EXHIBIT 10.1
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LHO FINANCING PARTNERSHIP I, L.P.
(Borrower)
to
GENERAL ELECTRIC CAPITAL CORPORATION
(Lender)
LOAN AGREEMENT
Dated: As of July 29, 1999
Property Location: 7800 Normandale Boulevard
Bloomington,
Hennepin County, Minnesota
DOCUMENT PREPARED BY:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: Reese Mason, Esq.
TABLE OF CONTENTS
PAGE
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ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions . . . . . . . . . . . . . . 1
ARTICLE II
LOAN TERMS
Section 2.1 The Loan. . . . . . . . . . . . . . . . . . . . 12
Section 2.2 Interest Rate . . . . . . . . . . . . . . . . . 13
Section 2.3 Terms of Payment. . . . . . . . . . . . . . . . 13
Section 2.4 Prepayment; Defeasance. . . . . . . . . . . . . 15
Section 2.5 Release of Property . . . . . . . . . . . . . . 17
ARTICLE III
SECURITY; RESERVES AND CASH MANAGEMENT
Section 3.1 Security; Establishment of Funds. . . . . . . . 18
Section 3.2 Pledge and Grant of Security Interest . . . . . 19
Section 3.3 Disbursement of Funds . . . . . . . . . . . . . 19
Section 3.4 Intentionally Deleted.. . . . . . . . . . . . . 20
Section 3.5 Cash Management Account.. . . . . . . . . . . . 20
Section 3.6 Payments Received Under the Cash
Management Agreement. . . . . . . . . . . . . . 21
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Closing Conditions. . . . . . . . . . . . . . . 22
ARTICLE V
INSURANCE, CONDEMNATION, AND IMPOUNDS
Section 5.1 Insurance; Casualty and Condemnation. . . . . . 25
Section 5.2 Condemnation. . . . . . . . . . . . . . . . . . 29
Section 5.3 Restoration . . . . . . . . . . . . . . . . . . 29
Section 5.4 Impounds. . . . . . . . . . . . . . . . . . . . 33
Section 5.5 Letters of Credit.. . . . . . . . . . . . . . . 35
ARTICLE VI
ENVIRONMENTAL MATTERS
Section 6.1 Certain Definitions . . . . . . . . . . . . . . 35
Section 6.2 Representations and Warranties on
Environmental Matters . . . . . . . . . . . . . 36
Section 6.3 Covenants on Environmental Matters. . . . . . . 36
Section 6.4 Allocation of Risks and Indemnity . . . . . . . 37
Section 6.5 No Waiver . . . . . . . . . . . . . . . . . . . 37
PAGE
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ARTICLE VII
LEASING MATTERS
Section 7.1 Representations and Warranties on Leases. . . . 38
Section 7.2 Approval Rights . . . . . . . . . . . . . . . . 38
Section 7.3 Covenants . . . . . . . . . . . . . . . . . . . 38
Section 7.4 Tenant Estoppels. . . . . . . . . . . . . . . . 38
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.1 Organization, Power and Authority . . . . . . . 39
Section 8.2 Validity of Loan Documents. . . . . . . . . . . 39
Section 8.3 No Conflicts. . . . . . . . . . . . . . . . . . 39
Section 8.4 Liabilities; Litigation.. . . . . . . . . . . . 39
Section 8.5 Taxes and Assessments . . . . . . . . . . . . . 40
Section 8.6 Other Agreements; Defaults. . . . . . . . . . . 40
Section 8.7 Title . . . . . . . . . . . . . . . . . . . . . 40
Section 8.8 Compliance with Law.. . . . . . . . . . . . . . 41
Section 8.9 Location of Borrower. . . . . . . . . . . . . . 41
Section 8.10 ERISA.. . . . . . . . . . . . . . . . . . . . . 41
Section 8.11 Forfeiture. . . . . . . . . . . . . . . . . . . 41
Section 8.12 Tax Filings . . . . . . . . . . . . . . . . . . 42
Section 8.13 Solvency. . . . . . . . . . . . . . . . . . . . 42
Section 8.14 Full and Accurate Disclosure. . . . . . . . . . 42
Section 8.15 Flood Zone. . . . . . . . . . . . . . . . . . . 42
Section 8.16 Federal Reserve Regulations . . . . . . . . . . 43
Section 8.17 Not a Foreign Person. . . . . . . . . . . . . . 43
Section 8.18 Separate Lots . . . . . . . . . . . . . . . . . 43
Section 8.19 No Prior Assignment . . . . . . . . . . . . . . 43
Section 8.20 Insurance . . . . . . . . . . . . . . . . . . . 43
Section 8.21 Use of the Property . . . . . . . . . . . . . . 43
Section 8.22 Certificate of Occupancy; Licenses. . . . . . . 43
Section 8.23 Physical Condition. . . . . . . . . . . . . . . 43
Section 8.24 Boundaries. . . . . . . . . . . . . . . . . . . 44
Section 8.25 Intentionally Deleted.. . . . . . . . . . . . . 44
Section 8.26 Intentionally Deleted.. . . . . . . . . . . . . 44
Section 8.27 Filing and Recording Taxes. . . . . . . . . . . 44
Section 8.28 Single Purpose Entity/Separateness. . . . . . . 44
Section 8.29 Management Agreement. . . . . . . . . . . . . . 48
Section 8.30 Operating Leases. . . . . . . . . . . . . . . . 48
Section 8.31 Investment Company Act. . . . . . . . . . . . . 49
Section 8.32 Leases. . . . . . . . . . . . . . . . . . . . . 49
Section 8.33 SPE Compliance. . . . . . . . . . . . . . . . . 49
Section 8.34 Ground Lease Representations and Warranties . . 49
Section 8.35 Intentionally Deleted.. . . . . . . . . . . . . 50
Section 8.36 Parking Agreements. . . . . . . . . . . . . . . 50
ARTICLE IX
FINANCIAL REPORTING
Section 9.1 Financial Statements. . . . . . . . . . . . . . 51
Section 9.2 Accounting Principles . . . . . . . . . . . . . 52
Section 9.3 Other Information; Access . . . . . . . . . . . 52
Section 9.4 Format of Delivery. . . . . . . . . . . . . . . 52
PAGE
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ARTICLE X
COVENANTS
Section 10.1 Due on Sale and Encumbrance; Transfers
of Interests. . . . . . . . . . . . . . . . . . 53
Section 10.2 Taxes; Utility Charges. . . . . . . . . . . . . 53
Section 10.3 Operating Lease . . . . . . . . . . . . . . . . 53
Section 10.4 Operation; Maintenance; Inspection. . . . . . . 53
Section 10.5 Taxes on Security . . . . . . . . . . . . . . . 54
Section 10.6 Legal Existence; Name, Etc. . . . . . . . . . . 54
Section 10.7 Further Assurances. . . . . . . . . . . . . . . 54
Section 10.8 Estoppel Certificates.. . . . . . . . . . . . . 54
Section 10.9 Notice of Certain Events. . . . . . . . . . . . 55
Section 10.10 Indemnification . . . . . . . . . . . . . . . . 55
Section 10.11 Payment for Labor and Materials . . . . . . . . 57
Section 10.12 Alterations . . . . . . . . . . . . . . . . . . 56
Section 10.13 Handicapped Access. . . . . . . . . . . . . . . 56
Section 10.14 Certain Hotel/Operating Lease Covenants . . . . 57
Section 10.15 The Ground Lease. . . . . . . . . . . . . . . . 57
Section 10.16 O & M Agreement . . . . . . . . . . . . . . . . 57
ARTICLE XI
EVENTS OF DEFAULT
Section 11.1 Payments. . . . . . . . . . . . . . . . . . . . 58
Section 11.2 Insurance . . . . . . . . . . . . . . . . . . . 58
Section 11.3 Single Purpose Entity . . . . . . . . . . . . . 58
Section 11.4 Insolvency Opinion. . . . . . . . . . . . . . . 58
Section 11.5 Taxes . . . . . . . . . . . . . . . . . . . . . 58
Section 11.6 Sale, Encumbrance, Etc. . . . . . . . . . . . . 58
Section 11.7 Representations and Warranties. . . . . . . . . 58
Section 11.8 Additional Loan . . . . . . . . . . . . . . . . 58
Section 11.9 Involuntary Bankruptcy or Other Proceeding. . . 58
Section 11.10 Voluntary Petitions, Etc. . . . . . . . . . . . 58
Section 11.11 Covenants . . . . . . . . . . . . . . . . . . . 59
Section 11.12 Operating Lease.. . . . . . . . . . . . . . . . 59
Section 11.13 Management Agreement. . . . . . . . . . . . . . 59
Section 11.14 Ground Lease Rent . . . . . . . . . . . . . . . 59
Section 11.15 Ground Lease Default. . . . . . . . . . . . . . 59
ARTICLE XII
REMEDIES
Section 12.1 Remedies - Insolvency Events . . . . . . . . . 60
Section 12.2 Remedies - Other Events.. . . . . . . . . . . . 60
Section 12.3 Lender's Right to Perform the Obligations . . . 61
Section 12.4 Cross-Default; Cross-Collateralization;
Waiver of Marshalling of Assets.. . . . . . . . 61
ARTICLE XIII
LIMITATIONS ON LIABILITY
Section 13.1 Limitation on Liability . . . . . . . . . . . . 62
Section 13.2 Limitation on Liability of Lender's Officers
Employees, Etc. . . . . . . . . . . . . . . . . 63
PAGE
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ARTICLE XIV
SECURITIZATION
Section 14.1 Securitization. . . . . . . . . . . . . . . . . 63
Section 14.2 Securitization Indemnification. . . . . . . . . 64
Section 14.3 Servicer. . . . . . . . . . . . . . . . . . . . 66
Section 14.4 Uncrossing the Loan and the Additional Loan . . 66
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices . . . . . . . . . . . . . . . . . . . . 66
Section 15.2 Amendments and Waivers. . . . . . . . . . . . . 67
Section 15.3 Limitation on Interest. . . . . . . . . . . . . 67
Section 15.4 Invalid Provisions. . . . . . . . . . . . . . . 68
Section 15.5 Reimbursement of Expenses . . . . . . . . . . . 68
Section 15.6 Approvals; Third Parties; Conditions. . . . . . 68
Section 15.7 Lender Not in Control; No Partnership . . . . . 69
Section 15.8 Time of the Essence . . . . . . . . . . . . . . 69
Section 15.9 Successors and Assigns. . . . . . . . . . . . . 69
Section 15.10 Renewal, Extension or Rearrangement . . . . . . 69
Section 15.11 Waivers . . . . . . . . . . . . . . . . . . . . 69
Section 15.12 Cumulative Rights; Joint and Several Liability. 69
Section 15.13 Singular and Plural . . . . . . . . . . . . . . 70
Section 15.14 Phrases . . . . . . . . . . . . . . . . . . . . 70
Section 15.15 Exhibits and Schedules. . . . . . . . . . . . . 70
Section 15.16 Titles of Articles, Sections and Subsections. . 70
Section 15.17 Promotional Material. . . . . . . . . . . . . . 70
Section 15.18 Survival. . . . . . . . . . . . . . . . . . . . 70
Section 15.19 Waiver of Jury Trial. . . . . . . . . . . . . . 70
Section 15.20 Waiver of Punitive or Consequential Damages . . 70
Section 15.21 Governing Law.. . . . . . . . . . . . . . . . . 71
Section 15.22 Entire Agreement. . . . . . . . . . . . . . . . 71
Section 15.23 Counterparts. . . . . . . . . . . . . . . . . . 71
Section 15.24 Brokers and Financial Advisors. . . . . . . . . 72
Section 15.25 Conflicts . . . . . . . . . . . . . . . . . . . 72
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B FORM OF FINANCIAL STATEMENTS
SCHEDULE I REQUIRED REPAIRS
SCHEDULE II OPERATING LEASE
SCHEDULE III RELEASE AMOUNTS
SCHEDULE IV LEASE PURCHASE OPTION
SCHEDULE V INSURANCE CLAIMS
LOAN AGREEMENT
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This Loan Agreement (this "Agreement") is entered into as of
July 29, 1999, between GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation ("Lender"), and LHO FINANCING PARTNERSHIP I, L.P., a Delaware
limited partnership ("Borrower").
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. As used herein, the following
terms have the meanings indicated:
"Access Laws" has the meaning assigned in Section 10.13.
"Accrued Interest" has the meaning assigned in Section 2.3(b).
"Additional Insolvency Opinion" has the meaning assigned in
Section 8.33.
"Additional Loan" means the loan (other than the Loan) made to
Borrower by Lender on the date hereof, which Additional Loan is secured by
a deed of trust encumbering the Meridien Property.
"Additional Loan Documents" shall mean all documents
evidencing, securing, governing or otherwise pertaining to the Additional
Loan, and all amendments, modifications, renewals, substitutions or
replacements of any of the foregoing.
"Additional Payment Stream" has the meaning assigned in
Section 2.4(c).
"Additional Property" means the property (other than the
Property) which is mortgaged by Borrower as of the date hereof to secure
the Additional Loan.
"Adjusted Rate" has the meaning assigned in Section 2.2.
"Adjusted Release Amount" shall mean the product of (a) the
quotient obtained by dividing the original Release Amount for the Property
by the sum of the original Release Amount for the Property and the
Additional Property, (b) the outstanding principal balance of the Loan
(i.e., the Note and the Defeased Note, if applicable) and the Additional
Loan, and (c) one hundred twenty-five percent (125%); provided, however,
that, the "Adjusted Release Amount" shall mean the outstanding principal
balance of the Loan (taking into account the "Additional Payment Stream"
(as defined in the Additional Loan Documents)) in the event that the
Additional Loan previously has been completely defeased in accordance with
the Additional Loan Documents.
"Affiliate" means (a) any corporation in which Borrower or any
partner, shareholder, director, officer, member, or manager of Borrower
directly or indirectly owns or controls more than ten percent (10%) of the
beneficial interest, (b) any partnership, joint venture or limited
liability company in which Borrower or any partner, shareholder, director,
officer, member, or manager of Borrower is a partner, joint venturer or
member, (c) any trust in which Borrower or any partner, shareholder,
director, officer, member or manager of Borrower is a trustee or
beneficiary, (d) any entity of any type which is directly or indirectly
owned or controlled by Borrower or any partner, shareholder, director,
officer, member or manager of Borrower, (e) any partner, shareholder,
director, officer, member, manager or employee of Borrower, (f) any Person
related by birth, adoption or marriage to any partner, shareholder,
director, officer, member, manager, or employee of Borrower, or (g) any
Borrower Party.
"Agreement" means this Loan Agreement, as amended from time to
time.
"Annual Budget" shall mean the operating budget, including all
planned capital expenditures, for the Property prepared by Borrower, the
Operating Lessee or Manager for the applicable calendar year or other
period.
"Anticipated Payment Date" means August 1, 2009.
"Approved Annual Budget" has the meaning assigned in Section
2.3(h).
"Assignment of Leases and Rents" means the Assignment of Leases
and Rents, executed by Borrower for the benefit of Lender, and pertaining
to leases of space in the Property and any amendments, modifications,
renewals, substitutions or replacement thereof.
"Award" has the meaning assigned in Section 5.2.
"Bankruptcy Party" has the meaning assigned in Section 11.9.
"Basic Carrying Costs" shall mean the sum of Ground Rent, Taxes
and Insurance Premiums for the Property for the relevant calendar year or
payment period.
"Borrower Party" means any Joinder Party, any guarantor, any
general partner of Borrower, if Borrower is a partnership or limited
partnership, any general partner in any partnership or limited partnership
that is a general partner of Borrower, any managing member of Borrower if
Borrower is a limited liability company, and any managing member in any
limited liability company that is a managing member of Borrower, at any
level.
"Business Day" means a day other than a Saturday, a Sunday, or
a legal holiday on which national banks located in the State of New York
are not open for general banking business.
"Capital Expenditures" means, for any period, the amount
expended for items capitalized under generally accepted accounting
principles (including expenditures for building improvements or major
repairs, leasing commissions and tenant improvements).
"Cash Expenses" means, for any period, the operating expenses
for the operation of the Property as set forth in an Approved Annual
Budget, to the extent that such expenses are actually incurred by Borrower,
minus any payments into the Tax and Insurance Escrow Fund.
"Cash Management Account" has the meaning set forth in Section
3.5(a).
"Cash Management Agreement" has the meaning set forth in
Section 2.3(i).
"Casualty Consultant" has the meaning set forth in Section
5.3(b)(iii).
"Casualty Retainage" has the meaning set forth in Section
5.3(b)(iv).
"Closing Date" means the date the Loan is funded by Lender.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations
issued pursuant thereto in temporary or final form.
"Condemnation" has the meaning assigned in Section 5.2.
"Condemnation Proceeds" has the meaning assigned in Section
5.3(b).
"Contract Rate" has the meaning assigned in Section 2.2.
"Debt" shall mean the outstanding principal amount set forth
in, and evidenced by, this Agreement and the Note, together with all
interest accrued and unpaid thereon and all other sums (including the Yield
Maintenance Premium) due to Lender in respect of the Loan under the Note,
this Agreement, the Mortgage or any other Loan Document and the Additional
Loan under the Additional Loan Documents.
"Debt Service" means the aggregate interest, fixed principal,
and other payments due under the Loan, and on any other outstanding
permitted Indebtedness approved by Lender for the period of time for which
calculated.
"Debt Service Coverage Ratio" shall mean a ratio for the
applicable period in which:
(a) the numerator is (i) for so long as the Operating Lease
is in effect, the Lease Term NOI and (ii) at all other times during the
term of the Loan, the Net Operating Income for the Property and/or the
Additional Property, as applicable,; and
(b) the denominator is the aggregate amount of principal and
interest due and payable on the Note (or in the event that a Defeasance
Event has occurred, the Undefeased Note) and/or the note executed in
connection with the Additional Loan secured by a mortgage and/or a deed of
trust encumbering the Additional Property referred to in the numerator, as
applicable, based on the actual loan constant.
"Default Rate" means the lesser of (a) the maximum rate of
interest allowed by applicable law, and (b) five percent (5%) per annum in
excess of the Contract Rate or the Adjusted Rate, whichever is then in
effect.
"Defeasance Date" has the meaning ascribed in Section
2.4(b)(i).
"Defeasance Deposit" shall mean an amount equal to the sum of
the Adjusted Release Amount (when in connection with a release, whether
pursuant to a partial defeasance or defeasance in full, provided that if in
connection with a partial defeasance, then the Defeasance Deposit shall
include any prior Defeasance Deposits deposited in connection with prior
Defeasance Events) or, in a partial defeasance where no release is sought,
the principal amount of the Defeased Note, as applicable, the Yield
Maintenance Premium, any costs and expenses incurred or to be incurred in
the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance
Payments and any revenue, documentary stamp or intangible taxes or any
other tax or charge due in connection with the transfer of the Note or the
Defeased Note, as applicable, the creation of the Defeased Note and the
Undefeased Note, if applicable, or otherwise required to accomplish the
requirements of Sections 2.4 and 2.5 hereof.
"Defeasance Event" has the meaning assigned in Section 2.4(b).
"Defeased Note" has the meaning assigned in Section 2.4(b).
"DSCR Event" means in the event that, at any time during the
Loan, the Debt Service Coverage Ratio for the Property and the Additional
Property, in the aggregate, for the immediately preceding twelve (12)
months shall be less than 1.4 to 1.0.; provided, however, that during the
continuance of a Restoration (and until the stabilization thereafter) a
DSCR Event shall only occur in the event that the Debt Service Coverage
Ratio for the Property and Additional Property, in the aggregate, for the
immediately preceding twelve (12) months shall be less than 1.2 to 1.0.
"DSCR Release Event" means in the event that, following the
occurrence of a DSCR Event, the Debt Service Coverage Ratio for the
Property and the Additional Property, in the aggregate, for the immediately
preceding twelve (12) months shall be equal to or greater than 1.4 or 1.0
for two consecutive calendar quarters.
"Eligible Account" shall mean a separate and identifiable
account from all other funds held by the holding institution that is either
(i) an account or accounts maintained with a federal or state-chartered
depository institution or trust company which complies with the definition
of Eligible Institution or (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity which, in the case of a
state chartered depository institution or trust company is subject to
regulations substantially similar to 12 C.F.R. Section 9.10(b), having in
either case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit,
passbook or other instrument.
"Eligible Institution" shall mean a depository institution or
trust company that satisfies the Rating Criteria.
"Environmental Laws" has the meaning assigned in
Section 6.1(a).
"ERISA" has the meaning assigned in Section 8.10(a).
"Event of Default" has the meaning assigned in Article 11.
"Extraordinary Expenses" means an extraordinary operating
expense or capital expense not set forth in an Approved Annual Budget.
"FFE Note" means that certain Promissory Note dated as of April
29, 1998 by Radisson Bloomington Corporation in favor of LaSalle Hotel
Operating Partnership, L.P., assigned to Borrower pursuant to that certain
Assignment of Note dated as of the date hereof.
"FFE Note Security Agreement" means that certain Security
Agreement (Pledge of Notes) given by Borrower to Lender dated as of the
date hereof.
"Funds" means the Required Repair Fund and the Replacement
Escrow Fund.
"Ground Lease" means that certain Lease dated March 14, 1980,
between Ground Lessor, as landlord, and Radisson South Company
(predecessor-in-interest to Borrower), as tenant, as amended by that
certain First Amendment to Lease dated as of November 24, 1995 by and
between Ground Lessor and Minnesota California Partners (predecessor-in-
interest to Borrower).
"Ground Lessor" shall mean Carlson Real Estate Company, a
Minnesota limited partnership, its successors and assigns.
"Governmental Authority" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise) having jurisdiction over the Property, the Borrower and/or the
Loan, as applicable, whether now or hereafter in existence.
"Hazardous Materials" has the meaning assigned in
Section 6.1(b).
"Hazardous Materials Indemnity Agreement" shall mean that
certain hazardous materials indemnity agreement dated the date hereof by
the Borrower and Indemnitor in favor of Lender.
"Improvements" shall have the meaning assigned to such term in
the Mortgage.
"Indebtedness" means, for any Person, without duplication:
(a) all indebtedness of such Person for borrowed money, for amounts drawn
under a letter of credit, or for the deferred purchase price of property
for which such Person or its assets is liable, (b) all unfunded amounts
under a loan agreement, letter of credit, or other credit facility for
which such Person would be liable, if such amounts were advanced under the
credit facility, (c) all amounts required to be paid by such Person as a
guaranteed payment to partners or a preferred or special dividend,
including any mandatory redemption of shares or interests, (d) all
indebtedness guaranteed by such Person, directly or indirectly, (e) all
obligations under leases that constitute capital leases for which such
Person is liable, and (f) all obligations of such Person under interest
rate swaps, caps, floors, collars and other interest hedge agreements, in
each case whether such Person is liable contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which obligations such
Person otherwise assures a creditor against loss.
"Indemnitor" shall mean the Operating Partnership.
"Independent Director" means a Person who shall not have been
at the time of such individual's appointment or at any time while serving
as a director of the corporate general partner of Borrower, and may not
have been at any time during the preceding five years or thereafter (i) a
shareholder of, or an officer, director, partner or employee of, Borrower
or any of its shareholders, subsidiaries or affiliates, (ii) a customer of,
or supplier to, Borrower or any of its shareholders, subsidiaries or
affiliates, (iii) a person or other entity controlling or under common
control with any such shareholder, partner, supplier or customer, or (iv) a
member of the immediate family of any such shareholder, officer, director,
partner, employee, supplier or customer of Borrower. As used herein, the
term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a person
or entity, whether through ownership of voting securities, by contract or
otherwise.
"Insolvency Opinion" has the meaning assigned in Section 8.33.
"Installment Amount" has the meaning assigned in Section
5.4(b).
"Insurance Premiums" has the meaning assigned in Section
5.1(b).
"Insurance Proceeds" has the meaning assigned in Section
5.3(b).
"Joinder Party" means the Persons executing the Joinder hereto.
"Lease" shall mean all leases, subleases, occupancy agreements,
licenses, concessions, rental contracts and other agreements (written or
oral) now or hereafter existing relating to the use or occupancy of the
project located on the Property, including the Operating Lease, together
with all guarantees, letters of credit and other credit support,
modifications, extensions and renewals thereof, whether before or after the
filing by or against Borrower of any petition of relief under 11 U.S.C.
Section 101 et seq., and all related security and other deposits.
"Lease Term NOI" means the amount obtained by subtracting Lease
Term Operating Expenses from Lease Term Operating Revenues.
"Lease Term Operating Expenses" means all Operating Expenses
incurred by Borrower for so long as the Operating Lease is in effect, which
Lease Term Operating Expenses shall not include any operating expenses paid
by Operating Lessee pursuant to its obligations under the Operating Lease.
"Lease Term Operating Revenues" means all operating Revenue of
Borrower for so long as the Operating Lease is in effect, which shall be
comprised of Operating Lease Rent and other Operating Revenues, if any,
derived by Borrower.
"Legal Requirements" shall mean federal, state, county,
municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting the Property or any part thereof or the construction,
use, alteration or operation thereof, or any part thereof, whether now or
hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments,
either of record or known to Borrower, at any time in force affecting the
Property or any part thereof, including, without limitation, any which may
(i) require repairs, modifications or alterations in or to the Property or
any part thereof, or (ii) any way limit the use and enjoyment thereof.
"Letter of Credit" shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit in favor of Lender and
entitling Lender to draw thereon in New York, New York, issued by a
domestic Eligible Institution with an office in New York, New York.
"Liabilities" has the meaning assigned in Section 14.2(b).
"Lien" means any interest, or claim thereof, in the Property
securing an obligation owed to, or a claim by, any Person other than the
owner of the Property, whether such interest is based on common law,
statute or contract, including the lien or security interest arising from a
deed of trust, mortgage, assignment, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a Lease, consignment or
bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, Leases and other title exceptions and
encumbrances affecting the Property.
"Loan" means the loan made by Lender to Borrower under this
Agreement and all other amounts secured by the Loan Documents.
"Loan Documents" means: (a) this Agreement, (b) the Note,
(c) the Mortgage, (d) the Second Mortgage, (e) the Assignment of Leases and
Rents, (f) the Hazardous Materials Indemnity Agreement, (g) Uniform
Commercial Code financing statements, (h) such assignments of management
agreements, contracts and other rights as may be requested by
Lender, (i) the Cash Management Agreement, (j) the FFE Note Security
Agreement, (k) the O&M Agreement, (l) all other documents evidencing,
securing, governing or otherwise pertaining to the Loan, and (m) all
amendments, modifications, renewals, substitutions or replacements of any
of the foregoing.
"Lockout Yield Maintenance Premium" shall mean an amount equal
to the greater of (a) one percent (1%) of the outstanding principal amount
of the Loan to be prepaid or satisfied, as applicable, or (b) the Yield
Maintenance Premium that would be required if a Defeasance Event had
occurred (whether or not permitted under this Agreement) in an amount equal
to the outstanding principal amount of the Loan to be satisfied or prepaid,
as applicable; plus if the prepayment of which the Lockout Yield
Maintenance Premium is a part is not paid on a Payment Date, the interest
that would have accrued on the Loan through the next Payment Date.
"LTV" means the outstanding principal balance of the Note to
the appraised or underwritten (based upon the underwriting procedures and
guidelines utilized as of the Closing Date) value of the Property,
determined by Lender in its reasonable discretion.
"Management Agreement" means the management agreement entered
into by and between Borrower or Operating Lessee, as applicable, and the
Manager pursuant to which the Manager is to provide management and other
services with respect to the Property.
"Manager" means Radisson Hotel Corporation, or any replacement
manager approved in accordance with the terms and provisions of the Loan
Documents.
"Maturity Date" means the earliest of (a) August 1, 2024;
(b) any earlier date on which the entire Loan is required to be paid in
full, by acceleration or otherwise, under this Agreement or any of the
other Loan Documents; or (c) if the Loan is not subject to a Securitization
on the Anticipated Payment Date, the Anticipated Payment Date.
"Meridien Property" shall mean the premises known as "Le
Meridien Dallas", located at 650 Pearl Street, Dallas, Texas.
"Monthly Debt Service Payment Amount" has the meaning assigned
in Section 2.3(a).
"Mortgage" the Fee and Leasehold Mortgage, Assignment of Leases
and Rents, Security Agreement and Fixture Filing, executed by Borrower in
favor of Lender, covering the Property and any amendments, modifications,
renewals, substitutions or replacement thereof.
"Net Operating Income" means the amount obtained by subtracting
Operating Expenses from Operating Revenues.
"Net Proceeds" has the meaning assigned in Section 5.3(b).
"Net Proceeds Deficiency" has the meaning assigned in Section
5.3(b)(vi).
"Note" means the Promissory Note of even date, in the stated
principal amount of $30,300,000.00, executed by Borrower, and payable to
the order of Lender in evidence of the Loan as the same may hereafter be
modified, amended, restated, renewed or replaced and including any Defeased
Note and Undefeased Note that may exist from time to time.
"O&M Agreement" means that certain Operation and Maintenance
Agreement dated the date hereof between Borrower and Lender given in
connection with the Loan, as the same may be amended, restated, replaced,
supplemental or otherwise modified from time to time.
"Offering Document" has the meaning assigned in Section
14.2(a).
"Operating Expenses" means all reasonable and necessary
expenses of Borrower (not paid by Operating Lessee pursuant to the
obligations of Operating Lessee under the Operating Lease for so long as
the Operating Lease remains in effect) for operating the Property and the
Additional Property, if applicable, in the ordinary course of business
which are paid in cash by or on behalf of Borrower and which are directly
associated with and fairly allocable to the Property and the Additional
Property, if applicable, for the applicable period, including real estate
taxes and assessments, insurance premiums, maintenance costs, management
fees and costs for the Property and the Additional Property, if applicable,
accounting, legal, and other professional fees, fees relating to
environmental and net cash flow and audits, and other expenses incurred by
Lender and reimbursed by Borrower under this Agreement and the other Loan
Documents, deposits to the Replacement Escrow Fund, Tax and Insurance Fund,
deposits to the escrows required pursuant to the Additional Loan Documents,
deposits or "book-entries" for reserves required pursuant to Operating
Leases to which Borrower is a party, wages, salaries, and personnel
expenses, but excluding Debt Service and debt service paid in connection
with the Additional Loan, capital expenditures with respect to the Property
and the Additional Property, if applicable, any of the foregoing expenses
which are paid from deposits to cash reserves previously included as
Operating Expenses, any payment or expense for which Borrower was or is to
be reimbursed from proceeds of the Loan and the applicable Additional Loan,
or from proceeds of insurance or by any third party, and any non-cash
charges such as depreciation and amortization. Any management fee or other
expense payable to Borrower or to an Affiliate of Borrower with respect to
the Property and the Additional Property, if applicable shall be included
as an Operating Expense only with Lender's prior approval. Operating
Expenses shall not include any (i) expenses (including, without limitation,
federal, state or local income taxes or legal and other professional fees)
unrelated to the operation of the Property and the Additional Property, if
applicable.
"Operating Lease" means the lease agreement in effect between
the Borrower and the Operating Lessee for the use and operation of the
Property and all amendments, modifications, renewals, substitutions or
replacements of such lease. The initial Operating Lease in effect as of
the date hereof is identified on Schedule II attached hereto.
"Operating Lease Rent" shall mean collectively, (a) all rents,
revenues, issues, profits, income and proceeds due or to become due to
Borrower under the Operating Lease, and (b) any payments of principal
and/or interest on the FFE Note (whether denominated as principal, interest
or rent).
"Operating Lessee" means lessee under the Operating Lease. The
initial Operating Lessee under the Operating Lease in effect as of the date
hereof is identified on Schedule II attached hereto.
"Operating Partnership" shall mean LaSalle Hotel Operating
Partnership L.P., a Delaware limited partnership.
"Operating Revenues" means all gross revenues of Borrower
derived from the Property and the Additional Property, if applicable, or
otherwise arising in respect of the Property and the Additional Property,
if applicable, which are properly allocable to the Property and such
Additional Property for the applicable period, including Rent, Operating
Lease Rent, interest and other receipts from Leases and parking agreements,
concession fees and charges and other miscellaneous operating revenues at
the Property and the Additional Property, if applicable, but excluding
security deposits and earnest money deposits until they are forfeited by
the depositor, advance rentals until they are earned, and proceeds from a
sale or other disposition. Operating Revenues shall not include (a) any
condemnation or insurance proceeds, other than the proceeds of any business
interruption or loss of income insurance received by Borrower, (b) any
proceeds resulting from the sale, exchange, transfer, financing or
refinancing of all or any part of the Property or the Additional Property,
(c) any rent accrued by Borrower but not received because of any free rent
provisions or other rental concessions in any Lease, (d) any repayments
received from tenants of principal loaned or advanced to tenants by
Borrower, (e) any payments due pursuant to the terms of any Lease in
connection with the cancellation or termination of a Lease, (f) investment
income on any reserves or funds not related to the normal operation of the
Property or the Additional Property, including, without limitation, funds
allocated to pay for construction expenses or (g) any type of income other
than Operating Lease Rent that would otherwise be considered Operating
Revenues pursuant to the provisions above but is paid directly by any
tenant to a Person or entity other than Borrower.
"Parking Agreements" shall mean, collectively, the Restaurant
Parking Agreement and the Sofitel Parking Agreement.
"Payment Date" shall mean the first day of each calendar month
commencing on the first day of September 1, 1999.
"Permitted Encumbrances" means outstanding liens, easements,
restrictions, security interests and other exceptions to title set forth in
the policies of title insurance insuring the lien of the Mortgage, together
with the liens and security interests in favor of Lender created by the
Loan Documents.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, trustee, estate, limited
liability company, unincorporated organization, real estate investment
trust, government or any agency or political subdivision thereof, or any
other form of entity.
"Personalty" shall have the meaning assigned to such term in
the Mortgage.
"Policies" has the meaning assigned in Section 5.1(b).
"Policy" has the meaning assigned in Section 5.1(b).
"Potential Default" means the occurrence of any event or
condition which, with the giving of notice, the passage of time, or both,
would constitute an Event of Default.
"Property" means each parcel of real property more particularly
described on Exhibit A attached hereto, and the improvements thereon owned
by Borrower and encumbered by the Mortgage, the Second Mortgage, and the
FFE Note, together with all rights pertaining to such property improvements
and FFE Note.
"Property Condition Report" means that certain Property
Condition Report dated March 17, 1999 prepared by International Valuation
and Inspection Inc..
"Rating Agencies" means each of Standard & Poor's, Moody's
Investors Service, Inc., Duff & Phelps Credit Rating Co. and Fitch IBCA,
Inc., or any other nationally-recognized statistical rating agency which
has been approved by Lender; provided, that, after a Securitization,
"Rating Agencies" shall be deemed to mean the Rating Agencies that have
rated the Securities issued in connection with the Securitization.
"Rating Criteria" with respect to any Person, shall mean the
short term unsecured debt obligations or commercial paper which are rated
at least A-1 by Standard & Poor's Ratings Group, P-1 by Moody's Investors
Service, Inc., D-1 by Duff & Phelps Credit Rating Co. and F-1+ by Fitch
IBCA, Inc. in the case of accounts in which funds are held for 30 days or
less (or, in the case of accounts in which funds are held for more than 30
days, the long term unsecured debt obligations of which are rated at least
"AA-" by Fitch, Duff and Standard & Poor's and "Aa3" by Moody's).
"Registration Statement" has the meaning assigned in Section
14.2(b).
"Release Amount" means, as applicable, the release amount for
the Property or the Additional Property as set forth on Schedule III
hereto.
"Release Date" shall mean the earlier of (i) the date that is
two (2) years from the "startup day" within the meaning of Section
860G(a)(9) of the Code of the REMIC Trust or (ii) three (3) years from the
first Payment Date.
"REMIC Trust" shall mean a "real estate mortgage investment
conduit" within the meaning of Section 860D of the Code that holds the
Note.
"Rent" shall mean all rents, revenues, issues, profits, income
and proceeds due or to become due from tenants of the Property, including
rentals and all other payments of any kind under the Operating Lease, and
Leases (if any) for using, leasing, licensing, possessing, operating from,
rendering in, selling or otherwise enjoying the Property actually received
by Borrower, including, without limitation, all hotel receipts, revenues
and credit card receipts collected from guest rooms, restaurants, bars,
meeting rooms, banquet rooms and recreational facilities, all receivables,
customer obligations, installment payment obligations and other obligations
now existing or hereafter arising or created out of the sale, lease,
sublease, license, concession or other grant of the right of the use and
occupancy of property or rendering of services by Borrower, any Operating
Lessee or any operator or manager of the hotel or the commercial space
located in the Improvements or acquired from others (including, without
limitation, from the rental of any office space, retail space, guest rooms
or other space, halls, stores, and offices, and deposits securing
reservations of such space), license, lease, sublease and concession fees
and rentals, health club membership fees, food and beverage wholesale and
retail sales, service charges, vending machine sales and proceeds, if any,
from business interruption or other loss of income insurance.
"Replacement Deposit" has the meaning assigned in Section
3.1(b).
"Replacement Escrow Fund" has the meaning assigned in Section
3.1(b).
"Replacement Fund Recoupment Amount" has the meaning assigned
in Section 3.1(b).
"Required Repair Fund" has the meaning assigned in Section
3.1(a).
"Restaurant Parking Agreement" means that certain Parking
Agreement dated November 2, 1995 by and between Minnesota California
Partners (predecessor-in-interest to Borrower), Carlson Real Estate Company
and the City of Bloomington.
"Restoration" shall mean the repair and restoration of the
Property (including, without limitation, the preparation of designs and
plans for such repair and restoration) after a casualty or Condemnation as
nearly as possible to the condition the Property was in immediately prior
to such casualty or Condemnation, with such alterations as may be
reasonably approved by Lender.
"Scheduled Defeasance Payments" has the meaning assigned in
Section 2.4(c).
"Second Mortgage" means the Second Fee and Leasehold Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing,
executed by Borrower in favor of Lender, securing the Additional Loan and
encumbering the Property and any amendments, modifications, renewals,
substitutions or replacements thereof.
"Securities" has the meaning assigned in Section 14.1.
"Securities Act" has the meaning assigned in Section 14.2.
"Securitization" has the meaning assigned in Section 14.1.
"Securitization Information" has the meaning assigned in
Section 14.1(a)(iii).
"Security Agreement" has the meaning assigned in Section
2.4(b)(vi).
"Servicer" has the meaning assigned in Section 14.3.
"Servicing Agreement" has the meaning assigned in Section 14.3.
"Severed Loan Documents" has the meaning assigned in Section
12.2(c).
"Severing Documentation" has the meaning assigned in Section
14.4.
"Single Purpose Bankruptcy Remote Entity" has the meaning
assigned in Section 8.28(a).
"Site Assessment" means an environmental engineering report for
the Property prepared at Borrower's expense by an engineer engaged by
Borrower and approved by Lender, and in a manner satisfactory to Lender,
based upon an investigation relating to and making appropriate inquiries
concerning the existence of Hazardous Materials on or about the Property,
and the past or present discharge, disposal, release or escape of any such
substances, all consistent with ASTM Standard E1527-93 or any successor
thereto published by ASTM and good customary and commercial practice.
"Sofitel Parking Agreement" means that certain Parking
Agreement between Minnesota California Partners (predecessor-in-interest to
Borrower) and Hotel Sofitel Minneapolis dated November 1, 1995.
"Standard and Poor's" shall mean Standard and Poor's Ratings
Group, a division of McGraw-Hill, Inc.
"State" means the State in which the Property is located.
"Static Cash Account" has the meaning assigned in Section
5.4(b).
"Subordination Agreement" shall mean that certain Subordination
Agreement among Lender, Borrower and Operating Lessee dated as of July 29,
1999.
"Successor Borrower" has the meaning assigned in Section
2.5(6).
"T&I Letter of Credit" has the meaning assigned in Section
5.4(b).
"Tax and Insurance Escrow Fund" has the meaning assigned in
Section 5.4(a).
"Taxes" has the meaning assigned in Section 10.2.
"Threshold Amount" has the meaning assigned in Section 10.12.
"Treasury Rate" shall mean, as of the Anticipated Payment Date,
the yield, calculated by linear interpolation (rounded to the nearest one-
thousandth of one percent (i.e., 0.001%) of the yields of non-callable
United States Treasury obligations with terms (one longer and one shorter)
most nearly approximating the period from such date of determination to the
Maturity Date, as determined by Lender on the basis of Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading U.S.
Governmental Security/Treasury Constant Maturities, or other recognized
source of financial market information selected by Lender.
"Trigger Event" means the first to occur, if any, of the
Anticipated Payment Date or a DSCR Event.
"Trigger Period" means the period of time during the term of
the Loan (a) following a DSCR Event until the occurrence of a DSCR Release
Event, and (b) following the Anticipated Payment Date; provided, that, a
Trigger Period existing after two (2) DSCR Release Events or the occurrence
of the Anticipated Payment Date shall remain in effect for the remainder of
the term of the Loan notwithstanding the subsequent occurrence of a DSCR
Release Event.
"Undefeased Note" has the meaning assigned in Section 2.4(b).
"USAH" shall mean the Uniform System of Accounts for Hotels,
Ninth Revised Edition, 1996, as the same may be revised, amended or
supplemented.
"U.S. Obligations" shall mean direct non-callable obligations
of the United States of America.
"Yield Maintenance Premium" shall mean the amount (if any)
which, when added to the Adjusted Release Amount or the principal amount of
the Defeased Note, as applicable, for the Property will be sufficient to
purchase U.S. Obligations providing the required Scheduled Defeasance
Payments.
ARTICLE II
LOAN TERMS
Section 2.1 The Loan. Lender agrees to make a Loan of THIRTY
MILLION THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($30,300,000.00) to the
Borrower, which shall be funded in one advance and repaid in accordance
with the terms of this Agreement and the Note. Borrower hereby agrees to
accept the Loan on the Closing Date, subject to and upon the terms and
conditions set forth herein.
Section 2.2 Interest Rate. From the date hereof through but
not including the Anticipated Payment Date, the outstanding principal
balance of the Loan shall bear interest at a rate of interest equal to
eight and ten one hundredths percent (8.10%) per annum (the "Contract
Rate"). From and after the Anticipated Payment Date through and including
the Maturity Date, the outstanding principal balance of the Loan shall bear
interest at a rate per annum equal to the greater of (i) the Contract Rate
plus two percentage points (2%) or (ii) the Treasury Rate plus two
percentage points (2%); provided, however, if after the Anticipated Payment
Date at any time the Loan is not subject to a Securitization, such rate
shall be increased an additional three (3) percentage points (3%) per annum
for so long as the Loan is not subject to a Securitization (the Contract
Rate, as adjusted pursuant to this sentence, hereinafter referred to as the
"Adjusted Rate").
Section 2.3 Terms of Payment.
(a) Interest and Principal. The Loan shall be payable as
follows: (i) payment of interest only (computed at the Contract Rate) on
the date hereof for the period from the date hereof through the last day of
the current month (unless the Closing Date is the first day of a calendar
month, in which case no such interest is due); and (ii) thereafter a
constant payment of $235,871.08 (the "Monthly Debt Service Payment
Amount"), on the first day of September, 1999 and on each Payment Date
thereafter; each of such payments to be applied (A) to the payment of
interest computed at the Contract Rate and (B) the balance applied toward
reduction of the principal sum. The constant payment required hereunder is
based upon a twenty-five (25) year amortization schedule.
(b) To the extent the Loan is outstanding, from and after the
Anticipated Payment Date interest shall accrue on the unpaid principal
balance from time to time outstanding on the Loan at the Adjusted Rate.
Borrower shall continue to make payments of principal and interest in
monthly installments beginning on the Anticipated Payment Date and on the
first day of each calendar month thereafter up to and including the
Maturity Date in an amount equal to the Monthly Debt Service Payment Amount
and, notwithstanding the following provision with respect to Accrued
Interest, the failure to make any such payment as and when due shall
constitute an Event of Default. Each Monthly Debt Service Payment Amount
paid after the Anticipated Payment Date shall be applied to the payment of
interest computed at the Contract Rate with remainder applied to reduce the
outstanding principal balance of the Loan in accordance with Section 2.3(a)
above. Interest accrued at the Adjusted Rate and not paid shall be
deferred and added to the Debt and shall earn interest at the Adjusted Rate
to the extent permitted by applicable law (such accrued interest is
hereinafter defined as "Accrued Interest"). In addition to such payments
of principal and interest, from and after the Anticipated Payment Date,
Borrower shall make payments in reduction of the outstanding principal
balance of the Loan and accrued interest in monthly installments beginning
on the Anticipated Payment Date and on the first day of each calendar month
thereafter up to and including the Maturity Date in accordance with the
terms and provisions of Section 3.5 below.
(c) Maturity. On the Maturity Date, Borrower shall pay to
Lender all outstanding principal, accrued and unpaid interest (including
Accrued Interest, if any), default interest, late charges and any and all
other amounts due under the Loan Documents.
(d) Default Rate. Upon the occurrence and during the
continuance of an Event of Default, Lender shall be entitled to receive and
Borrower shall pay to Lender interest on the entire unpaid principal sum
and any other amounts due at the Default Rate. Interest at the Default
Rate shall be computed from the occurrence of the Event of Default until
the earlier to occur of (a) the permitted cure of such Event of Default by
Borrower or (b) the actual receipt and collection of the Debt (or that
portion thereof that is then due). Interest at the Default Rate shall be
added to the Debt and shall be secured by the Mortgage. This section,
however, shall not be construed as an agreement or privilege to extend the
date of the payment of the Debt, nor as a waiver of any other right or
remedy accruing to Lender by reason of the occurrence of any Event of
Default.
(e) Making of Payments. Each payment by Borrower hereunder
or under the Note shall be made in funds settled through the New York
Clearing House Interbank Payments System or by check drawn on a New York
Clearing House bank by 1:00 p.m., New York City time, on the date such
payment is due. Whenever any payment hereunder or under the Note shall be
stated to be due on a day which is not a Business Day, such payment shall
be made on the first Business Day thereafter.
(f) Computations. Interest payable hereunder or under the
Note by Borrower shall be computed on the basis of a 360-day year
consisting of twelve (12) months of thirty (30) days each, except that
interest due and payable for a period less than a full month shall be
calculated by multiplying the actual number of days elapsed in such period
by a daily rate based on said 360-day year.
(g) Late Payment Charge. If any principal, interest or any
other sums due under the Loan Documents is not paid by Borrower within five
(5) days of (and including) the date it is due, Borrower shall pay to
Lender upon demand an amount equal to the lesser of five percent (5%) of
such unpaid sum or the maximum amount permitted by applicable law in order
to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgage and
the other Loan Documents.
(h) Annual Budget. For the year commencing on January 1,
2000, and for each calendar year thereafter, Borrower shall submit to
Lender an Annual Budget not later than forty-five (45) days prior to the
commencement of such period or calendar year in form reasonably
satisfactory to Lender, or for so long as the Operating Lease remains in
effect, no later than three (3) days after a budget is delivered to
Borrower by Operating Lessee pursuant to the terms of the Operating Lease
in substantially the same form approved by Lender in connection with the
closing of the Loan. The Annual Budget submitted for the portion of the
calendar year beginning on the Anticipated Payment Date, and the Annual
Budget submitted for each calendar year thereafter, shall be subject to
Lender's written approval (each such Annual Budget as approved by Lender,
an "Approved Annual Budget"); provided, that, Borrower shall deliver to
Lender on or prior to twenty (20) days prior to the Anticipated Payment
Date, (a) the proposed Annual Budget for the remainder of the calendar year
beginning on the Anticipated Payment Date or (b) written notification that
Borrower intends to pay the Debt in full on or prior the Anticipated
Payment Date. In the event that Lender objects to a proposed Annual Budget
submitted by Borrower or Operating Lessee, Lender shall advise Borrower of
such objections within thirty (30) days after receipt thereof (and deliver
to such party a reasonably detailed description of such objections) and
Borrower shall promptly revise, or shall cause Operating Lessee to revise,
such Annual Budget and resubmit the same to Lender. Lender shall advise
Borrower of any objections to such revised Annual Budget within ten (10)
days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall promptly revise, or
shall cause Operating Lessee to revise, the same in accordance with the
process described in this subsection until the Lender approves the Annual
Budget. Until such time that Lender approves a proposed Annual Budget, the
most recently Approved Annual Budget shall apply; provided that, such
Approved Annual Budget shall be adjusted to reflect actual increases in
real estate taxes, insurance premiums and utilities expenses.
(i) Cash Management Agreement. Simultaneously with the
execution hereof Borrower has entered into a cash management agreement
among Borrower, Lender, Operating Lessee and one or more certain financial
institutions (together with any modifications or amendments thereof, are
hereinafter collectively referred to as the "Cash Management Agreement"),
which provide, among other things, that all Operating Lease Rent and any
other Operating Revenues which Borrower is entitled to receive, if any, and
other sums collected from, or arising with respect to, the Property be
deposited in accordance with the Cash Management Agreement and that such
amounts shall be disbursed in accordance with Section 3.5 hereof. The
Borrower shall pay all costs and expenses required under the Cash
Management Agreement. Upon the occurrence of an Event of Default, Lender
may apply any sums then held pursuant to the Cash Management Agreement to
the payment of the Debt in any order in its sole discretion. Until
expended or applied, amounts held pursuant to the Cash Management Agreement
shall constitute additional security for the Debt.
Section 2.4 Prepayment; Defeasance.
(a) Prepayment. Borrower shall repay any outstanding
principal indebtedness of the Loan in full on the Maturity Date, together
with interest thereon to (but excluding) the date of repayment. Other than
as set forth in this Section 2.4, Borrower shall have no right to prepay
all or any portion of the Loan prior to the Anticipated Payment Date. On
any scheduled Payment Date occurring no earlier than one hundred eighty
(180) days prior to the Anticipated Payment Date, Borrower may, at its
option and upon thirty (30) days prior written notice from Borrower to
Lender, prepay in whole or in part the Debt without payment of any premium.
Any such payment shall be applied to the last payments of principal and
interest due under the Loan. Each voluntary prepayment after one hundred
eighty (180) days prior to the Anticipated Payment Date shall be made on a
scheduled Payment Date and include all accrued and unpaid interest up to
but not including such scheduled Payment Date or, if not paid on a
scheduled Payment Date, include interest that would have accrued on such
prepayment through the next regularly scheduled Payment Date. If prior to
the Anticipated Payment Date and following the occurrence of any Event of
Default, Borrower shall tender payment of an amount sufficient to satisfy
all or any portion of the Debt, such tender by Borrower shall be deemed to
be voluntary and may be accepted or rejected by Lender in its sole
discretion. If Lender accepts such tender, Borrower shall pay, in addition
to the Debt, the Lockout Yield Maintenance Premium and any and all amounts
outstanding under the Additional Loan together with any prepayment
consideration to be paid in connection with a prepayment of such Additional
Loan following an Event of Default under such Additional Loan.
(b) Voluntary Defeasance of the Loan. Provided no Event of
Default exists, at any time after the Release Date and prior to the
Anticipated Payment Date Borrower may voluntarily defease all or any
portion of the Loan by providing Lender with U.S. Obligations that produce
payments which replicate the Scheduled Defeasance Payments (hereinafter, a
"Defeasance Event"). Each Defeasance Event by the Borrower shall be
subject to the satisfaction of the following conditions precedent:
(i) Borrower shall provide not less than thirty (30)
days prior written notice to Lender specifying the Payment Date (the
"Defeasance Date") on which the Defeasance Event is to occur. Such notice
shall indicate the principal amount of the Note to be defeased;
(ii) Borrower shall pay to Lender all accrued and unpaid
interest on the principal balance of the Note to but not including the
Defeasance Date. If for any reason the Defeasance Date is not a Payment
Date, the Borrower shall also pay interest that would have accrued on the
Note through and including the day immediately preceding the next Payment
Date;
(iii)Borrower shall pay to Lender all other sums, not
including scheduled interest or principal payments then remaining unpaid
under the Note, this Agreement, the Mortgage, and the other Loan Documents;
(iv) Borrower shall pay to Lender the required
Defeasance Deposit for the Defeasance Event;
(v) In the event only a portion of the Loan is the
subject of the Defeasance Event, Borrower shall prepare all necessary
documents to amend and restate the Note and issue two substitute notes, one
note having a principal balance equal to the defeased portion of the
original Note (the "Defeased Note") and the other note having a principal
balance equal to the undefeased portion of the Note (the "Undefeased
Note"). The Defeased Note and Undefeased Note shall have identical terms
as the Note except for the principal balance. A Defeased Note cannot be
the subject of any further Defeasance Event;
(vi) Borrower shall execute and deliver a security
agreement, in form and substance reasonably satisfactory to Lender,
creating a first priority lien on the Defeasance Deposit and the U.S.
Obligations purchased with the Defeasance Deposit in accordance with this
provision of this Section 2.4 (the "Security Agreement");
(vii)Borrower shall deliver an opinion of counsel for
Borrower in form reasonably satisfactory to Lender opining, among other
things, that Borrower has legally and validly transferred and assigned the
U.S. Obligations and all obligations, rights and duties under and to the
Note to the Successor Borrower, that Lender has a perfected first priority
security interest in the Defeasance Deposit and the U.S. Obligations
delivered by Borrower, and that any REMIC Trust formed pursuant to a
Securitization will not fail to maintain its status as a "real estate
mortgage investment conduit" within the meaning of Section 860D of the Code
as a result of such Defeasance Event;
(viii) Lender shall have received evidence in
writing from the applicable Rating Agencies to the effect that such release
will not result in a downgrading, withdrawal or qualification of the
respective ratings in effect immediately prior to such Defeasance Event for
the Securities issued in connection with the Securitization which are then
outstanding. If required by the applicable Rating Agencies or Lender, the
Borrower shall also deliver or cause to be delivered a non-consolidation
opinion with respect to the Successor Borrower in form and substance
reasonably satisfactory to Lender and the applicable Rating Agencies;
(ix) Borrower shall deliver an Officer's Certificate
certifying that the requirements set forth in this Section 2.4(b) have been
satisfied;
(x) Borrower shall deliver a certificate of a "big
five" or other nationally recognized public accounting firm reasonably
acceptable to Lender certifying that the U.S. Obligations purchased with
the Defeasance Deposit generate monthly amounts equal to or greater than
the required scheduled Defeasance Payments;
(xi) Borrower shall, at the reasonable request of
Lender, deliver endorsements to the title insurance policies delivered to
Lender in connection with the Additional Loan and such other certificates,
documents or instruments as Lender may reasonably request; and
(xii)Borrower shall pay all reasonable costs and
expenses of Lender incurred in connection with the Defeasance Event,
including any reasonable costs and expenses associated with a release of
the Lien of the Mortgage as provided in Section 2.5 hereof as well as
reasonable attorneys' fees and expenses.
(c) In connection with each Defeasance Event, Borrower hereby
appoints Lender as its agent and attorney-in-fact for the purpose of using
the Defeasance Deposit to purchase U.S. Obligations which provide payments
on or prior to, but as close as possible to, all successive scheduled
payment dates after the Defeasance Date, such payments to be computed on a
principal balance equal to the Adjusted Release Amount with such payment
being equal to the amount of the corresponding installment of principal and
interest on such principal balance at the interest rate and on the then
remaining amortization schedule set forth herein, in the case of a
Defeasance Event for the entire Loan that is, or remains, undefeased, or
interest and principal payments to be required under the Defeasance Note
relating to the then current Defeasance Event, in the case of a Defeasance
Event for only a portion of the undefeased principal balance of the Loan,
as applicable, and assuming such principal balance is prepaid in full on
the Anticipated Payment Date (the "Scheduled Defeasance Payments").
Borrower, pursuant to the Security Agreement or other appropriate document,
shall authorize and direct that the payments received from the U.S.
Obligations shall be made directly to the Lender (unless otherwise directed
by Lender) and applied to satisfy the obligations of Borrower with respect
to the Loan (whether the Note or the Defeased Note) and the relevant
portion of the Additional Loan under this Section 2.4, if applicable. The
amount of payments received from the U.S. Obligations purchased in
connection with this Section 2.4 on each Payment Date after the Defeasance
Date in excess of the amounts due under the Note and this Agreement on such
Payment Date (the "Additional Payment Stream") shall be credited pro-rata
against the payments then due on the corresponding scheduled payment date
under the Additional Loan. Any portion of the Defeasance Deposit in excess
of the amount necessary to purchase the U.S. Obligations required by this
Section 2.4 and satisfy Borrower's obligations under this Section 2.4 and
Section 2.5 shall be promptly remitted to Borrower.
Section 2.5 Release of Property. Except as set forth in this
Section 2.5, no repayment, prepayment or defeasance of all or any portion
of the Note shall cause, give rise to a right to require, or otherwise
result in, the release of the Liens of the Mortgage or the Second Mortgage
on the Property.
(a) Release upon Defeasance.
(i) If the Borrower has elected to defease the entire
Loan and the requirements of Section 2.4 and this Section 2.5(a) and
(b) have been satisfied, the Property shall be released from the Liens of
the Mortgage and the Second Mortgage and the U.S. Obligations, pledged
pursuant to the Security Agreement or Security Agreements, as applicable,
shall be the sole source of collateral securing the Note; provided,
however, that, no release shall be granted unless, after giving effect to
such release, (A) the Debt Service Coverage Ratio for the Additional
Property then remaining subject to Liens in favor of
Lender (taking into account the payment of the Additional
Payment Stream) shall be equal to the greater of (1) the Debt Service
Coverage Ratio for the Property and the Additional Property for the twelve
(12) full calendar months immediately preceding the release of the
Property, and (2) the Debt Service Coverage Ratio for the Property and the
Additional Property on the Closing Date, and (B) the LTV for the Additional
Loan remaining after the release of the Property (after subtracting from
the outstanding principal amount of the Additional Loan the principal
amounts of such Additional Loan that will be repaid over time pursuant to
the payment of the Scheduled Defeasance Payments) shall be the lesser of
(1) the combined LTV for the Property and the Additional Property on the
Closing Date and (2) the combined LTV for the Property and the Additional
Property immediately prior to the release.
(ii) In connection with the release of the Liens, the
Borrower shall submit to Lender, not less than thirty (30) days prior to
the Defeasance Date, a release of Liens (and related Loan Documents) for
execution by Lender. Such release shall be in a form appropriate in each
jurisdiction in which the Property is located and satisfactory to Lender in
its reasonable discretion. In addition, Borrower shall provide all other
documentation Lender reasonably requires to be delivered by Borrower in
connection with such release.
(b) Successor Borrower. In connection with any release of
the Liens under Section 2.5(a), Borrower may, or at the request of Lender
shall, establish or designate a successor entity (the "Successor Borrower")
which shall be a single purpose bankruptcy remote entity approved by
Lender, which approval shall not by unreasonably withheld, delayed or
conditioned, and Borrower shall transfer and assign all obligations, rights
and duties under and to the Note or the Defeased Note, as applicable,
together with the pledged U.S. Obligations to such Successor Borrower.
Such Successor Borrower shall assume the obligations under the Note or the
Defeased Note, as applicable, and the Security Agreement and Borrower shall
be relieved of its obligations under such documents. The Borrower shall
pay $1,000 to any such Successor Borrower as consideration for assuming the
obligations under the Note or the Defeased Note, as applicable, and the
Security Agreement. Notwithstanding anything in this Agreement to the
contrary, no other assumption fee shall be payable upon a transfer of the
Note or the Defeased Note, as applicable, in accordance with this Section
2.5, but Borrower shall pay all out-of-pocket costs and expenses reasonably
incurred by Lender, including Lender's attorneys' fees and expenses
incurred in connection therewith.
ARTICLE III
SECURITY; RESERVES AND CASH MANAGEMENT
Section 3.1 Security; Establishment of Funds. The Loan shall
be evidenced by the Note of Borrower, in the original principal amount of
the Loan. The Loan shall be secured by the Mortgage creating a first lien
(subject to Permitted Encumbrances) on the Property, the Assignment of
Leases and Rents and the other Loan Documents. As further security for the
Loan, Borrower agrees to establish the following reserves with Lender, to
be held by Lender as security for the Loan:
(a) Required Repairs Fund. On the date hereof, Borrower
shall deposit with Lender the amount of $17,500.00 (the "Required Repair
Fund") to perform the required repairs set forth on Schedule I annexed
hereto by the deadlines set forth in such Schedule (which deadlines shall
in no event be later than six (6) months from the date hereof);
(b) Replacement Escrow Fund. Upon the occurrence of a DSCR
Event, Borrower shall deposit with Lender on each Payment Date, (i) four
percent (4%) of gross revenues from the Property for the full month
immediately preceding the month prior to the month during which such
Payment Date occurs (the "Replacement Deposit") for replacements and
repairs of the type required to be made to the Property during the calendar
year (the "Replacement Escrow Fund"), and (ii) until the amount on deposit
in the Replacement Escrow Fund is equal to the amount that would have been
there on deposit in the Replacement Escrow Fund if the Replacement Deposit
had been deposited in the Replacement Escrow Fund on each Payment Date
since the Closing Date (deducting amounts that would have been disbursed
pursuant to the terms hereof for replacements and repairs to the Property)
all amounts remaining after payment of Debt Service and Operating Expenses,
if any (the "Replacement Fund Recoupment Amount"), as determined pursuant
to (A) the Annual Budget approved by Lender in its reasonable discretion
until the first to occur of the Anticipated Payment Date or the amounts due
as the Replacement Fund Recoupment Amount are on deposit in the Replacement
Escrow Fund, or (B) the Approved Annual Budget following the Anticipated
Payment Date. Such computation of gross revenue shall be based upon the
actual gross revenue disclosed by the financial statements delivered to
Lender in connection herewith.
Section 3.2 Pledge and Grant of Security Interest. Borrower
hereby pledges to Lender, and grants a security interest in, any and all
monies now or hereafter deposited in the Funds as additional security for
the payment of the Loan. Borrower shall not, without obtaining the prior
written consent of Lender, further pledge, assign or grant any security
interest in the Funds or permit any lien or encumbrance to attached
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements
(except those naming Lender as the secured party) to be filed with respect
thereto. The Funds shall (a) be held in Lender's name and may be
commingled with Lender's own funds at financial institutions selected by
Lender in its sole discretion, and (b) bear interest at available money
market rates. Any interest earned on the Funds shall be disbursed or
applied in the same manner and subject to the same terms and conditions as
the Funds. All earnings on the Funds shall be added to and become part of
the Funds and shall be the benefit of Borrower, subject to Lender's rights
pursuant to this Agreement. Lender shall not be responsible for any losses
resulting from the investment of the Funds or for obtaining any specific
level or percentage of earning on the Funds. Borrower shall be liable for
any income taxes due on the earnings from the Funds. Upon the occurrence
of an Event of Default, Lender may apply any sums then present in the Funds
to the payment of the Loan in any order in its sole discretion. Until
expended or applied as above provided, the Funds shall constitute
additional security for the Loan.
Section 3.3 Disbursement of Funds. After the occurrence of the
Anticipated Payment Date, Lender may reasonably reassess its estimate of
the amount necessary for the Funds from time to time and may adjust the
monthly amounts required to be deposited into the Funds upon thirty (30)
days notice to Borrower. Lender shall make disbursements from the Funds as
requested by Borrower, and approved by Lender in its sole discretion, no
more often than twice a month in increments of not less than $5,000.00 upon
delivery by Borrower of a draw request in a form reasonably acceptable to
Lender accompanied by copies of paid invoices for the amounts requested;
provided, however, that with respect to any unpaid invoice in an amount
exceeding $25,000 Lender shall, at the request of Borrower, issue a joint
check and provided further that, it shall be a condition to the next
requested disbursement that Borrower provide Lender with paid copies of
such unpaid invoices for which Lender has made disbursements. If required
by Lender, lien waivers and releases from all parties furnishing materials
and/or services in connection with the requested payment. Lender may, in
its reasonable discretion, require an inspection of the Property prior to
making a monthly disbursement in order to verify completion of replacements
and repairs for which reimbursement is sought, which inspection shall be at
the expense of Borrower unless the replacement(s) and/or repair(s) for
which reimbursement is sought is non-structural and in the aggregate is in
an amount less than $50,000. Lender shall have no obligation to release
any of the Funds while any Event of Default then exists. All reasonable
costs and expenses incurred by Lender in the disbursement of any of the
Funds shall be paid by Borrower promptly upon demand.
Section 3.4 Intentionally Deleted.
Section 3.5 Cash Management Account.
(a) Borrower shall establish and maintain a segregated
Eligible Account (the "Cash Management Account") which Cash Management
Account shall be subject to the Cash Management Agreement. The Cash
Management Account shall be entitled "General Electric Capital Corporation,
as Lender to the LaSalle Borrower - Cash Management Account"; provided,
however, that, if the Loan is transferred or sold, the name of the Cash
Management Account shall be changed at the request of Lender to reflect the
legal name of Lender's successor. Borrower shall deposit, and shall direct
the Operating Lessee to deposit all Operating Lease Rent directly into the
Cash Management Account. Borrower shall deposit all amounts received by
Borrower constituting Rents into the Cash Management Account promptly upon
receipt. Borrower hereby grants to Lender a first priority security
interest in the Cash Management Account and all deposits at any time
contained therein and the proceeds thereof and will take all actions
necessary to maintain in favor of Lender a perfected first priority
security interest in the Cash Management Account, including, without
limitation, executing and filing UCC-1 Financing Statements and
continuations thereof. Borrower will not in any way alter or modify the
Cash Management Account and will notify Lender of the account number
thereof.
(b) Provided no Event of Default shall have occurred and be
continuing, following the occurrence and during the continuance of a
Trigger Event, on the first day of each calendar month (or, if such day is
not a Business Day, on the immediately preceding Business Day) all funds on
deposit in the Cash Management Account shall be applied by Lender to the
payment of the following items in the order indicated:
(i) First, for payment of Ground Rent to become due on
the first day of the next calendar month;
(ii) Second, payments to the Tax and Insurance Escrow
Fund in accordance with the terms and conditions of Section 5.4 hereof;
(iii)Third, payment of the Monthly Debt Service Payment
Amount, applied first to the payment of accrued and unpaid interest
computed at the Contract Rate with the remainder applied to the reduction
of the outstanding principal balance of the Note;
(iv) Fourth, payments to the Replacement Escrow Fund in
accordance with the terms and conditions hereof;
(v) Fifth, payment to Lender of any other amounts then
due and payable under the Loan Documents (other than Accrued Interest);
(vi) Sixth, payment to Lender of any escrows, principal
or interest (other than "Accrued Interest" (as defined in the Additional
Loan Documents)) amounts then due and payable in connection with the
Additional Loan; provided, however, that no payments shall be applied in
accordance with this clause (vi) until Lender has reasonably determined
that there are not sufficient funds on deposit in the Cash Management
Account to pay the amounts due and payable with respect to such escrows,
principal and interest;
(vii)Seventh, on or after the Anticipated Payment Date,
payments for monthly Cash Expenses incurred in accordance with the related
Approved Annual Budget pursuant to a written request for payment submitted
by Borrower to Lender specifying the individual Cash Expenses in a form
reasonably acceptable to Lender;
(viii) Eighth, on or after the Anticipated Payment
Date, payments for Extraordinary Expenses approved by Lender, if any, which
approval shall not be unreasonably withheld, delayed or conditioned;
(ix) Ninth, payments to the Replacement Escrow Fund
until the Replacement Fund Recoupment Amount is on deposit therein.
(x) Tenth, on or after the Anticipated Payment Date,
payments to Lender in reduction of the outstanding principal balance of the
Loan;
(xi) Eleventh, on or after the Anticipated Payment Date,
payments to Lender for Accrued Interest;
(xii)Twelfth, payments to Lender of any additional
amounts then due and payable in connection with the Additional Loan; and
(xiii) Lastly, payment of any excess amounts to
Borrower.
(c) The insufficiency of funds on deposit in the Cash
Management Account shall not absolve Borrower of the obligation to make any
payments, as and when due pursuant to this Agreement and the other Loan
Documents, and such obligations shall be separate and independent, and not
conditioned on any event or circumstance whatsoever.
(d) All funds on deposit in the Cash Management Account
following the occurrence of an Event of Default may be applied by Lender in
such order and priority as Lender shall determine.
Section 3.6 Payments Received Under the Cash Management
Agreement. Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, and provided no Event of Default has
occurred and is continuing, following the occurrence of a Trigger Event,
Borrower's obligations with respect to the monthly payment of principal and
interest and amounts due for the Tax and Insurance Escrow Fund, Required
Repair Fund, Replacement Escrow Fund, and any other payment reserves
established pursuant to this Agreement or any other Loan Document shall be
deemed satisfied to the extent sufficient amounts are deposited in the Cash
Management Account established pursuant to the Cash Management Agreement to
satisfy all such obligations on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Lender.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Closing Conditions. The obligation of Lender to
make the Loan hereunder and/or the Additional Loan is subject to the
fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date:
(a) Representations and Warranties; Compliance with
Conditions. The representations and warranties of Borrower contained in
this Agreement and the other Loan Documents shall be true and correct in
all material respects on and as of the Closing Date with the same effect as
if made on and as of such date, and no Event of Default shall have occurred
and be continuing as of the Closing Date; and Borrower shall be in
compliance in all material respects with all terms and conditions set forth
in this Agreement and in each other Loan Document on its part to be
observed or performed as of the Closing Date.
(b) Loan Agreement and Note. Lender shall have received a
copy of this Agreement and the Note, in each case, duly executed and
delivered on behalf of Borrower.
(c) Delivery of Loan Documents; Title Insurance; Reports;
Leases.
(i) Mortgage, Assignment of Leases, Assignments of
Agreements. Lender shall have received from Borrower fully executed and
acknowledged counterparts of the Mortgage, the Second Mortgage and the
Assignment of Leases and Rents relating to the Property and evidence that
counterparts of the Mortgage, the Second Mortgage and Assignment of Leases
and Rents have been delivered to the title company for recording, in the
reasonable judgment of Lender, so as to effectively create upon such
recording a valid and enforceable Lien upon the Property, of the requisite
priority, in favor of Lender (or such other trustee as may be required or
desired under local law), subject only to the Permitted Encumbrances and
such other Liens as are permitted pursuant to the Loan Documents. Lender
shall have also received from Borrower fully executed counterparts of the
other Loan Documents.
(ii) Title Insurance. Lender shall have received title
insurance policies (or marked and signed commitments to issue such title
insurance policies) issued by a title company reasonably acceptable to
Lender and dated as of the Closing Date. Such title insurance policies
shall (A) provide coverage in amounts reasonably satisfactory to Lender,
(B) insure Lender that the Mortgage creates a valid lien on the Property
encumbered thereby of the requisite priority, free and clear of all
exceptions from coverage other than Permitted Encumbrances and standard
exceptions and exclusions from coverage (as modified by the terms of any
endorsements), (C) contain such endorsements and affirmative coverages as
Lender may reasonably request, and (D) name Lender as the insured. The
title insurance policies shall be assignable. Lender also shall have
received evidence that all premiums in respect of such title insurance
policies have been paid.
(iii)Survey. Lender shall have received a current title
survey for the Property, certified to the title company and Lender and
their successors and assigns, in form and content reasonably satisfactory
to Lender and prepared by a professional and properly licensed land
surveyor reasonably satisfactory to Lender in accordance the 1992 Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys. The survey
should meet the classification of an "Urban Survey" and the following
additional items from the list of "Optional Survey Responsibilities and
Specifications" (Table A) should be added to each survey: 2, 3, 4, 6, 7,
8, 9, 10, 11 and 13. Such survey shall reflect the same legal description
contained in the title insurance policy relating to the Property referred
to in clause (ii) above and shall include, among other things, a metes and
bounds description of the real property comprising part of the Property
reasonably satisfactory to Lender. The surveyor's seal shall be affixed to
each survey and the surveyor shall provide a certification for each survey
in form and substance reasonably acceptable to Lender.
(iv) Insurance. Lender shall have received valid
certificates of insurance for the policies of insurance required hereunder,
reasonably satisfactory to Lender, and evidence of the payment of all
premiums payable for the existing policy period.
(v) Environmental Reports. Lender shall have received
an environmental report in respect of the Property, which environmental
report shall be satisfactory to Lender.
(vi) Zoning. Lender shall have received, at Lender's
option, (i) letters or other evidence with respect to the Property from the
appropriate municipal authorities (or other Persons) concerning applicable
zoning and building laws, (ii) an ALTA 3.1 zoning endorsement for the
applicable title insurance policy, or (iii) a zoning opinion letter, in
substance reasonably satisfactory to Lender.
(vii)Encumbrances. Borrower shall have taken or caused
to be taken such actions in such a manner so that Lender has a valid and
perfected Lien of the requisite priority as of the Closing Date with
respect to the Mortgage and the Second Mortgage, subject only to applicable
Permitted Encumbrances and such other Liens as are permitted pursuant to
the Loan Documents, and Lender shall have received reasonably satisfactory
evidence thereof.
(d) Related Documents. Each additional document not
specifically referenced herein, but relating to the transactions
contemplated herein, shall have been duly authorized, executed and
delivered by all parties thereto and Lender shall have received and
approved certified copies thereof.
(e) Delivery of Organizational Documents. On or before the
Closing Date, Borrower shall deliver or cause to be delivered to Lender (i)
copies certified by Borrower of all organizational documentation related to
Borrower and/or the formation, structure, existence, good standing and/or
qualification to do business, as Lender may reasonably request, including,
without limitation, good standing certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the
entering into of the Loan and incumbency certificates as may be reasonably
requested by Lender.
(f) Opinions of Borrower's Counsel. Lender shall have
received opinions of Borrower's counsel (i) with respect to non-
consolidation, and (ii) with respect to due execution, authority,
enforceability of the Loan Documents and such other matters as Lender may
reasonably require, all such opinions in form, scope and substance
reasonably satisfactory to Lender and Lender's counsel.
(g) Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be reasonably satisfactory in form and substance
to Lender, and Lender shall have received all such counterpart originals or
certified copies of such documents as Lender may reasonably request.
(h) Payments. All payments, deposits or escrows required to
be made or established by Borrower under this Agreement, the Note and the
other Loan Documents on or before the Closing Date shall have been paid.
(i) Intentionally Deleted.
(j) Ground Lease Estoppel. Lender shall have received an
executed estoppel from the Ground Lessor which shall be in form and
substance reasonably satisfactory to Lender.
(k) Budgets. Borrower shall have delivered, and Lender shall
have approved, the Annual Budget for the current calendar year.
(l) Basic Carrying Costs. Borrower shall have paid all Basic
Carrying Costs relating to the Property which are (i) in arrears, (ii) then
due and payable, and (iii) not being contested pursuant to the terms and
conditions of this Agreement.
(m) Transaction Costs. Borrower shall have paid or
reimbursed Lender for all title insurance premiums and recording and filing
fees incurred in connection with the origination of the Loan.
(n) Material Adverse Change. There shall have been no
material adverse change in the financial condition or business condition of
Borrower, Operating Lessee, or the Property or the Additional Property
since the date of the most recent financial statements delivered to Lender.
The income and expenses of the Property and the Additional Property, the
Operating Leases thereof, and all other features of the transaction shall
be as represented to Lender without material adverse change. Neither
Borrower nor Operating Lessee shall be the subject of any bankruptcy,
reorganization, or insolvency proceeding.
(o) Leases. Lender shall have received copies of all tenant
Leases, certified copies of any tenant Leases as requested by Lender and
certified copies of all ground Leases affecting the Property. Lender shall
have received a current certified rent roll of the Property, reasonably
satisfactory in form and substance to Lender.
(p) Subordination and Attornment. Lender shall have received
a Subordination Agreement with respect to the Operating Lease.
(q) Tax Lot. Lender shall have received evidence that the
Property constitutes a separate tax lot, which evidence shall be reasonably
satisfactory in form and substance to Lender.
(r) Physical Conditions Reports. Lender shall have received
a Physical Conditions Report with respect to the Property, which report
shall be reasonably satisfactory in form and substance to Lender.
(s) Management Agreement. Lender shall have received a
certified copy of the Management Agreement with respect to the Property
which shall be reasonably satisfactory in form and substance to Lender.
(t) Appraisal. Lender shall have received an appraisal of
the Property, which shall be reasonably satisfactory in form and substance
to Lender.
(u) Financial Statements. Lender shall have received a
balance sheet with respect to the Property for the two most recent calendar
years and statements of income and statements of cash flows with respect to
the Property for the three most recent calendar years.
(v) Operating Lease. Lender shall have received a certified
copy of the Operating Lease between Borrower and the Operating Lessee with
respect to the Property, which shall be reasonably satisfactory in form and
substance to Lender.
(w) Further Documents. Lender or its counsel shall have
received such other and further approvals, opinions, documents and
information as Lender or its counsel may have reasonably requested and the
form and content of all the Loan Documents.
ARTICLE V
INSURANCE, CONDEMNATION, AND IMPOUNDS
Section 5.1 Insurance; Casualty and Condemnation.
(a) Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Property providing at least the
following coverages:
(i) comprehensive all risk insurance on the
Improvements and the Personalty, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements, in each case (A) in an amount equal to one
hundred percent (100%) of the "Full Replacement Cost," which for purposes
of this Agreement shall mean actual replacement value (exclusive of costs
of excavations, foundations, underground utilities and footings) with a
waiver of depreciation, but the amount shall in no event be less than the
outstanding principal balance of the Loan; (B) containing an agreed amount
endorsement with respect to the Improvements and Personalty waiving all co-
insurance provisions; (C) providing for no deductible in excess of Ten
Thousand and No/100 Dollars ($10,000) for all such insurance coverage; and
(D) containing an "Ordinance or Law Coverage" or "Enforcement" endorsement
if any of the Improvements or the use of the Property shall at any time
constitute legal non-conforming structures or uses. In addition, Borrower
shall obtain: (y) if any portion of the Improvements is currently or at any
time in the future located in a federally designated "special flood hazard
area", flood hazard insurance in an amount equal to the lesser of (1) the
outstanding principal balance of the Note or (2) the maximum amount of such
insurance available under the National Flood Insurance Act of 1968, the
Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended or such greater amount as Lender
shall require; and (z) earthquake insurance in amounts and in form and
substance reasonably satisfactory to Lender in the event the Property is
located in an area with a high degree of seismic activity, provided that
the insurance pursuant to clauses (y) and (z) hereof shall be on terms
consistent with the comprehensive all risk insurance policy required under
this subsection (i);
(ii) commercial general liability insurance against
claims for personal injury, bodily injury, death or property damage
occurring upon, in or about the Property, such insurance (A) to be on the
so-called "occurrence" form with a combined limit of not less than Two
Million and No/100 Dollars ($2,000,000) in the aggregate and One Million
and No/100 Dollars ($1,000,000) per occurrence (and, if on a blanket
policy, containing an "Aggregate Per Location" endorsement); (B) to
continue at not less than the aforesaid limit until reasonably required to
be changed by Lender in writing by reason of changed economic conditions
making such protection inadequate; and (C) to cover at least the following
hazards: (1) premises and operations; (2) products and completed operations
on an "if any" basis; (3) independent contractors; (4) blanket contractual
liability for all legal contracts; and (5) contractual liability covering
the indemnities contained in the Mortgage to the extent the same is
available;
(iii)business income insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance
provided for in subsection (i) above; (C) containing an extended period of
indemnity endorsement which provides that after the physical loss to the
Improvements and Personalty has been repaired, the continued loss of income
will be insured until such income either returns to the same level it was
at prior to the loss, or the expiration of twelve (12) months from the date
that the Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire
prior to the end of such period; (D) in an amount equal to one hundred
percent (100%) of the projected gross operating profit of Borrower plus the
management fee due under the Management Agreement for a period of twelve
(12) months from the date that the Property is repaired or replaced and
operations are resumed; and (E) providing for "extra expense" coverage in
an amount satisfactory to Lender. The amount of such business income
insurance shall be determined prior to the date hereof and at least once
each year thereafter based on Borrower's reasonable estimate of the gross
operating profit of Borrower plus the management fee due under the
Management Agreement for the succeeding twelve (12) month period. Subject
to Operating Lessee's right to receive any portion of the business income
insurance pursuant to the terms of the Operating Lease, all proceeds
payable to Lender pursuant to this subsection, including, at a minimum the
amounts representing Operating Lease Rent, shall be held by Lender and
shall be applied to the obligations secured by the Loan Documents from time
to time due and payable hereunder and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of its
obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements, and
only if the Property coverage form does not otherwise apply, (A) owner's
contingent or protective liability insurance covering claims not covered by
or under the terms or provisions of the above mentioned commercial general
liability insurance policy; and (B) the insurance provided for in
subsection (i) above written in a so-called builder's risk completed value
form (1) on a non-reporting basis, (2) against all risks insured against
pursuant to subsection (i) above, (3) including permission to occupy the
Property, and (4) with an agreed amount endorsement waiving co-insurance
provisions;
(v) workers' compensation, subject to the statutory
limits of the state in which the Property is located, and employer's
liability insurance with a limit of at least One Million and No/100 Dollars
($1,000,000) per accident and per disease per employee, and One Million and
No/100 Dollars ($1,000,000) for disease aggregate in respect of any work or
operations on or about the Property, or in connection with the Property or
its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on terms
consistent with the commercial property insurance policy required under
subsection (i) above;
(vii)umbrella liability insurance in an amount not less
than Fifty Million and No/100 Dollars ($50,000,000) per occurrence on terms
consistent with the commercial general liability insurance policy required
under subsection (ii) above;
(viii) motor vehicle liability coverage for all
owned and non-owned vehicles, including rented and leased vehicles
containing minimum limits per occurrence, of One Million and No/100 Dollars
($1,000,000);
(ix) so-called "dramshop" insurance or other liability
insurance required in connection with the sale of alcoholic beverages;
(x) insurance against employee dishonesty in an amount
not less than one (1) month of gross revenue from the Property with a
deductible not greater than Ten Thousand and No/100 Dollars ($10,000); and
(xi) upon sixty (60) days' written notice, such other
reasonable insurance and in such reasonable amounts as Lender from time to
time may reasonably request against such other insurable hazards which at
the time are commonly insured against for property similar to the Property
located in or around the region in which the Property is located.
(b) All insurance provided for in Section 5.1(a) shall be
obtained under valid and enforceable policies (collectively, the "Policies"
or in the singular, the "Policy"), and shall be subject to the reasonable
approval of Lender as to insurance companies, amounts, deductibles, loss
payees and insureds. The Policies shall be issued by financially sound and
responsible insurance companies authorized to do business in the state in
which the Property is located with a rating of "A-X" or better as
established by Best's Rating Guide and having a claims paying ability
rating of "AA" or better by at least two (2) of the Rating Agencies (one of
which shall be (i) Standard & Poor's if Standard & Poor's is rating the
Securities issued in the Securitization of which this Loan is a part, and
(ii) Moody's if Moody's is rating the Securities issued in the
Securitization of which this Loan is a part). The Policies described in
Section 5.1 (with the exception of Section 5.1(ii)) shall designate Lender
as loss payee. Not less than ten (10) days prior to the expiration dates
of the Policies theretofore furnished to Lender, certificates of insurance
evidencing the Policies accompanied by evidence satisfactory to Lender of
payment of the premiums due thereunder (the "Insurance Premiums"), shall be
delivered by Borrower to Lender.
(c) Borrower shall deliver to Lender certificates of
insurance for blanket Policies delivered in connection with the Loan that
specify and set forth the declared replacement cost value and the declared
business income amount for the Property.
(d) All Policies of insurance provided for or contemplated by
Section 5.1(a), except for the Policy referenced in Section 5.1(a)(v),
shall name Borrower as the insured and, if permitted by applicable law,
Lender as the additional insured, as its interests may appear, and in the
case of property damage, boiler and machinery, flood and earthquake
insurance, shall contain a so-called New York standard non-contributing
mortgagee clause in favor of Lender providing that the loss thereunder
shall be payable to Lender.
(e) All Policies of insurance provided for in Section 5.1(a)
shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting
for Borrower, or of any tenant or other occupant, or failure to comply with
the provisions of any Policy, which might otherwise result in a forfeiture
of the insurance or any part thereof, shall in any way affect the validity
or enforceability of the insurance insofar as Lender is concerned;
(ii) the Policy shall not be materially changed (other
than to increase the coverage provided thereby) or canceled without at
least (A) ten (10) days' written notice to Lender and any other party named
therein an additional insured in the case of non-payment of Insurance
Premiums, and (B) in each other instance, thirty (30) days' written notice
to Lender and any other party named therein as an additional insured;
(iii)each Policy shall provide that the issuers thereof
shall give written notice to Lender if the Policy has not been renewed
fifteen (15) days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance
Premiums thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and effect,
Lender shall have the right, upon five (5) days notice to Borrower, to take
such action as Lender reasonably deems necessary to protect its interest in
the Property, including, without limitation, the obtaining of such
insurance coverage as Lender in its reasonable discretion deems appropriate
and all premiums incurred by Lender in connection with such action or in
obtaining such insurance and keeping it in effect shall be paid by Borrower
to Lender upon demand and until paid shall be secured by the Mortgage and
shall bear interest at the Default Rate.
(g) If the Property shall be damaged or destroyed, in whole
or in part, by fire or other casualty, Borrower shall give prompt notice of
such damage to Lender and shall promptly commence and diligently prosecute
the completion of the Restoration of the Property and otherwise in
accordance with Section 5.3. Borrower shall pay all costs of such
Restoration whether or not such costs are covered by insurance. Lender
may, but shall not be obligated to make proof of loss if not made promptly
by Borrower.
(h) In the event of foreclosure of the Mortgage with respect
to the Property, or other transfer of title to the Property in
extinguishment in whole or in part of the Debt all right, title and
interest of Borrower in and to the Policies that are not blanket Policies
then in force concerning the Property and all proceeds payable thereunder
shall thereupon vest in the purchaser at such foreclosure or Lender or
other transferee in the event of such other transfer of title.
Section 5.2 Condemnation. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding (a "Condemnation") affecting the Property and
shall deliver to Lender copies of any and all papers served in connection
with such proceedings. Lender may participate in any such proceedings and
Borrower shall deliver to Lender all instruments required to permit
participation in such proceedings. Borrower shall, at its expense,
diligently prosecute any such proceedings, and shall consult with Lender,
its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. Lender is hereby irrevocably appointed as
Borrower's attorney-in-fact, coupled with an interest, with exclusive power
to collect and receive any Award and, from and after an Event of Default,
to make any compromise or settlement in connection with any such
Condemnation. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including but not limited to
any transfer made in lieu of or in anticipation of the exercise of such
taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement and the
Debt shall not be reduced until any award or payment therefor (an "Award")
shall have been actually received and applied by Lender, after the
deduction of reasonable expenses of collection, to the reduction or
discharge of the Debt without premium or penalty. Lender shall not be
limited to the interest paid on the Award by the condemning authority but
shall be entitled to receive out of the award interest at the rate or rates
provided herein or in the Note. If the Property or any portion thereof is
taken by a condemning authority, Borrower shall promptly commence and
diligently prosecute the Restoration of the Property and otherwise comply
with the provisions of Section 5.3. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the Award,
Lender shall have the right, whether or not a deficiency judgment on the
Note shall have been sought, recovered or denied, to receive the Award, or
a portion thereof sufficient to pay the Debt.
Section 5.3 Restoration. The following provisions shall apply
in connection with the Restoration of the Property:
(a) If the Net Proceeds shall be less than Three Hundred
Thousand and No/100 Dollars ($300,000) and the costs of completing the
Restoration shall be less than Three Hundred Thousand and No/100 Dollars
($300,000), the Net Proceeds will be disbursed by Lender to Borrower upon
receipt, provided that all of the conditions set forth in Section 5.3(b)(i)
are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due diligence
the Restoration in accordance with the terms of this Agreement.
(b) If the Net Proceeds are equal to or greater than Three
Hundred Thousand and No/100 Dollars ($300,000) or the costs of completing
the Restoration is equal to or greater than Three Hundred Thousand and
No/100 Dollars ($300,000) Lender shall make the Net Proceeds available for
the Restoration in accordance with the provisions of this Section 5.3. The
term "Net Proceeds" for purposes of this Section 5.3 shall mean: (i) the
net amount of all insurance proceeds received by Lender pursuant to Section
5.1 (a)(i), (iv), (vi) and (vii) as a result of such damage or destruction,
after deduction of its reasonable costs and expenses (including, but not
limited to, reasonable counsel fees), if any, in collecting same
("Insurance Proceeds"), or (ii) the net amount of the Award, after
deduction of its reasonable costs and expenses (including, but not limited
to, reasonable counsel fees), if any, in collecting same ("Condemnation
Proceeds"), whichever the case may be.
(i) The Net Proceeds shall be made available to
Borrower for Restoration provided that the Net Proceeds are received prior
to the Anticipated Payment Date and each of the following conditions are
met:
(A) no Event of Default shall have occurred and
be continuing and the Ground Lease shall not have been cancelled or
terminated due to such casualty or Condemnation;
(B) (1) in the event the Net Proceeds are
Insurance Proceeds, less than fifty percent (50%) of the total floor area
of the Improvements of the Property that has been damaged, destroyed or
rendered unusable as a result of such fire or other casualty or (2) in the
event the Net Proceeds are Condemnation Proceeds, less than ten percent
(10%) of the land constituting the Property that is taken, and such land is
located along the perimeter or periphery of the Property, and no portion of
the Improvements is located in such land;
(C) the Operating Lease shall remain in full
force and effect during and after the completion of the Restoration,
notwithstanding the occurrence of any such fire or other casualty or
taking, whichever the case may be;
(D) Borrower shall commence the Restoration as
soon as reasonably practicable (but in no event later than sixty (60) days
after such damage or destruction or taking, whichever the case may be,
occurs) and shall diligently pursue the same to satisfactory completion;
(E) Lender shall be satisfied in its reasonable
discretion that any operating deficits, including all scheduled payments of
principal and interest under the Note, which will be incurred with respect
to the Property as a result of the occurrence of any such fire or other
casualty or taking, whichever the case may be, will be covered out of (1)
the Net Proceeds, (2) the insurance coverage referred to in Section
5.1(a)(iii), if applicable, or (3) by other funds of Borrower;
(F) Lender shall be satisfied in its reasonable
discretion that the Restoration will be completed on or before the earliest
to occur of (1) six (6) months prior to the Anticipated Payment Date, (2)
the earliest date required for such completion under the terms of the
Operating Lease or the Management Agreement, (3) such time as may be
required under applicable zoning law, ordinance, rule or regulation in
order to repair and restore the Property to the condition it was in
immediately prior to such fire or other casualty or to as nearly as
possible the condition it was in immediately prior to such taking, as
applicable or (4) the expiration of the insurance coverage referred to in
Section 5.1(a)(iii);
(G) the Property and the use thereof after the
Restoration will be in compliance with and permitted under all applicable
zoning laws, ordinances, rules and regulations and all necessary operating
or reciprocal easement agreements for the operation and maintenance of the
Property are, or remain, in effect;
(H) the Restoration shall be done and completed
by Borrower in an expeditious and diligent fashion and in compliance with
all applicable governmental laws, rules and regulations (including, without
limitation, all applicable environmental laws);
(I) such fire or other casualty or taking, as
applicable, does not result in the loss of access to the Property or the
related Improvements;
(J) The projected Debt Service Coverage Ratio for
the Loan, in Lender's reasonable estimation, for the twelve (12) month
period immediately following the Restoration (and stabilization
thereafter), but not including the period commencing with the Casualty or
Condemnation and ending on the last day of stabilization, shall be equal to
the greater of (i) a Debt Service Coverage Ratio of 1.4 to 1.0, and (ii)
the Debt Service Coverage Ratio for the Loan for the twelve (12) full
calendar months immediately preceding the casualty or Condemnation of the
Property; and
(K) Lender shall be satisfied that, upon the
completion of the Restoration, the LTV shall be the lesser of (i) the LTV
on the Closing Date, and (ii) the LTV immediately prior to the casualty or
condemnation, as applicable.
(ii) The Net Proceeds shall be held by Lender in an interest-
bearing account and, until disbursed in accordance with the
provisions of this Section 5.3(b), shall constitute additional security for
the Debt and other obligations under the Loan Documents. The Net Proceeds
shall be disbursed by Lender to, or as directed by, Borrower from time to
time during the course of the Restoration, upon receipt of evidence
reasonably satisfactory to Lender that (A) all materials installed and work
and labor performed (except to the extent that they are to be paid for out
of the requested disbursement) in connection with the Restoration have been
paid for, and (B) there exist no notices of pendency, stop orders,
mechanic's or materialman's liens or notices of intention to file same, or
any other liens or encumbrances of any nature whatsoever on the Property
arising out of the Restoration which have not either been fully bonded to
the satisfaction of Lender and discharged of record or in the alternative
fully insured to the satisfaction of Lender by the title company issuing
the title insurance policy.
(iii)In the event that the Restoration involves
structural elements of the Improvements or the costs of completing the
Restoration shall exceed $300,000, then in each case, all plans and
specifications required in connection with the Restoration shall be subject
to prior review and reasonable acceptance in all respects by Lender and by
an independent consulting engineer selected by Borrower and approved by
Lender in its reasonable discretion (the "Casualty Consultant"), which
approval by Lender, if not granted or denied within fifteen (15) days of
Lender's receipt of a request therefor, together with any supporting
material reasonably requested by Lender or Casualty Consultant, shall be
deemed to be approved by Lender. Lender shall have the use of the plans
and specifications and all permits, licenses and approvals required or
obtained in connection with the Restoration. The identity of the
contractors, subcontractors and materialmen engaged in the Restoration, as
well as the contracts under which they have been engaged, shall be subject
to prior review and acceptance by Lender and the Casualty Consultant. All
out-of-pocket costs and expenses incurred by Lender in connection with
making the Net Proceeds available for the Restoration including, without
limitation, reasonable counsel fees and disbursements and the Casualty
Consultant's reasonable fees, shall be paid by Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, minus the Casualty
Retainage. The term "Casualty Retainage" shall mean an amount equal to ten
percent (10%) of the costs actually incurred for work in place as part of
the Restoration, as certified by the Casualty Consultant, until the
Restoration has been completed. The Casualty Retainage shall in no event,
and notwithstanding anything to the contrary set forth above in this
Section 5.1(b), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration.
The Casualty Retainage shall not be released until the Casualty Consultant
certifies to Lender that the Restoration has been completed in accordance
with the provisions of this Section 5.1(b) and that all approvals necessary
for the re-occupancy and use of the Property have been obtained from all
appropriate governmental and quasi-governmental authorities, and Lender
receives evidence reasonably satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out of the
Casualty Retainage; provided, however, that Lender will release the portion
of the Casualty Retainage being held with respect to any contractor,
subcontractor or materialman engaged in the Restoration as of the date upon
which the Casualty Consultant certifies to Lender that the contractor,
subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the
contractor's, subcontractor's or materialman's contract, the contractor,
subcontractor or materialman delivers the lien waivers and evidence of
payment in full of all sums due to the contractor, subcontractor or
materialman as may be reasonably requested by Lender or by the title
company issuing the title insurance policy, and Lender receives an
endorsement to the title insurance policy insuring the continued priority
of the lien of the related Mortgage and evidence of payment of any premium
payable for such endorsement. If required by Lender, the release of any
such portion of the Casualty Retainage shall be approved by the surety
company, if any, which has issued a payment or performance bond with
respect to the contractor, subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements
of the Net Proceeds more frequently than twice every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the reasonable opinion of Lender, be
sufficient to pay in full the balance of the costs which are estimated by
the Casualty Consultant to be incurred in connection with the completion of
the Restoration (to restore the Property to the condition prior to the
casualty and not any costs or expenses associated with the betterment of
the Property, which betterment shall be subject to the terms and conditions
of Section 10.12 hereof), Borrower shall cure the deficiency (the "Net
Proceeds Deficiency") by either depositing with Lender an amount equal to
the Net Proceeds Deficiency before any further disbursement of the Net
Proceeds shall be made or delivering to Lender a Letter of Credit in the
amount of the Net Proceeds Deficiency. The Net Proceeds Deficiency shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
subsection
shall constitute additional security for the Debt and Borrower
hereby authorizes Lender to draw upon any Letter of Credit delivered for
the Net Proceeds Deficiency for such purposes.
(vii)The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited with
Lender after the Casualty Consultant certifies to Lender that the
Restoration has been completed in accordance with the provisions of this
Section 5.1(b), and the receipt by Lender of evidence reasonably
satisfactory to Lender that all costs incurred in connection with the
Restoration have been paid in full, shall be remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing under the Note, this Loan Agreement or any of the other Loan
Documents.
(c) All Net Proceeds not required (i) to be made available
for the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Section 5.1.(b)(vii) may be retained and applied by
Lender toward the payment of the Debt, without premium or penalty, whether
or not then due and payable in such order, priority and proportions as
Lender in its sole discretion shall deem proper, or, at the discretion of
Lender, the same may be paid, either in whole or in part, to Borrower for
such purposes as Lender shall designate, in its discretion; provided, that,
in the event that Lender applies any Insurance Proceeds toward the payment
of the Debt in accordance with this Section 5.3(c)(i), Borrower, so long as
no Event of Default shall have occurred and is continuing, shall be
permitted, within the one hundred twenty (120) day period immediately
following such application of Insurance Proceeds to the Debt, to prepay the
entire outstanding amount of the Loan (but not the Additional Loan) without
any prepayment consideration, fee, yield maintenance premium or penalty.
Section 5.4 Impounds.
(a) Borrower shall deposit with Lender, monthly, (a)
one-twelfth (1/12th) of the Taxes that Lender reasonably estimates will be
payable during the next ensuing twelve (12) months in order to accumulate
with Lender sufficient funds to pay all such Taxes at least thirty (30)
days prior to their respective due dates, and (b) one-twelfth of the
Insurance Premiums that Lender estimates will be payable for the renewal of
the coverage afforded by the insurance policies required by Lender upon the
expiration thereof in order to accumulate with Lender sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to
expiration (said amounts in (a) and (b) above hereinafter called the "Tax
and Insurance Escrow Fund"). At or before the advance of the Loan,
Borrower shall deposit with Lender a sum of money which together with the
monthly installments will be sufficient to make each of such payments
thirty (30) days prior to the date any delinquency or penalty becomes due
with respect to such payments. Deposits shall be made on the basis of
Lender's reasonable estimate from time to time of the charges for the
current year (after giving effect to any reassessment or, at Lender's
election, on the basis of the charges for the prior year, with adjustments
when the charges are fixed for the then current year). All funds so
deposited shall (a) be held by Lender, (b) be commingled with Lender's
general funds, and (c) earn interest at available money market rates. Any
earnings on such funds shall be added to and be a part of the Tax and
Insurance Escrow Fund and shall be disbursed or applied in the same manner
and subject to the same terms as funds on deposit in the Tax and Insurance
Escrow Fund. Any such earnings shall be for the benefit of the Borrower,
subject to the Lender's rights pursuant to this Agreement. Lender shall
not be responsible for any losses resulting from the investment of amounts
on deposit in the Tax and Insurance Escrow Fund or for obtaining any
specific level or percentage earnings on such amounts so invested.
Borrower shall be liable for any income taxes due on the earnings for the
amounts on deposit in the Tax and Insurance Escrow Fund. Borrower hereby
grants to Lender a security interest in all funds so deposited with Lender
for the purpose of securing the Loan. While an Event of Default exists,
the funds deposited may be applied in payment of the charges for which such
funds have been deposited, or to the payment of the Loan or any other
charges affecting the security of Lender, as Lender may elect, but no such
application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender. Borrower shall furnish Lender
with bills for the charges for which such deposits are required at least
thirty (30) days prior to the date on which the charges first become
payable; provided, that, in the event that Borrower has not received such
bills at least thirty (30) days prior to the date on which the charges
first become payable, then Borrower shall deliver such bills to Lender
promptly upon the receipt thereof. If at any time the amount on deposit
with Lender, together with amounts to be deposited by Borrower before such
charges are payable, is insufficient to pay such charges, Borrower shall
deposit any deficiency with Lender immediately upon demand. Lender shall
pay such charges when the amount on deposit with Lender is sufficient to
pay such charges and Lender has received a bill for such charges.
(b) In lieu of making the required monthly payments to the
Tax and Insurance Escrow Fund and provided no Event of Default exists,
Borrower has the option to deliver to Lender (i) a cash deposit in an
amount reasonably estimated by Lender to be equal to fifty percent (50%) of
the estimated amount of annual Insurance Premiums and Taxes to be paid
during the calendar year (the "Installment Amount"), which cash deposit
shall be held by Lender as security for the Debt (the "Static Cash
Account") or (ii) a Letter of Credit in an amount reasonably estimated by
Lender to be equal to the Installment Amount (the "T&I Letter of Credit").
In the event that Borrower, after delivering a Static Cash Account or a T&I
Letter of Credit in accordance with this Section 5.4, elects to resume
making monthly payments required under the Tax and Insurance Escrow Fund,
Borrower shall make an initial deposit into such Tax and Insurance Escrow
Fund equal to the amount reasonably estimated by Lender to be the amount
that would have been on deposit in such Tax and Insurance Escrow Fund on
the date thereof if Borrower had not delivered such Static Cash Account or
a T&I Letter of Credit. Borrower shall give Lender thirty (30) days prior
written notice of such election and Borrower shall pay to Lender all of
Lender's reasonable out-of-pocket costs and expenses in connection
therewith. Borrower shall not be entitled to draw from such Static Cash
Account or a T&I Letter of Credit. During the time the appropriate amount
of funds are on deposit in the Static Cash Account or the T&I Letter of
Credit is outstanding, Borrower shall pay all Taxes and Insurance Premiums
as the same become due and payable and shall furnish to Lender evidence of
(i) payment of Taxes reasonably satisfactory to Lender on or prior to the
date when such Taxes are due, and (ii) payment of Insurance Premiums
reasonably satisfactory to Lender at least fifteen (15) days prior to the
date when such Insurance Premiums are due. Borrower shall provide Lender
with written notice of any increases in the Taxes and Insurance Premiums
thirty (30) days prior to the effective date of any such increase
(provided, that, if Borrower has not received notice of such increase at
least thirty (30) days prior to such effective date, then Borrower shall
notify Lender of such increase promptly upon receiving notice of such
increase) and the Static Cash Account or the T&I Letter of Credit, as
applicable, shall be increased to an amount equal to the new Installment
Amount at least ten (10) days prior to such increase.
Section 5.5 Letters of Credit.
(a) Each Letter of Credit delivered under this Agreement or
any other Loan Document shall be additional security for the payment of the
Debt. Upon the occurrence of an Event of Default, Lender in its sole and
absolute discretion may, but shall not be obligated to, draw upon any
Letter of Credit for payments of any amounts then due and payable under the
Note, this Agreement, the Mortgage or the other Loan Documents.
(b) (1) In addition to any other right Lender may have to
draw upon a Letter of Credit pursuant to the terms and conditions of this
Agreement and the other Loan Documents, Lender shall have the additional
rights to draw in full upon any Letter of Credit: (A) if Lender has not
received at least thirty (30) days prior to the date on which the then
outstanding Letter of Credit is scheduled to expire, a notice from the
issuing bank that it has renewed the applicable Letter of Credit; (B) upon
receipt of notice from the issuing bank that the applicable Letter of
Credit will be terminated; and (C) thirty (30) days after Lender has
received notice and given notice to the Borrower that the bank issuing the
applicable Letter of Credit shall cease to be an Eligible Institution.
(2) In the event that Lender draws upon a Letter of
Credit in accordance with the provisions of subsection 5.5(b)(1) above, any
and all such amounts not otherwise expended by Lender shall be held by
Lender as cash collateral in an interest bearing account established and
maintained by Lender and Lender shall be entitled to draw upon and apply
such proceeds at the time and in the manner provided in this Agreement or
the other Loan Documents for draws upon the applicable Letter of Credit.
(3) Notwithstanding anything to the contrary contained
above, Lender is not obligated to draw on a Letter of Credit upon the
happening of an event specified in this subsection and shall not be liable
for any losses sustained by Borrower due to the insolvency of the bank
issuing a Letter of Credit if Lender has not drawn on the Letter of Credit.
ARTICLE VI
ENVIRONMENTAL MATTERS
Section 6.1 Certain Definitions. As used herein, the following
terms have the meanings indicated:
(a) "Environmental Laws" Any local, state, federal or other
governmental authority, statute, ordinance, code, order, decree, law, rule
or regulation pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or clean-up including,
without limitation, the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, the Resource Conservation and Recovery Act,
as amended, the Emergency Planning and Community Right-to-Know Act of 1986,
as amended, the Hazardous Substances Transportation Act, as amended, the
Solid Waste Disposal Act, as amended, the Clean Water Act, as amended, the
Clean Air Act, as amended, the Toxic Substances Control Act, as amended,
the Safe Drinking Water Act, as amended, the Occupational Safety and Health
Act, as amended, any state superlien and environmental clean-up statutes
and all regulations adopted in respect of the foregoing laws whether
presently in force or coming into being and/or effectiveness hereafter.
(b) "Hazardous Materials" means (i) petroleum or chemical
products, whether in liquid, solid, or gaseous form, or any fraction or
by-product thereof, (ii) asbestos or asbestos-containing materials,
(iii) polychlorinated biphenyls (pcbs), (iv) radon gas, (v) underground
storage tanks, (vi) any explosive or radioactive substances, (vii) lead or
lead-based paint, or (viii) any other substance, material, waste or mixture
which is or shall be listed, defined, or otherwise determined by any
governmental authority to be hazardous, toxic, dangerous or otherwise
regulated, controlled or giving rise to liability under any Environmental
Laws.
Section 6.2 Representations and Warranties on Environmental
Matters. To Borrower's actual knowledge, except as set forth in the Site
Assessment delivered in connection with the origination of the Loan, (a) no
Hazardous Material is now or was formerly used, stored, generated,
manufactured, installed, treated, discharged, disposed of or otherwise
present at or about the Property or any property adjacent to the Property
(except for cleaning and other products currently used in connection with,
and necessary and appropriate for, the routine maintenance or repair of the
Property or the operation thereof as a hotel in material compliance with
Environmental Laws) and no Hazardous Material was removed or transported
from the Property, except in full compliance with any Environmental Laws,
(b) all permits, licenses, approvals and filings required by Environmental
Laws have been obtained, and the use, operation and condition of the
Property does not, and did not previously, violate any Environmental Laws,
(c) no civil, criminal or administrative action, suit, claim, hearing,
investigation or proceeding has been brought or been threatened (in
writing), nor have any settlements been reached by or with any parties or
any liens imposed in connection with the Property concerning Hazardous
Materials or Environmental Laws; and (d) no underground storage tanks exist
on any part of the Property.
Section 6.3 Covenants on Environmental Matters.
(a) Borrower shall, and shall cause the Operating Lessee and
Manager to, (i) comply in all material respects with applicable
Environmental Laws; (ii) notify Lender immediately upon Borrower's
discovery of any spill, discharge, release or presence of any Hazardous
Material at, upon, under, within, contiguous to or otherwise affecting the
Property which Borrower is required to report, repair or remediate pursuant
to any Environmental Laws; (iii) promptly remove such Hazardous Materials
and remediate the Property in compliance with Environmental Laws; and
(iv) promptly forward to Lender copies of all orders, notices, permits,
applications or other communications and reports in connection with any
spill, discharge, release or the presence of any Hazardous Material or any
other matters relating to the Environmental Laws or any similar laws or
regulations, as they may affect the Property or Borrower.
(b) Borrower shall not cause, shall prohibit any other Person
within the control of Borrower from causing, and shall use prudent,
commercially reasonable efforts to prohibit other Persons (including
tenants) from (i) causing any spill, discharge or release, or the use,
storage, generation, manufacture, installation, or disposal, of any
Hazardous Materials at, upon, under, within or about the Property or the
transportation of any Hazardous Materials to or from the Property (except
for cleaning and other products used in connection with, and necessary and
appropriate for, routine maintenance or repair of the Property or the
operation thereof as a hotel in compliance with Environmental Laws in all
material respects), (ii) installing any underground storage tanks at the
Property, or (iii) conducting any activity that requires a permit or other
authorization under Environmental Laws (other than activities in the
ordinary course of business consistent with the uses at the Property on the
date hereof).
(c) Borrower shall provide to Lender, at Borrower's expense
promptly upon the written request of Lender from time to time, a Site
Assessment or, if required by Lender, an update to any existing Site
Assessment, to assess the presence or absence of any Hazardous Materials
and the potential costs in connection with abatement, cleanup or removal of
any Hazardous Materials found on, under, at or within the Property.
Borrower shall not be responsible for the cost of such Site Assessment or
update unless Lender's request for a Site Assessment is based on
information provided under Section 6.3(a), a reasonable suspicion of
Hazardous Materials at or near the Property, a breach of representations
under Section 6.2, or an Event of Default, in which case any such Site
Assessment or update shall be at Borrower's expense.
Section 6.4 Allocation of Risks and Indemnity. As between
Borrower, Lender and Indemnitor, all risk of loss associated with non-
compliance with Environmental Laws, or with the presence of any Hazardous
Material at, upon, within, contiguous to or otherwise affecting the
Property, shall lie solely with Borrower and Indemnitor; provided, however,
Borrower shall not be liable under such indemnification to the extent such
loss, liability, damage, claim, cost or expense results solely from
Lender's gross negligence or willful misconduct. Accordingly, Borrower and
Indemnitor shall bear all risks and costs associated with any loss
(including any loss in value attributable to Hazardous Materials), damage
or liability therefrom, including all costs of removal of Hazardous
Materials or other remediation required by Lender or by law. Borrower
shall indemnify, defend and hold Lender and its shareholders, directors,
officers, employees and agents harmless from and against all loss,
liabilities, damages, claims, costs and expenses (including reasonable
costs of defense and consultant fees, investigation and laboratory fees,
court costs, and other litigation expenses) arising out of or associated,
in any way, with (a) the non-compliance with Environmental Laws, or (b) the
existence of Hazardous Materials in, on, or about the Property, (c) any
personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to Hazardous Materials, (d) any lawsuit
brought or threatened, settlement reached, or government order relating to
such Hazardous Materials, (e) a breach of any representation, warranty or
covenant contained in this Article 6, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute or
common law, or (f) the imposition of any environmental lien encumbering the
Property; provided, however, Borrower shall not be liable under such
indemnification to the extent such loss, liability, damage, claim, cost or
expense results solely from Lender's gross negligence or willful
misconduct. Borrower's obligations under this Section 6.4 shall arise
whether or not any governmental authority has taken or threatened any
action in connection with the presence of any Hazardous Material, and
whether or not the existence of any such Hazardous Material or potential
liability on account thereof is disclosed in the Site Assessment and shall
continue notwithstanding the repayment of the Loan or any transfer or sale
of any right, title and interest in the Property (by foreclosure, deed in
lieu of foreclosure or otherwise). Any amounts payable to Lender by reason
of the application of this Section 6.4 shall become immediately due and
payable and shall bear interest at the Default Rate from the date loss or
damage is sustained by Lender until paid. The obligations and liabilities
of Borrower under this Section 6.4 shall survive any termination,
satisfaction, assignment, entry of a judgment of foreclosure or delivery of
a deed in lieu of foreclosure.
Section 6.5 No Waiver. Notwithstanding any provision in this
Article 6 or elsewhere in the Loan Documents, or any rights or remedies
granted by the Loan Documents, Lender does not waive and expressly reserves
all rights and benefits now or hereafter accruing to Lender under the
"security interest" or "secured creditor" exception under applicable
Environmental Laws, as the same may be amended. No action taken by Lender
pursuant to the Loan Documents shall be deemed or construed to be a waiver
or relinquishment of any such rights or benefits under the "security
interest exception."
ARTICLE VII
LEASING MATTERS
Section 7.1 Representations and Warranties on Leases. Borrower
represents and warrants to Lender with respect to the Leases under which
Borrower is the Landlord, if any, that: (a) the rent roll delivered to
Lender is true, complete and correct, and the Leases are valid and in and
full force and effect; (b) the Leases (including amendments) are in
writing, and there are no oral agreements with respect thereto; (c) the
copies of the Leases delivered to Lender are true and complete; (d) neither
the landlord nor any tenant is in material default under any of the Leases;
(e) Borrower has no knowledge of any notice of termination or default with
respect to any Lease; (f) Borrower has not assigned or pledged any of the
Leases, the rents or any interests therein except to Lender; (g) except as
expressly disclosed on Schedule IV attached hereto, no tenant or other
party has an option or right of first refusal or offer, to purchase all or
any portion of the Property; (h) no tenant has the right to terminate its
Lease prior to expiration of the stated term of such Lease; (i) no tenant
has prepaid more than one month's rent in advance (except for bona fide
security deposits not in excess of an amount equal to two month's rent, or
as otherwise expressly provided in such Lease); (j) no tenant under any
Lease has any right or option for additional space; (k) all existing Leases
are subordinate to the Mortgage either pursuant to their terms or a
recorded subordination agreement; and (l) there are no long term subleases
in effect other than subleases of space for ancillary hotel uses such as
gift shops.
Section 7.2 Approval Rights. All material Leases under which
Borrower is the Landlord or under which the tenant otherwise will be
granted non-disturbance by the Borrower, and other rental arrangements
shall in all respects be approved by Lender, which approval (a) shall not
be unreasonably withheld, delayed or conditioned, and (b) shall be deemed
granted in the event that Lender does not respond within twenty (20) days
after receiving a request for such approval together with a copy of such
Lease and all other supporting materials reasonably requested by Lender.
Section 7.3 Covenants. Borrower (a) shall perform the
obligations which Borrower is required to perform under the Leases;
(b) shall enforce, in a commercially reasonable manner, the obligations to
be performed by the tenants; (c) shall promptly furnish to Lender any
notice of default or termination received by Borrower from any tenant, and
any notice of default or termination given by Borrower to any tenant;
(d) shall not collect any rents for more than thirty (30) days in advance
of the time when the same shall become due, except for bona fide security
deposits not in excess of an amount equal to two months rent, or as
otherwise expressly provided in such Lease; (e) shall not enter into any
new ground Lease or master Lease of any part of the Property; (f) shall not
further assign or encumber any Lease; (g) shall not, except with Lender's
prior written consent (i) cancel or accept surrender or termination of any
Lease or (ii) amend or modify any of the material terms of any Lease, which
consent (A) shall not be unreasonably withheld, delayed or conditioned, and
(B) shall be deemed granted in the event that Lender does not respond
within twenty (20) days after receiving a request for such consent together
with all supporting materials reasonably requested by Lender. Any action
in violation of clauses (e), (f) and (g) of this Section 7.3 shall be void
at the election of Lender.
Section 7.4 Tenant Estoppels. At Lender's request, Borrower
shall use commercially reasonable efforts to obtain and furnish to Lender,
written estoppels in form and substance reasonably satisfactory to Lender,
executed by tenants under Leases and the Operating Lessee under the
Operating Lease at the Property and confirming the term, rent, and other
provisions and matters relating to the Leases.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants to Lender that:
Section 8.1 Organization, Power and Authority. Borrower and
the Operating Lessee (a) are duly organized, validly existing and in good
standing under the laws of the state of their formation or existence, (b)
are in compliance with all material legal requirements applicable to doing
business in the State, and (c) have the necessary governmental approvals to
own and operate the Property and conduct the business now conducted or to
be conducted thereon. Each Borrower Party (a) is duly organized, validly
existing and in good standing under the laws of the state of its formation
or existence and (b) to the extent necessary, is in compliance with all
legal requirements applicable to doing business in the State. Borrower has
the full power, authority and right to execute, deliver and perform its
obligations pursuant to this Loan Agreement and the other Loan Documents,
and to mortgage the Property pursuant to the terms of the Mortgage and to
keep and observe all of the terms of this Loan Agreement and the other Loan
Documents on Borrower's part to be performed.
Section 8.2 Validity of Loan Documents. The execution,
delivery and performance by Borrower and each Borrower Party of the Loan
Documents: (a) are duly authorized and do not require the consent or
approval of any other party or governmental authority which has not been
obtained; and (b) will not violate any law or result in the imposition of
any lien, charge or encumbrance upon the assets of any such party, except
as contemplated by the Loan Documents. The Loan Documents constitute the
legal, valid and binding obligations of Borrower and each Borrower Party,
enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, or similar laws generally affecting the
enforcement of creditors' rights and general principles of equity.
Section 8.3 No Conflicts. The execution, delivery and
performance of this Agreement and the other Loan Documents by Borrower will
not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance (other than pursuant to the Loan
Documents) upon any of the property or assets of Borrower pursuant to the
terms of any indenture, mortgage, deed of trust, loan agreement,
partnership agreement or other agreement or instrument to which Borrower is
a party or by which any of Borrower's property or assets is subject, nor
will such action result in any violation of the provisions of any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over Borrower or any of Borrower's properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or
other governmental agency or body required for the execution, delivery and
performance by Borrower of this Agreement or any other Loan Documents has
been obtained and is in full force and effect.
Section 8.4 Liabilities; Litigation.
(a) All financial data, including, without limitation, the
statements of cash flow and income and operating expense, that have been
delivered by Borrower and each Borrower Party are (i) true, complete and
correct in all material respects, (ii) accurately represent the financial
condition of the Property as of the date of such reports, and (iii) to the
extent prepared or audited by an independent certified public accounting
firm, have been prepared in accordance with generally accepted accounting
principals throughout the periods covered, except as disclosed therein.
Borrower does not have any contingent liabilities, liabilities for taxes
due and payable, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to
Borrower and reasonably likely to have a materially adverse effect on the
Property or the operation thereof as a hotel, except as referred to or
reflected in said financial statements. Since the date of the financial
statements, there has been no materially adverse change in the financial
condition, operations or business of Borrower from that set forth in said
financial statements. There is no litigation, administrative proceeding,
investigation or other legal action (including any proceeding under any
state or federal bankruptcy or insolvency law) pending or, to the knowledge
of Borrower, threatened, against the Property, Borrower or any Borrower
Party which if adversely determined could have a material adverse effect on
such party, the Property or the Loan.
(b) Neither Borrower nor any Borrower Party is contemplating
either the filing of a petition by it under state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets
or property, and neither Borrower nor any Borrower Party has knowledge of
any Person contemplating the filing of any such petition against it.
Section 8.5 Taxes and Assessments. There are no pending or, to
Borrower's best knowledge, proposed, special or other assessments for
public improvements or otherwise affecting the Property, nor are there any
contemplated improvements to the Property that may result in such special
or other assessments.
Section 8.6 Other Agreements; Defaults. Neither Borrower nor
any Borrower Party is a party to any agreement or instrument or subject to
any court order, injunction, permit, or restriction which might materially
and adversely affect the Property or the business, operations, or condition
(financial or otherwise) of Borrower or any Borrower Party. Neither
Borrower nor any Borrower Party is in violation of any agreement which
violation would have a material and adverse effect on the Property,
Borrower, or any Borrower Party or Borrower's or any Borrower Party's
business, properties, or assets, operations or condition, financial or
otherwise.
Section 8.7 Title. Borrower has good, marketable and insurable
title to the Property, free and clear of all Liens whatsoever except the
Permitted Encumbrances, such other Liens as are permitted pursuant to the
Loan Documents and the Liens created by the Loan Documents. The Mortgage
and the Second Mortgage create (i) a valid, perfected lien on the Property,
subject only to Permitted Encumbrances and the Liens created by the Loan
Documents and (ii) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Leases), all in
accordance with the terms thereof, in each case subject only to any
applicable Permitted Encumbrances, such other Liens as are permitted
pursuant to the Loan Documents and the Liens created by the Loan Documents.
There are no claims for payment for work, labor or materials affecting the
Property which are or may become a lien prior to, or of equal priority
with, the liens created by the Loan Documents. None of the Permitted
Encumbrances, individually or in the aggregate, materially interfere with
the benefits of the security intended to be provided by the Mortgage, the
Second Mortgage and this Loan Agreement, materially and adversely affect
the value of the Property, impair the use or operations of the Property or
impair Borrower's ability to pay its obligations in a timely manner.
Section 8.8 Compliance with Law.
(a) Borrower has, or pursuant to the Operating Lease, has
caused the Operating Lessee to have all requisite licenses, permits,
franchises, qualifications, certificates of occupancy or other governmental
authorizations to own, Lease and operate the Property and carry on its
business, and the Property is in compliance with all applicable legal
requirements and, to the best of Borrower's knowledge, except as expressly
set forth in the Property Condition Report, is free of structural defects,
and all building systems contained therein, to the best of Borrower's
knowledge, except as expressly set forth in the Property Condition Report,
are in good working order, subject to ordinary wear and tear. The Property
does not constitute, in whole or in part, a legally non-conforming use
under applicable legal requirements;
(b) No condemnation has been commenced or, to Borrower's
knowledge, is threatened with respect to all or any portion of the Property
or for the relocation of roadways providing access to the Property; and
(c) The Property has adequate rights of access to public ways
and is served by adequate water, sewer, sanitary sewer and storm drain
facilities. All public utilities necessary to the full use and enjoyment
of the Property are located in the public right-of-way abutting the
Property, and all such utilities are connected so as to serve the Property
without passing over other property, except to the extent such other
property is subject to a perpetual easement for such utility benefiting the
Property. All roads necessary for the utilization of the Property for its
current purpose have been completed and dedicated to public use and
accepted by all governmental authorities.
Section 8.9 Location of Borrower. Borrower's principal place
of business and chief executive offices are located at the address stated
in Section 15.1.
Section 8.10ERISA.
(a) To the best of Borrower's knowledge, as of the date
hereof and throughout the term of the Loan, (i) Borrower is not and will
not be an "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
which is subject to Title I of ERISA, and (ii) the assets of Borrower do
not and will not constitute "plan assets" of one or more such plans for
purposes of Title I of ERISA; and
(b) As of the date hereof and throughout the term of the Loan
(i) Borrower is not and will not be a "governmental plan" within the
meaning of Section 3(32) of ERISA and (ii) transactions by or with Borrower
are not and will not be subject to state statutes applicable to Borrower
regulating investments of and fiduciary obligations with respect to
governmental plans.
Section 8.11Forfeiture. To the best of Borrower's knowledge,
there has not been and shall never be committed by Borrower or any other
person in occupancy of or involved with the operation or use of the
Property any act or omission affording the federal government or any state
or local government the right of forfeiture as against the Property or any
part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not
to commit, permit or suffer to exist any act or omission affording such
right of forfeiture.
Section 8.12Tax Filings. Borrower and each Borrower Party have
filed (or have obtained effective extensions for filing) all federal, state
and local tax returns required to be filed and have paid or made adequate
provision for the payment of all federal, state and local taxes, charges
and assessments payable by Borrower and each Borrower Party, respectively.
Borrower and each Borrower Party believe that their respective tax returns
properly reflect the income and taxes of Borrower and each Borrower Party,
respectively, for the periods covered thereby, subject only to reasonable
adjustments required by the Internal Revenue Service or other applicable
tax authority upon audit.
Section 8.13Solvency. The Borrower (a) has not entered into
the transaction or any Loan Document with the actual intent to hinder,
delay, or defraud any creditor and (b) received reasonably equivalent value
in exchange for its obligations under the Loan Documents. Giving effect to
the Loan, the fair saleable value of Borrower's assets exceeds and will,
immediately following the making of the Loan, exceed Borrower's total
liabilities, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities. The fair saleable value of Borrower's
assets is and will, immediately following the making of the Loan, be
greater than Borrower's probable liabilities, including the maximum amount
of its contingent liabilities on its debts as such debts become absolute
and matured, Borrower's assets do not and, immediately following the making
of the Loan will not, constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted. Borrower does
not intend to, and does not believe that it will, incur Indebtedness and
liabilities (including contingent liabilities and other commitments) beyond
its ability to pay such Indebtedness as they mature (taking into account
the timing and amounts of cash to be received by Borrower and the amounts
to be payable on or in respect of obligations of Borrower). Except as
expressly disclosed to Lender in writing, no petition in bankruptcy has
been filed against Borrower, Indemnitor, any guarantor or any Borrower
Party in the last seven (7) years, and neither Borrower, Indemnitor, any
guarantor nor any Borrower Party in the last seven (7) years has ever made
an assignment for the benefit of creditors or taken advantage of any
insolvency act for the benefit of debtors.
Section 8.14Full and Accurate Disclosure. All written
information submitted by Borrower or any Borrower Party to Lender in
connection with the Loan or in satisfaction of the terms thereof and all
statements of fact made by Borrower or any Borrower Party in this Agreement
or in any other Loan Document, are accurate, complete and correct in all
material respects. No statement of fact made by Borrower or any Borrower
Party, or, to the best of Borrower's knowledge, on behalf of Borrower or
any Borrower Party, in this Agreement or in any of the other Loan Documents
contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no fact presently known to Borrower which has not
been disclosed to Lender which materially and adversely affects, nor as far
as Borrower can foresee, might materially and adversely affect, the
Property or the business, operations or condition (financial or otherwise)
of Borrower or any Borrower Party.
Section 8.15Flood Zone. No portion of the improvements
comprising the Property is located in an area identified by the Secretary
of Housing and Urban Development or any successor thereto as an area having
special flood hazards pursuant to the National Flood Insurance Act of 1968,
the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Act of 1994, as amended, or any successor law, or, if located within any
such area, Borrower has obtained and will maintain the insurance prescribed
in Section 5.1 hereof.
Section 8.16Federal Reserve Regulations. No part of the
proceeds of the Loan will be used for the purpose of purchasing or
acquiring any "margin stock" within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System or for any other purpose
which would be inconsistent with such Regulation U or any other Regulations
of such Board of Governors, or for any purposes prohibited by Legal
Requirements or by the terms and conditions of this Agreement or the other
Loan Documents.
Section 8.17Not a Foreign Person. Borrower is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Code.
Section 8.18Separate Lots. The Property is comprised of one
(1) or more parcels which constitutes a separate tax lot and does not
constitute a portion of any other tax lot not a part of the Property.
Section 8.19No Prior Assignment. There are no prior
assignments of the Leases, Operating Lease or any portion of the Rents or
Operating Lease Rent due and payable or to become due and payable which are
presently outstanding.
Section 8.20Insurance. Borrower has obtained and has delivered
to Lender Accord Certificates reflecting the insurance coverages, amounts
and other requirements set forth in this Agreement. Except as expressly
provided on Schedule V hereto, no material claims have been made under any
such Policy, and no Person, including Borrower, has done, by act or
omission, anything which would materially impair the coverage of any such
policy.
Section 8.21Use of the Property. The Property is used
exclusively as a full service, premium brand-name hotel and other
appurtenant and related uses including, but not limited to, restaurants and
lounges.
Section 8.22Certificate of Occupancy; Licenses. To the best of
Borrower's knowledge, all certifications, permits, licenses and approvals,
including without limitation, certificates of completion and occupancy
permits and any applicable liquor license required for the legal use,
occupancy and operation of the Property as a full service hotel
(collectively, the "Licenses"), have been obtained and are in full force
and effect. The Borrower shall keep and maintain, or cause to be kept and
maintained, all licenses necessary for the operation of the Property as a
full service hotel. The use being made of the Property is in conformity
with the certificate of occupancy issued for the Property.
Section 8.23Physical Condition. Except as expressly disclosed
in the Property Condition Report, to the best of Borrower's knowledge, the
Property, including, without limitation, all buildings, improvements,
parking facilities, sidewalks, storm drainage systems, roofs, plumbing
systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and
repair in all material respects; there exists no structural or other
material defects or damages in the Property, whether latent or otherwise,
and Borrower has not received notice from any insurance company or bonding
company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause
the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.
Section 8.24Boundaries. All of the improvements which were
included in determining the appraised value of the Property lie wholly
within the boundaries and building restriction lines of the Property, and
no improvements on adjoining properties encroach upon the Property, and no
easements or other encumbrances upon the Property encroach upon any of the
improvements, so as to affect the value or marketability of the Property
except those which are insured against by title insurance.
Section 8.25Intentionally Deleted.
Section 8.26Intentionally Deleted.
Section 8.27Filing and Recording Taxes. All transfer taxes,
deed stamps, intangible taxes or other amounts in the nature of transfer
taxes required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the transfer of the Property to
Borrower have been paid. To the best of Borrower's knowledge, all
mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the
Loan Documents, including, without limitation, the Mortgage encumbering the
Property have been paid, and, under current Legal Requirements, the
Mortgage encumbering the Property is enforceable in accordance with their
respective terms by Lender (or any subsequent holder thereof).
Section 8.28Single Purpose Entity/Separateness.
(a) Borrower hereby represents and warrants, and covenants
and agrees that Borrower is, shall be and shall continue to be a Special
Purpose Bankruptcy Remote Entity. A "Special Purpose Bankruptcy Remote
Entity" means a corporation, limited partnership or limited liability
company which at all times on and after the date hereof:
(i) is organized solely for the purpose of (A) acquiring,
developing, owning, holding, selling, leasing, transferring, exchanging,
managing and operating the Property and Additional Property, entering into
the Loan Agreement with the Lender, refinancing the Property in connection
with a permitted repayment of the Loan and transacting any and all lawful
business that is incident, necessary and appropriate to accomplish the
foregoing; or (B) acting as a general partner of the limited partnership
that owns the Property or acting as a member of the limited liability
company that owns the Property, as applicable;
(ii) has not engaged and will not engage in any business
unrelated to (A) the acquisition, development, ownership, management or
operation of the Property and Additional Property, or (B) acting as the
general partner of the limited partnership that owns the Property or acting
as a member of the limited liability company that owns the Property, as
applicable;
(iii) does not have and will not have any assets other than (A)
those related to the Property and Additional Property or (B) its
partnership interest in the limited partnership that owns the Property that
acts as the general partner thereof or its member interest in the limited
liability company that owns the Property that acts as a member thereof, as
applicable;
(iv) has not engaged, sought or consented to and will not
engage in, seek or consent to (A) any dissolution, winding up, liquidation,
consolidation, merger, sale of all or substantially all of its assets,
transfer of partnership or membership interests (if such entity is a
general partner in a limited partnership or a member in a limited liability
company) or (B) any amendment of its limited partnership agreement,
articles of incorporation, articles of organization, certificate of
formation or operating agreement (as applicable) with respect to the
matters set forth in this Section;
(v) if such entity is a limited partnership, has, as its only
general partners, Special Purpose Bankruptcy Remote Entities that are
corporations, limited partnerships or limited liability companies (with
more than one member);
(vi) if such entity is a corporation, has at least one
Independent Director, and has not caused or allowed and will not cause or
allow the board of directors of such entity to take any action requiring
the unanimous affirmative vote of 100% of the members of its board of
directors unless an Independent Director shall have participated in such
vote;
(vii) if such entity is a limited liability company, has at
least one member that is a Special Purpose Bankruptcy Remote Entity that is
a corporation that has at least one Independent Director and that owns at
least one percent (1%) of the equity of the limited liability company;
(viii) if such entity is (a) a limited partnership, has a
limited partnership agreement, (b) a limited liability company, has
articles of organization, a certificate of formation and/or an operating
agreement, as applicable, or (c) a corporation, has a certificate of
incorporation or articles that, in each case, provides that such entity
will not: (1) dissolve, merge, liquidate, consolidate; (2) sell all or
substantially all of its assets or the assets of Borrower; (3) engage in
any other business activity, or amend its organizational documents with
respect to the matters set forth in this Section without the consent of the
Lender, which consent (A) shall not be unreasonably withheld or delayed and
(B) may be conditioned upon the receipt by Lender of a non-consolidation
opinion reasonably satisfactory to Lender and confirmation from the Rating
Agency that such activity or amendment will not result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Securities issued pursuant to a Securitization or (4) without the
affirmative vote of an Independent Director and of all other directors of
the corporation that is the general partner or managing or co-managing
member of such entity, file, a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings with respect to itself or to any
other entity in which it has a direct or indirect legal or beneficial
ownership interest;
(ix) if such entity is a limited partnership or limited
liability company that is the general partner of a limited partnership or
the member of a limited liability company that is the Special Purpose
Bankruptcy Remote Entity, has a corporation that owns at least one percent
(1%) of the equity of such entity as its general partner or managing
member, as applicable, that is a Special Purpose Bankruptcy Remote Entity;
(x) is and will remain solvent and pay its debts and
liability (including, as applicable, shared personnel and overhead
expenses) from its assets as the same shall become due, and is maintaining
and will maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations;
(xi) to the best of Borrower's knowledge, has not failed and
will not fail to correct any known misunderstanding regarding the separate
identity of such entity;
(xii) has maintained and will maintain its accounts, books and
records separate from any other Person and will file its own tax returns,
except to the extent that it is required to file consolidated tax returns
by law;
(xiii) has maintained and will maintain its own records, books,
resolutions and agreements;
(xiv) has not commingled and will not commingle its funds or
assets with those of any other Person and, has not participated and will
not participate in any cash management system with any other Person;
(xv) has held and will hold its assets in its own name;
(xvi) has conducted and will conduct its business in its name
or in a name franchised or licensed to it by an entity other than an
Affiliate of Borrower, except for services rendered under a business
management services agreement with an Affiliate that complies with the
terms contained in Section 8.29 herein, so long as the manager, or
equivalent thereof, under such business management services agreement holds
itself out as an agent of the Borrower;
(xvii) has maintained and will maintain its financial
statements, accounting records and other entity documents separate from any
other Person and has not permitted and will not permit its assets to be
listed as assets on the financial statement of any other entity except as
required by generally accepted accounting principles; provided, however,
that any such consolidated financial statement shall contain a note
indicating that its separate assets and liabilities are neither available
to pay the debts of the consolidated entity nor constitute obligations of
the consolidated entity;
(xviii) has paid and will pay its own liabilities and
expenses, including the salaries of its own employees, out of its own funds
and assets, and has maintained and will maintain a sufficient number of
employees in light of its contemplated business operations;
(xix) has observed and will observe all partnership, corporate
or limited liability company formalities, as applicable;
(xx) has and will have no Indebtedness other than (i) the Loan
and the Additional Loan (ii) liabilities incurred in the ordinary course of
business relating to the ownership and operation of the Property which is
outstanding for not more than sixty (60) days with trade creditors, in the
aggregate provided such liabilities are not evidenced by a note and are
paid when due, and (iii) liabilities incurred in the financing or equipment
and other personal property used exclusively at the Property or the
Additional Properties, secured solely by such equipment or personal
property being financed, not to exceed at any one time two percent (2%) of
the Release Amount for the Property;
(xxi) has not and will not assume or guarantee or become
obligated for the debts of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person except as
permitted pursuant to this Agreement;
(xxii) has not and will not acquire obligations or securities of
its partners, members or shareholders or any other Affiliate;
(xxiii) has allocated and will allocate fairly and
reasonably any overhead expenses that are shared with any Affiliate,
including, but not limited to, paying for shared office space and services
performed by any employee of an affiliate;
(xxiv) maintains and uses and will maintain and use separate
stationery, invoices and checks bearing its name. The stationary,
invoices, and checks utilized by the Special Purpose Bankruptcy Remote
Entity or utilized to collect its funds or pay its expenses shall bear its
own name and shall not bear the name of any other entity unless such entity
is clearly designated as being the Special Purpose Bankruptcy Remote
Entity's agent;
(xxv) has not pledged and will not pledge its assets for the
benefit of any other Person;
(xxvi) has held itself out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its
own name;
(xxvii) has maintained and will maintain its assets in such
a manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person;
(xxviii) has not made and will not make loans to any Person
or hold evidence of indebtedness issued by any other person or entity
(other than cash and investment-grade securities issued by an entity that
is not an Affiliate of or subject to common ownership with such entity);
(xxix) has not identified and will not identify its partners,
members or shareholders, or any Affiliate of any of them, as a division or
part of it, and has not identified itself and shall not identify itself as
a division of any other Person;
(xxx) has not entered into or been a party to, and will not
enter into or be a party to, any transaction with its partners, members,
shareholders or Affiliates except (A) in the ordinary course of its
business and on terms which are intrinsically fair, commercially reasonable
and are no less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party and (B) in
connection with the Loan Agreement;
(xxxi) has not and will not have any obligation to, and will
not, indemnify its partners, officers, directors or members, as the case
may be, or has such an obligation that is fully subordinated to the Debt
and will not constitute a claim against it in the event that cash flow in
excess of the amount required to pay the Debt is insufficient to pay such
obligation;
(xxxii) if such entity is a corporation, it is required to
consider the interests of its creditors in connection with all corporate
actions;
(xxxiii) does not and will not have any of its obligations
guaranteed by any Affiliate except as contemplated herein; and
(xxxiv) has complied and will comply with all of the terms
and provisions contained in its organizational documents. The statement of
facts contained in its organizational documents are true and correct and
will remain true and correct.
(b) The representations and warranties set forth in Section
8.28(a) shall survive for so long as any amount remains payable to Lender
under this Agreement or any other Loan Document.
Section 8.29Management Agreement.
(a) Borrower shall not (i) and shall not permit (if within
its powers under the Operating Lease) Operating Lessee to, enter into any
agreement relating to the management or operation of the Property with
Manager or any other party without the express written consent of Lender,
which consent shall not be unreasonably withheld, nor (ii) grant any form
of non-disturbance to any property manager engaged by the Operating Lessee
for the management or the operation of the Property without the express
written consent of Lender, which consent (A) shall not be unreasonably
withheld or delayed, and (B) except with respect to a new manager or the
grant of non-disturbance, shall be deemed granted in the event that Lender
does not respond within fifteen (15) days after receiving a request for
such consent together with all supporting materials reasonably requested by
Lender; provided, however, with respect to a new manager, or the grant of
non-disturbance, such consent may be conditioned upon Borrower delivering
evidence in writing from the applicable Rating Agencies to the effect that
such new manager and management agreement or non-disturbance will not
result in a downgrade, withdrawal or qualification of the respective
ratings then in effect for any Securities issued in connection with a
Securitization. At the request of Lender, Borrower shall, or shall use
commercially reasonable efforts to cause Operating Lessee, to deliver to
Lender copies of such information that Borrower, or Operating Lessee, as
applicable, is entitled to receive under the management agreement,
including, without limitation, any financial reporting.
(b) Borrower, upon the request of Lender (and with respect to
the Operating Lease in effect as of the date hereof, to the extent that
Borrower is empowered to do so under such Operating Lease), shall terminate
any Manager designated by Lender, without penalty or fee, if at any time
during the Loan (i) such Manager shall become insolvent or a debtor in any
bankruptcy or insolvency proceeding, (ii) there is continuing an Event of
Default, or (iii) the Anticipated Payment Date has occurred and the Loan
has not been repaid. The Management Agreement entered into by Borrower
shall provide that such Manager may be terminated, without penalty or fee,
upon the occurrence of any of the foregoing. At such time as the Manager
may be removed, a replacement manager acceptable to Lender and the
applicable Rating Agencies in their sole discretion shall assume management
of the Properties and shall receive a property management fee not to exceed
then current market rates.
Section 8.30Operating Leases.
(a) The Operating Lease, pursuant to which the Operating
Lessee operates the Property as a hotel, is in full force and effect and
there is no material default, breach or violation existing thereunder by
Borrower or to the best of Borrower's knowledge, any other party thereto
and no event has occurred (other than payments due but not yet delinquent)
that, with the passage of time or the giving of notice, or both, would
constitute a default, breach or violation by any party thereunder. The
Operating Lease Rent, and the terms and provisions of the Operating Lease,
are subordinate to this Agreement, the Mortgage and the Second Mortgage.
Subject to the terms of Section 10.14 hereof, any new Operating Lease or
Operating Lessee shall be approved or disapproved by Lender in its
reasonable discretion within fifteen (15) Business Days of Lender's receipt
thereof together with all supporting materials reasonably requested by
Lender in order to make such determination, and with respect to a new
Operating Lease or Operating Lessee, such consent may be conditioned upon
Borrower delivering evidence in writing from the applicable Rating Agencies
to the effect that such new Operating Lease and/or Operating Lessee will
not result in a downgrade, withdrawal or qualification of the respective
ratings then in effect for any Securities issued in connection with a
Securitization. Borrower shall send any request for Lender's approval of
a new Operating Lease in an envelope labeled "PRIORITY" and shall state at
the top of the first page in bold lettering "LENDER'S RESPONSE IS REQUIRED
WITHIN TEN BUSINESS DAYS OF RECEIPT OF THIS REQUEST PURSUANT TO THE TERMS
OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER." If at any time
Lender consents to the appointment of a new Operating Lessee, such new
Operating Lessee and Borrower shall, as a condition of Lender's consent,
execute a subordination agreement reasonably satisfactory to Lender in form
and substance. In the event that Lender approves a new operating lease
with a Person other than Operating Lessee, on substantially the same terms
(or terms more favorable to Borrower) as the existing Operating Lease, then
Lender hereby agrees to enter into a subordination agreement with such
person in form and substance substantially similar to the Subordination
Agreement.
(b) Neither the execution and delivery of the Loan Documents,
Borrower's performance thereunder, nor the exercise of any remedies by
Lender, will adversely affect Borrower's rights under the Operating Lease
or any of the Licenses.
Section 8.31Investment Company Act. The Borrower is not (a) an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (b) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within
the mean of the Public Utility Holding Company Act of 1935, as amended; or
(c) subject to any other federal or state law or regulation which purports
to restrict or regulate its ability to borrow money.
Section 8.32Leases. Except as expressly disclosed in Schedule
IV attached hereto, Borrower is not a party, either directly or as a
successor or assignee, to any Leases other than the Operating Lease.
Section 8.33SPE Compliance. (i) All of the assumptions made in
that certain substantive non-consolidation opinion letter dated the date
hereof, delivered by Borrower's counsel in connection with the Loan (the
"Insolvency Opinion"), including, but not limited to, any exhibits attached
thereto, are true and correct in all respects and any assumptions made in
any subsequent non-consolidation opinion delivered in connection with the
Loan Documents (an "Additional Insolvency Opinion"), including, but not
limited to, any exhibits attached thereto, will have been and shall be true
and correct in all respects. Borrower has complied and will comply with
all of the assumptions made with respect to it in the Insolvency Opinion.
Borrower will have complied and will comply with all of the assumptions
made with respect to it in any Additional Insolvency Opinion. Each entity
other than the Borrower with respect to which an assumption is made in the
Insolvency Opinion has complied and will comply with all of the assumptions
made with respect to it in the Insolvency Opinion. Each entity other than
Borrower with respect to which an assumption shall be made in any
Additional Insolvency Opinion will have complied and will comply with all
of the assumptions made with respect to it in any Additional Insolvency
Opinion and (ii) all the representations and warranties set forth in
Section 8.28 hereof are true and correct.
Section 8.34Ground Lease Representations and Warranties.
Borrower hereby represents and warrants to Lender the following with
respect to the Ground Lease:
(a) A memorandum of the Ground Lease has been duly recorded,
the Ground Lease permits the interest of Borrower to be encumbered by a
mortgage or the Ground Lessor has approved and consented to the encumbrance
of the Property by the Mortgage and the Second Mortgage and there have not
been amendments or modifications to the terms of the Ground Lease since its
recordation, with the exception of written instruments which have been
recorded. The Ground Lease may not be canceled, terminated, surrendered or
amended without the prior written consent of Lender.
(b) Except for the Permitted Encumbrances, Borrower's
interest in the Ground Lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage other than the Ground
Lessor's related fee interest.
(c) Borrower's interest in the Ground Lease is assignable to
Lender upon notice to, but without the consent of, the Ground Lessor (or,
if any such consent is required, it has been obtained prior to the Closing
Date). The Ground Lease is further assignable by Lender, its successors
and assigns without Ground Lessor's consent.
(d) As of the date hereof, the Ground Lease is in full force
and effect and no default beyond applicable notice of grace periods has
occurred and is continuing under the Ground Lease and there is no existing
condition which, but for the passage of time or the giving of notice, could
result in a default under the terms of the Ground Lease.
(e) The Ground Lease requires the Ground Lessor to give
notice of any default by Borrower to Lender. The Ground Lease, or an
estoppel letter received by Lender from Ground Lessor, further provides
that notice of termination given under the Ground Lease is not effective
against Lender unless a copy of the notice has been delivered to Lender in
the manner described in the Ground Lease.
(f) Lender is permitted the opportunity (including, where
necessary, sufficient time to gain possession of the interest of Borrower
under the Ground Lease) to cure any default under the Ground Lease, which
is curable after the receipt of notice of any of the default before the
landlord thereunder may terminate the Ground Lease.
(g) The Ground Lease has a term which extends, including
renewals exercisable at the option of Borrower, not less than ten (10)
years beyond the Maturity Date. During the term of the Loan, Borrower
shall exercise any renewal options to extend the Ground Lease in accordance
with the terms and conditions thereof.
(h) The Ground Lease requires Ground Lessor to enter into a
new lease upon termination of the Ground Lease for any reason, including
rejection of the Ground Lease in a bankruptcy proceeding.
(i) Under the terms of the Ground Lease and the Mortgage,
taken together, any related insurance and Borrower's interest in the
condemnation proceeds will be applied either to the repair or restoration
of all or part of the Property, with Lender having the right to hold and
disburse the proceeds as the repair or restoration progresses, or to the
payment of the outstanding principal balance of the Loan together with any
accrued interest thereon.
(j) The Ground Lease does not impose any restrictions on
subleasing.
Section 8.35Intentionally Deleted.
Section 8.36Parking Agreements. Borrower hereby represents
warrants, covenants and agrees that (a) the Parking Agreements are valid
and in full force and effect, (b) the Parking Agreements are in writing and
there are no oral agreements with respect thereto, (c) the copies of the
Parking Agreements delivered to Lender are true and complete, (d) none of
the parties thereto are in material default under the Parking Agreements,
(e) Borrower has no knowledge of any notice of termination or default with
respect to the Parking Agreements, (f) Borrower shall perform all of the
obligations which Borrower is required to perform under the Parking
Agreements, (g) Borrower shall enforce, in a commercially reasonable
manner, the obligations to be performed by the parties to the Parking
Agreements other than Borrower, (h) Borrower shall promptly furnish to
Lender any notice delivered by any party under the Parking Agreements, (i)
Borrower shall not further assign or encumber the Parking Agreements, (j)
Borrower shall not, except with Lender's prior written consent (not to be
unreasonably withheld, conditioned or delayed) (A) cancel or accept any
surrender or termination of the Parking Agreements or (B) amend or modify
any term of the Parking Agreements, and (k) Borrower shall, at the request
of Lender, to the extent Borrower is permitted under the Parking
Agreements, exercise any options to extend the Parking Agreements in
accordance with the terms and conditions thereof.
ARTICLE IX
FINANCIAL REPORTING
Section 9.1 Financial Statements.
(a) Obligations of Borrower. Borrower will keep and maintain
or will cause to be kept and maintained, in accordance with generally
accepted accounting principles and USAH proper and accurate books, records
and accounts reflecting all of the financial affairs of Borrower and
Operating Lessee, all items of income and expense in connection with the
operation on an individual basis of the Property. Lender shall have the
right from time to time at all times during normal business hours upon
reasonable prior written notice to Borrower, and as permitted under the
Operating Lease to examine such books, records and accounts at the office
of Borrower, Operating Lessee or other Person maintaining such books,
records and accounts and, at Lender's cost and expense, to make such copies
or extracts thereof as Lender shall desire. After the occurrence of an
Event of Default, Borrower shall pay any costs and expenses incurred by
Lender to examine Borrower's accounting records with respect to the
Property, as Lender shall determine to be reasonably necessary or
appropriate in the protection of Lender's interest.
(b) Monthly Reports. Within ten (10) days of receipt, for so
long as the Operating Lease shall remain in effect, Borrower will deliver
to Lender the monthly reports furnished to Borrower by the Operating Lessee
pursuant to the terms of the Operating Lease in a form substantially
similar to the form attached hereto as Exhibit B. In the event that the
Operating Lease is no longer in effect, within forty-five (45) days after
the end of each calendar month, Borrower shall furnish to Lender a monthly
report in a form substantially similar to the form attached hereto as
Exhibit B.
(c) Quarterly Reports. Within sixty (60) days after the end
of each calendar quarter, Borrower shall furnish or cause Operating Lessee
to furnish, to Lender a detailed operating statement for the Borrower
(showing quarterly activity and year-to-date) containing a statement of
income and cash flow together with a balance sheet of Borrower for the
calendar quarter just ended. Borrower's quarterly statements shall be
accompanied by (i) a comparison of the budgeted income and expenses and the
actual income and expenses for the prior calendar quarter, and (ii) a
certificate executed by an officer of Borrower or the general partner of
Borrower stating that each such quarterly statement presents fairly the
financial condition and the results of operations of the Borrower and has
been prepared in accordance with general accepted accounting principles.
(d) Annual Reports. Within one-hundred twenty (120) days
after the end of each calendar year, Borrower will furnish to Lender a
complete copy of Borrower's and Operating Lessee's (as required pursuant to
the terms of the Operating Lease) annual financial statements audited by a
"big five" accounting firm or other independent certified public accountant
acceptable to Lender in accordance with generally accepted accounting
principles for such calendar year which financial statements shall contain
a balance sheet and a detailed operating statement stating net cash flow.
Borrower's annual financial statements shall be accompanied by (i) a
certificate executed by an officer of Borrower or the general partner of
Borrower stating that each such annual financial statement presents fairly
the financial condition and the results of operations of the Borrower and
the Property and has been prepared in accordance with general accepted
accounting principles, and (ii) an unqualified opinion of a "big five"
accounting firm or other independent certified public accountant reasonably
acceptable to Lender.
(e) Certification; Supporting Documentation. Each such
financial statement shall be in scope and detail reasonably satisfactory to
Lender and certified by an officer of Borrower with sufficient knowledge
thereof; provided, however, that such certification shall be qualified to
the best of such representative's knowledge in the event that such
statement was prepared by the Operating Lessee pursuant to the terms of the
Operating Lease.
(f) Additional Reports. Borrower shall deliver to Lender as
soon as reasonably available but in no event later than thirty (30) days
after such items become available to Borrower in final form:
(i) copies of any final engineering or environmental reports
prepared for Borrower or the Operating Lessee with respect to the Property;
(ii) a copy of any notice received by Borrower from any
environmental authority having jurisdiction over the Property with respect
to a condition existing or alleged to exist or emanate from or at the
Property;
(iii) copies of any financial statements and reports required
to be delivered to Borrower by the Operating Lessee pursuant to the
Operating Lease.
Section 9.2 Accounting Principles. All financial statements
shall be prepared in accordance with generally accepted accounting
principles in the United States of America as in effect on the date so
indicated and consistently applied and the USAH (or such other accounting
basis reasonably acceptable for Lender).
Section 9.3 Other Information; Access. Borrower shall deliver
to Lender such additional information regarding Borrower, its subsidiaries,
its business, any Borrower Party, and the Property within 30 days after
Lender's reasonable request therefor. Borrower shall permit Lender to
examine such records, books and papers of Borrower which reflect upon its
financial condition and the income and expenses of the Property.
Section 9.4 Format of Delivery. Any reports, statements or
other information required to be delivered under this Agreement shall be
delivered in paper form.
ARTICLE X
COVENANTS
Borrower covenants and agrees with Lender as follows:
Section 10.1Due on Sale and Encumbrance; Transfers of
Interests. Subject to Section 3.9 of the Mortgage, without the prior
written consent of Lender, neither Borrower nor any other Person having an
ownership or beneficial interest in Borrower shall sell, transfer, convey,
mortgage, pledge, or assign any interest in the Property or any part
thereof or further encumber, alienate, grant a Lien or grant any other
interest in any of the Property or any part thereof, whether voluntarily or
involuntarily, in violation of the covenants and conditions set forth in
the Mortgage.
Section 10.2Taxes; Utility Charges. Borrower shall pay before
any fine, penalty, interest or cost may be added thereto, and shall not
enter into any agreement to defer, any real estate taxes and assessments,
franchise taxes and charges, and other governmental charges (the "Taxes")
that may become a Lien upon the Property or become payable during the term
of the Loan; provided, however, Borrower may contest the validity of Taxes
so long as (a) Borrower notifies Lender that it intends to contest such
Taxes, (b) Borrower provides Lender with an indemnity, bond or other
security reasonably satisfactory to Lender assuring the discharge of
Borrower's obligations for such Taxes, including interest and penalties, to
the extent that the amount in question (together with all interest,
penalties and fees to accrue thereon) plus the next installment of Taxes
(then or subsequently to be paid) exceeds the amounts escrowed with Lender
and attributable to the payment of Taxes for the Property pursuant to
Section 5.4 hereof, (c) Borrower is diligently contesting the same by
appropriate legal proceedings in good faith and at its own expense and
concludes such contest prior to the tenth (10th) day preceding the earlier
to occur of the Maturity Date or the date on which the Property is
scheduled to be sold for non-payment, (d) Borrower promptly upon final
determination thereof pay the amount of any such Taxes, together with all
costs, interest and penalties which may be payable in connection therewith,
and (e) notwithstanding the foregoing, Borrower shall immediately upon
request of Lender pay any such Taxes notwithstanding such contest if, in
the reasonable opinion of Lender, the Property or any part thereof or
interest therein may be in danger of being sold, forfeited, foreclosed,
terminated, cancelled or lost. Lender may pay over any cash deposit or part
thereof to the claimant entitled thereto at any time when, in the judgment
of Lender, the entitlement of such claimant is established. Borrower's
compliance with Section 5.4 of this Agreement relating to impounds for
Taxes shall, with respect to payment of such Taxes, be deemed compliance
with this Section 10.2. Borrower shall not suffer or permit the joint
assessment of the Property with any other real property constituting a
separate tax lot or with any other real or personal property. Borrower
shall promptly pay for all utility services provided to the Property.
Section 10.3Operating Lease. The Borrower shall hold and
maintain, or cause Operating Lessee to hold and maintain, all necessary
licenses, certifications and permits required by law. Borrower shall fully
perform all of its covenants, agreements and obligations under the
Operating Lease.
Section 10.4Operation; Maintenance; Inspection. Borrower shall
observe and comply, or cause Operating Lessee to observe and comply, with
all legal requirements applicable to the ownership, use and operation of
the Property. Borrower shall maintain, or cause Operating Lessee to
maintain, the Property in good condition and promptly repair any damage or
casualty. Borrower shall permit Lender and its agents, representatives and
employees, upon reasonable prior notice to Borrower, to inspect the
Property and conduct such environmental and engineering studies as Lender
may require, provided such inspections and studies do not materially
interfere with the use and operation of the Property or violate the terms
and conditions of the Operating Lease.
Section 10.5Taxes on Security. Borrower shall pay all taxes,
charges, filing, registration and recording fees, excises and levies
payable with respect to the Note or the Liens created or secured by the
Loan Documents, other than income, franchise and doing business taxes
imposed on Lender. If there shall be enacted any law (a) deducting the
Loan from the value of the Property for the purpose of taxation, (b)
affecting any Lien on the Property, or (c) changing existing laws of
taxation of mortgages, deeds of trust, security deeds, or debts secured by
real property, or changing the manner of collecting any such taxes,
Borrower shall promptly pay to Lender, on demand, all taxes, costs and
charges for which Lender is or may be liable as a result thereof; however,
if such payment would be prohibited by law or would render the Loan
usurious, then instead of collecting such payment, Lender may declare all
amounts owing under the Loan Documents to be due and payable within ninety
(90) days after demand by Lender.
Section 10.6Legal Existence; Name, Etc. Borrower and each SPC
Party shall preserve and keep in full force and effect its entity status,
franchises, rights and privileges under the laws of the state of its
formation, and all qualifications, licenses and permits applicable to the
ownership, use and operation of the Property. Except as permitted by the
Loan Documents, neither Borrower nor any general partner or managing member
of Borrower shall wind up, liquidate, dissolve, reorganize, merge, or
consolidate with or into, or convey, sell, assign, transfer, Lease, or
otherwise dispose of all or substantially all of its assets, or acquire all
or substantially all of the assets of the business of any Person, or permit
any subsidiary or Affiliate of Borrower to do so. Borrower shall not
change its name, identity, or organizational structure, or the location of
its chief executive office or principal place of business unless Borrower
(a) shall have obtained the prior written consent of Lender to such change,
and (b) shall have taken all actions reasonably necessary or reasonably
requested by Lender to file or amend any financing statement or
continuation statement to assure perfection and continuation of perfection
of security interests under the Loan Documents.
Section 10.7Further Assurances. Borrower shall promptly
(a) cure any defects in the execution and delivery of the Loan Documents,
and (b) execute and deliver, or cause to be executed and delivered, all
such other documents, agreements and instruments as Lender may reasonably
request to further evidence and more fully describe the collateral for the
Loan, to correct any omissions in the Loan Documents, to perfect, protect
or preserve any liens created under any of the Loan Documents, or to make
any recordings, file any notices, or obtain any consents, as may be
necessary or appropriate in connection therewith. Borrower grants Lender
an irrevocable power of attorney coupled with an interest for the purpose
of perfecting any and all rights available to Lender under the Loan
Documents, at law and in equity, including without limitation such rights
available to Lender pursuant to this Section 10.7; provided, however, that
Lender will not exercise such power of attorney until the expiration of
fifteen (15) days after Lender delivers to Borrower notice of Lender's
intention to exercise such power of attorney.
Section 10.8Estoppel Certificates.
(a) Borrower, within ten (10) days after request, shall
furnish to Lender a written statement, duly acknowledged, setting forth the
amount due on the Loan, the terms of payment of the Loan, the date to which
interest has been paid, whether any offsets or defenses exist against the
Loan and, if any are alleged to exist, the nature thereof in detail, and
such other matters as Lender reasonably may request.
(b) Lender, within ten (10) days after request, shall furnish
to Borrower a written statement, duly acknowledged, setting forth the
amount due on the Loan, the terms of payment on the Loan and the date to
which interest has been paid.
Section 10.9Notice of Certain Events. Borrower shall promptly
notify Lender of (a) any Event of Default, together with a detailed
statement of the steps being taken to cure such Event of Default; (b) any
notice of default received by Borrower under other obligations relating to
the Property and otherwise material to Borrower's business; and (c) any
threatened or pending legal, judicial or regulatory proceedings, including
any dispute between Borrower and any governmental authority, affecting
Borrower or the Property.
Section 10.10Indemnification. Borrower shall protect, defend,
indemnify and save harmless Lender its shareholders, directors, officers,
employees and agents from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including without
limitation reasonable attorneys' fees and expenses), imposed upon or
incurred by or asserted against Lender (except for events caused by the
gross negligence of Lender and arising after the date that Lender takes
title and actual possession of the Property pursuant to a foreclosure or
deed-in-lieu thereof) by reason of (a) ownership of the Mortgage, the
Property or any interest therein or receipt of any rents; (b) any accident,
injury to or death of persons or loss of or damage to property occurring
in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or
ways; (c) any use, nonuse or condition in, on or about the Property or any
part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (d) performance of any labor or
services or the furnishing of any materials or other property in respect of
the Property or any part thereof; and (e) the failure of any Person to file
timely with the Internal Revenue Service an accurate Form 1099-B, Statement
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with this Agreement, or
to supply a copy thereof in a timely fashion to the recipient of the
proceeds of the transaction in connection with which this Agreement is
made. Any amounts payable to Lender by reason of the application of this
section shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender until
paid.
Section 10.11Payment for Labor and Materials. Borrower will
promptly pay when due all bills and costs for labor, materials, and
specifically fabricated materials incurred in connection with the Property
and never permit to exist beyond the due date thereof in respect of the
Property or any part thereof any lien or security interest, even though
inferior to the liens and the security interest hereof, and in any event
never permit to be created or exist in respect of the Property or any part
thereof any other or additional lien or security interest other than the
liens or security interests hereof, except for the Permitted Encumbrances;
provided, however, Borrower may contest the validity of such bills and
costs so long as (a) Borrower notifies Lender that it intends to contest
such bills and costs, (b) Borrower provides Lender with an indemnity, bond
or other security reasonably satisfactory to Lender assuring the discharge
of Borrower's obligations for such bills and costs, including interest and
penalties, to the extent that the amount in question exceeds amounts
already escrowed with Lender specifically for the related labor and/or
materials provided to Borrower and/or the Property and the payment of any
reasonably foreseeable related interest, costs or fees in connection
therewith, provided, that, in the event that the amount in question is less
than $50,000.00, such security shall take the form of an indemnity from the
Borrower and Joinder Party in form and substance reasonably acceptable to
Lender, (c) Borrower is diligently contesting the same by appropriate legal
proceedings in good faith and at its own expense and concludes such contest
prior to the tenth (10th) day preceding the earlier to occur of the
Anticipated Payment Date or the date on which the Property is scheduled to
be sold for non-payment, (d) Borrower promptly upon final determination
thereof pays the amount of any such bills and costs, together with all
costs, interest and penalties which may be payable in connection therewith;
and (e) notwithstanding the foregoing, Borrower shall immediately upon
request of Lender pay any such bills and costs notwithstanding such contest
if, in the reasonable opinion of Lender, the Property or any part thereof
or interest therein may be in danger of being sold, forfeited, foreclosed,
terminated, canceled or lost.
Section 10.12Alterations. Borrower shall obtain Lender's prior
written consent to any alterations to any Improvements on the Property that
are reasonably likely to have a material adverse effect on Borrower's
financial condition, the use, operation or value of the Property or the Net
Operating Income with respect to the Property, other than alterations
performed in connection with the restoration of the Property after the
occurrence of a casualty in accordance with the terms and provisions of
this Agreement, provided, that, (a) Lender shall respond to Borrower's
request for consent to a proposed alteration within fifteen (15) days after
receiving such request together with all supporting materials reasonably
requested by Lender, and (b) such consent shall not be unreasonably
withheld conditioned or delayed. If the total unpaid amounts due and
payable with respect to alterations to the Improvements shall at any time
exceed $750,000 (the "Threshold Amount"), Borrower shall promptly deliver
to Lender as security for the payment of such amounts and as additional
security for Borrower's obligations under the Loan Documents any of the
following: (1) cash, (2) U.S. Obligations, (3) other securities having a
rating acceptable to Lender and that the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current
ratings assigned in connection with any Securitization, or (4) a completion
bond or irrevocable letter of credit (payable on sight draft only) issued
by a financial institution having a rating by Standard & Poor's Ratings
Group of not less than A-1+ if the term of such bond or letter of credit is
no longer than three (3) months or, if such term is in excess of three (3)
months, issued by a financial institution having a rating that is
acceptable to Lender and that the applicable Rating Agencies have confirmed
in writing will not, in and of itself, result in a downgrade, withdrawal or
qualification of the initial, or, if higher, then current ratings assigned
in connection with any Securitization. Such security shall be in an amount
equal to the excess of the total unpaid amounts with respect to alterations
to the Improvements on the Property (other than such amounts to be paid or
reimbursed by tenants under the Leases) over the Threshold Amount and may
be reduced from time to time by the cost estimated by Lender to terminate
any of the alterations and restore the Property to the extent necessary to
prevent any material adverse effect on the use, operation or value of the
Property or the Net Operating Income with respect to the Property.
Section 10.13Handicapped Access.
(a) Borrower agrees that the Property shall at all times
materially comply to the extent applicable with the requirements of the
Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of
1988, all state and local laws and ordinances related to handicapped access
and all rules, regulations, and orders issued pursuant thereto including,
without limitation, the Americans with Disabilities Act Accessibility
Guidelines for Buildings and Facilities (collectively, "Access Laws").
(b) Notwithstanding any provisions set forth herein or in any
other document regarding Lender's approval of alterations of the Property,
Borrower shall not alter the Property in any manner which would increase
Borrower's responsibilities for compliance with the applicable Access Laws
without the prior written approval of Lender, which are not to be
unreasonably withheld, delayed or conditioned. The foregoing shall apply
to tenant improvements constructed by Borrower or by any of its tenants.
Lender may condition any such approval upon receipt of a certificate of
Access Law compliance from an architect, engineer, or other person
acceptable to Lender.
(c) Borrower agrees to give prompt notice to Lender of the
receipt by Borrower of any complaints related to violation of any Access
Laws and of the commencement of any proceedings or investigations which
relate to compliance with applicable Access Laws.
Section 10.14Certain Hotel/Operating Lease Covenants. Borrower
further covenants and agrees with Lender as follows:
(a) Borrower shall cause the hotel located on the Property to
be operated pursuant to the Operating Lease and the Management Agreement.
(b) Borrower shall:
(i) to the extent that Borrower has the right or ability to
do so pursuant to any document or other agreement, not permit the
termination, extension or modification or entering into of any Operating
Lease or Management Agreement without Lender's prior written consent, which
consent shall not be unreasonably withheld or delayed;
(ii) notify Lender of any default under the Operating Lease or
Management Agreement of which it is aware within three (3) Business Days
after receiving notice of such default;
(iii) deliver to Lender a copy of each monthly financial
statement, final business plan, final capital expenditures plan, notice,
report (if any) and estimate (if any) received by it under the Operating
Lease or Management Agreement within three (3) Business Days after
receiving such items;
(iv) to the extent that Borrower has the right or ability to
do so pursuant to any document or other agreement, enforce, in a
commercially reasonable manner, the performance and observance of all of
the covenants and agreements required to be performed and/or observed by
the Operating Lessee under each Operating Lease and the Manager under each
Management Agreement within three (3) Business Days after becoming aware of
a violation of such covenants or agreements; and
(v) not change or alter, or permit the changing or altering
of, the brand-name hotel at the Property without Lender's prior written
consent, which consent shall not be unreasonably withheld or delayed.
(c) Notwithstanding anything herein to the contrary, Borrower
may, without the consent of Lender, renew or extend the Operating Lease
only with Operating Lessee on substantially the same terms (or terms more
favorable to Borrower) as the existing Operating Lease.
Section 10.15The Ground Lease. The provisions of Section 3.10
of the Mortgage are hereby incorporated herein by this reference, mutatis
mutandis, as if such Section was set forth herein in full.
Section 10.16O & M Agreement. Borrower will maintain, or cause
to be maintained, in conformity with all applicable laws, rules and
regulations regarding any materials containing asbestos located at the
Property and will comply with the O&M Agreement.
ARTICLE XI
EVENTS OF DEFAULT
Each of the following shall constitute a default (each, an
"Event of Default") under the Loan:
Section 11.1Payments. Borrower's failure to pay any regularly
scheduled installment of principal, interest or other amount due under the
Loan Documents within five (5) days of (and including) the day it is due,
or Borrower's failure to pay the Loan at the Maturity Date, whether by
acceleration or otherwise.
Section 11.2Insurance. Borrower's failure to maintain
insurance as required under Section 5.1 of this Agreement.
Section 11.3Single Purpose Entity. If Borrower breaches any of
its covenants contained in Section 8.28 or 8.33 hereof.
Section 11.4Insolvency Opinion. If any of the assumptions
contained in the Insolvency Opinion, or any Additional Insolvency Opinion
is or shall become untrue in any material respect.
Section 11.5Taxes. If any of the Taxes are not paid when the
same are due and payable (subject to Borrower's right to contest Taxes
pursuant to Section 10.2 hereof).
Section 11.6Sale, Encumbrance, Etc. The sale, transfer,
conveyance, pledge, mortgage or assignment of any part or all of the
Property, or any interest therein, or of any interest in Borrower, in
violation of the Mortgage or the Second Mortgage.
Section 11.7Representations and Warranties. Any representation
or warranty made in any Loan Document proves to be untrue in any material
respect when made or deemed made.
Section 11.8Additional Loan. Any Event of Default as defined
under the Additional Loan.
Section 11.9Involuntary Bankruptcy or Other Proceeding.
Commencement of an involuntary case or other proceeding against Borrower,
any Borrower Party or any other Person having an ownership or security
interest in the Property (each, a "Bankruptcy Party") which seeks
liquidation, reorganization or other relief with respect to it or its debts
or other liabilities under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeks the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any of its
property, and such involuntary case or other proceeding shall remain
undismissed or unstayed for a period of 90 days; or an order for relief
against a Bankruptcy Party shall be entered in any such case under the
Federal Bankruptcy Code.
Section 11.10Voluntary Petitions, Etc. Commencement by a
Bankruptcy Party of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts or other liabilities under any bankruptcy, insolvency or other
similar law or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official for it or any of its property, or
consent by a Bankruptcy Party to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or the making by a Bankruptcy Party of a
general assignment for the benefit of creditors, or the failure by a
Bankruptcy Party, or the admission by a Bankruptcy Party in writing of its
inability, to pay its debts generally as they become due, or any action by
a Bankruptcy Party to authorize or effect any of the foregoing;
Section 11.11Covenants. Borrower's failure to perform or
observe any of the agreements and covenants contained in this Agreement or
in any of the other Loan Documents and not specified above in Sections 11.1
to 11.10, or below in Sections 11.12 to 11.15, and the continuance of such
failure for thirty (30) days after notice by Lender to Borrower; however,
subject to any shorter period for curing any failure by Borrower as
specified in any of the other Loan Documents, Borrower shall have an
additional sixty (60) days to cure such failure if (a) such failure does
not involve the failure to make payments on a monetary obligation; (b) such
failure cannot reasonably be cured within thirty (30) days; (c) Borrower is
diligently undertaking to cure such default; and (d) if reasonably
requested by Lender, Borrower has provided Lender with security reasonably
satisfactory to Lender against any interruption of payment or impairment of
collateral as a result of such continuing failure.
Section 11.12Operating Lease.
(a) If there is a material default by Borrower under the
Operating Lease beyond any applicable notice and cure period; or (b) if the
Operating Lease is amended, modified or terminated in violation of Section
10.14 hereof.
Section 11.13Management Agreement.
(a) If there is a material default by the Borrower or the
Operating Lessee under the Management Agreement (i) which is not cured by
Borrower or (ii) which Borrower is not enforcing its rights under the
Operating Lease with respect thereto; or (b) if the Management Agreement is
amended, modified, terminated or entered into in violation of Section 8.29
hereof.
Section 11.14Ground Lease Rent. If the payment of any rent,
additional rent or other charge mentioned in or made payable by the Ground
Lease as and when such rent or other charge is payable is not made by
Borrower, Operating Lessee or Manager.
Section 11.15Ground Lease Default. If there shall occur any
material default by Borrower, as tenant under the Ground Lease, in the
observance or performance of any term, covenant or condition of the Ground
Lease on the part of Borrower, to be observed or performed, and said
default is not cured within fifteen (15) days prior to the expiration of
any applicable grace period therein provided, or if any one or more of the
events referred to in the Ground Lease shall occur which would cause the
Ground Lease to terminate without notice or action by the landlord under
the Ground Lease or which would entitle the Ground Lessor to terminate the
Ground Lease and the term thereof by giving notice to Borrower, as tenant
thereunder, or if the leasehold estate created by the Ground Lease shall be
surrendered or the Ground Lease shall be terminated or canceled for any
reason or under any circumstances whatsoever, or if any of the terms,
covenants or conditions of the Ground Lease shall in any manner be
modified, changed, supplemented, altered, or amended without the written
consent of Lender.
ARTICLE XII
REMEDIES
Section 12.1Remedies - Insolvency Events. Upon or during the
occurrence of any Event of Default described in Section 11.9 or 11.10, all
amounts due under the Loan Documents immediately shall become due and
payable, all without written notice and without presentment, demand,
protest, notice of protest or dishonor, notice of intent to accelerate the
maturity thereof, notice of acceleration of the maturity thereof, or any
other notice of default of any kind, all of which are hereby expressly
waived by Borrower.
Section 12.2Remedies - Other Events.
(a) Except as set forth in Section 12.1 above, while any
Event of Default exists, Lender may (i) declare the entire Loan to be
immediately due and payable without presentment, demand, protest, notice of
protest or dishonor, notice of intent to accelerate the maturity thereof,
notice of acceleration of the maturity thereof, or other notice of default
of any kind, all of which are hereby expressly waived by Borrower, and (ii)
exercise all rights and remedies therefor under the Loan Documents and at
law or in equity.
(b) Subject to Section 13.1 hereof, with respect to Borrower
and the Property, nothing contained herein or in any other Loan Document
shall be construed as requiring Lender to resort to the Property for the
satisfaction of any of the Debt, and Lender may seek satisfaction out of
the Property or any part thereof, in its absolute discretion in respect of
the Debt. In addition, Lender shall have the right from time to time to
partially foreclose the Mortgage or the Second Mortgage in any manner and
for any amounts secured by the Mortgage or the Second Mortgage then due and
payable as determined by Lender in its sole discretion including, without
limitation, the following circumstances: (i) in the event Borrower defaults
beyond any applicable grace period in the payment of one or more scheduled
payments of principal and interest, Lender may foreclose the Mortgage to
recover such delinquent payments, or (ii) in the event Lender elects to
accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose the Mortgage to recover so much of the principal
balance of the Loan as Lender may accelerate and such other sums secured by
the Mortgage as Lender may elect. Notwithstanding one or more partial
foreclosures, the Property shall remain subject to the Mortgage or the
Second Mortgage to secure payment of sums secured by the Mortgage or the
Second Mortgage and not previously recovered.
(c) Lender shall have the right from time to time to sever
the Note and the other Loan Documents into one or more separate notes,
mortgages and other security documents (the "Severed Loan Documents") in
such denominations as Lender shall determine in its sole discretion for
purposes of evidencing and enforcing its rights and remedies provided
hereunder. Borrower shall execute and deliver to Lender from time to time,
promptly after the request of Lender, a severance agreement and such other
documents as Lender shall request in order to effect the severance
described in the preceding sentence, all in form and substance reasonably
satisfactory to Lender. Borrower hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest,
in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that
its said attorney shall do by virtue thereof; provided, however, Lender
shall not make or execute any such documents under such power until three
(3) days after notice has been given to Borrower by Lender of Lender's
intent to exercise its rights under such power.
Section 12.3Lender's Right to Perform the Obligations. If
Borrower shall fail, refuse or neglect to make any payment or perform any
act required by the Loan Documents, then while any Event of Default exists,
and without notice to or demand upon Borrower and without waiving or
releasing any other right, remedy or recourse Lender may have because of
such Event of Default, Lender may (but shall not be obligated to) make such
payment or perform such act for the account of and at the expense of
Borrower, and shall have the right to enter upon the Property for such
purpose and to take all such action thereon and with respect to the
Property as it may deem necessary or appropriate. If Lender shall elect to
pay any sum due with reference to the Property, Lender may do so in
reliance on any bill, statement or assessment procured from the appropriate
governmental authority or other issuer thereof without inquiring into the
accuracy or validity thereof. Similarly, in making any payments to protect
the security intended to be created by the Loan Documents, Lender shall not
be bound to inquire into the validity of any apparent or threatened adverse
title, lien, encumbrance, claim or charge before making an advance for the
purpose of preventing or removing the same. Borrower shall indemnify
Lender for all losses, expenses, damages, claims and causes of action,
including reasonable attorneys' fees, incurred or accruing by reason of any
acts performed by Lender pursuant to the provisions of this Section 12.3;
provided, however, that Borrower shall not be liable under such
indemnification to the extent such losses, expenses, damages, claims and
causes of action result solely from Lender's gross negligence or willful
misconduct and arise after the point in time that Lender takes title and
actual possession of the Property. All sums paid by Lender pursuant to
this Section 12.3, and all other sums expended by Lender to which it shall
be entitled to be indemnified, together with interest thereon at the
Default Rate from the date of such payment or expenditure until paid, shall
constitute additions to the Loan, shall be secured by the Loan Documents
and shall be paid by Borrower to Lender upon demand.
Section 12.4Cross-Default; Cross-Collateralization; Waiver of
Marshalling of Assets.
(a) The Borrower acknowledges that Lender has made the Loan
and the Additional Loan to the Borrower upon the security of the collective
interest in the Property and the Additional Property of the Borrower, and
in reliance upon the aggregate of the Property and the Additional Property
taken together being of greater value as collateral security than the sum
of the Property and the Additional Property taken separately. The Borrower
agrees that the Loan is and will be cross-collateralized and cross-
defaulted with the Additional Loan so that (i) an Event of Default under
the Mortgage shall constitute an Event of Default with respect to the deed
of trust executed in connection with the Additional Loan and an Event of
Default under any of such other deed of trust executed in connection with
the Additional Loan shall be an Event of Default under the Mortgage; and
(ii) an Event of Default under the Note or this Loan Agreement shall
constitute an Event of Default under the Additional Loan and an Event of
Default under the Additional Loan shall constitute an Event of Default
under the Note and this Loan Agreement.
(b) To the fullest extent permitted by law, Borrower, for
itself and its successors and assigns, waives all rights to a marshalling
of the assets of Borrower, Borrower's partners and others with interests in
Borrower, and of the Property, or to a sale in inverse order of alienation
in the event of foreclosure of the Mortgage or the Second Mortgage, and
agrees not to assert any right under any laws pertaining to the marshalling
of assets, the sale in inverse order of alienation, homestead exemption,
the administration of estates of decedents, or any other matters whatsoever
to defeat, reduce or affect the right of Lender under the Loan Documents to
a sale of the Property for the collection of the Debt without any prior or
different resort for collection or of the right of Lender to the payment of
the Debt out of the net proceeds of the Property in preference to every
other claimant whatsoever.
ARTICLE XIII
LIMITATIONS ON LIABILITY
Section 13.1Limitation on Liability. Except as provided below,
none of Borrower, any partner of Borrower, any partner, member,
shareholder, director, officer, employee or agent of Borrower or of any
such partner, and any legal representative, heir, estate, successor or
assign of any of the foregoing, shall be personally liable for amounts due
under the Loan Documents. Borrower, but not any partner, member,
shareholder, director, officer, employee or agent of Borrower or any such
partner, shall be personally liable to Lender for any deficiency, loss or
damage suffered by Lender because of: (a) Borrower's commission of a
criminal act; (b) the failure to comply with provisions of the Loan
Documents prohibiting the sale, transfer or encumbrance of the Property,
any other collateral, or any direct or indirect ownership interest in
Borrower; (c) the misapplication by Borrower or any Borrower Party of any
funds derived from the Property, including security deposits, insurance
proceeds and condemnation awards; (d) the fraud or intentional
misrepresentation by Borrower or any Borrower Party now or hereafter made
in or in connection with the Loan Documents or the Loan including any
statements or certificates delivered under the Loan Documents;
(e) Borrower's collection of rents more than one month in advance (except
for bona fide security deposits under the Operating Lease) or entering into
or modifying Leases, or receipt of monies by Borrower or any Borrower Party
in connection with the modification of any Leases, in violation of this
Agreement or any of the other Loan Documents; (f) Borrower's failure to
apply proceeds of rents or any other payments in respect of the Leases and
other income of the Property or any other collateral to the costs of
maintenance and operation of the Property and to the payment of taxes, lien
claims, insurance premiums, Debt Service and other amounts due under the
Loan Documents; (g) Borrower's interference with Lender's exercise of
rights under the Assignment of Leases and Rents; (h) Borrower's failure to
maintain insurance as required by this Agreement or to pay any taxes or
assessments affecting the Property; (i) waste to the Property caused by the
intentional acts or omissions of Borrower, its agents, employees, or
contractors; (j) Borrower's obligations with respect to environmental
matters under Article 6; (k) Borrower's failure to pay for any loss,
liability or expense (including reasonable attorneys' fees) incurred by
Lender arising out of any claim or allegation made by Borrower, its
successors or assigns, or any creditor of Borrower, that this Agreement or
the transactions contemplated by the Loan Documents establishes a joint
venture, partnership or other similar arrangement between Borrower and
Lender; (l) any brokerage commission or finder's fees claimed in connection
with the transactions contemplated by the Loan Documents or (m) Borrower's
indemnification of Lender set forth in Section 14.2 hereafter.
Notwithstanding anything to the contrary in this Agreement, the
Note or any of the Loan Documents, (i) Lender shall not be deemed to have
waived any right which Lender may have under Section 506(a), 506(b),
1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim
for the full amount of the Debt secured by the Mortgage or the Second
Mortgage or to require that all collateral shall continue to secure all of
the Debt owing to Lender in accordance with the Loan Documents, and (ii)
the Debt shall be fully recourse to Borrower, but not any partner, member,
shareholder, director, officer, employee or agent of Borrower or any such
partner, in the event that: (A) there is a default under Section 11.10
hereof; (B) Borrower fails to obtain Lender's prior written consent to any
subordinate financing or other voluntary lien encumbering the Property in
violation of the Loan Documents; or (C) Borrower fails to obtain Lender's
prior written consent to any assignment, transfer, or conveyance of the
Property or any interest therein as required by the Loan Documents.
Section 13.2Limitation on Liability of Lender's Officers,
Employees, Etc. Any obligation or liability whatsoever of Lender which may
arise at any time under this Agreement or any other Loan Document shall be
satisfied, if at all, out of Lender's interest in the Property only. No
such obligation or liability shall be personally binding upon, nor shall
resort for the enforcement thereof be had to, the property of any of
Lender's shareholders, directors, officers, employees or agents, regardless
of whether such obligation or liability is in the nature of contract, tort
or otherwise.
ARTICLE XIV
SECURITIZATION
Section 14.1Securitization.
At the request of the holder of the Note and, to the extent not
already required to be provided by Borrower under this Agreement and to the
extent readily available to Borrower at no third-party cost, Borrower
shall, subject to the provisions of clause (b) hereof, use reasonable
efforts to satisfy the market standards to which the holder of the Note
customarily adheres or which may be reasonably required in the marketplace
or by the Rating Agencies in connection with the sale of the Note or
participation therein or the first successful securitization (such sale
and/or securitization, the "Securitization") of rated single or multi-class
securities (the "Securities") secured by or evidencing ownership interests
in the Note and the Mortgage, including, without limitation, to:
(a) (i) provide such financial and other information with respect to
the Property, the Borrower, the Operating Partnership, the Operating Lessee
and the Manager,
(ii) provide budgets relating to the Property, and
(iii) to, upon ten (10) days' prior written notice to Borrower,
perform or permit or cause to be performed or permitted such site
inspection, appraisals, market studies, environmental reviews and reports
(Phase I's and, if appropriate, Phase II's), engineering reports and other
due diligence investigations of the Property, as may be reasonably
requested by the holder of the Note or the Rating Agencies or as may be
necessary or appropriate in connection with the Securitization (the
"Securitization Information"), which items described in this subsection
(iii) shall be at the cost of Lender, together, if customary, with
appropriate verification and/or consents of the Securitization Information
through letters of auditors or opinions of counsel of independent attorneys
reasonably acceptable to the Lender and the Rating Agencies;
(b) execute such amendments to the Loan Documents and
organizational documents as may be reasonably requested by the holder of
the Note or the Rating Agencies or otherwise to effect the Securitization;
provided, however, that the Borrower shall not be required to modify or
amend any Loan Document if such modification or amendment would (i) change
the interest rate, the stated maturity or the amortization of principal set
forth in the Note, (ii) modify or amend any other material economic term of
the Loan, or (iii) otherwise materially reduce Borrower's rights or
materially increase its obligations under the Loan Documents.
All reasonable third party costs and expenses incurred by
Lender in connection with Borrower's complying with requests made under
this Section 14.1, including, without limitation, costs incurred in
connection with the Securitization Information, shall be paid by the
Lender; provided, that, Borrower shall be responsible for all costs and
expenses incurred by Borrower in complying with such requests, including
without limitation (i) any costs and expenses incurred by Borrower in
compiling the Securitization Information (except as set forth in clause (a)
(iii) above) or financial statements, and (ii) Borrower's attorney's fees.
Section 14.2Securitization Indemnification.
(a) Borrower understands that certain of the Securitization
Information and the financial reports relating to the Property may be
included in disclosure documents in connection with the Securitization,
including, without limitation, a prospectus, prospectus supplement or
private placement memorandum (each, an "Offering Document") and may also be
included in filings with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), or the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Offering Document is required to be
revised prior to the sale of all Securities, the Borrower will cooperate
with the holder of the Note in updating the Offering Document by providing
all current information reasonably necessary, but at no out-of-pocket cost
to Borrower, to keep the Offering Document accurate and complete in all
material respects.
(b) Borrower agrees to provide in connection with each of (i)
a preliminary and a private placement memorandum or (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, upon receipt by
Borrower of a copy of such memorandum and/or prospectus, an indemnification
certificate (A) certifying that Borrower has carefully examined such
memorandum or prospectus, as applicable (such review being limited to those
sections of the memorandum or prospectus, as applicable, requested by
Lender in writing; provided, however, that, Borrower shall not be
responsible for any information supplied by third parties nor shall
Borrower be responsible for statistical or numerical information contained
therein) and the sections reviewed by Borrower do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in the light of the circumstances under
which they were made, not misleading, (B) indemnifying Lender (and for
purposes of this Section 14.2, Lender hereunder shall include its officers
and directors), any affiliate of Lender that has filed or may file the
registration statement relating to the securitization (the "Registration
Statement"), each of its directors, each of its officers who have signed
the Registration Statement and each person or entity who controls the
affiliate within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and Lender, each of its directors and each person
who controls Lender within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act (collectively, the "Underwriter Group")
for any losses, claims, damages or liabilities (the "Liabilities") to which
Lender, or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such sections for which
Borrower is responsible or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated in
such sections or necessary in order to make the statements in such sections
for which Borrower is responsible or in light of the circumstances under
which they were made, not misleading and (C) agreeing to reimburse Lender
and the Underwriter Group for any legal or other expenses reasonably
incurred by Lender in connection with investigating or defending the
Liabilities; provided, however, that Borrower will be liable in any such
case under clauses (B) or (C) above only to the extent that any such loss
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by or on behalf of Borrower in connection
with the preparation of the memorandum or prospectus or in connection with
the underwriting of the debt, in connection with financial statements of
Borrower, operating statements, environmental site assessment reports and
property condition reports with respect to the Property, and only if such
sections are not materially revised after Borrower's review of same. This
indemnity agreement will be in addition to any liability which Borrower may
otherwise have.
(c) In connection with filings under the Exchange Act,
Borrower agrees to indemnify (i) Lender, and the Underwriter Group for
Liabilities to which Lender, or the Underwriter Group may become subject
insofar as the Liabilities arise out of or are based upon the omission or
alleged omission to state in the Securitization Information or financial
reports relating to the Property a material fact required to be stated in
the Securitization Information or financial reports relating to the
Property in order to make the statements in the Securitization Information
or financial reports relating to the Property, in light of the
circumstances under which they were made not misleading and (ii) reimburse
Lender or the Underwriter Group for any legal or other expenses reasonably
incurred by Lender or the Underwriter Group in connection with defending or
investigating the Liabilities.
(d) Promptly after receipt by an indemnified party under this
Section 14.2 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 14.2, notify the indemnifying party
in writing of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying party from any
liability which the indemnifying party may have to any indemnified party
hereunder except to the extent that failure to notify causes prejudice to
the indemnifying party. In the event that any action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent
that it (or they) may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably satisfactory
to such indemnified party. After notice from the indemnifying party to
such indemnified party under this Section 14.2 the indemnifying party shall
be responsible for any reasonable legal or other reasonable expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there are any legal defenses available to it
and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party shall
not be liable for the expenses of more than one separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section
14.2(b) or (c) is for any reason held to be unenforceable by an indemnified
party in respect of any losses, claims, damages or liabilities (or action
in respect thereof) referred to therein which would otherwise be
indemnifiable under Section 14.2(b) or (c), the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in respect
thereof); provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, the following
factors shall be considered: (i) Lender's and Borrower's relative knowledge
and access to information concerning the matter with respect to which claim
was asserted; (ii) the opportunity to correct and prevent any statement or
omission; and (iii) any other equitable considerations appropriate in the
circumstances.
(f) The liabilities and obligations of both Borrower and
Lender under this Section 14.2 shall survive the termination of this
Agreement and the satisfaction and discharge of the Debt.
Section 14.3Servicer. At the option of Lender and at no cost
to Borrower, the Loan may be serviced by a Servicer/Trustee ("Servicer")
selected by Lender. Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement ("Servicing Agreement") between
Lender and Servicer.
Section 14.4Uncrossing the Loan and the Additional Loan. At
the election of Lender in its sole discretion, the Loan and the Additional
Loan will no longer be cross-collateralized or cross-defaulted with each
other. Borrower, at Lender's sole cost and expense, hereby agrees to form
a new Single Purpose Bankruptcy Remote Entity borrower and to deliver to
Lender to effectuate such un-crossing of the Loan, and the Additional Loan,
as reasonably requested by Lender, (a) additional executed documents, or
amendments and modifications to the Loan Documents, (b) new opinions or
updates to the opinions delivered to Lender in connection with the closing
of the Loan, (c) endorsements and/or updates to the title insurance policy
delivered to Lender in connection with the closing of the Loan, and (d) any
other certificates, instruments and documentation reasonably determined by
Lender as necessary or appropriate to such uncrossing (the items described
in subsections (a) through (d) collectively hereinafter referred to as the
"Severing Documentation"), which Severing Documentation shall be acceptable
to Lender in form and substance in its reasonable discretion. Borrower
hereby covenants and agrees to be responsible for Borrower's attorney's
fees incurred in connection with the preparation and delivery of the
Severing Documentation and the effectuation of the uncrossing of the Loan
from the Additional Loan. Borrower hereby acknowledges and agrees that
upon such uncrossing of the Loan and the Additional Loan, Lender may
effect, in its sole discretion, one or more Securitizations of which the
Loan and/or the Additional Loan may be a part. Borrower and Lender hereby
acknowledge and agree that upon the uncrossing of the Loan from all of the
Additional Loan (i.e., the Loan being then a "stand alone" Loan), the
Severing Documentation shall, include an amendment to this Agreement
replacing the definition of "Adjusted Release Amount" to read "means the
outstanding principal balance of the Loan."
ARTICLE XV
MISCELLANEOUS
Section 15.1Notices. Any notice required or permitted to be
given under this Agreement shall be in writing and either shall be mailed
by certified mail, postage prepaid, return receipt requested, or sent by
overnight air courier service, or personally delivered to a representative
of the receiving party, or sent by telecopy (provided an identical notice
is also sent simultaneously by mail, overnight courier, or personal
delivery as otherwise provided in this Section 15.1). All such
communications shall be mailed, sent or delivered, addressed to the party
for whom it is intended at its address set forth below.
If to Borrower: c/o LaSalle Hotel Properties
1401 Eye Street, NW
Washington, DC 20005
Attention: Mr. Hans Weger
Telecopy: (202) 222-2653
With a copy to: Brown & Wood LLP
One World Trade Center
New York, N.Y. 10048-0557
Attention: Michael F. Taylor, Esq.
Telecopy: (212) 839-5599
If to Lender: General Electric Capital Corporation
c/o GE Capital Loan Servicing, Inc.
363 North Sam Houston Parkway East, Suite 1200
Houston, Texas 77060
Attention: Legal Department
Telecopy: (281) 405-7153
With a copy to: General Electric Capital Corporation
92 Long Ridge Road
Stamford, Connecticut 06927
Attention: Paul Mundinger, Esq.
Telecopy: (203) 357-6364
Any communication so addressed and mailed shall be deemed to be given on
the earliest of (a) when actually delivered, (b) on the first Business Day
after deposit with an overnight air courier service, or (c) on the third
Business Day after deposit in the United States mail, postage prepaid, in
each case to the address of the intended addressee, and any communication
so delivered in person shall be deemed to be given when receipted for by,
or actually received by Lender or Borrower, as the case may be. If given
by telecopy, a notice shall be deemed given and received when the telecopy
is transmitted to the party's telecopy number specified above confirmation
of complete receipt is received by the transmitting party during normal
business hours or on the next Business Day if not confirmed during normal
business hours. Either party may designate a change of address by written
notice to the other by giving at least ten (10) days prior written notice
of such change of address.
Section 15.2Amendments and Waivers. No amendment or waiver of
any provision of the Loan Documents shall be effective unless in writing
and signed by the party against whom enforcement is sought.
Section 15.3Limitation on Interest. It is the intention of the
parties hereto to conform strictly to applicable usury laws. Accordingly,
all agreements between Borrower and Lender with respect to the Loan are
hereby expressly limited so that in no event, whether by reason of
acceleration of maturity or otherwise, shall the amount paid or agreed to
be paid to Lender or charged by Lender for the use, forbearance or
detention of the money to be lent hereunder or otherwise, exceed the
maximum amount allowed by law. If the Loan would be usurious under
applicable law (including the laws of the State and the laws of the United
States of America), then, notwithstanding anything to the contrary in the
Loan Documents: (a) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved,
charged or received under the Loan Documents shall under no circumstances
exceed the maximum amount of interest allowed by applicable law, and any
excess shall be credited on the Note by the holder thereof; and (b) if
maturity is accelerated by reason of an election by Lender, or in the event
of any prepayment, then any consideration which constitutes interest may
never include more than the maximum amount allowed by applicable law. In
such case, excess interest, if any, provided for in the Loan Documents or
otherwise, to the extent permitted by applicable law, shall be amortized,
prorated, allocated and spread from the date of advance until payment in
full so that the actual rate of interest is uniform through the term
hereof. If such amortization, proration, allocation and spreading is not
permitted under applicable law, then such excess interest shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the Note. The terms and provisions
of this Section 15.3 shall control and supersede every other provision of
the Loan Documents. The Loan Documents are contracts made under and shall
be construed in accordance with and governed by the laws of the State,
except that if at any time the laws of the United States of America permit
Lender to contract for, take, reserve, charge or receive a higher rate of
interest than is allowed by the laws of the State (whether such federal
laws directly so provide or refer to the law of any state), then such
federal laws shall to such extent govern as to the rate of interest which
Lender may contract for, take, reserve, charge or receive under the Loan
Documents.
Section 15.4Invalid Provisions. If any provision of any Loan
Document is held to be illegal, invalid or unenforceable, such provision
shall be fully severable; the Loan Documents shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part thereof; the remaining provisions thereof shall remain in
full effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance therefrom; and in lieu of such
illegal, invalid or unenforceable provision there shall be added
automatically as a part of such Loan Document a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be
possible to be legal, valid and enforceable.
Section 15.5Reimbursement of Expenses. Borrower shall pay all
reasonable expenses incurred by Lender in connection with the Loan,
including reasonable fees and expenses of Lender's attorneys,
environmental, engineering and other consultants, and fees, charges or
taxes for the recording or filing of Loan Documents. Borrower shall pay
all expenses of Lender in connection with the administration of the Loan,
including audit costs, inspection fees, settlement of condemnation and
casualty awards, and premiums for title insurance and endorsements thereto.
Borrower shall, upon request, promptly reimburse Lender for all reasonable
amounts expended, advanced or incurred by Lender to collect the Note, or to
enforce the rights of Lender under this Agreement or any other Loan
Document, or to defend or assert the rights and claims of Lender under the
Loan Documents or with respect to the Property (by litigation or other
proceedings), which amounts will include all court costs, reasonable
attorneys' fees and expenses, reasonable fees of auditors and accountants,
and reasonable investigation expenses as may be incurred by Lender in
connection with any such matters (whether or not litigation is instituted),
together with interest at the Default Rate on each such amount from the
date of disbursement until the date of reimbursement to Lender, all of
which shall constitute part of the Loan and shall be secured by the Loan
Documents.
Section 15.6Approvals; Third Parties; Conditions. All approval
rights retained or exercised by Lender with respect to Leases, contracts,
plans, studies and other matters are solely to facilitate Lender's credit
underwriting, and shall not be deemed or construed as a determination that
Lender has passed on the adequacy thereof for any other purpose and may not
be relied upon by Borrower or any other Person. This Agreement is for the
sole and exclusive use of Lender and Borrower and may not be enforced, nor
relied upon, by any Person other than Lender and Borrower. All conditions
of the obligations of Lender hereunder, including the obligation to make
advances, are imposed solely and exclusively for the benefit of Lender, its
successors and assigns, and no other Person shall have standing to require
satisfaction of such conditions or be entitled to assume that Lender will
refuse to make advances in the absence of strict compliance with any or all
of such conditions, and no other Person shall, under any circumstances, be
deemed to be a beneficiary of such conditions, any and all of which may be
freely waived in whole or in part by Lender at any time in Lender's sole
discretion.
Section 15.7Lender Not in Control; No Partnership. None of the
covenants or other provisions contained in this Agreement shall, or shall
be deemed to, give Lender the right or power to exercise control over the
affairs or management of Borrower, the power of Lender being limited to the
rights to exercise the remedies referred to in the Loan Documents. The
relationship between Borrower and Lender is, and at all times shall remain,
solely that of debtor and creditor. No covenant or provision of the Loan
Documents is intended, nor shall it be deemed or construed, to create a
partnership, joint venture, agency or common interest in profits or income
between Lender and Borrower or to create an equity in the Property in
Lender. Lender neither undertakes nor assumes any responsibility or duty
to Borrower or to any other person with respect to the Property or the
Loan, except as expressly provided in the Loan Documents; and
notwithstanding any other provision of the Loan Documents: (a) Lender is
not, and shall not be construed as, a partner, joint venturer, alter ego,
manager, controlling person or other business associate or participant of
any kind of Borrower or its stockholders, members, or partners and Lender
does not intend to ever assume such status; (b) Lender shall in no event be
liable for any debts, expenses or losses incurred or sustained by Borrower
unless such debts, expenses or losses are caused solely by Lender's gross
negligence or willful misconduct; and (c) Lender shall not be deemed
responsible for or a participant in any acts, omissions or decisions of
Borrower or its stockholders, members, or partners. Lender and Borrower
disclaim any intention to create any partnership, joint venture, agency or
common interest in profits or income between Lender and Borrower, or to
create an equity in the Property in Lender, or any sharing of liabilities,
losses, costs or expenses.
Section 15.8Time of the Essence. Time is of the essence with
respect to this Agreement.
Section 15.9Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of Lender and Borrower and their
respective successors and assigns of Lender and Borrower, provided that,
except as permitted under the Loan Documents, neither Borrower nor any
other Borrower Party shall, without the prior written consent of Lender,
assign any rights, duties or obligations hereunder.
Section 15.10Renewal, Extension or Rearrangement. All
provisions of the Loan Documents shall apply with equal effect to each and
all promissory notes and amendments thereof hereinafter executed which in
whole or in part represent a renewal, extension, increase or rearrangement
of the Loan.
Section 15.11Waivers. No course of dealing on the part of
Lender, its officers, employees, consultants or agents, nor any failure or
delay by Lender with respect to exercising any right, power or privilege of
Lender under any of the Loan Documents, shall operate as a waiver thereof.
Section 15.12Cumulative Rights; Joint and Several Liability.
Rights and remedies of Lender under the Loan Documents shall be cumulative,
and the exercise or partial exercise of any such right or remedy shall not
preclude the exercise of any other right or remedy. If more than one
person or entity has executed this Agreement as "Borrower," the obligations
of all such persons or entities hereunder shall be joint and several.
Section 15.13Singular and Plural. Words used in this Agreement
and the other Loan Documents in the singular, where the context so permits,
shall be deemed to include the plural and vice versa. The definitions of
words in the singular in this Agreement and the other Loan Documents shall
apply to such words when used in the plural where the context so permits
and vice versa.
Section 15.14Phrases. When used in this Agreement and the other
Loan Documents, the phrase "including" shall mean "including, but not
limited to," the phrase "satisfactory to Lender" shall mean "in form and
substance satisfactory to Lender in all respects," the phrase "with
Lender's consent" or "with Lender's approval" shall mean such consent or
approval at Lender's discretion, and the phrase "acceptable to Lender"
shall mean "acceptable to Lender at Lender's sole discretion."
Section 15.15Exhibits and Schedules. The exhibits and schedules
attached to this Agreement are incorporated herein and shall be considered
a part of this Agreement for the purposes stated herein.
Section 15.16Titles of Articles, Sections and Subsections. All
titles or headings to articles, sections, subsections or other divisions of
this Agreement and the other Loan Documents or the exhibits hereto and
thereto are only for the convenience of the parties and shall not be
construed to have any effect or meaning with respect to the other content
of such articles, sections, subsections or other divisions, such other
content being controlling as to the agreement between the parties hereto.
Section 15.17Promotional Material. Lender may issue press
releases, advertisements and other promotional materials in connection with
its respective promotional and marketing activities, and such materials may
describe the Loan in general terms or in detail. All references to Lender
or the REIT or the Operating Partnership contained in any press release,
advertisement or promotional material issued by Lender or Borrower shall be
approved in writing by Lender or Borrower shall be approved in writing by
the other party in advance of issuance, which approval shall not be
unreasonably withheld, delayed or conditioned. The provisions of this
Section 15.17 shall not, however, apply in any respect to references or
descriptions in disclosure, presentations or promotional material by Lender
or any other Person made in connection with a Securitization or any other
sale or marketing of the Loan for which no consent is required by Borrower
or any other Person.
Section 15.18Survival. All of the representations, warranties,
covenants, and indemnities hereunder (including environmental matters under
Article 6), and under the indemnification provisions of the other Loan
Documents shall survive the repayment in full of the Loan and the release
of the liens evidencing or securing the Loan, and shall survive the
transfer (by sale, foreclosure, conveyance in lieu of foreclosure or
otherwise) of any or all right, title and interest in and to the Property
to any party, whether or not an Affiliate of Borrower.
Section 15.19WAIVER OF JURY TRIAL. BORROWER HEREBY AGREES NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES
ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER
OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER,
AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS
TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
Section 15.20Waiver of Punitive or Consequential Damages.
Neither Lender nor Borrower shall be responsible or liable to the other or
to any other Person for any punitive, exemplary or consequential damages
which may be alleged as a result of the Loan or the transaction
contemplated hereby, including any breach or other default by any party
hereto.
Section 15.21Governing Law.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK,
AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE
STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED
HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES
OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA,
EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND
ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH
STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT
PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES
ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S
OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER
DOES HEREBY DESIGNATE AND APPOINT BROWN &WOOD LLP AS ITS AUTHORIZED AGENT
TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS
WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL
OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS
UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED
OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A
SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS
FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK,
NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 15.22Entire Agreement. This Agreement and the other
Loan Documents embody the entire agreement and understanding between Lender
and Borrower and supersede all prior agreements and understandings between
such parties relating to the subject matter hereof and thereof.
Accordingly, the Loan Documents may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.
Section 15.23Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all
of which shall constitute one document.
Section 15.24Brokers and Financial Advisors. Borrower hereby
represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all
claims, liabilities, costs and expenses of any kind (including Lender's
attorneys' fees and expenses) in any way relating to or arising from a
claim by any Person that such Person acted on behalf of Borrower or Lender
in connection with the transactions contemplated herein. The provisions of
this Section 15.24 shall survive the expiration and termination of this
Agreement and the payment of the Debt.
Section 15.25Conflicts. In the event of any conflict between
the provisions of this Agreement and any of the other Loan Documents, the
provisions of this Agreement shall control.
EXECUTED as of the date first written above.
LENDER: GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation
By: /s/ Peter Tzelios
------------------------------
Name:Peter Tzelios
------------------------------
Title: Authorized Signatory
------------------------------
BORROWER: LHO FINANCING PARTNERSHIP I, L.P.,
a Delaware limited partnership
By: LHO Financing, Inc.,
a Delaware corporation
By: /s/ Hans Weger
------------------------
Name: Hans Weger
------------------------
Title: Chief Financial Officer
------------------------
JOINDER
-------
By executing this Joinder (the "Joinder"), the undersigned
("Joinder Party") guarantees the performance by Borrower of all obligations
and liabilities for which Borrower is personally liable under Section 13.1
of this Agreement. This Joinder is a guaranty of full and complete payment
and performance and not of collectibility.
1. Waivers. To the fullest extent permitted by applicable
law, the Joinder Party waives all rights and defenses of sureties,
guarantors, accommodation parties and/or co-makers and agrees that its
obligations under this Joinder shall be primary, absolute and
unconditional, and that its obligations under this Joinder shall be
unaffected by any of such rights or defenses, including:
(a) the unenforceability of any Loan Document against
Borrower and/or any guarantor or the Joinder Party;
(b) any release or other action or inaction taken by Lender
with respect to the collateral, the Loan, Borrower, any guarantor and/or
the Joinder Party, whether or not the same may impair or destroy any
subrogation rights of the Joinder Party, or constitute a legal or equitable
discharge of any surety or indemnitor;
(c) the existence of any collateral or other security for the
Loan, and any requirement that Lender pursue any of such collateral or
other security, or pursue any remedies it may have against Borrower, any
guarantor and/or the Joinder Party;
(d) any requirement that Lender provide notice to or obtain
the Joinder Party's consent to any modification, increase, extension or
other amendment of the Loan, including the guaranteed obligations;
(e) any right of subrogation (until payment in full of the
Loan, including the guaranteed obligations, and the expiration of any
applicable preference period and statute of limitations for fraudulent
conveyance claims);
(f) any defense based on any statute of limitations;
(g) any payment by Borrower to Lender if such payment is held
to be a preference or fraudulent conveyance under bankruptcy laws or Lender
is otherwise required to refund such payment to Borrower or any other
party; and
(h) any voluntary or involuntary bankruptcy, receivership,
insolvency, reorganization or similar proceeding affecting Borrower or any
of its assets.
2. Agreements. The Joinder Party further represents,
warrants and agrees that:
(a) The obligations under this Joinder are enforceable
against Joinder Party and are not subject to any defenses, offsets or
counterclaims;
(b) The provisions of this Joinder are for the benefit of
Lender and its successors and assigns;
(c) Lender shall have the right to (i) renew, modify, extend
or accelerate the Loan, (ii) pursue some or all of its remedies against
Borrower, any guarantor or the Joinder Party, (iii) add, release or
substitute any collateral for the Loan or party obligated thereunder, and
(iv) release Borrower, any guarantor or the Joinder Party from liability,
all without notice to or consent of the Joinder Party (or other Joinder
Party) and without affecting the obligations of the Joinder Party
hereunder;
(d) The Joinder Party covenants and agrees to furnish to
Lender, within ninety (90) days after the end of each calendar year, a
current (as of the end of such calendar year) balance sheet of the Joinder
Party, in scope and detail reasonably satisfactory to Lender, certified by
an officer of the Joinder Party and, if required by Lender, prepared on a
review basis and certified by an independent public accountant reasonably
satisfactory to Lender; and
(e) To the maximum extent permitted by law, the Joinder Party
hereby knowingly, voluntarily and intentionally waives the right to a trial
by jury in respect of any litigation based hereon. This waiver is a
material inducement to Lender to enter into this Agreement.
This Joinder shall be governed by the laws of the State of New
York.
Executed as of July 29, 1999.
[Signature appears on the following page]
JOINDER PARTY: LASALLE HOTEL OPERATING PARTNERSHIP,
a Delaware limited partnership
By: /s/ Hans Weger
------------------------------
Name:Hans Weger
------------------------------
Title: Chief Financial Officer
------------------------------