Exhibit 10.5

 

$17,836,000 TERM LOAN

 

LOAN AGREEMENT

 

among

 

PHR TCI, LLC

(as “Borrower”)

 

and

 

CITIZENS BANK, NATIONAL ASSOCIATION

(as “Agent” and a “Lender”)

 

and

 

the Other Lenders Now

or Hereafter Parties Hereto

 

and

 

CITIZENS BANK, NATIONAL ASSOCIATION

as

 

Sole Lead Arranger and Sole Bookrunner

 

Dated: As of August 15, 2018

 

 

 

 

TABLE OF CONTENTS

 

1. BACKGROUND 1     1.1 General Definitions 1     1.1.1 Defined Terms 1 1.1.2
Accounting and Other Terms 25 1.1.3 Certain Matters of Construction 26     1.2
Borrower and Other Loan Parties 26     1.3 Land and Improvements; Property 26  
  1.4 Use of Loan Proceeds 26     1.5 Loan 26     2. LOAN PROVISIONS 27     2.1
Amount of Loan 27     2.2 Term of Loan; Extension Right 27     2.3 Conditions to
Extending Maturity Date 27     2.3.1 Notice From Borrower 27 2.3.2 No Default 27
2.3.3 Debt Service Coverage Ratio 27 2.3.4 LTV Ratio 28 2.3.5 Conditions
Satisfied 28 2.3.6 Extension Fee 28 2.3.7 Additional Documents 28 2.3.8 Required
Interest Rate Protection Agreement 28 2.3.9 Before End of Initial Term 28    
2.4 Interest 29     2.4.1 Interest Rate. 29 2.4.2 Intentionally Omitted 30 2.4.3
Default Rate 30 2.4.4 Late Charges 30 2.4.5 Interest Installments 30 2.4.6
Recapture of Interest 31 2.4.7 Maximum Legal Rate 31 2.4.8 Amendments to Current
Law 31 2.4.9 Liquidated Damages 32     2.5 Principal Repayment 32     2.5.1
Principal Amortization 32 2.5.2 Intentionally Omitted 32 2.5.3 Prepayment and
Certain Payments 33     2.6 Intentionally Omitted 34

 

 i 

 

 

2.7 Net Payments 34     2.8 Application of Payments and Collections 34     2.9
Intentionally Omitted 34     2.10 Term of Agreement 34     2.11 Special LIBOR
Rate Loan Provisions 34     2.11.1 LIBOR Rate Lending Unlawful 34 2.11.2
Unavailability of LIBOR Rate 35 2.11.3 Increased Costs 35 2.11.4 Increased
Capital Costs 36 2.11.5 Taxes 36 2.11.6 Interest 37 2.11.7 Successor LIBOR 37  
  2.12 Loan Fees 38     2.12.1 Commitment Fee 38 2.12.2 Extension Fee 38    
2.13 Acceleration 38     2.14 The Loan to Constitute One Obligation 38     2.15
Notations 38     2.16 Time of Payments and Prepayments in Immediately Available
Funds 39     2.17 Agent Advances 40     3. SECURITY FOR THE LOAN; LOAN AND
SECURITY DOCUMENTS 40     3.1 Security 40     3.1.1 Mortgage and Security
Agreement 40 3.1.2 Assignment of Leases and Rents 40 3.1.3 Pledge and Security
Agreement 40 3.1.4 Intentionally Omitted 41 3.1.5 Collateral Assignment of
Contracts, Licenses and Permits 41 3.1.6 Guaranty 41 3.1.7 Assignment of
Interest Rate Protection Agreement 41 3.1.8 Environmental Indemnity Agreement 41
3.1.9 The other Security Documents 41     3.2 Loan Documents and Security
Documents 41     3.3 Termination of Security Interests 42     3.4 Security for
Hedging Obligations 42     4. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES
42     5. LENDERS' CONSULTANTS 42     5.1 Right to Employ 42

 

 ii 

 

 

5.2 Functions 42     5.3 Payment 43     5.4 Access 43     5.5 No Liability 43  
  6. LOAN DISBURSEMENT 43     6.1 Request for Loan 43     6.2 Advance of Loan
Proceeds 43     7. CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT 43     7.1
Conditions Precedent 43     7.1.1 Satisfactory Loan Documents 43 7.1.2 No
Material Change 43 7.1.3 Warranties and Representations Accurate 44 7.1.4
Financials and Appraisals 44 7.1.5 Validity and Sufficiency of Security
Documents 44 7.1.6 No Other Liens; Taxes and Municipal Charges Current 44 7.1.7
Property Matters 44 7.1.8 Compliance With Law 45 7.1.9 Title Insurance; Other
Evidence of Perfection 45 7.1.10 Survey 45 7.1.11 Condition of Property 45
7.1.12 No Takings 45 7.1.13 Insurance 45 7.1.14 Acquisition Documents 46 7.1.15
Hazardous Substances 46 7.1.16 Organizational Documents and Entity Agreements 46
7.1.17 Votes, Consents and Authorizations 46 7.1.18 Legal and Other Opinions 46
7.1.19 Leasing Matters 46 7.1.20 No Default 47 7.1.21 Closing Affidavit 47
7.1.22 Inter-Company Loan Documents 47 7.1.23 Other Documents 47 7.1.24 Other
Information Concerning the Property 47 7.1.25 No Proceedings, Etc 47 7.1.26
Payment of Agent's and Lenders' Fees and Costs 47 7.1.27 Required Equity
Contribution 48 7.1.28 Required Interest Rate Protection Agreement 48 7.1.29
Operating Lease Matters 48 7.1.30 No Operating Lease Default 48 7.1.31 Proforma
Compliance Certificate 48 7.1.32 Patriot Act; KYC 48     7.3 Conditions
Subsequent 49

 

 iii 

 

 

8. WARRANTIES AND REPRESENTATIONS 49     8.1 Financial Information 49     8.2 No
Violations 49     8.3 No Litigation 49     8.4 Operating Lease; Other Leases 49
    8.5 Compliance With Legal Requirements 50     8.6 Required Licenses and
Permits 50     8.7 Curb Cuts and Utility Connections 50     8.8 Good Title and
No Liens 50     8.9 Use of Loan Proceeds 50     8.10 Entity Matters 51    
8.10.1 Organization 51 8.10.2 Ownership and Organizational and Taxpayer
Identification Numbers 51 8.10.3 Authorization 51 8.10.4 Commercial Organization
51 8.10.5 Limited Liability Company Agreement 51     8.11 Valid and Binding 51  
  8.12 Deferred Compensation and ERISA 51     8.13 No Required Consents 52    
8.14 No Default 52     8.15 No Broker or Finder 52     8.16 Background
Information and Certificates 52     8.17 Taxes and Assessments 52     8.18
Solvency 52     8.19 Other Agreements 52     8.20 No Subsidiaries 53     8.21
Investment Company Act of 1940 53     8.22 Guarantor's Warranties and
Representations 53     8.23 Patriot Act 53     8.24 Hotel Management and
Franchise Agreement 54     8.25 Reaffirmation and Survival of Representations 54
    9. COVENANTS 54     9.1 Compliance Certificate 54

 

 iv 

 

 

9.2 Financial Statements and Reports 55     9.2.1 Annual Statements 55 9.2.2
Quarterly Statements 55 9.2.3 Monthly Reports 56 9.2.4 Data Requested 56 9.2.5
Tax Returns 56 9.2.6 Budgets and Pro Forma 56 9.2.7 License or Permit Notices 56
9.2.8 Guarantor's Statements 56 9.2.9 Additional Information 57 9.2.11 Reporting
Medium 57     9.3 Payment of Taxes and Other Obligations; Tax Escrow Account 57
    9.3.1 Payment 57 9.3.2 Tax Escrow Account 57     9.4 Conduct of Business;
Compliance with Law 58     9.5 Insurance 58     9.6 Restrictions on Liens,
Transfers and Additional Debt 58     9.6.1 Prohibited Transactions 58 9.6.2
Permitted Transactions 59 9.6.3 Permitted Transfers 59 9.6.4 Permitted
Additional Debt 60 9.6.5 Additional Funds 61 9.6.6 Right to Accelerate Loan 61
9.6.7 Required Lenders' Options 61     9.7 Limits on Guaranties; No Improper
Distributions 61     9.7.1 No Guaranties 61 9.7.2 No Improper Distributions 61  
  9.8 Restrictions on Investments 61     9.9 Indemnification Against Payment of
Brokers' Fees 62     9.10 Environmental Indemnity Obligations 62     9.11 No
Dissolution, Merger or Acquisition 62     9.12 Contracts of a Material or
Significant Nature 62     9.13 Management of the Property 62     9.14 Pay
Indebtedness and Perform Obligations 63     9.15 Deposit of Proceeds; Bank
Accounts 63     9.16 Place for Records; Inspection 63     9.17 Costs and
Expenses 64     9.18 Compliance with Legal Requirements 65

 

 v 

 

 

9.19 General Indemnity 65     9.20 Leasing Matters 65     Intentionally Omitted
65 9.20.2 Agent’s Approval Required 65 9.20.3 Borrower's Requests 66 9.20.4
Lenders' Response 66 9.20.5 SNDAs and Estoppels 66     9.21 Intentionally
Omitted 67     9.22 Tenant Security Deposits 67     9.23 Audits 67     9.24
Filings 67     9.25 Certain Expenses 67     9.26 Compliance with ERISA 67    
9.27 Records and Books 67     9.28 Further Assurances 67     9.29 Borrower
Cooperation with Sell Down 68     9.30 Substitute Notes 68     9.31 New Places
of Business 68     9.32 New Name or State of Organization; Fictitious Names 68  
  9.33 Margin Stock 68     9.34 Fiscal Year 68     9.35 No Modification of
Inter-Company Loans 68     9.36 Lost Notes, etc 68     9.37 Prohibited
Transactions 69     9.38 Accounting Method 69     9.39 Subordinated Indebtedness
69     9.40 Transactions with Affiliates 69     9.41 Construction and Completion
69     9.42 Interest Rate Protection Agreements 69     9.43 Controlled
Substances 70     9.44 Updated Appraisals 70     9.45 No Amendment of Limited
Liability Company Agreement 70     9.46 License and Permit Transfers 70     9.47
Required Interest Rate Protection Agreement 70

 

 vi 

 

 

9.48 Certain Operating Lease Covenants 71     9.49 Certain Hotel/Franchise
Agreement Covenants 72     10. SPECIAL PROVISIONS 72     10.1 Right to Contest
72     10.1.1 Taxes and Claims by Third Parties 72 10.1.2 Legal Requirements 73
    10.2 Debt Service Coverage Ratio, Cash Reserve Account and Required
Principal Payments 73     10.3 Reduction and Release of Repayment Guaranty 76  
  10.3.1 Repayment Guaranty Reduction 76 10.3.2 Repayment Guaranty Release 76  
  10.4 Intentionally Omitted. 77     10.5 Tenant Letters of Credit 77     11.
EVENTS OF DEFAULT 78     11.1 Default and Events of Default 78     11.1.1
Generally 78 11.1.2 Notes, Mortgage and Other Loan Documents 78 11.1.3 Financial
Status and Insolvency 79 11.1.4 Liens 79 11.1.5 Breach of Representation or
Warranty 79 11.1.6 Default Under Significant Lease or Material Assigned Contract
79 11.1.7 Hedging Contracts 80 11.1.8 Guarantor Default 80 11.1.10 Judgments 80
11.1.12 Required Interest Rate Protection Agreement 80 11.1.13 Operating Lease,
Hotel Management Agreement, or Franchise Agreement Default 80     11.2 Grace
Periods and Notice 81     11.2.1 No Notice or Grace Period 81 11.2.2 Nonpayment
of Interest and Principal 81 11.2.3 Other Monetary Defaults 81 11.2.4
Nonmonetary Defaults and Breaches of Warranties and Representations Capable of
Cure 81     11.3 Certain Remedies 82     11.3.1 Accelerate Obligations 82 11.3.2
Pursue Remedies 82     11.4 Written Waivers 82     12. ADDITIONAL REMEDIES 82

 

 vii 

 

 

12.1 Remedies 82     12.1.1 Enter and Perform 82 12.1.2 Discontinue Work 83
12.1.3 Exercise Rights 83 12.1.4 Other Actions 83     12.2 Reimbursement 83    
12.3 Power of Attorney 83     13. SECURITY INTEREST AND SET OFF 84     13.1
Security Interest and Set-Off 84     13.2 Right to Freeze 84     13.3 Additional
Rights 84     14. CASUALTY AND TAKING 84     14.1 Casualty and Obligation To
Repair 84     14.2 Adjustment of Claims 85     14.3 Payment and Application of
Insurance Proceeds 85     14.4 Conditions To Release of Insurance Proceeds and
Condemnation Awards 86     14.5 Taking 86     14.6 Application of Unreleased
Proceeds 86     15. THE AGENT AND THE LENDERS 87     15.1 Appointment and
Authorization of Agent 87     15.2 Delegation of Duties 88     15.3 Liability of
Agent 88     15.4 Reliance by Agent 89     15.5 Notice of Default 89     15.6
Credit Decision; Disclosure of Information by Agent 89     15.7 Indemnification
of Agent 90     15.8 Agent in Individual Capacity 91     15.9 Successor Agent 91
    15.10 Releases; Acquisition and Transfers of Collateral 91     15.11
Application of Payments 93     15.12 Benefit 93     15.13 Co-Agents; Lead
Managers 93     15.14 Respecting Loans and Payments 94

 

 viii 

 

 

15.14.1 Procedures for Loan Advances 94 15.14.2 Nature of Obligations of Lenders
and Failure of a Lender to Fund 94 15.14.3 Payments to Agent 95 15.14.4
Adjustments 95 15.14.5 Setoff 95 15.14.6 Distribution by Agent 96 15.14.7
Defaulting Lender 96 15.14.8 Holders 98     16. ASSIGNMENT AND PARTICIPATION
PROVISIONS AND CERTAIN ADMINISTRATIVE MATTERS 98     16.1 Assignment and
Participation Provisions 98     16.1.1 Conditions to Assignment by Lenders 98
16.1.2 Certain Representations and Warranties; Limitations, Covenants 99 16.1.3
Register 100 16.1.4 New Notes 100 16.1.5 Participations 101 16.1.6 Disclosure
101 16.1.7 Miscellaneous Assignment Provisions 101 16.1.8 Certain Mergers 102
16.1.9 Tax Forms 102     16.2 Certain Administrative Matters 104     16.2.1
Amendment, Waiver, Consent, Reliance on Agent, Etc 104 16.2.2 Deemed Consent or
Approval 105     16.3 Certain Lender Representations 105     17. GENERAL
PROVISIONS 105     17.1 Notices 105     17.1.1 Mode of Delivery 105 17.1.2
Effectiveness of Facsimile Documents and Signatures 107 17.1.3 Limited Use of
Electronic Mail 107 17.1.4 Reliance by Agent and Lenders 107     17.2 No
Assignment by Borrower 107     17.4 Parties Bound; No Third Party Beneficiaries
108     17.5 Waivers, Extensions and Releases 108     17.6 Governing Law 108    
17.6.1 Substantial Relationship 108 17.6.2 Place of Delivery 108 17.6.3
Governing Law 108 17.6.4 Exceptions 109     17.7 Consent to Jurisdiction and
Service of Process 110     17.8 JURY TRIAL WAIVER 110

 

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17.9 Survival 111     17.10 Cumulative Rights; No Waiver 111     17.11
Limitations on Claims Against Agent or Lenders 111     17.11.1 Borrower Must
Notify 111 17.11.2 Remedies 111 17.11.3 Limitations 112     17.12 Obligations
Absolute 112     17.13 Table of Contents, Title and Headings 112     17.14
Counterparts; Electronic Communications 112     17.15 Intentionally Omitted 112
    17.16 Time of the Essence 112     17.17 Amendments; No Oral Changes, etc 113
    17.18 Severability 114     17.19 Cumulative Effect; Conflict of Terms 114  
  17.20 Agent's or Lenders' Consent 114     17.21 Interpretation; Integration
115     17.22 No Preservation or Marshaling 115     17.23 Waivers by Borrower
115     17.24 Monthly Statements 115     17.25 Recourse Provisions 116    
17.25.1 Borrower Fully Liable 116 17.25.2 Guarantor Liability 116 17.25.3 Member
Liability 116 17.25.4 Additional Matters 116     17.26 Office of Foreign Asset
Control ("OFAC") and Patriot Act Notice 116     17.27 Electronic Transmission of
Data 117     17.28 No Advisory or Fiduciary Responsibility 118     17.29
Disclaimer by Agent and Lenders 118     Signatures  

 

 x 

 

 

Exhibits

 

Exhibit A - Organizational Chart Setting Forth Ownership Interests, Authorized
Representatives and Organizational and Taxpayer Identification Numbers      
Exhibit B - Intentionally Omitted       Exhibit C - Required Property, Hazard
and Other Insurance       Exhibit D - Lenders' Pro Rata Shares and Agent’s and
Lenders’ Notice Addresses and Wire Transfer Instructions       Exhibit E - Form
of Assignment and Assumption Agreement       Exhibit F - Form of Compliance
Certificate       Exhibit G - Conditions Subsequent       Exhibit H   Approved
Capital Expenditures Budget

 

 xi 

 

 

LOAN AGREEMENT

 

This is an agreement (“Loan Agreement” or “Agreement”) made and entered into as
of the 15th day of August, 2018, by and among (a) PHR TCI, LLC, a Delaware
limited liability company, having an address at c/o Procaccianti Companies, 1140
Reservoir Avenue, Cranston, Rhode Island 02920 (“Borrower”), (b) CITIZENS BANK,
NATIONAL ASSOCIATION, a national banking association organized under the laws of
the United States, having an office at One Citizens Plaza, Providence, Rhode
Island 02903 (hereinafter sometimes referred to as “Agent” and sometimes as
“Citizens”) as a Lender and in its capacity as Agent for itself and for each of
the other Lenders who are now or who hereafter become parties to this Agreement
pursuant to the terms of Section 16 hereof and (c) all such Lenders.

 

WITNESSETH:

 

1.              BACKGROUND.

 

1.1            General Definitions.

 

1.1.1           Defined Terms. When used herein, the following terms shall have
the following meanings (terms defined in the singular shall have the same
meaning when used in the plural and vice versa):

 

Acceptable Letter of Credit – shall mean an irrevocable, transferable standby
letter of credit issued for the benefit of Agent, on behalf of the Lenders, by a
commercial bank located in the United States which is acceptable to Agent, in
Agent's reasonable discretion, and which letter of credit (a) shall have an
expiration date that is at least ninety-five (95) days after the then current
Maturity Date (or applicable Extended Maturity Date) of the Loan (or, if such
letter of credit has an earlier expiration date, such letter of credit shall be
extended or replaced by Borrower at least thirty (30) days prior to the
expiration date of the then current letter of credit), (b) may be drawn upon by
Agent by sight draft alone and (c) is otherwise acceptable to Agent in form and
content in Agent's reasonable discretion.

 

Acceptable Standards - as defined in the definition of Environmental Site
Assessment.

 

Acquisition Costs - the sum of the net price actually paid by Borrower to
purchase the Property, plus due diligence, closing, legal, financing and other
expenses reasonably incurred and actually paid by Borrower in connection with
its purchase of the Property.

 

Adjusted LIBOR Rate - means, relative to a LIBOR Rate Loan, a rate per annum
determined by dividing (x) the LIBOR Rate for such LIBOR Interest Period by (y)
a percentage equal to one hundred percent (100%) minus the LIBOR Reserve
Percentage.

 

 

 

 

Affiliate - of any Person shall mean any other Person which, directly or
indirectly, Controls or is Controlled by or is under common Control with such
first-mentioned Person, or any individual, in the case of a Person who is an
individual, who has a relationship by blood, marriage or adoption to such
first-mentioned Person not more remote than first cousin, and, without limiting
the generality of the foregoing, shall include (a) any Person beneficially
owning or holding 51% or more of any class of voting stock or voting partnership
interests or voting limited liability company membership interests or beneficial
interests of such first-mentioned Person or (b) any Person of which such
first-mentioned Person owns or holds 51% or more of any class of voting stock or
partnership interests or limited liability company membership interests or
beneficial interests.

 

Agent – Citizens or any other Person which is at the time in question serving as
the agent under the terms of Section 15 hereof and the other Loan Documents.

 

Agent Advances – as defined in Section 2.17.

 

Agent’s Office - Agent’s address and, as appropriate, account as set forth on
the Schedule of Lenders, or such other address or account as Agent hereafter may
from time to time notify Borrower and Lenders.

 

Agent-Related Persons - Agent, together with its Affiliates (including
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of Agent and such Affiliates.

 

Aggregate Commitments – the Commitments of all Lenders.

 

Agreement - as defined in the Preamble.

 

A.M. - a time from and including 12 o'clock midnight to and excluding 12 o'clock
noon on any day using eastern time.

 

Amortization Commencement Date - the 15th day of August, 2019; provided,
however, that upon and following any prepayment of the Loan prior to such date
in accordance with the terms and conditions of Section 2.5.3 hereof, in an
amount sufficient to reduce the LTV Ratio (based on the Approved Appraised Value
of the Property as of the date hereof) to equal or less than fifty-five percent
(55%) (i.e., such that the aggregate amount of all prepayments made up to and
including such prepayment shall equal the Paydown Amount), the Amortization
Commencement Date shall thereafter be deemed to be the Maturity Date (or, if the
Maturity Date has been extended pursuant to the provisions of this Agreement,
the then applicable Extended Maturity Date).

 

Applicable Interest Rate - as defined in Section 2.4.1.

 

Approved Appraised Value - the appraised value of the Property, less the value
of any FF&E located thereon, set forth in the most recent MAI appraisal thereof
which has been (a) prepared at Agent's direction by an appraiser selected by
Agent and (b) approved and accepted by Required Lenders prior to the date hereof
or subsequently pursuant to Section 2.3 below; provided, however, until the
first (1st) anniversary of the date hereof, any calculations or ratios
(including, without limitation, any LTV Ratio) shall use the Approved Appraised
Value as of the date hereof.

 

 2 

 

 

Approved Lease - as defined in Section 9.20.2.

 

Arranger – means Citizens Bank, National Association, in its capacity as sole
lead arranger and sole bookrunner.

 

Asset Manager - as defined in Section 15.10(b).

 

Assignment and Assumption - as defined in Section 16.1.1.

 

Assignment of Interest Rate Protection Agreement – as defined in Section 3.1.7.

 

Assignment of Leases and Rents - as defined in Section 3.1.2.

 

Authorized Representatives - as defined in Section 4 and listed on Exhibit A.

 

Bankruptcy Remote Entity - as to the Borrower, such term shall mean that
Borrower (i) is a Single Purpose Entity which owns no assets other than the
Property and related assets and (ii) has no Indebtedness and in the future will
not incur any Indebtedness other than obligations in connection with the Loan
and Permitted Additional Debt.

 

Basel III – the global regulatory standards on bank capital adequacy and
liquidity referred to by the Basel Committee on Banking Supervision as “Basel
III” or the “Basel III Framework” published in December 2010 together with any
further guidance or standards in relation to “Basel III” or the “Basel III
Framework” published or to be published by said Basel Committee.

 

Beneficial Ownership Certification – means, with respect to the Borrower, a
certification regarding beneficial ownership as required by the Beneficial
Ownership Regulation, which certification shall be in the form required by
Agent.

 

Beneficial Ownership Regulation – means 31 C.F.R. § 1010.230.

 

Borrower - as defined in the Preamble.

 

Business Day - means:

 

(a)            any day which is neither a Saturday or Sunday nor a legal holiday
on which commercial banks are authorized or required to be closed, or in fact
are closed in the state where Agent’s Office is located (which for purposes of
this Agreement is Rhode Island);

 

(b)            when such term is used to describe a day on which a borrowing,
payment, prepayment or repayment is to be made in respect of a LIBOR Rate Loan,
any day which is (i) neither a Saturday or Sunday nor a legal holiday on which
commercial banks are authorized or required to be closed in New York City; and
(ii) a London Banking Day; and

 

 3 

 

 

(c)            when such term is used to describe a day on which an interest
rate determination is to be made in respect of a LIBOR Rate Loan, any day which
is a London Banking Day.

 

Calculation Date - each date, from time to time, as of which any Loan Party’s
compliance with its respective financial covenants is being calculated pursuant
to the terms of the Loan Documents, which date shall be (i) the last day of each
calendar quarter for purposes of the testing of the Debt Service Coverage Ratio
in accordance with Section 10.2 hereof, and (ii) the last Business Day of such
other calendar months as Agent and Borrower may agree to and with respect to
which Agent has received all financial information required by Agent for
purposes of determining the Debt Service Coverage Ratio or Debt Yield.

 

Calculation Period – the twelve (12) month calendar month period immediately
preceding the Calculation Date in question (also referred to as the “trailing
twelve-month period”).

 

Capital Reserve Amount – the greater of (i) four percent (4%) of gross revenues
from the Property per annum or (ii) actual capital reserve amounts.

 

Capitalized Lease Obligations - all lease obligations which have been or should
be, in accordance with GAAP, capitalized on the books of the lessee.

 

Cash Collateral – all deposits, credits, collateral and property of Borrower,
now or hereafter in the possession, custody, safekeeping or control of Agent or
any Lender or any Affiliate of Agent or any Lender (including without limitation
any Affiliate of Citizens Financial Group, Inc. and its successors and assigns)
or in transit to any of them; which term includes, without limitation, the Cash
Reserve Account and the Tax Escrow Account, all sums deposited in such accounts
and any cash collateral pledged to Agent pursuant to any provision of this
Agreement or any of the other Loan Documents.

 

Cash Reserve Account - an interest bearing account which Borrower is required to
establish with Citizens, as depository bank, prior to the first date that any
funds are required to be deposited in such account pursuant to the terms of this
Agreement; which account shall be (i) funded and disbursed in accordance with
Section 10.2 and (ii) pledged and assigned to Agent, for the benefit of the
Lenders, as additional security for payment, performance and observance of the
Obligations.

 

Casualty - as defined in Section 14.1.

 

CERCLA - the Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. §9601, et seq.), as amended from time to time, which for purposes
of this definition shall include, without limitation, the Superfund Amendments
and Reauthorization Act.

 

 4 

 

 

Change in Law - the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any Law, (b) any change in any
Law or in the administration, interpretation, implementation or application
thereof by any Governmental Authority, or (c) the making or issuance of any
request, rule, guideline, or directive (whether or not having the force of Law)
by any Governmental Authority; provided that notwithstanding anything herein to
the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and (y) all requests, rules, guidelines, or directives promulgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or
any successor or similar authority), or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted, or issued.

 

Citizens - as defined in the Preamble.

 

Civil Asset Forfeiture Reform Act - the Civil Asset Forfeiture Reform Act of
2000 (18 U.S.C. Sections 983 et seq.), as amended from time to time, and any
successor statute.

 

Closing Note - the promissory note of even date herewith issued by Borrower to
Agent, as agent for the Lenders, in the stated maximum principal amount of
Seventeen Million Eight Hundred Thirty-Six Thousand and no/100 Dollars
($17,836,000.00); together with any renewals, extensions of modifications
thereof and substitutions therefor.

 

Code - the United States Internal Revenue Code of 1986, as amended, and all
rules and regulations promulgated pursuant thereto, as the same may be amended
or supplemented from time to time.

 

Collateral - as defined in Section 7.1.5.

 

Collateral Assignment of Contracts, Licenses and Permits – as defined in Section
3.1.5.

 

Commitment - as defined in Section 1.5.

 

Commitment Fee – as defined in Section 2.12.1.

 

Compliance Certificate - as defined in Section 9.1.

 

Conditions Subsequent - as defined in Section 7.2.

 

Consultant - as defined in Section 5.1.

 

Control - means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlled by”, “under common Control with”, “Controlling” and “Controlled”
have meanings correlative thereto.

 

Controlled Substances Act - the Controlled Substances Act (21 U.S.C. Sections
801 et seq.), as amended from time to time, and any successor statute.

 

Cost to Repair - as defined in Section 14.3.

 

Counterparty – shall mean each counterparty to, or issuer of, any Interest Rate
Protection Agreement other than Borrower or an Affiliate of Borrower.

 

 5 

 

 

Debt Service Coverage Interest Rate - an interest rate equal to the greatest of
(a) the Adjusted LIBOR Rate that is in effect on the Calculation Date in
question plus the LIBOR Rate Margin, or (b) six and three-quarters percent
(6.75%) per annum or (c) a rate two and one-half percent (2.5%) in excess of the
Debt Service Coverage Treasury Rate in effect on the Calculation Date in
question.

 

Debt Service Coverage Principal Balance - the outstanding principal balance of
the Loan on the Calculation Date.

 

Debt Service Coverage Ratio - (x) the Net Operating Income divided by (y) the
sum of the Debt Service Coverage Principal Balance multiplied by the Debt
Service Coverage Interest Rate, plus an amount equal to the annual principal
amortization payments that would be required during the one year period
following the Calculation Date in question with respect to a loan in an amount
equal to the Debt Service Coverage Principal Balance, based on a twenty-five
(25) year amortization schedule at an interest rate equal to the Debt Service
Coverage Interest Rate then in effect; all as calculated on and as of the
Calculation Date in question.

 

Debt Service Coverage Treasury Rate - as of the Calculation Date in question,
the latest published rate for United States Treasury Notes (but the rate on
Treasury Notes issued on a discounted basis shall be converted to a bond
equivalent) as published weekly in the Federal Reserve Statistical Release H.15
(519) of Selected Interest Rates having a ten (10) year maturity (or the closest
thereto) from such Calculation Date.

 

Debt Yield - the Net Operating Income divided by the Debt Yield Principal
Balance.

 

Debt Yield Principal Balance - the outstanding principal balance of the Loan on
any Calculation Date.

 

Default - as defined in Section 11.1.

 

Default Rate - a rate per annum equal to the lesser of: (i) four (4) percentage
points over the Applicable Interest Rate or (ii) the Maximum Legal Rate.

 

 6 

 

 

Defaulting Lender - subject to any provisions hereof permitting a Defaulting
Lender to cure, any Lender that (a) has failed to (i) fund all or any portion of
its advances within two (2) Business Days of the date such advances were
required to be funded hereunder unless such Lender notifies Agent and Borrower
in writing that such failure is the result of such Lender’s determination that
one or more conditions precedent to advances (each of which conditions
precedent, together with any applicable default, shall be specifically
identified in such writing) has not been satisfied, or (ii) pay to Agent or any
other Lender any other amount required to be paid by it hereunder within two (2)
Business Days of the date when due, (b) has notified Borrower or Agent in
writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect (unless such writing or
public statement relates to such Lender’s obligation to fund an advance
hereunder and states that such position is based on such Lender’s determination
that a condition precedent to advances (which condition precedent together with
any applicable default, shall be specifically identified in such writing or
public statement) cannot be satisfied), (c) has failed, within three (3)
Business Days after written request by Agent or Borrower to confirm in writing
to Agent and Borrower that it will comply with its prospective funding
obligations hereunder (provided that such Lender shall cease to be a Defaulting
Lender pursuant to this Subsection (c) upon receipt of such written confirmation
by Agent and Borrower), or (d) has, or has a direct or indirect parent company
that has, (i) become the subject of a proceeding under any federal, state or
local Law, domestic or foreign, as now or hereafter in effect relating to
bankruptcy, insolvency, liquidation, receivership, reorganization, arrangement,
composition, extension or adjustment of debts, or any similar Law affecting the
rights of creditors, or (ii) had appointed for it a receiver, custodian,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its regulatory
authority acting in such a capacity; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow, or disaffirm any contracts or agreements made with such
Lender.  Any determination by Agent that a Lender is a Defaulting Lender under
any one or more of Subsections (a) through (d) above shall be conclusive and
binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender (subject to any provisions hereof permitting a Defaulting
Lender to cure) upon delivery of written notice by Agent of such determination
to Borrower and each Lender.

 

Defaulting Lender Amount - the Defaulting Lender’s Pro Rata Share of a Payment
Amount.

 

Defaulting Lender Obligation - as defined in Section 15.14.7.

 

Defaulting Lender Payment Amounts - a Defaulting Lender Amount plus interest
from the date such Defaulting Lender Amount was funded by Agent and/or an
Electing Lender, as applicable, to the date such amount is repaid to Agent
and/or such Electing Lender, as applicable, at the rate per annum applicable to
such Defaulting Lender Amount under the Loan or otherwise at the LIBOR Rate.

 

Distributions - with respect to any Person, any dividends, distributions or
payments of any kind whatsoever (whether of cash or other property in any form)
made by such Person to or for the benefit of any direct or indirect holder of
any ownership or other beneficial interest in such Person, in any capacity, or
to any Affiliate thereof, including, without limitation, the purchase,
redemption, exchange or other retirement by such Person, directly or indirectly,
of any such ownership or other beneficial interest.

 

Dollars and $ - lawful money of the United States.

 

Electing Lender – as defined in Section 15.14.7.

 

Election Notice – as defined in Section 15.14.7.

 

 7 

 

 

Election Period – as defined in Section 15.14.7.

 

Eligible Assignee - shall mean (a) any Lender or any Affiliate or subsidiary of
a Lender, and (b) any other Person consented to as such by the Agent; provided,
however, so long as no Event of Default exists, any such other Person must be a
commercial bank, investment fund, financial institution or other institutional
lender which has an office in the United States and which is not subject to
United States withholding tax requirements on account of interest payments made
to it by Borrower. Notwithstanding anything contained in this definition of
“Eligible Assignee” to the contrary, under no circumstances shall any Person be
an Eligible Assignee if (1) such Person or an Affiliate of such Person is then
actively engaged in any suit, action or other proceeding as a party adverse to
Agent or an Affiliate of Agent or (2) such Person is the Borrower, Guarantor or
an Affiliate of Borrower or Guarantor.

 

Environmental Indemnity Agreement – as defined in Section 9.10.

 

Environmental Indemnity Obligations - as defined in Section 9.10.

 

Environmental Legal Requirements - all federal, state or local Laws, pertaining
to industrial hygiene, environmental conditions or the existence, release,
generation, storage or disposal of any Hazardous Substances, including but not
limited to, CERCLA and RCRA.

 

Environmental Site Assessment - an environmental site assessment report
conforming to the standards for Phase I (and, where applicable, Phase II)
Environmental Site Assessments in ASTM Standard Procedures for Environmental
Site Assessments, E 1527-00 or other standards reasonably satisfactory to Agent
(either of which is herein called the “Acceptable Standards”), which is in all
respects satisfactory to Agent and which has been prepared by a qualified
environmental firm satisfactory to Agent (a) indicating that, on the basis of an
investigation conducted in accordance with the Acceptable Standards, (i) it
found no Hazardous Substances present on or in the Property at levels that
require reporting or remediation, or both, pursuant to any Environmental Legal
Requirements that are applicable to the Property (“Prohibited Hazardous
Substances”), (ii) it did not learn of any conditions on or in the land adjacent
to the Property that would cause it to believe that there might be Prohibited
Hazardous Substances present on or in the Property, and (iii) no notice of
violation of any of the Environmental Legal Requirements, or other claim or
order issued pursuant to any Environmental Legal Requirements, has been duly
filed against the Property by any Governmental Authority; or (b) if any
Prohibited Hazardous Substance is present on the Property or if any such notice
of violation, claim or order has been filed, providing evidence satisfactory to
Agent as to the extent and nature of the environmental problem caused thereby
and the estimated costs, requirements and duration of any recommended
remediation or reporting, or both.

 

ERISA - the Employee Retirement Income Security Act of 1974, as amended, and all
rules and regulations from time to time promulgated thereunder.

 

ERISA Plan - as defined in Section 8.12.

 

 8 

 

 

Event of Default - as defined in Section 11.1.

 

Exhibit - means, when followed by a letter, the exhibit attached to this
Agreement bearing that letter and by such reference is fully incorporated in
this Agreement.

 

Extended Maturity Date - as defined in Section 2.2.

 

Extended Term - as defined in Section 2.2.

 

Extension Fee - as defined in Section 2.3.6.

 

Extension Notice - as defined in Section 2.3.1.

 

FATCA - Sections 1471 through 1474 of the Code, as in effect on the date of this
Agreement (or any amended or successor version that is substantively
comparable), any current or future regulation or published official
interpretation thereof, any applicable agreement entered into pursuant to
Section 1471(b)(1) of the Code, and any applicable intergovernmental agreement
with respect to the foregoing.

 

Fee Letter – that certain Fee Letter agreement between Agent and Borrower of
even date herewith.

 

FF&E - furniture, furnishings, fixtures or equipment necessary for the operating
of the Property, including, without limitation, any refrigerators, dishwashers,
garbage disposers, washers, dryers and other appliances; light fixtures,
awnings, pictures, screens, blinds, shades, curtains, and curtain rods;
televisions and television systems; telephones and telephone systems; computers
and computer systems; mirrors, cabinets, paneling, rugs, and floor and wall
coverings; and exercise equipment.

 

First Extended Maturity Date – as defined in Section 2.2.

 

First Extended Term – as defined in Section 2.2.

 

First/Second Extended Term Required DSC Amount - as defined in Section 10.2.1.

 

Following Business Day Convention - shall mean the convention for adjusting any
relevant date if it would otherwise fall on a day that is not a Business Day.
When used in connection with a date the term, “Following Business Day
Convention” shall mean that an adjustment will be made if that date would
otherwise fall on a day that is not a Business Day so that the date will be the
first following day that is a Business Day.

 

Foreign Lender – as defined in Section 16.1.9.

 

Franchise Agreement - that certain License Agreement dated August 15, 2018
between Holiday Hospitality Franchising, LLC, a Delaware limited liability
company, as franchisor, and Tenant, as franchisee, which Franchise Agreement has
been collaterally assigned by Tenant to Borrower, pursuant to the Tenant
Collateral Assignment of Contracts, Licenses and Permits.

 

 9 

 

 

Funding Date – the 15th day of August, 2018.

 

GAAP - generally accepted accounting principles in the United States of America
in effect from time to time.

 

Governmental Authority - the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

Gross Income – all actual revenues derived from the ownership and operation of
the Property, including, without limitation, revenues, receipts, income, fees,
receivables and accounts relating to or arising from rentals, rent equivalent
income, income and profits from guest rooms, meeting rooms, food and beverage
facilities, recreational facilities (if any), vending machines, telephone and
television systems, computer equipment and systems, communications systems, data
processing systems; guest laundry, the provision or sale of other goods and
services, and any other items of revenues, which are earned by Borrower during
the Calculation Period in question and, in accordance with the Uniform System of
Accounts, would be classified as income allocable to such Calculation Period;
provided however Gross Income shall not include (i) equity contributions, (ii)
Loan Proceeds, (iii) insurance proceeds (except for business interruption
insurance proceeds), (iv) rents and/or other income derived from the Operating
Lease, (v) tenant security deposits (unless and until they are applied to
rents), (vi) condemnation awards, (vii) any lease termination payments or
liquidated damages, (viii) rentals payable by tenants who are subject to
protection from their creditors (whether as a result of a voluntary or
involuntary proceeding) under the United States Bankruptcy Code or under any
similar Law providing for the protection of debtors, (ix) rents payable by
tenants who are more than sixty (60) days overdue in the payment of any rents or
other payments due under their respective lease, and (x) any non-recurring
extraordinary amounts received by Borrower during the Calculation Period in
question, as reasonably determined by Agent.

 

Guarantor – TH Investment Holdings II, LLC, a Delaware limited liability
company.

 

Guaranty – as defined in Section 3.1.6

 

Hazardous Substances – as such term is defined in the Environmental Indemnity
Agreement:

 

Hedging Contracts - interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements, or any other agreements or arrangements now
or hereafter entered into between the Borrower and Citizens (or another
Affiliate of Citizens Financial Group, Inc.) and designed to protect the
Borrower against fluctuations in interest rates or currency exchange rates.

 

Hedging Obligations - with respect to the Borrower, all liabilities of the
Borrower to Citizens (or another Affiliate of Citizens Financial Group, Inc.)
under Hedging Contracts.

 

 10 

 

 

Hotel Management Agreement – means that certain Hotel Management Agreement dated
as of August 15, 2018, between Hotel Manager and Tenant, which Hotel Management
Agreement has been collaterally assigned by Tenant to Borrower, pursuant to the
Tenant Collateral Assignment of Contracts, Licenses and Permits.

 

Hotel Manager – PHR Traverse City Hotel Manager, LLC, a Michigan limited
liability company, or any management firm which has been retained by Borrower or
Tenant to manage the Property in accordance with the provisions of Section 9.13
hereof.

 

Hotel Taxes – federal, state and municipal excise, occupancy, sales and use
taxes collected by or on behalf of Borrower, Tenant or Hotel Manager directly
from customers, patrons or guests of the Property as part of or based on the
sales price of any goods, services or other items, such as gross receipts, room,
admission, cabaret or equivalent taxes and required to be paid to a Governmental
Authority.

 

Improper Distributions - other than payments at market rates for goods and
services related to the leasing, management, repair, maintenance and operation
of the Property, any payments or Distributions of any kind whatsoever (whether
of cash or property) made by or on behalf of Borrower from any of its assets,
income or profits to or for the benefit of any holder of any direct or indirect
ownership interest in Borrower or in any other Loan Party, or to or for the
benefit of any Affiliate of Borrower or any Affiliate of any other Loan Party or
any Affiliate of any other holder of any direct or indirect ownership interest
in Borrower or in any other Loan Party, at any time (a) when there shall exist
any Event of Default (i.e., continuing after the expiration of any applicable
grace or notice period, if any), or (b) when there shall be any outstanding
amounts of principal or interest that are then owing and actually past due and
payable to Lenders in connection with the Loan, or (c) when Net Cash Flow is
required to be deposited in the Cash Reserve Account pursuant to Section 10.2
below.

 

Improvements - as defined in Section 1.3.

 

Indebtedness - as applied to any Person means, without duplication (a) all items
which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of such Person on the date as
of which Indebtedness is to be determined, including, without limitation,
Capitalized Lease Obligations, (b) all obligations of other Persons which such
Person has guaranteed and (c) in the case of Borrower (without duplication), the
Obligations (including any Hedging Obligations).

 

Indemnified Liabilities - as defined in Section 9.19.

 

Indemnified Parties - as defined in Section 9.19.

 

 11 

 

 

Independent Director or Independent Manager –an individual who has prior
experience as an independent director, independent manager or independent member
with at least three (3) years of employment experience and who is provided by CT
Corporation, Corporation Service Company, National Registered Agents, Inc.,
Wilmington Trust Company, Stewart Management Company, Lord Securities
Corporation or, if none of those companies is then providing professional
Independent Directors, another nationally-recognized company reasonably approved
by Agent, in each case that is not an Affiliate of Borrower and that provides
professional Independent Directors and other corporate services in the ordinary
course of its business, and which individual is duly appointed as an Independent
Director and is not, and has never been, and will not while serving as
Independent Director be, any of the following:

 

(i)a member, partner, equityholder, manager, director, officer or employee of
Borrower, or any of its equityholders or Affiliates (other than as an
Independent Director of the Borrower or an Affiliate of Borrower that is not in
the direct chain of ownership of Borrower and that is required by a creditor to
be a single purpose bankruptcy remote entity, provided that such Independent
Director is employed by a company that routinely provides professional
Independent Directors or managers in the ordinary course of its business);

(ii)a creditor, supplier or service provider (including provider of professional
services) to Borrower, or any of its equityholders or Affiliates (other than a
nationally-recognized company that routinely provides professional Independent
Directors and other corporate services to Borrower or any of its Affiliates in
the ordinary course of its business);

(iii)a family member of any such member, partner, equityholder, manager,
director, officer, employee, creditor, supplier or service provider; or

(iv)a Person that Controls (whether directly, indirectly or otherwise) any of
(i), (ii) or (iii) above.

 

A natural person who otherwise satisfies the foregoing definition and satisfies
subparagraph (i) by reason of being the Independent Director of a “special
purpose entity” affiliated with Borrower shall be qualified to serve as an
Independent Director of Borrower, provided that the fees that such individual
earns from serving as an Independent Director of affiliates of the Borrower in
any given year constitute in the aggregate less than five percent (5%) of such
individual’s annual income for that year.

 

Initial Term - as defined in Section 2.2.

 

Initial Extended Term Required DSC Amount - as defined in Section 10.2.1.

 

Inter-Company Loans - unsecured loans made to Borrower by Member, or by any Loan
Party, or by any other Affiliate of Borrower or by any Affiliate of any of the
foregoing.

 

Interest Payment Date – initially, the 1st day of September, 2018, and the 1st
day of each month thereafter, or if such day falls on a day which Agent is not
open, then on the next Business Day following such date.

 

Interest Rate Protection Agreement – any so-called interest rate “swap”
agreement, interest rate “cap” agreement, interest rate “collar”, or any other
interest rate protection agreement (however denominated) now or hereafter
entered into by and between Borrower and any Person, together with each
amendment, extension, modification, replacement or recasting of any one or more
of such agreements.

 

 12 

 

 

Investment - the acquisition of any real or tangible personal property or of any
stock or other security, any loan, advance, bank deposit, money market fund,
contribution to capital, extension of credit (except for accounts receivable
arising in the ordinary course of business and payable in accordance with
customary terms), or purchase or commitment or option to purchase or otherwise
acquire real estate or tangible personal property or stock or other securities
of any party or any part of the business or assets comprising such business, or
any part thereof.

 

Land - as defined in Section 1.3.

 

Late Charge - as is defined in Section 2.4.4.

 

Laws – means, collectively, all rules, guidelines, or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority), or the United States or
foreign regulatory authorities, in each case pursuant to Basel III and/or the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all other
international, foreign, Federal, state and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.

 

Legal Requirements - all applicable federal, state, county and local Laws,
rules, and the requirements of any Governmental Authority having or claiming
jurisdiction with respect thereto, including, but not limited to, those
applicable to zoning, subdivision, building, health, fire, safety, sanitation,
the protection of the handicapped, and environmental matters and shall also
include all orders and directives of any Governmental Authority having or
claiming jurisdiction with respect thereto.

 

Lender – Citizens Bank, National Association, in its capacity as a Lender, and
any other Person that is a signatory hereto under the caption “Lenders” on the
signature pages hereto and any other Person which hereafter becomes a party
hereto as a “Lender” pursuant to the terms of Section 16.1, each in their
individual capacity, and Lenders means Citizens Bank, National Association, in
its capacity as a Lender, and each such other Person, together with their
respective successors and assigns as holders of an interest or interests in the
Loan.

 

Lending Office - as to any Lender, the office or offices of such Lender
described on the Schedule of Lenders, or such other office or offices as such
Lender may from time to time notify Borrower and Agent.

 

LIBOR Breakage Fee - as defined in Section 2.5.3(c).

 

LIBOR Interest Period - means, in the case of a LIBOR Rate Loan:

 

(i)initially, the period beginning on (and including) the Funding Date and
ending on (but excluding) the 1st day of September, 2018 (the “Stub Period”);
and

 

 13 

 

 

(ii)then, the period commencing on (and including) the last day of the Stub
Period and ending on (but excluding) the day which numerically corresponds to
such date one month thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month); and

 

(iii)thereafter, each period commencing on the last day of the next preceding
LIBOR Interest Period and ending one month thereafter;

 

provided, however, that

 

(a)if the Borrower has or may incur Hedging Obligations with Citizens (or with
an Affiliate of Citizens Financial Group, Inc.) in connection with the Loan, the
LIBOR Interest Period shall be of the same duration as the relevant period set
under the applicable Hedging Contract;

 

(b)if such LIBOR Interest Period would otherwise end on a day which is not a
Business Day, such LIBOR Interest Period shall end on the next following
Business Day unless such day falls in the next calendar month, in which case
such LIBOR Interest Period shall end on the first preceding Business Day; and

 

(c)no LIBOR Interest Period may end later than the Maturity Date (or, if
applicable, the then applicable Extended Maturity Date).

 

LIBOR Rate - means, relative to any LIBOR Interest Period, the offered rate for
deposits of U.S. Dollars for a term coextensive with the designated LIBOR
Interest Period which the ICE Benchmark Administration (or any successor
administrator of LIBOR rates) fixes as its LIBOR rate as of 11:00 a.m. London
time on the day which is two London Banking Days prior to the beginning of such
LIBOR Interest Period. If such day is not a London Banking Day, the LIBOR Rate
shall be determined on the next preceding day which is a London Banking Day. If
for any reason the Agent cannot determine such offered rate fixed by the then
current administrator of LIBOR rates, the Agent may, in its sole but reasonable
discretion, use an alternative method to select a rate calculated by the Agent
to reflect Lenders' cost of funds. Notwithstanding the foregoing, if the LIBOR
Rate shall be less than zero, such rate shall be deemed to be zero for purposes
of this Agreement.

 

LIBOR Rate Loan - means the Loan for the period(s) when the rate of interest
applicable to the Loan is calculated by reference to the LIBOR Rate in the
manner set forth herein.

 

LIBOR Rate Margin – as of the closing of the Loan, the LIBOR Rate Margin shall
be three percent (3.0%). Upon and following any prepayment of the Loan, in
accordance with the terms and conditions of Section 2.5.3 hereof, in an amount
sufficient to reduce the LTV Ratio (based on the Approved Appraised Value of the
Property) to equal or less than fifty-five percent (55%), the LIBOR Rate Margin
shall thereafter be reduced to two and one-half percent (2.5%).

 

 14 

 

 

LIBOR Reserve Percentage - means, relative to any day of any LIBOR Interest
Period, the maximum aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
under any regulations of the Board of Governors of the Federal Reserve System
(the “Board”) or other Governmental Authority having jurisdiction with respect
thereto as issued from time to time and then applicable to assets or liabilities
consisting of “Eurocurrency Liabilities”, as currently defined in Regulation D
of the Board, having a term approximately equal or comparable to such LIBOR
Interest Period.

 

LIBOR Scheduled Unavailability Date – as defined in Section 2.11.7.

 

LIBOR Successor Rate – as defined in Section 2.11.7.

 

LIBOR Successor Rate Conforming Changes – with respect to any proposed LIBOR
Successor Rate, any conforming changes to the definition of LIBOR Interest
Period, timing and frequency of determining rates and making payments of
interest and other administrative and yield protection matters as may be
appropriate, in the discretion of Agent, to reflect the implementation of such
LIBOR Successor Rate and to permit the administration thereof by the Agent in a
manner substantially consistent with then-prevailing market practice (or, if the
Agent determines that implementation of any portion of such market practice is
not administratively feasible or that no market practice for the administration
of such LIBOR Successor Rate exists, in such other manner of administration as
the Agent determines in consultation with the Borrower).

 

Licenses and Permits - all licenses, permits, authorizations and agreements
issued by or agreed to by any Governmental Authority, or by a private party
pursuant to a Permitted Title Exception including the Operating Lease, and
including, but not limited to, building permits, occupancy permits and such
special permits, variances and other relief as may be required pursuant to Legal
Requirements which may be applicable to the Property.

 

Loan - as defined in Section 1.4.

 

Loan Advance - as defined in Section 6.2.

 

Loan Agreement - as defined in the Preamble.

 

Loan Amount - the amount of Loan Proceeds actually advanced or to be advanced by
Lenders.

 

Loan Documents - this Agreement, the Notes, the Environmental Indemnity
Agreement, the Security Documents and the Other Agreements, all as amended,
renewed, modified, replaced, extended or restated from time to time.

 

Loan Party - singly and collectively, Borrower, Member, Tenant and Guarantor.

 

Loan Proceeds - all outstanding proceeds of the Loan advanced by Lenders.

 

 15 

 

 

London Banking Day – a day on which dealings in U.S. Dollar deposits are
transacted by and between banks in the London interbank market.

 

LTV Ratio - as determined on any date in connection with a requested extension
of the Maturity Date or, if applicable, the First Extended Maturity Date, Second
Extended Maturity Date, or Third Extended Maturity Date, will be the percentage
arrived at by dividing (i) the outstanding principal balance of the Loan on such
date by (ii) the Approved Appraised Value of the Property. After the first (1st)
anniversary of the date hereof, in connection with the determination of the
Approved Appraised Value, the Required Lenders shall have the right to require
the preparation of a new appraisal satisfactory to the Required Lenders.

 

MAI - Member of the Appraisers Institute.

 

Material Action – shall mean, with respect to any Single Purpose Entity, any
action to file any insolvency, or reorganization case or proceeding, to
institute proceedings to have such Single Purpose Entity be adjudicated bankrupt
or insolvent, to institute proceedings under any applicable insolvency law, to
seek any relief under any law relating to relief from debts or the protection of
debtors, to consent to the filing or institution of bankruptcy or insolvency
proceedings against such Single Purpose Entity, to file a petition seeking, or
consent to, reorganization or relief with respect to such Single Purpose Entity
under any applicable federal or state law relating to bankruptcy or insolvency,
to seek or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian, or any similar official of or for such Single
Purpose Entity or a substantial part of its property, to make any assignment for
the benefit of creditors of such Single Purpose Entity, to admit in writing such
Single Purpose Entity’s inability to pay its debts generally as they become due
as part of a general scheme to induce an involuntary bankruptcy, or to take
action in furtherance of any of the foregoing.

 

Material Adverse Effect - shall mean a material adverse change in, or a material
adverse effect upon:

 

(a)          the condition (financial or otherwise), business, affairs,
properties, assets, liabilities (actual or contingent), operations or
performance of Borrower or Guarantor, in each case after giving effect to any
related transactions;

 

(b)          the ability of Borrower or Guarantor to pay, perform or observe any
of its respective obligations under any of the Loan Documents or Other
Agreements to which it is a party;

 

(c)          the validity, perfection or priority of any lien that is granted
(or that is intended to be granted) pursuant to any of the Security Documents;

 

(d)          the legality, validity, binding effect or enforceability of any of
the Loan Documents or on the ability of the Agent and the Lenders to enforce any
of their rights or remedies under any of the Loan Documents;

 

 16 

 

 

(e)          the ability of Borrower (i) to perform any of its material
obligations under the Operating Lease or to enforce the Operating Lease, or (ii)
to cause Tenant to perform any of its material obligations under the Franchise
Agreement or to enforce the Franchise Agreement; or

 

(f)          the ability of Borrower (i) to perform its obligations under the
Operating Lease or (ii) to enforce the Operating Lease; or

 

(g)          the use, operation, occupancy or value of the Property.

 

Maturity - the Maturity Date, or, if the Maturity Date has been extended
pursuant to the provisions of this Agreement, the then applicable Extended
Maturity Date, or in any instance, upon acceleration of the Loan, if the Loan
has been accelerated as a result of the occurrence of an Event of Default.

 

Maturity Date - subject to the Borrower's right to extend the same on the terms
and conditions set forth in Sections 2.2 and 2.3 below, the 15th day of August,
2021, being the date on which the Notes are due and payable in full.

 

Maximum Commitment – Seventeen Million Eight Hundred Thirty-Six Thousand and
no/100 Dollars ($17,836,000.00).

 

Maximum Legal Rate - on any day, the highest non-usurious rate of interest
permitted by applicable Law on such day, computed on the basis of the actual
number of days elapsed over a year of 360 days.

 

Maximum Loan Amount – as defined in Section 2.1.

 

Member - Procaccianti Hotel REIT, L.P., a Delaware limited partnership, which is
the Sole Member and the Manager of Borrower.

 

Minimum Counterparty Rating – shall mean a credit rating from Standard & Poor's
Rating Services and Fitch, Inc. of a least [“AA”] and from Moody's Investor
Services, Inc. of at least [“A-a2”].

 

Monthly Principal Payment Amount - as defined in Section 2.5.1.

 

Mortgage - as defined in Section 3.1.1.

 

NCF Payment Date – the fifteenth (15th) day of each calendar month, commencing
on the 15th day of the calendar month immediately following the first calendar
month with respect to which Borrower is required to deposit Net Cash Flow in the
Cash Reserve Account pursuant to the terms of Section 10.2 hereof.

 

NCF Period – the calendar month immediately preceding each NCF Payment Date
(e.g., in the case of the January 15, 2020 NCF Payment Date, the applicable NCF
Period will be the month of December, 2019).

 

 17 

 

 

Net Cash Flow - for any NCF Period, (i) all cash (including all Rents and other
revenues of every type and nature, but excluding security deposits) received by
Tenant, Borrower or the Hotel Manager with respect to the ownership and
operation of the Property during such NCF Period, minus (ii) all expenses
incurred in the normal course of business with respect to the Property and paid
by Tenant, Borrower or the Hotel Manager (or in the case of expenses that are
not paid monthly such as property taxes and insurance, which are accrued) during
such NCF Period, minus (iii) all principal and interest actually paid by
Borrower to Agent on account of the Loan during such NCF Period. Notwithstanding
the foregoing, if Borrower is then required to make monthly tax and insurance
escrow payments to Agent pursuant to the terms of Section 9.3.2 below, Borrower
shall not pay property taxes or insurance premiums (as applicable) to the
applicable taxing authorities and insurance companies (as applicable) and, for
purposes of calculating Net Cash Flow, such amounts shall not be subtracted
under clause (ii) of the preceding sentence. All computations of the items
included and deducted in items (i) and (ii) above shall be completed on a
consolidated basis between Borrower and Tenant.

 

Net Cash Flow Statement – a statement (which shall be in form, substance and
detail reasonably satisfactory to Agent and shall be certified by the chief
financial officer of the Borrower or similar officer to be true, accurate and
complete in all material respects) setting forth the Net Cash Flow of the
Property for the applicable NCF Period.

 

Net Operating Income - for any Calculation Period, the Property's Gross Income
for such Calculation Period minus the sum of (a) the Property's Operating
Expenses for such Calculation Period plus (b) the Capital Reserve Amount for
such Calculation Period.

 

Note - any individual promissory note of Borrower payable to the order of Agent,
as agent for Lenders, or to a Lender and evidencing all or a portion of the
Loan, including, without limitation, the Closing Note, and Notes means all of
the Notes, collectively; together with any renewals, extensions or modifications
thereof and substitutions therefor. To the extent that at any time there is only
one Note in effect, all references in this Agreement to the “Notes” shall be
deemed to refer to such single Note.

 

Notice of Borrowing - as defined in Section 6.1.

 

NRSF - net rentable square feet.

 

Obligations - all liabilities and obligations of Borrower to Agent and/or
Lenders under and with respect to the Loan, the Notes, this Agreement, any
Hedging Contracts and the other Loan Documents (including, without limitation,
the indemnity provisions thereof), and all renewals, increases, extensions,
modifications, rearrangements or restatements thereof, and all other advances,
debts, liabilities, obligations, covenants and duties owing, arising, due or
payable from Borrower to Agent and/or Lenders of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
arising under or with respect to this Agreement or any of the other Loan
Documents, whether direct or indirect, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising. The term
includes, without limitation, all principal, interest, charges, expenses, fees,
attorneys' fees and any other sums chargeable to Borrower under any of the Loan
Documents.

 

 18 

 

 

OFAC – the Office of Foreign Assets Control of the United States Department of
the Treasury.

 

Operating Expenses - all expenses of every kind incurred by Borrower or Tenant
in the normal course of business with respect to the ownership, operation,
leasing, maintenance and management of the Property during the Calculation
Period in question which, in accordance with accrual basis accounting and GAAP,
would be classified as expenses allocable to such Calculation Period for a
similar type of property, including, but not limited to, expenses for taxes,
utilities, insurance, repairs, replacements, maintenance, management fees in an
amount equal to the greater of (x) three percent (3%) of gross revenues from the
Property per annum or (y) actual management fees paid (subject to adjustment by
Agent in its reasonable discretion), salaries, advertising expenses,
professional fees, wages and utilities, and franchise, technology and marketing
fees in the amount of eight and one-half percent (8.5%) of gross revenues from
the Property per annum, but excluding: (i) any such expenses that are paid
directly by tenants pursuant to the terms of Approved Leases, (ii) depreciation,
(iii) debt service (including, if applicable, principal amortization payments)
on the Loan, and (iv) any reasonable non-recurring extraordinary expenses
incurred during the Calculation Period in question.

 

Operating Lease – means that certain Amended and Restated Hotel Lease Agreement
by and between Borrower and Tenant with respect to the Property dated as of the
date hereof.

 

Other Agreements - any and all agreements, instruments and documents (other than
this Agreement, the Notes and the Security Documents), heretofore, now or
hereafter executed by Borrower, Tenant or Guarantor and delivered to Agent
and/or Lenders with respect to the transactions contemplated by this Agreement
(including without limitation any Subordination Agreements and any Hedging
Contracts with Citizens or its successors or with any other Affiliate of
Citizens Financial Group, Inc.), together with related documentation, all as
amended, renewed, modified, extended or restated from time to time.

 

Participant Register – as defined in Section 16.1.5.

 

Patriot Act – as defined in Section 17.26.

 

Paydown Amount –the amount of Two Million Seven Hundred Forty-Four Thousand and
no/100 Dollars ($2,744,000.00), being the aggregate prepayment amount required
to reduce the LTV Ratio (based on the Approved Appraised Value of the Property
as of the date hereof) to equal or less than fifty-five percent (55%).

 

Payment Amount – a Loan Advance, an unreimbursed Agent Advance, any unreimbursed
Indemnified Liabilities, or any other amount that a Lender is required to fund
under this Agreement.

 

Payments - as defined in Section 15.11.

 

 19 

 

 

Permitted Additional Debt - as defined in Section 9.6.4.

 

Permitted Title Exceptions - real estate taxes and other governmental
assessments to the extent that the same are not yet due and payable and such
other matters as are (a) referenced in Exhibit B to the Mortgage or (b)
otherwise permitted under the terms of the Loan Documents.

 

Permitted Transactions - as defined in Section 9.6.2.

 

Permitted Transfers - as defined in Section 9.6.3.

 

Person - an individual, sole proprietorship, partnership, limited liability
company, corporation, joint stock company, joint venture, association, estate,
trust, business trust or unincorporated organization, or a Governmental
Authority.

 

Pledge and Security Agreement - as defined in Section 3.1.3.

 

P.M. - a time from and including twelve o'clock noon to and excluding twelve
o'clock midnight on any day using eastern time.

 

Prime Rate - a rate per annum equal to the rate of interest announced by Agent
from time to time as its “Prime Rate”. Any change in the Prime Rate shall be
effective immediately from and after such change in the Prime Rate. The Borrower
acknowledges that Agent may make loans to its customers above, at or below the
Prime Rate.

 

Prime Rate Loan - any Loan for the period(s) when the rate of interest
applicable to such Loan is calculated by reference to the Prime Rate.

 

Prime Rate Margin - as of the closing of the Loan, the Prime Rate Margin shall
be three percent (3.0%). Upon and following any prepayment of the Loan, in
accordance with the terms and conditions of Section 2.5.3 hereof, in an amount
sufficient to reduce the LTV Ratio (based on the Approved Appraised Value of the
Property) to not more than fifty-five percent (55%), the Prime Rate Margin shall
thereafter be reduced to two and one-half percent (2.5%).

 

Principal Repayment Amount - any regularly scheduled reductions in the
outstanding principal of the Loan to be made on any Interest Payment Date.

 

Prohibited Hazardous Substances – as defined in the definition of Environmental
Site Assessment.

 

Prohibited Transaction – any transaction set forth in Section 406 of ERISA or
Section 4975 of the Code for which there is no applicable statutory or
regulatory exemption (including a class exemption or any individual exemption).

 

Property - as defined in Section 1.3.

 

 20 

 

 

Pro Rata Share - means, with respect to each Lender at any time, a fraction
expressed as a percentage, the numerator of which is the amount of the
Commitment of such Lender at such time and the denominator of which is the
amount of the Aggregate Commitments at such time or, if the Aggregate
Commitments have been terminated, a fraction (expressed as a percentage, carried
out to the thirteenth decimal place), the numerator of which is the total
outstanding amount of all of the Obligations held by such Lender at such time
and the denominator of which is the total outstanding amount of all Obligations
at such time. The initial Pro Rata Share of each Lender named on the signature
pages hereto is set forth opposite the name of that Lender on Exhibit D.

 

RCRA - the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §6901, et
seq.), as amended from time to time.

 

Register - as defined in Section 16.1.3.

 

Registered Land Surveyor - a land surveyor or engineer licensed as such in the
jurisdiction where the Property is situated.

 

Repair Work - as defined in Section 14.1.

 

Repayment Guaranty Reduction - as defined in Section 10.3.1.

 

Repayment Guaranty Release - as defined in Section 10.3.2.

 

Reportable Event - any of the events set forth in Section 4043(b) of ERISA.

 

Required Equity Contribution - as defined in Section 7.1.27.

 

Required Interest Rate Protection Agreement – singly and collectively, one or
more Interest Rate Protection Agreements issued by Agent or an Affiliate of
Agent or by another Counterparty which is reasonably acceptable to Agent, which
Counterparty has a Minimum Counterparty Rating (except if such Counterparty is
Agent or an Affiliate of Agent it shall not be required to have a Minimum
Counterparty Rating), which agreement(s) shall:

 

(a)          be for a notional amount equal to the Maximum Loan Amount, less the
Paydown Amount;

 

(b)          if such agreement is a cap agreement, provide for strike price of
no greater than three percent (3%) per annum;

 

(c)          have a term which does not expire prior to the Maturity Date or the
then applicable Extended Maturity Date;

 

(d)          be otherwise in form and on terms that are reasonably satisfactory
to Agent; and

 

 21 

 

 

(e)          be pledged and assigned to Agent, for the benefit of the Lenders,
as additional security for the payment and performance of the Borrower's
Obligations pursuant to the Assignment of Interest Rate Protection Agreement,
which pledge and assignment shall have been acknowledged and consented to by the
Counterparty to such Interest Rate Protection Agreement in form reasonably
satisfactory to Agent.

 

In connection with any Required Interest Rate Protection Agreement, unless
Agent, any Lender or any Affiliate of Agent or any Lender is the Counterparty
thereunder, Borrower shall obtain and deliver to Agent an opinion of counsel
from counsel for the Counterparty (upon which Agent and Lenders and their
respective successors and assigns may rely) which opinion must be in form and
substance reasonably acceptable to Agent.

 

Any Person that at any time obtains a Required Interest Rate Protection
Agreement or any guarantor of such obligor’s obligations in respect of any such
Required Interest Rate Protection Agreement (including but not limited to any
general partner of any thereof) is required to be an “eligible contract
participant” as such term is defined in the Commodity Exchange Act (7 U.S.C. § 1
et seq.), as amended from time to time, and any successor statute.

 

Required Lenders - any Lender or Lenders holding an aggregate Pro Rata Share of
the outstanding principal balance of the Loan in an amount in excess of 66.67%
of the total outstanding principal balance of the Loan (unless there are only
two Lenders, in which case Required Lenders shall mean both such Lenders);
provided that the outstanding principal balance of the Loan that is held by any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.

 

Schedule of Lenders - the schedule of Lenders party to this Agreement as set
forth on Exhibit D, as it may be modified from time to time in accordance with
this Agreement.

 

Second Extended Maturity Date – as defined in Section 2.2.

 

Second Extended Term – as defined in Section 2.2.

 

Section - when followed by a number, the section or subsection of this Agreement
bearing that number.

 

Security - as defined in Section 3.1.

 

Security Documents - the Mortgage, the Assignment of Leases and Rents, the
Environmental Indemnity Agreement, the Pledge and Security Agreement, the
Collateral Assignment of Contracts, Licenses and Permits, the Tenant Collateral
Assignment of Contracts, Licenses and Permits, the Tri-Party Agreement, the
Pledge Agreement Regarding Liquor License, the Subordination of Operating Lease,
the Guaranty, the Assignment of Interest Rate Protection Agreement and
associated UCC Financing Statements; and any so-called Blocked Account Control
Agreement(s) or Deposit Account Control Agreement(s); together with any
modifications thereof, additions thereto and substitutions therefor.

 

 22 

 

 

Single Purpose Entity - means a limited partnership or limited liability company
which, at all times since its formation and thereafter until the Loan has been
repaid in full, (a) was organized solely for the purpose of owning the Property,
(b) has not and will not engage in any business unrelated to the ownership of
the Property, (c) has not and will not have any assets other than those related
to the Property, (d) except as otherwise expressly permitted by the Loan
Documents has not and will not engage in, seek or consent to any dissolution,
winding up, liquidation, consolidation, or merger, (e) will not amend its
certificate of limited partnership, certificate of formation, operating
agreement or partnership agreement without the prior written consent of Agent in
any manner that (I) violates the single purpose covenants set forth in this
Agreement, or (II) amends, modifies or otherwise changes any provision thereof
that by its terms cannot be modified at any time when the Loan is outstanding or
by its terms cannot be modified without Agent’s consent, (f) has not and will
not fail to correct any known misunderstanding regarding the separate identity
of such entity, (g) has maintained and will maintain its accounts, books and
records separate from any other Person provided that this clause shall not
prohibit or restrict Borrower’s financial statements from being consolidated
with financial statements for Guarantor or any other constituent owner, (h) has
not and will not commingle its funds or assets with those of any other entity,
(i) has held and will hold its assets in its own name, (j) except to the extent
that Borrower is, and/or is identified as, a subsidiary or affiliate of
Guarantor or any other constituent owner, has conducted and will conduct its
business in its name or under the tradename of the hotel pursuant to the
Franchise Agreement, (k) has paid and will pay its liabilities, including
salaries of any employees (if any), out of its own funds and assets, to the
extent there exists sufficient net cash flow from the Property or the Borrower,
as applicable, to do so, (l) has observed and will observe all limited
partnership (or, if applicable, limited liability company) formalities, (m) has
no Indebtedness other than Indebtedness which is permitted under the Loan
Documents (including without limitation Section 9.6 of this Agreement), (n) has
not and will not assume or guarantee or become obligated for the debts of any
other Person other than as expressly permitted under the Loan Documents, or hold
out its credit as being available to satisfy the obligations of any other entity
Person, (o) will not acquire obligations or securities of its members or
partners, as applicable, (p) except as provided in the Loan Documents, has not
and will not pledge its assets for the benefit of any other Person, (q) except
to the extent that Borrower is, and/or is identified as, a subsidiary or
Affiliate of Guarantor or any other constituent owner, has held and identified
itself and will hold itself out and identify itself as a separate and distinct
entity under its own name and not as a division or part of any other Person,
except as may be customary and appropriate with respect to hotel operations
pursuant to the Franchise Agreement (r) has not made and will not make loans to
any Person, provided that, for the avoidance of doubt, the provision of any
allowance to any tenant in connection with any Approved Lease of the Property
shall not violate this clause (r), (s) except to the extent that Borrower is,
and/or is identified as, a subsidiary or Affiliate of Guarantor or any other
constituent owner, has not and will not identify its members or partners, as
applicable, or any Affiliates of any of them, as a division or part of it, (t)
has not entered and will not enter into or be a party to, any transaction with
its members or partners or its Affiliates except in the ordinary course of its
business and on terms which are intrinsically fair and are not less favorable to
it than would be obtained in a comparable arms-length transaction with an
unrelated third party, (u) with respect to Borrower, if a single member limited
liability company, shall have at least two springing members, one of which, upon
the dissolution of such sole member or the withdrawal or the disassociation of
such sole member from Borrower, shall immediately become the sole member of
Borrower, and the other of which shall become the sole member of Borrower if the
first such springing member is no longer available to serve as such sole member,
and (v) shall at all times have at least one (1) duly appointed Independent
Director or Independent Manager, and shall not, at any time, take any Material
Action without the prior unanimous written consent of all Independent Directors
or Independent Managers.

 

 23 

 

 

SNDA Agreement - as defined in Section 9.20.5.

 

Statement - as defined in Section 17.24.

 

Subordination Agreement - a written agreement entered into by and among
Borrower, Agent and the obligee of any Inter-Company Loan which agreement is in
form and substance reasonably satisfactory to the Agent and which provides,
inter alia, (a) that such Inter-Company Loan is fully subordinated to the Loan,
(b) that, so long as any of the Obligations are outstanding, such Inter-Company
Loan shall not be secured by any lien or encumbrance on any of Borrower's assets
and no claims with respect to such Inter-Company Loan will be asserted in any
bankruptcy proceeding or other creditors' rights proceeding with respect to the
Borrower or the Property and (c) that upon the declaration of any Event of
Default, such Inter-Company Loan shall automatically become not payable and not
collectible until all of the Obligations have been satisfied in full and (d) no
payments shall be made or accepted on such Inter-Company Loan at any time when
Net Cash Flow is required to be deposited in the Cash Reserve Account pursuant
to Section 10.2 below.

 

Subordination of Operating Lease - that certain Subordination, Assignment and
Security Agreement among Borrower, Tenant and Agent, on behalf of itself and the
other Lenders, dated of even date herewith.

 

Substitute Note(s) - as defined in Section 9.30.

 

Survey - current as-built survey of the Property, certified to Agent by a
Registered Land Surveyor, showing all existing Improvements, all easements
affecting the Land and the points of access to the public road upon which the
Land fronts and which is otherwise in compliance with Agent's survey
requirements previously delivered to Borrower.

 

Tax Escrow Account - an interest bearing account which Borrower is required to
establish with Agent prior to the first date that any funds are required to be
deposited in such account pursuant to the terms of this Agreement; which account
shall be (i) funded and disbursed in accordance with the terms of Article 8 of
the Mortgage and Section 9.3 hereof and (ii) pledged and assigned to Agent as
additional security for the payment, performance and observance of the
Obligations.

 

Taxes – as defined in Section 2.11.5.

 

Tenant – shall mean PHR TCI OPCO SUB, LLC, a Michigan limited liability company.

 

 24 

 

 

Tenant Collateral Assignment of Contracts, Licenses and Permits – that certain
Collateral Assignment and Security Agreement In Respect of Contracts, Licenses
and Permits of even date herewith, executed by Tenant in favor of Borrower.

 

Tenant LC Proceeds – as defined in Section 10.5.2.

 

Tenant Letter of Credit - a letter of credit issued on behalf of a tenant or
other occupant under a lease or other agreement for occupancy of space in the
Improvements or on behalf of a lease guarantor for the benefit of Borrower or
Agent as security for the payment and performance by such tenant (or such Lease
guarantor or such other occupant) of its obligations under its respective lease
(or lease guaranty) or other agreement.

 

Term - the period commencing on the date of the closing of the Loan and ending
on the Maturity Date, or, if the Maturity Date has been extended pursuant to the
provisions of this Agreement, the then applicable Extended Maturity Date.

 

Third Extended Maturity Date – as defined in Section 2.2.

 

Third Extended Term – as defined in Section 2.2.

 

Third Extended Term Required DSC Amount - as defined in Section 10.2.1.

 

Tri-Party Agreement - that certain Tri-Party Agreement among Tenant, Hotel
Manager and Agent, on behalf of itself and the other Lenders, dated of even date
herewith.

 

UCC - as applicable, the Uniform Commercial Code as in effect from time to time
in the Commonwealth of Massachusetts or any other jurisdiction whose Laws govern
the creation, attachment, perfection or priority of any security interest
(including, for this purpose, any collateral assignment or lien) granted or
purported to be granted to or for the benefit of Agent or any Lender pursuant to
the Loan Documents, including (but not limited to) any jurisdiction where
Borrower or any of the Collateral is deemed located.

 

UCC Financing Statements – collectively, all financing statements under the UCC
filed or recorded from time to time by or for the benefit of Agent or any Lender
in connection with the Loan.

 

1.1.2           Accounting and Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP applied
on a consistent basis by the accounting entity to which they refer, and all
financial data pursuant to this Agreement shall be prepared in accordance with
such principles. All other terms contained in this Agreement shall have, when
the context so indicates, the meanings provided for by the UCC to the extent the
same are used or defined therein. However, if a term is defined in Article 9 of
the UCC differently than in another Article of the UCC, the term has the meaning
specified in Article 9 of the UCC.

 

 25 

 

 

1.1.3           Certain Matters of Construction. The terms “herein”, “hereof”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used shall be deemed to cover all genders. The section titles, table of contents
and list of exhibits appear as a matter of convenience only and shall not affect
the interpretation of this Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any instruments or agreements, including, without
limitation, references to any of the Loan Documents, shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof. A reference to any agreement, budget, document or schedule shall
include such agreement, budget, document or schedule as revised, amended,
modified, restated or supplemented from time to time in accordance with its
terms and the terms of this Agreement. The singular includes the plural and the
plural includes the singular. A reference to any Person includes its permitted
successors and permitted assigns. The words “include”, “includes” and
“including” are by way of example and are not limiting. The words “approval” and
“approved”, as the context so determines, means an approval in writing given to
the party seeking approval after full and fair disclosure to the party giving
approval of all material facts necessary in order to determine whether approval
should be granted. Reference to a particular “Section” refers to that Section of
this Agreement unless otherwise indicated.

 

1.2            Borrower and Other Loan Parties. Borrower is a limited liability
company organized under the laws of the State of Delaware of which the Member is
the only manager and only member. The Manager is a limited partnership organized
under the laws of the State of Delaware. Guarantor is a limited liability
company organized under the laws of the State of Delaware.

 

1.3            Land and Improvements; Property. Borrower proposes to acquire
that certain parcel of land located in Traverse City, State of Michigan which is
more particularly described in Exhibit A to the Mortgage (“Land”). The Land is
presently improved with an approximately 75,715 NRSF building located at 263
West Grandview Parkway, Traverse City, Grand Traverse County, Michigan 49684 and
operated as a 107-room Hotel Indigo (the “Improvements”). The Land and
Improvements are herein collectively called the “Property”.

 

1.4            Use of Loan Proceeds. Borrower has applied to Agent for a loan of
up to Seventeen Million Eight Hundred Thirty-Six Thousand and no/100 Dollars
($17,836,000.00) (“Loan”), the proceeds of which are to be used, to the extent
sufficient therefor: (a) to pay a portion of the Acquisition Costs of the
Property, and (b) to pay certain costs and expenses incurred by Borrower in
connection with the closing the Loan.

 

1.5            Loan. Subject to all of the terms, conditions and provisions of
this Agreement, and of the agreements and instruments referred to herein, each
of the Lenders severally agrees to make such Lender's Pro Rata Share of the Loan
to the Borrower (each Lender's “Commitment”). Borrower agrees to accept and
repay the Loan in accordance with the terms hereof. The maximum cumulative
amount of all advances of Loan Proceeds (i.e., regardless of principal payments)
shall not exceed the Maximum Loan Amount. Unless sooner terminated in accordance
with the terms of this Agreement, the obligation of each Lender to make Loan
Advances hereunder shall commence on the date of this Agreement and shall
terminate on the Commitment Termination Date.

 

 26 

 

 

2.              LOAN PROVISIONS.

 

2.1            Amount of Loan. Subject to the terms and conditions of this
Agreement and the other Loan Documents, each Lender severally agrees to advance
to Borrower its respective Pro Rata Share of Loan Proceeds in an amount equal to
the lesser of (a) sixty-five percent (65%) of the Approved Appraised Value on an
“as stabilized” basis as shown in the MAI appraisal of the Property received and
approved by the Lenders prior to the date of this Agreement, (b) sixty-nine
percent (69%) of the Acquisition Costs approved by Agent, (c) such amount which
results in a minimum Debt Yield of ten and one-half percent (10.5%), or (c) the
Maximum Commitment (such lesser amount being herein referred to as the “Maximum
Loan Amount”). Based on the foregoing (including the Approved Appraised Value of
the Property as of the date hereof), as of the date hereof, the Maximum Loan
Amount is Seventeen Million Eight Hundred Thirty-Six Thousand and no/100 Dollars
($17,836,000.00).

 

2.2            Term of Loan; Extension Right. The Loan shall be for a term (the
“Initial Term”) commencing on the date hereof and ending on the Maturity Date.
The Initial Term may be extended for a “First Extended Term” ending on the 15th
day of August, 2022 (“First Extended Maturity Date”), the First Extended Term
may be further extended for a “Second Extended Term” ending on the 15th day of
August, 2023 (“Second Extended Maturity Date”), and the Second Extended Term may
be further extended for a “Third Extended Term” ending on the 15th day of
August, 2024 (“Third Extended Maturity Date”), in each case, upon satisfaction
of the conditions set forth in Section 2.3 below. The First Extended Term,
Second Extended Term, and the Third Extended Term are herein singly and
collectively referred to as the “Extended Term”. The First Extended Maturity
Date, the Second Extended Maturity Date, and the Third Extended Maturity Date
are herein singly and collectively referred to as the “Extended Maturity Date”.

 

2.3            Conditions to Extending Maturity Date. Subject to the
satisfaction of each of the following conditions, Borrower, at its option, may
elect to extend the Maturity Date of the Loan until the First Extended Maturity
Date and Borrower may thereafter elect to further extend the First Extended
Maturity Date to the Second Extended Maturity Date, and the Second Extended
Maturity Date to the Third Extended Maturity Date:

 

2.3.1           Notice From Borrower. Borrower shall have given Agent written
notice (an “Extension Notice”) of Borrower's request to exercise its extension
right at least forty-five (45) days, but not more than one hundred twenty (120)
days, before the Maturity Date or, in the case of a request for an extension for
the Second Extended Term, before the First Extended Maturity Date, or in the
case of a request for an extension for the Third Extended Term, before the
Second Extended Maturity Date;

 

2.3.2           No Default. No Default shall exist;

 

2.3.3           Debt Service Coverage Ratio. The Debt Service Coverage Ratio
shall: (a) in the case of a requested extension for the First Extended Term, be
equal to or greater than 1.35 to 1, and (b) in the case of a requested extension
for each of the Second Extended Term or Third Extended Term, be equal to or
greater than 1.40 to 1;

 

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2.3.4           LTV Ratio. The LTV Ratio (based on the then “as is” Approved
Appraised Value of the Property) shall be less than sixty-five percent (65%);

 

2.3.5           Conditions Satisfied. All of the conditions set forth in Section
7 of this Agreement, to the extent applicable, shall continue to be satisfied;

 

2.3.6           Extension Fee. (a) In the case of a requested extension for the
First Extended Term, an extension fee in an amount equal to 0.1% of the then
outstanding Loan Proceeds shall have been paid to the Agent, for the pro rata
account of each Lender, on or prior to the Maturity Date, and (b) in the case of
a requested extension for the Second Extended Term or Third Extended Term, an
additional extension fee in an amount equal to 0.2% of the then outstanding Loan
Proceeds shall have been paid to Agent, for the pro rata account of each Lender,
on or prior to the First Extended Maturity Date or Second Extended Maturity
Date, as applicable (any extension fee that is payable pursuant to this Section
2.3.6 is referred to in this Agreement as an “Extension Fee”);

 

2.3.7           Additional Documents. Borrower shall have executed and/or
delivered to Agent and Lenders such agreements and documents and furnished to
Agent and Lenders such additional information as Agent or the Required Lenders
may require in their commercially reasonable discretion incident to the
extension, including, without limitation, evidence satisfactory to Agent that
the Hotel Management Agreement, Franchise Agreement, and any licenses,
management or other agreements with respect to food and beverage service and
parking are in full force and effect; and

 

2.3.8           Required Interest Rate Protection Agreement. Borrower shall have
delivered to Agent a Required Interest Rate Protection Agreement having a term
which does not expire prior to the then applicable Extended Maturity Date; and

 

2.3.9           Before End of Initial Term. Each of the foregoing conditions
shall be satisfied on the date of receipt of Borrower’s notice under Section
2.3.1 (other than the condition described in Section 2.3.6, which shall be
required to be satisfied on or prior to the Maturity Date or on or prior to the
First Extended Maturity Date or Second Extended Maturity Date, as applicable),
and on the Maturity Date, and, in the case of a request for an extension for the
Second Extended Term or Third Extended Term, on the First Extended Maturity Date
and Second Extended Maturity Date, as applicable.

 

Within thirty (30) days following receipt by Agent of any Extension Notice,
Agent shall notify Borrower in writing as to what other documents, information
or certificates are required to be provided by Borrower to Agent pursuant to
Section 2.3.7, above. In connection with the calculation of the LTV Ratio,
unless waived by all Lenders, a new MAI appraisal of the Property shall be
required, which appraisal must be in all respects satisfactory to the Required
Lenders. Borrower shall pay all costs incurred in connection with obtaining any
such new appraisal of the Property.

 

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If all of the conditions to extension have been satisfied, other than the
conditions imposed under Section 2.3.3 and/or Section 2.3.4 above, then Borrower
shall be entitled to satisfy such conditions by making a principal payment not
later than fifteen (15) days prior to the Maturity Date (or, if applicable, not
later than fifteen (15) days prior to the First Extended Maturity Date or the
Second Extended Maturity Date) in such amount as would be required (as
reasonably determined by Agent) to satisfy both of such conditions, subject to
Borrower having given Agent written notice of its intention to make such
principal payment not later than thirty (30) days prior to the Maturity Date
(or, if applicable, the First Extended Maturity Date or Second Extended Maturity
Date).

 

If all of the conditions to extension have been satisfied, other than payment of
the then applicable Extension Fee, Agent shall so notify Borrower and, upon
Agent's receipt of the then applicable Extension Fee for the pro rata account of
Lenders not later than thirty (30) days prior to the Maturity Date, or, in the
case of any request for an extension to the Second Extended Maturity Date or
Third Extended Maturity Date, not later than thirty (30) days prior to the First
Extended Maturity Date or Second Extended Maturity Date, as applicable, so long
as no Default exists, the Loan Term shall be extended until the applicable
Extended Maturity Date.

 

2.4           Interest.

 

2.4.1           Interest Rate.

 

(a)           Interest Provisions.  Interest on the outstanding principal
balance of the Loan shall accrue as (i) a LIBOR Rate Loan or (ii) if applicable
pursuant to Section 2.4.1(b) or Section 2.11, a Prime Rate Loan. Interest on the
outstanding principal amount of the Loan, when classified as a: (i) LIBOR Rate
Loan, shall accrue during each LIBOR Interest Period at a rate per annum equal
to the sum of the Adjusted LIBOR Rate for such LIBOR Interest Period plus the
applicable LIBOR Rate Margin, and shall be due and payable on each Interest
Payment Date and on the Maturity Date, and (ii) Prime Rate Loan, shall accrue at
a rate per annum equal to the sum of the Prime Rate plus the applicable Prime
Rate Margin, and shall be due and payable on each Interest Payment Date and on
the Maturity Date. Interest shall be calculated for the actual number of days
elapsed on the basis of a 360-day year, including the first date of the
applicable period to, but not including, the date of repayment.

 

The “Applicable Interest Rate” shall be the rate for a LIBOR Rate Loan except to
the extent otherwise provided in this Agreement, in which case the Applicable
Interest Rate shall be the rate for a Prime Rate Loan.

 

For so long as LIBOR Rate Loans are available pursuant to the terms of this
Agreement, only LIBOR Rate Loans shall be permitted. During any period that
LIBOR Rate Loans are not available pursuant to the terms of this Agreement, the
entire outstanding principal amount of the Loan shall be a Prime Rate Loan.
Borrower shall have no right to elect to have any of the outstanding principal
amount of the Loan be a Prime Rate Loan.

 

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(b)           Automatic Rollover of LIBOR Rate Loan. Upon the expiration of a
LIBOR Interest Period, the LIBOR Rate Loan shall automatically be continued as a
LIBOR Rate Loan at the then applicable Adjusted LIBOR Rate plus the applicable
LIBOR Rate Margin and in an amount equal to the principal amount of the expiring
LIBOR Rate Loan less any Principal Repayment Amount made by Borrower; provided,
however, that no portion of the outstanding principal amount of a LIBOR Rate
Loan may be continued as a LIBOR Rate Loan when any Event of Default has
occurred and is continuing. If any Event of Default has occurred and is
continuing (if the Required Lenders do not otherwise elect to exercise any right
to accelerate the Loan hereunder), the LIBOR Rate Loan shall automatically be
continued as a Prime Rate Loan on the first day of the next Interest Period.

 

2.4.2           Intentionally Omitted.

 

2.4.3           Default Rate. Notwithstanding anything to the contrary set forth
in this Agreement, from and after the occurrence of an Event of Default and
during the continuation thereof (whether or not Agent has accelerated payment of
the Loan) and from and after the Maturity Date (or, if Borrower has elected and
qualified for an extension of the initial Maturity Date in accordance with
Section 2.3 above, from and after the then applicable Extended Maturity Date),
the outstanding principal balance of all Obligations (including all unpaid
installments of interest under the Note) shall bear interest, calculated daily
(computed on the actual days elapsed over a year of 360 days), at the Default
Rate.

 

2.4.4           Late Charges. In the event that any regularly scheduled monthly
payment of interest or principal and interest (excluding, for the avoidance of
doubt, any principal payment due at Maturity), shall not be received by Agent
within ten (10) days after the date such payment is due, Agent shall have the
right, at its sole option and without notice to the Borrower, such notice being
expressly waived hereby, to assess the Borrower a late payment charge (“Late
Charge”) in the amount of five percent (5%) for each Dollar ($1.00) of such
overdue monthly installment, which shall become immediately due and payable to
Agent, for the pro rata benefit of Lenders, as agreed compensation to Lenders
for the additional costs and expenses reasonably expected to be incurred by
Lenders by reason of such nonpayment, such as in contacting the Borrower and
arranging for and processing remedial payment. The Borrower acknowledges that
the exact amount of such costs and expenses may be difficult, if not impossible,
to determine with certainty, and further acknowledges and confesses the amount
of such charge to be a consciously considered, good faith estimate of the actual
damage to Lenders by reason of such default. The payment of such Late Charge
shall be secured by the Security Documents, shall be payable on demand, but in
any event not later than the due date of the next regularly scheduled monthly
payment hereunder, and shall apply only to monthly installments due and payable
hereunder prior to any acceleration by Agent of the Obligations evidenced
hereby. Whether or not expressed, this election shall not impair the Lenders’
further right to interest on the unpaid amount at the Default Rate from the date
such payment was due through the date of actual payment.

 

2.4.5           Interest Installments. All accrued, but unpaid, interest on the
Notes shall be due and payable, in arrears, on each Interest Payment Date, as
applicable, and on the Maturity Date (or, if applicable, the applicable Extended
Maturity Date). Notwithstanding anything to the contrary set forth in the Notes,
Borrower shall pay all such interest to Agent for the pro rata account of each
Lender.

 

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2.4.6           Recapture of Interest. Notwithstanding the foregoing, if at any
time the amount of interest to be paid by Borrower would exceed the Maximum
Legal Rate, then the interest payable under this Agreement shall be computed
upon the basis of the Maximum Legal Rate, but any subsequent reduction in the
Applicable Interest Rate shall not reduce such interest thereafter payable
hereunder below the amount computed on the basis of the Maximum Legal Rate until
the aggregate amount of such interest accrued and payable under this Agreement
equals the total amount of interest which would have accrued if such interest
had been at all times computed solely on the basis of the Applicable Interest
Rate.

 

2.4.7           Maximum Legal Rate. All agreements between Borrower, Guarantor,
Agent and Lenders are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of maturity of the
Obligations or otherwise, shall the amount paid or agreed to be paid to Agent or
Lenders for the use or the forbearance of the Indebtedness evidenced by the
Notes exceed the Maximum Legal Rate. As used herein, the Maximum Legal Rate
shall mean the Maximum Legal Rate in effect as of the date hereof; provided,
however, in the event that there is a change in the Maximum Legal Rate which
results in a higher permissible rate of interest, then the Maximum Legal Rate
shall be governed by such new Law as of its effective date. In this regard, it
is expressly agreed that it is the intent of Borrower, Agent and Lenders in the
execution, delivery and acceptance of this Agreement and the Notes to contract
in strict compliance with the Laws of the Commonwealth of Massachusetts from
time to time in effect. If, under or from any circumstances whatsoever,
fulfillment of any provision hereof or of any of the other Loan Documents at the
time of performance of such provision shall be due, shall involve transcending
the limit of such validity prescribed by applicable Law, then the obligation to
be fulfilled shall automatically be reduced to the limits of such validity, and
if under or from any circumstances whatsoever Agent or any Lender should ever
receive as interest any amount which would exceed the Maximum Legal Rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance of the Obligations and not to the payment of interest.
This provision shall control every other provision of all agreements between
Borrower, Guarantor, Agent and Lenders.

 

2.4.8           Amendments to Current Law. If the interest that is payable
hereunder has been limited by applicable state or federal Law and the applicable
state or federal Law is amended in the future to allow a greater rate of
interest to be charged under this Agreement or the other Loan Documents than is
presently allowed by applicable state or federal Law, then the limitation of
interest hereunder shall be increased to the lesser of (a) the true contract
rate, or (b) maximum rate of interest allowed by applicable state or federal Law
as amended, which increase shall be effective hereunder on the effective date of
such amendment.

 

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2.4.9           Liquidated Damages. Borrower acknowledges that the occurrence of
any Event of Default will (a) require Agent and Lenders to incur additional
expenses in servicing and administering the Loan and (b) result in loss to Agent
and Lenders of the use of the money due and impede Agent and Lenders in meeting
their other financial and loan commitments. Borrower further acknowledges that
the damages caused thereby will be extremely difficult and impractical to
ascertain. Accordingly, Borrower agrees that any Late Charge and/or interest at
the Default Rate imposed on Borrower under this Agreement represent the
reasonable estimate by Agent, Lenders and Borrower of a fair compensation for
the loss that may be sustained by Agent and Lenders due to the failure of
Borrower to make timely payments and further agrees that both the imposition of
the Late Charge and the accrual of interest at the Default Rate constitute a
reasonable estimate of the damages to Agent and Lenders resulting from the Event
of Default, regardless of whether there has been acceleration of the Loan.

 

2.5           Principal Repayment.

 

2.5.1           Principal Amortization. Except as may be required pursuant to
Sections 10.2 and 14, no principal amortization will be required prior to the
Amortization Commencement Date. Thereafter, in addition to any principal
payments that may be required pursuant to Section 10.2, commencing on the first
Interest Payment Date immediately following the Amortization Commencement Date
(provided that the Amortization Commencement Date has not been extended to
Maturity, in accordance with the terms and conditions set forth in the
definition of “Amortization Commencement Date”) and continuing on each Interest
Payment Date thereafter including, if the Maturity Date is extended pursuant to
Section 2.2 and Section 2.3, during any Extended Term, Borrower shall make a
principal payment to Agent, for the pro rata benefit of each Lender, in an
amount equal to the hereinafter defined “Monthly Principal Payment Amount”. The
Monthly Principal Payment Amount is defined as an amount equal to Thirty Five
Thousand and no/100 Dollars ($35,000.00) per month. Monthly installments of
interest on the Loan shall be payable in full concurrently with such monthly
principal payments. In any event, if not sooner paid, the entire outstanding
principal balance of the Loan, together with all accrued and unpaid interest and
all fees, expenses and other amounts that are payable pursuant to the terms of
the Loan Documents, shall be due and payable in full at Maturity.
Notwithstanding the foregoing, upon and following any prepayment of the Loan in
accordance with the terms and conditions of Section 2.5.3 hereof, in an amount
sufficient to reduce the LTV Ratio (based on the Approved Appraised Value of the
Property as of the date hereof) to equal or less than fifty-five percent (55%),
as set forth in the definition of “Amortization Commencement Date”, commencing
on the first Interest Payment Date immediately following the date of such
prepayment, Borrower’s monthly payments hereunder and/or under any Note shall
revert to payments of interest only, and no further principal amortization will
be required hereunder and/or under any Note until the Maturity Date (or, if the
Maturity Date has been extended pursuant to the provisions of this Agreement,
the then applicable Extended Maturity Date).

 

2.5.2            Intentionally Omitted.

 

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2.5.3           Prepayment and Certain Payments.

 

(a)           Prepayment Notice and Terms. The Loan may be prepaid in whole or
in part at any time (in a minimum principal amount of $100,000, except in the
case of any prepayments made pursuant to Section 10.2 which shall be in the
amount required thereunder), upon at least three (3) Business Days prior written
notice to Agent (which notice may be subsequently withdrawn by Borrower in
writing as long as (i) such withdrawal is delivered to Agent at least three (3)
Business Days prior to the scheduled prepayment date or, if a scheduled sale or
refinancing of the Property fails to close due to failure to satisfy any closing
conditions or buyer default that occurs after the commencement of such three (3)
day period, such withdrawal notice is delivered to Agent prior to or on the
scheduled prepayment date and (ii) Borrower reimburses Agent for any costs and
expenses actually incurred by Agent, including actual and reasonable attorneys'
fees and expenses, in connection with preparing for the scheduled prepayment),
provided that Borrower shall be obligated to pay any LIBOR Breakage Fees
associated with prepayment of any outstanding principal of the Loan accruing
interest based on a LIBOR Rate, and, in the event that Borrower has entered into
any Hedging Contracts, Borrower shall be obligated to pay any fees or penalties
pursuant to such agreements evidencing the same.

 

(b)           Voluntary Prepayment of LIBOR Rate Loans. LIBOR Rate Loans may be
prepaid upon the terms and conditions set forth herein. For LIBOR Rate Loans in
connection with which the Borrower has or may incur Hedging Obligations,
additional obligations may be associated with prepayment, in accordance with the
terms and conditions of the applicable Hedging Contracts. The Borrower shall
give the Agent, no later than 10:00 A.M., eastern time, at least three (3)
Business Days' notice of any proposed prepayment of any LIBOR Rate Loans (which
notice may be subsequently withdrawn by Borrower in writing as long as (i) such
withdrawal is delivered to Agent at least three (3) Business Days prior to the
scheduled prepayment date or, if a scheduled sale of the Property fails to close
due to failure to satisfy any closing conditions or buyer default that occurs
after the commencement of such three (3) day period, such withdrawal notice is
delivered to Agent prior to or on the scheduled prepayment date and (ii)
Borrower reimburses Agent for any costs and expenses actually incurred by Agent,
including actual and reasonable attorneys' fees and expenses, in connection with
preparing for the scheduled prepayment), specifying the proposed date of payment
of such LIBOR Rate Loans, and the principal amount to be paid. Each partial
prepayment of the principal amount of LIBOR Rate Loans shall be in an integral
multiple of $100,000 and accompanied by the payment of all charges outstanding
on such LIBOR Rate Loans (including the LIBOR Breakage Fee) and of all accrued
interest on the principal repaid to the date of payment.

 

(c)           LIBOR Breakage Fee. Upon any prepayment of a LIBOR Rate Loan on
any day that is not the last day of the relevant LIBOR Interest Period
(regardless of the source of such prepayment and whether voluntary, by
acceleration or otherwise), Borrower shall pay an amount (“LIBOR Breakage Fee”),
as calculated by the Agent, equal to the amount of any losses, expenses and
liabilities (including without limitation any loss of margin and anticipated
profits) that Lenders may sustain as a result of such payment. The Borrower
understands, agrees and acknowledges that: (i) the Lenders do not have any
obligation to purchase, sell and/or match funds in connection with the use of
the LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Rate
Loan, (ii) the LIBOR Rate may be used merely as a reference in determining such
rate, and (iii) the Borrower has accepted the LIBOR Rate as a reasonable and
fair basis for calculating the LIBOR Breakage Fee and other funding losses
incurred by the Lenders. Borrower further agrees to pay the LIBOR Breakage Fee
and other funding losses, if any, whether or not any Lender elects to purchase,
sell and/or match funds. Borrower shall pay all LIBOR Breakage Fees within ten
(10) days following Agent’s written request for payment of such fees.

 

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(d)           Application of Prepayments. Any partial prepayment of principal
shall first be applied to any installment of principal then due and owing and
shall then be applied to installments of principal due in the reverse order of
maturity, and no such partial prepayment shall relieve Borrower of the
obligation to pay each subsequent installment of principal when due.

 

(e)           No Readvance. Any principal that is repaid shall not be
readvanced.

 

2.6           Intentionally Omitted.

 

2.7           Net Payments. All payments by Borrower of principal, interest,
fees, indemnities and other amounts payable to Agent and/or Lenders hereunder
shall be made without set-off or counterclaim.

 

2.8           Application of Payments and Collections. As long as no Event of
Default has occurred and is continuing, all payments shall be applied first to
the payment of all fees, expenses and other amounts then due to the Agent and
the Lenders (excluding principal and interest), and then to accrued interest,
and the balance on account of outstanding principal. After the occurrence of an
Event of Default and during the continuance thereof, Borrower shall have no
right, and it hereby irrevocably waives the right, to direct the application of
any and all payments and collections at any time or times received by Agent
and/or Lenders from or on behalf of Borrower, and Borrower does hereby
irrevocably agree that Lenders shall, after the occurrence of an Event of
Default and during the continuance thereof, have the continuing exclusive right,
subject to applicable Law, to apply and reapply any and all such payments and
collections received at any time or times by Lenders against the Obligations, in
such manner as Lenders may deem advisable (or as may otherwise be set forth in
the Mortgage), notwithstanding any entry by Lenders upon any of their books and
records.

 

2.9           Intentionally Omitted.

 

2.10         Term of Agreement. The provisions of this Agreement shall be and
remain in effect until full and final payment in immediately available funds of
all of the Obligations.

 

2.11         Special LIBOR Rate Loan Provisions. All LIBOR Rate Loans shall be
subject to and governed by the following terms and conditions:

 

2.11.1          LIBOR Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon written notice thereof to the Borrower be
conclusive and binding on the Borrower) that the introduction of or any change
in or in the interpretation of any law, rule, regulation or guideline, (whether
or not having the force of law) makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Lender to make,
continue or maintain any LIBOR Rate Loan as, or to convert any loan into, a
LIBOR Rate Loan of a certain duration, the obligations of the Lenders to make,
continue, maintain or convert into any such LIBOR Rate Loans shall, upon such
determination, forthwith be suspended until the Agent shall notify the Borrower
that the circumstances causing such suspension no longer exist, and all LIBOR
Rate Loans of such type shall automatically convert into Prime Rate Loans at the
end of the then current LIBOR Interest Periods with respect thereto or sooner,
if required by such law or interpretation.

 

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2.11.2          Unavailability of LIBOR Rate. In the event that any Lender, in
its sole discretion, shall have determined that U.S. Dollar deposits in the
relevant amount and for the relevant LIBOR Interest Period are not available to
such Lender in the London interbank market; or by reason of circumstances
affecting such Lender in the London interbank market, adequate and reasonable
means do not exist for ascertaining the LIBOR Rate applicable to the relevant
LIBOR Interest Period; or the LIBOR Rate no longer adequately and fairly
reflects such Lender’s cost of funding loans; upon notice from the Agent to the
Borrower, the obligations of such Lender to make or continue any loans as, or to
convert any loans into, LIBOR Rate Loans of such duration shall forthwith be
suspended until the Agent shall notify the Borrower that the circumstances
causing such suspension no longer exist, and any amount of the Loan subject to
such unavailability shall be converted to a Prime Rate Loan. Notwithstanding
anything to the contrary contained in this Section 2.11.2, neither Agent nor any
Lender shall convert the Loan to a Prime Rate Loan under this Section 2.11.2,
unless such determination is generally being made by Agent or such Lender with
respect to other LIBOR based loans which are similar to the Loan in type, size,
and duration and are made to similarly situated borrowers or are otherwise
similar to the Loan in a manner which is material to Agent or such Lender’s
determination hereunder.

 

2.11.3          Increased Costs. If, on or after the date hereof, the adoption
of any applicable Law, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency: (a) shall impose, modify or
deem applicable any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System of the United States) against assets of, deposits
with or for the account of, or credit extended by, such Lender; or (b) shall
impose on any Lender any other condition affecting its LIBOR Rate Loans or its
obligation to make LIBOR Rate Loans, and the result of any of the foregoing is
to increase the cost to such Lender of making or maintaining any LIBOR Rate
Loan, or to reduce the amount of any sum received or receivable by such Lender
under this Agreement with respect thereto, by an amount deemed by such Lender to
be material, then, within fifteen (15) days after demand by the Agent, the
Borrower shall pay such additional amount or amounts as will compensate such
Lender for such increased cost or reduction.

 

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2.11.4          Increased Capital Costs. If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
Law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any central bank, regulator or other Governmental
Authority affects or would affect the amount of capital required or expected to
be maintained by any Lender, or Person Controlling any Lender, and such Lender
determines (in its sole and absolute discretion) that the rate of return on its
or such Controlling Person’s capital as a consequence of its commitments or the
Loan made by such Lender is reduced to a level below that which such Lender or
such Controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by the Agent
to the Borrower, the Borrower shall pay, within ten (10) days after such notice,
additional amounts sufficient to compensate such Lender or such Controlling
Person for such reduction in rate of return. A statement of such Lender as to
any such additional amount or amounts (including calculations thereof in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower. In determining such amount, a Lender may use any method
of averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.

 

2.11.5          Taxes. All payments by the Borrower of principal of, and
interest on, LIBOR Rate Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes, taxes imposed on or measured by the Lenders’ net
income or receipts, backup withholding taxes and taxes resulting from the
failure to provide any documentation required to be provided under Section
16.1.9 (such non-excluded items being called “Taxes”). In the event that any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Borrower will

 

(a)           pay directly to the relevant taxing authority the full amount
required to be so withheld or deducted;

 

(b)          promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and

 

(c)           pay to the Agent such additional amount or amounts as is necessary
to ensure that the net amount actually received by the Lenders will equal the
full amount the Lenders would have received had no such withholding or deduction
been required.

 

Moreover, if any Taxes are directly asserted against any Lender with respect to
any payment received by any Lender hereunder, Lenders may pay such Taxes and the
Borrower will promptly pay such additional amount (including any penalties,
interest or expenses) as is necessary in order that the net amount received by
the Lenders after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount the Lenders would have received had
not such Taxes been asserted.

 

If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Lenders for any
incremental Taxes, interest or penalties that may become payable by the Lenders
as a result of any such failure.

 

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2.11.6          Interest. Agent does not warrant, nor accept responsibility, nor
shall Agent have any liability with respect to the administration, submission or
any other matter related to the rates in the definition of “LIBOR Rate” or with
respect to any comparable or successor rate thereto.

 

2.11.7          Successor LIBOR.

 

(a)           Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Documents, if at any time Agent determines (which
determination shall be conclusive absent manifest error) that:

 

(i)            adequate and reasonable means do not exist for ascertaining the
LIBOR Rate for any requested LIBOR Interest Period, and such circumstances are
unlikely to be temporary,

 

(ii)           the applicable supervisor or administrator of the LIBOR Rate or a
Governmental Authority having jurisdiction over Agent has made a public
statement identifying a specific date after which the LIBOR Rate shall no longer
be available or used for determining interest rates for loans (such specific
date, the “LIBOR Scheduled Unavailability Date”), or

 

(iii)          a rate other than the LIBOR Rate has become a widely recognized
benchmark interest rate for newly originated loans of this type made in Dollars
to borrowers domiciled in the United States,

 

then Agent may, in consultation with the Borrower, select an alternate benchmark
interest rate (including any credit spread or other adjustments to such
alternate benchmark (if any) incorporated therein) to replace the LIBOR Rate for
purposes of this Agreement (such rate, the “LIBOR Successor Rate”).

 

(b)          Agent and the Borrower shall negotiate in good faith any amendments
to this Agreement as may be necessary and appropriate to effectively replace the
LIBOR Rate with the LIBOR Successor Rate and incorporate any LIBOR Successor
Rate Conforming Changes related thereto. Notwithstanding anything to the
contrary contained in this Agreement or any other Loan Document, any such
amendment entered into by the Agent and the Borrower shall become effective
without any further action or consent of any other party to this Agreement on
the fifth Business Day following the date that a draft of such amendment is
provided to the Lenders for review, unless the Agent receives, on or before noon
eastern time on such date, a written notice from the Required Lenders stating
that such Required Lenders object to such amendment.

 

(c)           If Agent determines (which determination shall be conclusive
absent manifest error) that the circumstances under clause (a)(i) above have
arisen or the LIBOR Scheduled Unavailability Date has occurred, then (i) Agent
shall promptly notify the Borrower and the Lenders of such determination, which
notice may be given by telephone, and (ii) until such time as a LIBOR Successor
Rate has been selected and this Agreement has been amended to implement such
LIBOR Successor Rate any LIBOR Successor Rate Conforming Changes, (A) the
obligation of the Lenders to make or maintain LIBOR Rate Loans shall be
suspended, and (B) all LIBOR Rate Loans of shall be converted to Prime Rate
Loans and shall accrue at a rate per annum equal to the sum of the Prime Rate
plus the applicable Prime Rate Margin.

 

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(d)           The LIBOR Successor Rate and any LIBOR Successor Rate Conforming
Changes shall be determined, applied and implemented in a manner that gives due
consideration to the then-prevailing market practice in the United States for
determining, applying and implementing benchmark interest rates for newly
originated loans of this type made in Dollars to borrowers domiciled in the
United States. Notwithstanding anything to the contrary contained herein, for
purposes of this Agreement, no LIBOR Successor Rate selected in accordance with
the foregoing shall at any time be less than 0.00% per annum.

 

2.12         Loan Fees.

 

2.12.1          Commitment Fee. At the closing of the Loan, to the extent not
previously paid, Borrower shall pay to Agent, for Agent’s own account, a
commitment fee in the amount specified in the Fee Letter (the “Commitment Fee”).
The entire Commitment Fee has been fully earned by Agent and is non-refundable.

 

2.12.2          Extension Fee. The Extension Fee shall be payable to Agent, for
the pro rata account of each Lender, as provided in Section 2.3 above.

 

2.13          Acceleration. The Loan may be accelerated, at the option of the
Required Lenders, at any time following the occurrence and during the
continuance of any Event of Default. Upon such an acceleration, the entire
principal balance of the Loan, together with all unpaid and accrued interest and
all costs, expenses and fees, shall be due and payable together with interest on
such amounts at the Default Rate. If the Loan shall be accelerated for any
reason whatsoever, any applicable LIBOR Breakage Fee and/or breakage fee
associated with the termination of any Hedging Contract in effect as of the date
of such acceleration shall be paid. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, except to the extent
prohibited by applicable Law, from and after the acceleration of the Loan, an
Event of Default shall be deemed to be continuing notwithstanding Borrower's
cure of any Event of Default.

 

2.14         The Loan to Constitute One Obligation. The Loan shall constitute
one general obligation of Borrower to Lenders, and shall be secured by Agent's
security interests in and liens upon all of the Collateral, and by all other
security interests and liens heretofore, now or at any time or times hereafter
granted by Borrower to Agent or to Lenders.

 

2.15         Notations. At the time of (i) the making of each Loan evidenced by
any Note, and (ii) each payment or prepayment of any Note, each Lender may enter
upon its records an appropriate notation evidencing (a) such Lender's Pro Rata
Share of the Loan and (b) such payment or prepayment of principal and (c) in the
case of payments or prepayments of principal, the portion of the Loan which was
paid or prepaid. No failure to make any such notation shall affect the
Borrower's unconditional obligations to repay the Loan and all interest, fees
and other sums due in connection with this Agreement and/or any Note in full,
nor shall any such failure, standing alone, constitute grounds for disproving a
payment of principal by the Borrower. However, in the absence of manifest error,
such notations and each Lender's records containing such notations shall
constitute presumptive evidence of the facts stated therein, including, without
limitation, the outstanding amount of such Lender's Pro Rata Share of the Loan
and all amounts due and owing to such Lender at any time. Any such notations and
such Lender's records containing such notations may be introduced in evidence in
any judicial or administrative proceeding relating to this Agreement, the Loan
or any Note.

 

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2.16         Time of Payments and Prepayments in Immediately Available Funds.

 

2.16.1          Notwithstanding any provision to the contrary contained in any
of the Loan Documents, (a) the due dates of all payments under the Loan
Documents shall be adjusted in accordance with the Following Business Day
Convention, and (b) all payments and prepayments of principal, fees, interest
and any other amounts owed from time to time under this Agreement and/or under
any Note shall be made to the Agent for the pro rata account of each Lender at
the Agent's address in the United States designated for such purpose by Agent in
Dollars and in immediately available funds prior to 2:00 o'clock P.M. on the
Business Day that such payment is due, subject to, if applicable, the Following
Business Day Convention. Any such payment or prepayment which is received by the
Agent in Dollars and in immediately available funds after 2:00 o'clock P.M. on a
Business Day shall be deemed received for all purposes of this Agreement on the
next succeeding Business Day except that solely for the purpose of determining
whether a Default has occurred, any such payment or prepayment if received by
the Agent prior to the close of the Agent's business on a Business Day shall be
deemed received on such Business Day.

 

2.16.2          All payments of principal, interest, fees and any other amounts
which are owing to any or all of the Lenders or the Agent hereunder and/or under
any Note shall be paid directly to Agent (i.e., Borrower shall not pay and shall
have no obligation to pay any such amount directly to any Lender other than
Agent). All such payments that are received by the Agent in immediately
available Dollars prior to 2:00 o'clock P.M. on any Business Day shall, to the
extent owing to Lenders other than the Agent, be sent by wire transfer by the
Agent on the same Business Day. Each such wire transfer by Agent shall be
addressed to each Lender in accordance with the wire instructions set forth in
Exhibit D hereto, as the same may be amended from time to time pursuant to the
terms hereof. The amount of each payment wired by the Agent to each such Lender
shall be such amount as shall be necessary to provide such Lender with its Pro
Rata Share of such payment (without consideration or use of any contra accounts
of any Lender), or with such other amount as may be owing to such Lender in
accordance with this Agreement. Each such wire transfer shall be sent by the
Agent only after the Agent has received immediately available Dollars from or on
behalf of the Borrower and each such wire transfer shall provide each Lender
receiving same with immediately available Dollars on receipt by such Lender. Any
such payments of immediately available Dollars received by the Agent after 2:00
o'clock P.M. on any Business Day shall be forwarded in the same manner by the
Agent to such Lender(s) as soon as practicable and, in any event, no later than
the immediately succeeding Business Day.

 

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2.17           Agent Advances.

 

(a)           Agent is authorized, from time to time, in Agent’s sole discretion
to make, authorize or determine Loan Advances, or otherwise expend funds, on
behalf of Lenders (“Agent Advances”), (i) to pay any costs, fees and expenses as
described in Section 9.17 herein, (ii) when the applicable conditions precedent
set forth in Section 7.1 have been satisfied to the extent required by Agent,
and (iii) when Agent deems in good faith necessary or desirable to preserve or
protect the Collateral or any portion thereof (including those with respect to
property taxes, insurance premiums, completion of construction, operation,
management, improvements, maintenance, repair, sale and disposition) (A) subject
to Section 15.5, after the occurrence of a Default, and (B) subject to Section
15.10, after acquisition of all or a portion of the Collateral by foreclosure or
otherwise.

 

(b)           Agent Advances shall constitute obligatory advances of Lenders
under this Agreement, shall be repayable on demand and secured by the
Collateral, and if unpaid by Lenders as set forth below shall bear interest at
the rate applicable to such amount under the Loan. Agent shall notify each
Lender in writing of each Agent Advance. Upon receipt of notice from Agent of
its making of an Agent Advance, each Lender shall make the amount of such
Lender’s Pro Rata Share of the outstanding principal amount of the Agent Advance
available to Agent, in same day funds, to such account of Agent as Agent may
designate, (i) on or before 3:00 P.M. on the day Agent provides Lenders with
notice of the making of such Agent Advance if Agent provides such notice on or
before 12:00 P.M., or (ii) on or before 12:00 P.M. on the Business Day
immediately following the day Agent provides Lenders with notice of the making
of such advance if Agent provides notice after 12:00 P.M.

 

3.           SECURITY FOR THE LOAN; LOAN AND SECURITY DOCUMENTS.

 

3.1           Security. The Loan, together with all other Obligations of
Borrower, to Agent and/or Lenders (including all Hedging Obligations) shall be
secured, inter alia, by the following “Security” which Borrower agrees to
provide and maintain:

 

3.1.1           Mortgage and Security Agreement. A first priority (subject only
to Permitted Title Exceptions) mortgage, security agreement and fixture filing
(the “Mortgage”) with respect to (i) the Property, (ii) all land, improvements,
furniture, fixtures, goods, equipment, and other assets (including, without
limitation, accounts, contracts, contract rights, Licenses and Permits, general
intangibles, documents and instruments), including all after-acquired property,
owned, or in which Borrower has or obtains any interest, in connection with the
Property; (iii) all insurance proceeds and other proceeds therefrom, and (iv)
all other assets of Borrower whether now owned or hereafter acquired.

 

3.1.2           Assignment of Leases and Rents. A first priority absolute
assignment of leases and rents (the “Assignment of Leases and Rents”) with
respect to all leases, subleases and occupancy rights of the Property and all
income and profits to be derived from the operation and leasing of the Property.

 

3.1.3           Pledge and Security Agreement. A pledge/assignment and security
agreement assigning to Agent and granting Agent, for the benefit of Lenders, a
first priority and perfected security interest in all Cash Collateral and all
sums deposited in the Tax Escrow Account and the Cash Reserve Account and any
other reserve accounts maintained by Borrower pursuant to the Loan Documents and
all Tenant Letters of Credit (the “Pledge and Security Agreement”).

 

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3.1.4           Intentionally Omitted.

 

3.1.5           Collateral Assignment of Contracts, Licenses and Permits. A
first priority Collateral Assignment and Security Agreement In Respect of
Contracts, Licenses and Permits (the “Collateral Assignment of Contracts,
Licenses and Permits”) with respect to all contracts, agreements, warranties,
Licenses and Permits now owned or hereafter acquired by Borrower (and
collaterally assigned by Tenant to Borrower) which relate in any manner to the
Property.

 

3.1.6           Guaranty. The (i) unconditional, continuing Limited Guaranty
(re: Certain Specified Matters) from Guarantor, and (ii) Guaranty (re:
Completion) from Guarantor, each guaranteeing the matters that are set forth
therein (singly and collectively, the “Guaranty”).

 

3.1.7           Assignment of Interest Rate Protection Agreement. A first
priority assignment of interest rate protection agreement assigning to Agent and
granting Agent a first priority and perfected security interest in all of
Borrower’s right, title and interest in and to any Interest Rate Protection
Agreement now or hereafter entered into by and between Borrower and any issuer
of any such agreement (the “Assignment of Interest Rate Protection Agreement”).

 

3.1.8           Environmental Indemnity Agreement. The Environmental Indemnity
Agreement from the Borrower and Guarantor with respect to various matters that
are set forth therein.

 

3.1.9           The other Security Documents.

 

3.2           Loan Documents and Security Documents.

 

The Loan shall be made, evidenced, administered, secured or otherwise supported
and governed by all of the terms, conditions and provisions of the Loan
Documents, each as the same may be hereafter modified or amended, consisting of:
(i) this Agreement; (ii) the Note or Notes executed by the Borrower in favor of
Agent or the Lenders; (iii) the Mortgage; (iv) the Assignment of Leases and
Rents; (v) the Pledge and Security Agreement; (vi) the Collateral Assignment of
Contracts, Licenses and Permits; (vii) the Environmental Indemnity Agreement;
(viii) the Guaranty; (ix) the Assignment of Interest Rate Protection Agreement;
(x) related UCC Financing Statements; and (xi) any other Security Documents and
Other Agreements executed to further evidence or secure the Loan. Each of the
Loan Documents listed in items (i) through (xi) inclusive is dated of even date
herewith.

 

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3.3           Termination of Security Interests. Upon the satisfaction in full
of all of the Obligations (including, without limitation, all Hedging
Obligations), Lenders shall cause Agent to release, terminate and satisfy all of
its security interests in and liens upon all remaining Collateral, and Agent
shall deliver to Borrower any and all funds remaining in its possession and any
and all written instruments reasonably requested by Borrower which are necessary
to evidence such release, termination and satisfaction. Neither Agent nor any
Lender shall have any obligation to pay any costs or fees associated with the
filing or recordation of any such release, termination or satisfaction and
Borrower agrees to pay all actual and reasonable costs and expenses (including
actual and reasonable attorneys' fees) incurred by Agent or any Lender in
connection with the preparation, recording and filing of any of such
instruments.

 

3.4           Security for Hedging Obligations. All presently existing and
hereafter arising Hedging Obligations of Borrower to Citizens (or to its
successors or to any other Affiliate of Citizens Financial Group, Inc.) pursuant
to any Hedging Contracts now or hereafter entered into by and between Borrower
and any such Person in connection with the Loan shall be secured by the Security
Documents pari-passu with the Loan. Any such Hedging Contracts shall be fully
recourse to Borrower and shall be cross-defaulted with the other Loan Documents.
Any Interest Rate Protection Agreement that is provided by any other
Counterparty (a) shall not be secured by any of the Collateral and (b) shall be
fully non-recourse to Borrower.

 

4.           CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES.

 

Agent and Lenders are authorized to rely upon the continuing authority of the
persons, officers, signatories or agents hereafter designated (“Authorized
Representatives”) to bind Borrower with respect to all matters pertaining to the
Loan and the Loan Documents including, but not limited to, the execution of
Notices of Borrowing. Such authorization may be changed only upon written notice
to Agent accompanied by evidence, reasonably satisfactory to Agent, of the
authority of the person giving such notice and such notice shall be effective
not sooner than five (5) Business Days following receipt thereof by Agent. The
present Authorized Representatives are listed on Exhibit A.

 

5.           LENDERS' CONSULTANTS.

 

5.1           Right to Employ. Agent shall have the right to employ, for the
below functions, its own personnel or one or more engineers, architects,
builders or other construction specialists, environmental advisors, accountants
and attorneys to act as advisors to Agent in connection with the Loan (each of
which shall be a “Consultant”).

 

5.2           Functions.

 

5.2.1           The functions of a Consultant may include without limitation:
(a) inspection and physical review of the Property; (b) review and analysis of
any work to be done in connection with the Property (if any); (c) review and
analysis of environmental matters; and (d) review and analysis of legal matters
pertaining to the Property or issues arising under the Loan Documents, or
otherwise in connection with the Property.

 

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5.2.2           Intentionally Omitted.

 

5.3           Payment. The actual and reasonable costs and fees of Consultants
for the functions described in Section 5.2 above shall be paid by Borrower upon
billing therefor.

 

5.4           Access. Borrower shall provide Agent's personnel and all
Consultants with continuing access, subject to the rights of any tenants under
any leases of any portion(s) of the Property for which Agent seeks access, to
all aspects of the Property and all books and records related thereto at
reasonable times during any Business Day, upon at least two (2) Business Days'
prior written notice to Borrower.

 

5.5           No Liability. Neither Agent nor any Lender nor any Consultant
shall have any liability to Borrower or to any third party on account of: (a)
services performed by any Consultant; or (b) any failure or neglect by any
Consultant to properly perform services, provided however, each Consultant shall
be liable for its respective gross negligence and willful misconduct; or (c) any
approval or disapproval of work, plans or other matters. Neither Agent nor any
Lender nor any Consultant shall have any obligation regarding proper performance
of work related to the Property. Borrower shall have no rights under or relating
to any agreement, report or similar document prepared by any Consultant.

 

6.           LOAN DISBURSEMENT.

 

6.1           Request for Loan. In connection with the closing of the Loan,
Borrower shall give Agent written notice (a “Notice of Borrowing”) specifying
(a) the amount of Loan Proceeds which Borrower is requesting be advanced, (b)
the requested borrowing date, and (c) if Borrower requests Lenders to wire all
or a portion of such Loan Proceeds (whether to Borrower or to a title insurance
company as escrow agent), the relevant wiring instructions. Such Notice of
Borrowing shall be irrevocable and binding on Borrower.

 

6.2           Advance of Loan Proceeds. Each Lender shall severally, subject to
compliance with all of the other terms, conditions and provisions of this
Agreement, make a disbursement of its respective Pro Rata Share of the Loan
Proceeds (the “Loan Advance”) entirely at the closing of the Loan.

 

7.           CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT.

 

7.1           Conditions Precedent. It shall be a condition precedent of each
Lender's obligation to close the Loan and to fund its respective Pro Rata Share
of the Loan that each of the following conditions precedent be satisfied in full
(as determined by Agent in its discretion which discretion shall be exercised in
good faith having due regard for the advice of Agent's Consultants), unless
waived by Agent at or prior to closing and funding the Loan:

 

7.1.1           Satisfactory Loan Documents. Each of the Loan Documents shall be
satisfactory in form, content and manner of execution and delivery to Agent,
Lenders and their respective counsel.

 

7.1.2           No Material Change. No material adverse change shall have
occurred in the financial condition, business, affairs, operations or Control of
Borrower or the Guarantor since the date of their respective financial
statements most recently delivered to Agent.

 

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7.1.3           Warranties and Representations Accurate. All warranties and
representations made by or on behalf of Borrower or the Guarantor or any other
Loan Party to Agent and/or Lenders shall be true, accurate and complete in all
material respects and shall not omit any material fact necessary to make the
same not misleading.

 

7.1.4           Financials and Appraisals. Lenders shall have received and
approved: (a) current financial statements from Borrower in all respects
satisfactory to Lenders, a pro-forma balance sheet for the Borrower in all
respects satisfactory to Lenders, setting forth the cost basis of the Property,
prepared by Borrower, together with a certification by Borrower stating that
such balance sheet is accurate in all material respects; (b) financial
statements of the Guarantor in all respects satisfactory to Lenders; (c) an
appraisal of the Property from an appraiser acceptable to Agent setting forth
the Approved Appraised Value of the Property (on a “stabilized” basis) that is
sufficient to cause the LTV Ratio on a “stabilized” basis to not exceed
sixty-five percent (65%); (d) an operating statement for the Property; and (e)
such other information as Agent may reasonably request.

 

7.1.5           Validity and Sufficiency of Security Documents. The Mortgage and
the other Security Documents shall create valid and perfected liens on all
property described therein (collectively, the “Collateral”) and each of the
Security Documents and related UCC Financing Statements shall have been duly
recorded and filed or the title insurance company shall have issued the lender’s
title insurance policy required pursuant to Section 7.1.9 insuring Agent’s liens
with respect thereto, in each case to the satisfaction of Agent and its counsel.

 

7.1.6           No Other Liens; Taxes and Municipal Charges Current. Subject to
Section 11.1.4 below, the Collateral shall not be subject to any liens or
encumbrances, whether inferior or superior to the Loan Documents or the Security
Documents, except in respect of: (a) real estate taxes and personal property
taxes not yet due and payable; and (b) Permitted Title Exceptions. All real
estate taxes, personal property taxes and other municipal charges relating to
any of the Collateral shall be current.

 

7.1.7           Property Matters. Agent shall have received and approved each of
the following: (a) the Survey, the Hotel Management Agreement, the Franchise
Agreement, and evidence satisfactory to Agent of Licenses and Permits (which may
be held by or in the name of the Hotel Manager) for the Property sufficient to
allow the Property to be operated in the ordinary course of business for the
purposes described in Section 1.3 and as contemplated under any applicable
leases and as needed under applicable Legal Requirements; and (b) a report or
other evidence satisfactory to Agent, (which, if required by Agent has been
approved by Agent's Consultants), to the effect that the Property is in good
repair and safe condition with no structural deficiencies and no material need
for repairs or replacements except in the ordinary course of business.

 

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7.1.8         Compliance With Law. Agent shall have received and approved
evidence that:

 

(a)          Present Compliance. To the best of Borrower’s knowledge, all real
estate and tangible personal property constituting or intended to constitute
Collateral for the Loan complies with all applicable Legal Requirements and the
provisions of all applicable Licenses and Permits.

 

(b)          No Prohibitions or Violations. There are no applicable Legal
Requirements which prohibit or adversely limit the use of the Property for the
purposes the same is intended for, to the best of Borrower’s knowledge, nor is
there any outstanding and uncured violation of any applicable Legal
Requirements.

 

(c)          Licenses and Permits. All Licenses and Permits and all private
approvals of every nature whatsoever, if any, which are reasonably necessary in
order to allow the operation of the Property for the purposes described in
Section 1.3 above and as required under any applicable leases and as needed
under applicable Legal Requirements have been duly and finally received with all
appeal periods therefrom having elapsed, with no appeal having been taken
therefrom, and with no violations existing under the terms thereof.

 

(d)          Qualification to Do Business. Borrower is qualified to do business
in the State where the Property is located.

 

7.1.9         Title Insurance; Other Evidence of Perfection. Agent shall have
received: (a) a mortgagee's title insurance policy which meets Agent's title
insurance requirements previously furnished to Borrower to the satisfaction of
Agent and its counsel, effective as of the date and time of the funding of the
Loan; and (b) such other evidence of the perfection of Agent’s liens and
security interests as Agent or its counsel may reasonably require.

 

7.1.10       Survey. Agent shall have received and approved a current, on-site
instrument survey of the Property containing a certification thereon, or on a
separate surveyor's certificate, of a Registered Land Surveyor acceptable to
Agent, which meets Agent's survey requirements previously furnished to Borrower.

 

7.1.11       Condition of Property. There shall have been no material unrepaired
or unrestored damage or destruction by fire or otherwise to any of the real or
tangible personal property comprising or intended to comprise the Collateral.

 

7.1.12       No Takings. Neither the Property nor any material portion of the
Property shall have been taken by eminent domain; nor shall there be any threat
of such a taking.

 

7.1.13       Insurance. Borrower shall have provided to Agent with respect to
the Property and the Collateral evidence of: (i) insurance coverages which meet
the property, hazard and other insurance requirements set forth on Exhibit C of
this Agreement to the satisfaction of Agent and its Consultants; and (ii)
payment of the premiums for such insurance.

 

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7.1.14       Acquisition Documents. Borrower shall have provided to Agent true
and complete copies (including all amendments) of (a) the purchase and sale
agreement pursuant to which Borrower intends to acquire the Property, (b) a
signed settlement statement accurately reflecting the Acquisition Costs of the
Property and (c) the deed and all other conveyance documents conveying the
Property to Borrower.

 

7.1.15       Hazardous Substances. Agent shall have received, and in Agent's
sole discretion approved, a satisfactory Environmental Site Assessment
indicating the acceptability of the environmental risk associated with the
Property, addressing the existence of any Hazardous Substances at, or which may
affect, the Property and the Property’s compliance with all applicable
Environmental Legal Requirements.

 

7.1.16       Organizational Documents and Entity Agreements. Agent shall have
received and approved an organization chart of Borrower and Guarantor, the
limited liability company operating agreement of Borrower and the organizational
documents of the Member, Guarantor, and all of the other Loan Parties.

 

7.1.17       Votes, Consents and Authorizations. Agent shall have received and
approved certified copies of all partnership, limited liability company and
corporate votes, consents and authorizations that may be reasonably required to
evidence authority for: (a) closing the Loan and the transactions contemplated
hereby; (b) providing continuing authorization to designated persons to deal in
all respects on behalf of Borrower, Member, Guarantor, and all of the other Loan
Parties; and (c) the execution of all Loan Documents.

 

7.1.18       Legal and Other Opinions.

 

(a)          Agent shall have received and approved legal opinion letters from
counsel representing Borrower and Guarantor which meet Agent's legal opinion
requirements.

 

(b)          Agent shall also have received from qualified attorneys and
surveyors, such other certificates, opinions, surveys, and other evidence of
compliance with each of the conditions herein set forth as Agent may reasonably
require.

 

7.1.19             Leasing Matters.

 

(a)          Leases. Agent shall have received and approved complete copies of
all existing leases, subleases and any and all lease guaranties (to the extent
requested by Agent).

 

(b)          Estoppels and SNDA Agreements. Agent shall have also received
satisfactory estoppel certificates and SNDA Agreements to the extent previously
specified by Agent.

 

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(c)          Hotel Management Agreement and Franchise Agreement. Agent shall
have also received and approved each of the Hotel Management Agreement and the
Franchise Agreement.

 

7.1.20        No Default. There shall not be any Default under any of the Loan
Documents which has occurred and is continuing.

 

7.1.21        Closing Affidavit. At the closing of the Loan, Borrower and
Guarantor shall execute and deliver to Agent an affidavit certifying to Lenders:
(a) that all financial information furnished by or on behalf of Borrower or
Guarantor to Agent is accurate and correct in all material respects as of the
reporting date(s) thereof and that there have been no material adverse changes
therein since the reporting date(s) thereof; (b) that except as disclosed in
writing to Agent and approved by Agent in writing, neither Borrower nor
Guarantor is in default under any material obligation or agreement to which it
is a party or by which it or the Property is bound; and (c) that, except as
disclosed in writing to Agent and approved by Agent in writing, there is no
material litigation pending or, to the best of Borrower's and of Guarantor's
knowledge, threatened, against Borrower or Guarantor which is not fully covered
by insurance.

 

7.1.22       Inter-Company Loan Documents. If there exist any Inter-Company
Loans, Agent shall have received and approved certified copies of all
Inter-Company Loan documents, together with a certification from Borrower that
such documents so delivered constitute all of the Inter-Company Loan documents.

 

7.1.23       Other Documents. Agent shall have received and approved such other
documents, instruments, agreements and certificates as Agent or Lenders shall
reasonably request, each in form and substance reasonably satisfactory to Agent,
in connection with the Property and the transactions contemplated hereby,
including such other documents, instruments and agreements as Agent reasonably
determines are necessary at any time to perfect any of Agent's security
interests in the Collateral.

 

7.1.24       Other Information Concerning the Property. Agent shall have
received and approved any and all other information and documentation Agent
deems necessary to conduct Agent's analysis of the Property.

 

7.1.25       No Proceedings, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain or prohibit, or to obtain
damages in respect of, or which is related to or arises out of this Agreement or
the consummation of the transactions contemplated hereby or which, in Agent's
judgment, would make it inadvisable to consummate the transactions contemplated
by this Agreement or any of the other Loan Documents.

 

7.1.26       Payment of Agent's and Lenders' Fees and Costs. Borrower shall have
paid (a) the fees payable to Agent and Lenders described in Section 2.12.1, and
(b) all of Agent's and Lenders' costs and expenses as described in Section 9.17.

 

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7.1.27       Required Equity Contribution. Borrower shall have furnished to
Agent evidence reasonably satisfactory to Agent that, in connection with
Borrower's acquisition of the Property, cash equity funds in an amount not less
than Eight Million Five Hundred Nine Thousand Eight Hundred Sixty-One and 88/100
Dollars ($8,509,861.88) have been contributed to Borrower by its Member and that
such funds remain invested in Borrower (the “Required Equity Contribution”). All
of Borrower's Required Equity Contribution shall be made as capital
contributions or by way of Inter-Company Loans which constitute Permitted
Additional Debt.

 

7.1.28       Required Interest Rate Protection Agreement. Agent shall have
received and approved a Required Interest Rate Protection Agreement which
satisfies the conditions that are set forth in the definition of such term and
the counterparty thereunder shall have acknowledged and consented to the pledge
and assignment thereof to Agent in form reasonably satisfactory to Agent. If
Borrower elects to purchase a Required Interest Rate Protection Agreement which
has a term that expires later than the Maturity Date or the then applicable
Extended Maturity Date, upon repayment of the Loan on the Maturity Date or on
the applicable Extended Maturity Date, Borrower may incur additional obligations
associated with the breaking of such Required Interest Rate Protection Agreement
before the conclusion of its term in accordance with the terms and conditions
thereof.

 

7.1.29       Operating Lease Matters. Agent shall have approved all the terms
and conditions of the Operating Lease and the Tenant shall have executed and
delivered to Agent an Operating Lease Estoppel Certificate in all respects
reasonably satisfactory to Agent.

 

7.1.30       No Operating Lease Default. There shall not exist any default in
the payment, performance or observance of any of Borrower’s or Tenant’s
obligations under the Operating Lease and there shall not exist any event or
condition which, with the giving of notice or the passage of time or both, could
become such a default.

 

7.1.31       Proforma Compliance Certificate. Borrower shall have delivered to
Agent a proforma Compliance Certificate demonstrating that upon the funding of
the Loan the Debt Service Coverage Ratio will be greater than or equal to 1.25
to 1.

 

7.1.32       Patriot Act; KYC. At least five (5) days prior to the Loan closing
date, Agent shall have received:

 

(a)          any and all documentation and other information requested by Agent
in connection with applicable “know your customer” and anti-money-laundering
rules and regulations, including the Patriot Act; and

 

(b)          to the extent the Borrower constitutes a “legal entity customer”
under the Beneficial Ownership Regulation, a completed Beneficial Ownership
Certification in relation to the Borrower.

 

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7.2           Conditions Subsequent. Borrower shall satisfy each of the
conditions and provide Agent with each of the items set forth in Exhibit G
hereto (collectively, the “Conditions Subsequent”) within thirty (30) days of
the date hereof, or such other time as is set forth in such Exhibit G.
Borrower's failure to fully satisfy each of the Conditions Subsequent set forth
in Exhibit G within such thirty (30) day period or within any other therein
specified time period shall, at Required Lenders' sole discretion, constitute an
Event of Default under this Agreement, no additional grace or notice periods
being applicable thereto.

 

8.             WARRANTIES AND REPRESENTATIONS.

 

Borrower warrants and represents to Agent and Lenders, for the express purpose
of inducing Agent and Lenders to enter into this Agreement, to make the Loan,
and to otherwise complete all of the transactions contemplated hereby, that as
of the date of this Agreement, as follows:

 

8.1           Financial Information. True, accurate and complete in all material
respects financial statements of Borrower and true, accurate and complete in all
material respects financial statements of Guarantor have been delivered to
Lenders and the same fairly present the financial condition of Borrower and of
Guarantor as of the respective dates thereof and no material and adverse change
has occurred in such financial condition since the respective dates thereof. The
fiscal years of Borrower and the Guarantor end on December 31 of each year.

 

8.2           No Violations. The consummation of the Loan and the subsequent
payment and performance of the Obligations evidenced and secured by the Loan
Documents shall not constitute a violation of, or conflict with, any Law,
contract, agreement or organizational document to which Borrower or any other
Loan Party is a party or by which Borrower or, to the Borrower’s knowledge, any
other Loan Party, or the Property, may be bound.

 

8.3           No Litigation. (a) There is no condemnation proceeding pending or,
to the best of Borrower's knowledge, threatened against the Property and (b)
there is no material litigation now pending, or, to the best of Borrower's
knowledge, threatened, against Borrower or the Guarantor (with respect to the
Property or otherwise) which if adversely decided could materially impair the
ability of Borrower or Guarantor to pay and perform its respective obligations
hereunder or under the other Loan Documents. Except as disclosed in writing to
Agent and approved by Agent in writing, there is no litigation, whether or not
material, pending, or, to the best of Borrower's knowledge, threatened, against
Borrower or the Guarantor in which the amount in controversy exceeds $250,000
and which is not fully covered by insurance.

 

8.4           Operating Lease; Other Leases . A true and complete copy of the
Operating Lease, together with all amendments thereto (if any), has been
delivered by Borrower to Agent. The Operating Lease has not been further amended
or changed in any respect and it is in full force and effect and enforceable in
accordance with the terms thereof. True and complete copies of all other leases
and subleases, together with all amendments thereto, of the Property which are
now in effect (and all guaranties thereof) have been delivered to Agent. Such
leases and subleases (and lease guaranties) have not been further amended or
changed in any respect and, except as disclosed in writing to Agent and approved
by Agent in writing, all such leases and subleases (and lease guaranties) are in
full force and effect and are enforceable in accordance with their respective
terms.

 

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8.5           Compliance With Legal Requirements. To the best of Borrower’s
knowledge, the Property complies with all Legal Requirements and any and all
covenants, conditions, restrictions or other matters which affect the Property.

 

8.6           Required Licenses and Permits. Borrower or Tenant possesses all
licenses, permits and franchises, and all rights thereto, necessary to conduct
its business as now conducted and as presently proposed to be conducted. All
Licenses and Permits which are reasonably required in order for Borrower or
Tenant to operate the Property in the usual course of business have been duly
and properly obtained and have been complied with, in all material respects. All
Licenses and Permits which are reasonably required in order to construct any
approved capital improvements and tenant improvements, but only to the extent
now available given the status of their design and construction as of the date
of this warranty and representation, have been duly and properly obtained. All
such Licenses and Permits which are not presently available given the status of
the design and construction of any approved capital improvements and tenant
improvements, shall be duly and properly obtained in a timely manner so as not
to delay completion of any approved capital improvements or tenant improvements.
All such Licenses and Permits once obtained shall remain in full force and
effect and shall be complied with in all material respects.

 

8.7           Curb Cuts and Utility Connections. All curb cuts and utility
connections required for the current use of the Property and all Licenses and
Permits therefor have been duly obtained and are in full force and effect and
all utility services as reasonably required for water, gas, electric, telephone,
sewer and storm drainage and sanitary waste disposal are available as a matter
of right (subject to any required payments and compliance therewith), in each
case, to an extent adequate to serve the Property for its current uses.

 

8.8           Good Title and No Liens. Borrower is the lawful current owner of
the Property. Borrower has permanent non-cancelable appurtenant rights with
respect to all areas over, under or on which support, utility, drainage, passage
or other access easements are required to make use of the Property and all
required parking as contemplated hereby, by all applicable leases and by all
applicable Legal Requirements. The Property is free and clear of all liens and
encumbrances of any nature whatsoever, except for Permitted Title Exceptions.

 

8.9           Use of Loan Proceeds. The proceeds of the Loan shall be used
solely and exclusively for the purposes set forth in Section 1.4 above. No
portion of the proceeds of the Loan shall be used in whole or in part, directly
or indirectly, and whether immediately, incidentally or ultimately (a) to
purchase or carry any “margin stock” (as such term is defined in Regulation U of
the Board of Governors of the Federal Reserve System), or to extend credit to
others for the purpose thereof, or to repay or refund indebtedness previously
incurred for such purpose, or (b) for any purpose which would violate or is
inconsistent with the provisions of regulations of the Board of Governors of the
Federal Reserve System including, without limitation, Regulations T, U and X
thereof.

 

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8.10          Entity Matters.

 

8.10.1       Organization. Borrower is a duly organized and validly existing
limited liability company in good standing under the laws of the State of
Delaware. The Member is a duly organized and validly existing limited
partnership in good standing under the laws of the State of Delaware. The Tenant
is a duly organized and validly existing limited liability company in good
standing under the laws of the State of Michigan. Borrower and Tenant are each
(and at all times will be) duly qualified in the jurisdiction where the Property
is situated and in each other jurisdiction where the nature of their business is
such that qualification is required. Borrower, Member, Guarantor, and Tenant
have all requisite power and authority to conduct their business and to own
their respective properties, as now conducted or owned, and as contemplated by
this Agreement.

 

8.10.2       Ownership and Organizational and Taxpayer Identification Numbers.
The holders of all limited liability company interest or limited partnership
interests in Borrower, Tenant, and in Member are listed on Exhibit A; and no
additional ownership interests therein, or rights or instruments convertible
into such ownership interests, shall be issued, nor shall any such ownership
change, except for Permitted Transfers. The organizational and taxpayer
identification number(s) of Borrower, Member, Tenant and the Guarantor are
accurately stated in Exhibit A. All other information set forth in Exhibit A is
accurate and complete.

 

8.10.3       Authorization. All required limited liability company and other
entity actions and proceedings have been duly taken so as to authorize the
execution and delivery by Borrower, Tenant and Guarantor of the Loan Documents
and the payment and performance of Borrower's, Tenant’s and Guarantor's
respective Obligations thereunder.

 

8.10.4       Commercial Organization. Borrower is a business or commercial
organization and the Loan is being made solely for the purpose of carrying on a
business or commercial enterprise.

 

8.10.5       Limited Liability Company Agreement. The Borrower’s limited
liability company agreement is in full force and effect and a true and complete
copy thereof has been delivered to Agent.

 

8.11          Valid and Binding. Each of the Loan Documents constitutes legal,
valid and binding obligations of Borrower and, where applicable, Tenant and
Guarantor, and each is enforceable in accordance with the respective terms
thereof, subject to bankruptcy, insolvency and similar Laws of general
application affecting the rights and remedies of creditors and, with respect to
the availability of the remedies of specific enforcement, subject to the
discretion of the court before which any proceeding therefor may be brought.

 

8.12          Deferred Compensation and ERISA. Borrower does not have any
pension, profit sharing, stock option, insurance or other arrangement or plan
for employees covered by ERISA except as may be designated to Agent in writing
by Borrower from time to time (“ERISA Plan”) and no “Reportable Event” as
defined in ERISA has occurred and is now continuing with respect to any such
ERISA Plan. The granting of the Loan, the performance by Borrower of its
obligations under the Loan Documents and Borrower's conducting of its operations
do not and will not violate any provisions of ERISA.

 

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8.13         No Required Consents. The execution, delivery and performance of
the Loan Documents and the transactions contemplated thereby do not require any
approval or consent of, or filing (other than the recording of the Mortgage and
the Assignment of Leases and Rents and the filing and recording of the UCC
Financing Statements) or registration with, any Governmental Authority, or any
other party, except with respect to any disclosure required in connection with
state and federal securities laws and rules.

 

8.14         No Default. To the best of Borrower’s knowledge, no Default exists
under any of the Loan Documents.

 

8.15         No Broker or Finder. No Loan Party, nor anyone acting on behalf
thereof, has dealt with, made any agreement with or retained the services of any
broker, finder or other person or entity who or which may be entitled to a
broker’s or finder’s fee, or other compensation, payable by Borrower, by any
other Loan Party, by Agent or by any Lender in connection with the Loan, except
HFF, LP, which shall be paid in full by the Borrower.

 

8.16         Background Information and Certificates. All of the factual
information contained or referred to in Section 1 of this Agreement and in the
Exhibits to this Agreement or the other Loan Documents, and in the certificates
and opinions furnished to Agent and/or Lenders by or on behalf of Borrower in
connection with the Property or the Loan, is true, accurate and complete in all
material respects, and omits no material fact necessary to make the same not
misleading. As of the date hereof, the information included in the Beneficial
Ownership Certificate is true and correct in all respects.

 

8.17         Taxes and Assessments. Borrower and each of the other Loan Parties
have filed all federal, state and local tax returns and other similar reports
that are required by law to be filed and have paid, or made provision for the
payment of, all taxes, assessments, fees and other governmental charges that are
due and payable by Borrower and/or each of the other Loan Parties.

 

8.18         Solvency. Borrower and the each of the other Loan Parties are, and
after giving effect to the transactions contemplated under the Loan Documents
will be, solvent. After giving effect to the transactions contemplated under the
Loan Documents, Borrower and the each of the other Loan Parties: (a) will be
able to pay their respective debts as they become due, and (b) will have funds
and capital sufficient to carry on their respective businesses and all
businesses in which they are about to engage.

 

8.19         Other Agreements. To the best of the Borrower's knowledge, neither
Borrower nor any other Loan Party is a party to any indenture, loan, or credit
agreement, or to any lease or other agreement or instrument, or subject to any
charter or corporate restriction, which could reasonably be expected to have a
Material Adverse Effect. To the best of the Borrower's knowledge, neither
Borrower nor any other Loan Party is in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument material to its business to
which it is a party.

 

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8.20         No Subsidiaries. Borrower has no subsidiaries.

 

8.21         Investment Company Act of 1940. Borrower is not subject to
regulation under the Investment Company Act of 1940 or any statute or regulation
which has the effect of limiting its ability to incur Indebtedness for money
borrowed as contemplated by the Loan Documents.

 

8.22         Guarantor's Warranties and Representations. Borrower has no reason
to believe that any warranties or representations made in writing by Guarantor
to Agent are untrue, incomplete or misleading in any respect.

 

8.23         Patriot Act.

 

(a)          As of the date of this Agreement, the Borrower is and, during the
term of this Agreement shall remain, in full compliance with all the applicable
laws and regulations of the United States of America that prohibit, regulate or
restrict financial transactions, including but not limited to, conducting any
activity or failing to conduct any activity, if such action or inaction
constitutes a money laundering crime, including any money laundering crime
prohibited under the Money Laundering Control Act, 18 U.S.C. 1956, 1957, or the
Bank Secrecy Act, 31 U.S.C. 5311 et seq. and any amendments or successors
thereto and any applicable regulations promulgated thereunder.

 

(b)          Borrower represents and warrants that to the best of its knowledge
as of the date of this Agreement: (a) neither it, nor any of its owners holding
twenty percent (20%) or more of the direct or indirect interests in Borrower is
named as a “Specially Designated National and Blocked Person” as designated by
the United States Department of the Treasury’s Office of Foreign Assets Control
or as a person, group, entity or nation designated in Presidential Executive
Order 13224 as a person who commits, threatens to commit, or supports terrorism;
(b) it is not owned or Controlled, directly or indirectly, by the government of
any country that is subject to a United States Embargo; and (c) it is not
acting, directly or indirectly, for or on behalf of any person, group, entity or
nation named by the United States Treasury Department as a “Specially Designated
National and Blocked Person,” or for or on behalf of any person, group, entity
or nation designated in Presidential Executive Order 13224 as a person who
commits, threatens to commit, or supports terrorism; and that it is not engaged
in this transaction directly or indirectly on behalf of, or facilitating this
transaction directly or indirectly on behalf of, any such person, group, entity
or nation.

 

(c)            Borrower acknowledges that it understands and has been advised by
its own legal counsel on the requirements of the applicable laws referred to
above, including the Money Laundering Control Act, 18 U.S.C. 1956, 1957, the
Bank Secrecy Act, 31 U.S.C. 5311 et seq., the applicable regulations promulgated
thereunder, and the Foreign Assets Control Regulations, 31 C.F.R. Section 500 et
seq.

 

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8.24         Hotel Management and Franchise Agreement.

 

(a)          The Hotel Management Agreement is in full force and effect and
there is no default thereunder by any party thereto and no event has occurred
that, with the passage of time and/or the giving of notice would constitute a
default thereunder. The Hotel Management Agreement was entered into on
commercially reasonable terms.

 

(b)          The Franchise Agreement is in full force and effect and there is no
default thereunder by any party thereto and, to the best of Borrower’s
knowledge, no event has occurred that, with the passage of time and/or the
giving of notice would constitute a default thereunder. The Franchise Agreement
was entered into on commercially reasonable terms.

 

8.25         Reaffirmation and Survival of Representations. The submission of a
Notice of Borrowing by Borrower pursuant to this Agreement shall constitute (a)
an automatic representation and warranty by Borrower to Agent and Lenders that
there does not then exist any Default, (b) in the event the date of such Notice
of Borrowing is different than the date of this Agreement, a reaffirmation as of
the date of said Notice of Borrowing that all of the representations and
warranties of Borrower contained in this Agreement and the other Loan Documents
are true, accurate and complete in all material respects as if made on such date
rather than the date of this Agreement, and (c) a representation and warranty of
Borrower that the information set forth in such Notice of Borrowing is true and
correct and omits no material fact necessary to make the same not misleading.
Borrower covenants, warrants and represents to Agent and Lenders that all
representations and warranties of Borrower contained in this Agreement or any of
the other Loan Documents shall survive the execution, delivery and acceptance
thereof by the parties thereto and the closing of the transactions described
therein or related thereto.

 

9.             COVENANTS.

 

Borrower covenants and agrees that from the date hereof and so long as any
Indebtedness remains unpaid hereunder, or any of the Loan or other Obligations
remains outstanding, as follows:

 

9.1           Compliance Certificate. Concurrently with the delivery of the
financial statements described in Section 9.2.1(a), Borrower shall forward to
Agent a copy of the independent auditor's report to Borrower's management that
is prepared in connection with and expresses such auditor's opinion to Borrower
with respect to such financial statements. Concurrently with the delivery of all
financial statements described in Sections 9.2.2 (a) and (b), Borrower shall
cause to be prepared and furnished to Agent a certificate in the form of Exhibit
F hereto (a “Compliance Certificate”) from an Authorized Representative
certifying to Lenders, to the best of Borrower’s knowledge: (a) that no Default
has occurred and is continuing, or, if any such Default has occurred and is
continuing specifying the nature thereof, (b) as to compliance with the
covenants referenced therein and (c) as to the accuracy of the financial
information provided pursuant to Section 9.2 below.

 

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9.2           Financial Statements and Reports. Borrower shall furnish or cause
to be furnished to Agent from time to time, the following financial statements
and reports and other information, all in form, manner of presentation and
substance reasonably acceptable to the Agent:

 

9.2.1        Annual Statements. Within one hundred twenty (120) days after the
end of each calendar year (commencing with the year ending December 31, 2018):

 

(a)          consolidated financial statements of Borrower and Tenant (including
balance sheet, statement of financial condition, reconciliation of net worth,
income statement and cash flow statement) (i) prepared in accordance with GAAP,
or other recognized method of accounting acceptable to Agent, consistently
applied, consistent with the financial statements previously delivered to Agent,
and (ii) audited by a so-called “big four” accounting firm or another
independent, certified public accounting firm reasonably acceptable to Agent;
all such financial statements to include and to be supplemented by such detail
and supporting data and schedules as Agent may from time to time reasonably
require;

 

(b)          intentionally omitted; and

 

(c)          if requested by Agent, a detailed, updated list of all material
service contracts that are then in effect with respect to the Property setting
forth the name of each vendor, the date of each such contract and such other
details as Agent may reasonably request.

 

9.2.2        Quarterly Statements. Within sixty (60) days following the end of
each calendar quarter except, in the case of the fourth calendar quarter,
balance sheets and income statements which shall be furnished within one hundred
twenty (120) days following the end of each fourth calendar quarter:

 

(a)          the following certified by the Borrower to be true, accurate and
complete in all material respects: (i) unaudited financial statements of
Borrower in form reasonably acceptable to Agent, such financial statements to
include a balance sheet, income statement and cash flow statement and to be
supplemented by such detail and supporting data and schedules as Agent may from
time to time reasonably require; (ii) as to the Property, an operating statement
showing the results of operation for the prior quarter and on a year-to-date
basis for the period just ended and, within forty-five (45) days following the
end of each calendar year, an operating statement for the year just ended; (iii)
the current STR Report for the Property, (iv) a Property tax status report
setting forth the annual real estate taxes payable with respect to the Property,
the due dates of such real estate taxes and the portions of such taxes which
have been paid; and (v) such other information as the Agent may reasonably
require;

 

(b)          the following, prepared by Borrower based upon the books and
records of Borrower and certified by Borrower to be true, accurate and complete
in all material respects: Borrower's calculation of the Debt Service Coverage
Ratio as of the end of such calendar quarter and Borrower's calculation of the
amount, if any, to be deposited by Borrower in the Cash Reserve Account or the
amount of principal, if any, to be repaid or Acceptable Letter of Credit to be
furnished pursuant to Section 10.2 hereof; and

 

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(c)          to the extent not previously provided to Agent, full and complete
copies of all new leases (and of all renewals, amendments or modifications of
existing leases) that were executed by Borrower during the calendar quarter in
question.

 

9.2.3        Monthly Reports.

 

(a)          If Borrower is then required to deposit Net Cash Flow in the Cash
Reserve Account pursuant to the terms of Section 10.2 below, within twenty (20)
days following the end of each calendar month, operating statement with respect
to the Property showing the results of operation for the preceding twelve-month
trailing period.

 

(b)          If Borrower is then required to deposit Net Cash Flow in the Cash
Reserve Account pursuant to the terms of Section 10.2 below, prior to each NCF
Payment Date, a Net Cash Flow Statement for the immediately preceding NCF Period
certifying Borrower’s calculation of monthly Net Cash Flow for the immediately
preceding NCF Period and the amount required to be deposited by Borrower in the
Cash Reserve Account pursuant to Section 10.2 of this Agreement (e.g., if
January 15, 2020 is an NCF Payment Date, on or before January 15, 2020 Borrower
shall have submitted to Agent a Net Cash Flow Statement for the December, 2019
NCF Period).

 

9.2.4        Data Requested. Within a reasonable period of time and from time to
time such other financial data and information (in each case unaudited) as Agent
may reasonably request in writing with respect to the Property or Borrower or
Guarantor, including, but not limited to, rent rolls, aged receivables, aged
payables, leases, budgets, forecasts, reserves, cash flow projections, physical
condition of the Property and pending lease proposals.

 

9.2.5        Tax Returns. Within thirty (30) days after filing, complete copies
of all federal and state tax returns and supporting schedules of Borrower and
Guarantor.

 

9.2.6        Budgets and Pro Forma. Not later than January 20 of each calendar
year, commencing January 20, 2019, a proposed operating expense budget for the
Property for such year and a pro-forma cash flow statement for the Property for
such year, each in form reasonably acceptable to Agent, together with copies of
all budgets, forecasts and projections which support such proposed budget(s) and
pro-forma for such calendar year.

 

9.2.7        License or Permit Notices. Concurrently with the giving thereof,
and within five (5) Business Days after Borrower’s receipt thereof, copies of
all notices asserting a material default under, or requesting a material waiver,
modification or amendment of, any License or Permit.

 

9.2.8        Guarantor's Statements. When due pursuant to the terms of the
Guaranty, the financial statements and reports required to be furnished by
Guarantor as set forth in the Guaranty.

 

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9.2.9         Additional Information. In addition, Borrower shall furnish to
Agent:

 

(a)          Promptly after the commencement thereof, notice of all actions,
suits and proceedings before any court or other Governmental Authority, domestic
or foreign, affecting the Borrower or Guarantor, which, if determined adversely
to the Borrower or Guarantor, could reasonably be expected to have a Material
Adverse Effect; and

 

(b)          Promptly after the filing or receiving thereof, copies of all
reports, including annual reports, and notices which the Borrower files with or
receives from the Pension Benefit Guaranty Corporation or the United States
Department of Labor under ERISA, to the extent Borrower is required to file or
receives such reports; and

 

(c)          Promptly after Borrower receives actual knowledge thereof, notice
of the existence of any Default or Event of Default; and

 

(d)          Promptly after Borrower receives actual knowledge thereof, notice
of any change reasonably expected to have a Material Adverse Effect; and

 

(e)          Prompt written notice of any change in the information provided in
the most recently delivered Beneficial Ownership Certification that would result
in a change to the list of beneficial owners identified therein.

 

9.2.10       Intentionally Omitted.

 

9.2.11       Reporting Medium. All financial reports and statements provided to
Agent pursuant to this Section 9 may be submitted to Agent in “hard copy” or in
electronic medium (i.e., as an email attachment) in a format reasonably
acceptable to Agent.

 

9.3           Payment of Taxes and Other Obligations; Tax Escrow Account.

 

9.3.1        Payment. Subject to the right to contest set forth in Section 10.1,
Borrower shall duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges payable by it, or with respect to the Property, as well as
all claims or obligations for labor, materials, supplies or services (involving
an amount in excess of $50,000 in any instance or $150,000 in the aggregate) or
for borrowed funds in any amount. Borrower shall (or shall cause Tenant or Hotel
Manager to) pay all Hotel Taxes now or hereafter payable to the applicable
Governmental Authority prior to delinquency as the same become due and payable.

 

9.3.2        Tax Escrow Account. Within ten (10) days after Agent's demand made
at any time during which there exists and shall be continuing any Event of
Default, Borrower shall make monthly tax and insurance payments to Agent for
deposit in the Tax Escrow Account, in accordance with the provisions of Article
8 in the Mortgage. Borrower's obligation to make such tax and insurance payments
shall continue until such Event of Default shall have been cured. Borrower's
failure to make any such tax or insurance payment within ten (10) days after the
due date thereof (no additional grace or notice period being applicable thereto)
shall constitute an Event of Default under this Agreement. If Borrower is
required to open a Tax Escrow Account pursuant to the terms of this Agreement,
in connection therewith Borrower shall execute and deliver a so-called “Deposit
Account Control Agreement” with respect to the Tax Escrow Account in
substantially the form required by Citizens at that time.

 

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9.4            Conduct of Business; Compliance with Law. Borrower shall engage
solely in the ownership and operation of the Property and related activities,
and will not enter into any new ventures, or undertake any new Investments, or
any new business dealings which do not directly relate to the ownership and
operation of the Property, without the Required Lenders' express prior written
consent in each instance. As an express inducement to Lenders to make and
maintain the Loan, the Borrower agrees that at all times prior to payment and
satisfaction of all Obligations, the Borrower shall be and remain a Bankruptcy
Remote Entity. Borrower shall operate the Property and conduct its affairs in a
lawful manner and in substantial compliance with all Legal Requirements
applicable thereto including without limitation all applicable provisions of
ERISA.

 

9.5            Insurance. Borrower shall at all times maintain in full force and
effect the insurance coverages set forth in Exhibit C of this Agreement and
shall cause Agent to be designated as mortgagee/loss payee and as additional
insured in accordance with the requirements of Exhibit C. All insurance premiums
shall be paid in advance not less than ten (10) days prior to the due dates
thereof, and Agent shall be provided with evidence of such prepayment of
insurance premiums prior to closing and thereafter at least thirty (30) days
prior to each date on which the coverage may lapse for non-payment or otherwise
or replacement of such coverages. If Borrower fails to provide and pay for such
insurance and deliver to Agent evidence of such payment within five (5) days of
the demand for same by Agent, Agent may, at Borrower's expense, procure the
same, but Agent shall not be required to do so.

 

9.6            Restrictions on Liens, Transfers and Additional Debt

 

9.6.1         Prohibited Transactions. Except for Permitted Transactions, the
Borrower shall not:

 

(a)          create or incur, or suffer to be created or incurred, or to exist,
any encumbrance, mortgage, deed of trust, pledge, lien, charge or other security
interest of any kind, or any negative pledge of any kind, upon any of its assets
of any character, whether or not related to the Property, or any portion
thereof, whether now owned or hereafter acquired or upon the proceeds or
products thereof;

 

(b)          create or incur any Indebtedness, whether secured or unsecured,
either directly or as a guarantor, except for the Loan and Permitted Additional
Debt;

 

(c)          issue any ownership interests in addition to those specified in
Exhibit A, or issue any rights or instruments that are convertible into any such
additional ownership interests;

 

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(d)          permit any sale, transfer, exchange, assignment or pledge of or
grant of any security interest in (i) any ownership interests in Borrower or
(ii) any Distributions on account of any such ownership interests or any
proceeds thereof;

 

(e)          sell, lease, convey, transfer or exchange any of its material
assets of any character, whether or not related to the Property, or any portion
thereof, whether now owned or hereafter acquired; or

 

(f)          permit any Person to create or incur any Indebtedness, whether
secured or unsecured, either directly or as a guarantor, which is in any way
recourse (whether directly, indirectly, absolutely or contingently) to Borrower
or to any assets that are owned by Borrower.

 

9.6.2        Permitted Transactions. The term “Permitted Transactions” shall
mean Permitted Transfers, Permitted Additional Debt, Permitted Title Exceptions
and Approved Leases.

 

9.6.3        Permitted Transfers. The term “Permitted Transfers” shall mean:

 

(a)          the Security Documents and other agreements in favor of Agent on
behalf of the Lenders;

 

(b)          transactions, whether outright or as security, for which the
Required Lenders' prior written consent has been obtained, which consent may be
withheld, granted or granted conditionally, subject to such protective and other
conditions as the Required Lenders may require in their sole and absolute
discretion;

 

(c)          sales or dispositions in the ordinary course of business of worn,
obsolete or damaged items of personal property or fixtures which are suitably
replaced if needed; and

 

(d)          the transfer, issuance, sale, trade, or barter of any direct or
indirect ownership interests in shares or stock of Procaccianti Hotel REIT, Inc.
(the "REIT") or interests in the Member (including, without limitation, any
direct or indirect interest in the same, including options, warrants, membership
interests, profit interests or the issuance of any rights or instruments that
are convertible into any such shares or interests). Notwithstanding the
foregoing, at all times: (i) James A. Procaccianti and his Affiliates shall
continue to own, in the aggregate, directly or indirectly, not less than
fifty-one percent (51%) of the Class A Shares of the REIT; (ii) each of James A.
Procaccianti and Gregory D. Vickowski shall be an officer and director of the
REIT; (iii) the REIT shall maintain an advisory agreement pursuant to which
Procaccianti Hotel Advisors, LLC, a Delaware limited liability company (“PH
Advisor”), operates, directs and supervises the operations and administration of
the REIT and its investments, subject to and in accordance with such advisory
agreement, which advisory agreement shall be in substantially similar form to
the Amended and Restated Advisory Agreement dated as of August 2, 2018 by and
between the REIT, the Member, and PH Advisor; and (iv) PH Advisor shall continue
to be under common Control with the Guarantor. Any failure to satisfy the
conditions set forth in clauses (i) through (iv) of the immediately preceding
sentence shall be deemed a material breach of this Section 9.6.3(d).

 

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Borrower agrees and acknowledges that any Permitted Transfer made pursuant to
Section 9.6.3(b) above is subject to the disclosure requirements that are
described in Section 17.26 below.

 

9.6.4         Permitted Additional Debt. The term “Permitted Additional Debt”
shall mean:

 

(a)          Indebtedness, whether secured or unsecured, for which the Required
Lenders' prior written consent has been obtained, which consent may be withheld,
granted or granted conditionally subject to such protective and other conditions
as the Required Lenders may require in their sole and absolute discretion;

 

(b)          unsecured Indebtedness (excluding borrowed funds) which is incurred
in the ordinary course of business of operating the Property for Operating
Expenses and which is payable without interest if paid by the applicable due
date;

 

(c)          Inter-Company Loans (i) which are fully subordinated to the payment
and performance of all Obligations, (ii) which are unsecured, and (iii) with
respect to which (x) Agent and the obligee have entered into a written
Subordination Agreement; and (y) Required Lenders' prior written consent has
been obtained, which consent may be withheld, granted or granted conditionally
subject to such protective and other conditions as Required Lenders may require
in their sole and absolute discretion;

 

(d)          any tax, assessment, charge, levy or claim which is not yet
delinquent or which is being contested as described in Section 10.1.1 provided
that Borrower is in compliance with the terms of Section 10.1.1;

 

(e)          Indebtedness which ordinarily will be passed through to and paid by
the tenants of the Property incurred in the ordinary course of operating the
Property;

 

(f)          purchase money Indebtedness or equipment lease obligations incurred
in the ordinary course of business of operating the Property which do not exceed
$250,000 in the aggregate at any one time;

 

(g)          Indebtedness arising pursuant to any Hedging Contracts now or
hereafter entered into by Borrower with Citizens (or with any Affiliate of
Citizens Financial Group, Inc.) in connection with the Loan;

 

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(h)          Indebtedness arising pursuant to or in connection with Borrower's
obligations as landlord under Approved Leases; and

 

(i)          Indebtedness arising pursuant to Permitted Title Exceptions.

 

9.6.5         Additional Funds. All funds required for the Property (including
any funds required for Acquisition Costs, capital expenditures and leasing
costs) in excess of those available from the Loan, shall be provided by
Borrower.

 

9.6.6         Right to Accelerate Loan. The Loan shall become due and payable in
full, and the Required Lenders shall have the right to direct Agent to
accelerate the Loan and declare an Event of Default, at the option of the
Required Lenders, upon any breach or violation of the provisions of this Section
9.6, provided, however, except for a voluntary conveyance, mortgage, deed of
trust or lien (as to which no notice or grace periods shall be applicable), a
Default under this Section 9.6 shall be subject to the grace or notice periods
provided in Section 11.1.4 or 11.2.4, whichever is shorter.

 

9.6.7         Required Lenders' Options. Subject to Section 17.17(a), Required
Lenders may, at their option, in lieu of causing Agent to accelerate the Loan,
and in their sole and absolute discretion, agree to waive compliance with the
provisions of this Section 9.6 in any instance upon compliance with such terms
and conditions as Required Lenders may impose, including, without limitation,
the payment of a material fee and an increase in the interest rate and other
terms of the Loan. Except for Permitted Transfers, Required Lenders may grant or
withhold, or conditionally grant, their consent to any proposed transfer in
their sole and absolute discretion.

 

9.7           Limits on Guaranties; No Improper Distributions.

 

9.7.1       No Guaranties. The Borrower shall not guaranty the obligations of
any Person.

 

9.7.2       No Improper Distributions. Borrower shall not make any payment or
Distribution of money or property (in any form) if such payment or Distribution
would constitute an Improper Distribution.

 

9.8           Restrictions on Investments. Borrower shall not make or permit to
exist any direct or indirect Investment in:

 

(a)           any real property other than the Property; or

 

(b)           any tangible personal property other than that acquired in the
ordinary course of Borrower's present business in connection with owning,
managing and operating the Property.

 

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9.9           Indemnification Against Payment of Brokers' Fees. Borrower agrees
to defend, indemnify and save harmless Agent and Lenders from and against any
and all liabilities, damages, penalties, costs, and expenses, relating in any
manner to any brokerage or finder's fees in respect of the Loan.

 

9.10         Environmental Indemnity Obligations. Borrower and Guarantor have
executed and delivered to Agent an Environmental Indemnity Agreement (the
“Environmental Indemnity Agreement”) pursuant to the terms of which Borrower and
Guarantor have jointly and severally agreed to pay and perform their therein
specified obligations with respect to environmental matters and to indemnify and
hold Agent and Lenders harmless with respect to such environmental matters. All
obligations of Borrower and Guarantor under the Environmental Indemnity
Agreement are herein collectively defined as the “Environmental Indemnity
Obligations”. The Environmental Indemnity Obligations shall survive the
foreclosure (or the acceptance of a deed-in-lieu of foreclosure) and/or
discharge of the Mortgage and shall for all purposes be deemed to be an
Obligation and shall be fully secured by all of the other Security Documents.

 

9.11         No Dissolution, Merger or Acquisition. Borrower shall not dissolve
or liquidate, or merge or consolidate with, or otherwise acquire all or
substantially all of the assets of, any other Person, or enter into any merger
or consolidation agreements.

 

9.12         Contracts of a Material or Significant Nature. Except for contracts
otherwise complying with this Agreement and contracts incident to the routine
operation of the Property such as utilities, insurance and maintenance, Borrower
shall not enter into any other contracts, agreements or purchase orders which
would involve the expenditure, in the aggregate in any one year, of any amounts
in excess of the amounts contemplated by the then effective Property budget
without, in each case, the Agent's prior written consent, which consent shall
not be unreasonably withheld or delayed, but which consent may be conditioned
upon a demonstration by Borrower to the Agent's reasonable satisfaction that the
contract, agreement or purchase order is reasonable and that Borrower has
adequate resources to pay and perform the same.

 

9.13         Management of the Property.

 

(a)          Borrower shall cause Tenant to cause Hotel Manager to manage the
Property in accordance with the Hotel Management Agreement and the Franchise
Agreement. Borrower shall cause Tenant to (a) diligently perform and observe all
of the terms, covenants and conditions of the Hotel Management Agreement on the
part of Tenant to be performed and observed, (b) promptly notify Agent of any
notice to Tenant of any default by Tenant in the performance or observance of
any of the terms, covenants or conditions of the Hotel Management Agreement on
the part of Tenant to be performed and observed, and (c) promptly notify Agent
of any default by Hotel Manager in the performance or observance of any of the
terms, covenants or conditions of the Hotel Management Agreement on the part of
Hotel Manager to be performed and observed.

 

(b)          Borrower shall not permit Tenant to surrender, terminate, cancel,
modify, renew or extend the Hotel Management Agreement or enter into any other
agreement relating to the management or operation of the Property with Hotel
Manager or any other Person, or consent to the assignment by the Manager of its
interest under the Hotel Management Agreement, in each case without the express
consent of Agent.

 

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9.14         Pay Indebtedness and Perform Obligations. Borrower shall:

 

(a)          make full and timely payment when due of all amounts owed by the
Borrower to the Agent and/or the Lenders, whether now existing or hereafter
arising;

 

(b)          duly comply with all of the terms and covenants contained in each
of the Loan Documents; and

 

(c)          subject to the terms of Section 10.1 below, duly comply with all
applicable provisions of all other agreements, indentures, leases, contracts and
other documents binding upon the Borrower;

 

all at the times (and in any case prior to the expiration of any applicable
grace periods) and places and in the manner set forth therein.

 

9.15         Deposit of Proceeds; Bank Accounts.

 

(a)          Borrower shall maintain all of its checking, depository and other
“bank” accounts with Agent. All cash proceeds resulting from the operations of
Borrower and of the Property shall be deposited in one or more segregated
deposit accounts at Agent.

 

(b)          Agent and Lenders are hereby authorized, on or after the due date,
to charge such accounts, or any other deposit account of Borrower at Agent or at
any Lender, with the amount of all payments due under this Agreement, the Notes
or the other Loan Documents. The failure of Agent or any Lender to so charge any
such account shall not affect or limit Borrower's obligation to make any
required payment.

 

9.16         Place for Records; Inspection. Borrower shall maintain all of its
business records at the address specified at the beginning of this Agreement.
Upon two (2) Business Days' prior notice and at reasonable times during normal
business hours Agent shall have the right (through such agents or Consultants as
Agent may designate) to examine Borrower's property and make copies of and
abstracts from Borrower's books of account, correspondence and other records, it
being agreed that Lenders shall use reasonable efforts to not divulge
information obtained from such examination to others except in connection with
Legal Requirements and in connection with administering the Loan, enforcing
their rights and remedies under the Loan Documents and in the conduct, operation
and regulation of their banking and lending businesses (which may include,
without limitation, the transfer of the Loan or of participation interests
therein). Any transferee of the Loan or any holder of a participation interest
in the Loan shall be entitled to deal with such information in the same manner
and in connection with any subsequent transfer of its interest in the Loan or of
further participation interests therein.

 

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9.17         Costs and Expenses. Borrower shall pay all actual and reasonable
costs and expenses incurred by Agent (whether prior or subsequent to the date
hereof and regardless of whether an Event of Default exists) in connection with
(a) the negotiation, preparation, execution, delivery, administration (to the
extent imposed by Agent on similarly situated borrowers or under mortgage loans
similar in type and amount to the Loan), modification, amendment or waiver of,
or consent under, any provision of this Agreement, any of the other Loan
Documents or any of the other documents to be delivered hereunder or thereunder,
(b) the closing or administration of the Loan, (c) any Default or alleged
Default hereunder, (d) the exercise or defense of any right or remedy of Agent
or any Lender, or the enforcement of any obligations of Borrower, under this
Agreement or any other Loan Document and (e) to the extent imposed by Agent on
similarly situated borrowers or under mortgage loans similar in type and amount
to the Loan, the syndication of the Loan; including in each case, without
limitation, all reasonable fees and expenses associated with travel and all
reasonable fees and expenses of legal counsel (including outside legal counsel
but excluding costs of in-house legal counsel), accountants, appraisers,
engineers, surveyors and consultants retained by Agent with respect thereto and
with respect to advising Agent as to its rights and obligations under this
Agreement and the other Loan Documents. Additionally, if an Event of Default
occurs, Borrower shall pay all costs and expenses incurred by Agent and any of
the Lenders (including, without limitation, the reasonable fees and expenses of
legal counsel, including outside legal counsel but excluding costs of in-house
legal counsel) in connection with the restructuring or enforcement (whether
through negotiation, collection, bankruptcy, insolvency or other enforcement
proceedings or otherwise) of this Agreement and the other Loan Documents and the
collection of the Loan, including, without limitation, any costs incurred in
connection with any attempt to inspect, verify, protect, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon any of the
Collateral. Additionally, Borrower shall pay all costs and expenses incurred by
Agent and any of the Lenders (including, without limitation, the reasonable fees
and expenses of legal counsel, including outside legal counsel but excluding
costs of in-house legal counsel) in connection with any litigation, contest,
dispute, suit, proceeding or action brought against Agent or any Lender by any
third party relating in any way to the Property or any of the other Collateral,
this Agreement or any of the other Loan Documents or Borrower's affairs.
Additionally, if any taxes (excluding taxes imposed upon or measured by the net
income of Agent or Lenders but including, without limitation, any stamp or
documentary taxes or any other excise or property taxes, note or mortgage taxes
and all revenue stamps) shall be payable on account of the execution or delivery
of this Agreement, or the execution, delivery, issuance or recording of any of
the other Loan Documents, or the creation of any of the Obligations hereunder,
by reason of any existing or hereafter enacted federal or state statute,
Borrower will pay all such taxes, including, but not limited to, any interest
and penalties thereon, and will indemnify and hold Agent and Lenders harmless
from and against liability in connection therewith. Additionally, Borrower shall
pay all recording, filing, title insurance and related costs reasonably incurred
by Agent in connection with the Loan. All amounts payable by Borrower pursuant
to this Section 9.17 shall be due and payable ten (10) days after written demand
to Borrower (which demand shall include invoices for such amounts). All such
amounts shall be additional Obligations under this Agreement and shall be
secured by the Security Documents and the Collateral. All such amounts shall
bear interest at the Applicable Interest Rate (or, if applicable, the Default
Rate).

 

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9.18         Compliance with Legal Requirements. Borrower shall comply in all
material respects with all Legal Requirements applicable to the Property,
Borrower, or both. Borrower shall obtain and keep in force any and all Licenses
and Permits, franchises, or other governmental authorizations necessary to the
ownership of its material assets or to the conduct of a material portion of its
business. Borrower shall at all times keep and maintain all of its assets in
compliance with, and shall not cause or permit any of the same to be in material
violation of, any applicable Environmental Legal Requirements.

 

9.19         General Indemnity. Borrower shall indemnify, protect, and hold
Agent, any Agent-Related Person, Lenders and their respective parents,
subsidiaries, directors, officers, employees, representatives, agents,
successors, assigns, and attorneys (collectively, the “Indemnified Parties”)
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, fees, actions, causes of action, judgments, suits, claims, costs,
expenses (including, without limitation, actual and reasonable attorneys' fees
and legal expenses whether or not suit is brought and settlement costs), and
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Indemnified Parties, in any way relating to or
arising out of the Property, the Loan, the Collateral, the Loan Documents or any
of the transactions contemplated therein (collectively, the “Indemnified
Liabilities”), to the extent that any of the Indemnified Liabilities results,
directly or indirectly, from any claim made or action, suit, or proceedings
commenced by or on behalf of any Person other than the Indemnified Parties or
Borrower. Notwithstanding the foregoing, an Indemnified Party shall not be
entitled to indemnification in respect of claims arising from acts of its own
gross negligence or willful misconduct to the extent that such gross negligence
or willful misconduct is determined by the final judgment of a court of
competent jurisdiction, not subject to further appeal, in proceedings to which
such Indemnified Party is a proper party. The provisions of and undertakings and
indemnification set forth in this paragraph shall survive the satisfaction and
payment of the Obligations and termination of this Agreement. To the extent that
the foregoing undertaking by the Borrower may be unenforceable for any reason,
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable Law.

 

9.20         Leasing Matters.

 

9.20.1      Intentionally Omitted.

 

9.20.2      Agent’s Approval Required.

 

(a)           Borrower shall be at liberty to renew, modify, amend, terminate or
take other actions with respect to existing leases, or enter into new leases, of
premises within the Property on commercially reasonable terms and conditions,
except that the Agent’s prior written consent shall be required with respect to
any such new lease. Agent shall not unreasonably withhold, delay or condition
its consent to any such requested termination, deviation or other action so long
as the request is consistent with then existing market conditions. To the extent
requested by Agent, Agent shall be provided, within ten (10) Business Days
following execution thereof, with a full and complete copy of each permitted
lease and any permitted renewal, amendment or modification thereof.

 

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(b)          Any lease, renewal, or modification or amendment of lease which has
been so approved by the Agent and, if so requested by the Agent as to which the
tenant has executed an SNDA Agreement, an estoppel certificate, or both, in each
case in form reasonably acceptable to Agent, shall be an “Approved Lease”.

 

9.20.3     Borrower's Requests. Any request by Borrower for an approval from
Agent with respect to leasing matters shall be sent to Agent and shall be
accompanied, by the following: (a) for a new lease, an executive summary of the
terms and conditions of any proposed lease, and, if applicable, any proposed
guaranty; (b) an economic analysis of any proposed lease, (c) if requested by
Agent, a complete copy of the proposed lease or amendment or modification
thereof complete with all applicable schedules and exhibits; (d) if requested by
Agent, for a new lease, a complete copy of any proposed guaranty; (e) if
requested by Agent (as to new leases or amendments or modifications to existing
leases involving material economic changes, and as to proposed sub-lets or
assignments), comprehensive financial information with respect to the proposed
tenant and, if applicable, the proposed guarantor; and (f) an executive summary
of the facts and conditions relating to any proposed termination of lease.

 

9.20.4       Lenders' Response.

 

(a)          Intentionally omitted.

 

(b)          Agent shall act on requests from Borrower for any approval under
Section 9.20.2 in a commercially reasonable manner and, in any event, Agent
shall respond to any such request within ten (10) Business Days following
Agent’s receipt thereof. Agent’s response may consist of an approval or
disapproval of the request, or a conditional approval thereof subject to
specified conditions, or a request for further data or information, or any
combination thereof. In order to expedite the processing of requests for such
approvals, Borrower agrees to provide Lenders with as much advance information
as is possible in a commercially reasonable manner in advance of Borrower's
formal request for an approval. Agent’s failure to respond to any request for
any approval under Section 9.20.2 within ten (10) Business Days following
Agent’s receipt thereof, shall be deemed to be its disapproval of such request.

 

9.20.5      SNDAs and Estoppels. Agent shall have the right to require Borrower
to cause each tenant and subtenant to execute and deliver to Agent (a) a
subordination, non-disturbance of possession and attornment agreement (“SNDA
Agreement”) in form, content and manner of execution reasonably acceptable to
Agent, and (b) from time to time, an estoppel certificate in form and manner of
execution reasonably acceptable to Agent. In addition, upon the execution of any
new Approved Lease and upon Borrower's request, Agent shall execute and deliver
an SNDA Agreement with such new tenant or subtenant.

 

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9.21         Intentionally Omitted.

 

9.22         Tenant Security Deposits. Upon Agent's written demand at any time
during the continuance of any Event of Default, Borrower will transfer to Agent
all tenant and subtenant security deposits and other refundable deposits held by
Borrower or by the Hotel Manager, which tenant and subtenant security deposits
and other refundable deposits will be held and applied by Agent in accordance
with applicable Law and the applicable leases or other agreements.

 

9.23         Audits. Agent, upon request of the Required Lenders, may from time
to time, upon notification to Borrower, conduct an audit of any and all
collateral and all books and records of Borrower, and all costs of one (1) audit
per calendar year shall be reimbursed by Borrower within thirty (30) days after
the notification by Agent to Borrower of the completion of such audit.

 

9.24         Filings. Borrower shall file all federal, state and local tax
returns and other reports Borrower is required by Law to file.

 

9.25         Certain Expenses. Borrower shall pay to Agent and/or Lenders, upon
demand therefor, any and all reasonable fees, costs or expenses which Agent
and/or Lenders pays to a bank or other similar institution arising out of or in
connection with (i) the forwarding to Borrower, or to any other Person on behalf
of Borrower, any proceeds of the Loan and (ii) the depositing for collection of
any check or item of payment received by or delivered to Agent and/or Lenders on
account of the Obligations.

 

9.26         Compliance with ERISA. Borrower shall (i) at all times make prompt
payment of contributions required to meet the minimum funding standards set
forth in ERISA with respect to each ERISA Plan; (ii) promptly after the filing
thereof, furnish to Agent copies of any annual report required to be filed
pursuant to ERISA in connection with each ERISA Plan and any other employee
benefit plan of Borrower subject to ERISA; (iii) notify Agent as soon as
practicable of any Reportable Event and of any additional act or condition
arising in connection with any ERISA Plan which Borrower believes might
constitute grounds for the termination thereof by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States district
court of a trustee to administer such ERISA Plan; and (iv) furnish to Agent,
promptly upon Agent's request therefor, such additional information concerning
any ERISA Plan or any other such employee benefit plan as may be reasonably
requested.

 

9.27         Records and Books. Borrower shall keep adequate records and books
of account with respect to its business activities in which proper entries are
made in accordance with GAAP reflecting all of its financial transactions.

 

9.28         Further Assurances. Borrower shall, at Agent's request, promptly
execute and deliver or cause to be executed and delivered to Agent any and all
documents, instruments and agreements reasonably deemed necessary by Agent to
perfect or to continue the perfection of Agent's liens or otherwise to give
effect to or carry out the terms or intent of this Agreement or any of the other
Loan Documents.

 

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9.29         Borrower Cooperation with Sell Down. Borrower agrees that it will
assist Agent in achieving timely sales of portions of the Loan (whether via
syndication or the sale of participation interests), which assistance will be
accomplished by a variety of means including direct contact between senior
officers and advisers of the Borrower and any proposed participants or new
Lenders. Borrower shall provide, and shall cause its advisers to provide, all
reasonable information reasonably requested by Agent in order to accomplish such
a sale or sales of interests in the Loan. In connection with the above, Borrower
will not be required to make any certifications not otherwise provided for in
this Agreement and Borrower will not be required to incur any material expense.

 

9.30         Substitute Notes. In connection with the closing of the Loan,
Borrower is executing and delivering to Agent one Note in the principal amount
of $17,836,000.00. Thereafter, Borrower shall execute such replacement and
substitute Notes (the “Substitute Note(s)”) as may be requested by Agent or
Agent and any Lender from time to time to facilitate the issuance of individual
Notes to each of the Lenders or the assignment by a Lender of all or part of its
rights and obligations under this Agreement, provided, however, such Substitute
Note(s) shall in the aggregate total the amount of the Note being replaced, and
upon delivery of a Substitute Note, the Agent or Lender in question shall
conspicuously mark the face of the Note being substituted with the following
legend: “THIS NOTE HAS BEEN RENEWED AND SUBSTITUTED” and promptly return same to
Borrower.

 

9.31         New Places of Business. Borrower shall not transfer its principal
place of business or chief executive office without at least thirty (30) days
prior written notice to Agent.

 

9.32         New Name or State of Organization; Fictitious Names. Borrower shall
not change its name or jurisdiction of organization or use any fictitious name
or “d/b/a” except upon thirty (30) days prior written notice to Agent and after
the filing by Agent of UCC Financing Statements, in form and substance
satisfactory to Agent to perfect or continue the perfection of Agent's liens and
security interests.

 

9.33         Margin Stock. Borrower shall not own, purchase or acquire (or enter
into any contract to purchase or acquire) any “margin security”, as defined by
any regulation of the Federal Reserve Board as now in effect or as the same may
hereafter be in effect.

 

9.34         Fiscal Year. Borrower shall not change its fiscal year.

 

9.35         No Modification of Inter-Company Loans. Borrower shall not (a)
amend, modify or terminate any document governing, evidencing or otherwise
related to any Inter-Company Loan in any way that creates any change that
conflicts with the relevant Subordination Agreement or this Agreement, or (b)
make any payment under any Inter-Company Loan in a manner that is inconsistent
with the terms of the applicable Subordination Agreement or of Section 9.7.2 of
this Agreement.

 

9.36         Lost Notes, etc. Upon receipt of an affidavit of an officer of any
Lender as to the loss, theft, destruction or mutilation of any Note (or of any
other Loan Document which is not of public record), Borrower will issue, in lieu
thereof, a replacement Note or replacement other Loan Document in the same
principal amount and otherwise of like tenor and identical in all respects.

 

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9.37          Prohibited Transactions. Borrower shall not take any action, or
fail to take any action, if such action or failure to act would cause the
execution, delivery and performance of the Loan Documents or the borrowing of
any Loan Proceeds to involve any Prohibited Transaction.

 

9.38          Accounting Method. Borrower shall not make or consent to a
material change in its method of accounting (including, without limitation, the
basis of application of GAAP) or in its tax elections under the Code, as
applicable, without, in each case, the prior written consent of Agent which
consent shall not be unreasonably withheld.

 

9.39          Subordinated Indebtedness. Borrower shall not make any payment on
any Indebtedness subordinated to the Loan in violation of any Subordination
Agreement or other agreement relating thereto.

 

9.40          Transactions with Affiliates. Borrower shall not enter into, or be
a party to, any transaction with any Affiliate (including, without limitation,
transactions involving the purchase, sale or exchange of property, the rendering
of services or the sale of stock) except in the ordinary course of business
pursuant to the reasonable requirements of the Borrower and upon fair and
reasonable terms no less favorable to the Borrower than Borrower would obtain in
a comparable arm's-length transaction with a person other than an Affiliate.

 

9.41          Construction and Completion. Borrower shall promptly commence and
diligently pursue to completion all work set forth in the capital expenditures
budget attached hereto as Exhibit H (the “Approved Capital Expenditures
Budget”). Without limiting the foregoing, all work required to be completed by
Borrower pursuant to any so-called “Property Improvement Plan” now or hereafter
entered into by Borrower and the franchisor under the Franchise Agreement shall
be completed when required in accordance with the terms thereof. Borrower shall
promptly correct and remedy any defects or deficiencies in construction of
capital improvements or tenant improvements or any future repairs, restorations,
reconstructions or modifications thereto.

 

9.42          Interest Rate Protection Agreements. If at any time Borrower shall
enter into any Interest Rate Protection Agreement with any Person, Borrower
shall (a) deliver a copy of such Interest Rate Protection Agreement (including
all confirmations and schedules related thereto) to Agent within five (5) days
after Borrower's execution thereof, and (b) execute and deliver to Agent such
additional documents as Agent may reasonably require in order to assign all of
Borrower's rights under any such Interest Rate Protection Agreement to Agent as
additional security for the payment and performance of Borrower's Obligations.

 

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9.43          Controlled Substances. Without limiting the provisions of Section
9.4, Borrower shall not suffer or permit any tenant under any lease to violate
any Laws affecting the Property, including the Controlled Substances Act or the
Civil Asset Forfeiture Reform Act. Upon learning of any conduct contrary to this
Section, Borrower shall promptly take all actions reasonably expected under the
circumstances to terminate any such use of the Property, including: (a) to give
timely notice to an appropriate law enforcement agency of information that led
Borrower to know such conduct had occurred, and (b) in a timely fashion to
revoke or make a good faith attempt to revoke permission for those engaging in
such conduct to use the Property or to take reasonable actions in consultation
with a law enforcement agency to prevent the illegal use of the Property.

 

9.44          Updated Appraisals. Agent shall have the right to obtain a new or
updated appraisals of the Property from time to time, and Borrower shall
cooperate with Agent in this regard. Any such new or updated appraisals shall be
at Lenders' expense unless otherwise provided in this Agreement or unless an
Event of Default exists, in which case Borrower shall pay for any such new or
updated appraisals.

 

9.45          No Amendment of Limited Liability Company Agreement. The
Borrower’s limited liability company agreement shall not be amended in any
material respect without the prior written consent of Agent, which consent shall
not be unreasonably withheld.

 

9.46          License and Permit Transfers. In the event that Agent exercises
its right to foreclose any of the Security Documents, Borrower shall fully
cooperate with Agent (and/or any purchaser at any foreclosure sale) to cause the
transfer of any and all Licenses and Permits required for the operation of the
Property to the purchaser at any such foreclosure sale or their nominee.

 

9.47          Required Interest Rate Protection Agreement.

 

(a)            Borrower shall at all times during the Term maintain a Required
Interest Rate Protection Agreement in full force and effect. Prior to the
expiration of any Required Interest Rate Protection Agreement, Borrower shall
purchase a replacement Required Interest Rate Protection Agreement so that
Borrower shall maintain a Required Interest Rate Protection Agreement in full
force and effect at all times. If Borrower fails to purchase any such Required
Interest Rate Protection Agreement, Agent may, at its option, purchase a
Required Interest Rate Protection Agreement that is acceptable to Agent and, in
any such case, Borrower shall pay to Agent, on demand, all costs incurred by
Agent in connection therewith, together with interest on such amount at the
Default Rate. Borrower shall not terminate, consent to a termination or agree to
any amendment to any Required Interest Rate Protection Agreement without the
prior written consent of Agent in each instance.

 

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(b)            Borrower shall comply with all of its obligations under the terms
and provisions of any Required Interest Rate Protection Agreement. Borrower
shall take all actions reasonably requested by Agent to enforce Agent’s rights
under any Required Interest Rate Protection Agreement in the event of a default
by the Counterparty and Borrower shall not waive, amend or otherwise modify any
of its rights thereunder. Borrower shall not (i) without the prior written
consent of Agent, modify, amend or supplement the terms of any Required Interest
Rate Protection Agreement, (ii) without the prior written consent of Agent,
cause the termination of any Required Interest Rate Protection Agreement prior
to its stated maturity date, (iii)  without the prior written consent of Agent,
waive or release any obligation of the Counterparty (or any successor or
substitute party to any Required Interest Rate Protection Agreement) under any
Required Interest Rate Protection Agreement, (iv) without the prior written
consent of Agent, consent or agree to any act or omission to act on the part of
the Counterparty (or any successor or substitute party to any Required Interest
Rate Protection Agreement) which, without such consent or agreement, would
constitute a default under such Required Interest Rate Protection Agreement,
(v) fail to exercise promptly and diligently each and every material right which
it may have under any Required Interest Rate Protection Agreement, (vi) take or
omit to take any action or suffer or permit any action to be omitted or taken,
the taking or omission of which would result in any right of offset against sums
payable under any Required Interest Rate Protection Agreement or any defense by
the Counterparty (or any successor or substitute party to any Required Interest
Rate Protection Agreement) to payment or (vii) fail to give prompt written
notice to Agent of any notice of default given or received by Borrower under or
with respect to any Required Interest Rate Protection Agreement, together with a
complete copy of any such notice.

 

(c)            If for any reason the Counterparty’s rating shall fall below the
Minimum Counterparty Rating, Borrower shall within ten (10) Business Days
following receipt of notice thereof from Agent, procure a new interest rate
protection product from a counterparty having a rating equal to the Minimum
Counterparty Rating in the form of the Required Interest Rate Protection
Agreement and Borrower shall pledge same to Agent pursuant to an assignment of
interest rate protection agreement in the form of the Assignment of Interest
Rate Protection Agreement or such other assignment form as is then generally
utilized by Agent and accompanied by an opinion letter from counsel to such new
Counterparty in form and substance reasonably satisfactory to Agent. The
provisions of this subsection (b) shall not be applicable if the Counterparty is
Agent or an Affiliate of Agent.

 

9.48          Certain Operating Lease Covenants. Borrower further covenants and
agrees with Agent as follows:

 

(a)            Borrower shall not, without Agent’s prior consent: (i) surrender,
terminate or cancel the Operating Lease; (ii) reduce or consent to the reduction
of the term of the Operating Lease; (ii) increase or consent to the increase of
the amount of any rent or other charges under the Operating Lease; or (iii)
otherwise modify, change, supplement, alter or amend, or waive or release any of
its rights and remedies under the Operating Lease in any material respect; and

 

(b)            Borrower shall: (i) promptly perform and/or observe all of the
covenants and agreements required to be performed and observed by it under the
Operating Lease and do all things necessary to preserve and to keep unimpaired
its rights thereunder; (ii) promptly notify Agent of any default under the
Operating Lease of which it is aware; and (iii) promptly deliver to Agent a copy
of each financial statement, business plan, capital expenditures plan, notice,
report and estimate received by Borrower under the Operating Lease.

 

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9.49          Certain Hotel/Franchise Agreement Covenants. Borrower further
covenants and agrees with Agent as follows:

 

(a)            Borrower shall not, without Agent’s prior consent permit the
Tenant to: (i) surrender, terminate or cancel the Franchise Agreement; (ii)
change the brand or “flag” set forth in the Franchise Agreement; (iii) reduce or
consent to the reduction of the term of the Franchise Agreement; (vi) increase
or consent to the increase of the amount of any charges under the Franchise
Agreement; or (v) otherwise modify, change, supplement, alter or amend, or waive
or release any of its rights and remedies under the Franchise Agreement in any
material respect;

 

(b)            Borrower shall not permit Tenant to, without Agent’s written
consent, enter into transactions with any affiliate, including, without
limitation, any arrangement providing for the managing of the Property, the
rendering or receipt of services or the purchase or sale of inventory, except
any such transaction in the ordinary course of business of Tenant if the
monetary or business consideration arising therefrom would be substantially as
advantageous to Tenant as the monetary or business consideration that would
obtain in a comparable transaction with a Person not an Affiliate of Tenant;

 

(c)            Borrower and Tenant shall cause the Property to be operated
pursuant to the Franchise Agreement;

 

(d)            Borrower shall cause Tenant to:

 

(i)          promptly perform and/or observe all of the covenants and agreements
required to be performed and observed by it under the Franchise Agreement and do
all things necessary to preserve and to keep unimpaired its rights thereunder;

 

(ii)         promptly notify Agent of any default under the Franchise Agreement
of which it is aware;

 

(iii)        promptly deliver to Agent a copy of each financial statement,
business plan, capital expenditures plan, notice, report and estimate received
by Master Tenant under the Franchise Agreement; and

 

(e)            promptly enforce the performance and observance of all of the
covenants and agreements required to be performed and/or observed by the
franchisor under the Franchise Agreement.

 

10.SPECIAL PROVISIONS.

 

10.1          Right to Contest.

 

10.1.1       Taxes and Claims by Third Parties. Notwithstanding the provisions
of Section 9.3 which obligate Borrower to pay taxes and other obligations to
third parties when due, it is agreed that any tax, assessment, charge, levy,
claim or obligation to a third party (expressly excluding an obligation created
under the Loan Documents) need not be paid while the validity or amount thereof
is being contested currently, diligently and in good faith by appropriate
proceedings and if Borrower has adequate unencumbered (except in favor of Agent)
cash reserves with respect thereto or if Borrower has fully bonded such claim,
and provided that such contest does not create a default by landlord under any
lease assigned to Agent; and provided, further, that Borrower shall pay all
taxes, assessments, charges, levies or obligations: (a) immediately upon the
commencement of proceedings to enforce any lien which may have attached as
security therefor, unless such proceeding is stayed by proper court order
pending the outcome of such contest; and (b) as to claims for labor, materials
or supplies, prior to the imposition of any lien on the Property unless the lien
is discharged or bonded as set forth in Section 11.1.4.

 

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10.1.2       Legal Requirements. Borrower may contest any claim, demand, levy or
assessment under any Legal Requirements by any Person if: (a) the contest is
based upon a material question of law or fact raised by Borrower in good faith;
(b) Borrower properly commences and thereafter diligently pursues the contest;
(c) the contest will not materially impair the ability to ultimately comply with
the contested Legal Requirement should the contest not be successful and the
conduct of the contest will not materially interfere with the landlord's ability
to obligate all tenants and other occupants to pay all Rents and other charges
without offset; (d) Borrower demonstrates to the Agent's reasonable satisfaction
that Borrower has the financial capability to undertake and pay for such contest
and any corrective or remedial action then or thereafter reasonably likely to be
necessary; (e) no Event of Default exists; (f) in any case in which the likely
cost of complying with the Legal Requirement in the event the contest is not
successfully resolved, as reasonably determined by Agent, is more than $50,000,
there is no reason to believe that the contest will not be resolved prior to the
original Maturity Date or, if an Extended Term has become effective, prior to
the applicable Extended Maturity Date; and (g) if the contest relates to an
Environmental Legal Requirement, the conditions set forth in the Environmental
Indemnity Agreement relating to such contest shall all be satisfied.

 

10.2          Debt Service Coverage Ratio, Cash Reserve Account and Required
Principal Payments.

 

10.2.1       (a)         Commencing with the Calculation Period ending September
30, 2018 and on each other Calculation Date thereafter during the Term, Agent
shall calculate the then Debt Service Coverage Ratio.

 

(b)          If, on any such Calculation Date occurring during the Initial Term,
the Debt Service Coverage Ratio is calculated to be less than 1.25 to 1 but
greater than 1.1 to 1, then within ten (10) days after written notice from
Agent, Borrower shall either: (i) pay down the outstanding principal balance of
the Loan to such amount as would have caused such Debt Service Coverage Ratio
requirement to have been satisfied if such reduced principal balance had been in
effect on such Calculation Date (the “Initial Term Required DSC Amount”), (ii)
furnish to Agent an Acceptable Letter of Credit in an amount equal to the
Initial Term Required DSC Amount as additional security for the Obligations, or
(iii) deposit in the Cash Reserve Account all Net Cash Flow received by Borrower
during the immediately preceding NCF Period and deposit in the Cash Reserve
Account on or before each NCF Payment Date thereafter all Net Cash Flow received
by Borrower during the immediately preceding NCF Period until such time as the
Debt Service Coverage Ratio is greater than or equal to 1.25 to 1 for two (2)
consecutive calendar quarters on the Calculation Date in question. If, on any
Calculation Date, the Debt Service Coverage Ratio is calculated to be greater
than 1.25 to 1 for two (2) consecutive calendar quarters, provided that there
does not then exist any Default, upon written request from Borrower (i) Agent
shall remit any funds then on deposit in the Cash Reserve Account (if any) to
Borrower and (ii) Borrower shall no longer be required to deposit all Net Cash
Flow in the Cash Reserve Account pursuant to this Section 10.2.1(b) as long as
the Debt Service Coverage Ratio continues to be greater than or equal to the
ratio that is then required pursuant to this Section 10.2.1.

 

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(c)          If, on any Calculation Date occurring during the First Extended
Term or Second Extended Term, the Debt Service Coverage Ratio is calculated to
be less than 1.3 to 1 but greater than 1.1 to 1, then within ten (10) days after
written notice from Agent, Borrower shall either: (i) pay down the outstanding
principal balance of the Loan to such amount as would have caused such Debt
Service Coverage Ratio requirement to have been satisfied if such reduced
principal balance had been in effect on such Calculation Date (the “First/Second
Extended Term Required DSC Amount”), (ii) furnish to Agent an Acceptable Letter
of Credit in an amount equal to the First/Second Extended Term Required DSC
Amount as additional security for the Obligations, or (iii) deposit in the Cash
Reserve Account all Net Cash Flow received by Borrower during the immediately
preceding NCF Period and deposit in the Cash Reserve Account on or before each
NCF Payment Date thereafter all Net Cash Flow received by Borrower during the
immediately preceding NCF Period until such time as the Debt Service Coverage
Ratio is greater than or equal to 1.3 to 1 for two (2) consecutive calendar
quarters on the Calculation Date in question. If, on any Calculation Date, the
Debt Service Coverage Ratio is calculated to be greater than 1.3 to 1 for two
(2) consecutive calendar quarters, provided that there does not then exist any
Default, upon written request from Borrower (i) Agent shall remit any funds then
on deposit in the Cash Reserve Account (if any) to Borrower and (ii) Borrower
shall no longer be required to deposit all Net Cash Flow in the Cash Reserve
Account pursuant to this Section 10.2.1(c) as long as the Debt Service Coverage
Ratio continues to be greater than or equal to the ratio that is then required
pursuant to this Section 10.2.1.

 

(d)          If, on any Calculation Date occurring during the Third Extended
Term, the Debt Service Coverage Ratio is calculated to be less than 1.35 to 1
but greater than 1.1 to 1, then within ten (10) days after written notice from
Agent, Borrower shall either: (i) pay down the outstanding principal balance of
the Loan to such amount as would have caused such Debt Service Coverage Ratio
requirement to have been satisfied if such reduced principal balance had been in
effect on such Calculation Date (the “Third Extended Term Required DSC Amount”),
(ii) furnish to Agent an Acceptable Letter of Credit in an amount equal to the
Third Extended Term Required DSC Amount as additional security for the
Obligations, or (iii) deposit in the Cash Reserve Account all Net Cash Flow
received by Borrower during the immediately preceding NCF Period and deposit in
the Cash Reserve Account on or before each NCF Payment Date thereafter all Net
Cash Flow received by Borrower during the immediately preceding NCF Period until
such time as the Debt Service Coverage Ratio is greater than or equal to 1.35 to
1 for two (2) consecutive calendar quarters on the Calculation Date in question.
If, on any Calculation Date, the Debt Service Coverage Ratio is calculated to be
greater than 1.35 to 1 for two (2) consecutive calendar quarters, provided that
there does not then exist any Default, upon written request from Borrower (i)
Agent shall remit any funds then on deposit in the Cash Reserve Account (if any)
to Borrower and (ii) Borrower shall no longer be required to deposit all Net
Cash Flow in the Cash Reserve Account pursuant to this Section 10.2.1(d) as long
as the Debt Service Coverage Ratio continues to be greater than or equal to the
ratio that is then required pursuant to this Section 10.2.1.

 

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(e)          As provided in Section 9.2.3 above, if Borrower is required to
deposit Net Cash Flow in the Cash Reserve Account pursuant to the terms of this
Agreement, then on or prior to the 15th day of each calendar month, Borrower
shall furnish to Agent, a Net Cash Flow Statement certifying Borrower’s monthly
calculation of Net Cash Flow for the immediately preceding NCF Period (i.e., the
preceding calendar month).

 

10.2.2       If on any such Calculation Date occurring during the Initial Term
or during any Extended Term (if applicable), the Debt Service Coverage Ratio is
calculated to be less than 1.1 to 1, then within ten (10) days after written
notice from Agent, Borrower shall either (i) pay down the outstanding principal
balance of the Loan to such amount as would have caused the then applicable Debt
Service Coverage Ratio requirement under Section 10.2.1(b), (c), or (d) to have
been satisfied if such reduced principal balance had been in effect on the
Calculation Date in question or (ii) furnish to Agent an Acceptable Letter of
Credit in the amount required under preceding clause (i) as additional security
for the Obligations. If Borrower elects to furnish any such Acceptable Letter of
Credit and thereafter the then applicable Debt Service Coverage Ratio
requirement under Section 10.2.1(b), (c), or (d) shall have been satisfied for
at least two (2) consecutive Calculation Periods, as long as there does not then
exist any Event of Default, Agent shall, upon Borrower's written request, return
such Acceptable Letter of Credit to Borrower.

 

10.2.3       To the extent required under Section 10.2.1 above, (a) Borrower
shall establish with Citizens as depository bank, a Cash Reserve Account, (b)
the Borrower shall deposit funds in the amount(s) required pursuant to Section
10.2.1 above with Citizens as depository bank, in the Cash Reserve Account, and
(c) Borrower shall to the extent required herein at all times thereafter
maintain and fund such Cash Reserve Account in the amount(s) required pursuant
to Section 10.2.1 above. If Borrower is required to establish a Cash Reserve
Account pursuant to the terms of this Agreement, in connection therewith
Borrower shall execute and deliver a so-called “Deposit Account Control
Agreement” with respect to the Cash Reserve Account in substantially the form
reasonably required by Citizens as depository bank at that time.

 

10.2.4       The Cash Reserve Account shall be pledged and assigned to the
Agent, for its benefit and for the benefit of the Lenders, as additional
collateral for the payment and performance of the Obligations. Any Acceptable
Letter of Credit furnished by Borrower pursuant to this Section 10.2 shall be
held by Agent, for its benefit and for the benefit of the Lenders, as additional
collateral for the payment and performance of the Obligations. Agent shall have
no obligation to apply any funds in the Cash Reserve Account or any such
Acceptable Letter of Credit against interest or principal payments due in
connection with the Loan and any such application shall be made by Agent in the
Required Lenders’ sole discretion. Any amounts remaining in the Cash Reserve
Account (if any) upon repayment in full of the Loan and all other Obligations
shall be released to Borrower.

 

10.2.5       It shall be an Event of Default if Borrower fails to make any Cash
Reserve Account deposit or any principal payment or to furnish any Acceptable
Letter of Credit that is required under this Section 10.2 within ten (10) days
after written notice from Agent properly requesting the same.

 

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10.3          Reduction and Release of Repayment Guaranty.

 

10.3.1       Repayment Guaranty Reduction. If on any Calculation Date, the Debt
Service Coverage Ratio is calculated to be greater than 1.45 to 1 and the LTV
Ratio (based on the Approved Appraised Value of the Property) is determined to
be less than sixty percent (60%), Borrower and Guarantor may request in writing
that the “Guaranteed Principal Amount” as defined in the Guaranty be reduced to
ten percent (10%) of the Maximum Commitment (the “Repayment Guaranty
Reduction”). In connection with such request, Agent and Lenders agree that the
“Guaranteed Principal Amount” shall be reduced in accordance with the terms of
this Section 10.3.1 and the terms and conditions of the Guaranty, upon
satisfaction of the following conditions:

 

(a)          No Default shall exist;

 

(b)          In connection with the calculation of the LTV Ratio for purposes of
this Section 10.3.1, to the extent a new MAI appraisal of the Property shall be
required pursuant to the definition of “Approved Appraised Value”, such
appraisal must be in all respects satisfactory to the Required Lenders. Borrower
shall pay all costs incurred in connection with obtaining any such new appraisal
of the Property; and

 

(c)          Borrower shall have executed and/or delivered to Agent and Lenders
such agreements and documents and furnished to Agent and Lenders such additional
information as Agent or the Required Lenders may reasonably require incident to
the Repayment Guaranty Reduction.

 

10.3.2.      Repayment Guaranty Release. Following any prepayment of the Loan in
accordance with the terms and conditions of Section 2.5.3 hereof, in an amount
sufficient to reduce the LTV Ratio (based on the Approved Appraised Value of the
Property) to less than fifty-five percent (55%), Borrower and Guarantor may
request in writing the release of the Guarantor’s guaranty obligations with
respect to the “Guaranteed Principal Amount” as defined in the Guaranty (the
“Repayment Guaranty Release”). Agent and Lenders agree that Agent is authorized
to release the Guarantor’s guarantee of the “Guaranteed Principal Amount”, in
accordance with the terms and conditions of the Guaranty, upon satisfaction of
the following conditions:

 

(a)          No Default shall exist;

 

(b)          The Debt Service Coverage Ratio shall be equal to or greater than
1.45 to 1;

 

(c)          In connection with the calculation of the LTV Ratio for purposes of
this Section 10.3.2, to the extent a new MAI appraisal of the Property shall be
required pursuant to the definition of “Approved Appraised Value”, such
appraisal must be in all respects satisfactory to the Required Lenders. Borrower
shall pay all costs incurred in connection with obtaining any such new appraisal
of the Property; and

 

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(d)          Borrower shall have executed and/or delivered to Agent and Lenders
such agreements and documents and furnished to Agent and Lenders such additional
information as Agent or the Required Lenders may reasonably require incident to
the Repayment Guaranty Release.

 

10.4          Intentionally Omitted.

 

10.5          Tenant Letters of Credit.

 

10.5.1       All now or hereafter existing Tenant Letters of Credit and all
proceeds thereof shall be deemed to be security for the Loan (subject to the
provisions of the lease in question) and shall be deemed to be covered by and
subject to the liens and security interests of the Security Documents. In this
regard, Borrower does hereby pledge, assign, transfer and deliver to Agent, and
Borrower does hereby grant to Agent a continuing security interest in, all now
or hereafter existing Tenant Letters of Credit and all proceeds thereof. At
Agent’s option, any now existing or hereafter arising Tenant Letter of Credit
which is in a principal amount of $200,000 or more shall either (a) be
transferred to Agent (i.e. name Agent the beneficiary thereof) and the original
thereof shall be physically delivered to Agent or (b) have all proceeds of any
drawing thereof be assigned and made directly payable to Agent pursuant to an
agreement with the issuing bank in form reasonably satisfactory to Agent, in
each case, within ten (10) Business Days after Borrower receives such Tenant
Letter of Credit.

 

10.5.2       At all times prior to the payment in full of the Obligations, if a
default shall occur under any lease that would entitle Borrower (or Agent) to
draw upon any Tenant Letter of Credit securing such lease, then:

 

(a)          as to Tenant Letters of Credit that are in the name and possession
of Borrower, Borrower shall take all actions necessary to draw upon such Tenant
Letter of Credit and collect all proceeds thereof (“Tenant LC Proceeds”): (i) in
accordance with Borrower’s reasonable judgment applying commercially reasonable
business practices prior to the acceleration of the Loan by Agent; or (ii) at
the direction of Agent after the acceleration of the Loan by Agent; and

 

(b)          as to Tenant Letters of Credit that are in the name and possession
of Agent, (i) prior to the acceleration of the Loan by Agent, at Borrower’s
written direction given in accordance with Borrower’s reasonable judgment
applying commercially reasonable business practices and at Borrower’s cost and
expense, Agent shall take all actions reasonably necessary to draw upon such
Tenant Letter of Credit and collect all Tenant LC Proceeds, and (ii) after the
acceleration of the Loan by Agent, Agent shall take such actions with respect to
any such Tenant Letter of Credit as Agent in its sole discretion may deem
appropriate.

 

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10.5.3       All Tenant LC Proceeds received by Borrower (whether prior to or
after Agent's acceleration of the Loan) shall be promptly paid to Agent to be
held by Agent as security for the Obligations (subject to the provisions of the
lease in question) and all Tenant LC Proceeds collected by Agent shall be held
by Agent as security for the Obligations (subject to the provisions of the lease
in question); provided, however, as long as there does not exist any Event of
Default, Borrower shall be entitled to draw upon any such Tenant LC Proceeds
(and Agent and Lenders shall be obligated to release such Tenant LC Proceeds to
Borrower) (a) to pay Rents or other amounts then due under the respective
defaulted lease, (b) to pay tenant improvement costs and leasing commissions
incurred by Borrower in connection with the re-leasing of the space covered by
the defaulted lease in question to a new tenant pursuant to a new Approved
Lease, and (c) to pay costs of collection in connection with the defaulted lease
in question.

 

10.5.4       All Tenant LC Proceeds received by Agent or otherwise in Agent’s
possession after Agent's acceleration of the Loan shall be held by Agent as
security for the Obligations or shall be paid or applied by Agent to the
Obligations or as may otherwise be deemed appropriate by Agent in its sole
discretion (subject in all cases to the provisions of the lease in question).

 

10.5.5          Any Tenant Letter of Credit in the possession of Agent shall be
returned to the respective tenant (or returned for reduction) when required by
the terms of the applicable lease. Upon the repayment in full of the Loan and
upon written request from Borrower, Agent will promptly deliver to Borrower any
and all Tenant Letters of Credit in the possession and/or control of Agent, if
any.

 

11.EVENTS OF DEFAULT.

 

The following provisions deal with Default, Events of Default, notice, grace and
cure periods, and certain rights of Agent and/or Lenders following an Event of
Default.

 

11.1          Default and Events of Default. The term “Default” as used herein
or in any of the other Loan Documents shall mean an Event of Default, or any
fact or circumstance which constitutes, or upon the lapse of time, or giving of
notice, or both, could constitute, an Event of Default. Each of the following
events, unless cured within any applicable grace period (if any) set forth or
referred to below in this Section 11.1, or in Section 11.2, shall constitute an
“Event of Default”:

 

11.1.1       Generally. A default by Borrower in the performance of any term,
provision or condition of this Agreement to be performed by Borrower, or a
breach, or other failure to satisfy, any other term, provision, condition,
covenant or warranty under this Agreement and such default remains uncured
beyond any applicable specific grace period (if any) provided for in this
Agreement, or as set forth in Section 11.2 below; or

 

11.1.2       Notes, Mortgage and Other Loan Documents. A default by Borrower in
the performance of any term or provision of any of the Notes, or the Mortgage,
or of any of the other Loan Documents, or a breach, or other failure to satisfy,
any other term, provision, condition or warranty under any of the Notes, the
Mortgage or any other Loan Document, and the specific grace period, if any,
allowed for the default in question shall have expired without such default
having been cured; or

 

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11.1.3       Financial Status and Insolvency.

 

(a)          Borrower shall: (i) admit in writing its inability to pay its debts
generally as they become due as part of a general scheme to induce an
involuntary bankruptcy (for the avoidance of doubt, correspondence from Borrower
to Agent or any Lender outside of legal proceedings admitting insolvency or
inability to pay debts as they become due will not give rise to liability
pursuant to this clause (a)); (ii) file a petition in bankruptcy or a petition
to take advantage of any insolvency act; (iii) make an assignment for the
benefit of creditors; (iv) consent to, or acquiesce in, the appointment of a
receiver, liquidator or trustee of itself or of the whole or any substantial
part of its properties or assets; (v) file a petition or answer seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the Federal Bankruptcy Laws or any other applicable Law;
(vi) have a court of competent jurisdiction enter an order, judgment or decree
appointing a receiver, liquidator or trustee of Borrower, or of the whole or any
substantial part of the property or assets of Borrower, and such order, judgment
or decree shall remain unvacated or not set aside or unstayed for sixty (60)
days; (vii) have a petition filed against it seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Federal Bankruptcy Laws or any other applicable Law and such
petition shall remain undismissed for sixty (60) days; (viii) have, under the
provisions of any other Law for the relief or aid of debtors, any court of
competent jurisdiction assume custody or control of Borrower or of the whole or
any substantial part of its property or assets and such custody or control shall
remain unterminated or unstayed for sixty (60) days; or (ix) have an attachment
or execution levied against the Property or other material asset(s) of the
Borrower which is not discharged or dissolved by payment or a bond within thirty
(30) days; or

 

(b)          any event described in Section 11.1.3(a) shall occur with respect
to the Borrower or Tenant; or

 

11.1.4       Liens. A lien for the performance of work, or the supply of
materials, or a notice of contract, or an attachment, judgment, execution or
levy is filed against any of the Land or any of the Improvements and remains
unsatisfied or is not discharged or dissolved by a bond (or otherwise
collateralized by Cash Collateral acceptable to the Agent) for a period of
thirty (30) days after the filing thereof; or

 

11.1.5       Breach of Representation or Warranty. Any material representation
or warranty made by Borrower or Guarantor herein or in any other instrument or
document relating to the Loan or to the Property shall be materially false or
misleading, or any warranty shall be materially breached; or

 

11.1.6       Default Under Significant Lease or Material Assigned Contract.
Borrower defaults under any Significant Lease of the Improvements or any
material contract assigned to Agent and such default is not cured within the
grace period applicable thereto such that the tenant or contracting party
obtains the right to terminate such lease or contract or to claim material
damages; or

 

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11.1.7       Hedging Contracts. There occurs under any Hedging Contract an Early
Termination Date (as defined in such Hedging Contract) resulting from (a) any
event of default (after any required notice and expiration of any applicable
cure period, if any) under such Hedging Contract as to which Borrower is the
Defaulting Party (as defined in such Hedging Contract) or (b) any Termination
Event (as defined in such Hedging Contract) under such Hedging Contract as to
which Borrower is an Affected Party (as defined in such Hedging Contract); or

 

11.1.8       Guarantor Default. A default by Guarantor in the payment,
performance or observance of any term or provision of the Guaranty or any other
Loan Document to which Guarantor is a party, or the breach, or any other failure
to satisfy any other term, provision, condition or warranty imposed upon the
Guarantor in the Guaranty or in any other Loan Document to which it is a party;
or

 

11.1.9       Intentionally Omitted;

 

11.1.10     Judgments. Any judgment for the payment of money which is not fully
covered by insurance in an amount exceeding $40,000.00 is entered against
Borrower or exceeding $250,000.00 is entered against Guarantor, and Borrower or
Guarantor fails to satisfy or discharge the same, or cause it to be discharged
or bonded to Agent's satisfaction, within thirty (30) days after the entry of
such judgment; or

 

11.1.11     Other Defaults. If Borrower or Guarantor shall default (after giving
effect to any applicable grace period) in the due and punctual payment of the
principal or interest on any Indebtedness (other than the Loan) exceeding in the
aggregate (i) $200,000.00 with respect to Borrower, or (ii) $400,000.00 with
respect to Guarantor, or if any default shall have occurred and be continuing
after any applicable grace period under any mortgage, note or other agreement
evidencing, securing or providing for the creation of any such Indebtedness,
which results in the acceleration of such Indebtedness or which permits, or with
the giving of notice or passage of time would permit, any holder or holders of
any such Indebtedness to accelerate the stated maturity thereof; or

 

11.1.12     Required Interest Rate Protection Agreement. Borrower fails to
purchase or maintain in full force and effect any Required Interest Rate
Protection Agreement or there occurs an Early Termination Date under any
Required Interest Rate Protection Agreement (as defined in such Required
Interest Rate Protection Agreement) resulting from any of the events identified
in Section 11.1.7(a) or (b) with respect to a Required Interest Rate Protection
Agreement; or

 

11.1.13     Operating Lease, Hotel Management Agreement, or Franchise Agreement
Default. Any Loan Party defaults in the payment, performance or observance of
any of its obligations under the Operating Lease, Hotel Management Agreement, or
the Franchise Agreement and such default is not cured within the grace period
applicable thereto (if any).

 

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11.2          Grace Periods and Notice. As to each of the foregoing events the
following provisions relating to grace periods and notice shall apply:

 

11.2.1       No Notice or Grace Period. There shall be no grace period and no
notice provision with respect to the payment of principal at Maturity and no
grace period and no notice provision with respect to defaults related to the
voluntary filing of bankruptcy or reorganization proceedings or an assignment
for the benefit of creditors, or with respect to nonmonetary defaults which are
not reasonably capable of being cured, or with respect to a breach of material
warranty or representation under Section 8.1 (regarding Financial Information),
or with respect to material breaches under Section 9.6 (Restrictions on Liens,
Transfers and Additional Debt), and Section 9.7 (Limits on Guaranties; Improper
Distributions). In addition, the below provisions of this Section 11.2 shall not
be applicable where (a) a grace or notice period is otherwise specifically
provided for or (b) it is specifically provided that no grace or notice period
shall be applicable.

 

11.2.2       Nonpayment of Interest and Principal. As to the nonpayment of
interest, and installments of principal prior to Maturity, there shall be a ten
(10) day grace period without any requirement of notice from Agent or Lenders.

 

11.2.3       Other Monetary Defaults. All other monetary defaults shall have a
ten (10) day grace period following notice from Agent, or, if shorter, a grace
period without notice until ten (10) Business Days before the last day on which
payment is required to be made in order to avoid: (i) the cancellation or lapse
of required insurance, or (ii) a tax sale or the imposition of late charges or
penalties in respect of taxes or other municipal charges.

 

11.2.4       Nonmonetary Defaults and Breaches of Warranties and Representations
Capable of Cure.

 

(a)          As to nonmonetary defaults which are reasonably capable of being
cured or remedied, unless there is a specific shorter or longer grace period
provided for in this Agreement or in another Loan Document, there shall be a
thirty (30) day grace period following written notice from Agent or, if such
default would reasonably require more than thirty (30) days to cure or remedy,
such longer period of time (not to exceed a total of ninety (90) days from
Agent's written notice) as may be reasonably required so long as Borrower shall
commence reasonable actions to remedy or cure the default within thirty (30)
days following such written notice and shall diligently prosecute such curative
action to completion within such ninety (90) day period. However, where there is
an emergency situation in which there is danger to person or property such
curative action shall be commenced as promptly as possible.

 

(b)          As to breaches of warranties and representations (other than those
related to financial information set forth in Section 8.1) there shall be a
thirty (30) day grace period following written notice from Agent.

 

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11.3          Certain Remedies. If an Event of Default shall occur, Agent, at
the request of the Required Lenders:

 

11.3.1       Accelerate Obligations. Shall, by written notice to Borrower,
declare the Obligations immediately due and payable provided that in the case of
a voluntary petition in bankruptcy filed by Borrower, by Guarantor or by any
other Loan Party or (after the expiration of the grace period if any set forth
in Section 11.1.3 above) an involuntary petition in bankruptcy filed against
Borrower, Guarantor or any other Loan Party such acceleration shall be automatic
whereupon each Note, and all accrued fees and interest and all other
Obligations, shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Borrower;

 

11.3.2       Pursue Remedies. Shall pursue any and all remedies provided for
hereunder, and/or under any one or more of the other Loan Documents and/or under
applicable Law, as the Required Lenders shall direct. In connection therewith,
the Agent shall, in accordance with the votes of the Required Lenders, exercise
all remedies on behalf of and for the account of each Lender and on behalf of
its respective Pro Rata Share of the Loan, its Note and the Obligations of the
Borrower owing to it or any of the foregoing, including, without limitation, all
remedies available under or as a result of this Agreement, the Notes or any of
the other Loan Documents or any other document, instrument or agreement now or
hereafter securing any Obligations without any such exercise being deemed to
modify in any way the fact that each Lender shall be deemed a separate creditor
of the Borrower to the extent of its Note and Pro Rata Share of the Loan and any
other amounts payable to such Lender under this Agreement and/or any of the
other Loan Documents and the Agent shall be deemed a separate creditor of the
Borrower to the extent of any amounts owed by the Borrower to the Agent; and

 

11.4          Written Waivers. If a Default or an Event of Default is waived by
the Required Lenders, in their sole discretion, pursuant to a specific written
instrument executed by authorized officers of Required Lenders (or Agent with
the written consent of Required Lenders), the Default or Event of Default so
waived shall be deemed to have never occurred.

 

12.ADDITIONAL REMEDIES.

 

12.1          Remedies. Upon the occurrence of an Event of Default, whether or
not the Indebtedness evidenced by the Notes and secured by the Mortgage shall be
due and payable and whether or not Agent shall have instituted any foreclosure
or other action for the enforcement of the Mortgage or the Notes, Agent (or its
nominee), at the request of the Required Lenders may, in addition to any other
remedies which Agent and/or Lenders' may have hereunder or under the other Loan
Documents or under applicable Law, and not in limitation thereof, and in the
Required Lenders' sole and absolute discretion:

 

12.1.1       Enter and Perform. Enter upon the Property to perform obligations
under leases, or to operate, maintain, repair and improve the Property and
employ watchmen to protect the Property, all at the risk, cost and expense of
Borrower, consent to such entry being hereby given by Borrower. All sums
expended by Agent on behalf of Lenders for such purposes shall be deemed to
constitute obligatory advances under this Agreement and shall be secured by the
Mortgage and the other Loan Documents;

 

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12.1.2       Discontinue Work. At any time discontinue any work commenced in
respect of the Property or change any course of action undertaken by it and not
be bound by any limitations or requirements of time whether set forth herein or
otherwise;

 

12.1.3       Exercise Rights. Exercise the rights of Borrower under any contract
or other agreement in any way relating to the Property and take over and use all
or any part of the labor, materials, supplies and equipment contracted for by
Borrower, whether or not previously incorporated into the realty; and

 

12.1.4       Other Actions. In connection with any work or action undertaken by
Agent and/or Lenders (or their nominee) pursuant to the provisions of the Loan
Documents:

 

(a)          engage builders, contractors, architects, engineers and others for
the purpose of furnishing labor, materials and equipment;

 

(b)          pay, settle or compromise all bills or claims which may become
liens against the property constituting the Collateral, or which have been or
may be incurred in any manner in connection with the Property or for the
discharge of liens, encumbrances or defects in the title of the Property or any
of the Collateral;

 

(c)          take or refrain from taking such action hereunder as the Required
Lenders may from time to time determine; and

 

(d)          engage marketing and leasing agents and real estate brokers to
advertise, lease or sell portions or all of the Property or other Collateral
upon such terms and conditions as the Required Lenders may in good faith
determine.

 

12.2          Reimbursement. Borrower shall be liable to Agent and Lenders for
all sums paid or incurred by Agent or Lenders pursuant to any of the Loan
Documents whether the same shall be paid or incurred pursuant to this Section 12
or otherwise, and all payments made or liabilities incurred by Agent and/or
Lenders hereunder of any kind whatsoever shall be paid by Borrower upon demand
with interest at the Default Rate as provided in this Agreement or the Notes
from the date of payment by Agent and/or Lenders to the date of payment to Agent
and/or Lenders and repayment of such sums with such interest shall be secured or
otherwise supported by the Security Documents.

 

12.3          Power of Attorney. For the purpose of exercising the rights
granted by this Section 12, as well as any and all other rights and remedies of
Agent and Lenders, Borrower hereby irrevocably constitutes and appoints Agent
(or any agent designated by Agent and/or Required Lenders) its true and lawful
attorney-in-fact (which power of attorney is with full power of substitution and
delegation and is coupled with an interest), upon the occurrence of and during
the continuation of any Event of Default, to execute, acknowledge and deliver
any instruments and to do and perform any acts permitted hereunder or by Law in
the name and on behalf of Borrower.

 

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13.SECURITY INTEREST AND SET OFF.

 

13.1          Security Interest and Set-Off. Borrower hereby grants to Agent and
each Lender, a continuing lien, security interest and right of setoff as
security for all of Borrower's Obligations, whether now existing or hereafter
arising, upon and against all Cash Collateral and all other deposits, credits,
collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Agent or any Lender or any Affiliate of Agent or of
any Lender (including without limitation any Affiliate of Citizens Financial
Group, Inc. and its successors and assigns) or in transit to any of them. At any
time, without demand or notice (any such notice being expressly waived by
Borrower), Agent and, subject to Section 13.3 below, each Lender and each such
Affiliate may setoff the same or any part thereof and apply the same to any
Obligation of Borrower even though unmatured and regardless of the adequacy of
any other collateral securing the Obligations. Borrower further agrees that any
“Early Termination Amount” that is payable to Borrower if any “Early Termination
Date” (as such terms are defined in any Hedging Contract) occurs under any
Hedging Contract shall also secure Borrower’s Obligations under this Agreement
and the other Loan Documents and any such amount(s) may be set off and applied
against Borrower's outstanding Obligations in accordance with this Agreement.
ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY LENDER OR ANY AFFILIATE THEREOF TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

 

13.2          Right to Freeze. Agent and each Lender (and each Affiliate
thereof) shall also have the right, at their option, upon the occurrence of any
event which would entitle Agent or Lenders to set-off or debit any accounts,
deposits, balances or other property of Borrower as set forth in Section 13.1,
to freeze, block or segregate any of such accounts, deposits, balances or other
property so that Borrower may not access, control or draw upon the same.

 

13.3          Additional Rights. The rights of Agent and Lenders and each
Affiliate of Agent and Lenders under this Section 13 are in addition to, and not
in limitation of, other rights and remedies, including other rights of set-off,
which Agent or Lenders may have; provided, however, no Lender and no such
Affiliate shall independently exercise any rights under this Section 13, or any
such other rights, without first obtaining Agent's prior written consent.

 

14.CASUALTY AND TAKING.

 

14.1          Casualty and Obligation To Repair. In the event of any damage or
destruction to the Property by reason of fire or other hazard or casualty
(collectively, a “Casualty”), Borrower shall give immediate written notice
thereof to Agent and Borrower shall proceed with reasonable diligence, in full
compliance with all Legal Requirements and the other requirements of the Loan
Documents and the requirements of each applicable Approved Lease, to repair,
restore, rebuild or replace the Property (collectively, the “Repair Work”).
Provided, however, Borrower's obligation to perform such Repair Work is subject
to an agreement of Required Lenders to release the respective insurance proceeds
pursuant to Section 14.3 below.

 

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14.2          Adjustment of Claims. All insurance claims shall be adjusted or
settled by Borrower, at Borrower's sole cost and expense, but subject to Agent's
prior written approval which approval shall not be unreasonably withheld;
provided that (a) if no Default exists, Borrower shall have the right to adjust
or settle any claim in an amount less than $100,000 without Agent's prior
written approval and (b) if any Default exists under any of the Loan Documents,
the Required Lenders shall have the right to direct Agent to adjust and
compromise such claims without the approval of Borrower.

 

14.3          Payment and Application of Insurance Proceeds. All proceeds of
insurance shall be paid to Agent for the pro rata benefit of Lenders or, at
Required Lenders' option, shall be applied to Borrower's Obligations or
released, in whole or in part, to pay for the actual cost of repair,
restoration, rebuilding or replacement (collectively, “Cost to Repair”).
Notwithstanding the foregoing, if the Cost to Repair does not exceed 50% of the
Approved Appraised Value of the Property, Agent shall release so much of the
insurance proceeds as may be required to pay for the actual Cost to Repair in
accordance with the provisions of Section 14.4 if:

 

(i)             in Agent's good faith judgment such proceeds, together with any
additional funds that may be deposited with and pledged to Agent for the benefit
of Lenders, are sufficient to pay for the Cost to Repair;

 

(ii)            in Agent's good faith judgment the Repair Work is likely to be
completed prior to the Maturity Date (or, if the Loan Term has been extended in
accordance with Sections 2.2 and 2.3 above, prior to the then applicable
Extended Maturity Date);

 

(iii)           no Default exists under the Loan Documents;

 

(iv)           to the extent required by Agent, tenants leasing (in the
aggregate) at least ninety percent (90%) of the NRSF of space in the Property
shall have waived in writing any right to terminate their respective leases on
account of such Casualty, conditioned only upon the Repair Work being completed
within a reasonable period of time acceptable to Agent or such period as is
expressly provided in the applicable leases, whichever is longer, so long as the
period does not exceed the period for which rent loss insurance is available or
for which, to the extent required by Agent, Borrower has deposited with Agent,
an amount equal to all such lost rent which is not covered by rent loss
insurance; and

 

(v)            as soon as is reasonably practical, Borrower commences such
Repair Work and diligently prosecutes such Repair Work to completion.

 

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14.4          Conditions To Release of Insurance Proceeds and Condemnation
Awards. As to any insurance proceeds or condemnation awards to be released by
Agent pursuant to Section 14.3 or Section 14.5 hereof in excess of $100,000,
Agent may impose reasonable conditions on such release which may include, but
are not limited to, the following:

 

(i)             Prior written approval by the Required Lenders, which approval
shall not be unreasonably withheld or delayed, of plans, specifications, cost
estimates, contracts and bonds for the restoration or repair of the loss or
damage;

 

(ii)            Waivers of lien, architect's certificates, contractor's sworn
statements and other evidence of costs, payments and completion as Agent may
reasonably require;

 

(iii)           If the Cost to Repair does not exceed $100,000, the funds to pay
therefor shall be released to Borrower. Funds shall be released upon final
completion of the Repair Work, unless Borrower requests earlier funding, in
which event partial monthly disbursements equal to 90% of the value of the work
completed or, if the applicable contract is on a cost plus basis, then 90% of
the costs of the work completed if such cost is less than the value thereof
shall be made prior to final completion of the repair, restoration or
replacement and the balance of the disbursements shall be made upon full
completion and the receipt by Agent of satisfactory evidence of payment and
release of all liens;

 

(iv)           Determination by Agent that the undisbursed balance of such
proceeds on deposit with Agent, together with additional funds deposited for the
purpose, shall be at least sufficient to pay for the remaining Cost to Repair,
free and clear of all liens and claims for lien;

 

(v)            All work to comply with the standards, quality of construction
and Legal Requirements applicable to the original construction of the
Improvements; and

 

(vi)           the absence of any Default under any of the Loan Documents.

 

14.5          Taking. If there is any condemnation for public use of all or any
part of the Property or of any Collateral, the awards on account thereof shall
be paid to Agent, for the pro rata benefit of Lenders, and shall be applied to
Borrower's Obligations, or at the Required Lenders' discretion released to
Borrower. If, in the case of a partial taking or a temporary taking, in the
judgment of Required Lenders, the effect of such taking is such that there has
not been a material and adverse impairment of the viability of the Property or
the value of the Collateral in question, so long as no Default exists, Agent
shall, subject to the terms and conditions set forth in Sections 14.3 and 14.4
above, release awards on account of such taking to Borrower if such awards are
sufficient (or amounts sufficient are otherwise made available) to repair or
restore the Property to a condition satisfactory to Required Lenders and such
partial or temporary taking shall not be deemed to violate the provisions of
Section 9.6.

 

14.6          Application of Unreleased Proceeds. To the extent that any
insurance proceeds or condemnation awards are not released to Borrower by Agent
pursuant to this Section 14, such proceeds and/or awards will be applied to the
outstanding Obligations.

 

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15.THE AGENT AND THE LENDERS

 

15.1          Appointment and Authorization of Agent.

 

(a)            Each Lender hereby irrevocably (subject to Section 15.9)
appoints, designates and authorizes Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere herein or in any other Loan Document, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent. Without limiting the generality of
the foregoing sentence, the use of the term “agent” herein and in the other Loan
Documents with reference to Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b)            No individual Lender or group of Lenders shall have any right to
amend or waive, or consent to the departure of any party from any provision of
any Loan Document, or secure or enforce the obligations of Borrower or Guarantor
or any other party pursuant to the Loan Documents, or otherwise. All such
rights, on behalf of Agent or any Lender or Lenders, shall be held and exercised
solely by and at the option of Agent for the pro rata benefit of the Lenders.
Such rights, however, are subject to the rights of a Lender or Lenders, as
expressly set forth in this Agreement, to approve matters or direct Agent to
take or refrain from taking action as set forth in this Agreement. Except as
expressly otherwise provided in this Agreement or the other Loan Documents,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights, or taking or refraining
from taking any actions which Agent is expressly entitled to exercise or take
under this Agreement and the other Loan Documents, including, without
limitation, (i) the determination if and to what extent matters or items subject
to Agent’s satisfaction are acceptable or otherwise within its discretion, and
(ii) the exercise of remedies pursuant to, but subject to, Article 10 or 11 or
pursuant to any other Loan Document, if applicable, and any action so taken or
not taken shall be deemed consented to by Lenders.

 

(c)            In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to Borrower or Guarantor, no individual
Lender or group of Lenders shall have the right, and Agent (irrespective of
whether the principal of the Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether Agent shall
have made any demand on Borrower) shall be exclusively entitled and empowered on
behalf of itself, and Lenders, by intervention in such proceeding or otherwise:

 

(i)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loan and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of Lenders and Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Lenders and Agent and their respective agents and counsel and all other amounts
due Lenders and Agent under Section 9.17 allowed in such judicial proceeding;
and

 

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(ii)          to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to Lenders, to pay to Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of Agent and its agents and counsel, and any other amounts due Agent under
Section 9.17.

 

Nothing contained herein shall be deemed to authorize Agent to authorize or
consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of Lenders except as approved by Required Lenders or to authorize
Agent to vote in respect of the claims of Lenders except as approved by Required
Lenders in any such proceeding.

 

15.2          Delegation of Duties. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultant experts concerning all matters pertaining to such duties. Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

 

15.3          Liability of Agent. No Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of Lenders for any recital,
statement, representation or warranty made by Borrower or any Subsidiary or
Affiliate of Borrower, or any officer thereof, contained herein or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of Borrower or Guarantor or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of Borrower, Guarantor, if applicable,
or any of their Affiliates.

 

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15.4          Reliance by Agent. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any party
to the Loan Documents), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders or all Lenders (if required
hereunder) as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders or such greater
number of Lenders as may be expressly required hereby in any instance, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all Lenders. In the absence of written instructions from the Required
Lenders or such greater number of Lenders, as expressly required hereunder,
Agent may take or not take any action, at its discretion, unless this Agreement
specifically requires the consent of the Required Lenders or such greater number
of Lenders.

 

15.5          Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default, unless Agent shall have received
written notice from a Lender, or Borrower referring to this Agreement,
describing such Default. If Agent determines that such Default will have a
Material Adverse Effect, Agent will notify Lenders of its receipt of any such
notice. Agent shall take such action with respect to such Default as may be
requested by the Required Lenders in accordance with Article 11 and Article 12;
provided, however, that unless and until Agent has received any such request,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable or
in the best interest of Lenders.

 

15.6          Credit Decision; Disclosure of Information by Agent.

 

(a)          Each Lender acknowledges that none of Agent-Related Persons has
made any representation or warranty to it, and that no act by Agent hereafter
taken, including any consent to and acceptance of any assignment or review of
the affairs of Borrower, and Guarantor, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lenders as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower, and
Guarantor, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower and Guarantor hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrower and Guarantor.

 

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(b)          Agent upon its receipt shall provide each Lender such notices,
reports and other documents expressly required to be furnished to Lenders by
Agent herein. To the extent not already available to a Lender, Agent shall also
provide Lender and/or make available for Lender’s inspection during reasonable
business hours and at Lender’s expense, upon Lender’s written request therefor:
(i) copies of the Loan Documents; (ii) such information as is then in Agent’s
possession in respect of the current status of principal and interest payments
and accruals in respect of the Loan; (iii) copies of all current financial
statements in respect of Borrower, any Guarantor or other Person liable for
payment or performance by Borrower of any obligations under the Loan Documents,
then in Agent’s possession with respect to the Loan; and (iv) other current
factual information then in Agent’s possession with respect to the Loan and
bearing on the continuing creditworthiness of Borrower or any Guarantor, or any
of their respective Affiliates; provided that nothing contained in this Section
shall impose any liability upon Agent for its failure to provide a Lender any of
such Loan Documents, information, or financial statements, unless such failure
constitutes willful misconduct or gross negligence on Agent’s part; and provided
further that Agent shall not be obligated to provide any Lender with any
information in violation of Law or any contractual restrictions on the
disclosure thereof (provided such contractual restrictions shall not apply to
distributing to a Lender factual and financial information expressly required to
be provided herein). Except as set forth above, Agent shall not have any duty or
responsibility to provide any Lenders with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrower or Guarantor or any of their
respective Affiliates which may come into the possession of any of Agent-Related
Persons.

 

15.7          Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, Lenders shall indemnify upon demand each
Agent-Related Person (to the extent not reimbursed by or on behalf of Borrower
and without limiting the obligation of Borrower to do so), pro rata, and hold
harmless each Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person’s own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, to the extent that Agent is not
reimbursed by or on behalf of Borrower, each Lender shall reimburse Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
attorney fees) incurred by Agent as described in Section 9.17. The undertaking
in this Section shall survive the payment of all Indebtedness hereunder and the
resignation or replacement of Agent.

 

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15.8          Agent in Individual Capacity. Agent, in its individual capacity,
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with any party to the Loan Documents and their respective Affiliates as though
Agent were not Agent hereunder and without notice to or consent of Lenders.
Lenders acknowledge that Borrower and Citizens Bank, National Association or its
Affiliate may enter into Interest Rate Protection Agreements. Lenders
acknowledge that, pursuant to such activities, Citizens Bank, National
Association or its Affiliates may receive information regarding any party to the
Loan Documents, or their respective Affiliates (including information that may
be subject to confidentiality obligations in favor of such parties or such
parties’ Affiliates) and acknowledge that Agent shall be under no obligation to
provide such information to them. With respect to its Pro Rata Share of the
Loan, Citizens Bank, National Association shall have the same rights and powers
under this Agreement as any other Lenders and may exercise such rights and
powers as though it were not Agent or party to Interest Rate Protection
Agreements, and the terms “Lender” and “Lenders” include Citizens Bank, National
Association in its individual capacity.

 

15.9          Successor Agent. Agent may, and at the request of the Required
Lenders as a result of Agent’s gross negligence or willful misconduct in
performing its duties under this Agreement shall, resign as Agent upon thirty
(30) days’ notice to Lenders. If Agent resigns under this Agreement, the
Required Lenders shall appoint from among Lenders a successor administrative
agent for Lenders, which successor administrative agent shall be consented to by
Borrower at all times other than during the existence of an Event of Default
(which consent of Borrower shall not be unreasonably withheld, conditioned or
delayed). If no successor administrative agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting
with Lenders and Borrower, a successor administrative agent from among Lenders.
Upon the acceptance of its appointment as successor administrative agent
hereunder, such successor administrative agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term “Agent” shall mean such
successor administrative agent, and the retiring Agent’s appointment, powers and
duties as Agent shall be terminated. After any retiring Agent’s resignation
hereunder as Agent, the provisions of this Article and other applicable Sections
of this Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement. If no successor
administrative agent has accepted appointment as Agent by the date which is
thirty (30) days following a retiring Agent’s notice of resignation, the
retiring Agent’s resignation shall nevertheless thereupon become effective and
the Required Lenders shall perform all of the duties of Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.

 

15.10          Releases; Acquisition and Transfers of Collateral.

 

(a)            Lenders hereby irrevocably authorize Agent to transfer or release
any lien on, or after foreclosure or other acquisition of title by Agent on
behalf of Lenders to transfer or sell, any Collateral (i) upon the termination
of the Commitment and payment and satisfaction in full of all Obligations
(except for any Obligations that survive payment in full of the Loan and as to
which no claim has arisen), (ii) constituting a release, transfer or sale of a
lien or Collateral if Borrower will certify to Agent that the release, transfer
or sale is permitted under this Agreement or the other Loan Documents (and Agent
may rely conclusively on any such certificate, without further inquiry); or
(iii) after foreclosure or other acquisition of title (1) for a purchase price
of at least 90% of the value indicated in the most recent appraisal of the
Collateral obtained by Agent made in accordance with regulations governing
Agent, less any reduction indicated in the appraisal estimated by experts in
such areas; or (2) if approved by the Required Lenders.

 

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(b)            If all or any portion of the Collateral is acquired by
foreclosure or by deed in lieu of foreclosure, Agent shall take title to such
Collateral in its name or by an Affiliate of Agent, but for the benefit of all
Lenders in their Pro Rata Shares on the date of the foreclosure sale or
recordation of the deed in lieu of foreclosure (the “Acquisition Date”). Agent
and all Lenders hereby expressly waive and relinquish any right of partition
with respect to any Collateral so acquired. After any Collateral is acquired,
Agent shall appoint and retain one or more Persons (individually and
collectively, the “Asset Manager”) experienced in the management, leasing, sale
and/or dispositions of similar properties.

 

After consulting with the Asset Manager, Agent shall prepare a written plan for
completion of construction (if required), operation, management, improvement,
maintenance, repair, sale and disposition of the Collateral and a budget for the
aforesaid, which may include a reasonable management fee payable to Agent (the
“Business Plan”). Agent will deliver the Business Plan not later than the
sixtieth (60th) day after the Acquisition Date to each Lender with a written
request for approval of the Business Plan. If the Business Plan is approved by
the Required Lenders, Agent and the Asset Manager shall adhere to the Business
Plan until a different Business Plan is approved by the Required Lenders. Agent
may propose an amendment to the Business Plan as it deems appropriate, which
shall also be subject to Required Lender approval. If the Business Plan (as may
be amended) proposed by Agent is not approved by the Required Lenders, (or if
sixty (60) days have elapsed following the Acquisition Date without a Business
Plan being proposed by Agent), any Lender may propose an alternative Business
Plan, which Agent shall submit to all Lenders for their approval. If an
alternative Business Plan is approved by the Required Lenders, Agent may appoint
one of the approving Lenders to implement the alternative Business Plan.
Notwithstanding any other provision of this Agreement, unless in violation of an
approved Business Plan or otherwise in an emergency situation, Agent shall,
subject to subsection (a) of this Section, have the right but not the obligation
to take any action in connection with the Collateral (including those with
respect to property taxes, insurance premiums, completion of construction,
operation, management, improvement, maintenance, repair, sale and disposition),
or any portion thereof.

 

(c)            Upon request by Agent or Borrower at any time, Lenders will
confirm in writing Agent’s authority to sell, transfer or release any such liens
of particular types or items of Collateral pursuant to this Section; provided,
however, that (i) Agent shall not be required to execute any document necessary
to evidence such release, transfer or sale on terms that, in Agent’s opinion,
would expose Agent to liability or create any obligation or entail any
consequence other than the transfer, release or sale without recourse,
representation or warranty, and (ii) such transfer, release or sale shall not in
any manner discharge, affect or impair the Obligations of Borrower other than
those expressly being released.

 

(d)            If all or any portion of the Collateral is acquired by
foreclosure or by deed in lieu of foreclosure, if only two (2) Lenders exist at
the time Agent receives a purchase offer for Collateral for which one of the
Lenders does not consent within ten (10) Business Days after notification from
Agent, the consenting Lender may offer (“Purchase Offer”) to purchase all of
non-consenting Lender’s right, title and interest in such Collateral for a
purchase price equal to non-consenting Lender’s Pro Rata Share of the net
proceeds anticipated from such sale of such Collateral (as reasonably determined
by Agent, including the undiscounted face principal amount of any purchase money
obligation not payable at closing) (“Net Proceeds”). Within ten (10) Business
Days thereafter the non-consenting Lender shall be deemed to have accepted such
Purchase Offer unless the non-consenting Lender notifies Agent that it elects to
purchase all of the consenting Lender’s right, title and interest in such
Collateral for a purchase price payable by the non-consenting Lender in an
amount equal to the consenting Lender’s Pro Rata Share of the Net Proceeds. Any
amount payable hereunder by a Lender shall be due on the earlier to occur of the
closing of the sale of such Collateral or ninety (90) days after the Purchase
Offer, regardless of whether such Collateral has been sold.

 

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15.11        Application of Payments. Except as otherwise provided below with
respect to Defaulting Lenders, aggregate principal and interest payments,
payments for Indemnified Liabilities, proceeds from foreclosure or sale of the
Collateral, and net operating income from the Collateral during any period it is
owned by Agent on behalf of Lenders (“Payments”) shall be apportioned pro rata
among Lenders and payments of any fees (other than fees designated for Agent’s
separate account) shall, as applicable, be apportioned pro rata among Lenders.
Notwithstanding anything to the contrary in this Agreement, all Payments due and
payable to Defaulting Lenders shall be due and payable to and be apportioned pro
rata among Agent and Electing Lenders. Such apportionment shall be in the
proportion that the Defaulting Lender Payment Amounts paid by them bears to the
total Defaulting Lender Payment Amounts of such Defaulting Lender. Such
apportionment shall be made until Agent and Lenders have been paid in full for
the Defaulting Lender Payment Amounts. All pro rata Payments shall be remitted
to Agent and all such payments not constituting payment of specific fees, and
all proceeds of the Collateral received by Agent, shall be applied first, to pay
any fees, indemnities, costs, expenses (including those in Section 15.7) and
reimbursements then due to Agent from Borrower; second, to pay any fees, costs,
expenses and reimbursements then due to Lenders from Borrower; third, to pay pro
rata interest and late charges due in respect of the Obligations and Agent
Advances; fourth, to pay or prepay pro rata principal of the Obligations and
Agent Advances; fifth, to pay any indebtedness of Borrower under Interest Rate
Protection Agreements; and last, to Borrower, if required by Law, or Lenders in
Pro Rata Share percentages equal to their percentages at the termination of the
Aggregate Commitments.

 

15.12        Benefit. The terms and conditions of this Article are inserted for
the sole benefit of Agent and Lenders; the same may be waived in whole or in
part, with or without terms or conditions, without prejudicing Agent’s or
Lenders’ rights to later assert them in whole or in part.

 

15.13        Co-Agents; Lead Managers. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
“syndication agent,” “documentation agent,” “co-agent,” “book manager,”
“bookrunner”, “lead manager,” “arranger,” “lead arranger” or “co-arranger”, if
any, shall have any right, power, obligation, liability, responsibility or duty
under this Agreement other than, in the case of such Lenders, those applicable
to all Lenders as such. Without limiting the foregoing, none of Lenders or other
Persons so identified as a “syndication agent,” “documentation agent,”
“co-agent”, “bookrunner” or “lead manager” shall have or be deemed to have any
fiduciary relationship with any Lenders. Each Lender acknowledges that it has
not relied, and will not rely, on any of Lenders or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.

 

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15.14        Respecting Loans and Payments.

 

15.14.1     Procedures for Loan Advances. Agent shall give written notice to
each Lender of each request for a Loan Advance (including each request for a new
LIBOR Rate Loan), or conversion of an existing Loan from a Prime Rate Loan to a
LIBOR Rate Loan, by facsimile transmission, hand delivery or overnight courier,
not later than 11:00 A.M. (i) three (3) Business Days prior to any LIBOR Rate
Loan or conversion to a LIBOR Rate Loan, or (ii) two (2) Business Days prior to
any Prime Rate Loan. Each such notice shall be accompanied by a written summary
of the request for a Loan Advance and shall specify (a) the date of the
requested Loan Advance, (b) the aggregate amount of the requested Loan Advance,
and (c) each Lender's Pro Rata Share of the requested Loan Advance. Each Lender
shall, before 11:00 A.M. on the date set forth in any such request for a Loan
Advance, make available to Agent, at an account to be designated by Agent, in
same day funds, each Lender's Pro Rata Share of the requested Loan Advance.
After Agent's receipt of such funds and upon Agent's determination that the
applicable conditions to making the requested Loan Advance have been fulfilled,
Agent shall make such funds available to Borrower as provided for in this
Agreement. Within a reasonable period of time following the making of each Loan
Advance, but in no event later than ten (10) Business Days following such Loan
Advance, Agent shall deliver to each Lender a copy of Borrower's Notice of
Borrowing with respect to such Loan Advance. Promptly after receipt by Agent of
written request from any Lender, Agent shall deliver to the requesting Lender
the accompanying certifications and such other instruments, documents,
certifications and approvals delivered by or on behalf of Borrower to Agent in
support of the requested Loan Advance.

 

15.14.2     Nature of Obligations of Lenders and Failure of a Lender to Fund.

 

15.14.2.1          Several Obligations. The obligations of the Lenders hereunder
are several and not joint. Failure of any Lender to fulfill its obligations
hereunder shall not result in any other Lender becoming obligated to advance
more than its Pro Rata Share of the Commitment, nor shall such failure release
or diminish the obligations of any other Lender to fund its Pro Rata Share of
the Commitment provided herein.

 

15.14.2.2          Failure of a Lender to Fund. Should any Lender fail to make
its Pro Rata Share of the requested Loan Advance available at the office of the
Agent prior to 11:00 A.M. on the date of borrowing specified in the notice to
such Lender, Agent shall notify Borrower of such default and, if Borrower so
requests, Agent may, but shall not be obligated to, advance to the Borrower, on
such Lender's behalf, out of funds otherwise available to Agent, such Lender's
Pro Rata Share of such Loan Advance, or a portion thereof; provided, however,
Agent shall not be authorized to make any such advance on behalf of any such
Lender if prior to 11:00 A.M. on such date of borrowing, Agent shall have
received a written instrument signed by a duly authorized officer of such Lender
revoking the Agent's authority hereunder or stating that such Lender's Pro Rata
Share is not required to be advanced pursuant to Section 15.14.1. If Agent
advances such Lender's Pro Rata Share of such Loan Advance or a portion thereof
as permitted hereby, Agent shall notify Borrower of such funding by Agent on the
date of funding and such Lender shall reimburse (or if such Lender fails to pay
such amount as hereinafter provided, Borrower shall repay) the Agent in full
therefor within four (4) Business Days after the date of such Loan Advance (or,
in the case of the Borrower's repayment, within one Business Day after demand by
Agent for payment), together with interest on the principal amount so advanced
by Agent at a rate per annum equal to the interest rate payable by Borrower from
time to time on such Loan Advance or portion thereof while it is outstanding.

 

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15.14.3     Payments to Agent. All payments of principal of and interest on the
Loan shall be made to the Agent by the Borrower or any other obligor or
guarantor for the account of the Lenders in Dollars in immediately available
funds as provided in the Notes and this Agreement. The Agent agrees promptly to
distribute to each Lender, on the same Business Day upon which each such payment
is made, such Lender's Pro Rata Share of each such payment in immediately
available funds, except as otherwise expressly provided herein. The Agent shall
upon each distribution promptly notify Borrower of such distribution and each
Lender of the amounts distributed to it applicable to principal of, and interest
on, the Pro Rata Share held by the applicable Lender. Each payment to the Agent
under the first sentence of this Section 15.14.3 shall constitute a payment by
the Borrower to each Lender in the amount of such Lender's Pro Rata Share of
such payment, and any such payment to the Agent shall not be considered
outstanding for any purpose after the date of such payment by the Borrower to
the Agent without regard to whether or when the Agent makes distribution thereof
as provided above. If any payment received by the Agent from the Borrower is
insufficient to pay both all accrued interest and all principal then due and
owing, the Agent shall first apply such payment to all outstanding interest
until paid in full and shall then apply the remainder of such payment to all
principal then due and owing, and shall distribute the payment to each Lender
accordingly.

 

15.14.4     Adjustments. If, after Agent has paid each Lender's Pro Rata Share
of any payment received or applied by Agent in respect of the Loan, that payment
is rescinded or must otherwise be returned or paid over by Agent, whether
pursuant to any bankruptcy or insolvency Law, sharing of payments clause of any
loan agreement or otherwise, such Lender shall, at Agent's request, promptly
return its Pro Rata Share of such payment or application to Agent, together with
such Lender's Pro Rata Share of any interest or other amount required to be paid
by Agent with respect to such payment or application.

 

15.14.5     Setoff. If any Lender (including the Agent), acting in its
individual capacity, shall exercise any right of setoff against a deposit
balance or other account of the Borrower held by such Lender on account of the
obligations of the Borrower under this Agreement, such Lender shall remit to the
Agent all such sums received pursuant to the exercise of such right of setoff,
and the Agent shall apply all such sums for the benefit of all of the Lenders
hereunder in accordance with the terms of this Agreement. Notwithstanding the
foregoing, no Lender shall exercise any such right of setoff without the prior
written consent of Agent.

 

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15.14.6     Distribution by Agent. If in the opinion of the Agent distribution
of any amount received by it in such capacity hereunder or under the Notes or
under any of the other Loan Documents might involve any liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction or has been resolved by
the mutual consent of all Lenders. In addition, the Agent may request full and
complete indemnity, in form and substance satisfactory to it, prior to making
any such distribution. If a court of competent jurisdiction shall adjudge that
any amount received and distributed by the Agent is to be repaid, each person to
whom any such distribution shall have been made shall either repay to the Agent
its Pro Rata Share of the amount so adjudged to be repaid or shall pay over to
the same in such manner and to such persons as shall be determined by such
court.

 

15.14.7     Defaulting Lender.

 

15.14.7.1          Notice and Cure of Lender Default; Election Period; Electing
Lenders. If any Lender is or becomes a Defaulting Lender, Agent shall notify
(such notice being referred to as the “Default Notice”) Borrower and each
non-Defaulting Lender. Each non-Defaulting Lender shall have the right, but in
no event or under any circumstance the obligation, to fund any such Defaulting
Lender Amount, provided that within twenty (20) days after the date of the
Default Notice (the “Election Period”), such non-Defaulting Lender or Lenders
(each such Lender, an “Electing Lender”) irrevocably commit(s) by notice in
writing (an “Election Notice”) to Agent, the other Lenders and Borrower to fund
the Defaulting Lender Amount and to assume the Defaulting Lender’s obligations
with respect to the advancing of the entire undisbursed portion of the
Defaulting Lender’s principal obligations under this Agreement (such entire
undisbursed portion of the Defaulting Lender’s principal obligations under this
Agreement, including its portion of the Payment Amount that is the subject of
the default, is hereinafter referred to as the “Defaulting Lender Obligation”).
If Agent receives more than one Election Notice within the Election Period, then
the commitment to fund the Defaulting Lender Amount and the Defaulting Lender
Obligation shall be apportioned pro rata among the Electing Lenders in the
proportion that the amount of each such Electing Lender’s Commitment bears to
the total Commitments of all Electing Lenders. If the Defaulting Lender fails to
pay the Defaulting Lender Payment Amount within the Election Period, the
Electing Lender or Lenders, as applicable, shall be automatically obligated to
fund the Defaulting Lender Amount and Defaulting Lender Obligation (and
Defaulting Lender shall no longer be entitled to fund such Defaulting Lender
Amount and Defaulting Lender Obligation) within three (3) Business Days
following the expiration of the Election Period to reimburse Agent or make
payment to Borrower, as applicable. Notwithstanding anything to the contrary
contained herein, if Agent has funded the Defaulting Lender Amount, Agent shall
be entitled to reimbursement for its portion of the Defaulting Lender Payment
Amount pursuant to Section 15.11.

 

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15.14.7.2          Removal of Rights; Indemnity. Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by or on behalf of Borrower to
Agent for the Defaulting Lender’s benefit; nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder or under any Note until all
Defaulting Lender Payment Amounts are paid in full. Amounts payable to a
Defaulting Lender shall be paid by Agent to reimburse Agent and any Electing
Lender pro rata for all Defaulting Lender Payment Amounts. Solely for the
purposes of voting or consenting to matters with respect to the Loan Documents,
a Defaulting Lender shall be deemed not to be a “Lender” and such Defaulting
Lender’s Commitment shall be deemed to be zero. A Defaulting Lender shall have
no right to participate in any discussions among and/or decisions by Lenders
hereunder and/or under the other Loan Documents. Further, any Defaulting Lender
shall be bound by any amendment to, or waiver of, any provision of, or any
action taken or omitted to be taken by Agent and/or the non-Defaulting Lenders
under, any Loan Document which is made subsequent to the Defaulting Lender’s
becoming a Defaulting Lender. This Section shall remain effective with respect
to a Defaulting Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement by curing such
default by payment of all Defaulting Lender Payment Amounts (i) within the
Election Period, or (ii) after the Election Period with the consent of the
non-Defaulting Lenders. Such Defaulting Lender nonetheless shall be bound by any
amendment to or waiver of any provision of, or any action taken or omitted to be
taken by Agent and/or the non-Defaulting Lenders under any Loan Document which
is made subsequent to that Lender’s becoming a Defaulting Lender and prior to
such cure or waiver. The operation of this Subsection or the Subsection above
alone shall not be construed to increase or otherwise affect the Commitment of
any non-Defaulting Lender, or relieve or excuse the performance by Borrower of
their duties and obligations hereunder or under any of the other Loan Documents.
Furthermore, nothing contained in this Section shall release or in any way limit
a Defaulting Lender’s obligations as a Lender hereunder and/or under any other
of the Loan Documents. Further, a Defaulting Lender shall indemnify and hold
harmless Agent and each of the non-Defaulting Lenders from any claim, loss, or
costs incurred by Agent and/or the non-Defaulting Lenders as a result of a
Defaulting Lender’s failure to comply with the requirements of this Agreement,
including, without limitation, any and all additional losses, damages, costs and
expenses (including, without limitation, attorneys’ fees) incurred by Agent and
any non-Defaulting Lender as a result of and/or in connection with (i) a
non-Defaulting Lender’s acting as an Electing Lender, (ii) any enforcement
action brought by Agent against a Defaulting Lender, and (iii) any action
brought against Agent and/or Lenders. The indemnification provided above shall
survive any termination of this Agreement. The provisions of this Section
15.14.7.2 regarding remedies against a Defaulting Lender shall be in addition
to, and not in limitation of, the rights and remedies that may be available to
Agent, any non-Defaulting Lender, Borrower or any other party, at law or in
equity.

 

15.14.7.3          Commitment Adjustments. In connection with the adjustment of
the amounts of the Commitments of the Defaulting Lender and Electing Lender(s)
upon the expiration of the Election Period as aforesaid, Borrower, Agent and
Lenders shall execute such modifications to the Loan Documents as shall, in the
reasonable judgment of Agent, be necessary or desirable in connection with the
adjustment of the amounts of Commitments in accordance with the foregoing
provisions of this Section. For the purpose of voting or consenting to matters
with respect to the Loan Documents such modifications shall also reflect the
removal of voting rights of the Defaulting Lender and increase in voting rights
of Electing Lenders to the extent an Electing Lender has funded the Defaulting
Lender Amount and assumed the Defaulting Lender Obligation. In connection with
such adjustments, Defaulting Lenders shall execute and deliver an Assignment and
Assumption covering that Lender’s Commitment and otherwise comply with Section
16.1. If a Lender refuses to execute and deliver such Assignment and Assumption
or otherwise comply with Section 16.1, such Lender hereby appoints Agent to do
so on such Lender’s behalf. Agent shall distribute an amended Schedule of
Lenders, which shall thereafter be incorporated into this Agreement, to reflect
such adjustments. However, all such Defaulting Lender Amounts and Defaulting
Lender Obligation funded by Agent or Electing Lenders shall continue to be
Defaulting Lender Amounts of the Defaulting Lender pursuant to its obligations
under this Agreement.

 

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15.14.7.4          No Election. In the event that no Lender elects to commit to
fund the Defaulting Lender Amount and Defaulting Lender Obligations within the
Election Period, Agent shall, upon the expiration of the Election Period, so
notify Borrower and each Lender.

 

15.14.8     Holders. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have
filed with the Agent. Any request, authority or consent of any person or entity
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or endorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor.

 

16.ASSIGNMENT AND PARTICIPATION PROVISIONS AND CERTAIN ADMINISTRATIVE MATTERS.

 

16.1          Assignment and Participation Provisions.

 

16.1.1       Conditions to Assignment by Lenders. Except as provided herein,
each Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the same portion of the Loan at the time owing to
it and the Notes held by it), upon satisfaction of the following conditions: (a)
each of the Agent and the Borrower shall have given its prior written consent to
such assignment (provided that, in the case of the Borrower, such consent shall
not be unreasonably withheld, conditioned or delayed and such consent shall not
be required (i) if a Default or an Event of Default shall have occurred and be
continuing or (ii) if Borrower has declined to approve two (2) or more Eligible
Assignees that have been proposed by an assigning Lender or (iii) if after
taking into account such assignment, Citizens (or its successors) retains more
than a fifty percent (50%) Pro-Rata Share of the Loan; and provided further that
this subsection (a) shall not be applicable to an assignment by a Lender to an
Affiliate of such Lender, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Lender’s rights and obligations
under this Agreement, (c) except in case of a Lender’s assignment of its entire
remaining interest in the Loan, each assignment shall be in an amount that is at
least $3,000,000 and is a whole multiple of $1,000,000, (d) as long as no
Default or Event of Default exists and is continuing, the Agent (or any
successor agent hereunder), in its individual capacity as a Lender, shall
retain, free of any such assignment, an amount of its Commitment of not less
than the amount of the Commitment of the Lender who holds the next largest
Commitment (provided, however, the foregoing restriction shall not be deemed to
have been violated if, as a result of a merger or acquisition, the Commitments
of two or more Lenders are combined and such combined Commitment exceeds the
Commitment of the Agent (or any such successor agent) in its capacity as a
Lender), (e) as long as no Default or Event of Default exists and is continuing,
the total number of Lenders shall not exceed three (3), and (f) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register, an Assignment and Assumption, substantially in the form of Exhibit E
hereto (an “Assignment and Assumption”), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Assumption, which
effective date shall be at least five (5) Business Days after the execution
thereof, (x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Assumption, have the rights and obligations of a
Lender hereunder and under the other Loan Documents, and (y) the assigning
Lender shall, to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in Section 16.1.3, be released from
its obligations under this Agreement.

 

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16.1.2       Certain Representations and Warranties; Limitations, Covenants. By
executing and delivering an Assignment and Assumption, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

 

(a)          other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, the assigning Lender makes no representation or warranty, express
or implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or the attachment, perfection or priority of
any security interest or mortgage (if any);

 

(b)          the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any other Person primarily or secondarily liable in respect of any
of the Obligations, or the performance or observance by the Borrower or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Agreement or any of the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto;

 

(c)          such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements provided
by the Borrower as required by the terms of this Agreement, together with such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Assumption;

 

(d)          such assignee will, independently and without reliance upon the
assigning Lender, the Agent or any other Lender and based upon such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;

 

(e)          such assignee represents and warrants that it is an Eligible
Assignee;

 

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(f)          such assignee appoints and authorizes the Agent to take such
actions as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto;

 

(g)          such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender;

 

(h)          such assignee represents and warrants that it is legally authorized
to enter into such Assignment and Assumption; and

 

(i)           such assignee represents and warrants that such assignment will
not cause a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.

 

16.1.3       Register. The Agent shall maintain a copy of each Assignment and
Assumption delivered to it and a register or similar list (the “Register”) for
the recordation of the names and addresses of the Lenders and the Pro Rata
Shares of the Commitment of, and principal amount (and stated interest) of the
Loan owing to, the Lenders from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, the Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower and the Lenders at any reasonable time
and from time to time upon reasonable prior notice. Upon each such recordation,
the assigning Lender agrees to pay to the Agent a registration fee in the sum of
$3,000.

 

16.1.4       New Notes. Upon its receipt of an Assignment and Assumption
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Lenders
(other than the assigning Lender). Within five (5) Business Days after receipt
of a request from Agent to do so, the Borrower, at its own expense, shall
execute and deliver to the Agent, in exchange for each surrendered Note, a new
Note to the order of such assignee in an amount equal to the amount assumed by
such assignee pursuant to such Assignment and Assumption and, if the assigning
Lender has retained some portion of its obligations hereunder, a new Note to the
order of the assigning Lender in amount equal to the amount retained by it
hereunder. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such Assignment and Assumption and shall otherwise be
substantially the form of the assigned Notes in all material respects. The
surrendered Notes shall be canceled and returned to the Borrower.

 

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16.1.5       Participations. Each Lender may sell participations to one or more
banks or other financial institutions in all or a portion of such Lender’s
rights and obligations under this Agreement and the other Loan Documents;
provided that (a) each such participation shall be in a minimum amount of
$3,000,000, (b) each participant shall meet the requirements of an Eligible
Assignee, (c) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to the Borrower, and (d) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on the Loan, extend the term or increase the
amount of the Pro Rata Share of the Commitment of such Lender as it relates to
such participant, reduce the amount of any commitment fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest. Each Lender that sells a participation shall, acting
solely for this purpose as an agent of the Borrower, maintain a register on
which it enters the name and address of each participant and the principal
amounts (and stated interest) of each participant’s interest in such Lender’s
rights and obligations under this Agreement and the other Loan Documents (the
“Participant Register”); provided that no Lender shall have any Obligation to
disclose all or any portion of the Participant Register (including the identity
of any Participant or any information relating to a Participant’s interest in
any Commitments, Loans or its other Obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such Commitment, Loan or other Obligation is in registered form under Section
5f.103-1(c) of the United States Treasury Regulations. The entries in the
Participant Register shall be conclusive absent manifest error, and such Lender
shall treat each Person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Agent (in its capacity as Agent) shall have no responsibility for maintaining a
Participant Register.

 

16.1.6       Disclosure. Borrower agrees that in addition to disclosures made in
accordance with standard and customary banking practices, any Lender may
disclose information obtained by such Lender pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise was known or becomes known to such assignee or participant
from a third party which is not, to the knowledge of such assignee or
participant, bound by any confidentiality provisions with respect thereto, or
otherwise becomes public knowledge, (b) not to disclose such information to a
third party, except auditors, accountants, attorneys and other agents of such
participant or assignee, bank regulators or other Governmental Authorities or as
required by Law or legal process and (c) not to make use of such information for
purposes of transactions unrelated to such contemplated assignment or
participation.

 

16.1.7       Miscellaneous Assignment Provisions.

 

(a)          Any assigning Lender shall retain its rights to be indemnified
pursuant to this Agreement with respect to any claims or actions arising prior
to the date of such assignment.

 

(b)          If any assignee Lender is a Foreign Lender, it shall comply with
Section 16.1.9 hereof.

 

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(c)          Anything contained in this Section 16.1 to the contrary
notwithstanding, any Lender may at any time pledge or assign all or any portion
of its interest and rights under the Loan Documents (including all or any
portion of its Notes) to any of the Federal Reserve Banks organized under §4 of
the Federal Reserve Act, 12 U.S.C. §341. No such pledge or assignment or the
enforcement thereof shall release any such Lender from its obligations hereunder
or under any of the other Loan Documents.

 

16.1.8       Certain Mergers. Notwithstanding the provisions of Section
16.1.1(e), above, in the event that any Lender is the subject of a merger with
another financial institution, the survivor of such merger shall assume the
rights and obligations of such Lender under the terms of this Agreement and the
other Loan Documents and any such merger shall not be considered a substitution
hereunder and will therefore not be deemed to increase the number of Lenders
hereunder.

 

16.1.9       Tax Forms.

 

(a)              (i)       Each Lender, and each holder of a participation
interest herein (or, if such Lender or holder is a disregarded entity for U.S.
federal income tax purposes, the Person that is treated as the owner of the
assets of such Lender or holder for U.S. federal income tax purposes), that is
not a “United States Person” (a “Foreign Lender”) within the meaning of Section
7701(a)(30) of the Code shall, to the extent it is legally able to do so,
deliver to Agent and Borrower, prior to receipt of any payment subject to
withholding (or upon accepting an assignment or receiving a participation
interest herein), two duly signed completed copies of either Form W-8BEN-E or
any successor thereto (relating to such Foreign Lender and entitling it to a
complete exemption from, or reduction of, withholding on all payments to be made
to such Foreign Lender by Borrower pursuant to this Agreement) or Form W-8ECI or
any successor thereto (relating to all payments to be made to such Foreign
Lender by Borrower pursuant to this Agreement) of the United States Internal
Revenue Service or such other evidence satisfactory to Borrower and Agent that
such Foreign Lender is entitled to an exemption from or reduction of, United
States withholding tax, including any exemption pursuant to Section 881(c) of
the Code. Thereafter and from time to time, each such Foreign Lender shall (A)
promptly submit to Agent and Borrower such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States Laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and Agent of any available
exemption from or reduction of, United States withholding taxes in respect of
all payments to be made to such Foreign Lender by Borrower pursuant to the Loan
Documents, (B) promptly notify Agent and Borrower of any change in circumstances
which would modify or render invalid any claimed exemption or reduction, and (C)
take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lenders, and as may be reasonably necessary
(including the re-designation of its lending office, if any) to avoid any
requirement of applicable Laws that Borrower make any deduction or withholding
for taxes from amounts payable to such Foreign Lender. If a payment made to a
Lender under any Loan Document would be subject to U.S. federal withholding Tax
imposed by FATCA if such Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to Borrower and
Agent at the time or times prescribed by Law and at such time or times
reasonably requested by Borrower or Agent such document prescribed by applicable
Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by Borrower or Agent as may be
necessary for Borrower and Agent to comply with their obligations under FATCA
and to determine that such Lender has complied with such Lender’s obligations
under FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of the preceding sentence, “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

 

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(ii)            Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or payable
to such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to Agent and Borrower on
the date when such Foreign Lender ceases to act for its own account with respect
to any portion of any such sums paid or payable, and at such other times as may
be necessary in the determination of Agent (in the reasonable exercise of its
discretion), (A) two duly signed completed copies of the forms or statements
required to be provided by such Lender as set forth above, to establish the
portion of any such sums paid or payable with respect to which such Lender acts
for its own account that is not subject to U.S. withholding tax, and (B) two
duly signed completed copies of United States Internal Revenue Service Form
W-8IMY (or any successor thereto), together with any information such Lender
chooses to transmit with such form, and any other certificate or statement of
exemption required under the Code, to establish that such Lender is not acting
for its own account with respect to a portion of any such sums payable to such
Lender.

 

(iii)            Borrower shall not be required to pay any additional amount to
any Foreign Lender under Section 2.11.5, (A) with respect to any Taxes required
to be deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an United States Internal
Revenue Service Form W-8BEN-E, W-8ECI, or W-8IMY pursuant to this Subsection (a)
of this Section, or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Subsection (a); provided that if such Lender shall
have satisfied the requirements of this Subsection (a) on the date such Lender
became a Lender or ceased to act for its own account with respect to any payment
under any of the Loan Documents, nothing in this Subsection (a) shall relieve
Borrower of its obligation to pay any amounts pursuant to Section 2.11.5 in the
event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.

 

(iv)            Agent may, without reduction, withhold any Taxes required to be
deducted and withheld from any payment under any of the Loan Documents with
respect to which Borrower is not required to pay additional amounts under this
Subsection (a).

 

(b)            Each Lender that is a “United States Person” within the meaning
of Section 7701(a)(30) of the Code shall deliver to Agent two duly signed
completed copies of United States Internal Revenue Service Form W-9. If such
Lender fails to deliver such forms, then Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable back-up
withholding tax imposed by the Code, without reduction.

 

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(c)            If any Governmental Authority asserts that Agent did not properly
withhold or backup withhold, as the case may be, any tax or other amount from
payments made to or for the account of any Lender, such Lender shall indemnify
Agent therefor, including all penalties and interest and costs and expenses
(including actual and reasonable attorneys’ fees) of Agent. Borrower shall, and
does hereby, indemnify Agent, and shall make payment in respect thereof within
ten (10) days after demand therefor, for any amount which a Lender for any
reason fails to pay indefeasibly to Agent as required pursuant to this Section
16.1.9(c). The obligation of Lenders and Borrower under this Subsection shall
survive the removal or replacement of a Lender, the payment of all Obligations,
the resignation or replacement of Agent and termination of this Agreement and/or
any other Loan Document.

 

16.2          Certain Administrative Matters.

 

16.2.1       Amendment, Waiver, Consent, Reliance on Agent, Etc.

 

(a)            Except as otherwise expressly provided herein or as to any term
or provision hereof which provides for the consent or approval of the Agent
only, no term or provision of this Agreement or any other Loan Document may be
changed, waived, discharged or terminated, nor may any consent required or
permitted by this Agreement or any other Loan Document be given, unless such
change, waiver, discharge, termination or consent receives the written approval
of the Required Lenders or unless such approval of the Required Lenders is
deemed given pursuant to Section 16.2.2 below.

 

Notwithstanding the foregoing, the unanimous written approval of all the Lenders
(other than a Defaulting Lender) shall be required with respect to any proposed
amendment, waiver, discharge, termination, or consent which:

 

(i)is described in Section 17.17 below; or

 

(ii)amends, modifies or waives any provisions of this Section 16.2.1;

 

and provided, further, that without the consent of the Agent, no such action
shall amend, modify or waive any provision of Article 15 or Article 16 or any
other provision of any Loan Documents which relates to the rights or obligations
of the Agent.

 

(b)            With respect to any requested amendment, waiver, consent or other
action which under the terms of this Agreement requires the approval of the
Required Lenders or of all of the Lenders, as the case may be, Borrower shall be
entitled to rely upon the written representation of the Agent that such approval
has been obtained and Borrower shall have no obligation to independently verify
that such is the case.

 

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16.2.2       Deemed Consent or Approval. With respect to any requested
amendment, waiver, consent or other action which requires the approval of the
Required Lenders in accordance with the terms of this Agreement, or if the Agent
is required hereunder to seek, or desires to seek, the approval of the Required
Lenders prior to undertaking a particular action or course of conduct, the Agent
in each case shall provide each Lender with written notice of any such request
for amendment, waiver or consent or any other requested or proposed action or
course of conduct, accompanied by such background information and explanations
as may be reasonably necessary to determine whether to approve or disapprove
such amendment, waiver, consent or other action or course of conduct. The Agent
may (but shall not be required to) include in any such notice, printed in
capital letters or boldface type, a legend substantially to the following
effect:

 

“THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE. FAILURE TO RESPOND WITHIN TEN
(10) BUSINESS DAYS FROM THE RECEIPT OF THIS COMMUNICATION SHALL CONSTITUTE A
DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION REQUESTED BY THE BORROWER OR THE
COURSE OF CONDUCT PROPOSED BY THE AGENT AND RECITED ABOVE.”

 

And if the foregoing legend is included by the Agent in its communication and if
such communication is delivered to a Lender by registered or certified mail or
by any recognized courier service or overnight delivery service such as Federal
Express, such Lender shall be deemed to have approved or consented to such
proposed action or course of conduct for all purposes hereunder if such Lender
fails to object to such action or course of conduct by written notice to the
Agent within ten (10) Business Days of such Lender’s receipt of such notice. The
procedure for deemed consent or approval that is set forth in this Section
16.2.2 shall not apply to any requested amendment, waiver, consent or other
action which requires the approval of all of the Lenders pursuant to Section
17.17(a) below.

 

16.3          Certain Lender Representations. Each Lender severally represents
and warrants, with respect to such Lender only, that such Lender is an Eligible
Assignee.

 

17.GENERAL PROVISIONS.

 

17.1          Notices.

 

17.1.1       Mode of Delivery. Any notice or other communication in connection
with this Agreement, the Notes, the Mortgage, or any of the other Loan
Documents, shall be in writing and (i) deposited in the United States Mail,
postage prepaid, by registered or certified mail, or (ii) hand delivered by any
commercially recognized courier service or overnight delivery service such as
Federal Express, or (iii) subject to Section 17.1.2 below, sent by facsimile
transmission, if a FAX Number is designated below (provided a copy is also sent
by a means of transmission listed in (i) or (ii) above), or (iv) subject to
Section 17.1.3 below, sent by electronic mail if an email address is designated
below, addressed as follows:

 

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If to Borrower:

 

PHR TCI, LLC

c/o Procaccianti Companies

1140 Reservoir Avenue

Cranston, Rhode Island 02920

Fax Number: (401) 943-6320

Attention:Gregory D. Vickowski, CFO

E-mail:gvickowski@procgroup.com

 

with copies by regular mail or such hand delivery or facsimile or email
transmission to:

 

Procaccianti Companies

1140 Reservoir Avenue

Cranston, Rhode Island 02920

Fax Number: (401) 943-6320

Attention:Ron M. Hadar, General Counsel

E-mail:rhadar@procaccianti.com

 

If to Citizens as Agent and/or Lender:

 

Citizens Bank, National Association

Commercial Real Estate RC0450

One Citizens Plaza

Providence, Rhode Island 02903

Fax Number: (401) ___-____

Attention:Commercial Real Estate Loan Administration

E-mail:alexander.hofstetter@citizensbank.com

nicholas.daprato@citizensbank.com          

 

with copies by regular mail or such hand delivery or facsimile or email
transmission to:

 

Hinckley Allen

100 Westminster Street, Suite 1500

Providence, Rhode Island 02903

Fax Number: (401) 277-9600

Attention:Kirsten E. Kenney, Esq.

E-mail:kkenney@hinckleyallen.com

 

If to any other Lender to the address set forth on Exhibit D.

 

Any such addressee may change its address and/or fax number and/or e-mail
address for such notices to such other address or fax number or e-mail address
in the United States as such addressee shall have specified by written notice
given as set forth above.

 

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All periods of notice shall be measured from the deemed date of delivery. A
notice shall be deemed to have been given, delivered and received for the
purposes of all Loan Documents upon the earliest of: (i) if sent by such
certified or registered mail, on the earlier of the third Business Day following
the date of postmark or on the date of actual receipt as evidenced by the return
receipt, (ii) if hand delivered at the specified address by such courier or
overnight delivery service, when so delivered or tendered for delivery during
customary business hours on a Business Day, (iii) if facsimile transmission is a
permitted means of giving notice, upon receipt during customary business hours
on a Business Day as evidenced by confirmation, or (iv) if electronic mail is a
permitted means of giving notice, upon receipt during customary business hours
on a Business Day as evidenced by electronic confirmation. Any notice delivered
outside of the customary business hours on a Business Day shall be deemed
received on the next Business Day. Notwithstanding the foregoing, (a) service of
a notice required by any applicable statute shall be considered complete when
the requirements of that statute are met and (b) no notice of change of address
shall be effective except upon actual receipt or upon refusal of receipt.

 

This Section shall not be construed in any way to affect or impair any waiver of
notice or demand provided in any Loan Document or to require giving of notice or
demand to or upon any Person in any situation or for any reason.

 

17.1.2       Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all parties to
the Loan Documents. Agent may also require that any such documents and
signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.

 

17.1.3       Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, to distribute Loan Documents for
execution by the parties thereto, and for other purposes described herein, and
may not be used for any other purpose.

 

17.1.4       Reliance by Agent and Lenders. Agent and Lenders shall be entitled
to rely and act upon any notices (including telephonic Loan advance notices, if
any) purportedly given by or on behalf of Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of Borrower. All
telephonic notices to and other communications with Agent may be recorded by
Agent, and each of the parties hereto hereby consents to such recording.

 

17.2          No Assignment by Borrower. Borrower shall not assign or transfer,
in whole or in part, any of its rights or obligations under any of the Loan
Documents or any monies due hereunder or any interest therein without the prior
written consent of each of the Lenders.

 

17.3          Intentionally Omitted.

 

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17.4          Parties Bound; No Third Party Beneficiaries.

 

(a)            The provisions of this Agreement and of each of the other Loan
Documents shall be binding upon and inure to the benefit of Borrower, Agent and
Lenders and their respective successors and assigns, except as otherwise
prohibited by this Agreement or any of the other Loan Documents.

 

(b)            This Agreement is a contract by and among Borrower, Agent and
Lenders for their mutual benefit, and no third person shall have any right,
claim or interest against Agent or Lenders by virtue of any provision hereof.

 

17.5          Waivers, Extensions and Releases.

 

(a)            Subject to Section 17.17(a) the Required Lenders may at any time
and from time to time waive any one or more of the conditions contained herein
or in any of the other Loan Documents, or extend the time of payment of the
Loan, or release portions of the Collateral from the provisions of this
Agreement and from the Mortgage or any other Security Document, but any such
waiver, extension or release shall be deemed to be made in pursuance and not in
modification hereof, and any such waiver in any instance, or under any
particular circumstance, shall not be considered a waiver of such condition in
any other instance or any other circumstance.

 

(b)            Lenders' failure, at any time or times hereafter, to require
strict performance by Borrower or Guarantor of any provision of the Loan
Documents shall not waive, affect or diminish any right of Lenders thereafter to
demand strict compliance and performance therewith. Any suspension or waiver by
Lenders of an Event of Default under any Loan Document shall not suspend, waive
or affect any other Event of Default under any Loan Document, whether the same
is prior or subsequent thereto and whether of the same or of a different type.
None of the undertakings, agreements, warranties, covenants and representations
of Borrower or Guarantor contained in any Loan Document and no Event of Default
under any Loan Documents shall be deemed to have been suspended or waived by
Lenders, unless such suspension or waiver is by an instrument in writing
specifying such suspension or waiver and is signed by a duly authorized
representative of Agent and directed to Borrower or Guarantor, as applicable.

 

17.6          Governing Law.

 

17.6.1       Substantial Relationship. It is understood and agreed that all of
the Loan Documents shall be deemed to have been delivered in the Commonwealth of
Massachusetts, which state the parties agree has a substantial relationship to
the parties and to the underlying transactions embodied by the Loan Documents.

 

17.6.2       Intentionally Omitted.

 

17.6.3       Governing Law. This Agreement and, except as otherwise provided in
Section 17.6.4, each of the other Loan Documents shall in all respects be
governed, construed, interpreted, applied and enforced in accordance with the
internal laws of the Commonwealth of Massachusetts without regard to principles
of conflicts of law.

 

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17.6.4       Exceptions. Notwithstanding the foregoing choice of law:

 

(a)             matters relating to (i) the creation, transfer, perfection,
priority and enforcement of the liens on and security interests in the Property
or other assets situated in states other than the Commonwealth of Massachusetts,
including by way of illustration, but not in limitation, actions for
foreclosure, for injunctive relief, or for the appointment of a receiver, and
(ii) the nature of the interest in the Property created, transferred or
perfected; the method for foreclosure of the liens on the Property; the nature
of the interest in real property that results from foreclosure and the manner
and effect of recording or failing to record evidence of a transaction that
transfers or creates an interest in real property, shall be governed by the laws
of the state where the Property is situated;

 

(b)             Agent and Lenders shall comply with applicable law in the state
where the Property is situated to the extent required by the law of such
jurisdiction in connection with the foreclosure of the security interests and
liens created under the Mortgage and the other Loan Documents with respect to
the Property or any other assets situated in states other than the Commonwealth
of Massachusetts; and

 

(c)             provisions of Federal law and the law of the state where the
Property is situated shall apply in defining the terms Hazardous Substances,
Environmental Legal Requirements and Legal Requirements applicable to the
Property as such terms are used in this Agreement and the other Loan Documents.

 

Nothing contained herein or any other provisions of the Loan Documents shall be
construed to provide that the substantive laws of the state where the Property
is situated shall apply to any parties' rights and obligations under any of the
Loan Documents, which, except as expressly provided in clauses (a), (b) and (c)
of this Section 17.6.4, are and shall continue to be governed by the substantive
law of the Commonwealth of Massachusetts. In addition, the fact that portions of
the Loan Documents may include provisions drafted to conform to the law of the
state where the Property is situated is not intended, nor shall it be deemed, in
any way, to derogate the parties' choice of law as set forth or referred to in
this Agreement or in the other Loan Documents. The parties further agree that
the Agent and Lenders may enforce their rights under the Loan Documents
including, but not limited to, their rights to sue the Borrower or to collect
any outstanding indebtedness in accordance with applicable law.

 

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17.7          Consent to Jurisdiction and Service of Process. AS PART OF THE
CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE
DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER, AGENT OR ANY LENDER,
BORROWER HEREBY CONSENTS AND AGREES THAT (EXCEPT AS OTHERWISE MANDATORILY
REQUIRED BY APPLICABLE LAW IN ORDER TO ENFORCE AGENT'S AND/OR LENDERS' RIGHTS
UNDER THIS AGREEMENT OR UNDER ANY OF THE OTHER LOAN DOCUMENTS AND EXCEPT AS
OTHERWISE PROVIDED IN ANY OF THE OTHER LOAN DOCUMENTS) THE SUPERIOR COURT OF
SUFFOLK COUNTY, MASSACHUSETTS OR, AT AGENT'S OR BORROWER'S OPTION, THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS, SHALL HAVE
NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER AND AGENT OR ANY LENDER PERTAINING TO THE LOAN DOCUMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATED THERETO. BORROWER EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. BORROWER FURTHER CONSENTS AND AGREES THAT
SERVICE OF PROCESS IN ANY SUIT BROUGHT FOR ENFORCEMENT OF THIS AGREEMENT MAY BE
MADE BY MAIL IN THE MANNER SET FORTH IN SECTION 17.1 ABOVE. NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT OR LENDERS TO
SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY AGENT OR LENDERS OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM
OR THE TAKING OF ANY ACTION TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION.

 

17.8          JURY TRIAL WAIVER. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW,
BORROWER, AGENT AND LENDERS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON THIS AGREEMENT, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF
THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK
TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. BORROWER CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR BORROWER, AGENT AND LENDERS TO ENTER INTO THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

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17.9          Survival. All representations, warranties, covenants and
agreements of Borrower herein or in any other Loan Document, or in any notice,
certificate, or other paper delivered by or on behalf of Borrower pursuant
hereto are significant and shall be deemed to have been relied upon by Agent and
Lenders notwithstanding any investigation made by Agent or Lenders or on their
behalf and shall survive the delivery of the Loan Documents and the making of
the Loan and each advance pursuant thereto. No review or approval by Agent,
Lenders, or by Lenders' Consultants or representatives, of any plans and
specifications, opinion letters, certificates by professionals or other item of
any nature shall relieve Borrower or anyone else of any of the obligations,
warranties or representations made by or on behalf of Borrower under any one or
more of the Loan Documents.

 

17.10        Cumulative Rights; No Waiver. All of the rights of Agent and
Lenders hereunder and under each of the other Loan Documents and any other
agreement now or hereafter executed in connection herewith or therewith, shall
be cumulative and may be exercised singly, together, or in such combination as
Agent or Lenders may determine in their sole good faith judgment. All covenants,
conditions, provisions, warranties, guaranties, indemnities, and other
undertakings of Borrower contained in this Agreement and the other Loan
Documents, or in any document referred to herein or contained in any agreement
supplementary hereto or in any schedule given to Agent or Lenders or contained
in any other agreement between Borrower and Agent or Lenders heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and not
in derogation or substitution of any of the terms, covenants, conditions, or
agreements of Borrower herein contained. The failure or delay of Agent or
Lenders to exercise or enforce any rights, liens, powers or remedies hereunder
or under any of the aforesaid agreements or other documents or security or
Collateral shall not operate as a waiver of such liens, rights, powers and
remedies, but all such liens, rights, powers, and remedies shall continue in
full force and effect until the Loan and all other Obligations shall have been
fully satisfied. In addition, no act of the Agent or Lenders pursuant to the
Loan Documents shall be construed as an election to proceed under any one remedy
to the exclusion of other remedies. All liens, rights, powers, and remedies
herein provided for are cumulative and none are exclusive.

 

17.11        Limitations on Claims Against Agent or Lenders.

 

17.11.1     Borrower Must Notify. Neither Agent nor any Lender shall be in
default under this Agreement, or under any other Loan Document, unless a written
notice specifically setting forth the claim of Borrower shall have been given to
Agent or such Lender within sixty (60) days after Borrower first had actual
knowledge or actual notice of the occurrence of the event which Borrower alleges
gave rise to such claim and Agent or such Lender does not remedy or cure the
default, if any there be, with reasonable promptness thereafter. Such actual
knowledge or actual notice shall refer to what was actually known by, or
expressed in a written notification furnished to, any of the Authorized
Representatives.

 

17.11.2     Remedies. If it is determined by the final order of a court of
competent jurisdiction, which is not subject to further appeal, that Agent or
any Lender breached any of their obligations under the Loan Documents and have
not remedied or cured the same with reasonable promptness following notice
thereof, Agent or such Lenders' responsibilities shall be limited to the payment
of any actual, direct, compensatory damages sustained by Borrower as a result
thereof plus Borrower's reasonable costs and expenses, including, without
limitation, actual and reasonable attorneys' fees and disbursements in
connection with such court proceedings.

 

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17.11.3     LIMITATIONS. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER AGAINST AGENT OR ANY LENDER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. IN NO EVENT SHALL AGENT OR ANY
SUCH LENDER BE LIABLE TO BORROWER OR ANYONE ELSE UNLESS A WRITTEN NOTICE
SPECIFICALLY SETTING FORTH THE CLAIM OF BORROWER SHALL HAVE BEEN GIVEN TO AGENT
OR ANY SUCH LENDER WITHIN THE TIME PERIOD SPECIFIED ABOVE.

 

17.12        Obligations Absolute. Except to the extent prohibited by applicable
law which cannot be waived, the Obligations of Borrower under the Loan Documents
shall be absolute, unconditional and irrevocable and shall be paid strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever, including, without limitation, the existence of any claim, set off,
defense or other right which Borrower may have at any time against the Agent or
any Lender whether in connection with the Loan or any unrelated transaction.

 

17.13        Table of Contents, Title and Headings. Any Table of Contents, the
titles and the headings of sections are not parts of this Agreement or any other
Loan Document and shall not be deemed to affect the meaning or construction of
any of their provisions.

 

17.14        Counterparts; Electronic Communications.

 

(a)            This Agreement may be executed in several counterparts, each of
which when executed and delivered is an original, but all of which together
shall constitute one instrument. In making proof of this Agreement, it shall not
be necessary to produce or account for more than one such counterpart which is
executed by the party against whom enforcement of this Agreement is sought.

 

(b)            To the extent expressly permitted by the provisions of Section
17.1.3, the parties hereby agree to the conduct of certain communications by
electronic means.

 

17.15        Intentionally Omitted.

 

17.16        Time of the Essence. Time is of the essence of each provision of
this Agreement and each other Loan Document.

 

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17.17        Amendments; No Oral Changes, etc.

 

(a)            Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, no amendment, modification,
termination, or waiver of any provision of any of the Loan Documents nor consent
to any departure by Borrower or Guarantor therefrom shall in any event be
effective unless the same shall be in a written notice given to Borrower or
Guarantor, respectively, by Agent and consented to in writing by the Required
Lenders (or by the Agent acting alone if any specific provision of this
Agreement provides that the Agent, acting alone, may grant such amendment,
modification, termination, waiver or departure) and Agent shall give any such
notice if the Required Lenders so consent or direct Agent to do so; provided,
however, that any such amendment, modification, termination, waiver or consent
shall require a written notice given to Borrower by the Agent and consented to
in writing by all of the Lenders if the effect thereof is to:

 

(i)              change any of the provisions affecting the interest rates on
the Loan;

 

(ii)            discharge or release the Borrower from its obligation to repay
all principal due under the Loan;

 

(iii)            release any Guarantor or any material portion of the Collateral
other than in accordance with the terms of the Loan Documents;

 

(iv)           except as otherwise expressly provided in this Agreement, change
any Lender's Pro Rata Share of the Loan;

 

(v)            modify this Section 17.17;

 

(vi)           change the definition of Required Lenders;

 

(vii)          extend any scheduled due date for payment of principal, interest
or fees;

 

(viii)         permit Borrower to assign any of its rights under or interest in
this Agreement; or

 

(ix)            increase the Maximum Loan Amount;

 

and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. Any amendment or modification of
this Agreement must be (i) signed by Borrower, Agent and at least all of the
Lenders consenting thereto who shall then hold the Pro Rata Shares of the Loans
required for such amendment or modification under this Section 17.17 and Agent
shall sign any such amendment, on behalf of the applicable Lenders, if such
Lenders so consent or direct Agent to do so provided that any Lender dissenting
therefrom shall be given an opportunity to sign any such amendment or
modification, and (ii) if requested by Agent, acknowledged and consented to by
Guarantor, which consent and acknowledgment shall include an affirmation and
ratification of Guarantor's obligations under the Loan Documents executed by
Guarantor. Any amendment of any of the Security Documents (other than UCC
Financing Statements) must be signed by each of the parties thereto.

 

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(b)            In no event shall any oral agreements, promises, actions,
inactions, knowledge, course of conduct, course of dealings or the like be
effective to amend, terminate, extend or otherwise modify this Agreement or any
of the other Loan Documents. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES, AND THE SAME MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

(c)            Amendments to Hedging Contracts. Notwithstanding any contrary
provision of this Agreement, (i) the Counterparty to any Hedging Contract may
enter into participations and risk sharing agreements with respect to any
Hedging Contracts and may exercise all rights and remedies under any Hedging
Contracts, and (ii) the documents evidencing Hedging Contracts may be amended,
or rights or privileges thereunder waived, in a writing executed solely by the
respective parties thereto.

 

17.18        Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

 

17.19        Cumulative Effect; Conflict of Terms. The provisions of the Other
Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in any of the Other
Agreements or the Security Documents by specific reference to the applicable
provision of this Agreement, if any provision contained in this Agreement is in
direct conflict with, or inconsistent with, any provision in any of the Other
Agreements or the Security Documents, the provision contained in this Agreement
shall govern and control unless the provision is governed by the laws of the
jurisdiction in which the Property is located in which case such other provision
shall be controlling.

 

17.20        Agent's or Lenders' Consent. Whenever Agent's or Lenders' consent
is required to be obtained under any Loan Documents as a condition to any
action, inaction, condition or event, Agent and Lenders shall be authorized to
give or withhold such consent in their sole and absolute discretion without
regard to reasonableness (unless otherwise expressly provided herein or therein)
and to condition their consent upon the giving of additional collateral security
for the Obligations, the payment of money or any other matter.

 

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17.21        Interpretation; Integration.

 

(a)            No provision in any of the Loan Documents shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other Governmental Authority by reason of such party having or being deemed to
have structured, drafted or dictated such provision.

 

(b)            This Agreement and the other Loan Documents are intended by the
parties as the final, complete and exclusive statement of the transactions
evidenced by this Agreement and the other Loan Documents. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superseded by this Agreement and the other Loan
Documents, and no party is relying on any promise, agreement or understanding
not set forth in this Agreement or the other Loan Documents.

 

17.22        No Preservation or Marshaling. Borrower agrees that neither Agent
nor any Lender shall have any obligation to preserve rights to the Collateral
against prior parties or to marshal any Collateral for the benefit of any
Person.

 

17.23        Waivers by Borrower. EXCEPT AS IS OTHERWISE EXPRESSLY PROVIDED FOR
HEREIN, OR AS REQUIRED BY APPLICABLE LAW, BORROWER WAIVES (A) PRESENTMENT,
DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON-PAYMENT,
INTENT TO ACCELERATE, ACCELERATION, MATURITY, RELEASE, COMPROMISE, SETTLEMENT,
EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT
OR LENDERS ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND
CONFIRMS WHATEVER AGENT OR LENDERS MAY DO IN THIS REGARD; (B) NOTICE PRIOR TO
TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR OBTAINING ANY BOND OR SECURITY
WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING AGENT OR LENDERS TO
EXERCISE ANY OF THEIR REMEDIES; (C) THE BENEFIT OF ALL VALUATION, APPRAISEMENT
AND EXEMPTION LAWS; AND (D) NOTICE OF ACCEPTANCE HEREOF. BORROWER ACKNOWLEDGES
THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT'S AND LENDERS'
ENTERING INTO THIS AGREEMENT AND THAT AGENT AND LENDERS ARE RELYING UPON THE
FOREGOING WAIVERS IN FUTURE DEALINGS WITH BORROWER. BORROWER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND
HAS KNOWINGLY AND VOLUNTARILY WAIVED SUCH RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL.

 

17.24        Monthly Statements. While Agent or Lenders may issue invoices or
other statements on a monthly or periodic basis (a “Statement”), it is expressly
acknowledged and agreed that: (i) the failure of Agent or Lenders to issue any
Statement on one or more occasions shall not affect Borrower's obligations to
make payments under the Loan Documents as and when due; (ii) the inaccuracy of
any Statement shall not be binding upon Agent or any Lender and so Borrower
shall always remain obligated to pay the full amount(s) required under the Loan
Documents as and when due notwithstanding any provision to the contrary
contained in any Statement; (iii) all Statements are issued for information
purposes only and shall never constitute any type of offer, acceptance,
modification, or waiver of the Loan Documents or any of Agent's or any Lenders'
rights or remedies thereunder; and (iv) in no event shall any Statement serve as
the basis for, or a component of, any course of dealing, course of conduct, or
trade practice which would modify, alter, or otherwise affect the express
written terms of the Loan Documents.

 

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17.25        Recourse Provisions.

 

17.25.1     Borrower Fully Liable. Borrower shall be fully liable for the Loan
and the payment and performance of all Obligations of Borrower to Agent and
Lenders.

 

17.25.2     Guarantor Liability. Guarantor shall be personally liable with
respect to the Loan and the payment and performance of the Obligations only to
the extent set forth in the Guaranty, the Environmental Indemnity Agreement and
in any other Loan Documents now or hereafter executed and delivered by Guarantor
(if any).

 

17.25.3     Member Liability. Except as set forth in the Guaranty, the
Environmental Indemnity Agreement and any other Loan Documents now or hereafter
executed and delivered by Member (if any), no Member of Borrower shall have any
personal liability for the payment and performance of the Obligations.

 

17.25.4     Additional Matters. Nothing contained in these limited recourse
provisions or elsewhere shall: (i) limit the right of Agent or Lenders to obtain
injunctive relief or to pursue equitable remedies under any of the Loan
Documents, excluding only any injunctive relief ordering payment of obligations
by any Person for which personal liability does not otherwise exist; or (ii)
limit the liability of any attorney, law firm, architect, accountant or other
professional who or which renders or provides any written opinion or certificate
to Lenders in connection with the Loan even though such person or entity may be
an agent or employee of a Person which is not personally liable for the
Obligations.

 

17.26        Office of Foreign Asset Control (“OFAC”) and Patriot Act Notice

 

(a)            Each Lender and Agent (for itself and not on behalf of any
Lender) hereby notifies Borrower and Guarantor that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (as amended, the “Patriot Act”), it is required to obtain, verify and
record information that identifies Borrower and Guarantor, which information
includes the name and address of Borrower and Guarantor and other information
that will allow such Lender or Agent, as applicable, to identify Borrower and
Guarantor in accordance with the Patriot Act. Borrower shall, promptly following
a request by Agent, provide all documentation and other information that any
Lender reasonably requests in order to comply with its ongoing obligations under
“know your customer” and OFAC requirements and all anti-money laundering or
other applicable Laws, including the Patriot Act and the Beneficial Ownership
Regulation, with respect to any Person owning such percentage of the direct or
indirect ownership interests in Borrower or Guarantor that may be then required
by applicable Law).

 

 116 

 

 

(b)            Each Lender and Agent hereby notifies Borrower that:

 

(i)              To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify and record information that identifies each customer who opens an
account (including the extension of credit to a customer). Therefore, all new
and existing customers are subject to the identity verification requirements.
When you open an account with any entity within the Lenders’ family of
companies, Lenders require the following information for the Business: Business
Name, Business Address, Business TIN and Business Phone Number.

 

(ii)             In addition, all financial institutions must check all
Borrowers; Collateral Owners; Guarantors; Co-signors; Receiving and Sending
Parties; General Partners, Managing Members and Trustees; and Limited Partners,
Managing Members and Beneficiaries holding ownership interests of twenty percent
(20%) or more in Borrower or Guarantor; against the US Department of Treasury’s
list for Specially Designated Nationals and Blocked Persons.

 

(iii)            Both the Patriot Act and OFAC verifications must be completed
prior to the Loan closing date.

 

17.27        Electronic Transmission of Data. The parties agree that certain
data related to the Loan (including confidential information, documents,
applications and reports) may be transmitted electronically, including
transmission over the internet. This data may be transmitted to, received from
or circulated among employees, agents and representatives of Borrower, Agent and
Lenders and their respective Affiliates and other Persons involved with the
subject matter of this Agreement. Borrower acknowledges and agrees that (a)
there are risks associated with the use of electronic transmission and that
neither Agent nor any Lender controls the method of transmittal or service
providers, (b) Agent and Lenders have no obligation or responsibility whatsoever
and assume no duty or obligation for the security, receipt or third party
interception of any such transmission, and (c) Borrower will release, hold
harmless and indemnify Agent and Lenders from any claim, damage or loss,
including that arising in whole or part from Agent's or any Lender’s strict
liability or sole, comparative or contributory negligence (other than any claim,
damage or loss arising from Agent's or a Lender's gross negligence or willful
misconduct), which is related to the electronic transmission of data.

 

 117 

 

 

17.28        No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby, the Borrower acknowledges and
agrees, and acknowledges its Affiliates’ understanding, that: (i) the credit
facility provided for hereunder and any related arranging or other services in
connection therewith (including in connection with any amendment, waiver or
other modification hereof or of any other Loan Document) are an arm’s-length
commercial transaction between the Borrower and its Affiliates, on the one hand,
and the Agent and the Arranger, on the other hand, and the Borrower is capable
of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, the
Agent and the Arranger each is and has been acting solely as a principal and is
not the financial advisor, agent or fiduciary, for the Borrower, any other Loan
Party or any of their respective Affiliates, stockholders, creditors or
employees or any other Person; (iii) neither the Agent nor the Arranger has
assumed or will assume an advisory, agency or fiduciary responsibility in favor
of the Borrower or any other Loan Party with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification hereof or of any other Loan Document
(irrespective of whether the Agent or the Arranger has advised or is currently
advising the Borrower, any other Loan Party or any of their respective
Affiliates on other matters) and neither the Agent nor the Arranger has any
obligation to the Borrower, to any other Loan Party or to any of their
respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein, or in the other Loan
Documents; (iv) the Agent and the Arranger and their respective Affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of the Borrower, the other Loan Parties and their respective
Affiliates, and neither the Agent nor the Arranger has any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Agent and the Arranger have not provided and will not
provide any legal, accounting, regulatory or tax advice to Borrower or any other
Loan Party with respect to any of the transactions contemplated hereby
(including any amendment, waiver or other modification hereof or of any other
Loan Document) and the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate. The
Borrower hereby waives and releases, to the fullest extent permitted by
applicable Law, any claims that it may have against the Agent or the Arranger
with respect to any breach or alleged breach of agency or fiduciary duty.

 

17.29        Disclaimer by Agent and Lenders. Agent and Lenders shall not be
liable to any subcontractor, supplier, laborer, architect, engineer or any other
party for services performed or materials supplied in connection with the
Property. Agent and Lenders shall not be liable for any debts or claims accruing
in favor of any such parties against Borrower or against the Property. Borrower
shall not be considered an agent of Agent or of Lenders for any purposes, and
Agent and Lenders are not venture partners with Borrower. Agent and Lenders
shall not be deemed to be in privity of contract with any contractor,
subcontractor or provider of services on or to the Property. Nor shall any
payment of funds directly to any contractor, or subcontractor or provider of
services on or to the Property, be deemed to create any third party beneficiary
status or recognition of same by Agent or Lenders. Approvals granted by Agent or
Lenders for any matters covered under this Agreement shall be narrowly construed
to cover only the parties and facts identified in any written approval.

 

[Remainder of page intentionally left blank. Signatures on following page(s).]

 

 118 

 

 

IN WITNESS WHEREOF this Agreement has been duly executed and delivered as a
sealed instrument as of the date first above written.

  

  BORROWER:       PHR TCI, LLC,   a Delaware limited liability company

 

  By: /s/ James A. Procaccianti   Name: James A. Procaccianti   Title:
Authorized Representative

 

  AGENT:       CITIZENS BANK, NATIONAL ASSOCIATION,
as Agent

 

  By: /s/ Alexander M. Hofstetter   Name: Alexander M. Hofstetter   Title:
Senior Vice President

 

  LENDER:       CITIZENS BANK, NATIONAL ASSOCIATION,
as a Lender

 

  By: /s/ Alexander M. Hofstetter   Name: Alexander M. Hofstetter   Title:
Senior Vice President

  

 

 

  

LIST OF EXHIBITS

 

            Section             Reference             Number              
Exhibit A   -   Organizational Chart Setting Forth  Ownership Interests,
Authorized  Representatives and Organizational and Taxpayer Identification
Numbers   4, 8.10.2               Exhibit B   -   Intentionally Omitted        
          Exhibit C   -   Required Hazard, Property and Other Insurance   7.1.13
and 9.5               Exhibit D   -   Lenders' Pro Rata Shares, Notice Addresses
and Wire Transfer Instructions   2.16, 15.2, 16.2.1 and 17.1              
Exhibit E   -   Form of Assignment and Assumption   16.1.1               Exhibit
F   -   Form of Compliance Certificate   9.1               Exhibit G   -  
Conditions Subsequent   7.2               Exhibit H   -   Approved Capital
Expenditures Budget   9.41

 

 

 

  

EXHIBIT A

 

ORGANIZATIONAL CHART SETTING FORTH OWNERSHIP INTERESTS, AUTHORIZED
REPRESENTATIVES

AND ORGANIZATIONAL AND TAXPAYER IDENTIFICATION NUMBERS

 

[tv501307_img01.jpg] 

 

 

 

  

EXHIBIT B

 

INTENTIONALLY OMITTED

 

 

 

  

EXHIBIT C

 

REQUIRED PROPERTY, HAZARD AND OTHER INSURANCE

 

Borrower shall at all times provide and maintain the following insurance
coverages with respect to the Property issued by companies qualified to do
business in the jurisdiction where the Property is located, having a Best's
Rating of not less than A-IX and otherwise reasonably acceptable to Agent:

 

(i)property insurance on an all-risk basis without exception (including, without
limitation, flood [required if property is in a “Special Flood Hazard Area” A or
V], vandalism and malicious mischief, terrorism, earthquake, collapse, boiler
explosion, sprinkler coverage, cost of demolition, increased costs of
construction and the value of the undamaged portion of the building and soft
costs coverage) covering all the real estate, fixtures and personal property to
the extent of the full insurable value thereof, on an all-risk non-reporting
form, having replacement cost, laws and ordinances and agreed amount
endorsements (with deductibles reasonably acceptable to Agent);

 

(ii)rent loss or business interruption insurance in an amount equal to one
year's projected Rents or gross revenues;

 

(iii)commercial general liability insurance, with underlying and umbrella
coverages totaling not less than $25,000,000 per occurrence and $25,000,000 in
the aggregate or such other amounts as may be reasonably determined by Agent
from time to time;

 

(iv)worker's compensation, employer's liability and other insurance required by
law (if applicable); and

 

(v)such other insurance coverages in such amounts as Agent may reasonably
request consistent with the customary practices of prudent developers and owners
of similar properties.

 

An actual insurance policy or certified copy thereof, or a binder, certificate
of insurance, or other evidence of property coverage in the form of Acord 28
(Evidence of Commercial Property Coverage), Acord 25 (Certificate of Insurance),
or a 30-day binder in form acceptable to Agent, shall be delivered at closing of
the Loan. Thereafter, if requested by Agent, a copy of any insurance policy
requested by Agent shall be delivered to Agent within ten (10) days after
Agent’s request therefor.

 

Flood insurance shall be provided if the Property is located in a flood prone,
flood risk or flood hazard area as designated pursuant to the Federal Flood
Disaster Protection Act of 1973, as amended, and the Regulations thereunder, or
if otherwise reasonably required by Agent.

 

 

 

  

Agent shall be named as first mortgagee on policies of all-risk-type insurance
on the Property, as loss payee on the Collateral and its contents, and as first
mortgagee on rent-loss or business interruption coverages related thereto.

 

Except with respect to commercial general liability insurance, as to which Agent
shall be named as an additional insured with respect to the Property, all other
required insurance coverages shall have a so-called “mortgagee's endorsement” or
“lender's loss-payable endorsement” which shall provide in substance as follows:

 

A.           Loss or damage, if any, under the policy shall be paid to Agent and
its successors and assigns in whatever form or capacity its interest may appear
and whether said interest be vested in Agent in its individual or in its
disclosed or undisclosed fiduciary or representative capacity, or otherwise, or
vested in a nominee or trustee of Agent.

 

B.           The insurance under the policy, or under any rider or endorsement
attached thereto, as to the interest only of Agent shall not be invalidated nor
suspended:

 

(a)by any error, omission or change respecting the ownership, description,
possession or location of the subject of the insurance or the interests therein
or the title thereto; or

 

(b)by the commencement of foreclosure or similar proceedings or the giving of
notice of sale of any of the property covered by the policy by virtue of any
mortgage, deed of trust, or security interest; or

 

(c)by any breach of warranty, act, omission, neglect, or noncompliance with any
provisions of the policy by the named insured, or anyone else, whether before or
after a loss, which under the provisions of the policy of insurance, would
invalidate or suspend the insurance as to the named insured, excluding, however,
any acts or omissions of Agent while exercising active control and management of
the insured property.

 

C.           Insurer shall provide Agent with not less than (x) ten (10) days’
prior written notice of cancellation of the policy (for non-payment) and (y)
thirty (30) days’ prior written notice of cancellation of the policy (for any
reason other than non-payment) or of the non-renewal thereof.

 

D.           The insurer reserves the right to cancel the policy at any time,
but only as provided by its terms. However, in such case this policy shall
continue in force for the benefit of Agent and Lenders for thirty (30) days
after written notice of such cancellation is received by Agent and shall then
cease.

 

E.           Should legal title to and beneficial ownership of any of the
property covered under the policy become vested in Agent or Lenders or their
agents, successors or assigns, insurance under the policy shall continue for the
term thereof for the benefit of Agent and Lenders.

 

 2 

 

  

F.           All notices herein provided to be given by the insurer to Agent or
Lenders in connection with the policy and lender's loss payable endorsement
shall be mailed to or delivered to Agent at the address specified by Agent:

 

  Citizens Bank, N.A.                    

 

 3 

 

  

EXHIBIT D

 

LENDERS' PRO RATA SHARES AND AGENT'S AND LENDERS'

NOTICE ADDRESSES AND WIRE TRANSFER INSTRUCTIONS

 

Name of AGENT, address for notices

and wire transfer instructions:

 

  Citizens Bank, N.A., Agent   One Citizens Plaza   Providence, RI 02903  
Attn:   Commercial Real Estate Loan Administration   Fax Number:
401-_____________       Wire Transfer Instructions:       Citizens Bank, N.A.  
ABA #:__________________   Beneficiary:______________   Account
#:_______________   Re:_____________________   Attention:________________  
Telephone:_______________

 

Name of LENDER, address for notices     and wire transfer instructions:   Pro
Rata Share           Citizens Bank, N.A.     100%   One Citizens Plaza      
Providence, RI 02903       Attn: Commercial Real Estate Loan Administration    
  Fax Number: 401-__________               Wire Transfer Instructions:          
    Citizens Bank, N.A.       ABA #:____________________        
Beneficiary:________________       Account #:         Re:_______________________
      Attention:_________________       Telephone:________________    

 

 

 

  

EXHIBIT E

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment”) is dated as of the Effective
Date set forth below and is entered into by and between _________________ (the
“Assignor”) and ____________________ (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Loan
Agreement identified below (the “Loan Agreement”), receipt of a copy of which is
hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Loan Agreement, as of the Effective Date inserted by
Administrative Agent as contemplated below, (i) all of the Assignor’s rights and
obligations as a Lender under the Loan Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below,
and (ii) to the extent permitted to be assigned under applicable Law, all
claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Loan Agreement, any other documents or
instruments delivered pursuant thereto or in any way based on or related to any
of the foregoing, including, but not limited to contract claims, tort claims,
malpractice claims, statutory claims and all other claims at Law or in equity,
related to the rights and obligations sold and assigned pursuant to Subsection
(i) above (the rights and obligations sold and assigned pursuant to Subsections
(i) and (ii) above being referred to herein collectively as the “Assigned
Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment, without representation or
warranty by the Assignor.

 

1. Assignor:      _____________________________________     2. Assignee:     
_______________________________ [, an Affiliate/Approved Fund of
__________________]     3. Borrower(s):  PHR TCI, LLC, a Delaware limited
liability company     4. Agent: Citizens Bank, National Association, as the
administrative agent under the Loan Agreement

 

 

 

 

5. Loan Agreement: The Loan Agreement, dated as of August 15, 2018 among
Borrower, the Lenders parties thereto, and Citizens Bank, National Association,
as Agent.

 

6.Assigned Interest:

 

Aggregate

Amount of

Commitment/Loans

for all Lenders

  

Amount of

Commitment/Loans

Assigned

  

Percentage

Assigned of

Commitment/Loans

                $   $    %

 

Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

The terms set forth in this Assignment are hereby agreed to:

 

  ASSIGNOR:                   By:     Name:     Title:           ASSIGNEE:      
            By:     Name:     Title:  

 

[Consented to and] Accepted:

 

CITIZENS BANK, NATIONAL ASSOCIATION   as Agent  

 

By:     Name:     Title:    

 

 2 

 

  

[Consented to by Borrower (if required):]       PHR TCI, LLC,   a Delaware
limited liability company  

 

By:     Name:     Title:    

 

 3 

 

  

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1.          Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Loan
Agreement or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents, or any
collateral thereunder, (iii) the financial condition of Borrower, any of its
Affiliates or any other Person obligated in respect of any Loan Document or (iv)
the performance or observance by Borrower, any of its Affiliates or any other
Person of any of their respective obligations under any Loan Document.

 

1.2.          Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Lender under the Loan Agreement, (ii) it meets all requirements
of an Eligible Assignee under the Loan Agreement (subject to receipt of such
consents as may be required under the Loan Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Loan Agreement as a
Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Loan
Agreement, together with copies of the most recent financial statements
delivered pursuant thereto, as applicable, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision independently and without reliance on Agent or any other Lender to
enter into this Assignment and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision, and (v) if it is a Foreign Lender,
it has delivered to Agent any documentation required to be delivered by it
pursuant to the terms of the Loan Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on
Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.

 

1.3           Assignee’s Address for Notices, etc. Attached hereto as Schedule 1
is all contact information, address, account and other administrative
information relating to the Assignee.

 

 

 

  

2.          Payments. From and after the Effective Date, Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have
accrued prior to or on or after the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by Administrative
Agent for periods prior to the Effective Date or with respect to the making of
this Assignment directly between themselves.

 

3.          General Provisions. This Assignment shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of
a signature page of this Assignment by facsimile shall be effective as delivery
of a manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the Law of the Commonwealth of
Massachusetts.

 

 2 

 

  

SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION

 

ADMINISTRATIVE DETAILS

 

(Assignee to list names of credit contacts, addresses, phone and facsimile
numbers, electronic mail addresses and account and payment information)

 

(a)LIBOR Lending Office:

 

Assignee name:     Address:         Attention:     Telephone:  (__)    
Facsimile: (__)     Electronic Mail:    

 

(b)          Domestic Lending Office:

 

Assignee name:     Address:           Attention:     Telephone:  (__)    
Facsimile: (__)     Electronic Mail:    

 

(c)          Notice Address:

 

Assignee name:     Address:           Attention:     Telephone:  (__)    
Facsimile: (__)     Electronic Mail:    

 

(d)Payment Instructions:

Account No.__

Attention: ___

Reference: __

 

 

 

 

EXHIBIT F

 

COMPLIANCE CERTIFICATE

 

Citizens Bank, N.A., Agent Date: ___________, 20__ One Citizens Plaza  
Providence, RI 02903   Attention:  Alex Hofstetter, Senior Vice President  

 

Re:Compliance Certificate required by Section 9.1 of the Loan Agreement dated as
of August 15, 2018 (as the same may be amended from time to time, the “Loan
Agreement”) by and among Citizens Bank, National Association as Agent and as a
Lender, the other Lenders party thereto and PHR TCI, LLC, a Delaware limited
liability company, as Borrower (“Borrower”)

 

Ladies and Gentlemen:

 

This certificate is submitted by the Borrower pursuant to Section 9.1 of the
Loan Agreement. Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Loan Agreement.

 

The Borrower hereby certifies to the Agent and the Lenders that, to the best of
the undersigned's knowledge:

 

A.           As of the date hereof, no Default has occurred and is continuing;

 

B.           The Annual Financial Statements dated as of December __, 20__ and
provided to Agent pursuant to Section 9.2.1 of the Loan Agreement were true,
accurate and complete in all material respects as of such date; - TO BE INCLUDED
IN COMPLIANCE CERTIFICATE REQUIRED TO BE ISSUED BY APRIL 30 OF EACH YEAR ONLY

 

C.           The Quarterly Financial Statements dated __________, 20__ and
provided to Agent pursuant to Section 9.2.2(a) of the Loan Agreement were true,
accurate and complete in all material respects as of such date [REQUIRED IF
COMPLIANCE CERTIFICATE IS BEING ISSUED IN CONNECTION WITH QUARTERLY FINANCIAL
STATEMENTS];

 

D.           As of the date hereof, there exists no Indebtedness which is not
Permitted Additional Debt.

 

E.           The following information is true, accurate and complete as of
________, 20__:

 

1.Debt Service Coverage Ratio (Quarterly Test)

(Loan Agreement - Section 9.2.2[b])

 

 

 

  

a) Net Operating Income: _________             b) Debt Service Coverage Interest
Rate (“DSCIR”) Determination     (As provided by Citizens)           The Greater
of:           “Adjusted LIBOR Rate” plus LIBOR Rate Margin _________   or DSC
Treasury Rate plus 2.5% _________   or 6.75% 6.75%         DSCIR: _________%    
  c) Debt Service Coverage Principal Balance       _________     (As of     Date
above - provided by Citizens)       d) Principal Amortization (25 year    
schedule):           Loan Balance (#1c) _________   Interest Rate (#1b)
_________   Term (Schedule) 25 yrs.         Principal Requirement 1 Year:
_________       e) Calculation of Total Debt Service:           Total Debt
Service: _________       f) Debt Service Coverage Ratio:           NOI (#1a)
_________   divided by     Total Debt Service (#1e) _________   Equals          
DSC Ratio: _________

 

 2 

 

  

2.Cash Reserve Account and Loan Repayments (Quarterly Test)

 (Loan Agreement - Sections 9.2.2(b) & 10.2)

 

DSC Ratio (#1f): _________

 

a)If less than the applicable minimum DSC Ratio that is now required pursuant to
Section 10.2.1 of the Loan Agreement but greater than 1.1 to 1, then either: (i)
deposit Net Cash Flow for immediately preceding NCF Period in Cash Reserve
Account and on each NCF Payment Date thereafter deposit all Net Cash Flow in
Cash Reserve Account, (ii) pay down Loan to the applicable minimum DSC Ratio
that is now required pursuant to Section 10.2.1, or (iii) furnish Acceptable
Letter of Credit in such amount.

 

b)If less than 1.1 to 1, then either: (i) pay down Loan to the applicable
minimum DSC Ratio that is now required pursuant to Section 10.2.1, or (ii)
furnish Acceptable Letter of Credit in such amount.

 

  Funds Deposited in Cash Reserve Account _________             Acceptable
Letter of Credit or Loan Paydown _________             Recalculated DSC Ratio
_________  

 

[Borrower signature on following page.]

 

 3 

 

  

The undersigned is a duly designated Authorized Representative of Borrower.

 

  BORROWER:       PHR TCI, LLC,   a Delaware limited liability company

 

  By:     Name:     Title:  

 

 4 

 

 

EXHIBIT G

 

CONDITIONS SUBSEQUENT

 

The following Conditions Subsequent (all in form and substance reasonably
satisfactory to Agent) shall be delivered to Agent or otherwise satisfied by
Borrower within thirty (30) days after the closing of the Loan or such other
period (if any) as is set forth below:

 

1.Title Insurance Policy for the Property in compliance with the
Recording/Escrow Letter from Hinckley, Allen & Snyder LLP to First American
Title Insurance Company, c/o Vanguard Title Insurance Agency, LLC, dated August
14, 2018.

 

2.Originals of all recorded/filed Security Documents (including UCC Financing
Statements). (To be delivered to Agent within ten (10) days after they are
returned by the respective recording office(s)).

 

3.Consent of the Issuer of the Required Interest Rate Protection Agreement to
its assignment to Agent (substantially in Agent's customary form). (To be
delivered to Agent within ten (10) Business Days after the date hereof.)

 

4.Baseline Environmental Assessment for the Property, as filed with the State of
Michigan Department of Environmental Quality. (To be delivered to Agent within
thirty (30) days after the date hereof.)

 

5.Amendment to the Operating Lease setting forth the “Fixed Rent” and
“Percentage Rent” thereunder, in form and substance satisfactory to Agent. (To
be delivered to Agent within fifteen (15) days after the date hereof.)

 

6.Original, fully executed Franchisor “Comfort Letter” in form and substance
satisfactory to Agent.

 

7.Signed and sealed Survey in the form approved by Agent as of the date hereof
(PDF and original to be delivered within two (2) days after the date hereof).

 

 

 

 

EXHIBIT H

 

APPROVED CAPITAL EXPENDITURES BUDGET

 

[See Attached]

 

 

 

 

Hotel Indigo Traverse City, 263 W Grandview Parkway, Traverse City, Michigan
49684

 

PIP Inspection - 02/19/18

PIP Date - 03/01/18

Budget Date - 03/19/18

Last Revision - 05/10/18 - BY EVAN

 

PIP #  Item Description  Qty  UOM  Unit Price Sub   Total Project Cost  
Comments 1.) Exterior Areas                       Site                    1 
Provide appropriate screening of hotel site equipment from guest view that
coordinates with the Hotel architecture.  1  Allow   2,500   $2,500   Hotel is
in violation of the screening of the dumpster. Allowance to correct, per
CBRE/IVI - $2,500.    NON-PIP ITEM: Replace PTAC Units on the north, east, and
west side (highway side) of the hotel  54  Each   1,750   $94,500   Evergreen
PTAC unit (with an STC of 35). Verbal pricing from Evergreen.    NON-PIP ITEM:
Replace guestrooms windows on the north side, east, and west (highway side) of
the hotel  0  Each   1,000   $-   DO NOT DO WINDOW REPLACEMENTS AT THIS TIME   
Site Total             $97,000                                Landscaping       
            2  Provide additional landscaping at entry beds, around the building
monument sign, and around porte cochere columns.  0  Allow   0   $-   Flowers in
entry beds around the parking lot maintained seasonally. Done May 2018. 3 
Provide additional planters at street side of Restaurant doors.  4  Each 
 1,250   $5,000   Resin-based, commercial product. Low maintentance. Can handle
harsh temps. Look at TerraCast Products, for example.    Landscaping Total    
        $5,000                                Outdoor/ Patio Terrace            
       5  Provide decorative planters with colorful seasonal plantings.  1 
Allow  $5,000   $5,000   Allowance of $5K for planters and plants. Seller
indicated they are doing this by Jun-18, but am guessing it will be minimal.   
Outdoor/ Patio Terrace Total             $5,000                             II.)
Public Areas                       Overall Area                    7  This hotel
is brand new and opened in 2016. Overall the design of this hotel provides the
base layer that the brand is expecting but is lacking the upscale implementation
of ‘Wit and Whimsy’. Provide additional design elements throughout that intrigue
the guest and reflect the neighborhood story in an interesting and creative
way.             $-        Overall Area Total             $-                
               Lobby                       NON-PIP ITEM: IT-Related Costs,
including HSIA, PBX, and Back Office.  1  Allow  $190,000   $150,000   HSIA -
$50K
PBX - $50K
Back Office - $50K

 

  Page 1 of 5

 

 

Hotel Indigo Traverse City, 263 W Grandview Parkway, Traverse City, Michigan
49684

 

PIP Inspection - 02/19/18

PIP Date - 03/01/18

Budget Date - 03/19/18

Last Revision - 05/10/18 - BY EVAN

 

PIP#  Item Description  Qty  UOM  Unit Price Sub   Total Project Cost   Comments
10  Replace reception area lobby seating. Provide two new chairs with arms, and
retain two of the green accent chairs, but provide new accent lumbar pillows in
an alternate printed fabric.  4  Each  $750   $3,000     11  At reception area
lobby seating, replace existing coffee table and provide a new creative table
concept that aligns with the neighborhood story.  1  Allow  $1,500   $1,500    
12  Remove the Neighborhood Guide or repurpose per Brand approved guidelines. 
           $-     13  Replace existing reception area rug and provide new
circular rug to anchor updated seating group. New rug should be colorful and
coordinate with the new and existing lobby decor.  1  Allow  $3,500   $3,500    
14  Replace reception area decorative ceiling fixture. New lobby light fixture
should be an impactful conversation piece that sets the tone for the refreshed
lobby design.  1  Allow  $4,500   $4,500     15  Replace decorative
accessories.  1  Allow  $5,000   $5,000   $5K allowance for decorative
nicknacks. 16  Remove existing paintings which are located throughout the public
areas. If paintings are not removed, locate all of them in a comprehensive
"gallery style'1 installation in a central area of the lobby.             $-   I
would not remove the existing paintings. I would keep the paintings as-is.   
Lobby Total             $167,500                                Grab and Go    
               18  Provide Grab n’ Go/ Market signage.             $-     18A 
Enhance Grab n’ Go experience  1  Allow  $50,000   $50,000   Could be located
across from the front desk, by the columns and restaurant. They currently serve
coffee there in the mornings.    Grab and Go Total             $50,000          
                     Business Center                    20  Replace existing art
piece and provide a new mural that aligns with the neighborhood story.  1 
Allow  $1,500   $1.500        Business Center Total             $1,500          
                     Restaurant                    23  Provide a communal table
within the F&B zone (adjacent to the bar) of the lobby space. Table should
accommodate 6-8 and have integrated power outlets.  1  Allow   1,000   $1,000  
Communal table is there (moved from boardroom), but does not have integrated
outlets. Need to add electric outlets to wall. 24  Murals and/or custom boutique
design features are required throughout the property that relate back to the
neighborhood story.  1  Allow   5,000   $5,000   $5K allowance for art
pieces/murals in restaurant area. 25  Replace existing art and provide a new
comprehensive art package that aligns with the neighborhood story.            
$-   Induded Above    Restaurant Total             $6,000                     
          Public Restrooms - Multi                    26  Provide art that
aligns with the neighborhood story.  1  Allow   1,000   $1,000   1 would not go
overboard here. A couple of art pieces in men’s bathroom only. No spot for
artwork in woman's bathroom. Bathrooms are unique with a lot of stone. $1K
allowance should be enough.

 

  Page 2 of 5

 

 

Hotel Indigo Traverse City, 263 W Grandview Parkway, Traverse City, Michigan
49684

 

PIP Inspection - 02/19/18

PIP Date - 03/01/18

Budget Date - 03/19/18

Last Revision - 05/10/18 - BY EVAN

 

PIP#  Item Description  Qty  UOM  Unit Price Sub   Total Project Cost   Comments
  Public Restrooms- Multi Total             $1,000                            
   Public Restrooms- Single                    27  Replace existing wall finish
and provide new decorative wall vinyl and tile at wet wall.             $-  
Completed 28  Replace vanity, and vanity mirror. Provide new vanity with
millwork base. Remove exiting mirror and provide electric mirror            
$-   Completed 29  Provide artwork.             $-   Completed    Public
Restrooms- Single Total             $-                               
Pre-function                    30  Provide seating at pre-function area, to
include upholstered benches and small conversational accent chairs.  1  Allow 
$-   $-   Already done 31  The hotel is missing the whit and whimsy design layer
required by the Brand. Replace and provide a new comprehensive art package that
aligns with the neighborhood story.  1  Allow  $-   $-   This is the same line
item as "Corridors" below.    Pre-function Total             $-                
               Coat Room                    32  Provide sliding doors or drapery
panel to conceal coat check closet when not in use by hotel guests.  1  Allow 
$-   $-   I would just remove this item. This is tucked away and nobody sees it
anyway.    Coat Room Total             $-                                Meeting
Room                    33  Replace window treatments. Provide new window
treatments with blackout capabilities for meetings/events.  1  Allow  $4,000  
$4,000     34  Provide the appropriate audio visual equipment at meeting spaces.
Retractable AV screen and/or large wall mounted TV with computer connections
required at a minimum.  2  Each  $19,000   $38,000   Room splits in two with
airwall. Pricing per Bridget proposal. 35  Provide a reverse door viewer.  1 
Allow  $-   $-   Done 36  Provide artwork or decorative mirror at built-in
credenza cabinet.  1  Allow  $1,000   $1,000        Meeting Room Total       
     $43,000                                Board Room                    37 
Provide a reverse door viewer.  1  Allow  $-   $-   Done    Board Room Total    
        $-                                Corridors                    38  The
hotel is missing the whit and whimsy design layer required by the Brand. Replace
and provide a new comprehensive art package that aligns with the neighborhood
story.  1  Allow  $5,000   $5,000   This is the corridor by the meeting room.
Would lower this to $5,000.    Corridors Total             $5,000             
               III.) Recreational areas                      Fitness Center    
              

 

  Page 3 of 5

 

 

Hotel Indigo Traverse City, 263 W Grandview Parkway, Traverse City, Michigan
49684

 

PIP Inspection - 02/19/18

PIP Date - 03/01/18

Budget Date - 03/19/18

Last Revision - 05/10/18 - BY EVAN

 

PIP#  Item Description  Qty  UOM   Unit Price Sub   Total Project Cost  
Comments    Provide a mural and/or decorative wall vinyl within the Fitness
Center.  1   Allow  $-   $-   There is already a mural on the wall. Hand painted
log brandings, by a local painter. Would not do this.    Fitness Center Total 
             $-                               IV.) Guest Room Areas         
               Elevator Lobbies                      39  Provide window
treatments to dress elevator lobby windows. Provide a millwork cornice with
decorative stationary panels and sheer roller blinds.  3   Each   $900  
$2,700     40  Replace existing wall finish with new accent wall vinyl and/or
paint to coordinate with the required carpet runner and mural/art installation. 
3   Each   $1,500   $4,500   Paint accent wall on each floor's elevator lobby.
41  Murals and/or custom boutique design features are required that relate to
the neighborhood story. Provide a mural at accent wall adjacent to elevators or
at a minimum provide a creative art installation.  3   Each   $1,000   $3,000  
Art per elevator lobby. 42  Provide a large upholstered bench or small
conversational seating grouping.  3   Each   $2,000   $6,000   Seating per
elevator lobby. 43  Provide decorative carpet runners at elevator lobbies.  3 
 Each   $1,500   $4,500        Elevator Lobbies Total               $20,700    
                             Corridors                         Provide window
treatments at corridor window with a millwork cornice with sheer roller blinds. 
6   Each   $900   $5,400        Corridors Total               $5,400          
                       Guest Bathrooms                      46  Provide glass
shower doors at bathroom showers.  102   Each   $-   $-   Waiver from IHG 47 
Provide robe hooks where appropriate in bathroom layout.  0   Each   $-   $-  
Already done. 48  Provide art at bathrooms.  102   Each   $150   $15,300   Guest
baths could use an art piece above toilet. No art in bathrooms currently.   
Guest Bathrooms Total               $15,300                              
SUBTOTAL              $422,400                                  Design /
Architect                         Purchasing  1   Allow   $15,000   $15,000    
   Design  1   Allow   $-   $-   Do not need a designer. SUBTOTAL             
$437,400                                  Soft Costs                        
Sales Tax  6.00%  $437,400        $15,746        Delivery Fees  10.00% 
$437,400        $26,244        General Requirements Allowance  5.00%  $437,400  
     $21,870        Overhead, General Conditions, Fees               $-       
Subtotal               $501,260                                  Contingency    
                

 

  Page 4 of 5

 

 

Hotel Indigo Traverse City, 263 W Grandview Parkway, Traverse City, Michigan
49684

 

PIP Inspection - 02/19/18

PIP Date - 03/01/18

Budget Date - 03/19/18

Last Revision - 05/10/18 - BY EVAN

 

PIP#  Item Description  Qty  UOM   Unit Price Sub   Total Project Cost  
Comments                          Contingency Allowance  5.00%  $501,260       
$25,063                                    Total               $526,323       
                          Project Management Fee                              
                    Project Management Fee  6.00%  $526,323        $31,579    
                             Total PIP Project Costs               $557,903