Paragon Bonds Clause Samples

Paragon Bonds. (a) The parties understand that (i) the property related to the Financed Hotels, the equity of the entities which own or lease the Financed Hotels, the Orlando Mortgage Note and the Orlando ODL Note are security for the Notes pursuant to the Restated Credit Agreement and the Supplement to the Restated Credit Agreement; (ii) Paragon is the payee under the Notes; (iii) Paragon financed its acquisition of the Notes through the issuance of the Bonds secured by Paragon’s pledge of the Notes and the security for the Notes under the Indenture; and (iv) the Indenture prohibits the repayment of the Bonds prior to November 15, 2005. Consequently, for the Transaction to proceed to the Closing, the Bonds must be repurchased or defeased in order to allow the repayment of the Notes by the Seller and the release of the liens on the Property securing the Notes. (b) Paragon has agreed with the Seller that it will commence a tender offer to and a consent solicitation from the holders of the Bonds on the terms and subject to the conditions as set forth on Schedule 4.1(b) (the “Offer and Solicitation”) no later than May 9, 2005. Paragon has agreed to use its Commercially Reasonable Efforts to complete the Offer and Solicitation concurrent with the Closing and in addition the Seller has agreed with Paragon to pay the costs of the Offer and Solicitation in excess of the principal and interest then due to the holders of the Bonds, (including defeasance costs and other payments to the holders of the Bonds, attorneys’ and Trustee’s fees and Dealer-Manager fees, collectively referred to as the “Solicitation Costs”). If, in the Seller’s reasonable estimate (based on, among other things, the advice of the Dealer-Manager), the Solicitation Costs are projected at any time to exceed the amount set forth on Schedule 4.1(b), the Seller may, upon notice to Paragon (with a copy to the Buyer), terminate its agreement to pay the Solicitation Costs upon the expiration of five (5) Business Days following such notice (thereby releasing Paragon from its agreement to conduct the Offer and Solicitation), unless prior thereto the Seller receives written confirmation from the Buyer that it undertakes to assume and pay all Solicitation Costs in excess of the amount set forth on Schedule 4.1(b) (it being understood that Buyer shall be under no obligation to do so).