In the context of Delta Hotels By Marriott, what is the definition of 'MICC Loan Documents'?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
ncement Agreement shall accrue interest at an annual rate of interest equal to one-half of one percent (0.5%) above the rate of interest accruing on the Loan.
- (c) The Equity Pledge shall secure the reimbursement obligations to MICC for advances made by MICC to Lender under the Credit Enhancement Agreement. To the extent that advances made by MICC are not repaid in accordance with the terms of the Reimbursement Agreement, the Equity Pledge shall permit MICC to (i) receive any and all net operating income from the operation of the Project and/or sale, refinance or casualty proceeds that would otherwise be payable to Borrower and/or [Members /Partners] up to the amount due under the Reimbursement Agreement, and (ii) foreclose the [Member / Partner] pledges, which may result in MICC becoming the owner of the [Member / Partner] interests in Borrower.
- 9. MICC Documents: As a condition to MICC providing the Credit Enhancement to Lender, the following documents shall be delivered to MICC in form acceptable to MICC: (i) Reimbursement Agreement executed by Borrower and [Members / Partners]; (ii) Equity Pledge executed by the [Members / Partners]; (iii) UCC Financing Statements; (iv) Guaranty Agreement (limited to non-recourse carveout acts identified in the Guaranty Agreement)
- **10.
Source: Item 6 — Obligations of Franchisee.** Franchisee agrees to the following: (FDD pages 363–513)
What This Means (2025 FDD)
According to the 2025 Delta Hotels By Marriott Franchise Disclosure Document, the MICC Loan Documents encompass several agreements required as a condition for Marriott International Capital Corporation (MICC) to provide credit enhancement to a lender. These documents outline the obligations and responsibilities of the borrower (franchisee) and any involved members or partners.
The specific documents included in the MICC Loan Documents are: (i) a Reimbursement Agreement executed by the borrower and their members/partners, which details the repayment terms for any advances made by MICC to the lender to cover borrower defaults; (ii) an Equity Pledge executed by the members/partners, securing the reimbursement obligations to MICC; (iii) UCC Financing Statements; and (iv) a Guaranty Agreement, limited to non-recourse carveout acts as defined in the agreement. These documents collectively ensure MICC's security and outline the conditions under which MICC provides credit enhancement.
Delta Hotels By Marriott franchisees should understand that these MICC Loan Documents contain clauses such as due-on-sale and due-on-encumbrance provisions, restricting the sale or encumbrance of the project or any member/partner interests without MICC's prior written consent. Additionally, these documents establish that the obligations of the borrower to MICC are independent of their obligations to the lender under the Senior Loan Documents, meaning that any release by the lender does not release the borrower from their obligations to MICC. Therefore, franchisees must carefully review and comply with all terms outlined in the MICC Loan Documents to avoid defaults and potential loss of equity.