The first lien credit facility was amended to, among other things: (i) permit the incurrence of the debt represented by the Notes; (ii) revise the financial maintenance covenants contained therein, including, removing the maximum total leverage ratio financial maintenance covenant, adding a maximum senior secured leverage ratio financial maintenance covenant, reducing the minimum interest coverage ratio financial maintenance covenant and providing for customary equity cure rights
related to financial maintenance compliance; and (iii) increase the size of Mood Media's first lien revolving credit facility from $20 million to $25 million.
Consequently, a ground lease must include certain cure rights and other key terms in favor of the leasehold mortgagee to protect it from such a catastrophic loss.
If, in order to exercise such cure rights, the leasehold mortgagee must foreclose on its leasehold mortgage or enforce its rights in a tenant bankruptcy proceeding, or appoint a receiver to obtain possession of the tenant's premises under the ground lease, the leasehold mortgagee should be afforded an unlimited grace period as long as the rent and other monetary obligations due under the ground lease are paid on a current basis.
All of the ground leases have initial terms or extension options that extend at least 20 years beyond the terms of the related mortgage loans and provide the trustee with notice and cure rights
in the event of a ground lease default.
In the event a financial covenant is not met, our senior secured credit facility provides for certain limited cure rights which provide us the ability to issue permitted cure securities in exchange for cash or otherwise receive cash that would be contributed to our capital in an amount that is necessary to satisfy the financial covenant required on a pro forma basis.
For the quarter ended September 30, 2007, we exercised a cure right as provided in the credit agreement whereby pro forma adjusted EBITDA for financial covenant tests as of September 30, 2007 was increased by $6.
For the quarter ended September 30, 2007, we exercised a cure right as provided in the credit agreement whereby pro forma adjusted EBITDA for the nine months ended September 30, 2007 for financial covenant tests as of September 30, 2007 was increased by $6.
WYNDHAM MAY ASSERT THAT IT HAS CURE RIGHTS
OR THAT IT
Additionally, the cure amount is limited such that it can be no greater than the amount required for purposes of complying with the financial covenants in the quarter in which it is exercised nor can this cure right be exercised more than two times in any trailing 4 quarter period, with the exception of two additional cure rights that were included in Amendment No.
2 designated up to two additional cure rights that can be exercised at any time during the term of the loan, provided that for quarters ending on or after June 30, 2008, the leverage ratio, as defined in the credit agreement, on the last day of such fiscal quarter is not more than 0.
The cure right cash contribution of $6 million necessary to cure our non- compliance with the financial covenants tested as of September 30, 2007, was received by our parent company from affiliates of The Carlyle Group, on November 14, 2007.