subaccount (the
"REPLACEMENT RESERVE SUBACCOUNT");
(iv) Required Repair Subaccount (the "REQUIRED
REPAIR SUBACCOUNT");
(v) Loss Proceeds Subaccount (the "LOSS PROCEEDS
SUBACCOUNT");
122
129
(vi) Security Deposit Subaccount (the "SECURITY
DEPOSIT SUBACCOUNT");
(viii) Borrower's Remainder Subaccount (the
"BORROWER'S REMAINDER SUBACCOUNT");
(ix) Ground Rent Subaccount (the "GROUND RENT
SUBACCOUNT");
(b) In order to further secure the performance by
Borrower of the Obligations and as a material inducement for Lenders to make
the Loan in accordance with terms of this Agreement, the Notes and each
Mortgage, Borrower hereby acknowledges and confirms that: (i) Administrative
Agent as its designee has established the Deposit Account in the name of
Administrative Agent, as agent for Lenders; (ii) the Deposit Account will be
subject to the sole dominion, control and discretion of Administrative Agent as
its designee, subject to the terms, covenants and conditions of this Agreement;
(iii) Administrative Agent or its designee shall have the sole right to make
withdrawals from the Deposit Account; and (d) neither Borrower nor any other
Person claiming on behalf of or through Borrower shall have any right or
authority, whether express or implied, to close or to make use of, or withdraw
any Account Proceeds from, the Deposit Account. The Deposit Account shall be
assigned the federal tax identification number of Borrower, which number is
00-0000000.
SECTION 10.3 DEPOSITS INTO CLEARING ACCOUNT.
(a) Within one (1) Business Day after receipt of the same
by Borrower or any agent or Person acting on behalf of Borrower, including,
without limitation, any Property Manager engaged by Borrower in connection with
any Asset or any other Loan Party, Borrower shall and Parent shall cause each
Loan Party to directly deposit (or cause to be deposited) all Rent and other
Mortgaged Property Gross Cash Flow and all Security Deposits into the Clearing
Account A for such Asset. Without limiting the generality of the foregoing:
(i) Borrower shall cause all Rent, payable on account of
any Tenant Lease, and Security Deposits, payable on account of any
Tenant Lease, to be transmitted directly to the Clearing Account A for
the Asset in connection with which the Rent is being paid, by each
Person granted a possessory interest or right to use or occupy all or
any portion of such Asset pursuant to a Tenant Lease (collectively,
the "TENANTS"), without such Rent or Security Deposits at any time
being under the control of Borrower or any of its agents or employees,
by executing and delivering to each Tenant under a Tenant Lease,
whether such Tenant Lease is presently effective or executed after the
date hereof, an irrevocable letter of direction (the "PAYMENT
DIRECTION LETTER") in the form attached hereto as Exhibit A, advising
each Tenant to directly deposit into such Clearing Account A at the
address set forth in the Payment Direction Letter, promptly when due,
all Rent and Security Deposits payable to Borrower as landlord under
the Tenant Leases.
123
130
Borrower represents, warrants and covenants that it shall deliver the
Payment Direction Letter (i) on or prior to the date hereof with
respect to Tenant Leases executed on or prior to the date hereof and
(ii) contemporaneously with the execution and delivery of all other
Tenant Leases after the date hereof. Neither Borrower nor the
Property Manager shall (i) terminate, amend, revoke or alter any
Payment Direction Letter by amending any Tenant Lease or otherwise or
(ii) direct or cause any Tenant to pay Rent in any manner other than
as specifically provided in the Payment Direction Letter.
(ii) Borrower shall cause all Credit Card Receivables to
be transmitted directly to the Clearing Account A for the Asset in
connection with which the Rent is being paid, by the Credit Card Payor
without such Credit Card Receivables at any time being under the
control of Borrower or any of its agents or employees, by executing
and delivering to each Credit Card Payor, an irrevocable letter of
direction (the "CREDIT CARD PAYOR PAYMENT DIRECTION LETTER") in the
form attached hereto as Exhibit B, advising each Credit Card Payor to
directly deposit into such Clearing Account A at the address set forth
in the Credit Card Payor Payment Direction Letter, promptly when due,
all Credit Card Receivables payable to Borrower. Borrower represents,
warrants and covenants that it shall deliver the Credit Card Payor
Payment Direction Letter (i) on or prior to the date hereof with
respect to each person who is a Credit Card Payor on the date hereof
and (ii) on or prior to accepting any other credit card for payment,
to each additional Credit Card Payor. Neither Borrower nor the
Property Manager shall (i) terminate, amend, revoke or alter any
Credit Card Payor Payment Direction Letter or (ii) direct or cause any
Credit Card Payor to pay Credit Card Receivables in any manner other
than as specifically provided in the Credit Card Payor Payment
Direction Letter.
(b) Borrower and Parent agree (i) not to commingle, or
permit any other Loan Party to commingle, any such Mortgaged Property Gross
Cash Flow or Security Deposits which it receives with other funds of Borrower
or any other Loan Party, (ii) that Borrower or any other Loan Party, as the
case may be, is holding Mortgaged Property Gross Cash Flow and Security
Deposits which it receives in an express trust for the benefit of Lenders until
all Mortgaged Property Gross Cash Flow and Security Deposits which it receives
are deposited into the Clearing Account A for the appropriate Asset and (iii)
to transmit or cause any other Loan Party to transmit such Mortgaged Property
Gross Cash Flow or Security Deposits which it receives into the Clearing
Account A for the Asset in connection with which such Mortgaged Property Gross
Cash Flow or Security Deposit was generated within one (1) Business Day after
receipt thereof.
(c) Borrower shall notify Administrative Agent (or cause
each Clearing Bank to notify Administrative Agent) contemporaneously with the
making of each deposit into any Clearing Account A under this Section which is
made by Borrower or any agent or Person on behalf of Borrower (other than
deposits made by Tenants or Credit Card Payors directly into Clearing Account
A) of the amount and date of such payment, which notification shall contain a
124
131
breakdown of the amount of Rent, Loss Proceeds and other Mortgaged Property
Gross Cash Flow and Security Deposits included in the deposit. Said
notification shall be accompanied by such supporting documentation as
Administrative Agent may reasonably require. Any deposit made by or on behalf
of Borrower into any Clearing Account A shall be deemed deposited into such
Clearing Account A when the funds in respect of such deposit shall become
available funds.
SECTION 10.4 TRANSFERS TO DEPOSIT ACCOUNT AND CLEARING
ACCOUNT B.
10.4.1 TRANSFERS FROM CLEARING ACCOUNT. (a) Subject to
clauses (b) and (c) below, Borrower shall cause the Clearing Bank to transfer,
on a daily basis by wire transfer or via the automated clearing house ("ACH")
system, amounts constituting available funds on deposit in Clearing Account A
in excess of $1,000 to the Deposit Account (the "MINIMUM BALANCE").
Simultaneously with any transfer to the Deposit Bank pursuant to this Section
10.4.1, the Clearing Bank shall send to the Deposit Bank, Administrative Agent
or its designee, and Borrower, via telecopy, a wire transfer or ACH system
advice setting forth the amount transferred.
(b) Prior to the Optional Prepayment Date, if no Cash
Trap Event shall have occurred or if (i) a Cash Trap Event shall have occurred
and (ii) the Cash Trap Period shall have expired or been terminated or waived
by Lenders and Administrative Agent in their sole discretion, then
Administrative Agent shall (subject to Administrative Agent again being
permitted to cause transfers from Clearing Account A to the Deposit Account
pursuant to Section 10.4.1, if a Cash Trap Event shall have occurred) cause
each Clearing Bank to distribute on a daily basis by wire transfer or via the
ACH system, any amounts constituting available funds on deposit in each
Clearing Account A (which do not constitute Loss Proceeds, Material Security
Deposits or Rent paid more than one month in advance) to Clearing Account B.
(c) Prior to the Optional Prepayment Date, if a Cash Trap
Event shall have occurred and the Cash Trap Period shall not have expired or
been terminated by the Lenders and Administrative Agent in their sole
discretion, then provided no Event of Default has occurred and is continuing
and sufficient funds (which do not constitute Loss Proceeds, Material Security
Deposits or Rent paid more than one month in advance) have been transferred to
the Deposit Account during the applicable Collection Period to distribute and
pay the amounts set forth in Section 10.9.1(a)(i)- (vi) on the next occurring
Distribution Date, Administrative Agent shall, subject to Section 10.9.3 and
10.12 hereof cause each Clearing Bank to distribute on a daily basis by wire
transfer or via the ACH system any additional amounts constituting available
funds on deposit in each Clearing Account A during the remainder of the
applicable Collection Period (which do not constitute Loss Proceeds, Material
Security Deposits, or Rent paid more than one month in advance) to Clearing
Account B.
(d) Borrower shall notify the Clearing Bank if any funds
deposited in Clearing Account A constitute Loss Proceeds, Material Security
Deposits or Rent paid more than one
125
132
month in advance, in sufficient time for the Clearing Bank to transfer such
funds to the Deposit Account. If any funds constituting Loss Proceeds,
Material Security Deposits or Rent paid more than one month in advance are
transferred to Clearing Account B, Borrower shall immediately transfer such
funds to the Deposit Account.
10.4.2 INSUFFICIENT FUNDS IN THE DEPOSIT ACCOUNT. Except as
otherwise expressly provided in this Agreement, all payments from time to time
in respect of the Loan (to the extent not independently funded by Mortgaged
Property Gross Cash Flow deposited into a Clearing Account A) and all
prepayments and other amounts paid by Borrower hereunder (other than fees and
expenses paid on the Closing Date) shall be remitted by Borrower to
Administrative Agent for deposit into the Deposit Account. The obligations of
Borrower under this Agreement and the other Loan Documents to pay principal and
interest and the other costs, expenses, charges, fees and payments payable
under this Agreement and the other Loan Documents, including, without
limitation, funding of the Tax and Insurance Escrow Subaccount and the
Replacement Reserve Subaccount and the Ground Rent Subaccount as required in
Sections 7.3, 7.4 and 7.6 is not limited to the amount of Mortgaged Property
Gross Cash Flow deposited into the Deposit Account, if any, and available for
the purpose of paying such amounts. In the event that the amounts available in
the Deposit Account for the payment of principal and interest or such other
costs, expenses, charges, fees or payments to be paid therefrom, or the amounts
allocated to the Subaccounts for the payment of costs, expenses, charges, fees
or payments to be paid therefrom, are not sufficient to permit the same to be
paid as and when due, then prior to the Disbursement Date immediately preceding
such due date (or in the case of Debt Service, on or prior to such date),
Borrower shall deposit into the Deposit Account such additional funds as may be
required in order to permit the timely payment of all such items (such deposits
being herein called "BORROWER CONTRIBUTION DEPOSITS"). Borrower's ignorance of
the amounts in Clearing Account A, the Deposit Account or any Subaccount
available for the purpose of making the required payments therefrom shall not
be a defense to the failure of Borrower to timely make Borrower Contribution
Deposits as required pursuant to the preceding sentence.
SECTION 10.5 INITIAL DEPOSITS INTO THE SUBACCOUNTS.
On or prior to the Closing Date, Borrower will deposit or will
cause to be deposited into the Deposit Account for allocation to the
Subaccounts the amounts set forth in the settlement statement which was
executed in connection with the Loan and as more particularly set forth on
Schedule I attached hereto.
SECTION 10.6 PLEDGE OF ACCOUNTS; EVENT OF DEFAULT.
As additional security for the payment of all sums due under
the Loan and the performance of all other terms, conditions and covenants of
this Agreement and the other Loan Documents on Borrower's part to be paid and
performed, Borrower hereby pledges, assigns and
126
133
grants to the Secured Parties a continuing perfected security interest in and
to and a first lien upon: (a) the Deposit Account (including each Subaccount)
and each Clearing Account A and all of the Borrower's right, title and interest
in and to all cash, property or rights transferred to or deposited into the
Deposit Account and each Clearing Account A from time to time by or on behalf
of Borrower in accordance with the provisions of this Agreement, (b) all
earnings, investments and securities held in the Deposit Account, and (c) any
and all proceeds of the foregoing (subject to the rights of Tenants whose
Security Deposits were allocated to the Security Deposit Subaccount). Borrower
further agrees to execute, acknowledge, deliver, file or do, at its sole cost
and expense, all other acts, assignments, notices, agreements and other
instruments as Administrative Agent may reasonably require in order to
effectuate, assure, convey, secure, assign and transfer unto Administrative
Agent any of the rights granted by this Section. Borrower shall not further
pledge, assign or grant a security interest in the Deposit Account, any
Subaccount or any Clearing Account A or permit any other Lien to attach thereto
or any levy to be made thereon, or any UCC-1 Financing Statement (except those
naming Administrative Agent as secured party) to be filed with respect thereto.
SECTION 10.7 INVESTMENT OF ACCOUNT FUNDS.
(a) So long as no Event of Default has occurred, all or a
portion of the funds deposited in the Deposit Account shall be invested and
reinvested by Administrative Agent pursuant to written instructions from
Borrower in one or more Eligible Investments; provided, however, that such
funds shall be invested in Eligible Investments in a manner that will permit
Administrative Agent to meet the payment obligations hereunder and any such
direction from Borrower shall contain a certification from Borrower (which may
be conclusively relied upon by Administrative Agent) that any such investments
constitute Eligible Investments. In the absence of any instructions from
Borrower or after the occurrence of an Event of Default, the funds deposited in
the Deposit Account shall be invested and reinvested by Administrative Agent in
securities or obligations described in clause (a) under the definition of
Eligible Investments and, in the case of an Event of Default, Borrower shall
have no authority to direct the investment of such funds. Funds deposited in
any Clearing Account A shall not be invested without Administrative Agent's
consent, which consent shall not be unreasonably withheld provided such
investment (x) is an Eligible Investment and (ii) shall mature on or prior to
the Business Day immediately following the investment of such funds.
(b) All interest, income, earnings or other gain from
investment of the funds deposited in the Deposit Account shall be credited to
the Deposit Account, net of any service charges to the Deposit Account, and any
loss resulting from such investments shall be charged to the Deposit Account.
Borrower shall include and report such interest, income, earnings and other
gain in its income for Federal, state and local income and franchise tax
purposes. Administrative Agent shall not be responsible for any losses with
respect to any investment in Eligible Investments of the funds deposited in the
Deposit Account or for any losses resulting from early withdrawal thereof under
Section 10.7(c) even if such investments in Eligible
127
134
Investments were made at the direction of Administrative Agent, and Borrower
shall bear the risk of all losses with respect to any such investments in
Eligible Investments (including any loss resulting from early withdrawal
thereof under Section 10.7(c)).
(c) Administrative Agent is hereby authorized and
empowered at any time and from time to time, without notice to Borrower or any
other Person, to cause any such investments to be sold or converted to cash in
order to make the disbursements required to be made from the Deposit Account
(and each Subaccount) in accordance with the terms of this Agreement, whether
or not at the time of such sale or conversion, such investments shall have
matured.
SECTION 10.8 REQUISITIONS.
10.8.1 SUBMISSION OF REQUISITIONS. If a Cash Trap Event
shall have occurred and the Cash Trap Period shall not have expired or been
terminated by the Requisite Lenders and Administrative Agent in their sole
discretion, no later than five (5) Business Days prior to the first day of each
Collection Period occurring after such Cash Trap Event, Borrower will submit to
Administrative Agent a Requisition for all Operating Expenses (each, a
"REQUISITION") that Borrower reasonably anticipates will be payable in respect
of each Asset during the following Collection Period.
10.8.2 CONTENT OF REQUISITIONS. No Requisition shall request
payment of amounts which were requested and paid in a previous Collection
Period (or otherwise previously paid by Borrower). Each Requisition shall be
accompanied by such supporting documentation as Administrative Agent may
reasonably require. Each Requisition shall also contain a certification
executed by Borrower confirming that Borrower has expended all amounts released
to it under the previous month's Requisition in the manner contemplated by such
Requisition (or listing any variances), and such certification shall specify
that portion, if any, of the aggregate amount of the prior month's Requisition
that was not expended by Borrower (the "UNUSED REQUISITION AMOUNT"). In
addition, each Requisition shall contain a certification confirming which
amounts requested are, or are not, budgeted in the current Approved Annual
Operating Budget. Each Requisition, commencing with the Requisition for the
calendar month following the Optional Prepayment Date and each Requisition
thereafter (each a "POST OPTIONAL PREPAYMENT DATE REQUISITION"), must be
approved by Administrative Agent. To the extent that the amount requested in a
Requisition is budgeted in the current Approved Annual Operating Budget for an
Asset, or is not in excess of one hundred and five percent (105%) of the
budgeted amount, such amount shall be deemed to be approved by Administrative
Agent. All other amounts requested in any Post Optional Prepayment Date
Requisition must be approved by the Requisite Lenders and Administrative Agent
in their sole discretion.
128
135
SECTION 10.9 DISBURSEMENTS FROM THE DEPOSIT ACCOUNT.
10.9.1 PRIOR TO THE OPTIONAL PREPAYMENT DATE. (a) From time
to time during each Collection Period (but not less than once during any two
week period) which is prior to the Optional Prepayment Date, Administrative
Agent shall, subject to Sections 10.9.3 and 10.12, cause the Deposit Bank to
distribute the amounts then held as collected funds in the Deposit Account
(other than (A) Loss Proceeds which shall be allocated to the Loss Proceeds
Subaccount, (B) Security Deposits which shall be allocated to the Security
Deposit Subaccount and (C) any Rent which is paid for more than one month in
advance, which shall be retained in the Deposit Account until payment thereof
is due under the applicable Tenant Lease) in the following order of priority
satisfying in full, to the extent required and possible, each priority before
making any distribution with respect to any succeeding priority:
(i) First, with respect to any Asset which is a
Leasehold Estate, to the funding of the Ground Rent Subaccount, in an
amount required to be paid to Administrative Agent pursuant to Section
7.6 hereof with respect to Ground Rent;
(ii) Second, to the funding of the Tax and
Insurance Escrow Subaccount, in the amount required to be paid to
Administrative Agent pursuant to Section 7.3 hereof with respect to
Taxes and Insurance Premiums;
(iii) Third, to the funding of the Monthly Debt
Service Subaccount, in payment of the monthly installment due under
the Note in an amount equal to the Monthly Debt Service Payment Amount
as set forth in the Note (to be applied first to the payment of
interest computed at the Initial Interest Rate with the remainder of
the Monthly Debt Service Amount applied to reduction of the
outstanding principal balance of the Notes);
(iv) Fourth, to the Monthly Debt Service
Subaccount, in payment of all other amounts then due and owing to
Lenders under the terms of this Agreement or any of the other Loan
Documents, including, without limitation, any amounts payable by
Borrower in connection with a Securitization pursuant to Sections 9.1
and 9.3 hereof;
(v) Fifth, to the funding of the Replacement
Reserve Subaccount, in the amount required to be paid to
Administrative Agent pursuant to Section 7.4 hereof;
(vi) Sixth [INTENTIONALLY DELETED];
(vii) Seventh, if a Cash Trap Event shall have
occurred and the Cash Trap Period shall not have expired (or been
terminated by Administrative Agent in the sole discretion of
Administrative Agent and Lenders), to the Borrower Remainder
Subaccount, in the amount equal to the Operating Expenses (including
any Management
129
136
Fee) set forth in the Requisition submitted during the immediately
preceding Collection Period (but excluding any amounts in the
Requisition which are to be paid pursuant to any other clause in this
Section 9.9.1(a)); provided, however, that if there is an outstanding
Unused Requisition Amount with respect to prior Requisitions, then the
amount to be released to the Borrower Remainder Subaccount under this
clause (vii) shall be reduced by an amount equal to such Unused
Requisition Amount; and
(viii) Eighth, the balance, if any, to the Borrower
Remainder Subaccount.
(b) Borrower will apply all amounts paid to Borrower
pursuant to Section 10.9.1(a)(vii) only for the purposes set forth in the
Requisition applicable thereto.
10.9.2 AFTER THE OPTIONAL PREPAYMENT DATE. (a) In the event
that Borrower does not prepay the entire Debt on the Optional Prepayment Date
and provided no Event of Default shall have occurred, then from time to time
(but not less than once during any two week period) during each Collection
Period which is after the Optional Prepayment Date, Administrative Agent shall,
subject to Section 10.12, cause the Deposit Bank to distribute the amounts then
held as collected funds in the Deposit Account (other than (A) Loss Proceeds
which shall be allocated to the Loss Proceeds Subaccount, (B) Security Deposits
which shall be allocated to the Security Deposit Subaccount, and (C) any Rent
which is paid for more than one month in advance, which shall be retained in
the Deposit Account until payment thereof is due under the applicable Tenant
Lease) in the following order of priority satisfying in full, to the extent
required and possible, each priority before making any distribution with
respect to any succeeding priority:
(i) First, with respect to any Asset which is a
Leasehold Estate, to the funding of the Ground Rent Subaccount in an
amount required to be paid to Administrative Agent pursuant to Section
7.6 hereof with respect to Ground Rent;
(ii) Second, to the funding of the Tax and
Insurance Escrow Subaccount, the amount required to be paid to
Administrative Agent pursuant to Section 7.3 hereof with respect to
Taxes and Insurance Premiums;
(iii) Third, to the funding of the Monthly Debt
Service Subaccount, in payment of the monthly installment due under
the Notes in an amount equal to the Monthly Debt Service Payment
Amount as set forth in the Notes (to be applied first to the payment
of interest computed at the Initial Interest Rate with the remainder
of the Monthly Debt Service Payment Amount applied to reduction of the
outstanding principal balance of the Notes);
130
137
(iv) Fourth, to the Borrower Remainder Subaccount,
in an amount equal to the Operating Expenses (excluding any Management
Fees) set forth in the Post Optional Prepayment Date Requisition
submitted during the preceding Collection Period (but excluding any
amounts which are to be paid pursuant to any other clause in this
Section 10.9.2(a)), but only to the extent that such Operating
Expenses have been approved by Administrative Agent as provided in
Section 10.8.2; provided, however, that if there is an outstanding
Unused Requisition Amount with respect to prior Requisitions, then the
amount to be released to the Borrower Remainder Subaccount under this
clause (iv) shall be reduced by an amount equal to such Unused
Requisition Amount;
(v) Fifth, to the funding of the Replacement
Reserve Subaccount, the amount required to be paid to Administrative
Agent pursuant to Section 7.4 hereof;
(vi) Sixth [INTENTIONALLY DELETED];
(vii) Seventh, to the Borrower Remainder
Subaccount, in an amount equal to Management Fees set forth in the
Post Optional Prepayment Date Requisition submitted during the
preceding Collection Period, to the extent approved by Administrative
Agent as provided in Section 10.8.2 hereof;
(viii) Eighth, to the Monthly Debt Service
Subaccount, in payment of the outstanding principal balance of the
Note until the Notes have been paid in full;
(ix) Ninth, to Administrative Agent and Lenders,
in payment of any other amounts due and unpaid to Administrative Agent
and Lenders under the Loan Documents;
(x) Tenth, to Lenders, in payment of any
outstanding and unpaid Accrued Interest; and
(xi) Eleventh, the balance, if any, to the
Borrower Remainder Subaccount.
(b) Administrative Agent and Borrower shall cause the
Lock-Box Agreements executed in connection with the Loan to be revised and
amended, if necessary, to comply with the preceding order and priority.
Nonpayment of the Accrued Interest in monthly installments as provided above as
a result of insufficient Mortgaged Property Gross Cash Flow shall not be a
Default. Nonpayment of all or any part of the amounts set forth in clauses (i)
through (viii) as a result of insufficient Mortgaged Property Gross Cash Flow
shall be an Event of Default.
131
138
(c) Borrower will apply all amounts paid to Borrower
pursuant to Section 10.9.2(a)(iv) only for the purposes set forth in the Post
Optional Prepayment Date Requisition applicable thereto.
10.9.3 UPON EVENT OF DEFAULT. Upon the occurrence of any
Event of Default, Administrative Agent may (or if directed by the Requisite
Lenders, shall) apply sums then present in the Deposit Account or any
Subaccount thereof and all sums thereafter deposited into the Deposit Account
(other than Security Deposits to the extent any Tenant may have a right to the
return of such Security Deposit) to the payment of the Debt, completion of the
Property Required Repairs, Taxes and Other Charges, Insurance Premiums and all
other sums payable pursuant to this Agreement and the other Loan Documents in
such order, proportion and priority as the Requisite Lenders and Administrative
Agent may determine in their sole discretion, except that Administrative Agent
shall apply funds (if any) on deposit in the Ground Rent Subaccount for payment
of due and unpaid Ground Rent prior to application for any other purpose.
Administrative Agent's right to withdraw and apply amounts in the Deposit
Account shall be in addition to all other rights and remedies provided under
this Agreement, the other Loan Documents, and at law or in equity.
SECTION 10.10 DISBURSEMENTS FROM CERTAIN SUBACCOUNTS.
10.10.1 DISBURSEMENTS FROM THE TAX AND INSURANCE ESCROW
SUBACCOUNT. Except as otherwise provided herein, Administrative Agent shall
cause the funds in the Tax and Insurance Escrow Subaccount to be disbursed by
the Deposit Bank in accordance with the terms of Section 7.3.
10.10.2 DISBURSEMENTS FROM THE REPLACEMENT RESERVE
SUBACCOUNT. Except as otherwise provided herein, Administrative Agent shall
cause funds in the Replacement Reserve Subaccount to be disbursed by the
Deposit Bank in accordance with the terms of Section 7.4.
10.10.3 DISBURSEMENTS FROM THE SECURITY DEPOSIT SUBACCOUNT.
In the event that Borrower receives a request from any Tenant (or the holder of
a reservation of Function Space) for a disbursement from the Security Deposit
Subaccount of all or any portion of such Tenant's (or such holder of a
reservation of Function Space) Security Deposit, Borrower shall immediately
give Administrative Agent written notice of such request. Upon receipt of such
notice by Administrative Agent, Administrative Agent shall review the same and
shall approve or disapprove such request in its reasonable discretion within
ten (10) Business Days after receipt of such notice from Borrower. In the
event that Administrative Agent approves a disbursement of all or any portion
of the funds in the Security Deposit Subaccount, Administrative Agent shall
cause the Deposit Bank to disburse such funds: (x) if payable to Borrower, into
Clearing Account B (provided, if a Cash Trap Period exists such funds shall be
retained in the Deposit Account but released from the Security Deposit
Subaccount and allocated in the same manner as Rent in accordance with Section
10.9.1 and 10.9.2, as applicable); or (y) if payable to any
132
139
Person other than Borrower, at the time and in the manner specified by
Borrower. Notwithstanding the foregoing, nothing contained in this Section
10.10.3 shall be deemed to impose upon Administrative Agent any obligation to
perform or discharge any obligation of Borrower as landlord under any of the
Tenant Leases or in connection with any Function Space. In the event the funds
in the Security Deposit Subaccount are insufficient at any time to permit
disbursement of the full amount requested by a Tenant (or the holder of a
reservation of Function Space) and approved by Administrative Agent,
Administrative Agent shall cause the disbursement of such funds as are
available in the Security Deposit Subaccount or may, in its sole discretion and
subject to applicable law, refuse to cause the disbursement of any funds from
the Security Deposit Subaccount until there exist sufficient funds to pay the
full amount requested. Under no circumstances shall Administrative Agent be
obligated under this Section 10.10.3 to disburse or cause the disbursement of
any funds with respect to Security Deposits other than those on deposit in the
Security Deposit Subaccount.
10.10.4 DISBURSEMENTS FROM THE LOSS PROCEEDS SUBACCOUNT.
Except as otherwise provided herein, Administrative Agent shall cause funds in
the Loss Proceeds Subaccount to be disbursed by the Deposit Bank in accordance
with the terms of Section 7.1.
10.10.5 DISBURSEMENTS FROM THE REQUIRED REPAIR SUBACCOUNT.
Except as otherwise provided herein, Administrative Agent shall cause funds in
the Required Repair Subaccount to be disbursed by the Deposit Bank pursuant to
the terms of Section 7.2.
10.10.6 DISBURSEMENTS FROM THE BORROWER REMAINDER SUBACCOUNT.
Except as otherwise provided herein, Administrative Agent shall cause the funds
in the Borrower Remainder Subaccount to be disbursed at least once each week by
wire transfer or via the ACH System to the Clearing Bank for deposit into
Clearing Account B.
10.10.7 DISBURSEMENTS FROM THE MONTHLY DEBT SERVICE
SUBACCOUNT. Administrative Agent shall cause the funds in the Monthly Debt
Service Subaccount to be disbursed to Lenders or their designee on the
Disbursement Date occurring immediately following the relevant Collection
Period.
10.10.8 INTENTIONALLY DELETED
10.10.9 DISBURSEMENTS FROM THE GROUND RENT SUBACCOUNT.
Except as otherwise provided herein, Administrative Agent shall cause funds in
the Ground Rent Subaccount to be disbursed by the Deposit Bank in accordance
with the terms of Section 7.6.
10.10.10 INTENTIONALLY DELETED
133
140
SECTION 10.11 LOCK-BOX AGREEMENTS.
Borrower represents, warrants and covenants that it shall
execute and comply with those certain Clearing Account Agreements (the
"CLEARING AGREEMENTS"), each dated on or about the Closing Date and that
certain Deposit Account Agreement (the "DEPOSIT AGREEMENT"), dated as of the
date hereof among Borrower, Administrative Agent and Lenders and various
financial institutions (the Clearing Agreements and the Deposit Agreement and
any modifications, amendments, replacements or substitutions thereof are
hereinafter collectively referred to as the "LOCK-BOX AGREEMENTS"). Borrower
shall pay all costs and expenses required under the Lock-Box Agreements.
SECTION 10.12 REQUIRED RATIO.
From and after the date of the Notes through but not including
the Maturity Date, Borrower shall achieve, and within forty-five (45) days of
the end of each calendar quarter (the "DSCR DETERMINATION DATE") provide
evidence to Administrative Agent of the achievement for the Property of, a Debt
Service Coverage Ratio of not less than 1.15 to 1.0 for the twelve (12) full
calendar months immediately preceding the end of such calendar quarter. If at
any time such ratio (the "REQUIRED RATIO") is not maintained and a Cash Trap
Period exists (or occurs at any time prior to the next DSCR Determination
Date), the Requisite Lenders and Administrative Agent, in their sole
discretion, shall have the right to retain all Mortgaged Property Gross Cash
Flow which would otherwise be payable to the Borrower Remainder Subaccount
pursuant to Section 10.9.1(a)(viii) (or Section 10.9.2(a)(xi), if applicable)
in that month and each succeeding calendar month in the Deposit Account (for
payment of the amounts described in Sections 10.9.1(a)(i), (ii), (iii), (iv),
(v), (vi) and (vii) (or, in the case where Section 10.9.2 is applicable,
Sections 10.9.2(a)(i), (ii), (iii), (iv), (v), (vi), (vii), (viii) and (ix)) in
the order of priority therein set forth until the Required Ratio is achieved as
of any subsequent DSCR Determination Date for the twelve (12) full calendar
months preceding the end of such subsequent calendar quarter. If the Required
Ratio is achieved as of any one DSCR Determination Date, then subject to
Administration Agent being again permitted to retain such Mortgaged Property
Gross Cash Flow in the Deposit Account in accordance with the immediately
preceding sentence, any Mortgaged Property Gross Cash Flow retained in the
Deposit Account pursuant to the immediately preceding sentence and not
theretofore used to satisfy Borrower's obligations set forth in Sections
10.9.1(a)(i), (ii), (iii), (iv), (v), (vi) or (vii) (or, in the case where
Section 10.9.2 is applicable, Sections 10.9.2(a)(i), (ii), (iii), (iv), (v),
(vi), (vii), (viii), (ix) or (x)) shall be applied to items set forth in
Section 10.9.1(a) (or Section 10.9.2(a), if applicable) in the order of
priority therein set forth. All calculations of the Debt Service Coverage
Ratio shall be subject to verification by Administrative Agent.
134
141
XI. MISCELLANEOUS
SECTION 11.1 SURVIVAL.
This Agreement and all covenants, agreements, representations
and warranties made herein and in the certificates delivered pursuant hereto
shall survive the making by Lenders of the Loan and the execution and delivery
to Lenders of the Notes, and shall continue in full force and effect so long as
all or any of the Debt is outstanding and unpaid unless a longer period is
expressly set forth herein or in the other Loan Documents. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on
behalf of Borrower, Parent or any other Loan Party, shall inure to the benefit
of the legal representatives, successors and assigns of Lenders.
SECTION 11.2 INTENTIONALLY DELETED.
SECTION 11.3 GOVERNING LAW.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, AND MADE BY ADMINISTRATIVE AGENT AND EACH LENDER AND ACCEPTED BY BORROWER
AND PARENT IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED
PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD
TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE ASSET IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH
STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY
AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND
PARENT, EACH HEREBY
135
142
UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND THIS AGREEMENT AND
THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST
ADMINISTRATIVE AGENT, LENDERS, BORROWER OR ANY OTHER LOAN PARTY ARISING OUT OF
OR RELATING TO THIS AGREEMENT MAY AT ADMINISTRATIVE AGENT'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX
XXXX, AND BORROWER AND PARENT EACH WAIVE ANY OBJECTIONS WHICH THEY,
INDIVIDUALLY OR COLLECTIVELY, MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR
FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER AND
PARENT EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUIT, ACTION OR PROCEEDING. BORROWER AND PARENT DO HEREBY DESIGNATE AND
APPOINT THE CORPORATION SERVICE COMPANY AT 000 XXXXXX XXXXXX, XXX XXXX, XXX
XXXX 00000, AS EACH OF THEIR AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS
BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND
AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER, OR PARENT, AS
APPROPRIATE, IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER OR PARENT, AS APPROPRIATE, IN ANY
SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER AND PARENT
EACH (I) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT OF ANY CHANGED
ADDRESS OF THEIR AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME
TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW
YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND
ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW
YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
SECTION 11.4 AMENDMENTS; WAIVERS.
11.4.1 No amendment, modification, termination or waiver of
any provision of this Agreement or of the Notes, and no consent to any
departure by Borrower therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders; provided that (i) no
136
143
such amendment, modification, termination, waiver or consent shall be effective
without the written concurrence of all Lenders if such amendment, modification,
termination, waiver or consent (1) increases the amount of any of the
Commitments or reduces the principal amount of the Loan; (2) changes in any
manner the definition of "Pro Rata Share" or the definition of "Requisite
Lenders"; (3) changes in any manner any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of a specified
percentage of Lenders; (4) postpones the scheduled final maturity date of the
Loan; (5) postpones the date on which any interest or any fees are payable;
decreases the interest rate borne by the Loan or the amount of any fees payable
hereunder; (6) releases any Lien granted in favor of Administrative Agent with
respect to a material portion of the Collateral, except as specifically
provided herein; (7) releases Parent or any other Loan Party from its
obligations under the Affiliate Guaranty, other than in accordance with the
terms of the Loan Documents; or (8) changes in any manner the provisions
contained in this Section 11.4, 11.13 or 11.18(c), (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of
that Note; and (iii) no amendment, modification, termination or waiver of any
provision of Article 12 or of any other provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of the Administrative
Agent shall be effective without the written concurrence of the Administrative
Agent. The Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrower in any case shall Borrower to any
other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this Section 11.4 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Borrower, on Borrower.
11.4.2 If the Administrative Agent notifies any Lender that
one or more requirements set forth in Section 3.1 hereof will not be satisfied,
or that performance of all or any part of such requirement will be deferred,
and, subsequent to such notification, such Lender delivers (or continues to
authorize delivery of) its signature page hereto, then such Lender shall be
deemed to have waived (subject to any conditions set forth in the applicable
notice) such requirement as a condition precedent to the effectiveness of the
Commitments.
SECTION 11.5 DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of
Administrative Agent and Lenders in insisting upon strict performance of any
term, condition, covenant or agreement, or exercising any right, power, remedy
or privilege hereunder, or under the Notes or under any other Loan Document, or
any other instrument given as security therefor, shall operate as or constitute
a waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of
137
144
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Notes or any other Loan Document, Administrative Agent and
Lenders shall not be deemed to have waived any right either to require prompt
payment when due of all other amounts due under this Agreement, the Notes or
the other Loan Documents, or to declare a default for failure to effect prompt
payment of any such other amount.
SECTION 11.6 NOTICES.
All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
(including by facsimile) and shall be effective for all purposes if hand
delivered or sent by (a) certified or registered United States mail, postage
prepaid, or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, or by facsimile (with
answer back acknowledged), addressed as follows:
If to Borrower: Bristol Lodging Company
00000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: (972)
Facsimile: (972)
with a copy to:
Xxxxxx Xxxxx Xxxx Xxxx & Xxxxx, P.C.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Parent: Bristol Lodging Holding Company
00000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: (972)
Facsimile: (972)
138
145
with a copy to:
Xxxxxx Xxxxx Xxxx Xxxx & Xxxxx, P.C.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Administrative Agent Nomura Asset Capital Corporation
or Nomura Asset Capital Two World Financial Center, Building B
Corporation, as lender: Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx XxXxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Nomura Asset Capital Corporation
Xxx Xxxxx Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx, Esq., General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Co-Agent or Bankers Trust Company
Bankers Trust Company, as lender: 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
139
146
with a copy to:
O'Melveny & Xxxxx, LLP
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Drake S. Tempest, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address and person as shall be designated from time to time by
any party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided for in this Section. A notice shall be deemed to
have been given: in the case of hand delivery, at the time of delivery; in the
case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; or in the case of expedited prepaid delivery and
facsimile, upon the first attempted delivery on a Business Day.
SECTION 11.7 TRIAL BY JURY.
BORROWER AND PARENT EACH HEREBY AGREE NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION
ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND PARENT, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. ADMINISTRATIVE AGENT AND EACH LENDER IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
SECTION 11.8 HEADINGS.
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
SECTION 11.9 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement
140
147
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
SECTION 11.10 PREFERENCES/MARSHALLING PREFERENCES.
Administrative Agent and Lenders shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by
Borrower to any portion of the obligations of Borrower hereunder. To the
extent Borrower makes a payment or payments to Administrative Agent or any
Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party under any bankruptcy
law, state or federal law, common law or equitable cause, then, to the extent
of such payment or proceeds received, the obligations hereunder or part thereof
intended to be satisfied shall be revived and continue in full force and
effect, as if such payment or proceeds had not been received by Administrative
Agent or such Lender, as the case may be. Neither Administrative Agent nor any
Lenders shall be under any obligation to marshal any assets in favor of
Borrower, any other Loan Party or any other party or against or in payment of
any or all of the Obligations.
SECTION 11.11 WAIVER OF NOTICE.
Borrower and Parent shall not be entitled to any notices of
any nature whatsoever from Administrative Agent except with respect to matters
for which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Administrative Agent to Borrower or Parent,
as appropriate, and except with respect to matters for which Borrower or Parent
is not, pursuant to applicable Legal Requirements, permitted to waive the
giving of notice. Borrower and Parent each hereby expressly waive the right to
receive any notice from Administrative Agent with respect to any matter for
which this Agreement or the other Loan Documents do not specifically and
expressly provide for the giving of notice by Administrative Agent to Borrower
or Parent, as appropriate.
SECTION 11.12 REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that
Administrative Agent or its agents have acted unreasonably or unreasonably
delayed acting in any case where, by law or under this Agreement or the other
Loan Documents, Administrative Agent or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower and Parent each agree that
neither Administrative Agent nor its agents shall be liable for any monetary
damages (including without limitation consequential or punitive damages), and
Borrower's or Parent's sole remedies shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. The parties hereto agree
that any action or proceeding to determine whether
141
148
Administrative Agent has acted reasonably shall be determined by an action
seeking declaratory judgment.
SECTION 11.13 EXPENSES; INDEMNIFICATION.
(a) Borrower covenants and agrees to pay, or if Borrower fails
to pay to reimburse, Administrative Agent upon receipt of written notice from
Administrative Agent for all reasonable out-of-pocket costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by
Administrative Agent and Lenders in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower or
any other Loan Party (including, without limitation, any opinions requested by
Administrative Agent and Lenders as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Property or any other
Collateral); (ii) Borrower's or any other Loan Party's ongoing performance of
and compliance with Borrower's or such Loan Party's respective agreements and
covenants contained in this Agreement and the other Loan Documents on its part
to be performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance
requirements; (iii) Administrative Agent's ongoing performance and compliance
with all agreements and conditions contained in this Agreement and the other
Loan Documents on its part to be performed or complied with after the Closing
Date; (iv) the negotiation, preparation, execution, delivery and administration
of any consents, amendments, waivers or other modifications to this Agreement
and the other Loan Documents and any other documents or matters requested by
Administrative Agent; (v) securing Borrower's or any other Loan Party's
compliance with any requests made pursuant to Section 9.1 hereof (subject to
the limitations contained in such Section); (vi) the filing and recording of
the Loan Documents, title insurance and reasonable fees and expenses of counsel
for providing to Lenders all required legal opinions, and other similar
expenses incurred in creating and perfecting the Liens in favor of
Administrative Agent's pursuant to this Agreement and the other Loan Documents;
(vii) enforcing or preserving any rights, in response to third party claims or
the prosecuting or defending of any action or proceeding or other litigation,
in each case against, under or affecting Borrower, any other Loan Party, this
Agreement, the other Loan Documents, the Property, any other Collateral, or any
other security given for the Loan; and (viii) enforcing any obligations of or
collecting any payments due from Borrower or any other Loan Party under this
Agreement, the other Loan Documents or with respect to any Asset or other
Collateral or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings; provided, however, that Borrower
shall not be liable for the payment of any such costs and expenses to the
extent the same arise by reason of the bad faith, recklessness or willful
violations of law of Administrative Agent as determined by a court of competent
jurisdiction in a final non-appealable judgment or order. Any cost and
expenses due and payable to Lenders or Administrative Agent may be paid from
any amounts in the Deposit Account.
142
149
(b) Borrower agrees to indemnify and hold harmless
Administrative Agent and Lenders and their respective Affiliates, and the
directors, officers, employees, agents, attorneys, consultants and advisors of
or to any of the foregoing (including, without limitation, those retained in
connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Section 3) (each of the foregoing being an
"INDEMNITEE") from and against any and all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments, suits, costs, disbursements
and expenses of any kind or nature (including, without limitation, fees and
disbursements of counsel to any such Indemnitee and experts, engineers and
consultants and the costs of investigation and feasibility studies) which may
be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto, whether direct,
indirect, or consequential and whether based on any federal, state or local law
or other statutory regulation, securities or commercial law or regulation, or
under common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of or based upon or attributable to this Agreement,
any other Loan Document, any document delivered hereunder or thereunder, any
Obligation, or any act, event or transaction related or attendant to any
thereof, including, without limitation, (i) arising from any breach of
Borrower's obligations under Section 2.2 or any Environmental Claim or any
remedial action arising out of or based upon anything relating to real property
owned or leased by the Borrower or any other Loan Party (collectively, the
"INDEMNIFIED MATTERS"); provided, however, that the Borrower shall not have any
obligation under this Section 11.13(b) to an Indemnitee with respect to any
Indemnified Matter caused by or resulting from the bad faith, recklessness or
willful violations of law of Indemnitee as determined by a court of competent
jurisdiction in a final non-appealable judgment or order.
(c) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 11.13) or any other Loan Document
shall (i) survive payment of the Obligations and (ii) inure to the benefit of
any Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.
SECTION 11.14 EXHIBITS AND SCHEDULES INCORPORATED.
The exhibits and schedules annexed hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.
SECTION 11.15 SETOFF.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default the
Administrative Agent and each Lender (provided that no Lender shall exercise
any right under this Section 11.15 without the prior written consent of the
Administrative Agent) is hereby authorized by Borrower at any time or from time
to time,
143
150
without notice to Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other indebtedness at any time held or owing by the Administrative Agent to
or for the credit or the account of Borrower against and on account of the
obligations and liabilities of Borrower to the Administrative Agent under this
Agreement and the Notes, including all claims of any nature or description
arising out of or connected with this Agreement or any other Loan Document,
irrespective of whether or not (i) the Administrative Agent shall have made any
demand hereunder or (ii) the principal of or the interest on the Loan or any
other amounts due hereunder shall have become due and payable pursuant to this
Agreement and although said obligations and liabilities, or any of them, may be
contingent or unmatured.
SECTION 11.16 RATABLE SHARING.
The Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with this Agreement), by realization upon
security, through the exercise of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to that Lender hereunder or under the other Loan Documents (collectively,
the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than the
proportion received by any other Lender in respect of the Aggregate Amounts Due
to such other Lender, then the Lender receiving such proportionately greater
payment shall (i) notify Administrative Agent and each other Lender of the
receipt of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of
a participation simultaneously upon the receipt by such seller of its portion
of such payment) in the Aggregate Amounts Due to the other Lender so that all
such recoveries of Aggregate Amounts Due shall be shared by all Lenders in
proportion to the Aggregate Amounts Due to them; provided, however, that if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Borrower or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Borrower and each Loan Party expressly consents to the foregoing arrangement
and agrees that any holder of a participation so purchased may exercise any and
all rights of banker's lien, set-off or counterclaim with respect to any and
all monies owing by Borrower to that holder with respect thereto as fully as if
that holder were owed the amount of the participation held by that holder.
144
151
SECTION 11.17 OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lenders' interest in and to this Agreement,
the Notes and the other Loan Documents shall take the same free and clear of
all offsets, counterclaims or defenses which are unrelated to such documents
which Borrower or any other Loan Party may otherwise have against any assignor
of such documents, and Borrower shall not and Parent shall not permit any Loan
Party, to interpose or assert any such unrelated counterclaim or defense in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by
Borrower, Parent and each other Loan Party.
SECTION 11.18 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD
PARTY BENEFICIARIES; INDEPENDENT NATURE OF LENDERS' RIGHTS.
(a) Borrower, Parent, Administrative Agent and Lenders
intend that the relationships created hereunder and under the other Loan
Documents be solely that of borrower, agent and lenders. Nothing herein or
therein is intended to create a joint venture, partnership, tenancy-in-common
or joint tenancy relationship between Borrower, Parent, Administrative Agent
and Lenders nor to grant Lenders any interest in the Property other than that
of mortgagee or lender.
(b) This Agreement and the other Loan Documents are
solely for the benefit of Lenders, Administrative Agent, as agent for Lenders,
Borrower and Parent and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lenders,
Administrative Agent, as agent for Lenders, Borrower and Parent (including
without limitation any other Loan Party) any right to insist upon or to enforce
the performance or observance of any of the obligations contained herein or
therein. All conditions to the obligations of Lenders to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lenders and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lenders will refuse
to make the Loan in the absence of strict compliance with any or all thereof
and no other Person shall under any circumstances be deemed to be a beneficiary
of such conditions, any or all of which may be freely waived in whole or in
part by Lenders if, in Lenders' sole discretion, Lenders deem it advisable or
desirable to do so.
(c) The obligations of the Lenders hereunder are several
and no Lender shall be responsible for the obligations or Commitment of any
other Lender hereunder. Nothing contained herein or in any other Loan
Document, and no action taken by the Lenders pursuant hereto or thereto, shall
be deemed to constitute the Lenders as a partnership, an association, a joint
venture or any other kind of entity. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
145
152
SECTION 11.19 PUBLICITY.
All news releases, publicity or advertising by Borrower or its
Affiliates (including any other Loan Party) through any media intended to reach
the general public which refers to the Loan Documents or the financing
evidenced by the Loan Documents or to Lenders, Nomura or any of their
Affiliates shall be subject to the prior written approval of the Requisite
Lenders not to be unreasonably withheld.
SECTION 11.20 WAIVER OF COUNTERCLAIM.
Borrower and Parent each hereby waive the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by Administrative Agent or its agents.
SECTION 11.21 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this
Loan Agreement and any of the other Loan Documents, the provisions of this Loan
Agreement shall control. The parties hereto acknowledge that they were
represented by competent counsel in connection with the negotiation, drafting
and execution of the Loan Documents and that such Loan Documents shall not be
subject to the principle of construing their meaning against the party which
drafted same. Borrower and Parent acknowledge that, with respect to the Loan,
Borrower shall rely solely on their own judgment and advisors in entering into
the Loan without relying in any manner on any statements, representations or
recommendations of Lenders or any parent, subsidiary or Affiliate of Lenders.
Lenders shall not be subject to any limitation whatsoever in the exercise of
any rights or remedies available to it under any of the Loan Documents or any
other agreements or instruments which govern the Loan by virtue of the
ownership by it or any parent, subsidiary or Affiliate of Lenders of any equity
interest any of them may acquire in Borrower, and Borrower hereby irrevocably
waives the right to raise any defense or take any action on the basis of the
foregoing with respect to Lenders' exercise of any such rights or remedies.
Borrower and Parent acknowledge that Lenders engage in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower, Parent or
their Affiliates.
SECTION 11.22 BROKERS AND FINANCIAL ADVISORS.
(a) Borrower and Parent hereby represents that no Loan Party
has dealt with any financial advisors, brokers, underwriters, placement agents,
agents or finders in connection with the transactions contemplated by this
Agreement. Borrower hereby agrees to indemnify and hold Administrative Agent
harmless from and against any and all claims, liabilities, costs and expenses
of any kind in any way relating to or arising from a claim by any Person that
such Person acted on behalf of any Loan Party in connection with the
transactions contemplated
146
153
herein. The provisions of this Section 11.22 shall survive the expiration and
termination of this Agreement and the payment of the Debt.
(b) Lenders hereby represent that Lenders have not dealt with
any financial advisors, brokers, underwriters, placement agents, agents or
finders in connection with the transactions contemplated by this Agreement.
Lenders hereby agree to indemnify and hold Borrower harmless from and against
any and all claims, liabilities, costs and expenses of any kind in any way
relating to or arising from a claim by any Person that such Person acted on
behalf of Lenders in connection with the transactions contemplated herein. The
provisions of this Section 11.22 shall survive the expiration and termination
of this Agreement and the payment of the Debt.
SECTION 11.23 PRIOR AGREEMENTS.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, including, without limitation, the Commitment
Letter dated August 12, 1997 (as same may be amended) between Borrower and
Lenders, are superseded by the terms of this Agreement and the other Loan
Documents.
SECTION 11.24 APPROVALS.
If in any Loan Document Lenders have agreed to not
unreasonably withhold its consent then, promptly after Lenders' denial of any
such consent, Lenders agree to provide Borrower a reasonably detailed statement
of the reasons for such denial.
SECTION 11.25 RELIANCE.
Borrower and Parent acknowledge that its representations,
warranties, covenants and agreements contained in this Agreement and the other
Loan Documents (including without limitation covenants and agreements to pay
Release Prices), are material inducements to Lenders to enter into this
Agreement and to make the Loan, that Lenders have already relied on such
representations, warranties, covenants and agreements in entering into this
Agreement and agreeing to make the Loan (notwithstanding any investigation
heretofore or hereafter made by or on behalf of Lenders), and that Lenders will
continue to rely on such representations, warranties, covenants and agreements
in their future dealings with the Loan Parties. Borrower and Parent agree that
its representations, warranties, covenants and agreements contained in this
Agreement and the other Loan Documents, are reasonable in purpose and scope.
Borrower and Parent represent and warrant that they have reviewed this
Agreement and the other Loan Documents with its legal counsel and that it
knowingly and voluntarily is entering into this Agreement and the other Loan
Documents following consultation with legal counsel.
147
154
SECTION 11.26 COUNTERPARTS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. Delivery of an executed counterpart of a
signature page of this Agreement by telefacsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 11.27 ADMINISTRATIVE AGENT'S DISCRETION; SUCCESSOR
AGENTS.
Whenever pursuant to this Agreement or any other Loan Document
the Administrative Agent exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to the
Administrative Agent, the decision of the Administrative Agent to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of the Administrative Agent. The Borrower acknowledges and
agrees that, notwithstanding anything in this Agreement to the contrary,
certain decisions to be made by the Administrative Agent under, or under
amendments, supplements or other modification to, this Agreement may be subject
to or determined by the further decision by the Lenders or a percentage of the
Lenders. The Borrower acknowledges that, in the event of the resignation or
removal of the Administrative Agent or a successor Administrative Agent
hereunder, a successor Administrative Agent may be appointed by the Lenders and
agrees that such successor Administrative Agent shall succeed to all of the
rights and duties of the Administrative Agent and collateral agent under the
Loan Documents but shall not be liable for any breach of any Loan Document by
any predecessor Administrative Agent.
SECTION 11.28 MAXIMUM AMOUNT. It is expressly stipulated and
agreed to be the intent of Borrower and Lenders at all times to comply with
applicable state law or applicable United States federal law (to the extent
that it permits Lenders to contract for, charge, take, reserve or receive a
greater amount of interest than under state law) and that this paragraph shall
control every other covenant and agreement in this Agreement, each Mortgage and
the other Loan Documents. If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for under
this Agreement, each Mortgage or any of the other Loan Documents or contracted
for, charged, taken, reserved or received with respect to the Debt, or if
Lenders' exercise of the option to accelerate the Maturity Date or any
prepayment by Borrower results in Borrower having paid any interest in excess
of that permitted by applicable law, then it is Borrower's and Lenders' express
intent that all excess amounts theretofore collected by Lenders, shall be
credited on the principal balance of the Notes and all other Debt and the
provisions of this Agreement, each Mortgage and the other Loan Documents
148
155
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder.
All sums paid or agreed to be paid to Lenders, for the use, forbearance or
detention of the Debt shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full stated term of
the Debt until payment in full so that the rate or amount of interest on
account of the Debt does not exceed the maximum lawful rate from time to time
in effect and applicable to the Debt for so long as the Debt is outstanding.
XII. AGENTS
SECTION 12.1 APPOINTMENT OF THE ADMINISTRATIVE AGENT AND
COLLATERAL AGENT.
Nomura Asset Capital Corporation is hereby appointed as the
Administrative Agent and collateral agent hereunder and under the other Loan
Documents and each Lender hereby authorizes the Administrative Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. The Administrative Agent agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 12.1 are solely for the benefit of the
Administrative Agent and the Lenders and no Loan Party shall have any rights as
a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Administrative Agent shall act
solely as an agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or trust with
or for Borrower or any Loan Party.
SECTION 12.2 APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS.
12.2.1 It is the purpose of this Agreement and the other Loan
Documents that there shall be no violation of any law of any jurisdiction
denying or restricting the right of banking corporations or associations to
transact business as agent or trustee in such jurisdiction. It is recognized
that in case of litigation under this Agreement or any of the other Loan
Documents, and in particular in case of the enforcement of any of the Loan
Documents, or in case the Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other Loan Documents
or take any other action which may be desirable or necessary in connection
therewith, it may be necessary that the Administrative Agent appoint an
additional individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co- agent (any such additional individual or
institution being referred to herein individually as a "SUPPLEMENTAL COLLATERAL
AGENT" and collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
149
156
12.2.2 In the event that the Administrative Agent appoints a
Supplemental Collateral Agent with respect to any Collateral, (i) each and
every right, power, privilege or duty expressed or intended by this Agreement
or any of the other Loan Documents to be exercised by or vested in or conveyed
to the Administrative Agent with respect to such Collateral shall be
exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Collateral Agent shall run to and be
enforceable by either the Administrative Agent or such Supplemental Collateral
Agent, and (ii) the provisions of this Section 12 and of Sections 11.13 that
refer to the Administrative Agent shall inure to the benefit of such
Supplemental Collateral Agent and all references therein to the Administrative
Agent shall be deemed to be references to the Administrative Agent and/or such
Supplemental Collateral Agent, as the context may require.
12.2.3 Should any instrument in writing from the Borrower or
any other Loan Party be required by any Supplemental Collateral Agent so
appointed by the Administrative Agent for more fully and certainly vesting in
and confirming to him or it such rights, powers, privileges and duties, the
Borrower shall, or shall cause such Loan Party to, execute, acknowledge and
deliver any and all such instruments promptly upon request by the
Administrative Agent. In case any Supplemental Collateral Agent, or a
successor thereto, shall die, become incapable of acting, resign or be removed,
all the rights, powers, privileges and duties of such Supplemental Collateral
Agent, to the extent permitted by law, shall vest in and be exercised by the
Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
SECTION 12.3 POWERS; DUTIES SPECIFIED.
Each Lender irrevocably authorizes the Administrative Agent to
take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Loan Documents as are specifically
delegated or granted to the Administrative Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. The Administrative Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. The Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees. The
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
150
157
SECTION 12.4 NO RESPONSIBILITY FOR CERTAIN MATTERS.
The Administrative Agent shall not be responsible to any
Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any other Loan Document or
for any representations, warranties, recitals or statements made herein or
therein or made in any written or oral statements or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of Borrower or any Loan Party to the Administrative Agent or any Lender in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of Borrower, any Loan Party or
any other Person liable for the payment of any Obligations, nor shall the
Administrative Agent be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or
agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loan or as to the existence or possible existence of any Event
of Default or Default. Anything contained in this Agreement to the contrary
notwithstanding, the Administrative Agent shall not have any liability arising
from confirmations of the amount of outstanding Loan or the component amounts
thereof.
SECTION 12.5 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers,
directors, employees or agents shall be liable to the Lenders for any action
taken or omitted by the Administrative Agent under or in connection with any of
the Loan Documents except to the extent caused by the Administrative Agent's
gross negligence or willful misconduct. The Administrative Agent shall be
entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection with this Agreement or any of the
other Loan Documents or from the exercise of any power, discretion or authority
vested in it hereunder or thereunder unless and until the Administrative Agent
shall have received instructions in respect thereof from Requisite Lenders (or
such other Lenders as may be required to give such instructions under Section
11.4) and, upon receipt of such instructions from Requisite Lenders (or such
other Lenders, as the case may be), the Administrative Agent shall be entitled
to act or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions. Without
prejudice to the generality of the foregoing, (i) the Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Borrower, Parent and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii)
no Lender shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders (or such other Lenders
as may be required to give such instructions under Section 11.4).
151
158
SECTION 12.6 ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER.
The agency hereby created shall in no way impair or affect any
of the rights and powers of, or impose any duties or obligations upon, the
Administrative Agent in its individual capacity as a Lender hereunder. With
respect to its participation in the Loan, the Administrative Agent shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include the Administrative Agent in
its individual capacity. The Administrative Agent and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of
banking, trust, financial advisory or other business with Borrower or any of
its Affiliates as if it were not performing the duties specified herein, and
may accept fees and other consideration from Parent, Borrower and its
Subsidiaries for services in connection with this Agreement and otherwise
without having to account for the same to Lenders.
SECTION 12.7 INDEPENDENT CREDIT ANALYSIS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower
and each Loan Party in connection with the making of the Loan hereunder and
that it has made and shall continue to make its own appraisal of the
creditworthiness of Borrower and each Loan Party. The Administrative Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, (i) to make any such investigation or any such appraisal on behalf of
the Lenders or (ii) except as provided in Section 12.8 below, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loan or at any time or
times thereafter, and the Administrative Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to any Lender.
SECTION 12.8 DELIVERY OF CERTAIN DOCUMENTS.
The Administrative Agent shall deliver to the Lenders,
reasonably promptly after receipt from the Borrower the financial statements,
certificates and other items delivered pursuant to subsections 5.1(j). In
addition, reasonably promptly after the effectiveness of any written amendment,
waiver or consent in accordance with the provisions of Section 11.4, the
Administrative Agent shall deliver a copy of such amendment, waiver or consent
to each Lender. Upon the request of any Lender, the Administrative Agent shall
deliver, reasonably promptly after receipt from the Borrower, any item required
to be delivered to the Administrative Agent pursuant to this Agreement.
152
159
SECTION 12.9 INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify the Administrative Agent, to the extent that the
Administrative Agent shall not have been reimbursed by the Borrower, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including reasonable counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against the Administrative Agent in
exercising its powers, rights and remedies or performing its duties hereunder
or under the other Loan Documents or otherwise in its capacity as the
Administrative Agent in any way relating to or arising out of this Agreement or
the other Loan Documents. If any indemnity furnished to the Administrative
Agent for any purpose shall, in the opinion of the Administrative Agent, be
insufficient or become impaired, the Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
SECTION 12.10 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign at any time by giving 30
days' prior written notice thereof to Lenders and may be removed by Requisite
Lenders for the Administrative Agent's bad faith, recklessness or willful
misconduct. Upon any such notice of resignation or removal Requisite Lenders
shall have the right, upon five Business Days' notice to Borrower, to appoint a
successor Administrative Agent. Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring or removed
Administrative Agent and the retiring or removed Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Administrative Agent's resignation or removal hereunder as
the Administrative Agent, the provisions of this Section 12.10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
the Administrative Agent under this Agreement.
SECTION 12.11 SECURITY DOCUMENTS.
Each Lender hereby further authorizes the Administrative
Agent, on behalf of and for the benefit of the Lenders, to enter into each
Security Document as secured party, and each Lender agrees to be bound by the
terms of each Security Document; provided that the Administrative Agent shall
not (i) enter into or consent to any written amendment, modification,
termination or waiver of any provision contained in any Security Document, or
(ii) release any Collateral (except as otherwise expressly permitted or
required pursuant to the terms of this Agreement or the applicable Security
Document), in each case without the prior consent of Requisite Lenders (or, if
required pursuant to Section 11.4, all Lenders); provided further, however,
that, without further written consent or authorization from the Lenders, the
153
160
Administrative Agent may execute any documents or instruments necessary to (a)
release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or that is
otherwise required to be released pursuant to this Agreement or to which
Requisite Lenders have otherwise consented. Anything contained in any of the
Loan Documents to the contrary notwithstanding, the Administrative Agent and
each Lender hereby agree that (1) no Lender shall have any right individually
to realize upon any of the Collateral under any Security Document, it being
understood and agreed that all rights and remedies under the Security Documents
may be exercised solely by the Administrative Agent for the benefit of the
Lenders in accordance with the terms thereof, and (2) in the event of a
foreclosure by the Administrative Agent on any of the Collateral pursuant to a
public or private sale, the Administrative Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and the
Administrative Agent, as agent for and representative of the Lenders (but not
any Lender or the Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by the Administrative Agent at such sale.
SECTION 12.12 PAYEE OF NOTE TREATED AS OWNER.
The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor.
154
161
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be duly executed by their duly authorized representatives, all as of the day
and year first above written.
BORROWER: BRISTOL LODGING COMPANY, a
Delaware corporation
By:
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
GUARANTOR: BRISTOL LODGING HOLDING COMPANY,
Delaware corporation
By:
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
162
ADMINISTRATIVE AGENT: NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
-------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
CO-AGENT: BANKERS TRUST COMPANY, a New York banking
corporation
By:
-------------------------------------
Name:
Title:
163
CO-LENDER: NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
-----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
CO-LENDER: BANKERS TRUST COMPANY, a New York banking
corporation
By:
-----------------------------------
Name:
Title:
164
SCHEDULE I
INITIAL DEPOSITS ON THE CLOSING DATE
SUBACCOUNT AMOUNT
Monthly Debt Service Subaccount $0.00
Tax and Insurance Escrow Subaccount $2,132,550.30
Replacement Reserve Subaccount $359,899.00
Required Repair Subaccount $30,000.00
Loss Proceeds Subaccount $0.00
Security Deposit Subaccount $150,000.00
(Function Spare only)
Ground Rent Subaccount $30,215.00
Borrower's Remainder Subaccount $0.00
165
SCHEDULE II
REQUIRED REPAIRS
ASSET ITEM OF REPAIR REQUIRED COMPLETION DATE
166
SCHEDULE III
RENT ROLL
(See Attached)
167
SCHEDULE IV
ALLOCATED LOAN AMOUNT
168
SCHEDULE V
FRANCHISE AGREEMENTS
(See Attached)
169
SCHEDULE VI
LIQUOR LICENSES
(See Attached)
170
SCHEDULE VII
ASSETS
(See Attached)
171
SCHEDULE VIII
Intentionally Deleted
172
SCHEDULE IX
Intentionally Deleted
173
SCHEDULE X
INTENTIONALLY DELETED
174
SCHEDULE XI
IP LICENSE AGREEMENTS
(See Attached)
175
SCHEDULE XII
INTELLECTUAL PROPERTY
(See Attached)
176
SCHEDULE XIII
SUBSIDIARIES
(See Attached)
177
SCHEDULE XIV
TENANT LEASES
(See Attached)
178
SCHEDULE XV
EXISTING DEBT
(See Attached)
179
SCHEDULE XVI
TAXES
(See Attached)
180
SCHEDULE XVII
MORTGAGE CAPS
(See Attached)
181
SCHEDULE XVIII
LENDER'S SHARE
LENDER SHARE
------ -----
1. Nomura Asset Capital Corporation $72,500,000
2. Bankers Trust Company $72,500,000
182
SCHEDULE XIX
PRINCIPAL PLACES OF BUSINESS
(See Attached)
183
SCHEDULE XX
Intentionally Deleted
184
SCHEDULE XXI
PRIOR ASSIGNMENTS OF COLLATERAL
(See Attached)
185
SCHEDULE XXII
ASSETS LOCATED IN FLOOD ZONES
(See Attached)
186
SCHEDULE XXIII
LEASING REQUIREMENTS
To be agreed upon by Administrative Agent and Borrowers subsequent to the
Closing Date.
187
SCHEDULE XXIV
CASUALTIES
(See Attached)
188
SCHEDULE XXV
TAX AND INSURANCE AMOUNTS
(To be delivered post-closing)
189
SCHEDULE XXVI
INSURANCE VARIATIONS
(See Attached)
190
EXHIBIT A
PAYMENT DIRECTION LETTER
[BORROWER]
VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED
[TENANT]
[ADDRESS 1]
[ADDRESS 2]
[ADDRESS 3]
re:
Ladies and Gentlemen:
This is to advise you that the hotel has been transferred to Bristol
Lodging Company, a wholly owned indirect subsidiary of Bristol Hotel Company,
in connection with a refinancing of the hotel by Nomura Asset Capital
Corporation. In order to implement Lender's Cash Management System:
1. From and after the date hereof, all rent and other sums and
charges due by you to us or otherwise payable to the landlord under your lease
(including, without limitation, any security deposit) or as a result of your
occupancy at ___________________ _________________ (whether due in the past,
present or future) should be made payable to Clearing Account A for Nomura
Asset Capital Corporation as Mortgagee of ____________________________ and
sent to the clearing bank, _________________________, at . You should continue
to send all rent and other sums and charges as directed by this letter until you
receive other written instructions from our lender, Nomura Asset Capital
Corporation.
2. _________________________________, the managing agent for your
leased space, will continue to manage your leased space.
191
Should you have any questions concerning this letter, please do not
hesitate to contact the managing agent.
Very truly yours,
Bristol Lodging Company
By:
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
BRISTOL HOTEL ASSET COMPANY
By:
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
192
EXHIBIT B
CREDIT CARD PAYOR PAYMENT DIRECTION LETTER
BRISTOL LODGING COMPANY
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
[CREDIT CARD PAYOR]
[ADDRESS 1]
Dear sir:
This is to advise you that from and after the date hereof, all sums,
charges and receivables payable by you to us, on account of that certain
[INSERT DESCRIPTION OF AGREEMENT BY WHICH PAYMENTS ARE MADE] should be payable
to "Nomura Asset Capital Corporation, as Administrative Agent" at the following
account:
Name: Nomura Asset Capital Corporation as Administrative
Agent for the lenders to Bristol Lodging Company
Account #:__________________________________
ABA #: ___________________________________
By countersigning below you agree to continue to send all sums and other sums
and charges as directed by this letter until you receive other written
instructions from Nomura Asset Capital Corporation.
Should you have any questions concerning this letter, please do not
hesitate to contact [________].
Very truly yours,
BRISTOL LODGING COMPANY,
a Delaware corporation
By:
--------------------------
Name:
Title:
[CREDIT CARD PAYOR]
By:
----------------
Name:
Title:
