EXHIBIT 10.3
LOAN AGREEMENT
dated as of June 16, 1999
among
EQI FINANCING PARTNERSHIP II, L.P.
and
EQI/WV FINANCING PARTNERSHIP, L.P.
as Borrower Parties
and
GMAC COMMERCIAL MORTGAGE CORPORATION
as Lender
LOAN AGREEMENT
This LOAN AGREEMENT is dated as of June 16, 1999 and entered into by
and among EQI FINANCING PARTNERSHIP II, L.P., a Tennessee limited partnership
("EQI"), EQI/WV FINANCING PARTNERSHIP, L.P., a Tennessee limited partnership
("EQI/WV"; and together with EQI, "Borrower"; EQI and EQI/WV are sometimes
referred to herein collectively as "Borrower Parties" and individually as a
"Borrower Party"); and GMAC COMMERCIAL MORTGAGE CORPORATION, a California
corporation (together with its successors and assigns as permitted herein,
"Lender"), with offices at 000 Xxxxxxx Xxxx, X.X. Xxx 0000, Xxxxxxx,
Xxxxxxxxxxxx 00000, Attn: Servicing - Executive Vice President.
WHEREAS, Lender has this day made a loan to Borrower in the original
principal amount of Ninety-Seven Million Twenty Thousand and No/100 Dollars
($97,020,000.00), which loan is evidenced by the Note (as defined below) and is
secured by, among other things, a first mortgage lien granted by Borrower on the
Properties (as defined below).
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower Parties and Lender,
intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Defined Terms.
The terms defined below are used in this Agreement as so defined. Terms
defined in the preamble and recitals to this Agreement are used in this
Agreement as so defined. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Minnesota Mortgage (as defined
below).
"Affiliate" means in relation to any Person, any other Person: (i)
directly or indirectly controlling, controlled by, or under common control with,
the first Person; (ii) directly or indirectly owning or holding five percent
(5%) or more of any equity interest in the first Person; or (iii) five percent
(5%) or more of whose voting stock or other equity interest is directly or
indirectly owned or held by the first Person. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, the Borrower Parties shall
be considered to be Affiliates of each other, irrespective of whether they now
or hereafter satisfy the foregoing criteria. Where the term Affiliate is used
without qualification such as "of Lender" or "of Borrower", the same shall mean
an Affiliate of Borrower. The Borrower Sponsors are Affiliates of Borrower.
"Agreement" means this Loan Agreement (including all schedules,
exhibits, annexes and appendices hereto).
"Allocated Loan Amount" means the amount of the Loan allocated, for
property release purposes, to a particular Property, as such allocated loan sum
for each Property is set forth on Schedule 1.1 -- Allocated Loan Amounts /
Properties. Borrower understands and acknowledges that each Property secures the
entire Loan, and in a foreclosure, bankruptcy or other Loan enforcement setting,
Lender's recovery against a particular Property shall not be limited by, and may
not bear any relationship to, the Allocated Loan Amount.
"Bankruptcy Code" means Title 11 of the United States Code, as amended
from time to time, and all rules and regulations promulgated thereunder.
"Borrower Parties" is defined in the first paragraph of this Agreement.
"Borrower Sponsors" means, collectively, Equity Inns Partnership, L.P.,
a Tennessee limited partnership, Equity Inns, Inc., a Tennessee corporation, and
Equity Inns Trust, a Maryland Trust.
"Borrower Party Secretary" has the meaning set forth in Section 3.1.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the Commonwealth of Pennsylvania or
State of New York or is a day on which banking institutions located in either of
such states is closed.
"Capital Lease" means any lease of any property (whether real, personal
or mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.
"Closing" means the funding of the Loan contemplated by this Agreement.
"Closing Certificate" has the meaning set forth in Section 3.1.
"Closing Date" means the date on which the Closing occurs.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (A) with respect to
any indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent of the Person incurring such liability, or the primary effect
thereof, is to provide assurance to the obligee of such liability that such
liability will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such liability will be protected
(in whole or in part) against loss with respect thereto; (B) with respect to any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (C) under any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates; or (D) under any foreign exchange contract, currency swap agreement or
other similar agreement or arrangement designed to protect that Person against
fluctuations in currency values. Contingent Obligations shall include (i) the
direct or indirect guaranty, endorsement (other than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (ii) the
obligation to make take-or-pay or similar payments if required regardless of
nonperformance by any other party or parties to an agreement, and (iii) any
liability of such Person for the obligations of another through any agreement to
purchase, repurchase or otherwise acquire such obligation or any property
constituting security therefor, to provide finds for the payment or discharge of
such obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed.
"Contractual Obligation", as applied to any Person, means any
indenture, mortgage, deed of trust, lending arrangement, contract, undertaking,
agreement or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject including, without limitation, the Loan Documents.
"Default" means any breach or default under any of the Loan Documents,
whether or not the same is an Event of Default, and also any condition or event
that, after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within any
applicable grace or cure period.
"Defeasance" and all defined terms containing the same have the
meanings set forth in Section 2.3.
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"DSCR" means the ratio, as determined by Lender, of
(i) the NOI from the Properties (adjusted as specified below)
for the twelve consecutive (12) month period used by Lender in accordance with
its then-standard underwriting practices (consistent with the requirements of
the Rating Agency), to
(ii) the annual debt service as projected by Lender for the
Loan, based on that assumed debt service constant used by Lender under its
then-current underwriting standards for loans and borrowers of this type
(consistent with the requirements of the Rating Agency).
In determining DSCR after any Property has been released from its Mortgage by
reason of Defeasance, the following shall not be included: (i) the NOI from such
Property, (ii) the Defeasance Collateral or the income stream therefrom, and
(iii) debt service for the portion of the outstanding principal amount of the
Loan equal to the Release Price applicable to such Property.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA (including a Multiemployer Plan) (i) which is
maintained for employees of Borrower or any ERISA Affiliate, (ii) which has at
any time within the preceding six (6) years been maintained for the employees of
Borrower or any current or former ERISA Affiliate or (iii) for which Borrower or
any ERISA Affiliate has any liability, including contingent liability.
"Environmental Claims" has the meaning set forth in Section 4.14.
"Environmental Indemnity" means the Environmental Indemnity Agreement
dated as of the Closing Date herewith from Borrower and Guarantors to Lender.
"Environmental Laws" means all present and future federal, state or
local laws, statutes, ordinances, codes, rules, regulations, orders, decrees,
common law, or directives, in any case imposing liability, reporting or
monitoring requirements, or standards of conduct, or relating to the indoor or
outdoor environment, industrial hygiene, public or worker health and safety,
natural resources, pollution, waste management, or the handling, generation,
release, disposal or storage of Hazardous Material.
"Environmental Reports" means environmental reports and audits prepared
by environmental engineers and/or consultants satisfactory to Lender in
accordance with standards acceptable to Lender.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
all rules and regulations promulgated thereunder.
"ERISA Affiliate" means any (i) corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the IRC) as Borrower, (ii) partnership or other trade or business (whether or
not incorporated) under common control (within the meaning of Section 414(c) of
the IRC) with Borrower, (iii) member of the same affiliated service group
(within the meaning of Section 414(m) of the IRC) as Borrower or any corporation
described in clause (i) above or any partnership or trade or business described
in clause (ii) or (iv) other Person which is required to be aggregated with
Borrower pursuant to regulations promulgated under Section 414(o) of the IRC.
Notwithstanding the foregoing, each of the Borrower Parties shall be deemed to
be ERISA Affiliates of each other for purposes of this Agreement, irrespective
of whether or not the foregoing criteria are satisfied now or hereafter.
"Financing Statements" means the UCC Financing Statements naming the
applicable Borrower Parties, as debtor, and Lender, as secured party, required
under applicable state law to perfect the security interests created hereunder
or under the other Loan Documents.
"GAAP" means generally accepted accounting principles as set forth in
Statement on Auditing Standards No. 69 entitled "The Meaning of Present Fairly
in Conformity with Generally Accepted Accounting Principles in the Independent
Auditor's Report" issued by the Auditing Standards Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination.
"Ground Leases" means the leases and other agreements pursuant to which
Borrower holds any leasehold interest in any Property.
"Hazardous Material" means all or any of the following: (A) substances,
materials, compounds, wastes, products, emissions and vapors that are defined or
listed in, regulated by, or otherwise classified pursuant to, any applicable
Environmental Laws, including any so defined, listed, regulated or classified as
"hazardous substances", "hazardous materials", "hazardous wastes", "toxic
substances", "pollutants", "contaminants", or any other formulation intended to
regulate, define, list or classify substances by reason of deleterious, harmful
or dangerous properties; (B) oil, petroleum or petroleum derived substances,
natural gas, natural gas liquids or synthetic gas and drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (C) any flammable
substances or explosives or any radioactive materials; (D) asbestos in any form;
(E) electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (F) radon; or (G) urea formaldehyde.
"Indebtedness", as applied to any Person, means: (A) all indebtedness
for borrowed money; (B) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP; (C) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money
(other than trade indebtedness incurred in the ordinary course of business); (D)
any obligation owed for all or any part of the deferred purchase price of
property or services if the purchase price is due more than six months from the
date the obligation is incurred or is evidenced by a note or similar written
instrument; and (E) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person.
"Investment" means (A) any direct or indirect purchase or other
acquisition by Borrower of any beneficial interest in, including stock,
partnership interest or other Securities of, any other Person or (B) any direct
or indirect loan, advance or capital contribution by Borrower to any other
Person, including all indebtedness and accounts receivable from that other
Person that are
not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such investment.
"IRC" shall mean the United States Internal Revenue Code of 1986, as
amended, and the related Treasury Department regulations, including temporary
regulations.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary, (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loan" shall have the meaning indicated in Section 2. 1.
"Material Adverse Effect" means (A) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Borrower or (B) the material impairment of the ability of Borrower or any
Affiliate thereof which is a party to a Loan Document to perform its obligations
under any such Loan Documents or of Lender to enforce or collect any of the
Obligations. In determining whether any individual event would result in a
Material Adverse Effect, notwithstanding that such event does not of itself have
such effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events would result
in a Material Adverse Effect.
"Minnesota Mortgage" means that certain Mortgage, Assignment of Leases
and Rents, Security Agreement and Fixture Filing dated as of the date hereof
executed by EQI for the benefit of Lender and encumbering that certain Residence
Inn Hotel located at 0000 Xxxxxxxxx Xxxx, Xxxxx, XX.
"Mortgages" means collectively, the mortgages, deeds of trust and deeds
to secure debt from Borrower to or for the benefit of Lender, each constituting
a lien on a Property as collateral for the Loan.
"Multiemplover Plan" means a "multiemployer plan" as defined in Section
3(37) or Section 4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate is
making, or is accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) years, or for
which Borrower or any ERISA Affiliate has any liability, including contingent
liability.
"New Loan Documents" shall have the meaning indicated in Section 2.4.
"Note" shall have the meaning indicated in Section 2.1.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of Borrower from time to time owed to Lender under the Loan
Documents, including the principal amount of all debts, claims and indebtedness,
accrued and unpaid interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
time to time hereafter owing, due or payable whether before or after the filing
of a proceeding under the Bankruptcy Code by or against Borrower.
"Optional Prepayment Date" shall have the meaning set forth in the
Note.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Part 3 of Title I of
ERISA, Title IV of ERISA or Section 412 of the IRC and (A) which is maintained
for employees of Borrower, or any of its ERISA Affiliates or (B) which has at
any time within the preceding six (6) years been maintained for the employees of
Borrower or any of its current or former ERISA Affiliates, or (C) for which
Borrower or any ERISA Affiliate has any liability, including contingent
liability.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof
and their respective permitted successors and assigns (or in the case of a
governmental person, the successor functional equivalent of such Person).
""Property" and "Properties" means those hotels, motels, and other
lodging facilities which serve as collateral for the Loan and upon which
Mortgages will be recorded on the Closing Date. If any such lodging facility is
sold and all Liens of the Mortgages are released therefrom in accordance with
this Agreement, then such lodging facility shall cease to be a "Property". The
Properties as of the Closing are identified on Schedule 1.1 -- Allocated Loan
Amounts / Properties.
"Rating Agency" shall mean any one or more of Standard & Poor's Rating
Group, Xxxxx'x Investors Service, Duff & Xxxxxx Credit Rating Co., Fitch
Investors Service, L.P., or any other nationally- recognized statistical rating
organization designated by Lender in its sole discretion.
"Release Price" shall mean, at any time and for any Property, one
hundred twenty-five percent (125%) of the Allocated Loan Amount for such
Property, plus accrued interest thereon through the date of payment to Lender.
"Release Property" shall have the meaning set forth in Section 2.4.
"Remaining Collateral Pool" shall have the meaning set forth in Section
2.3.
"REMIC" and "REMIC Trust" have the meanings set forth in Section 2.3.
"Secondary Market Transaction" has the meaning set forth in Section
6.4.
"Securities" (whether or not capitalized) means any stock, shares,
voting trust certificates, bonds, debentures, options, warrants, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securitization" shall mean a rated offering of securities representing
direct or indirect interests in one or more mortgage loans or the right to
receive income therefrom.
"Substitution" shall have the meaning set forth in Section 2.4.
"Substitute Property" shall have the meaning set forth in Section 2.4.
"Substitution Date" shall have the meaning set forth in Section 2.4.
"Termination Event" means: (A) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan; (B) the withdrawal of Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) or 4068(f) of ERISA; (C) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA; (D) the institution of proceedings to terminate, or the appointment of a
trustee with respect to, any Pension Plan by the PBGC; (E) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(F) the partial or complete withdrawal of Borrower or any ERISA Affiliate from a
Multiemployer Plan; (G) the imposition of a Lien pursuant to Section 412 of the
IRC or Section 302 of ERISA; (H) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA; or (I) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"Title Company" means Chicago Title Insurance Company and TICOR Title
Insurance Corporation or such other title insurance company as may be designated
by Lender, subject to the reasonable approval of Borrower.
"Title Policies" means a mortgagee's policy of title insurance issued
on the 1970 ALTA form by the Title Company, together with such reinsurance and
direct access agreements as Lender may require, insuring that each Mortgage is a
valid first and prior enforceable lien on the Borrower's fee simple interest (or
leasehold interest, as applicable) in the Properties (including any easements
appurtenant thereto) subject only to such exceptions to coverage as are
acceptable to Lender. Without limitation, there shall be no liens on the fee
superior to the Mortgage, other than statutory liens for nondelinquent property
taxes. Each Title Policy shall contain such endorsements as Lender may require,
including deletion of the creditors' rights exception and affirmative
endorsement coverage for creditors' rights risks. All such policies and
endorsements shall be in form specified by Lender.
Section 1.2 Accounting Terms: Utilization of GAAP for Purposes of Calculations
Under Agreement.
For purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to such terms in conformity with
GAAP.
Section 1.3 Other Definitional Provisions.
References to "Articles", "Sections", "Subsections", "Exhibits" and
"Schedules" shall be to Articles, Sections, subsections, Exhibits and Schedules,
respectively, of this Agreement unless otherwise specifically provided. Any of
the terms defined in Section 1 .1 may, unless the context otherwise requires, be
used in the singular or the plural depending on the reference. In this
Agreement, "hereof", "herein", "hereto", "hereunder" and the like mean and refer
to this Agreement as a whole and not merely to the specific article, section,
subsection, paragraph or clause in which the respective word appears; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a tangible
visible form; the words "including", "includes" and "include" shall be deemed to
be followed by the words "without limitation"; references to agreements and
other contractual instruments shall be deemed to include subsequent amendments,
assignments, and other modifications thereto, but only to the extent such
amendments, assignments and other modifications are not prohibited by the terms
of this Agreement or any other Loan Document; references to Persons include
their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.
ARTICLE 2
LOAN TERMS / DEFEASANCE / SUBSTITUTION
Section 2.1 Loan.
(A) Loan. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower contained herein
and in the other Loan Documents, Lender agrees to lend to Borrower, and Borrower
agrees to borrow from Lender, a loan (the "Loan") in the original principal
amount of Ninety-Seven Million Twenty Thousand and No/100 Dollars
($97,020,000.00).
(B) Note. The Loan shall be evidenced by two (2) separate promissory
notes (collectively, the "Note"), each duly executed by Borrower and in form and
substance satisfactory to Lender, one such note being in the original principal
sum of Three Million Eight Hundred Forty Thousand and No/100 Dollars
($3,840,000.00) and the other such note being in the original principal amount
of Ninety-Three Million One Hundred Eighty Thousand and No/100 Dollars
($93,180,000.00).
(C) Use of Proceeds. The proceeds of the Loan shall be used to (i) pay
all recording fees and taxes, title insurance premiums, the costs and expenses
incurred by Lender and Borrower Parties, including the legal fees and expenses
of counsel to Lender and Borrower Parties, and other costs and expenses approved
by Lender (which approval will not be unreasonably withheld) related to the
Loan; (ii) establish the Accounts required under the Loan Documents; and (iii)
for certain other business and commercial uses of Borrower.
(D) Sums Payable Under Note. The Note sets forth the provisions
regarding the calculation of sums payable thereunder and the method of making
such payments, including without limitation, the calculation and payments of the
regular interest rate, the default interest rate, late charges, principal
amortization and payments due at maturity.
Section 2.2 Prepayments.
No prepayment of the Loan shall be allowed in whole or in part except
as expressly provided in the Note. No other right to prepay shall be implied.
Section 2.3 Defeasance.
(A) Defeasance Generally. Subject to compliance with and satisfaction
of the terms and conditions of this Section, Borrower shall have the right on
any Monthly Payment Date (defined below) after the Defeasance Lockout Period
Expiration Date (defined below) and prior to the Optional Prepayment Date (as
defined in the Note), to obtain release of one or more of the Properties from
the Lien of the applicable Mortgages (such event being hereinafter referred to
as a "Defeasance") by delivering sufficient funds to Lender for Lender to
purchase the applicable Defeasance Collateral (defined below) as security for
the payment of the Loan. "Monthly Payment Date" shall mean the first day of each
calendar month prior to the Maturity Date. "Defeasance Lockout Period Expiration
Date" shall mean that date which is three (3) years after the date hereof.
(B) Conditions. As a condition precedent to any Defeasance and prior to
any release of the applicable Property, all of the following requirements shall
have been satisfied:
(i) Borrower shall provide not less than 30 days prior written
notice to Lender of the Monthly Payment Date upon which Borrower intends to
effect a Defeasance hereunder (the "Defeasance Date") identifying the subject
Properties.
(ii) No Default or Event of Default shall exist at the time
of the Defeasance.
(iii) Borrower shall pay to Lender a sum of money, sufficient
in Lender's determination, for Lender to purchase the required amount of
Defeasance Collateral, as described in clause (D) below; in connection
therewith, Borrower hereby appoints Lender as its agent and attorney-in-fact for
the purpose of using such sums to purchase the Defeasance Collateral, such
appointment being irrevocable and coupled with an interest.
(iv) Borrower shall deliver a release of the applicable
Property from the lien of the applicable Mortgage, Financing Statements and
other applicable Loan Documents evidencing a Lien against such Property (for
execution by Lender), in forms appropriate for the jurisdiction in which such
Property is located.
(v) The DSCR for the Properties that will be undefeased after
such Defeasance (that is, not including the Property subject to the Defeasance
and not including all Properties as to which Defeasance shall have previously
occurred) (such Properties being hereinafter referred to as the "Remaining
Collateral Pool"), shall be at least 1.90:1.0. Borrower shall be permitted,
without payment of any prepayment fee, to provide to Lender funds to purchase
such additional Defeasance Collateral (as determined by Lender in its sole
discretion), in excess of that which would otherwise be required hereunder, in
order to achieve net cash flow from such Defeasance Collateral and the Remaining
Collateral Pool as would equate, in Lender's sole determination, to such
required minimum 1.90 DSCR.
(vi) All accrued and unpaid principal, interest and all other
sums due under the Note, this Agreement and the other Loan Documents up to the
Defeasance Date, including, without limitation, all costs and expenses incurred
by Lender or its agents in connection with such Defeasance (including without
limitation, the reasonable fees and expenses incurred by attorneys and
accountants in connection with the review of the proposed Defeasance Collateral
and the preparation of the Defeasance Security Agreement (as hereinafter
defined) and related documentation), shall be paid in full on or prior to the
Defeasance Date.
(vii) At Lender's election, Borrower shall have delivered to
Lender all necessary documents to amend and restate the Note as required by
Lender to reflect that all or a portion of the real property security for the
Note has been defeased. After such restatement, at Lender's option, there may
be one or more notes. Such restated note or notes shall be in form and
substance satisfactory to Lender, and the allocation of security among such
notes shall be determined by Lender in its sole discretion. As used herein, as
to any Defeasance, the "Defeasance Note" shall mean the note(s) that is (are)
secured in whole or part by the applicable Defeasance Collateral. Therefore,
after defeasance of all of the Properties, the Defeasance Note shall (and if
Defeasance has occurred as to fewer than all of the Properties, then, at
Lender's option, the Defeasance Note may) be secured solely by Defeasance
Collateral.
(viii) Borrower shall execute and deliver to Lender any and
all certificates, opinions, documents or instruments required by Lender in
connection with the Defeasance, including, without limitation, a pledge and
security agreement satisfactory to Lender creating a first priority lien in
favor of Lender in the Defeasance Collateral (a "Defeasance Security
Agreement"), which shall provide among other things, that any excess received by
Lender from the Defeasance Collateral over the amounts payable by Borrower
hereunder shall be held by Lender as additional security, and that any excess
remaining after payment in full of all obligations of Borrower under the Loan
Documents shall be refunded to Borrower.
(ix) Borrower shall have delivered to Lender an opinion of
Borrower's counsel in form and substance satisfactory to Lender stating that (a)
the Defeasance Collateral and the proceeds thereof have been duly and validly
assigned and delivered to Lender, that Lender has a valid, perfected, first
priority lien and security interest in the Defeasance Collateral delivered and
the proceeds thereof (with appropriate assumptions regarding factual matters and
the applicable uniform commercial code as it relates to the priority of such
lien), and that the Defeasance Security Agreement is enforceable against
Borrower in accordance with its terms and (b) if the Lender shall at the time of
the Defeasance be a REMIC (defined below), (1) the Defeasance Collateral has
been validly assigned to the REMIC Trust which holds the Note (the "REMIC
Trust"), (2) the Defeasance has been effected in accordance with the
requirements of Treasury Regulation Section 1.860(G)-2(a)(8) (as such regulation
may be amended or substituted from time to time) and will not be treated as an
exchange pursuant to Section 1001 of the IRC and (3) the tax qualification and
status of the REMIC Trust as a REMIC will not be adversely affected or impaired
as a result of the Defeasance. The term "REMIC" shall mean a "real estate
mortgage investment conduit" within the meaning of Section 860D of the IRC.
(x) Borrower shall have delivered to Lender written
confirmation from the Rating Agencies selected by Lender that such Defeasance
will not result in a withdrawal, downgrade or qualification of the respective
ratings by the applicable Rating Agencies of any securities in connection with
the applicable securitization which are then outstanding in effect immediately
prior to such Defeasance. If required by Lender or the Rating Agencies, Borrower
shall, at Borrower's expense, also deliver or cause to be delivered a
non-consolidation opinion with respect to Borrower or the Defeasance Obligor
(as defined below) in form and substance satisfactory to Lender and the Rating
Agencies.
(xi) Borrower shall deliver an officer's certificate from
Borrower certifying that the requirements set forth in this Section 2.3 have
been satisfied.
(xii) Borrower shall have satisfied such additional criteria
as Lender then shall reasonably require in connection with defeasance of
mortgage loans generally.
(C) Substituted Defeasance Obligor. In connection with any Defeasance
hereunder, Borrower may, or at the option of Lender shall, in each instance at
Borrower's expense, establish or designate a successor entity acceptable to
Lender in its sole and absolute discretion (the "Defeasance Obligor") and in
such event, Borrower shall transfer and assign all of its obligations, rights
and duties under and to the Defeasance Note together with the Defeasance
Collateral to such Defeasance Obligor. Such Defeasance Obligor shall assume the
obligations under the Defeasance Note and any Defeasance Security Agreement as
well as under such provisions of the Loan Documents as Lender may designate, in
each case pursuant to an assumption agreement in form and substance satisfactory
to Lender. As conditions to such assignment and assumption, Borrower shall (i)
deliver to Lender an opinion of counsel (delivered by counsel satisfactory to
Lender) in form and substance satisfactory to Lender stating, among other
things, that such assumption agreement is enforceable against Borrower and such
successor entity in accordance with its terms and that the Note, the Defeasance
Security Agreement and the Loan Documents as so assumed, are enforceable against
such successor entity in accordance with their respective terms, and (ii) pay
all reasonable costs and expenses incurred by Lender or its agents in connection
with such assignment and assumption (including without limitation, the review of
the proposed transferee and the preparation of the assumption and related
documentation), and, after Defeasance of all of the Properties, Borrower shall
be relieved of its obligations under such documents and the Loan Documents
(except for provisions of the Loan Documents pertaining to indemnification,
choice of law, waivers, payment of costs and attorneys' fees, and other
provisions which by their terms expressly survive payment in full).
(D) Defeasance Collateral - Quantities and Criteria. The term
"Defeasance Collateral" as used herein shall mean direct, non-callable
obligations of the Treasury of the United States of America, for which its full
faith and credit is pledged, that provide for payments prior, but as close as
possible, to all successive Monthly Payment Dates occurring after the Defeasance
Date, with each such payment being equal to or greater than the amount of the
corresponding installment of principal and interest under the Note and other
Loan Documents, including the payment in full of all obligations outstanding
hereunder and under the Note and other Loan Documents assuming Borrower were to
prepay the Note in full on the Optional Prepayment Date. In the case of a
Defeasance of fewer than all of the Properties, the amount of the Defeasance
Collateral shall be sufficient, as determined by Lender, to pay a portion of the
aggregate monthly debt service, other Loan sums and amounts due at the Optional
Prepayment Date attributable to a portion of Loan principal equal to the Release
Price for the applicable Property, determined immediately prior to the
Defeasance.
(E) Defeasance Collateral - Security Interest. Etc. Each of the
obligations of the United States of America that is part of the Defeasance
Collateral shall be duly endorsed as directed by Lender or accompanied by a
written instrument of transfer in form and substance wholly satisfactory to
Lender (including, without limitation, such instruments as may be required by
the depository institution holding such securities or by the issuer thereof as
the case may be, to effectuate book entry transfers and pledges through the book
entry facilities of such institution) in order to perfect upon the delivery of
the Defeasance Collateral the first priority security interest therein in favor
of the Lender in conformity with all applicable state and federal laws governing
the granting of such security interest. Borrower shall authorize and direct that
the payments received from such obligations shall be made directly to Lender or
Lender's designee and applied to satisfy the obligations of Borrower or, if
applicable, Defeasance Obligor, under the Defeasance Note.
(F) Costs and Expenses. Borrower shall pay on demand all costs and
expenses (including reasonable attorneys' fees) incurred by Lender directly or
indirectly in connection with the Defeasance and the release of the Property,
whether or not the Defeasance or release actually occurs. Without limitation of
the foregoing, Borrower shall pay on demand any revenue, documentary stamp or
intangible taxes or any other tax or charge due in connection with the creation
of the Defeasance Note, the modification of the Note, and all costs of
acquisition and administration of the Defeasance Collateral.
(G) Release of Property. Upon compliance with all of the requirements
and conditions pertaining to Defeasance set forth above, Lender shall release or
cause the release of the applicable Property from the lien of the Mortgages and
the other Loan Documents in accordance with the terms hereof and thereof.
Section 2.4 Substitution of Properties.
(A) Substitution Generally. Subject to compliance with and satisfaction
of the terms and conditions of this Section, Borrower shall have the right on
any Substitution Date (as defined below) after the Defeasance Lockout Period
Expiration Date and prior to the Optional Prepayment Date, to obtain release of
one or more of the Properties from the Lien of the Applicable Mortgages and to
substitute one or more hotel properties (each such property, including all
related real and personal property, a "Substitute Property") for each such
released Property, as substituted collateral for the Loan (such event being
hereinafter referred to as a "Substitution").
(B) Conditions. As a condition precedent to any such Substitution and
prior to any release of the applicable Property or Properties (such Property or
Properties to be released being hereinafter referred to as a "Release
Property"), all the following requirements shall have been satisfied:
(i) Borrower shall provide not less than thirty (30) days
prior written notice to Lender of the Monthly Payment Date or other date
reasonably acceptable to Lender upon which Borrower intends to effect a
Substitution hereunder (the "Substitution Date") identifying the subject Release
Property or Release Properties, as well as the corresponding Substitute Property
or Substitute Properties.
(ii) No Default or Event of Default shall exist at the time
of the Substitution.
(iii) Borrower shall deliver a release of the applicable
Release Property from the lien of the applicable Mortgage, Financing Statements
and other applicable Loan Documents evidencing a Lien against such Property (for
execution by Lender), in forms appropriate for the jurisdiction in which such
Release Property is located.
(iv) The Allocated Loan Amount of the Release Property or
Release Properties as of any particular Substitution Date, shall not exceed
Twenty-Five Million Dollars ($25,000,000), and the aggregate Allocated Loan
Amount of all Release Properties released by Lender from and after the date
hereof shall not exceed Fifty Million Dollars ($50,000,000).
(v) The Substitute Property shall be of like-kind as the
Release Property for which it is being substituted, as reasonably determined by
Lender. As used herein "like-kind" shall mean that each Release Property and its
corresponding Substitute Property shall be hotel properties with substantially
the same level of services and amenities, each having franchises from
nationally-recognized hotel franchisors, and with net cash flow and property
valuations that are in the aggregate substantially similar, unless any of such
consistent characteristics is waived by Lender.
(vi) All accrued and unpaid principal, interest and all other
sums due under this Agreement and the Note and other Loan Documents up to the
Substitution Date, including, without limitation, all costs and expenses
incurred by Lender or its agents in connection with such Substitution, shall be
paid in full on or prior to the Substitution Date.
(vii) Borrower shall execute and deliver to Lender any and all
certificates, opinions, documents or instruments required by Lender in
connection with the Substitution, including, without limitation, Lender's
then-current form of mortgage or deed of trust and related security agreements,
and shall provide Lender with a valid, enforceable first-priority lien upon the
Substitute Property, including all land, improvements, furniture, fixtures,
equipment, accounts, reserves and other property related to such Substitute
Property.
(viii) Borrower shall provide Lender with a Phase I
environmental report for the Substitute Property, prepared by a company
acceptable to Lender, and with such report being in form and content and with
such conclusions as regards environmental matters as satisfy Lender's
then-current requirements.
(ix) Borrower shall provide Lender with a structural and
engineering report for the Substitute Property, prepared by a company acceptable
to Lender and being in form and content and having such conclusions as to the
structural and engineering status of the Substitute Property as satisfies
Lender's then-current requirements. Borrower shall escrow one hundred
twenty-five percent (125%) of the cost of any immediate repairs which are
recommended by such report, pursuant to an escrow agreement or holdback
agreement satisfactory to Lender.
(x) Borrower shall furnish Lender with an appraisal of the
Substitute Property from an appraiser acceptable to Lender and in form and
content satisfying Lender's then-current requirements, which appraisal shall
reflect a loan-to-value ratio not in excess of fifty-five percent (55%). The
numerator of such loan-to-value ratio shall be based upon the then-outstanding
principal balance of the Loan and the denominator of such ratio shall be
calculated by adding (i) the appraised value of the Substitute Property (in lieu
of the appraised property of the applicable Release Property) plus (ii) the
appraised value of all other Properties that are part of the Remaining
Collateral Pool (or, in Lender's sole discretion, in lieu of requiring current
appraisals of all such property, such other valuation as is acceptable to
Lender).
(xi) Borrower's title to the Substitute Property shall be free
and clear of all liens and encumbrances and shall otherwise satisfy Lender's
reasonable underwriting requirements. Borrower shall obtain title insurance
coverage for Lender for the Substitute Property, similar to the Title Policies,
reflecting Lender's first-priority mortgage lien and otherwise in accordance
with Lender's reasonable requirements.
(xii) The Substitute Property must generate a stabilized NOI ,
in accordance with Lender's then-current underwriting criteria and practices
(consistent with the requirements of the Rating Agency), which is equal to or
greater than the stabilized NOI of the applicable Release Property for which it
is being substituted.
(xiii) Borrower shall own the Substitute Property in fee
simple.
(xiv) Borrower shall have delivered to Lender an opinion of
Borrower's counsel in form and substance satisfactory to Lender stating that (a)
the Substitute Property has been duly mortgaged, assigned and delivered to
Lender, that Lender has a valid, perfected lien and security interest in all
portions of the Substitute Property, and that the new mortgage or deed of trust,
security agreement and other loan documents applicable to the Substitute
Property (the "New Loan Documents") are enforceable against Borrower in
accordance with their respective terms and (b) if the Lender shall at the time
of the Substitution be a REMIC, (1) the New Loan Documents have been validly
assigned to the REMIC Trust which holds the Note (the "REMIC Trust"), (2) the
Substitution has been effected in a manner that is not in violation of the
requirements of the IRC, if any, and (3) the tax qualification and status
of the REMIC Trust as a REMIC will not be adversely affected or impaired as a
result of the Substitution.
(xv) Borrower shall have delivered to Lender written
confirmation from the Rating Agencies selected by Lender that such Substitution
will not result in a withdrawal, downgrade or qualification of the respective
ratings by the applicable Rating Agencies of any securities in connection with
the applicable securitization which are then outstanding in effect immediately
prior to such Substitution. If required by Lender or the Rating Agencies,
Borrower shall, at Borrower's expense, also deliver or cause to be delivered a
non-consolidation opinion with respect to Borrower (as defined below) in form
and substance satisfactory to Lender and the Rating Agencies.
(xvi) Borrower shall deliver an officer's certificate from
Borrower certifying that the requirements set forth in this Section 2.4 have
been satisfied.
(xvii) Borrower shall have satisfied such additional criteria
as Lender then shall reasonably require in connection with release and
substitution of mortgage loans generally.
(C) Costs and Expenses. Borrower shall pay on demand all costs and
expenses (including reasonable attorneys' fees) incurred by Lender directly or
indirectly in connection with the Substitution and the release of the Release
Property, whether or not the Substitution or release actually occurs. Without
limitation of the foregoing, Borrower shall pay on demand any revenue,
documentary stamp, mortgage tax, title insurance premium, or intangible taxes or
any other tax or charge due in connection with the execution, delivery and
recordation of the New Loan Documents and all instruments related thereto.
(D) Release of Property. Upon compliance with all of the requirements
and conditions pertaining to Substitution set forth above, Lender shall release
or cause the release of the applicable Release Property from the lien of the
Mortgages and the other Loan Documents in accordance with the terms hereof and
thereof.
Section 2.5 Other Property Releases.
Except as described in Sections 2.3 and 2.4 above, no Property shall be
released from the lien of any mortgage or deed of trust held by Lender securing
the Loan, except in accordance with Section 5.6 below.
ARTICLE 3
CONDITIONS TO LOAN
Section 3.1 Conditions to Funding of the Loan on the Closing Date.
The obligations of Lender to find the Loan are subject to the prior or
concurrent satisfaction of the conditions set forth below. Where in this Section
any documents, instruments or information are to be delivered to Lender, then
the condition shall not be satisfied unless (i) the same shall be in form and
substance satisfactory to Lender, and (ii) if so required by Lender, Borrower
shall deliver to Lender a certificate duly executed by Borrower stating that the
applicable document, instrument or information is true and complete and does not
omit to state any information without which the same might reasonably be deemed
misleading.
(A) Loan Documents. On or before the day prior to the Closing Date,
Borrower shall deliver and cause to be delivered to Lender all of the Loan
Documents specified in Schedule 3.1(A), together with such other Loan Documents
as may be required by Lender, each, unless otherwise noted, dated as of the
Closing Date, duly executed, in form and substance satisfactory to Lender and in
quantities designated by Lender (except for the Note, of which only the original
shall be signed).
(B) Performance of Agreements, Truth of Representations and Warranties.
Each Borrower Party and all other Persons executing any agreement on behalf of
any Borrower Party shall have performed in all material respects all agreements
which this Agreement provides shall be performed on or before the Closing Date.
The representations and warranties contained herein and in the other Loan
Documents shall be true, correct and complete in all material respects on and as
of the Closing Date.
(C) Searches. Lender shall have received certified copies of UCC,
judgment, tax lien, bankruptcy and litigation search reports with respect to all
Borrower Parties, all dated not more than 30 days prior to the Closing Date, and
delivered prior to the Closing Date.
(D) Opinions of Counsel. On or before the Closing Date, Lender shall
have received from Hunton & Xxxxxxxx, counsel for Borrower, its written opinion
as to (w) the due formation, valid existence, and good standing of the Borrower
Parties, (x) the due authorization, execution and delivery of this Agreement and
the Loan Documents, (y) nonconsolidation of Borrower in bankruptcies of
Affiliates, including Borrower Sponsors, and (z) such other matters as may be
requested by Lender. Also on or before the Closing Date, Lender shall have
received opinions of local counsel to Borrower or Lender in the states in which
the Properties are located, as to enforceability and such other matters as
Lender may request. By execution of this document, Borrower authorizes and
directs such counsel to render such opinions and deliver the same to Lender on
or before the Closing Date.
(E) Insurance Policies and Endorsements. On or before the Closing Date,
Lender shall have received copies of certificates of insurance (dated not more
than thirty (30) days prior to the Closing Date) regarding insurance required to
be maintained under this Agreement and the other Loan Documents, together with
endorsements satisfactory to Lender naming Lender as additional insured and loss
payee, as required by Lender, under such policies. In addition, as to any
insurance covering matters arising under Environmental Law that Borrower may
have as to any of the Properties, the same shall be endorsed to Lender as
required by Lender.
(F) Certificates of Formation and Good Standing. Prior to the Closing
Date, Lender shall have received copies of the organizational documents and
filings of each Borrower Party, each Borrower Parties' general partner,
Guarantors, and Tenant, together with good standing certificates (or similar
documentation) (including verification of tax status) from the state of its
formation, from the state in which its principal place of business is located,
from the states where it owns Properties, and from all states in which the laws
thereof require such Person to be qualified and/or licensed to do business. Each
such certificate shall be dated not more than sixty (60) days prior to the
Closing Date, as applicable, and certified by the applicable Secretary of State
or other authorized governmental entity. In addition, on or before the Closing
Date both the secretary or corresponding officer of each Borrower Party, or the
secretary or corresponding officer of the partner, trustee, or other Person as
required by such Borrower Party's organizational documents (as the case may be,
the "Borrower Party Secretary") shall have delivered to Lender a certificate
stating that the copies of the organizational documents as delivered to Lender
are true and complete and are in full force and effect, and that the same have
not been amended except by such amendments as have been so delivered to Lender.
(G) Certificates of Incumbency and Resolutions. On or before the
Closing Date, Lender shall have received certificates of incumbency and
resolutions of each Borrower Party, Guarantors, and their constituents as
requested by Lender, approving and authorizing the Loan and the execution,
delivery and performance of the Loan Documents, certified as of the Closing Date
by the appropriate Borrower Party Secretary as being in full force and effect
without modification or amendment.
(H) Letter of Direction. Prior to the Closing Date, Lender shall have
received a letter of direction from Borrower addressed to Lender, or settlement
statement signed by Borrower and Lender, with respect to the disbursement of the
proceeds of the Loan.
(I) Financial Statements. Prior to the Closing Date, Lender shall have
received financial statements for the four most recent fiscal years, and for the
current fiscal year to date for the Properties. The financial statements for the
Borrower shall be audited on a consolidated basis for the most recent fiscal
year; and to the extent that audited financial statements are available for
prior years, Borrower shall provide them. If any such statements are not
available for Properties that have not been owned by Borrower for the applicable
periods, then Borrower shall provide such financial reports as are available.
All such financial statements shall be certified to Lender by the applicable
Borrower Party (through its chief financial officer), which certification
shall be in form and substance reasonably satisfactory to Lender.
(J) Appointment of Agent for Service. Prior to the Closing Date, Lender
shall have received a letter appointing CT Corporation System as each Borrower
Party's agent for service of process, and evidence of retention of said agent.
(K) Closing Certificate. On or before the Closing Date, Lender shall
have received certificates dated as of such date executed by Borrower and also
the chief financial officer (or similar officer) of Borrower (the "Closing
Certificate") stating that: (i) on such date, no Default or Event of Default has
occurred and is continuing; (ii) no material adverse change in the financial
condition or operations of the business of Borrower or the projected cash flow
of Borrower has occurred since December 31, 1998 (or if there has been any
change, specifying such change in detail); (iii) the representations and
warranties set forth in this Agreement are true and correct in all material
respects on and as of such date with the same effect as though made on and as of
such date (or if any such representations or warranties require qualification,
specifying such qualification in detail); (iv) there has been no material change
in any of the documents, instruments, or information delivered to Lender
pursuant to this Article (or if there has been any change, specifying such
change in detail); (v) Borrower on such date is in compliance with all the terms
and provisions set forth in this Agreement on its part to be observed and
performed, and (vi) that after giving effect to the Loan, the fair salable value
of the assets of Borrower will exceed the probable liability on its debts, that
Borrower will be able to pay its debts as they mature and that Borrower will not
have unreasonably small capital to conduct its business.
(L) Appraisals. Prior to the Closing Date, Lender shall have received
an independent appraisal of each Property from an appraiser engaged by Lender,
which indicates the fair market value of such Property and is satisfactory to
Lender in all respects. Each such appraisal shall conform in all respects to the
requirements for surveys set forth in the Financial Institutions Reform and
Recovery Act of 1989 and the regulations promulgated thereunder (as if Lender
were an institution under the jurisdiction thereof) and the Uniform Standards of
Professional Appraisal Practices of the Appraisal Foundation.
(M) Environmental Reports. Prior to the Closing Date, Lender shall have
received and approved Environmental Reports prepared or updated not later than
sixty (60) days prior to the Closing, relating to each of the Properties,
together with letters from the preparer(s) thereof entitling Lender to rely upon
the Environmental Reports.
(N) Operating Leases, Management, License and Franchise Agreements. On
or before the Closing Date, Lender shall have received certified copies of all
Operating Leases, management agreements, license agreements and franchise
agreements relating to the Properties.
(O) Zoning. On or before the 10th day prior to the Closing Date, Lender
shall have received evidence reasonably satisfactory to Lender as to the zoning
and subdivision compliance of the Properties.
(P) Franchisor Comfort Letters. Prior to the Closing Date, Lender
shall have received so-called "comfort letters" or equivalent assurances with
respect to each of the Properties, from Amerisuites Hospitality, Inc.
(Amerisuites), Promus Hotels, Inc. (Hampton Inn and Homewood Suites), Marriott
International, Inc. (Residence Inn by Marriott) and/or other franchisors, as the
case may be.
(Q) Title Policies. Prior to the Closing, Lender shall have received
preliminary title reports or title commitments for all Properties. On or before
the Closing Date, Lender shall have received and approved pro forma Title
Policies for each Mortgage, and as of the Closing the Title Company shall be
irrevocably committed and prepared immediately to issue the Title Policies.
(R) Surveys. Prior to the Closing Date, Lender shall have received a
survey of each Property reasonably satisfactory to Lender and sufficient to
enable the Title Company to delete the "standard survey exception" from the pro
forma Title Policies and to issue a "same as survey" endorsement.
(S) Licenses, Permits and Approvals. On or before the Closing Date,
Lender shall have received copies of a final, unconditional certificate of
occupancy issued with respect to each Property, together with all other
applicable licenses, permits and approvals required for the Borrower to own,
use, occupy, operate and maintain such Properties, including all necessary
licenses for food service and the service of alcoholic beverages.
(T) Leases and Other Agreements. On or before the Closing Date, Lender
shall have received and approved certified copies of all operating leases
(including each Operating Lease), operating agreements, service contracts,
management agreements, franchise agreements and equipment leases, if any,
relating to Borrower's ownership and operation of the Properties.
(U) Lender's Inspection. On or before the Closing Date, Lender shall
have received a satisfactory property condition report for each of the
Properties. Such report shall set forth any items of deferred maintenance at
such Property. Such reports shall be prepared by engineers satisfactory to
Lender.
(V) Deposits. The deposits required herein and in the other Loan
Documents, including without limitation, the initial deposits into the Accounts,
shall have been made from Loan funds.
(W) Ground Leases. Estoppels. Prior to the Closing, Lender shall
have received certified copies of the Ground Leases; and not later than the
Closing, Lender shall have received such estoppel certificates and agreements
as Lender may require, duly executed by Borrower and the holders of superior
interests in the Properties that are subject to Ground Leases.
(X) Commitment Fee. At the Closing, Lender shall have received its
financing fee of twenty-five one-hundredths percent (0.25%) of the maximum
principal amount of the Loan, which is paid in full.
(Y) Legal Fees: Closing Expenses. Borrower shall have paid any and
all legal fees and expenses of counsel to Lender, together with all recording
fees, mortgage taxes, other taxes, title insurance premiums, and other costs and
expenses related to the Closing.
(Z) Other Requirements. Prior to the Closing Date, Borrower Parties
shall have satisfied such other conditions as Lender may reasonably request.
(AA) Other Review. Lender shall have completed all other review of
Borrower Parties, the Properties, and such other items as they determine
relevant, and shall have determined based upon such review to find the Loan.
ARTICLE 4
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make the
Loan, each Borrower Party represents and warrants to Lender that the following
statements, after giving effect to the Loan, will be, true, correct and complete
as of the Closing Date.
Section 4.1 Organization, Powers, Capitalization, Good Standing, Business.
(A) Organization and Powers. Each Borrower Party is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Tennessee. EQI Financing Corporation II is the sole general
partner of each Borrower Party. Equity Inns Partnership, L.P. is a limited
partnership and Equity Inns, Inc. is a corporation, in each case duly organized,
validly existing and in good standing under the laws of Tennessee. Each Borrower
Party and Borrower Sponsor has all requisite power and authority to own and
operate its properties, to carry on its business as now conducted and proposed
to be conducted, and to enter into each Loan Document to which it is a party and
to perform the terms thereof.
(B) Qualification. Each Borrower Party is duly qualified and in good
standing in the state of its formation and in each state where it owns a
Property. In addition, each Borrower Party is duly qualified and in good
standing in each state where necessary to carry on its present business and
operations, except in jurisdictions in which the failure to be qualified and in
good standing could not reasonably be expected to have a Material Adverse
Effect. All jurisdictions in which each Borrower Party is qualified to do
business are set forth on Schedule 4.1(B).
(C) Business. Each Borrower Party is engaged only in the business of
owning and operating its Properties, and EQI Financing Corporation II is engaged
only in the business of acting as the sole general partner of each Borrower
Party.
Section 4.2 Authorization of Borrowing, etc.
(A) Authorization of Borrowing. Borrower has the power and authority to
incur the Indebtedness evidenced by the Note. The execution, delivery and
performance by each Borrower Party and Borrower Sponsor of each of the Loan
Documents to which it is a party and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary partnership,
trustee, corporate or other action, as the case may be.
(B) No Conflict. The execution, delivery and performance by each
Borrower Party and Borrower Sponsor of the Loan Documents to which it is a party
and the consummation of the transactions contemplated thereby do not and will
not: (1) violate (x) any provision of law applicable to any Borrower Party or
Borrower Sponsor; (y) the partnership agreement, certificate of limited
partnership, certificate of incorporation, bylaws, declaration of trust, or
other organizational documents, as the case may be, of each Borrower Party and
Borrower Sponsor; or (z) any order, judgment or decree of any court or other
agency of government binding on any Borrower Party or any of its Affiliates; (2)
conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of any Borrower Party
or any of its Affiliates; (3) result in or require the creation or imposition of
any Lien upon any of the Properties or any other assets of any Borrower Party or
any of its Affiliates; or (4) require any approval or consent of any Person
under any Contractual Obligation of any Borrower Party or any of its Affiliates,
other than those approvals or consents which have been obtained on or before the
dates required under such Contractual Obligation, but in no event later than the
Closing Date.
(C) Governmental Consents. The execution, delivery and performance by
each Borrower Party and Borrower Sponsor of the Loan Documents to which it is a
party, and the consummation of the transactions contemplated thereby do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
(D) Binding Obligation. This Agreement is, and the Loan Documents,
including the Note, when executed and delivered will be, the legally valid and
binding obligations of each Borrower Party and Borrower Sponsor which is a party
to the same, each enforceable against the Borrower Parties and Borrower
Sponsors, as applicable, in accordance with their respective terms, subject to
bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting creditor's rights. No Borrower Party or Borrower Sponsor has any
defense or offset to any of its obligations under the Loan Documents. No
Borrower Party or any Affiliate thereof has any claim against Lender, or any
officer, employee, agent, director, or Affiliate of Lender.
Section 4.3 Financial Statements.
All financial statements concerning any of Borrower and its Affiliates
which have been or will hereafter be furnished by or on behalf of Borrower to
Lender pursuant to this Agreement have been or will be prepared in accordance
with GAAP, consistently applied (except as disclosed therein) and do or will
present fairly the financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended.
Section 4.4 Indebtedness and Contingent Obligations.
As of the Closing, no Borrower Party shall have any Indebtedness or
Contingent Obligations except for the Obligations and except those, if any,
expressly permitted by this Agreement or any of the Mortgages.
Section 4.5 Title to Properties; Liens; Zoning; Leases; Agreements; Rent Roll;
Lease Issues; Condition.
(A) Borrower has good and marketable fee simple (or leasehold, as
applicable) title to its respective Properties. Borrower owns and will own at
all times all personal property relating to its respective Properties (other
than personal property owned by each Tenant and by any sub- tenants of any
Property as set forth on Schedule 4.5(A), subject only to those title exceptions
shown in the Title Policies. Except for such title exceptions, all such
Properties are free and clear of Liens. There are no proceedings in condemnation
or eminent domain affecting any of the Properties, and to the knowledge of
Borrower, none is threatened.
(B) Each Property is zoned for hotel use (or such use is grandfathered
or permitted pursuant to a variance or special exception as set forth on
Schedule 4.5(B) - 1), which zoning designation (or variance or exception, as
applicable) is unconditional, in full force and effect, and is beyond all
applicable appeal periods. Except as set forth in the immediately preceding
sentence and, each of the Properties is in compliance with all applicable
zoning, subdivision and land use laws, regulations and ordinances. Except as set
forth on Schedule 4.5(B) - 2, in the event that all or any part of the
improvements located on a Property are destroyed or damaged, said improvements
can be legally reconstructed to their condition prior to such damage or
destruction, and thereafter exist for the same use without violating any zoning
or other ordinances applicable thereto and without the necessity of obtaining
any variances or special permits, other than customary demolition, building and
other construction related permits (except for those Properties which use has
been grandfathered or granted a variance or special exception). Except as set
forth on Schedule 4.5(B) - 3, each Property contains enough peremanent parking
spaces (both regular spaces and handicap spaces), or unstriped available paved
space to satisfy all requirements imposed by applicable laws with respect to
parking. No legal proceedings are pending or, to the knowledge of Borrower,
threatened with respect to the zoning of any of the Properties. To the
knowledge of Borrowerbased on the zoning letters, neither the zoning nor
any other right to construct, use or operate the Properties is in any way
dependent upon or related to any real estate other than the applicable
Properties. No tract map, parcel map, condominium plan, condominium declaration,
or plat of subdivision will be recorded by Borrower with respect to any Property
without Lender's prior written consent.
(C) There are no Leases affecting any Property other than each
Operating Lease described in the Mortgages, the equipment leases described in
Section 11(d) of the Mortgages, and certain telecommunication leases with Apex
Company, or an affiliate thereof, at those Properties which are leased from
Borrower by Xxxxx Holding Corp. Except for the tenants identified in the Leases
that have been delivered to Lender, no Person (other than hotel guests occupying
hotel rooms and suites) has any right to occupy any portion of the Property, and
to the knowledge of Borrower after due inquiry, no Person is so occupying any
portion of any Property.
(D) Borrower has provided Lender, or has caused Tenant to provide
Lender, with true and complete copies of all contracts and agreements affecting
each Property and the operation and management of each Property, including, all
management agreements, all license agreements, all franchise agreements, the
Ground Leases and all Leases, tenancies or other contracts or agreements
relating to the use, maintenance, development, operation or management thereof.
Since the date of their provision to Lender, to the best of Borrower's knowledge
(after due inquiry), none of the foregoing agreements has been modified or
amended in any respect and no such modification or amendment is contemplated.
Except as set forth on Schedule 4.5(D), and except for the Loan Documents, no
Borrower is a party to, and will not be a party to any agreement, document or
instrument other than the Loan Documents and other than its organizational
documents.
(E) True and correct copies of the Operating Leases are attached hereto
as Schedule 4.5(E). (i) the Operating Leases are in full force and effect; (ii)
neither Borrower has given any notice of default to any tenant under any
Operating Lease which remains uncured; (iii) no tenant has any set off, claim or
defense to the enforcement of any Operating Lease; (iv) no tenant is in arrears
in the payment of rent, additional rent or any other charges whatsoever due
under any Operating Lease, or, to the knowledge of Borrower, is materially in
default in the performance of any other obligations under the applicable
Operating Lease; (v) Borrower has completed all work or alterations required of
the landlord or lessor under each Operating Lease, and all of the other
obligations of landlord or lessor under the Operating Leases have been
performed; and (vi) there are no rent concessions (whether in form of cash
contributions, work agreements, assumption of an existing tenant's other
obligations, or otherwise) or extensions of time whatsoever not reflected in
such Operating Lease.
(F) There are no legal proceedings commenced (or, to the best knowledge
of Borrower, threatened) against Borrower by any tenant or former tenant. No
rental in excess of one month's rent has been prepaid under any of the Leases.
Each of the Leases is valid and binding on the parties thereto in accordance
with its terms. The execution of this Agreement and the other Loan Documents
will not constitute an event of default under any of the Leases.
(G) All of the improvements located on each Property ("Improvements")
are in good condition and repair, except for the contemplated renovations set
forth on Schedule 4.5(G) - 1. Borrower is not aware of any latent or patent
structural or other significant defect or deficiency in the Improvements. Except
as set forth on Schedule 4.5(G) - 2, city water supply, storm and sanitary
sewers, and electrical, gas and telephone facilities are available to each
Property within the boundary lines of each Property, are sufficient to meet the
reasonable needs of each Property as now used or presently contemplated to be
used, and no other utility facilities are necessary to meet the reasonable needs
of each Property as now used, and design and as-built conditions of each
Property are such that surface and storm water does not accumulate on each
Property and does not drain from each Property across land of adjacent property
owners in any manner which would have a Material Adverse Effect on such
Property. Except as set forth on Schedule 4.5(G) - 3, no part of any Property is
within a flood plain and none of the Improvements create an encroachment over,
across or upon any Property's boundary lines, rights of way or easements, and no
building or other improvements on adjoining land create such an encroachment
which could reasonably be expected to have a Material Adverse Effect. All public
roads and streets necessary for service of and access to the Properties for the
current and contemplated uses thereof have been completed and are serviceable
and are physically and legally open for use by the public. All liquid or solid
waste disposal, septic or sewer system located at the Properties are in good and
safe condition and repair and in compliance with all applicable law.
Section 4.6 Litigation: Adverse Facts.
Except as set forth on Schedule 4.6 or for those matters for which
coverage has been tendered and accepted (without reservation) by the applicable
insurance carrier, there are no judgments outstanding against any Borrower
Party, or affecting any property of any Borrower Party, nor is there any action,
charge, claim, demand, suit, proceeding, petition, governmental investigation or
arbitration now pending or, to the best knowledge of Borrower after due inquiry,
threatened against any Borrower Party. The actions, charges, claims, demands,
suits, proceedings, petitions, investigations and arbitrations set forth on
Schedule 4.6 will not result, if adversely determined, and could not reasonably
be expected to result, either individually or in the aggregate, in any Material
Adverse Effect on Borrower or the Properties and do not relate to and will not
affect the consummation of the transactions contemplated hereby.
Section 4.7 Payment of Taxes.
All material tax returns and reports of each Borrower Party required to
be filed have been timely filed, and all taxes, assessments, fees and other
governmental charges upon such Person and upon its properties, assets, income
and franchises which are due and payable have been paid when due and payable.
There is not presently pending (and to the best of Borrower's knowledge, there
is not contemplated) any special assessment against any Property or any part
thereof. No part of any Property is included or assessed under or as part of
another tax lot or parcel, and no part of any other property is included or
assessed under or as part of the tax lots or parcels comprising any Property.
None of the United States income tax returns of Borrower Parties are under
audit. No tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
Borrower Parties in respect of any taxes or other governmental charges are in
accordance with GAAP.
Section 4.8 Adverse Contracts.
Except for the Loan Documents and each Operating Lease, neither
Borrower nor any of its Affiliates is a party to or bound by, nor is any of its
property subject to or bound by any contract or other agreement which restricts
its ability to conduct its business in the ordinary course or, either
individually or in the aggregate, has a Material Adverse Effect or could
reasonably be expected to have a Material Adverse Effect. All existing
management (property and asset), brokerage or other such similar agreements with
a Borrower Affiliate with respect to assets owned by Borrower, may be
terminated, without cause and without payment of a penalty or fee, on not less
than thirty (30) days prior written notice in the event that Lender at any time
exercises any of its rights to take control (voting or otherwise) of Borrower.
All fees paid under any such agreement with an Affiliate shall be subordinate to
the Indebtedness and all payments due under the Loan Documents.
Section 4.9 Performance of Agreements.
No Borrower Party is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
Contractual Obligation of any such Person which could have a Material Adverse
Effect.
Section 4.10 Governmental Regulation.
Borrower is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940
or to any federal or state statute or regulation limiting its ability to incur
indebtedness for borrowed money.
Section 4.11 Employee Benefit Plans.
Except with respect to plans, trusts or agreements identified on
Schedule 4.11:
(A) No Other Plans. Neither Borrower nor any ERISA Affiliate maintains
or contributes to, or has any obligation (including a contingent obligation)
under, any Employee Benefit Plans. Neither Borrower nor any ERISA Affiliate
maintains or contributes to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to employees after termination of
employment other than as specifically required by Part 6 of Title I of ERISA.
Neither Borrower nor any Person that is or was an ERISA Affiliate at any time
during the immediately preceding six years has ever maintained, been required to
contribute to, been required to pay any amount or had any obligation (whether
actual or contingent) with respect to any Pension Plan or Multiemployer Plan.
Neither Borrower nor any ERISA Affiliate is the grantor of a grantor trust
established pursuant to Subpart E of Subchapter J of the IRC.
(B) ERISA and IRC Compliance and Liability. Each Employee Benefit Plan
(i) has been administered in accordance with its terms and (ii) complies in
form, and has been maintained and operated in accordance with, the requirements
of ERISA and, where applicable, the IRC, except where failure to comply would
not result in a material liability to any such Person and except for the failure
to adopt any required amendments for which the remedial amendment period as
defined in Section 401(b) of the IRC has not yet expired. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of the IRC has been
determined by the Internal Revenue Service ("IRS") to be so qualified and each
trust related to such plan has been determined to be exempt under Section 501(a)
of the IRC. No material liability has been incurred by Borrower or any ERISA
Affiliate which remains unsatisfied for any taxes or penalties with respect to
any Employee Benefit Plan. Borrower and each ERISA Affiliate has complied in all
material respects with the applicable requirements of Part 6 of Title I of
ERISA.
(C) Funding. No Pension Plan has been terminated. No accumulated
funding deficiency (as defined in Section 412 of the IRC) has been incurred
(without regard to any waiver granted under Section 412 of the IRC), nor has any
funding waiver from the IRS been received or requested with respect to any
Pension Plan, nor has Borrower or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as required by Section 412 of
the IRC, Section 302 of ERISA or the terms of any Pension Plan prior to the due
dates of such contributions under Section 412 of the IRC or Section 302 of
ERISA, nor has there been any event requiring any disclosure under Section
4041(c)(3)(C), 4063(a) or 4068(f) of ERISA with respect to any Pension Plan.
(D) Prohibited Transactions and Payments. Neither Borrower nor any
ERISA Affiliate has: (1) engaged in a nonexempt prohibited transaction described
in Section 406 of ERISA or Section 4975 of the IRC; (2) incurred any liability
to the PBGC which remains outstanding other than the payment of premiums and
there are no premium payments which are due and unpaid; (3) failed to make a
required contribution or payment to a Multiemployer Plan; or
(4) failed to make a required installment or other required payment under
Section 412 of the IRC.
(E) No Termination Event. No Termination Event has occurred or is
reasonably expected to occur.
(F) ERISA Litigation. No material proceeding, claim, lawsuit and/or
investigation is existing or, to the best knowledge of Borrower after due
inquiry, threatened concerning or involving any (1) employee welfare benefit
plan (as defined in Section 3(1) of ERISA) currently maintained or contributed
to by Borrower or any ERISA Affiliate, (2) Pension Plan or (3) Multiemployer
Plan, other than routine claims for benefits.
Section 4.12 Intellectual Property.
Schedule 4.12 sets forth a complete listing of all patents, trademarks,
tradenames, and other intellectual property rights owned by or licensed to
Borrower for use in the ownership, operation and management of the businesses of
Borrower. Except as set forth in Schedule 4.12, Borrower has no licenses,
patents, trademarks, tradenames, or other intellectual property rights of any
other Person.
Section 4.13 Broker's Fees.
No brokers or finders fee, commission or similar compensation will be
payable with respect to the issuance or sale of the Note or any of the other
transactions contemplated hereby or by any of the Loan Documents. No other
similar fees or commissions will be payable by any Borrower Party for any other
services rendered ancillary to the transactions contemplated hereby.
Section 4.14 Environmental Compliance.
(A) No Environmental Claims. There are no claims, liabilities,
investigations, litigation, administrative proceedings, whether pending or to
the knowledge of Borrower, threatened, or judgments or orders relating to any
Hazardous Materials or otherwise arising out of or relating to Environmental
Laws (collectively called "Environmental Claims") asserted or threatened against
Borrower, or relating to any real property currently or formerly owned, leased
or operated by Borrower. Except as disclosed in the Environmental Reports, to
the best knowledge of Borrower, neither Borrower nor any other Person has caused
or permitted any Hazardous Material to be used, generated, reclaimed,
transported, released, treated, stored or disposed of in a manner which could
form the basis for an Environmental Claim against Borrower or any Property.
(B) Storage of Hazardous Materials. Except as disclosed in the
Environmental Reports delivered to Lender in accordance with Section 3.1, and
except for those items and materials customarily used in connection with the
management of property similar to the Properties which materials at the
Properties exist only in reasonable quantities, and are stored and used,
in accordance with all applicable Environmental Laws, to the best knowledge
of Borrower after due inquiry, no Hazardous Materials are or were stored or
otherwise located, and no underground storage tanks or surface impoundments
are or were located, on real property currently or formerly owned, leased or
operated by Borrower, or to the best knowledge of Borrower after due inquiry,
on adjacent parcels of real property, and no part of such real property, or to
the best knowledge of Borrower after due inquiry, no part of such adjacent
parcels of real property, including the groundwater located therein or
thereunder, is presently contaminated by Hazardous Materials.
(C) Compliance with Environmental Laws. To the knowledge of Borrower,
each Property and Borrower has been and is currently in compliance with all
applicable Environmental Laws, including obtaining and maintaining in effect all
permits, licenses or other authorizations required by applicable Environmental
Laws.
Section 4.15 Solvency.
As of and from and after the Closing, each Borrower Party: (A) owns and
will own assets the fair saleable value of which are (1) greater than the total
amount of liabilities (including Contingent Obligations) of such Borrower Party
and (2) greater than the amount that will be required to pay the probable
liabilities of such Borrower Party's then existing debts as they become absolute
and matured considering all financing alternatives and potential asset sales
reasonably available to such Borrower Party; (B) has capital that is not
insufficient in relation to its business as presently conducted or any
contemplated or undertaken transaction; and (C) does not intend to incur and
does not believe that it will incur debts beyond its ability to pay such debts
as they become due.
Section 4.16 Disclosure.
To the best knowledge of Borrower, no representation or warranty of
Borrower contained in this Agreement, the other Loan Documents or any other
document, certificate or written statement furnished to Lender by or on behalf
of Borrower for use in connection with the Loan Documents contains any untrue
statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. There is
no material fact known to Borrower that has had or will have a Material Adverse
Effect and that has not been disclosed herein or in such other documents,
certificates and statements furnished to Lender for use in connection with the
transactions contemplated hereby.
Section 4.17 Use of Proceeds and Margin Security.
Borrower shall use the proceeds of the Loan only for the purposes set
forth herein and consistent with all applicable laws, statutes, rules and
regulations. No portion of the proceeds of the Loan shall be used by Borrower or
Person in any manner that might cause the borrowing or the application of such
proceeds to violate Regulation G, Regulation U, Regulation T or Regulation X or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate the Securities and Exchange Act of 1933.
Section 4.18 Insurance.
Schedule 4.18 sets forth a complete and accurate description of all
policies of insurance for Borrower that are in effect as of the Closing Date.
Borrower is adequately insured under such policies, no notice of cancellation
has been received with respect to such policies and Borrower is in compliance
with all conditions contained in such policies. Borrower understands and
acknowledges that, as set forth in the Mortgages, to the extent that Borrower
does not obtain insurance policies required thereunder, Lender has the right to
do so.
Section 4.19 Compliance with Laws.
To the knowledge of Borrower, Borrower is not in violation of any, and
the Properties and other assets owned by Borrower are in compliance with each,
law, ordinance, rule, regulation, order, policy, guideline or other requirement
of any domestic or foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of their respective businesses or the
ownership of their respective properties, including, without limitation, any
violation relating to the "Americans With Disabilities Act," or relating to any
use, release, storage, transport or disposal of any Hazardous Material, which
violation or non-compliance would subject Borrower or any of its partners,
officers, trustees, or employees to criminal liability or could reasonably be
expected to have, either individually or together with all such other violations
and non-compliance, a Material Adverse Effect and no such violation has been
alleged. Borrower has filed in a timely manner all reports, documents and other
materials required to be filed by it with any governmental bureau, agency or
instrumentality (and the information contained in each of such filings is true,
correct and complete in all respects), except where failure to make such filings
would not have a Material Adverse Effect. Borrower has retained all records and
documents required to be retained by it pursuant to any law, ordinance, rule,
regulation, order, policy, guideline or other requirement of any governmental
authority, except where failure to retain such records would not subject any
Borrower Party or any of its respective partners, officers, trustees, or
employees to criminal liability and could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
Section 4.20 Investments.
No Borrower Party has any Investment in any Person.
Section 4.21 Legal Opinions.
The Borrower Parties reviewed and are familiar with all opinions of
legal counsel to be delivered in connection with the Loan. None of the
assumptions set forth in such opinions is incorrect.
Section 4.22 Bankruptcy.
None of the Borrower Parties or any Affiliate of any of them is a
debtor, and no property of any of them (including each Property) is property of
the estate, in any voluntary or involuntary case under the Bankruptcy Code or
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, whether in the United States or elsewhere. None of them and
no property of any of them is under the possession or control of a receiver,
trustee or other custodian. None of them has made any assignment for the benefit
of creditors. No such assignment or bankruptcy or similar case or proceeding is
now contemplated.
Section 4.23 Defaults.
No Default or Event of Default exists.
Section 4.24 Names, Principal Places of Business.
The principal place of business of each Borrower Party is c/o Equity
Inns, Inc., 0000 Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000. Borrower
has used no trade names or variations on their names.
ARTICLE 5
COVENANTS OF BORROWER
Each Borrower Party covenants and agrees that until payment in full of
the Loan, all accrued and unpaid interest and all other Obligations, unless
Lender shall otherwise give its prior written consent, such Person shall perform
and comply with all covenants in this Article 5 applicable to such Person.
Section 5.1 Estoppel Certificates.
(A) Within ten (10) Business Days following a request by Lender,
Borrower shall provide to Lender a duly acknowledged written statement
confirming the amount of the outstanding Indebtedness, the terms of payment and
maturity date of the Note, the date to which interest has been paid, and whether
any offsets or defenses exist against the Indebtedness, and if any such offsets
or defenses are alleged to exist, the nature thereof shall be set forth in
detail.
(B) Within ten (10) Business Days following a written request by
Borrower, Lender shall provide to Borrower for informational purposes only, a
duly acknowledged written statement setting forth the amount outstanding under
the Note, the date to which interest has been paid, and whether Lender has
provided Borrower with written notice of any Event of Default which remains
uncured. Compliance by Lender with the requirements of this Section shall be for
informational purposes only and shall not be deemed to be a waiver of any rights
or remedies of Lender hereunder or under any other Loan Document.
Section 5.2 Restriction on Fundamental Changes.
No Borrower Party:
(A) will, or will permit or suffer any other Person to: (i) amend,
modify or waive any term or provision of its partnership agreement, certificate
of limited partnership, certificate of incorporation, bylaws, declaration of
trust, or other organizational documents, as the case may be, unless required by
law or (ii) liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution);
(B) except as expressly permitted by Section 13 of each Mortgage, will,
or will permit or suffer any other Person on its behalf, to: (i) issue, sell,
assign, pledge, convey, dispose or otherwise encumber any stock, membership
interest, partnership interest, or other equity or beneficial interest in any
Person or (ii) grant any options, warrants, purchase rights or other similar
agreements or understandings with respect thereto;
(C) acquire by purchase or otherwise all or any part of the business or
assets of, or stock or other evidence of beneficial ownership of, any Person.
Section 5.3 Transactions with Affiliates.
Borrower will not directly or indirectly enter into or permit to exist
any transaction (including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any Affiliate of Borrower or with any
director, officer or employee of any Borrower Party, or transactions in the
ordinary course of and pursuant to the reasonable requirements of the business
of Borrower and upon fair and reasonable terms which are fully disclosed to
Lender and are no less favorable to Borrower than would be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate of
Borrower. Notwithstanding the foregoing, no payments may be made with respect to
any transaction with Affiliates upon the occurrence and during the continuation
of a Default or Event of Default. Each agreement with any Affiliate shall be for
a term not to exceed one (1) year, and shall provide that the same may be
terminated by Lender at its option during the continuation of an Event of
Default.
Section 5.4 Compliance with ERISA.
(A) Employee Benefit Plans. Except as listed in Schedule 4.11, none of
Borrower or their ERISA Affiliates is a party to any Employee Benefit Plan,
Pension Plan or Multiemployer Plan. As to any Employee Benefit Plan,
Multiemployer Plan or Pension Plan listed on Schedule 4.11, with reasonable
promptness, and in any event within thirty (30) days, Borrower will give notice
of and/or deliver to Lender copies of (1) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received or sent by
any ERISA Affiliate with respect to such request; and (2) the failure of any
ERISA Affiliate to make a required installment or payment under Section 302 of
ERISA or Section 412 of the IRC by the due date.
(B) Termination Events. Promptly and in any event within ten (10) days
of becoming aware of the occurrence of or forthcoming occurrence of any (1)
Termination Event or (2) "prohibited transaction," as such term is defined in
Section 406 of ERISA or Section 4975 of the IRC, in connection with any Pension
Plan or any trust created thereunder, Borrower will deliver to Lender a notice
specifying the nature thereof, what action the applicable Person has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the IRS, the Department of Labor or the PBGC with respect
thereto.
(C) ERISA Notices. With reasonable promptness but in any event within
ten (10) days, Borrower will deliver to Lender copies of (1) any favorable or
unfavorable determination letter from the IRS regarding the qualification of an
Employee Benefit Plan under Section 401(a) of the IRC; (2) all notices received
by Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan; (3) each
schedule (Actuarial Information) to the annual report (Form 5500 Series) filed
by Borrower or any ERISA Affiliate with the IRS with respect to each Pension
Plan; (4) all notices received by Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA, or the imposition of any other
liability under ERISA; (5) each funding waiver request filed with the IRS with
respect to any Pension Plan; and (6) notification of any increases in the
benefits of any Pension Plan or the contributions required under any
Multiemployer Plan. For purposes of this Section, Borrower shall be deemed to
know all facts known by the in-house administrator of any Employee Benefit Plan
of which Borrower or any ERISA Affiliate is the plan sponsor. Borrower will
notify Lender in writing within five (5) Business Days of Borrower obtaining
knowledge or reason to know that Borrower or any ERISA Affiliate has filed or
intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA.
(D) Certain Covenants. Borrower shall not:
(i) permit the occurrence of any Termination Event which would
result in a liability to Borrower or any ERISA Affiliate in excess of $100,000;
(ii) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities by more than $100,000;
(iii) permit any accumulated funding deficiency in excess of
$100,000 (as defined in Section 302 of ERISA and Section 412 of the IRC) with
respect to any Pension Plan, whether or not waived;
(iv fail to make any contribution or payment to any
Multiemployer Plan which Borrower or any ERISA Affiliate may be required to make
under any agreement relating to such Multiemployer Plan, or any law pertaining
thereto which results in or is likely to result in a liability in excess of
$100,000;
(v engage or permit ERISA Affiliate to engage, in any
prohibited transaction under Section 406 of ERISA or Section 4975 of the IRC for
which a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant to
Section 4975 of the IRC in excess of $100,000 is imposed; or
(vi fail, or permit any ERISA Affiliate to fail, to establish,
maintain and operate each Employee Benefit Plan in compliance in all material
respects with the provisions of ERISA, the IRC and all other applicable laws and
the regulations and interpretations thereof.
(E No Plan Assets. Borrower shall not, at any time during the term of
this Agreement, become (1) an employee benefit plan as defined in Section 3(3)
of ERISA which is subject to ERISA, (2) a plan as defined in Section 4975(e)(1)
of the IRC which is subject to Section 4975 of the IRC, (3) a "governmental
plan" within the meaning of Section 3(32) of ERISA or (4) an entity any of whose
underlying assets constitute "plan assets" of any such employee benefit plan,
plan or governmental plan for purposes of Title I or ERISA, Section 4975 of the
IRC or any state statutes applicable to the Borrower regulating investments of
governmental plans.
Section 5.5 Princeton, New Jersey Franchise.
Lender acknowledges that there currently exists certain defaults under
the franchise agreement (the "Princeton Franchise Agreement") from Marriott
International, Inc. or a subsidiary thereof pertaining to the Property located
at 0000 Xxxxx 0 xx Xxxxxxxxx, Xxx Xxxxxx. Lender agrees not to declare a Default
or Event of Default solely as a result of such default under the Princeton
Franchise Agreement; provided, however, Lender may declare a Default an Event of
Default (i) if the Princeton Franchise Agreement is terminated for any reason
and is not replaced by a substitute franchisor acceptable to Lender and to the
Rating Agency; or (ii) if the Princeton Franchise Agreement is not renewed on or
prior to its current expiration date of April 5, 2003 and is not replaced by a
substitute franchisor acceptable to Lender and to the Rating Agency. Borrower
agrees to use its best efforts to comply and to require that Tenant comply with
any plan to cure all defaults under the Princeton Franchise Agreement.
Section 5.6 Satisfaction of Loan; Release of Mortgages.
Borrower hereby acknowledges and agrees that the Loan is secured by,
among other things, Lender's mortgage lien on, assignment of leases and rents
from, and security interest in all of the Properties. Such mortgage lien,
assignment and security interest is evidenced by, among other instruments, the
Minnesota Mortgage and the Other Mortgages (as defined therein). The Minnesota
Mortgage and the Other Mortgages are cross-defaulted; they are also cross-
collateralized in that the Property described in each such mortgage serves as
collateral for the full amount of the Loan. In order to reduce Borrower's
expenditure for mortgage and recording taxes and for title insurance premiums,
Lender has agreed to allocate the Loan among the various Properties, such amount
being the Allocated Loan Amount as to each Property. Notwithstanding such
allocation made by Lender at Borrower's request, Borrower acknowledges and
agrees that each Property secures the full amount of the Loan, and that, except
for any releases of Properties made pursuant to Section 2.3 or 2.4 above, no
such Property shall be released from the lien of the applicable mortgage and
other Loan Documents until satisfaction in full of all amounts outstanding under
the Loan, including fees and expenses due Lender. Borrower shall not claim or
assert that any Property is entitled to be released from the lien of the
mortgage or deed of trust applicable to such Property regardless of whether the
outstanding principal balance of the Loan has been reduced by an amount that
equals or exceeds the Allocated Loan Amount allocated to such Property. Borrower
acknowledges that following the occurrence and during the continuance of an
Event of Default, Lender may pursue its rights and remedies, at Lender's option,
against one Property, or against several Properties or against all Properties
without in any way exhausting or restricting Lender's ability to subsequently,
in one or more proceedings, pursue other available remedies. Lender shall not be
required to marshal assets.
ARTICLE 6
RESTRUCTURING LOAN, SECONDARY MARKET TRANSACTIONS
Section 6.1 Secondary Market Transaction Generally.
Lender shall have the right to engage in one or more Secondary Market
Transactions, and to structure and restructure all or any part of the Loan,
including without limitation in multiple tranches, as a wraparound loan, or for
inclusion in a REMIC or other Securitization. Without limitation, Lender shall
have the right to cause the Note and the Mortgages to be split into one or more
loans (which may be evidenced by multiple notes, at Lender's option) secured by
one or more mortgages (some or all of which may or may not be cross-collaterized
or cross defaulted, at Lender's option) in whatever proportion Lender
determines, and thereafter to engage in Secondary Market Transactions with
respect to all or any part of the indebtedness and loan documentation,
subject, however, to the requirements of Section 6.2. In addition, Lender
may impose additional structuring requirements to address cross-
collateralization, cross-default, and other issues, subject, however to the
requirements of Section 6.2. Borrower acknowledges that it is the intention of
the parties that all or a portion of the Loan will be securitized and that all
or a portion of the Loan will be rated by one or more Rating Agencies.
Borrower further acknowledges that additional structural modifications may be
required to satisfy issues raised by any Rating Agencies, subject, however to
the requirements of Section 6.2.
Section 6.2 Cooperation: Limitations.
Borrower Parties shall use its best efforts to cooperate in good faith
with Lender in effecting any such restructuring or Secondary Market Transaction.
Such cooperation shall include without limitation, executing and delivering such
amendments to the Loan Documents as Lender may request, including executing and
delivering replacement notes and mortgages, provided however that no such
amendment shall modify (i) the effective interest rate payable under the Note;
(ii) the stated maturity date of the Note, (iii) the effective amortization of
the principal amount of the Note, (iv) any other economic terms of the
Obligations, (v) the non- recourse provisions of the Loan, and (vi) other
provisions of the Loan Documents that would reasonably be deemed material and
adverse to Borrower. Such cooperation also shall include using best efforts to
obtain such certificates and assurances from governmental entities and others as
Lender may request. Notwithstanding anything herein or in the other Loan
Documents to the contrary, Lender shall be solely responsible for all fees and
expenses incurred in connection with any Secondary Market Transaction, including
without limitation, the reasonable fees and expenses (including reasonable
attorneys' fees and expenses) incurred by Borrower Parties in cooperating with
any such Secondary Market Transaction in accordance with this Agreement.
Section 6.3 Information.
The Borrower Parties shall provide such information provided by
Borrower Parties and Affiliates and documents relating to the Borrower Parties,
Guarantors, the Properties and the business and operations of all of the
foregoing as Lender may reasonably request in connection with any such Secondary
Market Transaction. Lender shall be permitted to share all such information with
the investment banking firms, Rating Agencies, accounting firms, law firms,
other third party advisory firms, potential investors, and other parties
involved in any proposed Secondary Market Transaction. Any such information may
be incorporated into offering documents for the Secondary Market Transactions.
Lender and all of the aforesaid third-party advisors and professional firms and
investors shall be entitled to rely upon such information, and Borrower shall
indemnify, defend, and hold harmless Lender from and against any losses, claims,
damages and liabilities that arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in such information
certified as true and correct by Borrower Parties and provided by Borrower
Parties and Affiliates or that arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated in
such certified information or necessary in order to make the statements
in such information not misleading. Lender may publicize the existence of
the Obligations in connection with Lender's Secondary Market Transaction
activities or otherwise.
Section 6.4 Additional Provisions.
In any Secondary Market Transaction, Lender may transfer its
obligations under this Agreement and under the other Loan Documents (or may
transfer the portion thereof corresponding to the transferred portion of the
Obligations of Borrower), and thereafter the assigning Lender shall be relieved
of any obligations hereunder and under the other Loan Documents arising after
the date of said transfer with respect to the transferred interest, except to
the extent that such assigning Lender expressly in writing retains any liability
or obligations under the Loan Documents, including any express retained
obligations as a servicer of the REMIC Trust. Each transferee investor shall
become a "Lender" hereunder.
As used herein, "Secondary Market Transaction" means any of (i) the
sale, assignment, or other transfer of all or any portion of the Obligations or
the Loan Documents or any interest therein to one or more investors, (ii) the
sale, assignment, or other transfer of one or more participation interests in
the Obligations or Loan Documents to one or more investors, or (iii) the
transfer or deposit of all or any portion of the Obligations or Loan Documents
to or with one or more trusts or other entities which may sell certificates or
other instruments to investors evidencing an ownership interest in the assets of
such trust or the right to receive income or proceeds therefrom.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Expenses and Attorneys' Fees.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees, jointly and severally, to promptly pay all fees,
costs and expenses incurred by Lender in connection with any matters
contemplated by or arising out of this Agreement, including the following, and
all such fees, costs and expenses shall be part of the Obligations, payable on
demand to the extent not paid from expense deposits previously made by Borrower
to Lender: (A) fees, costs and expenses (including attorneys' fees, and other
professionals retained by Lender) incurred in connection with the examination,
review, due diligence investigation, documentation and closing of the financing
arrangements evidenced by the Loan Documents; (B) fees, costs and expenses
(including attorneys' fees and other professionals retained by Lender) incurred
in connection with the administration of the Loan Documents and the Loan and any
amendments, modifications and waivers relating thereto; (C) fees, costs and
expenses (including attorneys' fees and fees of other professionals retained
by Lender) incurred in any action to enforce this Agreement or the other Loan
Documents or to collect any payments due from Borrower under this Agreement, the
Note or any other Loan Document or incurred in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement,
whether in the nature of a "workout" or in connection with any insolvency or
bankruptcy proceedings or otherwise; and (D) fees, costs and expenses of all
appraisals required hereunder or under any other Loan Documents and other fees,
costs and expenses incurred in connection with any Defeasance or Substitution
hereunder. Notwithstanding the foregoing, Lender shall pay its own fees and
expenses of Lender incurred in a Secondary Market Transaction.
Section 7.2 Indemnity.
In addition to the payment of expenses as required elsewhere herein,
whether or not the transactions contemplated hereby shall be consummated, and in
addition to any other indemnifications set forth in the other Loan Documents,
Borrower agrees to indemnify, pay and hold Lender and any holder of the Note,
and the officers, directors, employees, agents, affiliates and attorneys of
Lender and such holders (collectively called the "Indemnitees") harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, tax liabilities, broker's or finders fees,
costs, expenses and disbursements of any kind or nature whatsoever (including
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party thereto)
that may be imposed on, incurred by, or asserted against that Indemnitee, in any
manner relating to or arising out of (A) the negotiation, execution, delivery,
performance, administration, or enforcement of any of the Loan Documents, (B)
any of the transactions contemplated by the Loan Documents, (C) any material
breach by Borrower of any representation, warranty, covenant, or other agreement
contained in any of the Loan Documents, (D) the presence, release, threatened
release, disposal, removal, or cleanup of any Hazardous Material located on,
about, within or affecting any of the properties or assets of Borrower or any
violation of any applicable Environmental Law for which Borrower is liable, (E)
Lender's agreement to make the Loan hereunder, or (F) the use or intended use of
the proceeds of the Loan (the foregoing liabilities herein collectively referred
to as the "Indemnified Liabilities"); provided that no Borrower shall have an
obligation to an Indemnitee hereunder with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, Borrower shall contribute the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them. This
provision shall not cause Borrower to be Liable for obligations which are
expressly excluded from Borrower's liability under the Environmental Indemnity.
Section 7.3 Amendments and Waivers.
Except as otherwise provided herein, no amendment, modification,
termination or waiver of any provision of this Agreement, the Note or any other
Loan Document, or consent to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by Lender. Each
amendment, modification, termination or waiver shall be effective only in the
specific instance and for the specific purpose for which it was given. No
amendment, modification, termination or waiver of any provision of the Note
shall be effective without the written concurrence of the holder of the Note. No
notice to or demand on Borrower in any case shall entitle Borrower or other
Person to any other or further notice or demand in similar or other
circumstances.
Section 7.4 Retention of Borrower's Documents.
Lender may, in accordance with Lender's customary practices, destroy or
otherwise dispose of all documents, schedules, invoices or other papers,
delivered by Borrower to Lender unless Borrower requests in writing that same be
returned. Upon such request and at Borrower's expense, Lender shall return such
papers when Lender's actual or anticipated need for same has terminated.
Section 7.5 Notices.
All notices shall be given in accordance with the terms and provisions
of the Mortgages.
Section 7.6 Survival of Warranties and Certain Agreements.
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making of the Loan
hereunder and the execution and delivery of the Note. Notwithstanding anything
in this Agreement or implied by law to the contrary, the agreements of Borrower
set forth in Sections 7.1, 7.2, 7.14 and 7.15 shall survive the payment of the
Loan and the termination of this Agreement. Subject to Section 7.8, all other
representations, warranties and agreements of Borrower and Lender set forth in
this Agreement shall terminate upon payment in full of the Loan and the
termination of this Agreement.
Section 7.7 Failure or Indulgence Not Waiver: Remedies Cumulative.
No failure or delay on the part of Lender or any holder of any Note in
the exercise of any power, right or privilege hereunder or under the Note or any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement, the Note and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available. To the fullest extent permitted by applicable law, each Borrower
hereby agrees that Lender may bring separate actions on this Loan Agreement, the
Note, the Mortgages or any of the other Loan Documents and each Borrower hereby
expressly waives any rights it may have under the law of any state to object to
or raise a defense in any such action regarding such splitting of causes of
actions.
Section 7.8 Marshaling: Payments Set Aside.
Lender shall not be under any obligation to marshal any assets in favor
of any Person or against or in payment of any or all of the Obligations. To the
extent that any Person makes a payment or payments to Lender, or Lender enforce
its remedies or exercise its rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the Obligations or part thereof originally intended to
be satisfied, and all Liens, if any, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
Section 7.9 Independence of Covenants.
All covenants hereunder shall be given in any jurisdiction independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 7.10 Severability.
The invalidity, illegality or unenforceability in any jurisdiction of
any provision in or obligation under this Agreement, the Note or other Loan
Documents shall not affect or impair the validity, legality or enforceability of
the remaining provisions or obligations under this Agreement, the Note or other
Loan Documents or of such provision or obligation in any other jurisdiction.
Section 7.11 Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
Section 7.12 APPLICABLE LAW.
THIS AGREEMENT AND ALL OF THE LOAN DOCUMENTS (EXCEPT, AS TO THE OTHER
LOAN DOCUMENTS, TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE THEREIN) SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
Section 7.13 Successors and Assigns: Subsequent Holders of Note.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns except that no
Borrower Party may assign its rights or obligations hereunder or under any of
the other Loan Documents.
Section 7.14 Sophisticated Parties. Reasonable Terms. No Fiduciary Relationship.
The Borrower Parties represent, warrant and acknowledge that (i) they
are sophisticated real estate investors, familiar with transactions of this
kind, and (ii) they have entered into this Agreement and the other Loan
Documents after conducting their own assessment of the alternatives available to
them in the market, and after lengthy negotiations in which they have been
represented by legal counsel of their choice. The Borrower Parties also
acknowledge and agree that the rights of Lender under this Agreement and the
other Loan Documents are reasonable and appropriate, taking into consideration
all of the facts and circumstances including without limitation the quantity of
the Loan, the nature of the Properties, and the risks incurred by Lender in this
transaction. No provision in this Agreement or in any of the other Loan
Documents and no course of dealing between the parties shall be deemed to create
(i) any partnership or joint venture between Lender and Borrower or any other
Person, or (ii) any fiduciary or similar duty by Lender to Borrower or any other
Person. The relationship between Lender and Borrower is exclusively the
relationship of a creditor and a debtor, and all relationships between Lender
and any other Borrower Party are ancillary to such creditor/debtor relationship.
Section 7.15 Limitation of Liability.
Neither Lender, nor any affiliate, officer, director, employee,
attorney, or agent of Lender, shall have any liability with respect to, and
Borrower hereby waives, releases, and agrees not to xxx any of them upon, any
claim for any special, indirect, incidental, or consequential damages
suffered or incurred by Borrower in connection with, arising out of, or in
any way related to, this Agreement or any of the other Loan Documents, or any
of the transactions contemplated by this Agreement or any of the other Loan
Documents, other than the gross negligence or willful misconduct of Lender.
Borrower hereby waives, releases, and agrees not to xxx Lender or any of
Lender's affiliates, officers, directors, employees, attorneys, or agents for
punitive damages in respect of any claim in connection with, arising out of,
or in any way related to, this Agreement or any of the other Loan Documents,
or any of the transactions contemplated by this Agreement or any of the
transactions contemplated hereby except to the extent same is caused by the
gross negligence or willful misconduct of Lender.
Section 7.16 No Duty.
All attorneys, accountants, appraisers, and other professional Persons
and consultants retained by Lender shall have the right to act exclusively in
the interest of Lender and shall have no duty of disclosure, duty of loyalty,
duty of care, or other duty or obligation of any type or nature whatsoever to
any Borrower Party or Affiliates thereof, or any other Person.
Section 7.17 Entire Agreement.
This Agreement, the Note, and the other Loan Documents referred to
herein embody the final, entire agreement among the parties hereto and supersede
any and all prior commitments, agreements, representations, and understandings,
whether written or oral, relating to the subject matter hereof and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto.
Section 7.18 Construction: Supremacy of the Loan Agreement.
Borrower and Lender acknowledge that each of them has had the benefit
of legal counsel of its own choice and has been afforded an opportunity to
review this Agreement and the other Loan Documents with its legal counsel and
that this Agreement and the other Loan Documents shall be construed as if
jointly drafted by Borrower and Lender.
Section 7.19 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT LOCATED
WITHIN THE COUNTY OF XXXXXXXXXX, COMMONWEALTH OF PENNSYLVANIA, OR ANY FEDERAL
COURT LOCATED WITHIN THE EASTERN DISTRICT OF PENNSYLVANIA AND IRREVOCABLY AGREES
THAT, SUBJECT TO LENDER'S ELECTION, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. BORROWER ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT, THE NOTE, SUCH OTHER LOAN DOCUMENTS OR SUCH
OBLIGATION. BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY BORROWER WHOM IRREVOCABLY AGREES
IN WRITING TO SERVE AS BORROWER'S AGENT TO RECEIVE ON BEHALF OF BORROWER SERVICE
OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. IF CT CORPORATION SYSTEM IS NOT PERSONALLY AVAILABLE, PROCESS MAY BE
SERVED UPON CT CORPORATION SYSTEM BY UNITED STATES REGISTERED OR CERTIFIED MAIL,
WHICH SERVICE SHALL BE DEEMED EFFECTIVE FIVE (5) DAYS AFTER MAILING, TO 0000
XXXXXX XXXXXX, XXXXXXXXXXXX, XX 00000. A COPY OF ANY SUCH PROCESS SO SERVED ON
CT CORPORATION SYSTEM, OR SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY
BORROWER, SHALL BE MAILED BY LENDER BY REGISTERED MAIL TO BORROWER AT ITS
ADDRESS PROVIDED HEREIN EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW,
ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF
PROCESS. IF ANY AGENT APPOINTED BY BORROWER REFUSES TO ACCEPT SERVICE, BORROWER
HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF XXXXX TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
Section 7.20 WAIVER OF JURY TRIAL.
BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP
THAT IS BEING ESTABLISHED. BORROWER AND LENDER ALSO WAIVE ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF
BORROWER OR LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. BORROWER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND
LENDER FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOAN. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.
Section 7.21 Sole Discretion of Lender.
Wherever pursuant to this Loan Agreement Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory shall be
in the sole discretion of Lender (exercised in its good faith and not in an
arbitrary or capricious manner) and shall be final and conclusive, except as may
be otherwise expressly and specifically provided herein.
Section 7.22 Joint and Several.
The obligations and liabilities of each of the Borrower Parties set
forth in this Agreement shall be joint and several.
Section 7.23 Counterparts: Effectiveness.
This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto.
Section 7.24 Limited Recourse.
Subject to the limitations and exceptions contained in Section 9 of the
Note and Section 42 of the Mortgages, Borrower shall not have any personal
recourse liability for amounts owing under the Note or any of the other Loan
Documents and no deficiency judgment therefor shall be enforced against the
personal assets of Borrower other than the Properties.
IN WITNESS WHEREOF, the respective duly authorized officers of the
undersigned have executed this Agreement as of the date first written above.
BORROWER PARTIES:
EQI FINANCING PARTNERSHIP II, L.P., a
Tennessee limited partnership
By: EQI Financing Corporation II, a
Tennessee corporation, its general
partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Title: V.P.
-----------------------------------
EQI/WV FINANCING PARTNERSHIP, L.P., a
Tennessee limited partnership
By: EQI FINANCING CORPORATION II, a
Tennessee corporation, its general
partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Title: V.P.
-----------------------------------
LENDER
GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation
By: /s/ Xxxxxx X. Xxxxxxx, XX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx, XX
-----------------------------------
Title: Senior Vice President
-----------------------------------
ATTACHMENTS
Schedule 1.1 -- Allocated Loan Amounts / Properties Schedule 3.1(A) -- Loan
Documents Schedule 4.1(B) -- States Where Borrower Parties Are Qualified
Schedule 4.5(A) -- Tenant / Sub-Tenant-Owned Personal Property Schedule 4.5(B) -
1 -- Zoning Variances / Special Exceptions Schedule 4.5(B) - 2 -- Zoning:
Exceptions to By-Right Rebuilding Schedule 4.5(B) - 3 -- Parking Exceptions
Schedule 4.5(D) -- Other Agreements of Borrower Schedule 4.5(E) -- Copies of
Operating Leases Schedule 4.5(G) - 1 -- Contemplated Renovations Schedule 4.5(G)
- 2 -- Utility Problems Schedule 4.5(G) - 3 -- Flood Plain / Encroachments
Schedule 4.6 -- Litigation Schedule 4.11 -- ERISA Plans Schedule 4.12 --
Intellectual Property Schedule 4.18 -- Insurance Policies
SCHEDULE 1.1
ALLOCATED LOAN AMOUNTS / PROPERTIES
Allocated Loan Amounts Properties
---------------------- ----------
1. Mortgage, Assignment of Leases and 1. AmeriSuites hotel located
Rents, Security Agreement and Fixture at 9104 Keystone Crossing,
Filing - ($3,840,000) Xxxxxxxxxxx, XX 00000
2. Mortgage, Assignment of Leases and 2. AmeriSuites hotel located
Rents, Security Agreement and Fixture at 0000 Xxxx 000xx Xxxxxx,
Filing - ($3,590,000) Xxxxxxxx Xxxx, XX 00000
3. Open-End Mortgage, Assignment of 3. AmeriSuites hotel located
Leases and Rents, Security Agreement and at 0000 Xxxxxxx Xxxxx,
Fixture Filing - ($4,650,000) Xxxxxxxx, XX 00000
4. Deed of Trust, Assignment of Leases and 4. AmeriSuites hotel located
Rents, Security Agreement and Fixture at 0000 Xxxxxxx Xxxxx,
Filing - ($3,460,000) Xxxxxxx, XX 00000
5. Credit Line Deed of Trust, Assignment of 5. AmeriSuites hotel located
Leases and Rents, Security Agreement and at 4100 Xxx, Xxxx Xxxxx,
Fixture Filing - ($5,410,000) VA 23060
6. Mortgage, Assignment of Leases and 6. Hampton Inn hotel located
Rents, Security Agreement and Fixture at 00000 Xxxxxxx Xxxxxxxx
Filing - ($4,410,000) Road, Xxxxxxxx Xxxx, XX
00000
7. Deed of Trust, Assignment of Leases and 7. Hampton Inn hotel located
Rents, Security Agreement and Fixture at 11212 North Newark
Filing - ($3,620,000) Circle, Xxxxxx Xxxx, XX
00000
8. Deed of Trust, Assignment of Leases and 8. Hampton Inn hotel located
Rents, Security Agreement and Fixture at 0000 Xxxxxx Xxxxxx,
Filing - ($4,750,000) Xxxxxxx, XX 00000
9. Deed of Trust, Assignment of Leases and 9. Hampton Inn hotel located
Rents, Security Agreement and Fixture at 0000 Xxxxxxx Xxxxxxxxx,
Filing - ($3,120,000) Xxxxxxxxxx, XX 00000
10. Credit Line Deed of Trust, Assignment of 10. Hampton Inn hotel located
Leases and Rents, Security Agreement and at 1053 Van Xxxxxxx Road,
Fixture Filing - ($4,050,000) Xxxxxxxxxx, XX 00000
Allocated Loan Amounts Properties
---------------------- ----------
11. Leasehold Deed of Trust, Assignment of 11. Homewood Suites hotel
Leases and Rents, Security Agreement and located at 2001 East
Fixture Filing - ($7,130,000) Xxxxxxxx Xxxxxx, Xxxxxxx,
XX 00000
12. Open-End Mortgage, Assignment of 12. Homewood Suites hotel
Leases and Rents, Security Agreement and located at 2670 East Xxxxxx
Fixture Filing - ($3,320,000) Road, Xxxxxxxxxxx, XX
00000
13. Deed of Trust, Assignment of Leases and 13. Homewood Suites hotel
Rents, Security Agreement and Fixture located at 4323 Spectrum
Filing - ($4,140,000) One, Xxx Xxxxxxx, XX 00000
14. Deed of Trust, Assignment of Leases and 14. Residence Inn hotel located
Rents, Security Agreement and Fixture at 6477 East Speedway
Filing - ($5,330,000) Blvd., Xxxxxx, XX 00000
15. Mortgage, Assignment of Leases and 15. Residence Inn hotel located
Rents, Security Agreement and Fixture at 0000 Xxxxxxxxx Xxxx,
Filing - ($6,500,000) Xxxxx, XX 00000
16. Leasehold Mortgage, Assignment of 16. Residence Inn hotel located
Leases and Rents, Security Agreement and at 00 Xxxx Xxxx, Xxxxxx
Fixture Filing - ($4,700,000) Xxxxx, XX 00000
17. Deed of Trust, Assignment of Leases and 17. Residence Inn hotel located
Rents, Security Agreement and Fixture at 1710 NE Multnomah
Filing - ($10,590,000) Street, Xxxxxxxx, XX 00000
18. Mortgage, Assignment of Leases and 18. Hampton Inn hotel located
Rents, Security Agreement and Fixture at 20600 Xxxxxxxx Road,
Filing - ($4,440,000) Xxxxxxxxxx, XX 00000
19. Mortgage, Assignment of Leases and 19. Residence Inn hotel located
Rents, Security Agreement and Fixture at 0000 Xxxxx 0, Xxxxxxxxx,
Xxxxxx - (x0,000,000) XX 00000
--------------------------------------------------------------------------------
SCHEDULE 3.1(A)
All documents are dated as of June 16, 1999 unless otherwise noted.
The Loan Agreement.
The Promissory Note made by the Borrower and the WV Borrower, payable
to the Lender, in the original principal amount of $93,180,000.00 plus interest.
The Promissory Note made by the Borrower and the WV Borrower, payable
to the Lender, in the original principal amount of $3,840,000, plus interest.
The Guaranty of Recourse Obligations made by the Guarantors for the
benefit of the Lender with respect to the Loan.
The Environmental Indemnity Agreement made by the Borrower, the WV
Borrower and the Guarantors for the benefit of the Lender with respect to the
Loan.
The Security Agreement between the Borrower, the WV Borrower and the
Lender.
The Assignment of Contracts, Licenses, Permits, Agreements, Warranties
and Approvals made by the Borrower and the WV Borrower for the benefit of the
Lender with respect to the Loan.
The Lockbox Account Agreement made by the Borrower and the WV Borrower
for the benefit of the Lender with respect to the Loan.
The Replacement Reserve Agreement made by the Borrower and the WV
Borrower for the benefit of the Lender with respect to the Loan.
The Repair Holdback Letter made by the Borrower and the WV Borrower for
the benefit of the Lender with respect to the Loan.
The Side Letter regarding Parking made by the Borrower for the benefit
of the Lender with respect to the Loan.
The Leasehold Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing from the Borrower with respect to property located
in Phoenix, Arizona.
The Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing from the Borrower with respect to property located in Tucson,
Arizona.
The Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing from the Borrower with respect to property located in
Indianapolis, Indiana.
The Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing from the Borrower with respect to property located in Overland
Park, Kansas.
The Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing from the Borrower with respect to property located in Overland
Park (Frontage Road), Kansas.
The Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing from the Borrower with respect to property located in Northville,
Michigan.
The Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing from the Borrower with respect to property located in Eagan,
Minnesota.
The Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing from the Borrower with respect to property located in Kansas
City, Missouri.
The Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing from the Borrower with respect to property located in Princeton,
New Jersey.
The Leasehold Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing from the Borrower with respect to property located
in Tinton Falls, New Jersey.
The Open-End Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing from the Borrower with respect to property located
in Columbus, Ohio.
The Open-End Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing from the Borrower with respect to property located
in Sharonville, Ohio.
The Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing from the Borrower with respect to property located in
Portland, Oregon.
The Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing from the Borrower with respect to property located in
Richardson, Texas.
The Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing from the Borrower with respect to property located in San
Antonio, Texas.
The Credit Line Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing from the WV Borrower with respect to property
located in Morgantown, West Virginia.
The Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing from the Borrower with respect to properties located in
Memphis, Tennessee.
The Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing from the Borrower with respect to properties located in
Memphis (Poplar Avenue), Tennessee.
The Credit Line Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing (the "Virginia Deed of Trust") from the Borrower
with respect to properties located in Xxxx Xxxxx (Richmond), Virginia.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Phoenix, Arizona.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Tucson, Arizona.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Indianapolis, Indiana.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Overland Park, Kansas.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Overland Park (Frontage Road), Kansas.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Northville, Michigan.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Eagan, Minnesota.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Kansas City, Missouri.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Princeton, New Jersey.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Tinton Falls, New Jersey.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Columbus, Ohio.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Sharonville, Ohio.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Portland, Oregon.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Memphis, Tennessee.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Memphis (Poplar Avenue), Tennessee.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in Richardson, Texas.
The Assignment of Leases and Rents and Profits from the Borrower with
respect to property located in San Antonio, Texas.
The Assignment of Leases and Rents and Profits (the "Virginia
Assignment of Leases") from the Borrower with respect to property located in
Xxxx Xxxxx (Richmond), Virginia.
The Assignment of Leases and Rents and Profits from the WV Borrower
with respect to property located in Morgantown, West Virginia.
The Borrower's and General Partner's Affidavit and Solvency Certificate
made by the Borrower, the WV Borrower and the Guarantors for the benefit of the
Lender with respect to the Loan.
The Borrower's Document Certification made by the Borrower and the WV
Borrower for the benefit of the Lender with respect to the Loan.
The Guarantors' Certification made by the Guarantors for the benefit of
the Lender with respect to the Loan.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Phoenix, Arizona for filing in the Real Estate Records of
Maricopa County, Arizona, and centrally in the State of Arizona.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Tucson, Arizona for filing in the Real Estate Records of
Pima County, Arizona, and centrally in the State of Arizona.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Indianapolis, Indiana for filing (i) in the Real Estate
Records of Xxxxxx County, Indiana, and centrally in the State of Indiana, and
(ii) the UCC-2 Financing Statement in the Real Estate Records of Xxxxxx County,
Indiana.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Overland Park, Kansas for filing in the Real Estate Records
of Xxxxxxx County, Kansas, and centrally in the State of Kansas.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Overland (Frontage Road), Kansas for filing in the Real
Estate Records of Xxxxxxx County, Kansas and centrally in the State of Kansas.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Northville, Michigan for filing in the Real Estate Records
of Xxxxx County, Michigan, and centrally in the State of Michigan.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Eagan, Minnesota for filing in the Real Estate Records of
Dakota County, Minnesota, and centrally in the State of Minnesota.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Kansas City, Missouri for filing in (i) the Real Estate
Records of Platte County, Missouri, (ii) the Personal Property Records in Platte
County, Missouri, and (iii) centrally in the State of Missouri.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Princeton, New Jersey for filing in Middlesex County, New
Jersey, and centrally in the State of New Jersey.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Tinton Falls, New Jersey for filing in Monmouth County, New
Jersey, and centrally in the State of New Jersey.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Columbus, Ohio for filing in (i) the Real Estate Records of
Franklin County, Ohio, (ii) the Personal Property Records of Franklin County,
Ohio, and (iii) centrally in the State of Ohio.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Sharonville, Ohio for filing in (i) the Real Estate Records
of Xxxxxxxx County, Ohio, (ii) the Personal Property Records of Xxxxxxxx County,
Ohio, and centrally in the State of Ohio.
The UCC-1A Financing Statements from the Borrower with respect to
property located in Portland, Oregon for filing in the Real Property Records of
Multnomah County, Oregon, and the UCC-1 Financing Statement for filing centrally
in the State of Oregon.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Memphis, Tennessee for filing in the Real Estate Records of
Shelby County, Tennessee, and centrally in the State of Tennessee.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Memphis (Poplar Avenue), Tennessee for filing in the Real
Estate Records of Shelby County, Tennessee, and centrally in the State of
Tennessee.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Richardson, Texas for filing in the Real Estate Records of
Dallas County, Texas, and centrally in the State of Texas.
The UCC-1 Financing Statements from the Borrower with respect to
property located in San Antonio, Texas for filing in the Real Estate Records of
Bexar County, Texas, and centrally in the State of Texas.
The UCC-1 Financing Statements from the Borrower with respect to
property located in Xxxx Xxxxx (Richmond), Virginia (the "Virginia Financing
Statements") for filing in the Real Estate Records of Henrico County, Virginia,
and centrally in the Commonwealth of Virginia.
The UCC-1 Financing Statements from the WV Borrower with respect to
property located in Morgantown, West Virginia for filing in the Real Estate
Records of Monongalia County, West Virginia, and centrally in the State of West
Virginia.
The UCC-1 Financing Statements from the Borrower with respect to
accounts located in Tennessee for filing centrally in the State of Tennessee.
The UCC-1 Financing Statements from the Borrower with respect to
accounts located in Pennsylvania for filing centrally in the State of
Pennsylvania.
The UCC-1 Financing Statements from the West Virginia Borrower with
respect to accounts located in Tennessee for filing centrally in the State of
Tennessee.
The UCC-1 Financing Statements from the West Virginia Borrower with
respect to accounts located in Pennsylvania for filing centrally in the State of
Pennsylvania.
The Consolidated Lease Estoppel, Subordination, Non-Disturbance and
Attornment Agreement made by the Borrower and Crossroads Future Financing
Company, L.L.C. for the benefit of the Lender with respect to the Loan.
The Consolidated Lease Estoppel, Subordination, Non-Disturbance and
Attornment Agreement made by the Borrower and Xxxxx Holding Corp. for the
benefit of the Lender with respect to the Loan.
The Consolidated Lease Estoppel, Subordination, Non-Disturbance and
Attornment Agreement made by the Borrower and Crossroads/Memphis Financing
Company II, L.L.C. for the benefit of the Lender with respect to the Loan.
The Consolidated Lease Estoppel, Subordination, Non-Disturbance and
Attornment Agreement made by the WV Borrower and Crossroads/Memphis Financing
Company II, L.L.C. for the benefit of the Lender with respect to the Loan.
SCHEDULE 4.1(B)
EQI Financing Partnership II, L.P.:
----------------------------------
Tennessee
Indiana
Kansas
Ohio
Tennessee
Virginia
Texas
Arizona
Minnesota
New Jersey
Oregon
Michigan
EQI/WV Financing Partnership, L.P.:
-----------------------------------
Tennessee
West Virginia
SCHEDULE 4-5A
TENANT / SUB-TENANT-OWNED PERSONAL PROPERTY
Schedule of personal property not owned by the Borrower:
All furniture, fixtures, and equipment are owned by the Borrower,
except (A) the possible exception of cable television systems,
telecommunications equipment, computers, reservation systems, and copy machines
under capital leases required by a franchisor or (B) "Inventory" as defined by
the Uniform System of accounts for hotels, which is owned by the Tenants and (C)
other minor articles of personal property owned by the tenants or their
management companies.
SCHEDULE 4.5(B) - 1
ZONING VARIANCES / SPECIAL EXCEPTIONS
To the knowledge of the Borrower, there are no grandfathered uses or
improvements, variances or special exceptions with respect to zoning matters
except as expressly set forth in the Zoning and Site Requirement Surveys
prepared by The Planning & Resource Corporation, true, correct and complete
copies of which have been delivered to the Lender.
SCHEDULE 4.5(B)-2
ZONING: EXCEPTIONS TO BY-RIGHT REBUILDING
NONE
SCHEDULE 4.5(B)-3
PARKING EXCEPTIONS
The minor parking deficiencies (which never exceed five parking spaces
per hotel) as disclosed in the Zoning and Site Requirement Surveys prepared by
The Planning & Zoning Resource Corporation, true, complete and correct copies of
which have been delivered to the Lender.
SCHEDULE 4.5(D)
OTHER AGREEMENTS OF BORROWER
The Ground Leases, the Leases, capital improvement contracts, and such
other agreements in the ordinary course of business and to comply with the
requirements of the Loan Documents.
SCHEDULE 4.5 (E)
COPIES OF OPERATING LEASES
SCHEDULE 4.5(G)-1
CONTEMPLATED RENOVATIONS
(See Attached)
SCHEDULE 4.5(G)-2
UTILITY PROBLEMS
All utilities are available, with the possible exception of gas where
electric heat is available.
SCHEDULE 4.5(G)-3
FLOOD PLAIN / ENCROACHMENTS
None of the properties are within a flood plain except as expressly set
forth in the surveys of the property, true and correct copies of which have been
delivered to the Lender.
There are no major encroachments with respect to the properties, except
as shown on the surveys, true and correct copies of which have been delivered to
the Lender.
SCHEDULE 4.6
LITIGATION
There is no material litigation pending against the Borrower Group.
SCHEDULE 4.11
ERISA PLANS
1. Equity Inns Services, Inc. 401(k) Profit Sharing Plan and Trust.
2. Equity Inns, Inc. Executive Deferred Compensation Plan.
3. Equity Inns, Inc. Executive Deferred Compensation Plan Trust. This Trust is
a "grantor trust," established pursuant to Subpart E of Subchapter J of the
IRC.
4. Change and Control and Termination Agreements, by and Between Equity Inns
Services, Inc., Equity Inns, Inc. and each of several executives employed by
Equity Inns Services, Inc. These agreements contain provisions requiring the
provision of welfare benefits to executives after termination of employment
in certain circumstances.
5. Group Health & Dental Plan
6. Group Life Insurance Plan
7. Long-Term Disability Benefit Plan
8. Vision Care Plan
SCHEDULE 4.12
INTELLECTUAL PROPERTY
None. Hotel brand names are owned by the franchisor and franchised to
the tenant/franchisee.
SCHEDULE 4.18
INSURANCE POLICIES
All insurance policies are obtained and maintained by the Tenants, not
the Borrower Parties, and certificates of insurance therefor have been delivered
to the Lender.
INDEX TO
LOAN AND SECURITY AGREEMENT
Page No.
ARTICLE 1- DEFINITIONS.........................................................1
Section 1.1 Certain Defined Terms........................................1
Section 1.2 Accounting Terms: Utilization of GAAP for Purposes of
Calculations Under Agreement.................................8
Section 1.3 Other Definitional Provisions................................9
ARTICLE 2 - LOAN TERMS / DEFEASANCE / SUBSTITUTION.............................9
Section 2.1 Loan.........................................................9
(A) Loan.........................................................9
(B) Note.........................................................9
(C) Use of Proceeds..............................................9
(D) Sums Payable Under Note.....................................10
Section 2.2 Prepayments.................................................10
Section 2.3 Defeasance..................................................10
(A) Defeasance Generally........................................10
(B) Conditions..................................................10
(C) Substituted Defeasance Obligor..............................12
(D) Defeasance Collateral - Quantities and Criteria.............13
(E) Defeasance Collateral - Security Interest. Etc..............13
(F) Costs and Expenses..........................................13
(G) Release of Property.........................................13
Section 2.4 Substitution of Properties..................................14
(A) Substitution Generally......................................14
(B) Conditions..................................................14
(C) Costs and Expenses..........................................16
(D) Release of Property.........................................16
Section 2.5 Other Property Releases.....................................16
ARTICLE 3 - CONDITIONS TO LOAN................................................17
Section 3.1 Conditions to Funding of the Loan on the Closing Date.......17
(A) Loan Documents..............................................17
(B) Performance of Agreements, Truth of Representations
and Warranties..............................................17
(C) Searches....................................................17
(D) Opinions of Counsel.........................................17
(E) Insurance Policies and Endorsements.........................18
(F) Certificates of Formation and Good Standing.................18
(G) Certificates of Incumbency and Resolutions..................18
(H) Letter of Direction.........................................18
(I) Financial Statements........................................18
(J) Appointment of Agent for Service............................19
(K) Closing Certificate.........................................19
(L) Appraisals..................................................19
(M) Environmental Reports.......................................19
(N) Operating Leases, Management, License and Franchise
Agreement.................s.................................19
(O) Zoning......................................................20
(P) Franchisor Comfort Letters..................................20
(Q) Title Policies..............................................20
(R) Surveys.....................................................20
(S) Licenses, Permits and Approvals.............................20
(T) Leases and Other Agreements.................................20
(U) Lender's Inspection.........................................20
(V) Deposits....................................................20
(W) Ground Leases. Estoppels....................................20
(X) Commitment Fee..............................................21
(Y) Legal Fees: Closing Expenses................................21
(Z) Other Requirements..........................................21
(AA) Other Review................................................21
ARTICLE 4 - BORROWER'S REPRESENTATIONS AND WARRANTIES.........................21
Section 4.1 Organization, Powers, Capitalization, Good Standing,
Business....................................................21
(A) Organization and Powers.....................................21
(B) Qualification...............................................21
(C) Business....................................................21
Section 4.2 Authorization of Borrowing, etc.............................22
(A) Authorization of Borrowing. ...............................22
(B) No Conflict.................................................22
(C) Governmental Consents.......................................22
(D) Binding Obligation..........................................22
Section 4.3 Financial Statements........................................22
Section 4.4 Indebtedness and Contingent Obligations.....................23
Section 4.5 Title to Properties; Liens; Zoning; Leases; Agreements;
Rent Roll; Lease Issues; Condition..........................23
Section 4.6 Litigation: Adverse Facts...................................25
Section 4.7 Payment of Taxes............................................25
Section 4.8 Adverse Contracts...........................................25
Section 4.9 Performance of Agreements...................................26
Section 4.10 Governmental Regulation.....................................26
Section 4.11 Employee Benefit Plans......................................26
(A) No Other Plans..............................................26
(B) ERISA and IRC Compliance and Liability......................26
(C) Funding.....................................................27
(D) Prohibited Transactions and Payments........................27
(E) No Termination Event........................................27
(F) ERISA Litigation............................................27
Section 4.12 Intellectual Property.......................................27
Section 4.13 Broker's Fees...............................................28
Section 4.14 Environmental Compliance....................................28
(A) No Environmental Claims.....................................28
(B) Storage of Hazardous Materials..............................28
(C) Compliance with Environmental Laws..........................28
Section 4.15 Solvency....................................................28
Section 4.16 Disclosure..................................................29
Section 4.17 Use of Proceeds and Margin Security.........................29
Section 4.18 Insurance...................................................29
Section 4.19 Compliance with Laws........................................29
Section 4.20 Investments.................................................30
Section 4.21 Legal Opinions..............................................30
Section 4.22 Bankruptcy..................................................30
Section 4.23 Defaults....................................................30
Section 4.24 Names, Principal Places of Business.........................30
ARTICLE 5 - COVENANTS OF BORROWER.............................................31
Section 5.1 Estoppel Certificates.......................................31
Section 5.2 Restriction on Fundamental Changes..........................31
Section 5.3 Transactions with Affiliates................................31
Section 5.4 Compliance with ERISA.......................................32
(A) Employee Benefit Plans......................................32
(B) Termination Events..........................................32
(C) ERISA Notices...............................................32
(D) Certain Covenants...........................................33
(E) No Plan Assets..............................................33
Section 5.5 Princeton, New Jersey Franchise.............................34
Section 5.6 Satisfaction of Loan; Release of Mortgages..................34
ARTICLE 6 - RESTRUCTURING LOAN, SECONDARY MARKET
TRANSACTIONS........................................................35
Section 6.1 Secondary Market Transaction Generally......................35
Section 6.2 Cooperation: Limitations....................................35
Section 6.3 Information.................................................35
Section 6.4 Additional Provisions.......................................36
ARTICLE 7 - MISCELLANEOUS.....................................................36
Section 7.1 Expenses and Attorneys' Fees................................36
Section 7.2 Indemnity...................................................37
Section 7.3 Amendments and Waivers......................................38
Section 7.4 Retention of Borrower's Documents...........................38
Section 7.5 Notices.....................................................38
Section 7.6 Survival of Warranties and Certain Agreements...............38
Section 7.7 Failure or Indulgence Not Waiver: Remedies Cumulative.......38
Section 7.8 Marshaling: Payments Set Aside..............................39
Section 7.9 Independence of Covenants...................................39
Section 7.10 Severability................................................39
Section 7.11 Headings....................................................39
Section 7.12 APPLICABLE LAW..............................................40
Section 7.13 Successors and Assigns: Subsequent Holders of Note..........40
Section 7.14 Sophisticated Parties. Reasonable Terms.
No Fiduciary Relationship...................................40
Section 7.15 Limitation of Liability.....................................40
Section 7.16 No Duty.....................................................41
Section 7.17 Entire Agreement............................................41
Section 7.18 Construction: Supremacy of the Loan Agreement...............41
Section 7.19 CONSENT TO JURISDICTION AND SERVICE OF PROCESS..............41
Section 7.20 WAIVER OF JURY TRIAL........................................42
Section 7.21 Sole Discretion of Lender...................................43
Section 7.22 Joint and Several...........................................43
Section 7.23 Counterparts: Effectiveness.................................43
Section 7.24 Limited Recourse............................................43
