EXHIBIT 10.3
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U.S. $113,000,000
SENIOR SECURED CREDIT AGREEMENT
DATED AS OF JULY 31, 2002
AMONG
MERISTAR H & R OPERATING COMPANY, L.P.
AS THE BORROWER,
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SOCIETE GENERALE
AS ADMINISTRATIVE AGENT,
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▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
AS JOINT LEAD ARRANGER AND BOOK RUNNER,
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▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
AS JOINT LEAD ARRANGER, BOOK RUNNER, AND CO-SYNDICATION AGENT,
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▇▇▇▇▇▇ BROTHERS, INC.
AS JOINT LEAD ARRANGER, BOOK RUNNER, AND CO-SYNDICATION AGENT,
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CREDIT LYONNAIS NEW YORK BRANCH
AS DOCUMENTATION AGENT,
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AND
VARIOUS LENDERS
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...............................1
Section 1.01 Certain Defined Terms....................................1
Section 1.02 Computation of Time Periods.............................37
Section 1.03 Accounting Terms; Changes in GAAP.......................37
Section 1.04 Classes and Types of Advances...........................38
Section 1.05 Miscellaneous...........................................38
ARTICLE II THE ADVANCES AND THE LETTERS OF CREDIT........................38
Section 2.01 The Advances............................................38
Section 2.02 Method of Borrowing.....................................42
Section 2.03 Fees....................................................47
Section 2.04 Reduction of the Revolving Commitments..................47
Section 2.05 Repayment of Advances on Maturity Date; Extension.......48
Section 2.06 Interest, Late Payment Fee..............................49
Section 2.07 Prepayments.............................................50
Section 2.08 Breakage Costs..........................................52
Section 2.09 Increased Costs.........................................53
Section 2.10 Payments and Computations...............................55
Section 2.11 Taxes...................................................57
Section 2.12 Illegality..............................................59
Section 2.13 Letters of Credit.......................................60
Section 2.14 Determination of Leverage Ratio and Senior
Leverage Ratio..........................................62
Section 2.15 Lender Replacement......................................63
Section 2.16 Sharing of Payments, Etc................................64
ARTICLE III CONDITIONS OF LENDING.........................................64
Section 3.01 Conditions Precedent to the Initial Advance.............64
Section 3.02 Conditions Precedent for Each Borrowing or
Letter of Credit........................................67
Section 3.03 Conditions as Covenants.................................68
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................68
Section 4.01 Existence; Qualification; Partners; Subsidiaries........68
Section 4.02 Partnership and Corporate Power.........................69
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.03 Authorization and Approvals.............................70
Section 4.04 Enforceable Obligations.................................70
Section 4.05 Financial Statements....................................70
Section 4.06 True and Complete Disclosure............................70
Section 4.07 Litigation..............................................71
Section 4.08 Use of Proceeds and Letters of Credit...................71
Section 4.09 Investment Company Act..................................72
Section 4.10 Taxes...................................................72
Section 4.11 Pension Plans...........................................72
Section 4.12 Insurance...............................................73
Section 4.13 No Burdensome Restrictions; No Defaults.................73
Section 4.14 Environmental Condition.................................73
Section 4.15 Legal Requirements, Zoning..............................74
Section 4.16 Existing Indebtedness and Interest Rate
Agreements; Solvency....................................74
Section 4.17 Leasing Arrangements....................................75
Section 4.18 Management Agreements...................................75
Section 4.19 Intercompany Agreement..................................75
Section 4.20 Franchise Agreements....................................75
Section 4.21 Owned Hospitality Properties............................76
Section 4.22 Approved Inter-Company Indebtedness.....................76
Section 4.23 Insurance Business......................................76
Section 4.24 Permitted Housing Business Leasing......................79
ARTICLE V AFFIRMATIVE COVENANTS.........................................79
Section 5.01 Compliance with Laws....................................79
Section 5.02 Preservation of Existence; Separateness, Etc............79
Section 5.03 Payment of Taxes, Etc...................................80
Section 5.04 Visitation Rights; Lender Meeting.......................81
Section 5.05 Reporting Requirements..................................81
Section 5.06 Maintenance of Property.................................84
Section 5.07 Insurance...............................................85
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TABLE OF CONTENTS
(continued)
PAGE
Section 5.08 Use of Proceeds and Letters of Credit...................85
Section 5.09 Collateral; Releases....................................85
Section 5.10 New Subsidiaries........................................86
Section 5.11 Insurance Business......................................86
Section 5.12 Interest Rate Agreements................................87
ARTICLE VI NEGATIVE COVENANTS............................................87
Section 6.01 Liens, Etc..............................................87
Section 6.02 Indebtedness............................................88
Section 6.03 Agreements Restricting Distributions From Subsidiaries..89
Section 6.04 Restricted Payments.....................................89
Section 6.05 Fundamental Changes; Asset Dispositions.................90
Section 6.06 Investments and other Property..........................91
Section 6.07 Affiliate Transactions..................................92
Section 6.08 Sale or Discount of Receivables.........................92
Section 6.09 Material Documents......................................92
Section 6.10 No Further Negative Pledges.............................92
ARTICLE VII FINANCIAL COVENANTS...........................................94
Section 7.01 Interest Coverage Ratio.................................94
Section 7.02 Senior Interest Coverage Ratio..........................94
Section 7.03 Leverage Ratio..........................................95
Section 7.04 Senior Leverage Ratio...................................96
Section 7.05 Maintenance of Net Worth................................96
ARTICLE VIII EVENTS OF DEFAULT; REMEDIES.................................. 96
Section 8.01 Events of Default...................................... 96
Section 8.02 Optional Acceleration of Maturity; Other Actions.......100
Section 8.03 Automatic Acceleration of Maturity.....................100
Section 8.04 Cash Collateral Account................................100
Section 8.05 Non-exclusivity of Remedies. ..........................101
Section 8.06 Right of Set-off.......................................101
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE IX AGENCY AND ISSUING BANK PROVISIONS...........................102
Section 9.01 Authorization and Action...............................102
Section 9.02 Administrative Agent's Reliance, Etc...................102
Section 9.03 Each Agent and Its Affiliates..........................103
Section 9.04 Lender Credit Decision.................................103
Section 9.05 Indemnification........................................103
Section 9.06 Successor Agent, the Alternate Currency Swing
Line Lender and Issuing Banks..........................104
Section 9.07 Joint Lead Arrangers, Book Runners, Co-Syndication
Agents and Documentation Agent.........................105
ARTICLE X MISCELLANEOUS................................................105
Section 10.01 Amendments, Etc........................................105
Section 10.02 Notices, Etc...........................................107
Section 10.03 No Waiver; Remedies....................................107
Section 10.04 Costs and Expenses.....................................107
Section 10.05 Binding Effect.........................................108
Section 10.06 Lender Assignments and Participations..................108
Section 10.07 Indemnification........................................112
Section 10.08 Execution in Counterparts..............................112
Section 10.09 Survival of Representations, Indemnifications, etc.....112
Section 10.10 Severability...........................................112
Section 10.11 Usury Not Intended.....................................112
Section 10.12 GOVERNING LAW..........................................113
Section 10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS;
JURY TRIAL.............................................113
Section 10.14 Knowledge of Borrower..................................115
Section 10.15 Lenders Not in Control.................................115
Section 10.16 Headings Descriptive...................................115
Section 10.17 Time is of the Essence.................................115
Section 10.18 Lender Interest Rate Agreements........................116
Section 10.19 Judgment Currency......................................116
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TABLE OF CONTENTS
(continued)
PAGE
Section 10.20 No Consequential Damages...............................116
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EXHIBITS:
Exhibit A-1 - Form of Dollar Revolving Note
Exhibit A-2 - Form of Term Note
Exhibit A-3 - Form of Euro Note
Exhibit A-4 - Form of Pound Note
Exhibit B - Form of Adjustment Report
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Environmental Indemnity
Exhibit F - Form of Guaranty
Exhibit G - Form of Notice of Borrowing
Exhibit H - Form of Notice of Conversion or Continuation
Exhibit I - Form of Security Agreement
SCHEDULES:
Schedule 1.01(a) - Commitments
Schedule 1.01(b) - Approved Inter-Company Indebtedness
Schedule 1.01(c) - Non-Pledged Ownership Interests
Schedule 1.01(d) - Existing Owned Hospitality Property Investments
Schedule 1.01(e) - Existing Management Agreements
Schedule 1.01(f) - Existing Participating Leases
Schedule 1.01(g) - Guarantors
Schedule 1.01(h) - Pre-Existing Designated Senior Indebtedness
Schedule 1.01(i) - Specified Acquirer
Schedule 4.01 - Subsidiaries
Schedule 4.07 - Litigation
Schedule 4.14 - Environmental Condition
Schedule 4.15 - Legal Requirements; Zoning; Utilities; Access
Schedule 4.16 - Existing Indebtedness and Interest Rate Agreements
Schedule 4.21 - Owned Hospitality Properties
Schedule 4.23(a) - Insurance Companies, Insurance Licenses and Deposited
Securities
Schedule 4.23(e) - Insurance Contracts and Reinsurance Contracts
Schedule 4.24 - Permitted Housing Business Leasing
Schedule 5.07 - Required Insurance Coverage
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SENIOR SECURED CREDIT AGREEMENT
THIS SENIOR SECURED CREDIT AGREEMENT (this "AGREEMENT"), dated as of July 31,
2002 (the "CLOSING DATE"), is among MERISTAR H & R OPERATING COMPANY, L.P., a
Delaware limited partnership, as the Borrower; SOCIETE GENERALE, as the
Administrative Agent, the Issuing Bank and the Alternate Currency Swing Line
Lender; ▇▇ ▇▇▇▇▇ SECURITIES CORPORATION, as Joint Lead Arranger and Book Runner;
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC., as Joint Lead Arranger, Book Runner and
Co-Syndication Agent; ▇▇▇▇▇▇ BROTHERS, INC., as Joint Lead Arranger, Book Runner
and Co-Syndication Agent; CREDIT LYONNAIS NEW YORK BRANCH, as Documentation
Agent; and the Lenders (as defined below).
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower desires that the Lenders extend certain credit
facilities, the proceeds of which will be used for the purposes set forth in
Section 4.08;
WHEREAS, the Lenders have agreed to extend such credit facilities as
more specifically described in this Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the
provisions contained in this Agreement, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"ACCEPTABLE LIEN" means a Lien which (a) exists in favor of the
Administrative Agent for its benefit and the ratable benefit of the Lenders and
the Alternate Currency Swing Line Lender, (b) secures the Obligations and (c) is
perfected and enforceable against all Persons in preference to any rights of any
Person in the property encumbered thereby and superior to all other Liens except
for Permitted Encumbrances; PROVIDED that the Lien on any Ownership Interests in
an Unconsolidated Entity may be subordinate to the Liens securing any
Indebtedness of such Unconsolidated Entity.
"ACCESSION AGREEMENT" means an Accession Agreement in the form attached
respectively to the Guaranty, Environmental Indemnity and Security Agreement as
Annex 1 thereto, which agreement causes the Person executing and delivering the
same to the Administrative Agent to become a party, respectively, to the
Guaranty, Environmental Indemnity and Security Agreement.
"ADDITIONAL DESIGNATED SENIOR INDEBTEDNESS" means, for the Parent and
its Subsidiaries, Senior Indebtedness of the Parent and its Subsidiaries (a)
which is set forth in clause (c) of the definition of Permitted Other
Indebtedness and is otherwise permitted by the provisions of this
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Agreement, (b) which is incurred after the Closing Date, (c) for which the gross
proceeds are equal to or greater than $90,000,000 but do not exceed
$175,000,000, (d) which is not subject to financial covenants or non-financial
covenants or terms which are materially more onerous than the terms of the
Credit Documents, (e) which does not have a maturity date before the Maturity
Date, as the Revolving Maturity Date may be extended, (f) which does not
prohibit the Parent or any of the Parent's Subsidiaries from granting Liens on
any of such Person's assets to secure the Obligations or any other Senior
Indebtedness except as may be expressly permitted by the provisions of Section
6.10, and (g) for which the Net Cash Proceeds are used to repay the Obligations
to the extent required by and in accordance with the terms of this Agreement.
"ADJUSTED BASE RATE" means, for any day, the fluctuating rate per annum
of interest equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Rate in effect on such day plus one-half of one percent
(.50%).
"ADJUSTED BASE RATE ADVANCE" means an Advance which bears interest as
provided in Section 2.06(a).
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"ADJUSTED EBITDA" means, for any Person or Hospitality Property, as
applicable, for any Rolling Period, the EBITDA of such Person or Hospitality
Property, as applicable, for such Rolling Period PLUS non-cash employee
compensation up to $2,000,000 per Fiscal Year in the aggregate commencing with
the 2002 Fiscal Year, and other non-cash items of such Person or Hospitality
Property, as applicable, for such Rolling Period; PROVIDED that for any
Hospitality Property the aggregate FF&E Reserves for such Rolling Period in
respect of such Hospitality Property shall be subtracted from such Hospitality
Property's EBITDA in determining such Hospitality Property's Adjusted EBITDA;
PROVIDED FURTHER that if the Parent or any of its Subsidiaries during such
Rolling Period or in the period from the end of such Rolling Period to the
Status Reset Date which occurs in the Fiscal Quarter following such Rolling
Period either (a) sells, disposes of or terminates any Permitted Property
Agreements or (b) sells or disposes of any Investments or Non-Replaced Property
with an Investment Amount in excess of $1,000,000, the EBITDA arising from such
Permitted Property Agreement, Investment, or Non-Replaced Property, as
applicable, for the applicable Rolling Period shall be excluded from the
calculation of Adjusted EBITDA; and PROVIDED FURTHER if the Parent or any of its
Subsidiaries during such Rolling Period or in the period from the end of such
Rolling Period to the Status Reset Date which occurs in the Fiscal Quarter
following such Rolling Period either (a) purchases or acquires any Permitted
Property Agreements or (b) purchases or acquires any Investments or Non-Replaced
Property with an Investment Amount in excess of $1,000,000, the EBITDA arising
from such Permitted Property Agreement, Investment, or Non-Replaced Property, as
applicable, for the applicable Rolling Period on a pro forma basis shall be
included in the calculation of Adjusted EBITDA; and PROVIDED FURTHER that the
Adjusted EBITDA for the Parent and its Subsidiaries for the Rolling Periods
ending on the dates set forth in the following chart will for purposes of the
financial covenants contained in Article VII be increased by the applicable
amount set forth next to the ending date of each such Rolling Period:
ENDING DATE OF ROLLING PERIOD ADJUSTED EBITDA ADJUSTMENT
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June 30, 2002 $5,000,000
September 30, 2002 $5,000,000
December 31, 2002 $3,750,000
March 31, 2003 $2,500,000
June 30, 2003 $1,250,000
"ADJUSTED NET WORTH" means, for the Parent as of any date, the sum of
(a) the Parent's Net Worth on such date PLUS (b) the minority interest reflected
as a liability on the Parent's balance sheet on such date determined in
accordance with GAAP (excluding that portion of the minority interest
attributable to Ownership Interests in any Subsidiary of the Borrower which is
not a Guarantor).
"ADJUSTMENT EVENT" has the meaning set forth in Section 2.14(a).
"ADJUSTMENT REPORT" means a certificate of the Borrower in
substantially the form of the attached Exhibit B.
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"ADMINISTRATIVE AGENT" means Societe Generale in its capacity as
Administrative Agent for the Lenders pursuant to Article IX and any successor
Administrative Agent appointed pursuant to Section 9.06.
"ADMINISTRATIVE AGENT FEE LETTER" means the letter agreement dated as
of May 1, 2002, among the Borrower, the Parent, IHC and Societe Generale,
Southwest Agency, as amended.
"ADVANCE" means a Revolving Advance or a Term Advance.
"AFFECTED LENDER" has the meaning set forth in Section 2.15(a).
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a Control Percentage, by contract or otherwise.
"AGREEMENT" has the meaning given such term in the initial paragraph of
this agreement.
"ALTERNATE CURRENCY" shall mean each of Euros and Pounds.
"ALTERNATE CURRENCY SWING LINE ADVANCE" means any advance by the
Alternate Currency Swing Line Lender to the Borrower pursuant to the Alternate
Currency Swing Line Lender's Alternate Currency Swing Line Commitment, and
refers to a Eurocurrency Rate Advance or a Pound Rate Advance.
"ALTERNATE CURRENCY SWING LINE COMMITMENT" means the obligation of the
Alternate Currency Swing Line Lender to make Alternate Currency Swing Line
Advances up to a maximum principal amount of $5,000,000 Dollar Equivalent at any
time outstanding.
"ALTERNATE CURRENCY SWING LINE LENDER" means Societe Generale or any
other Lender as a successor Alternate Currency Swing Line Lender.
"APPLICABLE CURRENCY" shall mean (a) with respect to any Alternate
Currency Swing Line Advances, the respective Alternate Currency in which the
respective Advances or related amounts are denominated and (b) with respect to
any other Obligations, Dollars.
"APPLICABLE FIXED RATE" means, (a) with respect to Eurocurrency Rate
Advances, the Eurocurrency Rate, (b) with respect to Eurodollar Rate Advances,
the Eurodollar Rate, and (c) with respect to Pound Rate Advances, the Pound
Rate.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, (a) in
the case of an Adjusted Base Rate Advance, such Lender's Domestic Lending
Office, (b) in the case of all Eurodollar Rate Advances, such Lender's
Eurodollar Lending Office, (c) in the case of all Alternate Currency Swing Line
Advances, the Alternate Currency Swing Line Lender's office as such Lender may
from time to time specify to the Borrower and the Administrative Agent for
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each type of Alternate Currency Swing Line Advance, and (d) in the case of any
other notice or request under the Credit Documents, the office of such Lender
specified as its "Credit Contact" in the questionnaire such Lender provided to
the Administrative Agent, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.
"APPLICABLE MANDATORY COST" means (a) for any Lender lending from an
Applicable Lending Office in a Participating Member State the percentage
notified by that Lender to the Administrative Agent as the cost of complying
with the minimum reserve requirements of the European Central Bank, (b) for any
Lender lending from an Applicable Lending Office in the United Kingdom the
percentage calculated by the Administrative Agent as follows:
A X 0.01 per cent. per annum
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300
Where:
"A" is the rate of charge payable by such Lender to the Financial
Services Authority pursuant to the Fees Regulations (but, for this purpose,
ignoring any minimum fee required pursuant to the Fees Regulations) and
expressed in pounds per (pound)1,000,000 of the Fee Base of such Lender.
"APPLICABLE MARGIN" means, (a) with respect to any Class of Advance at
any date, the applicable percentage per annum set forth below based upon the
Status then in effect under the column for such Type of Advance, (b) with
respect to the letter of credit fee payable under Section 2.03(b) at any date,
the applicable percentage per annum set forth below based upon the Status then
in effect under the column for Revolving Advances which are Fixed Rate Advances,
and (c) with respect to the commitment fee payable under Section 2.03(a) at any
date, .50% percent per annum.
Adjusted
Base Rate Fixed Rate
ADVANCES ADVANCES
-------- --------
Level I 1.00% 3.00%
Status
Level II 1.50% 3.50%
Status
Level III 2.00% 4.00%
Status
Level IV 2.50% 4.50%
Status
"APPRAISAL" means an appraisal prepared by an M.A.I. appraiser approved
by the Administrative Agent which appraisal is acceptable to the Administrative
Agent and done in
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conformity with the following standards: Uniform Standards of Professional
Appraisal Practice, the requirements of the Code of Professional Ethics and the
Standards of Professional Appraisal Practice of the Appraisal Institute, the
appraisal guidelines set forth by the office of the Comptroller of the Currency
and the Federal Reserve Board.
"APPROVED FUND" means any fund that invests in commercial loans which
is advised or managed by an investment advisor which has total assets under
management in excess of $250,000,000.
"APPROVED INTER-COMPANY INDEBTEDNESS" means the Indebtedness described
on Schedule 1.01(b), which Indebtedness (a) may not exceed $50,000,000 without
the approval of the Administrative Agent and may not exceed $52,500,000 without
the approval of the Required Lenders, (b) is unsecured, (c) is subordinated to
the Obligations in a manner acceptable to the Administrative Agent, and (d) is
Collateral.
"APPROVED INTER-COMPANY INDEBTEDNESS LOAN DOCUMENTS" means the
documents described on Schedule 1.01(b), together with any additional promissory
notes evidencing Approved Inter-Company Indebtedness.
"APPROVED MANAGEMENT AGREEMENT" means a management agreement by and
between a Person, as owner, and Borrower or Borrower's Subsidiary or
Unconsolidated Entity, as manager, in substantially the form of an Existing
Management Agreement, a form which does not include materially adverse
provisions which are not customary for management agreements of Hospitality
Properties or such other form as is approved by the Administrative Agent in
writing (which approval shall not be unreasonably withheld).
"APPROVED PARTICIPATING LEASE" means a lease (except for a Ground
Lease) by and between a Person, as lessor, and Borrower or Borrower's
Subsidiary, as lessee, in substantially the form of an Existing Participating
Lease, a form which does not include materially adverse provisions which are not
customary for participating leases of Hospitality Properties or such other form
as is approved by the Administrative Agent in writing (which approval shall not
be unreasonably withheld).
"ASSET DISPOSITION" means any conveyance, exchange, transfer, or
assignment of any Investment or Non-Replaced Property by the Borrower or a
Guarantor to a Person other than the Borrower or a Guarantor.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of the attached Exhibit C.
"ASSIGNMENT OF LEASES" means an assignment of leases, rents and
security deposits executed by the Borrower or any Guarantor to secure the
Obligations, each in form reasonably approved by the Administrative Agent with
such modifications as may be necessary and appropriate in the opinion of counsel
to the Administrative Agent to comply with the state law of the filing
jurisdiction and as may be reasonably satisfactory to the Administrative Agent,
as the same may be amended or terminated in accordance with its terms.
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"BEVERAGE ENTITY" means any Subsidiary or Unconsolidated Entity of the
Parent for which substantially all of such Person's Property is directly related
to the sale of beverages at a Hospitality Property, and "BEVERAGE ENTITIES"
means all such Persons.
"BORROWER" means MeriStar H & R Operating Company, L.P., a Delaware
limited partnership.
"BORROWING" means a borrowing consisting of simultaneous Advances of
the same Type (a) made by each Lender pursuant to Section 2.01(a) or 2.01(b),
(b) made by the Alternate Currency Swing Line Lender pursuant to Section
2.01(d), or (c) Converted by each Lender or the Alternate Currency Swing Line
Lender, as applicable, to Advances of a different Type pursuant to Section
2.02(b).
"BUSINESS DAY" means (a) with respect to Adjusted Base Rate Advances, a
day of the year on which banks are not required or authorized to close in
Dallas, Texas or New York, New York, and (b) with respect to Eurodollar Rate
Advances or Pound Rate Advances, a day of the year on which banks are not
required or authorized to close in Dallas, Texas , New York, New York, or
London, England, and (c) with respect to Eurocurrency Rate Advances, a day of
the year on which banks are not required or authorized to close in Paris, France
and which is also a TARGET Day.
"CAPITAL EXPENDITURE" means any payment made directly or indirectly for
the purpose of acquiring or constructing fixed assets, real property,
improvements, equipment, or other personal property, or for replacements or
substitutions therefore or additions thereto, which in accordance with GAAP
would be capitalized in the fixed asset accounts of such Person making such
expenditure, including, without limitation, amounts paid or payable for such
purpose under any conditional sale or other title retention agreement or under
any Capital Lease, but excluding repairs or maintenance of any Hospitality
Property in the normal and ordinary course of business in keeping with the past
practices of the Borrower, IHC or the Parent.
"CAPITAL LEASE" means, for any Person, any lease of any Property
(whether real, personal or mixed) by that Person as lessee which, in accordance
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.
"CAPITALIZATION EVENT" means any sale or issuance by the Parent or any
of its Subsidiaries of equity securities except for the issuance of the
Borrower's limited partnership interests in accordance with the provisions of
Section 6.05.
"CAPITALIZED LEASE OBLIGATIONS" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"CASH COLLATERAL ACCOUNT" means a special cash collateral account
containing cash deposited pursuant to the terms of this Agreement to be
maintained at the Administrative Agent's office in accordance with Section 8.04.
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"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, all rules and regulations and
requirements thereunder in each case as now or hereafter in effect.
"CHANGE IN CONTROL" means for any Person a change in ownership or
control of such Person effected through either of the following transactions:
(a) any Person or related group of Persons (other than
such Person or an Affiliate of such Person) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) of (i) securities
possessing more than fifty percent (50%) of the total combined voting
power of such Person's outstanding securities, or (ii) with respect to
the Parent or the Borrower after the date which is 18 months following
the Closing Date, securities (excluding securities held by CGLH
Partners I LP and CGLH Partners II LP as of the Closing Date and any
transferee of such securities) possessing more than thirty five percent
(35%) of the total combined voting power of such Person's outstanding
securities; or
(b) excluding with respect to the Parent those changes to
the Parent's Board of Directors that occur as part of the consummation
of the Merger, there is a change in the composition of such Person's
Board of Directors over a period of thirty-six (36) consecutive months
(or less) such that a majority of Board members (rounded up to the
nearest whole number) ceases, by reason of one or more proxy contests
for the election of Board members, to be comprised of individuals who
either (i) have been Board members continuously since the beginning of
such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board
members described in clause (i) who were still in office at the time
such election or nomination was approved by the Board.
"CLASS" has the meaning set forth in Section 1.04.
"CLOSING DATE" has the meaning given such term in the initial paragraph
of this agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"CO-LEAD ARRANGER FEE LETTER" means the letter agreement dated as of
May 1, 2002, among the Borrower, the Parent, IHC, ▇▇ ▇▇▇▇▇, and Citibank, as
amended.
"COLLATERAL" means all of the Parent's and its Subsidiaries' interests
in the following, whether owned on or acquired after the Closing Date: (a) the
Ownership Interests of all existing Subsidiaries and Unconsolidated Entities of
the Parent and the Borrower and any future Material Subsidiary or Material
Unconsolidated Entity except for the Ownership Interests in Beverage Entities
(the Ownership Interests required to be Collateral pursuant to this definition
being referred to herein as the "OWNERSHIP INTERESTS COLLATERAL"), (b) the
rights to receive payments for its account (including the right to receive
termination payments) under all Permitted Property Agreements, including without
limitation those Permitted Property Agreements to which
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Interstate Hotels, LLC and its Subsidiaries are a party, (c) Owned Hospitality
Properties, (d) the Approved Inter-Company Indebtedness and the Approved
Inter-Company Indebtedness Loan Documents, (e) any other collateral described in
the Security Agreement or other Security Documents; PROVIDED that the pledge of
such Property is not prohibited by the terms of (i) Permitted Property
Agreements, joint venture agreements, organizational documents and other
contractual arrangements to which the Borrower or a Subsidiary is a party and
which are in effect on the Closing Date, in each case as approved by the
Administrative Agent; (ii) with respect to any Ownership Interests in or
Property of a Permitted Other Subsidiary, the loan documentation for any
Permitted Other Indebtedness incurred by such Permitted Other Subsidiary; and
(iii) with respect to any Ownership Interests in an Unconsolidated Entity, the
loan documentation for Indebtedness incurred by such Unconsolidated Entity or
joint venture agreements or other contractual arrangements for such
Unconsolidated Entity. The Ownership Interests which cannot be pledged as of the
date of this Agreement are those certain Ownership Interests designated in
Schedule 1.01(c) as Non-Pledgable.
"COMMITMENT" means, (a) as to any Lender, its Revolving Commitment and
its Term Commitment, and (b) as to the Alternate Currency Swing Line Lender, its
Alternate Currency Swing Line Commitment.
"COMPLIANCE CERTIFICATE" means a certificate of the Borrower in
substantially the form of the attached Exhibit D.
"CONSOLIDATED" refers, with respect to any Person, to the consolidation
of the accounts of such Person with such Person's Subsidiaries in accordance
with GAAP.
"CONTROL PERCENTAGE" means, with respect to any Person, the percentage
of the outstanding capital stock of such Person having ordinary voting power
which gives the direct or indirect holder of such stock the power to elect a
majority of the Board of Directors of such Person.
"CONTROLLED GROUP" means all members of the controlled group of
corporations and all trades (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"CONVERT", "CONVERSION", and "CONVERTED" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.02(b).
"CREDIT DOCUMENTS" means this Agreement, the Notes, the Guaranties, the
Environmental Indemnities, the Security Documents, the Fee Letter, the Co-Lead
Arranger Fee Letter, the Administrative Agent Fee Letter, and each other
agreement, instrument or document executed by the Borrower or any of its
Subsidiaries at any time in connection with this Agreement.
"DEFAULT" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived, become
an Event of Default.
"DEFAULTING LENDER" means any Lender which has wrongfully refused or
failed to make available its portion of any Borrowing or to fund its portion of
any unreimbursed payment under
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Section 9.05, or notified in writing the Borrower or the Administrative Agent
that such Lender does not intend to comply with its obligations under this
Agreement.
"DESIGNATED LENDERS" means the Administrative Agent, Citibank and
▇▇▇▇▇▇.
"DESIGNATED REDEMPTION INDEBTEDNESS" means Indebtedness in the amount
of approximately $1,310,000 in the form of Mandatorily Redeemable Stock
consisting of 392,157 Preferred Units in the Borrower held by CapStar Management
Company, LLC which are redeemable at the option of the Unit holder pursuant to
the partnership agreement of Borrower on or after April 1, 2004 for, at the
option of the holder, cash in the amount of $3.34 per unit or the equivalent in
common stock of the Parent; PROVIDED that without the written consent of the
Required Lenders the Parent and the Borrower will not modify the documentation
creating or evidencing the "Designated Redemption Indebtedness" in any manner
which would increase the amount of such Indebtedness or accelerate the time at
which such Person is obligated to repay such Indebtedness.
"DISSOLVING SUBSIDIARY" means a direct or indirect non-Material
Subsidiary of the Parent and/or the Borrower which the Parent or the Borrower
intends to dissolve within thirty (30) days of the Closing Date and which is in
fact dissolved within thirty (30) days of the Closing Date.
"DOLLAR EQUIVALENT" means the equivalent in another currency of an
amount in Dollars to be determined by reference to the rate of exchange quoted
by Societe Generale at 10:00 a.m. (New York City time) on the date of
determination, for the spot purchase in the foreign exchange market of such
amount of Dollars with such other currency; PROVIDED that the Dollar Equivalent
of any amounts outstanding in a currency other than Dollars shall (a) for
purposes of Sections 2.01(d)(ii) and (iii), be the amount of Dollars that the
Administrative Agent determines, based upon the actual exchange rates which the
Administrative Agent believes can be obtained on the date of conversion pursuant
to Section 2.01(d)(ii) and (iii), would be required to be paid in Dollars to
purchase such amount of other currency and (b) for purposes of determining
compliance with Sections 2.01(b), 2.01(d)(i), 2.07 and 2.13(a), with respect to
any Alternate Currency Swing Line Advance be revalued based upon the then
current rate of exchange as provided above at the end of any Interest Period
applicable to such Advance, PROVIDED that, at any time during a calendar
quarter, if the exchange rate for an Alternate Currency has changed by 10% or
more from the exchange rate on the last Business Day of the preceding quarter,
then at the discretion of the Administrative Agent or at the request of the
Required Lenders, the Dollar Equivalent shall be reset based upon the then
current exchange rates as determined by Societe Generale as provided above,
which rates shall remain in effect until the last Business Day of such calendar
quarter or such earlier date, if any, as the rate is reset pursuant to this
proviso. Notwithstanding anything to the contrary contained in this definition,
at any time that a Default or an Event of Default then exists, the
Administrative Agent may revalue the Dollar Equivalent of any Alternate Currency
Swing Line Advances in its sole discretion.
"DOLLAR REVOLVING ADVANCE" means any advance by a Lender to the
Borrower in Dollars pursuant to such Lender's Revolving Commitment or a
continuation of an existing Dollar Revolving Advance, and refers to an Adjusted
Base Rate Advance or a Eurodollar Rate Advance.
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"DOLLAR REVOLVING NOTE" means a promissory note of the Borrower payable
to the order of any Lender, in substantially the form of the attached Exhibit
A-1, evidencing Indebtedness of the Borrower to such Lender resulting from
Dollar Revolving Advances from such Lender, and "DOLLAR REVOLVING NOTES" means
all of such promissory notes.
"DOLLARS" and "$" means lawful money of the United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the office
of such Lender specified as its "Operations Contact" for Adjusted Base Rate
Advances in the questionnaire such Lender provided to the Administrative Agent,
or such other office of such Lender as such Lender may from time to time specify
to the Borrower and the Administrative Agent.
"EBITDA" means for any Person or Hospitality Property, as applicable,
for any period for which such amount is being determined, an amount equal to (a)
the Net Income for such Person or Hospitality Property, as applicable, for such
period PLUS (b) to the extent deducted in determining Net Income, Interest
Expense, income taxes, depreciation, and amortization, as determined on a
Consolidated basis in accordance with GAAP PLUS (c) to the extent deducted in
determining Net Income, deductions for minority interest attributable to the
Ownership Interests in the Borrower not owned (directly or indirectly) by the
Parent.
"EFFECTIVE DATE" means the date all of the conditions precedent set
forth in Section 3.01 have been satisfied.
"ELIGIBLE ASSIGNEE" means any of the following approved by those
Persons who have approval rights pursuant to the provisions of Section 10.06,
which approval will not be unreasonably withheld: (a) a commercial bank
organized under the laws of the United States, or any State thereof, and having
primary capital of not less than $250,000,000 (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development and having primary capital (or its
equivalent) of not less than $250,000,000 (or its Dollar Equivalent), (c) an
investment bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $5,000,000,000, (d) an insurance
company, finance company or financial institution (whether a corporation,
partnership, trust or other Person) organized under the laws of the United
States, or any state thereof, and having total assets in excess of
$5,000,000,000, (e) with respect to Term Advances only, any Approved Fund, (f)
with respect to Term Advances only, any "accredited investor" (as defined in
Regulation D of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder) which has total assets in excess of
$100,000,000, (g) a Lender, and (h) an Affiliate of the respective assigning
Lender, without approval of any Person except as set forth in Section 10.06, but
otherwise meeting the eligibility requirements of (a), (b), (c), (d), (e) or (f)
above.
"ENGINEERING REPORT" means with respect to any Owned Hospitality
Property, an engineering report which (a) is prepared for the Lenders and the
Administrative Agent by a Person reasonably satisfactory to the Administrative
Agent, (b) is prepared in accordance with a scope of services reasonably
satisfactory to the Administrative Agent, (c) is prepared within three (3)
months of the date of acquisition of such Owned Hospitality Property, and (d)
reflects
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no material concerns pertaining to the physical condition of the Owned
Hospitality Property, including without limitation the structural, electrical,
plumbing, mechanical and other essential components of the Owned Hospitality
Property.
"ENVIRONMENT" or "ENVIRONMENTAL" shall have the respective meanings set
forth in 42 ▇.▇.▇.▇▇. 9601(8), as amended.
"ENVIRONMENTAL CLAIM" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of employees) which seeks to impose liability under any
Environmental Law.
"ENVIRONMENTAL INDEMNITY" means one or more environmental indemnity
agreements dated of even date herewith in substantially the form of the attached
Exhibit E executed or to be executed by the Borrower, the Parent and all
Guarantors, and any future environmental indemnities executed in connection with
any Hospitality Property, as any of such environmental indemnities may be
amended hereafter in accordance with the terms of such agreements.
"ENVIRONMENTAL LAW" means all Legal Requirements arising from, relating
to, or in connection with the Environment, health, or safety, including without
limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the air,
surface water, groundwater, land surface or subsurface strata, or other natural
resources; (b) solid, gaseous or liquid waste generation, treatment, processing,
recycling, reclamation, cleanup, storage, disposal or transportation; (c)
exposure to pollutants, contaminants, hazardous, medical, infectious, or toxic
substances, materials or wastes; (d) the safety or health of employees; or (e)
the manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous, medical, infectious, or toxic substances,
materials or wastes.
"ENVIRONMENTAL PERMIT" means any permit, license, order, approval or
other authorization under Environmental Law.
"ENVIRONMENTAL REPORT" means with respect to any Owned Hospitality
Property, an environmental report which (a) is prepared for the Lenders and the
Administrative Agent by a Person reasonably satisfactory to the Administrative
Agent, (b) is prepared in accordance with a scope of services reasonably
satisfactory to the Administrative Agent, (c) is prepared within three (3)
months of the date of acquisition of such Owned Hospitality Property, and (d)
certifies to the Administrative Agent and the Lenders that the Owned Hospitality
Property and the soil and the groundwater thereunder do not contain Hazardous
Substances except for Permitted Hazardous Substances.
"EQUITY INNS" means Equity Inns, Inc.
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"EQUITY INNS LETTER" means a comfort letter and estoppel certificate
executed by Equity Inns for the benefit of the Administrative Agent and the
Lenders, and acknowledged by the Borrower, pertaining to the Permitted Property
Agreements entered into between Equity Inns and Equity Inns' Subsidiaries and
the Parent and the Parent's Subsidiaries, in form and substance acceptable to
the Administrative Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EURO" and/or "?" means the euro referred to in Council Regulation (EC)
No. 1103/97 dated June 17, 1997 passed by the Council of the European Union, or,
if different, the then lawful currency of the member states of the European
Union that participate in the third stage of Economic and Monetary Union.
"EURO NOTE" means a promissory note of the Borrower payable to the
order of the Alternate Currency Swing Line Lender, in substantially the form of
the attached Exhibit A-3, evidencing indebtedness of the Borrower to the
Alternate Currency Swing Line Lender resulting from Eurocurrency Rate Advances.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.
"EUROCURRENCY RATE" means, for the Interest Period for each
Eurocurrency Rate Advance comprising part of the same Borrowing, the interest
rate per annum set forth on Telerate Page 248 as the Euro Interbank Offered
Rate, or such other page or pages as may replace such pages on Telerate for
purposes of displaying such rate, at or about 11:00 a.m. (Brussels time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to Societe Generale's Eurocurrency Rate Advance comprising
part of such Borrowing, and for a period equal to such Interest Period;
provided, however, that if such rate is not available on Telerate then such
offered rate shall be otherwise independently determined by Administrative Agent
from an alternate, substantially similar source available to Administrative
Agent or shall be calculated by Administrative Agent by a substantially similar
methodology as that theretofore used to determine such offered rate in Telerate.
"EUROCURRENCY RATE ADVANCE" shall have the meaning provided in Section
2.01(d).
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the
office or offices of such Lender specified as its "Operations Contact" for each
type of Fixed Rate Advance in the questionnaire such Lender provided to the
Administrative Agent, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent for each
type of Fixed Rate Advance.
"EURODOLLAR RATE" means, for the Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
(rounded upward to the nearest whole multiple of 1/16 of 1% per annum) equal to
the rate per annum at which deposits in Dollars are offered to prime banks in
the London interbank market at 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period as shown on the display
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designated "British Banker's Association Interest Settlement Rates" on Telerate
at Page 3750 or Page 3740, or such other page or pages as may replace such pages
on Telerate for purposes of displaying such rate, in an amount substantially
equal to Societe Generale's Eurodollar Rate Advance comprising part of such
Borrowing and for a period equal to such Interest Period; PROVIDED, however,
that if such rate is not available on Telerate then such offered rate shall be
otherwise independently determined by Administrative Agent from an alternate,
substantially similar source available to Administrative Agent or shall be
calculated by Administrative Agent by a substantially similar methodology as
that theretofore used to determine such offered rate in Telerate.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest as
provided in Section 2.06(b).
"EVENT OF DEFAULT" has the meaning set forth in Section 8.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,15 U.S.C., as
amended, and the rules and regulations promulgated thereunder.
"EXISTING MANAGEMENT AGREEMENTS" means the management agreements listed
on Schedule 1.01(e).
"EXISTING OWNED HOSPITALITY PROPERTY INVESTMENTS" means the Owned
Hospitality Property Investments set forth on Schedule 1.01(d) and other Owned
Hospitality Property Investments in which the Borrower's direct or indirect
ownership in such Owned Hospitality Property Investment is equal to or less than
twenty percent (20%) of the total ownership in such Owned Hospitality Property
Investment.
"EXISTING PARTICIPATING LEASES" means the participating leases set
forth on Schedule 1.01(f).
"EXPIRATION DATE" means, with respect to any Letter of Credit, the date
on which such Letter of Credit will expire or terminate in accordance with its
terms.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for any such day on
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any of its successors.
"FEE LETTER" means the letter agreement dated as of May 1, 2002, among
the Borrower, the Parent, IHC, and the Lenders, as amended.
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"FEES REGULATIONS" means the Banking Supervision (Fees) Regulations
1999 of the United Kingdom or such other law or regulation as may be in force
from time to time in respect of the payment of fees for banking supervision.
"FEE BASE" has the meaning given to it in, and will be calculated in
accordance with, the Fees Regulations.
"FELCOR" means FelCor Lodging Limited Partnership.
"FF&E RESERVE" means, for any Hospitality Property for any period, a
reserve equal to four percent (4%) of gross revenues from such Hospitality
Property for such period, excluding, however, from such calculation for such
Hospitality Property the gross revenues generated by the office, retail and
garage portions of such Hospitality Property.
"FINANCIAL STATEMENTS" means the respective financial statements of
MHRI and its Subsidiaries and IHC and its Subsidiaries dated as of March 31,
2002.
"FINANCING STATEMENT" means any Uniform Commercial Code - Financing
Statement - Form UCC-1 to be executed (if necessary or desirable) and delivered
by the Parent or any of its Subsidiaries in connection with perfecting the
security interest assigned by any Security Document, and any extension, renewal,
or amendment thereof.
"FISCAL QUARTER" means each of the three-month periods ending on March
31, June 30, September 30 and December 31.
"FISCAL YEAR" means the twelve-month period ending on December 31.
"FIXED RATE ADVANCE" means any Eurodollar Rate Advance or Alternate
Currency Swing Line Advance.
"FIXED RATE RESERVE PERCENTAGE" shall mean, on any day, that percentage
(expressed as a decimal fraction) which is in effect on such date, as provided
by the Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to the Administrative Agent (including,
without limitation, basic, supplemental, marginal and emergency reserves) under
Regulation D with respect to Eurocurrency Liabilities, or under any similar or
successor regulation with respect to Eurocurrency Liabilities or Eurocurrency
funding (or other category of liabilities which includes deposits by reference
to which the interest rate on a Fixed Rate Advance is determined or any category
or extensions of credit which includes loans by a non-United States office of
the Administrative Agent to United States residents). Each determination by the
Administrative Agent of the Fixed Rate Reserve Percentage, shall, in the absence
of manifest error, be conclusive and binding upon the Borrower.
"FUND," "TRUST FUND," or "SUPERFUND" means the Hazardous Substance
Response Trust Fund, established pursuant to 42 U.S.C. ss. 9631 (1988) and the
Post-closure Liability Trust Fund, established pursuant to 42 U.S.C. ss. 9641
(1988), which statutory provisions have been amended
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or repealed by the Superfund Amendments and Reauthorization Act of 1986, and the
"Fund," "Trust Fund," or "Superfund" that are now maintained pursuant to 42
U.S.C. ss. 9507.
"FUNDING DATE" shall have the meaning provided in Section 2.01(c)(ii).
"GAAP" means United States generally accepted accounting principles as
in effect from time to time, applied on a basis consistent with the requirements
of Section 1.03.
"GOVERNMENTAL AUTHORITY" means any foreign governmental authority, the
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Lender, the Parent, the Borrower, any Subsidiaries of the Borrower or the
Parent or any of their respective Properties.
"GOVERNMENTAL PROCEEDINGS" means any action or proceedings by or before
any Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
"GROUND LEASE" means a lease by and between a Person, as lessor, and
Borrower or Borrower's Subsidiary, as lessee, where the term of such lease is in
excess of twenty (20) years.
"GUARANTOR" means each of the Parent, each Subsidiary of the Parent
(except the Permitted Other Subsidiaries, the Beverage Entities, the Dissolving
Subsidiaries, Flagstone Hospitality Management LLC, and certain other
non-Material Subsidiaries which are prohibited from acting as a Guarantor
because of joint venture agreements, organizational documents and other
contractual arrangements to which such non-Material Subsidiary is a party and
which are in effect on the Closing Date, in each case as approved by the
Administrative Agent) existing as of the Closing Date, and any future Material
Subsidiary, and "GUARANTORS" means all of such Persons. The Guarantors on the
Closing Date are identified on Schedule 1.01(g).
"GUARANTY" means one or more Guaranty and Contribution Agreements in
substantially the form of the attached Exhibit F executed by the Guarantors,
evidencing the joint and several guaranty by the signatories thereto of the
obligations of Borrower in respect of the Credit Documents, and any future
guaranty and contribution agreement executed to secure Advances, as any of such
agreements may be amended hereafter in accordance with the terms of such
agreements.
"HAZARDOUS SUBSTANCE" or "HAZARDOUS MATERIAL" means the substances
identified as such pursuant to CERCLA and those regulated under any other
Environmental Law, including without limitation pollutants, contaminants,
petroleum, petroleum products, radio nuclides, radioactive materials, and
medical and infectious waste.
"HAZARDOUS WASTE" means the substances regulated as such pursuant to
any Environmental Law.
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"HOSPITALITY MANAGEMENT BUSINESS" shall mean the management, operation
or leasing as lessee of any Hospitality Property, including timeshare sales and
brokerage, and the operation of any Permitted Housing Business.
"HOSPITALITY PROPERTY" shall mean a full service or limited service
hotel or resort, a condominium or timeshare resort, an extended stay property,
or a conference center, and other facilities incidental to, or in support of
such property, including without limitation, restaurants and other food-service
facilities, golf facilities or other entertainment facilities or club,
conference or meeting facilities and Intellectual Property related thereto;
PROVIDED that such property shall NOT include any casino or other gaming
property (even if only a part of a Hospitality Property) or senior living
property.
"IHC" means Interstate Hotels Corporation, as such corporation existed
pre-Merger.
"IMPROVEMENTS" for any Owned Hospitality Property means all buildings,
structures, fixtures, tenant improvements and other improvements of every kind
and description now or hereafter located in or on or attached to the Land for
such Owned Hospitality Property; and all additions and betterments thereto and
all renewals, substitutions and replacements thereof.
"INDEBTEDNESS" means (without duplication), at any time and with
respect to any Person, (a) indebtedness of such Person for borrowed money
(whether by loan or the issuance and sale of debt securities) or for the
deferred purchase price of property or services purchased (other than amounts
constituting trade payables or bank drafts arising in the ordinary course of
business); (b) indebtedness of others in the amount which such Person has
directly or indirectly assumed or guaranteed or otherwise provided credit
support therefor or for which such Person is liable as a partner of such Person;
(c) indebtedness of others in the amount secured by a Lien on assets of such
Person, whether or not such Person shall have assumed such indebtedness unless
the validity of such Lien is being contested in good faith and with due
diligence by appropriate proceedings, PROVIDED that such Lien is subordinate to
the Liens created by the Security Documents and such Person shall have delivered
a bond or other security acceptable to the Administrative Agent equal to 125% of
the contested amount; (d) obligations of such Person in respect of letters of
credit, acceptance facilities, or drafts or similar instruments issued or
accepted by banks and other financial institutions for the account of such
Person (other than trade payables or bank drafts arising in the ordinary
course); (e) obligations of such Person under Capital Leases; (f) all
obligations, contingent or otherwise, of such Person under any synthetic lease,
tax retention operating lease, off balance sheet loan or similar off balance
sheet financing arrangement if the transaction giving rise to such obligation
(1) is considered indebtedness for borrowed money for U.S. federal income tax
purposes but is classified as an operating lease under GAAP and (2) does not
(and is not required pursuant to GAAP to) appear as a liability on the balance
sheet of such Person; (g) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Mandatorily
Redeemable Stock issued by such Person or any other Person, valued at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; (h) all obligations of such Person in respect of any take-out
commitment or forward equity commitment (excluding, in the case of the Borrower
and its Subsidiaries, any such obligation that can be satisfied solely by the
issuance of Ownership Interests (other than Mandatorily Redeemable Stock)); and
(i) to the extent treated as
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a liability under GAAP, obligations under interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements or other similar
agreements or arrangements designed to protect against fluctuations in interest
rates; PROVIDED that "Indebtedness" shall not include (i) any Indebtedness
related to the Parent's or the Parent's Subsidiary's Investment with respect to
the St. Louis Radisson Hotel which is non-recourse to the Parent, the Borrower
and their respective Subsidiaries except for the Ownership Interests in the
Unconsolidated Entity which owns such hotel and (ii) any Designated Redemption
Indebtedness.
"INSURANCE ANNUAL STATEMENT" means the annual statutory financial
statements of each Insurance Company required to be filed with the insurance
commissioner (or similar Governmental Authority) of its jurisdiction of
incorporation, which statement shall be in the form required by the jurisdiction
of incorporation of such Insurance Company or, if no specific form is so
required, in the form of financial statements permitted by such insurance
commissioner (or such similar Governmental Authority) to be used for filing
annual statutory financial statements and shall contain the type of information
permitted by such insurance commissioner (or such similar Governmental
Authority) to be disclosed therein, together with all exhibits or schedules
filed therewith.
"INSURANCE CONTRACT" means each outstanding insurance contract of each
Insurance Company.
"INSURANCE COMPANY" means each of the Borrower, the Parent or their
respective Subsidiaries that is or acts as an insurance company or provides a
guaranty for a Person acting as an insurance company.
"INSURANCE LICENSE" means any license, certificate of authority, permit
or other authorization which is required to be obtained from any Governmental
Authority in connection with the operation, ownership or transaction of
insurance business.
"INSURANCE RESERVE LIABILITIES" means all reserves and other
liabilities with respect to insurance and for claims and benefits incurred but
not reported.
"INSURANCE SURPLUS" means an estimate of the amount by which an
insurance plan's assets exceed its expected current and future liabilities,
including the amount expected to be needed to fund future benefit payments.
"INTELLECTUAL PROPERTY" shall have the meaning given such term in the
Security Agreement.
"INTERCOMPANY AGREEMENT" means the Intercompany Agreement dated as of
August 3, 1998, by and among the Parent, the Borrower, MHC, and MHC OP, as
amended by Amendment to Intercompany Agreement dated as of January 1, 2001, and
as may be further amended in accordance with the provisions of this Agreement.
"INTEREST COVERAGE RATIO" means, as of the end of any Rolling Period, a
ratio of (a) the Parent's Adjusted EBITDA to (b) the Parent's Interest Expense,
for such Rolling Period.
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"INTEREST EXPENSE" means, for any Person for any period for which such
amount is being determined, the total interest expense (including that properly
attributable to Capital Leases in accordance with GAAP) and all charges incurred
with respect to letters of credit determined on a Consolidated basis in
conformity with GAAP, PLUS capitalized interest of such Person and its
Subsidiaries, MINUS, for such periods for which all or a portion of such period
occurred prior to the date of the Merger, all interest income earned for such
period by such Person and its Subsidiaries prior to the date of the Merger
determined on a Consolidated basis in conformity with GAAP.
"INTEREST PERIOD" means, for each Fixed Rate Advance comprising part of
the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Adjusted Base Rate Advance into such an Advance
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below and Section 2.02 and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.02. To the extent available for a Fixed Rate
Advance, the duration of each such Interest Period shall be (i) one, two or
three months with respect to Alternate Currency Swing Line Advances and (ii)
one, two, three or six months for all other Fixed Rate Advances, in each case as
the Borrower may select, upon notice received by the Administrative Agent not
later than 11:00 a.m. (Dallas, Texas time) on the third Business Day prior to
the first day of such Interest Period, PROVIDED, HOWEVER, that:
(a) Interest Periods for Advances of the same Borrowing
shall be of the same duration;
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, PROVIDED that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the preceding
Business Day;
(c) any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month in
which it would have ended if there were a numerically corresponding day
in such calendar month;
(d) each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires; and
(e) no Interest Period with respect to any portion of any
Advance shall extend beyond the Maturity Date.
"INTEREST RATE AGREEMENTS" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement pertaining to the fluctuations in interest rates.
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"INVESTMENT" means, with respect to any Person, (a) any loan or advance
to any other Person, (b) the ownership, purchase or other acquisition of any
Ownership Interests or Ownership Interest Equivalents in any other Person, (c)
any joint venture or partnership with, or any capital contribution to, or other
investment in, any other Person, (d) any Capital Expenditure, and (e) any
payment, whether capitalized or not, to acquire a management agreement or lease
(including, without limitation, any Permitted Property Agreement or Permitted
Housing Agreement).
"INVESTMENT AMOUNT" means (a) for any Owned Hospitality Property the
sum of (i) the aggregate purchase price paid by the Borrower or its Subsidiary
for such Owned Hospitality Property, and (ii) the actual cost of any Capital
Expenditures for such Owned Hospitality Property made by the Borrower or its
Subsidiaries after the acquisition of such Owned Hospitality Property, and (b)
for any other Investment or Property the aggregate purchase price paid by the
Borrower or its Subsidiary for such other Investment or Property. The Investment
Amount shall include any Ownership Interests or Ownership Interest Equivalents
used to purchase such Investment at their fair market value at the time of
purchase; PROVIDED that any such Ownership Interests or Ownership Interest
Equivalents which are convertible into the Parent's common stock shall be valued
at the price at which they could be exchanged into the Parent's common stock
assuming such exchange occurred on the date of acquiring such Investment.
"ISSUING BANK" means Societe Generale or any Lender acting as a
successor Issuing Bank pursuant to Section 10.06, and "ISSUING BANKS" means,
collectively, all of such Lenders.
"LAND" for any Owned Hospitality Property means the real property upon
which the Owned Hospitality Property is located, together with all rights, title
and interests appurtenant to such real property, including without limitation
all rights, title and interests to (a) all strips and gores within or adjoining
such property, (b) the streets, roads, sidewalks, alleys, and ways adjacent
thereto, (c) all of the tenements, hereditaments, easements, reciprocal easement
agreements, rights-of-way and other rights, privileges and appurtenances
thereunto belonging or in any way pertaining thereto, (d) all reversions and
remainders, (e) all air space rights, and all water, sewer and wastewater
rights, (e) all mineral, oil, gas, hydrocarbon substances and other rights to
produce or share in the production of anything related to such property, and (f)
all other appurtenances appurtenant to such property, including without
limitation, any now or hereafter belonging or in anywise appertaining thereto.
"LEGAL REQUIREMENT" means any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or official interpretation of
any of the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Commercial Paper Inc.
"LENDERS" means the lenders listed on Schedule 1.01(a) and each
Eligible Assignee that shall become a party to this Agreement pursuant to
Section 10.06, and "LENDER" means any such Person. Unless the context otherwise
requires, each reference in this Agreement to a Lender
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includes the Alternate Currency Swing Line Lender or any Affiliate of the
Alternate Currency Swing Line Lender which is acting as the Alternate Currency
Swing Line.
"LETTER OF CREDIT" means, individually, any letter of credit issued by
the Issuing Bank in accordance with the provisions of Section 2.13 of this
Agreement.
"LETTER OF CREDIT DOCUMENTS" means, with respect to any Letter of
Credit, such Letter of Credit and any reimbursement or other agreements,
documents, and instruments entered into in connection with or relating to such
Letter of Credit.
"LETTER OF CREDIT EXPOSURE" means, at any time, the sum of (a) the
aggregate undrawn maximum face amount of each Letter of Credit and (b) the
aggregate unpaid amount of all Letter of Credit Obligations at such time.
"LETTER OF CREDIT OBLIGATIONS" means all obligations of the Borrower
arising in respect of the Letter of Credit Documents, including without
limitation the aggregate drawn amounts of Letters of Credit which have not been
reimbursed by the Borrower or converted into an Adjusted Base Rate Advance
pursuant to the provisions of Section 2.13(c).
"LEVERAGE RATIO" means the ratio on any date of (a) the Parent's Total
Indebtedness on such date to (b) the Parent's Adjusted EBITDA for the Rolling
Period immediately preceding such date.
"LIEN" means any mortgage, deed of trust, lien, pledge, charge,
security interest, encumbrance or other type of preferential arrangement to
secure or provide for the payment of any obligation of any Person, whether
arising by contract, operation of law or otherwise (including, without
limitation, the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement).
"LIQUID INVESTMENTS" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United
States;
(b) (i) negotiable or nonnegotiable certificates of
deposit, time deposits, or other similar banking arrangements maturing
within 180 days from the date of acquisition thereof ("bank debt
securities"), issued by (A) any Lender with a Revolving Commitment or
(B) any other bank or trust company which has a combined capital
surplus and undivided profit of not less than $250,000,000 or the
Dollar Equivalent thereof, if at the time of deposit or purchase, such
bank debt securities are rated not less than "A" (or the then
equivalent) by the rating service of S&P or of Moody's, and (ii)
commercial paper issued by (A) any Lender with a Revolving Commitment
or (B) any other Person if at the time of purchase such commercial
paper is rated not less than "A-2" (or the then equivalent) by the
rating service of S&P or not less than "P-2" (or the then equivalent)
by the rating service of Moody's, or upon the discontinuance of both of
such services, such other nationally recognized rating service or
services, as the case may be, as shall be selected by the Borrower with
the consent of the Administrative Agent;
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(c) repurchase agreements relating to investments
described in clauses (a) and (b) above with a market value at least
equal to the consideration paid in connection therewith, with any
Person who regularly engages in the business of entering into
repurchase agreements and has a combined capital surplus and undivided
profit of not less than $250,000,000 or the Dollar Equivalent thereof,
if at the time of entering into such agreement the debt securities of
such Person are rated not less than "A" (or the then equivalent) by the
rating service of S&P or of Moody's; and
(d) such other instruments (within the meaning of New
York's Uniform Commercial Code) as the Borrower may request and the
Administrative Agent may approve in writing, which approval will not be
unreasonably withheld.
"MANDATORILY REDEEMABLE STOCK" means, with respect to any Person, any
Ownership Interest of such Person which by the terms of such Ownership Interest
(or by the terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise (a)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than an Ownership Interest which is redeemable solely in
exchange for common stock or Ownership Interests Equivalent thereof), (b) is
convertible into or exchangeable or exercisable for Indebtedness or Mandatorily
Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in
whole or in part (other than an Ownership Interest which is redeemable solely in
exchange for common stock or Ownership Interests Equivalent thereof), in each
case on or prior to the Revolving Maturity Date, as such date may be extended
pursuant to the terms of Section 2.05(b).
"MANDATORY BORROWING" means a Borrowing comprised of Adjusted Base Rate
Advances made to repay an Alternate Currency Swing Line Advance as contemplated
by Section 2.01(d).
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL ADVERSE CHANGE" shall mean a material adverse change (a) in
the business, property, condition (financial or otherwise), prospects or results
of operations of the Borrower, the Parent and the other Guarantors taken as a
whole, in each case since March 31, 2002, or (b) in the validity or
enforceability of this Agreement or any of the other Credit Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIAL SUBSIDIARY" means any Subsidiary of the Parent having assets
or annual revenues in excess of $1,000,000.
"MATERIAL UNCONSOLIDATED ENTITY" means any Unconsolidated Entity of the
Parent for which the Investment Amount is in excess of $1,000,000.
"MATURITY DATE" means, (a) with respect to any Revolving Advances, the
Revolving Maturity Date, and (b) with respect to any Term Advances, the Term
Maturity Date.
"MAXIMUM RATE" means the maximum nonusurious interest rate under
applicable law.
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"MERGER" means the merger of IHC with and into MHRI, and the other
related transactions contemplated by the Merger Agreement.
"MERGER AGREEMENT" means the Agreement and Plan of Merger among IHC and
MHRI, dated May 1, 2002, as amended by Amendment No. 1 to Agreement and Plan of
Merger dated as of June 3, 2002.
"MHC" means MeriStar Hospitality Corporation, a Maryland corporation.
"MHC INDEBTEDNESS" means Subordinate Indebtedness owed by the Borrower
and the Borrower's Subsidiaries to MHC or MHC's Subsidiary (a) which cannot
exceed $57,000,000, (b) which does not have any scheduled principal repayments
or a maturity date prior to the fifth (5th) anniversary of the Closing Date, and
(c) the proceeds of which are used for the purposes set forth in Section
4.08(a).
"MHC LETTER" means a comfort letter and estoppel certificate executed
by MHC and MHC OP for the benefit of the Administrative Agent and the Lenders,
and acknowledged by the Borrower, pertaining to the Intercompany Agreement and
the Permitted Property Agreements entered into between MHC and MHC's
Subsidiaries and the Parent and the Parent's Subsidiaries, in form and substance
acceptable to the Administrative Agent.
"MHC OP" means MeriStar Hospitality Operating Partnership, L.P., a
Delaware limited partnership.
"MHRI" means MeriStar Hotels & Resorts, Inc., a Delaware corporation
prior to the Merger with IHC.
"MINIMUM NET WORTH" means, with respect to the Parent, at any time, the
sum of $75,000,000 PLUS (a) 75% of the aggregate net proceeds or value received
by the Parent or any of its Subsidiaries after the date of this Agreement in
connection with any Capitalization Events taken as a whole, including without
limitation in connection with the acquisition of any Investment or other
Property, PLUS (b) to the extent a positive number, 75% of the aggregate Net
Income of the Parent and the Parent's Subsidiaries for the period from and
including July 1, 2002 to the date of testing, on a Consolidated basis, MINUS
(c) an amount equal to the lesser of (i) $25,000,000 or (ii) the sum of (A) the
Parent's write-off under GAAP of the Parent's or the Parent's Subsidiary's
Investment with respect to the St. Louis Radisson Hotel up to a maximum
write-off of $11,500,000 and (B) the aggregate amount of all of the Parent's
write-offs under GAAP of intangible assets that occur after March 31, 2002.
"MOODY'S" means ▇▇▇▇▇'▇ Investor Service Inc.
"MORTGAGES" means, collectively, the deeds of trust and mortgages
executed by the Borrower or any Guarantor to secure the Obligations, each in
form reasonably acceptable to the Administrative Agent with such modifications
as may be necessary and appropriate in the opinion of counsel to the
Administrative Agent to comply with the state law of the filing jurisdiction and
as may be reasonably satisfactory to the Administrative Agent, as the same may
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be amended or terminated in accordance with their terms, and "MORTGAGE" means
any of such instruments.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Parent, the Borrower or any member of the
Controlled Group is making or accruing an obligation to make contributions.
"NET CASH PROCEEDS" means (a) the aggregate cash proceeds (including,
without limitation, insurance proceeds) received by the Parent, the Borrower or
any of their respective Subsidiaries (as applicable) in connection with any
Indebtedness incurrence on or after the Closing Date (excluding the Obligations
and the incurrence of other Indebtedness which does not trigger a Repayment
Event), Asset Disposition or Capitalization Event, MINUS (b) the reasonable
expenses of such Person in connection with such Indebtedness incurrence, Asset
Disposition or Capitalization Event, MINUS (c) to the extent that assets
disposed of in connection with an Asset Disposition secure Indebtedness
permitted pursuant to the provisions of Section 6.02(a), the amount of such
Indebtedness which is required to be repaid pursuant to the terms of such
Indebtedness in connection with such Asset Disposition, as reasonably evidenced
by the Borrower to the Administrative Agent.
"NET INCOME" means, for any Person or Hospitality Property, as
applicable, for any period for which such amount is being determined, the net
income or net loss of such Person (on a Consolidated basis) or Hospitality
Property, as applicable, after taxes, as determined on a Consolidated basis in
accordance with GAAP, excluding, however, (a) non-recurring expenses incurred in
connection with the Merger and (b) extraordinary items, including but not
limited to (i) any net gain or loss during such period arising from the sale,
exchange, or other disposition of capital assets (such term to include all fixed
assets and all securities) other than in the ordinary course of business, and
(ii) any write-up or write-down of assets.
"NET WORTH" means, for any Person, stockholders equity of such Person
determined in accordance with GAAP.
"NON-DEFAULTING LENDER" shall mean and include each Lender other than a
Defaulting Lender.
"NON-REPLACED PROPERTY" means any Property owned by the Borrower or any
of the Guarantors which (a) was used in the ownership, operation or management
of any Hospitality Property, (b) has been conveyed, exchanged, transferred, or
assigned by the Borrower or a Guarantor to a Person other than the Borrower or a
Guarantor, (c) has not been replaced in the ordinary course of business by
Property of equal or better quality, and (d) was not included within the
definition of "Investments".
"NOTE" means any of the Dollar Revolving Notes, the Term Notes, the
Euro Note or the Pound Note, and "NOTES" means all of such promissory notes.
"NOTICE OF BORROWING" means a notice of borrowing in the form of the
attached Exhibit G signed by a Responsible Officer of the Borrower.
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"NOTICE OF CONVERSION OR CONTINUATION" means a notice of conversion or
continuation in the form of the attached Exhibit H signed by a Responsible
Officer of the Borrower.
"OBLIGATIONS" means all Advances, Letter of Credit Obligations, and
other amounts payable by the Borrower to the Administrative Agent or the Lenders
under the Credit Documents.
"OWNED HOSPITALITY PROPERTY" means a Hospitality Property owned by the
Parent or one of the Parent's Subsidiaries or leased by the Parent or one of the
Parent's Subsidiaries pursuant to a Ground Lease.
"OWNED HOSPITALITY PROPERTY INVESTMENTS" shall mean Investments in
Owned Hospitality Properties or in Persons for which Hospitality Properties are
substantially all of such Person's Property.
"OWNED HOSPITALITY PROPERTY SECURITY DOCUMENTS" for any Owned
Hospitality Property (other than one owned by a Permitted Other Subsidiary),
means collectively (a) a Mortgage, (b) an Assignment of Leases, and (c) such
other security agreements, pledge agreements, assignments, mortgages, financing
statements, stock powers, and other collateral documentation as the Agents may
reasonably request.
"OWNERSHIP INTERESTS" means shares of stock, other securities,
partnership interests, member interests, beneficial interests or other interests
in any Person, whether voting or non-voting, and participations or other
equivalents (regardless of how designated) of or in a Person.
"OWNERSHIP INTERESTS COLLATERAL" has the meaning given such term in the
definition of "Collateral."
"OWNERSHIP INTEREST EQUIVALENTS" means all securities (other than
Ownership Interests) convertible into or exchangeable for Ownership Interests
and all warrants, options or other rights to purchase or subscribe for any
Ownership Interests, whether or not presently convertible, exchangeable or
exercisable.
"PARENT" means Interstate Hotels & Resorts, Inc. (fka MeriStar Hotels &
Resorts, Inc.), a Delaware corporation, the surviving entity of the merger of
IHC into MHRI pursuant to the Merger.
"PARTICIPATING MEMBER STATE" means each state so described in any
legislative measures of the European Council for the introduction of, changeover
to or operation of a single or unified European currency (whether known as the
Euro or otherwise), being in part the implementation of the third stage of
Economic and Monetary Union as contemplated in the Treaty of Rome of 25 March
1957, as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty
(which was signed at Maastricht on 7 February 1992 and came into force on 1
November 1993).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
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"PERMITTED ASSET DISPOSITION" means an Asset Disposition which (a)
occurs at a time in which no Default has occurred and is continuing, and (b)
would not cause a Default to occur upon the consummation of such Asset
Disposition.
"PERMITTED ENCUMBRANCES" means the Liens permitted to exist pursuant to
Section 6.01.
"PERMITTED HAZARDOUS SUBSTANCES" means (a) Hazardous Substances,
petroleum and petroleum products which are (i) used in the ordinary course of
business and in typical quantities for a Hospitality Property and (ii)
generated, used and disposed of in accordance with all Legal Requirements and
good industry practice, and (b) non-friable asbestos to the extent (i) that no
applicable Legal Requirements require removal of such asbestos from the
Hospitality Property and (ii) such asbestos is encapsulated in accordance with
all applicable Legal Requirements and such reasonable operations and maintenance
program as may be required by the Administrative Agent.
"PERMITTED HOUSING AGREEMENTS" means leases of Units as part of the
Permitted Housing Business (a) by the Borrower and its Subsidiaries to third
parties and (b) by third parties to the Borrower and its Subsidiaries.
"PERMITTED HOUSING BUSINESS" means the business of leasing Units,
subleasing such Units to another Person and providing ancillary services to such
Person in connection with such Units; PROVIDED that without the written consent
of the Required Lenders the Borrower and the Borrower's Subsidiaries shall not
enter into new leases of Units or extend the term of existing leases of Units
where the leases cause the Borrower to violate any of the Permitted Housing
Business Leasing Guidelines.
"PERMITTED HOUSING BUSINESS LEASING GUIDELINES" means the requirement
that the Borrower and the Borrower's Subsidiaries not lease Units or renew the
lease of Units if, upon consummation of such lease or renewal, (a) the aggregate
number of Units which have a term which exceeds 1 year is equal to or greater
than 700, (b) the aggregate number of Units which have a term which exceeds 5
years is equal to or greater than 400, and (c) the Borrower's and the Borrower's
Subsidiaries' aggregate lease obligations for the leases of Units outside the
United States, Canada and Western Europe exceeds 15% of the Borrower's and the
Borrower's Subsidiaries' aggregate lease obligations for Units.
"PERMITTED HOUSING COMPANY" means a Person which is primarily in the
Permitted Housing Business and which is approved by the Required Lenders.
"PERMITTED NEW INVESTMENTS" means the following Investments made after
the Closing Date:
(a) (i) to acquire Permitted Property Agreements and (ii)
in Persons for which Permitted Property Agreements are substantially
all of such Person's Property, which Persons become Subsidiaries of the
Borrower;
(b) (i) in Persons for which Permitted Property
Agreements are substantially all of such Person's Property, which
Persons do not become Subsidiaries of the
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Borrower, (ii) to acquire Permitted Housing Agreements, and (iii) in
Persons which are primarily in the Permitted Housing Business; PROVIDED
that the aggregate amount of such Investments, excluding any such
Investments existing as of the Effective Date, shall not exceed
$15,000,000;
(c) in Owned Hospitality Property Investments; PROVIDED
that (i) the aggregate Investment Amount in Owned Hospitality Property
Investments, excluding the Investment Amount in Existing Owned
Hospitality Property Investments, shall not at any time exceed
$50,000,000, (ii) at least five (5) Business Days prior to acquiring an
Owned Hospitality Property the Borrower shall have delivered to the
Administrative Agent the Property Information for such Owned
Hospitality Property (except that for the Pittsburgh Property the
Borrower need only provide (A) current Property Information for those
items set forth in paragraphs (b), (c), (e) and (g) of the definition
of "Property Information" and (B) the most recent, but not current
Property Information for those items set forth in paragraphs (a), (d),
and (f) of the definition of "Property Information"), (iii) any Ground
Lease for an Owned Hospitality Property must be financable in the
reasonable opinion of the Administrative Agent and (iv) no more than
twenty percent (20%) of the hotel rooms in the applicable Hospitality
Property may be subject to a timeshare regime;
(d) Investments in Persons who provide services to, among
other Hospitality Properties, Hospitality Properties for which Borrower
or one of Borrower's Subsidiaries has or will enter into a Permitted
Property Agreement and/or Owned Hospitality Property Investments;
PROVIDED that the aggregate amount of all such Investments in Persons
which provide such services shall not exceed $10,000,000; and
(e) Investments which (i) are not otherwise covered by
one of the preceding clauses (a)-(d) and (ii) are in Persons whose
primary business is not the Hospitality Management Business; PROVIDED
that the aggregate amount of the Investments in such Persons shall not
exceed $5,000,000.
For purposes of this definition, if in connection with the acquisition of
Permitted Property Agreements an Owned Hospitality Property Investment is also
made or acquired and the Borrower's direct or indirect ownership in such Owned
Hospitality Property Investment exceeds twenty percent (20%) of the total
ownership in such Owned Hospitality Property Investment, then a reasonable
portion of the Investment Amount for such Investment shall be attributed to such
Owned Hospitality Property Investment and counted toward the $50,000,000
limitation set forth in the foregoing clause (c). If such ownership percentage
is equal to or less than twenty percent (20%), then such Investment shall be
deemed to have been made under the foregoing clause (a) or (b), as applicable.
Notwithstanding anything in this definition to the contrary, Permitted New
Investments shall not include any Capital Expenditures made pursuant to the
provisions of Section 6.06(e) or Restricted Payments. Notwithstanding anything
in this Agreement to the contrary, (a) the Borrower shall have until the date
thirty (30) days following the Closing Date to deliver the Environmental Report
for the Pittsburgh Property, and (b) if such Environmental Report discloses any
material Release, Environmental Claim, or violation of Environmental Law, then
the Borrower shall cause such Release, Environmental Claim, or
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violation of Environmental Law to be remediated in accordance with the
provisions of the Environmental Indemnity within thirty (30) days of delivery of
such Environmental Report.
"PERMITTED NON-RECOURSE UNCONSOLIDATED ENTITY INDEBTEDNESS" means
Indebtedness of an Unconsolidated Entity which (i) is incurred by an
Unconsolidated Entity to acquire a Hospitality Property or Hospitality
Management Business or refinance such acquisition Indebtedness, and (ii) is
non-recourse to the Parent, the Borrower and their respective Subsidiaries
except for the Ownership Interests in such Unconsolidated Entity.
"PERMITTED OTHER INDEBTEDNESS" means:
(a) MHC Indebtedness or Permitted Subordinate Refinancing
Indebtedness;
(b) Indebtedness which (i) is incurred by a Permitted
Other Subsidiary to (A) acquire an Owned Hospitality Property
Investment which qualifies as a Permitted New Investment, (B) refinance
Indebtedness (including Permitted Owned Hospitality Property
Obligations) incurred to acquire a Permitted New Investment, or (C)
finance the Pittsburgh Property, where the Indebtedness incurred does
not exceed 70% of the Investment Amount for such Permitted New
Investment or Pittsburgh Property, as applicable, and (ii) is
non-recourse to the Parent, the Borrower and their respective
subsidiaries except for the Property of or the Ownership Interests in
such Permitted Other Subsidiary and customary recourse "carve-outs";
(c) Senior Indebtedness (excluding the Obligations and
any other Indebtedness separately listed in this definition of
"Permitted Other Indebtedness") which (i) in the aggregate does not
exceed the sum of (A) the Net Cash Proceeds from any such Indebtedness
used to repay Obligations in accordance with the provisions of this
Agreement PLUS (B) $50,000,000, and (ii) is not secured by any of the
Parent's, the Borrower's or their respective Subsidiaries Investments
or other Property except as expressly permitted by the provisions of
Section 6.01(h);
(d) Pre-Existing Designated Senior Indebtedness, PROVIDED
that the Borrower will use a portion of the first Advance under this
Agreement to repay such Indebtedness;
(e) Indebtedness of Interstate/Dallas GP, LLC and
Interstate/Dallas Partnership, LP (the "Dallas Pledgors") to FelCor in
the amount of approximately $4,170,000, secured by the interests of the
Dallas Pledgors in FCH/IHC Hotels, LP.;
(f) Permitted Non-Recourse Unconsolidated Entity
Indebtedness;
(g) Approved Inter-Company Indebtedness; and
(h) Minority Ownership Interests reflected on the
Parent's financial statements as Indebtedness.
"PERMITTED OTHER SUBSIDIARY" means a Subsidiary of the Parent which (a)
is a single-purpose Person, (b) has never been a Guarantor, nor owned any
Collateral, and (c) only owns
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Permitted New Investments acquired in whole or in part with the proceeds of
Indebtedness excluding the proceeds of Advances and other Property ancillary to
such Permitted New Investments.
"PERMITTED OWNED HOSPITALITY PROPERTY OBLIGATIONS" means Obligations
incurred in making an Investment in an Owned Hospitality Property or the
Ownership Interests in a Subsidiary which owns an Owned Hospitality Property
which pursuant to the terms of this Agreement is required to be Collateral;
PROVIDED that with respect to the Pittsburgh Property the "Permitted Owned
Hospitality Property Obligations" shall be deemed to be the greater of (a)
$5,000,000 and (b) the Net Cash Proceeds from the incurrence of the Permitted
Other Indebtedness to be secured by the Pittsburgh Property.
"PERMITTED PROPERTY AGREEMENTS" means (a) Existing Management
Agreements and Existing Participating Leases and (b) Approved Management
Agreements or Approved Participating Leases related to Hospitality Properties
entered into after the Closing Date.
"PERMITTED SUBORDINATE REFINANCING INDEBTEDNESS" means Subordinate
Indebtedness of the Parent or any of its Subsidiaries which satisfies the
following requirements:
(a) The Net Cash Proceeds of such Subordinate
Indebtedness are used (i) first, to repay the MHC Indebtedness in its
entirety, (ii) second, to repay the Obligations in accordance with the
provisions of Section 2.07(c), and (iii) third, for the purposes set
forth in Section 4.08(a).
(b) Such Subordinate Indebtedness does not exceed
$150,000,000.
(c) The interest rate on such Subordinate Indebtedness
may not exceed the Eurodollar Rate plus eight and one half percent
(8.5%), if interest is calculated on a floating basis, or twelve
percent (12%) if interest is calculated on a fixed basis.
(d) At least ten (10) days prior to the issuance of such
Subordinate Indebtedness, Borrower shall deliver to the Lenders a pro
forma Compliance Certificate and projections through the Maturity Date
(assuming the exercise of the extension option for the Revolving
Advances) demonstrating that, upon giving effect to the issuance of
such Subordinate Indebtedness on a pro forma basis, the Borrower will
be in compliance with all financial covenants contained in this
Agreement for the Rolling Period ending in the quarter in which such
Subordinate Indebtedness is incurred and all subsequent Rolling
Periods.
(e) Such Subordinated Indebtedness shall be subordinated
to the Obligations pursuant to provisions at least as favorable to the
Lenders as the provisions subordinating the MHC Indebtedness to the
Obligations.
(f) The financial covenants for such Subordinated
Indebtedness shall be no more restrictive to the Borrower than the
existing financial covenants for the MHC Indebtedness, and shall in no
case be more restrictive to the Borrower than those contained in this
Agreement.
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"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or a government or any
political subdivision or agency thereof or any trustee, receiver, custodian or
similar official.
"PITTSBURGH PROPERTY" means the Pittsburgh, Pennsylvania Airport
Residence Inn (Park Lane).
"PLAN" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Parent, the Borrower or any member of the
Controlled Group and covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code.
"POUND NOTE" means a promissory note of the Borrower payable to the
order of the Alternate Currency Swing Line Lender, in substantially the form of
the attached Exhibit A-4, evidencing indebtedness of the Borrower to the
Alternate Currency Swing Line Lender resulting from Pound Rate Advances.
"POUND RATE" means, for the Interest Period for each Pound Rate Advance
comprising part of the same Borrowing, an interest rate per annum (rounded
upward to the nearest whole multiple of 1/16 of 1% per annum) equal to the rate
per annum at which deposits in Pounds are offered to prime banks in the London
interbank market at 11:00 a.m. (London time) two Business Days before the first
day of such Interest Period as shown on the display designated "British Banker's
Association Interest Settlement Rates" on Telerate at Page 3750 or Page 3740, or
such other page or pages as may replace such pages on Telerate for purposes of
displaying such rate, in an amount substantially equal to Societe Generale's
Pound Rate Advance comprising part of such Borrowing and for a period equal to
such Interest Period; PROVIDED, however, that if such rate is not available on
Telerate then such offered rate shall be otherwise independently determined by
Administrative Agent from an alternate, substantially similar source available
to Administrative Agent or shall be calculated by Administrative Agent by a
substantially similar methodology as that theretofore used to determine such
offered rate in Telerate.
"POUND RATE ADVANCE" shall have the meaning provided in Section
2.01(d).
"POUNDS" shall mean freely and transferable lawful money of the United
Kingdom.
"PRE-EXISTING DESIGNATED SENIOR INDEBTEDNESS" means that certain Senior
Indebtedness of MHRI, IHC and their respective Subsidiaries existing immediately
prior to the Merger set forth on Schedule 1.01(h).
"PRESCRIBED FORMS" means such duly executed form(s) or statement(s),
and in such number of copies, which may, from time to time, be prescribed by law
and which, pursuant to applicable provisions of (a) an income tax treaty between
the United States and the country of residence of the Lender providing the
form(s) or statement(s), (b) the Code, or (c) any applicable rule or regulation
under the Code, permit the Borrower to make payments hereunder for the account
of such Lender free of (or, upon written request of the Borrower specifying the
applicable form, at a reduced rate of) deduction or withholding of income or
similar taxes
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(except for any deduction or withholding of income or similar taxes as a result
of any change in or in the interpretation of any such treaty, the Code or any
such rule or regulation).
"PRIME RATE" means a fluctuating interest rate per annum as shall be in
effect from time to time equal to the rate of interest publicly announced by the
Administrative Agent as its prime commercial lending rate (which may not be the
lowest rate offered to its customers), whether or not the Borrower has notice
thereof.
"PROPERTY" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person, including without
limitation, the Permitted Property Agreements, the Permitted Housing Agreements,
and all Owned Hospitality Properties.
"PROPERTY INFORMATION" for any Owned Hospitality Property means the
following information and documentation for such Owned Hospitality Property:
(a) an Engineering Report;
(b) an Environmental Report;
(c) a commitment for a Title Policy, together with a
legible copy of all documents referred to in such commitment;
(d) a current Appraisal satisfactory to the
Administrative Agent;
(e) a copy of the agreements pursuant to which the Owned
Hospitality Property is being acquired;
(f) a ALTA/ASCM survey reasonably satisfactory to the
Administrative Agent; and
(g) all financial statements reasonably required by the
Administrative Agent.
"PRO RATA SHARE" means, at any time with respect to any Lender, the
ratio (expressed as a percentage) of (a) such Lender's Commitments, plus, to the
extent any Class of Commitment has been terminated, such Lender's outstanding
Advances for such Class (and participation interest in the Letter of Credit
Exposure if the Revolving Commitments have been terminated) to (b) all Lenders'
aggregate Commitments, plus, to the extent any Class of Commitment has been
terminated, all Lenders' aggregate outstanding Advances for such Class (and
participation interest in the Letter of Credit Exposure if the Revolving
Commitments have been terminated).
"REGISTER" has the meaning set forth in paragraph (c) of Section 10.06.
"REGISTRATION STATEMENTS" means MHRI's S-4 filed with the Securities
and Exchange Commission on June 4, 2002, as amended by S-4a filed on June 25,
2002.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
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"REINSURANCE CONTRACT" means each outstanding reinsurance,
coinsurance and other similar contract of each Insurance Company.
"RELATED FUND" means, with respect to any Approved Fund, any other
Approved Fund that invests in commercial loans which is advised or managed by
the same investment advisor as such Approved Fund.
"RELEASE" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"REPAYMENT EVENT" means the incurrence of any Indebtedness on or after
the Closing Date by the Parent, the Borrower or one of their respective
Subsidiaries (excluding (a) the Obligations, (b) Indebtedness incurred under
clause (b) of the definition of "Permitted Other Indebtedness" which is not
incurred to refinance Permitted Owned Hospitality Property Obligations, and (c)
the portion of the Net Cash Proceeds from the incurrence of any Permitted
Subordinate Refinancing Indebtedness used to repay MHC Indebtedness and any
refinancing of any Permitted Subordinate Refinancing Indebtedness), a
Capitalization Event, or an Asset Disposition or the payment to the Borrower or
one of the Borrower's Subsidiaries of a termination payment under a Permitted
Property Agreement or a Permitted Housing Agreement after the Closing Date,
except for Asset Dispositions or any such termination payments for which the
aggregate Net Cash Proceeds do not exceed $1,000,000 in any calendar year.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA.
"REQUIRED LENDERS" means Non-Defaulting Lenders the sum of whose
outstanding Term Advances (and, prior to the termination thereof, Term
Commitments) and Revolving Commitments (or after the termination thereof,
outstanding Dollar Revolving Advances and participations in Letter of Credit
Exposure) represent at least 51% of the sum of all outstanding Term Advances
(and, if prior to the termination thereof, Term Commitments) of Non-Defaulting
Lenders and the sum of all Revolving Commitments of Non-Defaulting Lenders (or
after the termination of the Revolving Commitments, the sum of the then total
outstanding Dollar Revolving Advances of Non-Defaulting Lenders, and the
aggregate participations of all Non-Defaulting Lenders of Letter of Credit
Exposure at such time); provided that with respect to a vote which only involves
a certain Class or Classes, only the Commitments and Advances for the applicable
Class or Classes shall be used in the calculation of Required Lenders.
"RESPONSE" shall have the meaning set forth in CERCLA or under any
other Environmental Law.
"RESPONSIBLE OFFICER" means the Chief Executive Officer, President,
Executive Vice President, Chief Financial Officer or Treasurer of any Person,
or, with respect to a partnership, the general partner of such Person.
"RESTRICTED PAYMENT" means (a) any direct or indirect payment,
prepayment, redemption, purchase, or deposit of funds or Property for the
payment (including any sinking fund or defeasance), prepayment, redemption or
purchase of any Indebtedness not permitted by this Agreement or any Subordinate
Indebtedness, and (b) the making by any Person of any dividends
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or other distributions (in cash, property, or otherwise) on, or payment for the
purchase, redemption or other acquisition of, any Ownership Interests of such
Person, other than dividends or distributions payable in such Person's Ownership
Interests.
"REVOLVING ADVANCE" means any Alternate Currency Swing Line Advance or
any Dollar Revolving Advance.
"REVOLVING COMMITMENT" means, for each Lender, the amount set opposite
such Lender's name on Schedule 1.01(a) as its Revolving Commitment or, if such
Lender has entered into any Assignment and Acceptance after the Effective Date,
set forth for such Lender as its Revolving Commitment in the Register maintained
by the Administrative Agent pursuant to Section 10.06(c).
"REVOLVING EXPOSURE" at any time shall mean the sum of (i) the
aggregate principal amount of all Revolving Advances and (ii) the aggregate
amount of all Letter of Credit Exposure at such time.
"REVOLVING MATURITY DATE" means July 28, 2005, as such date may be
extended pursuant to the provisions of Section 2.05.
"REVOLVING REQUIRED LENDERS" means Non-Defaulting Lenders the sum of
whose Revolving Commitments (or after the termination thereof, outstanding
Dollar Revolving Advances and participations in Letter of Credit Exposure)
represent at least 51% of the sum of all Revolving Commitments of Non-Defaulting
Lenders (or after the termination of the Revolving Commitments, the sum of the
then total outstanding Dollar Revolving Advances of Non-Defaulting Lenders, and
the aggregate participations of all Non-Defaulting Lenders of Letter of Credit
Exposure at such time).
"REVOLVING SHARE" means, at any time with respect to any Lender with a
Revolving Commitment or outstanding Revolving Advance, the ratio (expressed as a
percentage) of such Lender's Revolving Commitment at such time to the aggregate
Revolving Commitments at such time, or, if the Revolving Commitments have been
terminated, the ratio (expressed as a percentage) of such Lender's Revolving
Advances at such time to the aggregate Revolving Advances at such time.
"ROLLING PERIOD" means, as of any date, the four Fiscal Quarters ending
immediately preceding such date.
"S&P" means Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc., or any successor thereof.
"SAP" means, with respect to each Insurance Company, the statutory
accounting practices prescribed or permitted by the insurance commissioner (or
other similar Governmental Authority) in the jurisdiction of such Insurance
Company for the preparation of Insurance Annual Statements and other financial
reports by insurance companies of the same type in effect from time to time,
applied in a manner consistent with those used in preparing the SAP Financial
Statements.
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"SAP FINANCIAL STATEMENTS" means the audited annual and unaudited
quarterly convention statements filed with the domiciliary state insurance
departments of each Insurance Company.
"SECURITY AGREEMENT" means the Security Agreement in favor of the
Administrative Agent from the Borrower, the Parent and the other Guarantors,
granting a Lien in all existing and future Collateral of the Borrower and its
Subsidiaries in substantially the form of the attached Exhibit I.
"SECURITY DOCUMENTS" means the Security Agreement, all Owned
Hospitality Property Security Documents, all Financing Statements and each other
document, instrument or agreement executed in connection therewith or otherwise
executed in order to secure all or a portion of the Obligations; and any
"SECURITY DOCUMENT" means any one of the foregoing.
"SENIOR INDEBTEDNESS" means Total Indebtedness minus Subordinate
Indebtedness.
"SENIOR LEVERAGE RATIO" means the ratio on any date of (a) the Parent's
Senior Indebtedness on such date to (b) the Parent's Adjusted EBITDA for the
Rolling Period immediately preceding such date.
"SENIOR INTEREST COVERAGE RATIO" means, as of the end of any Rolling
Period, a ratio of (a) the Parent's Adjusted EBITDA to (b) the Parent's Interest
Expense pertaining to Senior Indebtedness, for such Rolling Period.
"▇▇ ▇▇▇▇▇ " means ▇▇ ▇▇▇▇▇ Securities Corporation.
"SHARING EVENT" shall mean (a) the occurrence of any Event of Default
with respect to the Borrower pursuant to Section 8.01(f), (b) the declaration of
the Lenders' obligation to make Advances terminated, or the acceleration of the
maturity of any Advances, in each case pursuant Section 8.02 or 8.03, or (c) the
failure of the Borrower to pay any principal of, or interest on, Advances or any
Letter of Credit Obligations either (i) on the Maturity Date or (ii) on any
other date on which such failure has existed for ninety (90) days or longer.
"SPECIFIED ACQUIRER" means the Person listed on Schedule 1.01(i).
"SPECIFIED CHANGE OF CONTROL EVENT" means that Specified Acquirer or a
Subsidiary or parent of Specified Acquirer either (a) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of securities possessing more than
fifty percent (50%) of the total combined voting power of MHC's outstanding
securities or (b) otherwise merges with MHC.
"SSB" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
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"STATUS" means the existence of Level I Status, Level II Status, Level
III Status, or Level IV Status, as the case may be. As used in this definition:
"LEVEL I STATUS" exists at any date if, at such date, the
Leverage Ratio at the end of the preceding Rolling Period is less than 3.0;
"LEVEL II STATUS" exists at any date if, at such date, the
Leverage Ratio at the end of the preceding Rolling Period is equal to or greater
than 3.0 but less than 4.0;
"LEVEL III STATUS" exists at any date if, at such date, the
Leverage Ratio at the end of the preceding Rolling Period is equal to or greater
than 4.0 but less than 5.25;
"LEVEL IV STATUS" exists at any date if, at such date, the
Leverage Ratio at the end of the preceding Rolling Period is equal to or greater
than 5.25.
Status shall be determined and changed as of the Status Reset Date
following any Fiscal Quarter; PROVIDED THAT if the Borrower fails to timely
provide (a) the financial statements needed to recalculate the Leverage Ratio as
required by the provisions of Section 5.05(a) prior to the 50th day following
the end of any Fiscal Quarter (except for the Fiscal Quarter which ends on the
date the Fiscal Year ends), (b) the draft Compliance Certificate related to the
end of the Fiscal Year as required by the provisions of Section 5.05(b) prior to
the 50th day following the end of any Fiscal Year or (c) the financial
statements needed to recalculate the Leverage Ratio as required by the
provisions of Section 5.05(b) prior to the 95th day following the end of any
Fiscal Year, then Status shall automatically be reset at the Status one level
higher than the Status existing immediately prior to such Status reset until
such time as the Borrower provides such financial statements or draft Compliance
Certificate, as applicable; PROVIDED FURTHER that at the Closing Date the Status
under the Credit Agreement will be reset to Level III Status and such Status
shall not be reduced until the next Status Reset Date following the Closing
Date.
"STATUS RESET DATE" means the date following the end of any Fiscal
Quarter which is the earlier of (a) the 50th day following the end of such
Fiscal Quarter and (b) the date which is 5 days following the delivery of the
reports and other documents required by (i) the provisions of Section 5.05(a)
for such Fiscal Quarter (except for the Fiscal Quarter which ends on the date
the Fiscal Year ends) or (ii) the provisions of Section 5.05(b) for the Fiscal
Quarter which ends on the date the Fiscal Year ends; PROVIDED that the documents
contemplated by the preceding clause (ii) shall never be deemed delivered prior
to the 40th day following the end of the Fiscal Year.
"SUBORDINATE INDEBTEDNESS" means Indebtedness of the Borrower, the
Parent and their respective Subsidiaries which (a) shall not mature, become
payable or require the payment of any principal amount thereof (or any amount in
lieu thereof) or be mandatorily redeemable, pursuant to a sinking fund or
otherwise redeemable at the option of the holder thereof, in any case in whole
or in part, before the date that is 91 days after the Maturity Date and (b)
shall be junior and subordinate to the Obligations and subject to an
intercreditor agreement or subordination provisions which is acceptable to the
Administrative Agent.
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"SUBSIDIARY" means, with respect to any Person, at any date, any other
Person in whom such Person holds an Investment and whose financial results would
be consolidated under GAAP with the financial results of such Person if such
statements were prepared as of such date.
"TARGET" means Trans-European Automated Real-time Gross settlement
Express Transfer system.
"TARGET DAY" means a day on which payments in Euros are settled in the
TARGET system.
"TELERATE" means the Telerate System.
"TERM ADVANCE" means any advance by a Lender to the Borrower pursuant
to such Lender's Term Commitment or a continuation of an existing Term Advance,
and refers to an Adjusted Base Rate Advance or a Eurodollar Rate Advance.
"TERM COMMITMENT" means, for each Lender, the amount set opposite such
Lender's name on Schedule 1.01(a) as its Term Commitment or, if such Lender has
entered into any Assignment and Acceptance after the Effective Date, set forth
for such Lender as its Term Commitment in the Register maintained by the
Administrative Agent pursuant to Section 9.06(b); PROVIDED, however, that after
the date the initial Term Advance of a Lender is made, the Term Commitment for
such Lender shall be zero.
"TERM MATURITY DATE" means July 28, 2005.
"TERM NOTE" means a promissory note of the Borrower payable to the
order of any Lender in substantially the form of the attached Exhibit A-2,
evidencing indebtedness of the Borrower to such Lender resulting from any Term
Advance from such Lender, and "TERM NOTES" means all such Term Notes.
"TERM SHARE" means, at any time with respect to any Lender with an
outstanding Term Advance, the ratio (expressed as a percentage) of such Lender's
outstanding Term Advances at such time to the aggregate outstanding Term
Advances at such time.
"TERMINATION EVENT" means (a) the occurrence of a Reportable Event with
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of the Controlled Group from a Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c)
the giving of a notice of intent to terminate a Plan under Section 4041(c) of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or
(e) any other event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.
"TITLE POLICY" means a Mortgagee Policy of Title Insurance which (a) is
in the form of American Land Title Association Standard Loan Policy - 1970
(without modification, revision or amendment) (or such other form as approved by
the Administrative Agent) with endorsements
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reasonably requested by the Administrative Agent, (b) is issued by an
underwriter reasonably acceptable to the Administrative Agent, (c) insures that
the grantor of the Lien insured by such policy owns the Owned Hospitality
Property subject to such Lien in fee simple or pursuant to a leasehold estate
and that the Mortgage covering such Owned Hospitality Property is a valid lien
on such Owned Hospitality Property in favor of the Administrative Agent for the
benefit of the Lenders (subject only to Permitted Encumbrances), (d) does not
contain any exceptions for rights of parties in possession, or unpaid delinquent
installments of taxes, special assessments or subsequent assessments due to
changes in ownership or usage, or any other exceptions to coverage other than
Permitted Encumbrances.
"TOTAL INDEBTEDNESS" of any Person means the sum of the following
(without duplication): (a) all Indebtedness of such Person and its Subsidiaries
on a Consolidated basis, PLUS (b) such Person's and such Person's Subsidiaries'
Unconsolidated Entity Percentage of Indebtedness of such Person's and such
Person's Subsidiaries' Unconsolidated Entities, PLUS (c) to the extent not
already included in the calculation of either of the preceding clauses (a) or
(b), the aggregate amount of letters of credit for which such Person or any of
its Subsidiaries would have a direct or contingent obligation to reimburse the
issuers of such letters of credit upon a drawing under such letters of credit,
MINUS (d) to the extent included in the calculation of either of the preceding
clauses (a), (b), or (c), the amount of any minority interests.
"TYPE" has the meaning set forth in Section 1.04.
"UNCONSOLIDATED ENTITY" means, with respect to any Person, at any date,
any other Person in whom such Person holds an Investment and whose financial
results would not be consolidated under GAAP with the financial results of such
Person if such statements were prepared as of such date.
"UNCONSOLIDATED ENTITY PERCENTAGE" means, for any Person, with respect
to a Person's Unconsolidated Entity, the percentage of such Unconsolidated
Entity's Indebtedness for which recourse may be made against such Person.
"UNITS" means apartment or condominium units.
"WYNDHAM" means Wyndham International, Inc.
Section 1.02 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03 ACCOUNTING TERMS; CHANGES IN GAAP.
(a) All accounting terms not specifically defined in this
Agreement shall be construed in accordance with GAAP applied on a
consistent basis.
(b) Unless otherwise indicated, all financial statements
of the Borrower and the Parent, all calculations for compliance with
covenants in this Agreement, and all calculations of any amounts to be
calculated under the definitions in Section 1.01 shall be
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based upon the Consolidated accounts of the Borrower, the Parent and
their respective Subsidiaries (as applicable) in accordance with GAAP.
(c) If any changes in accounting principles after March
31, 2002 required by GAAP or the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants or similar
agencies results in a change in the method of calculation of, or
affects the results of such calculation of, any of the financial
covenants, standards or terms found in this Agreement, then the parties
shall enter into and diligently pursue negotiations in order to amend
such financial covenants, standards or terms so as to equitably reflect
such change, with the desired result that the criteria for evaluating
the financial condition of Borrower and its Subsidiaries (determined on
a Consolidated basis) shall be the same after such change as if such
change had not been made.
Section 1.04 CLASSES AND TYPES OF ADVANCES. Advances are
distinguished by "Class" and "Type". The "CLASS" of an Advance refers to the
determination whether such Advance is a Term Advance or a Revolving Advance,
each of which constitutes a Class. The "TYPE" of an Advance refers to the
determination whether such Advance is a Eurodollar Rate Advance, a Eurocurrency
Rate Advance, a Pound Rate Advance, or an Adjusted Base Rate Advance, each of
which constitutes a Type.
Section 1.05 MISCELLANEOUS. Article, Section, Schedule and Exhibit
references are to Articles and Sections, of and Schedules and Exhibits, to this
Agreement, unless otherwise specified.
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01 THE ADVANCES.
(a) TERM ADVANCES. Subject to the terms and conditions
set forth in this Agreement, each Lender severally agrees to make a
Term Advance to the Borrower on the Closing Date, in an aggregate
amount equal to such Lender's Term Commitment. No amount of any Term
Advance that has been repaid may be reborrowed.
(b) DOLLAR REVOLVING ADVANCES. Subject to and upon the
terms and conditions set forth herein, each Lender severally agrees at
any time and from time to time on any Business Day up to fifteen (15)
days prior to the Revolving Maturity Date, as the same may be extended,
to make Dollar Revolving Advances; PROVIDED that Dollar Revolving
Advances shall not be made (or be required to be made) by any Lender on
any date if, after giving effect thereto, (i) such Lender's Revolving
Share of the Revolving Exposure would exceed such Lender's Revolving
Commitment at such time, or (ii) the Revolving Exposure would exceed
the aggregate Revolving Commitments of the Lenders at such time. Within
the limits of each Lender's Revolving Commitment, the Borrower may from
time to time prepay Dollar Revolving Advances pursuant to the
provisions of Section 2.07 and reborrow Dollar Revolving Advances under
this Section 2.01(b).
(c) REVOLVING COMMITMENTS INCREASE.
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(i) The Borrower shall be entitled to request
that the aggregate Revolving Commitments be increased to an
amount not exceeding Sixty Million Dollars ($60,000,000);
PROVIDED that (A) no Default then exists, (B) the Borrower
gives the Lenders thirty (30) days prior written notice of
such election, (C) no Lender shall be obligated to increase
such Lender's Revolving Commitment without such Lender's
written consent which may be withheld in such Lender's sole
discretion, (D) the Borrower, not the Lenders or the
Administrative Agent, is responsible for arranging for Persons
to provide the additional Revolving Commitment amounts, (E)
any Person providing any additional Commitment amount must
qualify as an Eligible Assignee and be reasonably acceptable
to the Borrower, the Administrative Agent, the Issuing Bank,
and the Alternate Currency Swing Line Lender if such Person is
not already a Lender, (F) such increase in the Revolving
Commitments shall not increase the Alternate Currency Swing
Line Commitment, and (G) such increase in the Revolving
Commitments shall not cause the sum of (1) the Revolving
Commitments and (2) the Term Advances (and, prior to the
termination thereof, Term Commitments) to exceed $125,000,000.
In connection with any such increase in the Revolving
Commitments the parties shall execute any documents reasonably
requested in connection with or to evidence such increase,
including without limitation an amendment to this Agreement.
(ii) On the date (the "FUNDING DATE") designated
by the Administrative Agent, the Lenders whose Revolving
Commitments have increased in connection with such future
increase in the Total Commitments, as applicable, shall fund
to the Administrative Agent such amounts as may be required to
cause each of them to hold its Revolving Share of Dollar
Revolving Advances based upon the Commitments as of such
Funding Date, and the Administrative Agent shall distribute
the funds so received to the other Lenders in such amounts as
may be required to cause each of them to hold its Revolving
Share of Dollar Revolving Advances as of such Funding Date.
The Lenders receiving such amounts to be applied to Eurodollar
Rate Advances may demand payment of the breakage costs under
Section 2.08 as though Borrower had elected to prepay such
Eurodollar Rate Advances on such date and the Borrower shall
pay the amount so demanded as provided in Section 2.08. The
first payment of interest and letter of credit fees received
by the Administrative Agent after such Funding Date shall be
paid to the Lenders in amounts adjusted to reflect the
adjustments of their respective Revolving Shares of the Dollar
Revolving Advances as of the Funding Date. On the Funding Date
each Lender shall be deemed to have either sold or purchased,
as applicable, participations in (A) the Letter of Credit
Exposure sold to the Lenders pursuant to Section 2.13(b) so
that upon consummation of all such sales and purchases each
Lender holds participations in the Letter of Credit Exposure
equal to such Lender's Revolving Share of the total Letter of
Credit Exposure as of such Funding Date and (B) the Alternate
Currency Swing Line Advances sold to the Lenders pursuant to
Section 2.01(d)(iii) so that upon consummation of all such
sales and purchases each Lender holds participations in the
Alternate
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Currency Swing Line Advances equal to such Lender's Revolving
Share of the total Alternate Currency Swing Line Advances as
of such Funding Date.
(d) ALTERNATE CURRENCY SWING LINE ADVANCES.
(i) Subject to the terms and conditions set
forth in this Agreement, the Alternate Currency Swing Line
Lender agrees at any time and from time to time on any
Business Day up to twenty five (25) days prior to the
Revolving Maturity Date, as the same may be extended, to make
revolving advances to the Borrower in Euros (each a
"EUROCURRENCY RATE ADVANCE") and/or Pounds (each a "POUND RATE
ADVANCE"); PROVIDED that Alternate Currency Swing Line
Advances shall not be made (or be required to be made) by the
Alternate Currency Swing Line Lender on any date if, after
giving effect thereto, (A) any Lender's Revolving Share of the
Revolving Exposure would exceed such Lender's Revolving
Commitment at such time, (B) the Revolving Exposure would
exceed the aggregate Revolving Commitments of the Lenders at
such time, or (iii) the Dollar Equivalent of the Alternate
Currency Swing Line Advances exceeds the Alternate Currency
Swing Line Commitment. Within the limits of the Alternate
Currency Swing Line Commitment, the Borrower may from time to
time prepay Alternate Currency Swing Line Advances pursuant to
the provisions of Section 2.07 and reborrow Alternate Currency
Swing Line Advances under this Section 2.01(d).
(ii) The Borrower and the Lenders agree that upon
written demand by the Alternate Currency Swing Line Lender to
the Administrative Agent (which may be given at any time by
the Alternate Currency Swing Line Lender without the consent
of the Borrower and shall be deemed given if any Sharing Event
occurs), the Administrative Agent shall give each Lender a
notice of a Mandatory Borrowing. Upon receipt of such notice,
each Lender having a Revolving Commitment shall pay to the
Administrative Agent its Revolving Share of the Dollar
Equivalent of such Alternate Currency Swing Line Advance, and
such payment shall be an Adjusted Base Rate Advance made
pursuant to such Lender's Revolving Commitment, whether made
before or after termination of the Revolving Commitments,
acceleration of the Revolving Advances, or otherwise, and
whether or not the conditions precedent in Section 3.02 have
been satisfied at the time of such Mandatory Borrowing. The
Administrative Agent shall give each Lender notice of such
Mandatory Borrowing by 11:00 a.m. (Dallas, Texas time) on the
date the Mandatory Borrowing is to be made. Each Lender having
a Revolving Commitment shall, regardless of whether the
conditions in Section 3.02 have been met at the time of such
Mandatory Borrowing and regardless of whether there exists any
Default or Event of Default, make its Dollar Revolving Advance
available to the Administrative Agent for the account of the
Alternate Currency Swing Line Lender in immediately available
funds by 3:00 p.m. (Dallas, Texas time) on the date requested,
and the Borrower hereby irrevocably instructs the Alternate
Currency Swing Line Lender to apply the proceeds of such
Mandatory Borrowing to the payment of the outstanding
Alternate Currency Swing Line Advances. Until the Mandatory
Borrowing is actually applied to the
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repayment of Alternate Currency Swing Line Advances, interest
shall continue to accrue thereon.
(iii) In the event that any Mandatory Borrowing
cannot be made upon the day required in the preceding clause
(ii), upon written demand by the Alternate Currency Swing Line
Lender to each Lender, with a copy of such demand to the
Administrative Agent, each other Lender shall purchase from
the Alternate Currency Swing Line Lender, a participating
interest in each Alternate Currency Swing Line Advance in an
amount equal to such other Lender's Revolving Share of each
Alternate Currency Swing Line Advance as of the date of such
purchase. Each Lender agrees to purchase its Revolving Share
of each Alternate Currency Swing Line Advance on (A) the
Business Day on which demand therefore is made by the
Alternate Currency Swing Line Lender, provided notice of such
demand is given not later than 11:00 A.M. (Dallas, Texas time)
on such Business Day or (B) the first Business Day next
succeeding such demand if notice of such demand is given after
such time, by making available to the Administrative Agent for
the account of the Alternate Currency Swing Line Lender in
immediately available funds by 3:00 p.m. (Dallas, Texas time)
on such date, an amount equal to such Lender's Revolving Share
of the outstanding principal amount of and interest on the
Alternate Currency Swing Line Advances to be purchased by such
other Lender. The Borrower hereby agrees to each such
purchase. Promptly after receipt of such funds from the
purchasing Lenders, the Administrative Agent shall transfer
such funds to the Alternate Currency Swing Line Lender. Upon
any sale by the Alternate Currency Swing Line Lender to any
other Lender of a participating interest in any Alternate
Currency Swing Line Advance pursuant to this Section 2.01(d),
the Alternate Currency Swing Line Lender represents and
warrants to such other Lender that the Alternate Currency
Swing Line Lender is the legal and beneficial owner of such
interest being sold by it, free and clear of any liens, but
makes no other representation or warranty. Except for such
representation and warranty, the Alternate Currency Swing Line
Lender shall have no responsibility or liability to any other
Lender with respect to the Alternate Currency Swing Line
Advances, any participation sold, this Agreement or any party
hereto, and no Lender shall have any recourse against the
Alternate Currency Swing Line Lender with respect to the
Alternate Currency Swing Line Advances, any participation
sold, this Agreement or any party hereto, except that the
Alternate Currency Swing Line Lender shall pay to each Lender
that purchases a participation in a Alternate Currency Swing
Line Advance pursuant to this Section 2.01(d)(iii) such
Lender's ratable share of the payments, if any, actually
received by the Alternate Currency Swing Line Lender on such
Alternate Currency Swing Line Advance. Any sale of a
participating interest pursuant to this Section 2.01(d)(iii)
may, at the Alternate Currency Swing Line Lender's option, be
evidenced by a participation agreement or other document in
substantially the same form as any participation agreement or
other document customarily used by the Alternate Currency
Swing Line Lender to evidence its sale of a participating
interest in a loan. If and to the extent that any Lender shall
not have so made the amount required by this Section
2.01(d)(iii) available to the
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Administrative Agent, such Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount
was originally due until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for the
account of the Alternate Currency Swing Line Lender. If in
connection with a Lender's purchase of a participating
interest pursuant to this Section 2.01(d)(iii) a Lender cannot
pay such Lender's purchase price in the applicable Alternate
Currency because such Lender is legally prohibited from doing
so or because such Lender does not make advances in such
Alternate Currency, then such Lender may purchase such
Lender's participating interest by paying in Dollars the
Dollar Equivalent of such Lender's participating interest.
Upon any subsequent repayment of an Alternate Currency Swing
Line Advance for which any Lender bought a participation in
Dollars, the portion of the Alternate Currency Swing Line
Advance repaid in which such Lender participated shall be
converted by the Alternate Currency Swing Line Lender into
Dollars and such Dollars paid to such Lender. To the extent
that the amount of Dollars so repaid to any such Lender is
less than the applicable amount of Dollars originally paid by
such Lender for such Lender's participation in the Alternate
Currency Swing Line Advance repaid, then within one (1)
Business Day of the payment of such Dollars to such Lender the
Borrower shall pay such difference to such Lender in Dollars.
(iv) All Alternate Currency Swing Line Advances
shall mature, and the principal amount thereof and the unpaid
accrued interest thereon shall be due and payable on the last
day of the Interest Period therefore, on any date on which
such Alternate Currency Swing Line Advances are prepaid,
whether due to acceleration or otherwise, and on the date
twenty (20) days prior to the Revolving Maturity Date.
Section 2.02 METHOD OF BORROWING.
(a) NOTICE.
(i) Each Borrowing shall be made pursuant to a
Notice of Borrowing, given not later than 11:00 a.m. (Dallas,
Texas time) (A) on the third Business Day before the date of
the proposed Borrowing, in the case of a Borrowing consisting
of Eurodollar Rate AdvanceS, (B) on the fourth Business Day
before the date of the proposed Borrowing, in the case of a
Borrowing consisting of Alternate Currency Swingline Advances,
or (C) on the Business Day before the date of the proposed
Borrowing, in the case of a Borrowing consisting of Adjusted
Base Rate Advances, by the Borrower to the Administrative
Agent, which shall give each Lender (and, if applicable, the
Alternate Currency Swing Line Lender) prompt notice on the day
of receipt of such timely Notice of Borrowing of such proposed
Borrowing by telecopier. Each Notice of Borrowing shall be in
writing or by telecopier specifying the requested (A) date of
such Borrowing, (B) Type and Class of Advance comprising such
Borrowing, (C) aggregate amount of such Borrowing, and (D) if
such Borrowing is to be comprised of Eurodollar Rate
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Advances or Alternate Currency Swingline Advances, the
Interest Period for each such Advance. In the case of a
proposed Borrowing comprised of Eurodollar Rate AdvanceS, the
Administrative Agent shall promptly notify each Lender of the
applicable interest rate under Section 2.06(b). With respect
to all Advances excluding Alternate Currency Swing Line
Advances, each Lender shall, before 11:00 a.m. (Dallas, Texas
time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 10.02, or such
other location as the Administrative Agent may specify by
notice to the Lenders, in same day funds, such Lender's
Revolving Share or Term Share, as applicable, of such
Borrowing. With respect to Alternate Currency Swing Line
Advances, the Alternate Currency Swing Line Lender shall,
before 11:00 a.m. (Dallas, Texas time) on the date of such
Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address
referred to in Section 10.02, or such other location as the
Administrative Agent may specify by notice to the Alternate
Currency Swing Line Lender, in same day funds, the Alternate
Currency Swing Line Advances. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower at its account
with the Administrative Agent.
(ii) Notwithstanding the foregoing, the Borrower
may for Adjusted Base Rate Advances requested on the Closing
Date only request that such Advances be made on the same day
as the Notice of Borrowing, PROVIDED that such Notice of
Borrowing shall be given not later than 8:00 a.m. (Dallas,
Texas time) on the Closing Date. If such Notice of Borrowing
on the Closing Date is delivered to the Administrative Agent
by such time, (A) the Administrative Agent will promptly
notify each Lender who is obligated to fund an Advance under
such Notice of Borrowing of such Notice of Borrowing not later
than 11:00 a.m. (Dallas, Texas time) on the Closing Date and
(B) each Lender shall, before 2:00 p.m. (Dallas, Texas time)
on the Closing Date, make available for the account of its
Applicable Lending Office to the Administrative Agent at its
address referred to in Section 10.02, or such other location
as the Administrative Agent may specify by notice to the
Lenders, in same day funds, such Lender's Revolving Share or
Term Share, as applicable, of such Borrowing.
(b) CONVERSIONS AND CONTINUATIONS. In order to elect to
Convert or continue Advances comprising part of the same Borrowing
under this Section, the Borrower shall deliver an irrevocable Notice of
Conversion or Continuation to the Administrative Agent at the
Administrative Agent's office no later than 11:00 a.m. (Dallas, Texas
time) (i) on the date which is at least three (3) Business Days in
advance of the proposed Conversion or continuation date in the case of
a Conversion to or a continuation of a Borrowing comprised of
Eurodollar Rate AdvanceS, (ii) on the date which is at least four (4)
Business Days in advance of the proposed Conversion or continuation
date in the case of a Conversion to or a continuation of a Borrowing
comprised of Alternate Currency Swing Line Advances and (iii) on the
Business Day prior to the proposed conversion date in the
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case of a Conversion to a Borrowing comprised of Adjusted Base Rate
Advances. Each such Notice of Conversion or Continuation shall be in
writing or by telecopier, specifying (i) the requested Conversion or
continuation date (which shall be a Business Day), (ii) the Borrowing
amount, Type and Class of the Advances to be Converted or continued,
(iii) whether a Conversion or continuation is requested, and if a
Conversion, into what Type of Advances, and (iv) in the case of a
Conversion to, or a continuation of, Eurodollar Rate Advances or
Alternate Currency Swing Line Advances, the requested Interest Period.
Promptly after receipt of a Notice of Conversion or Continuation under
this paragraph, the Administrative Agent shall provide each Lender with
a copy thereof and, in the case of a Conversion to or a continuation of
Eurodollar Rate Advances, notify each Lender of the applicable interest
rate under Section 2.06(b). If the Borrower shall fail to specify an
Interest Period for a Eurodollar Rate Advance or Alternate Currency
Swing Line Advance including the continuation of a Eurodollar Rate
Advance or Alternate Currency Swing Line Advances, the Borrower shall
be deemed to have selected an Adjusted Base Rate Advance.
(c) CERTAIN LIMITATIONS. Notwithstanding anything in
paragraphs (a) and (b) above:
(i) in the case of Eurodollar Rate Advances and
Alternate Currency Swing Line Advances each Borrowing shall be
in an aggregate amount of not less than $1,000,000 or greater
multiples of $100,000;
(ii) in the case of Adjusted Base Rate Advances
each Borrowing shall be in an aggregate amount of not less
than $500,000 or greater multiples of $100,000;
(iii) except for Borrowings for the acquisition of
Permitted New Investments by the Borrower or its Subsidiary,
the Borrower may not request Borrowings on more than three (3)
days in any calendar month;
(iv) at no time shall there be more than five (5)
Interest Periods applicable to outstanding Eurodollar Rate
AdvanceS or two (2) Interest Periods applicable to outstanding
Alternate Currency Swing Line Advances;
(v) the Borrower may not select Fixed Rate
Advances for any Borrowing to be made, Converted or continued
if a Default has occurred and is continuing;
(vi) if any Lender shall, at any time prior to
the making of any requested Borrowing comprised of Fixed Rate
Advances, notify the Administrative Agent that the
introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central
bank or other governmental authority asserts that it is
unlawful, for such Lender or its Applicable Lending Office to
perform its obligations under this Agreement to make Fixed
Rate Advances or to fund or maintain Fixed Rate Advances, then
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such Lender's Revolving Share or Term Share, as applicable, of
such Borrowing shall be made as an Adjusted Base Rate Advance,
PROVIDED that such Adjusted Base Rate Advance shall be
considered part of the same Borrowing and interest on such
Adjusted Base Rate Advance shall be due and payable at the
same time that interest on the Fixed Rate Advances comprising
the remainder of such Borrowing shall be due and payable; and
such Lender agrees to use commercially reasonable efforts
(consistent with its internal policies and legal and
regulatory restrictions) to designate a different Applicable
Lending Office if the making of such designation would avoid
the effect of this paragraph and would not, in the reasonable
judgment of such Lender, be otherwise materially
disadvantageous to such Lender;
(vii) if the Administrative Agent is unable to
determine the Applicable Fixed Rate for Fixed Rate Advances
comprising any requested Borrowing, the right of the Borrower
to select Fixed Rate Advances for such Borrowing or for any
subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer
exist, and each Advance comprising such Borrowing shall be an
Adjusted Base Rate Advance;
(viii) if the Required Lenders shall, at least one
Business Day before the date of any requested Borrowing,
notify the Administrative Agent that the Applicable Fixed Rate
for Fixed Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Lenders of making or
funding their respective Fixed Rate Advances, as the case may
be, for such Borrowing, the right of the Borrower to select
Fixed Rate Advances for such Borrowing or for any subsequent
Borrowing shall be suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and
each Advance comprising such Borrowing shall be an Adjusted
Base Rate Advance; and
(ix) if the Borrower shall fail to select the
duration or continuation of any Interest Period for any Fixed
Rate Advances in accordance with the provisions contained in
the definition of "Interest Period" in Section 1.01 and
paragraph (a) or (b) above, the Administrative Agent will
forthwith so notify the Borrower and the Lenders and such
Advances will be made available to the Borrower on the date of
such Borrowing as Adjusted Base Rate Advances or, if an
existing Advance, Converted into Adjusted Base Rate Advances.
(d) NOTICES IRREVOCABLE. Each Notice of Borrowing and
Notice of Conversion or Continuation shall be irrevocable and binding
on the Borrower. In the case of any Borrowing which the related Notice
of Borrowing specifies is to be comprised of Fixed Rate Advances, the
Borrower shall indemnify each Lender against any loss, out-of-pocket
cost or expense incurred by such Lender as a result of any condition
precedent for Borrowing set forth in Article III not being satisfied
for any reason, including, without limitation, any loss, cost or
expense actually incurred by reason of the liquidation or
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reemployment of deposits or other funds acquired by such Lender to fund
the Advance to be made by such Lender as part of such Borrowing when
such Advance, as a result of such failure, is not made on such date.
(e) ADMINISTRATIVE AGENT RELIANCE. Unless the
Administrative Agent shall have received notice from a Lender before
the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's Revolving Share or Term Share,
as applicable, of the Borrowing, the Administrative Agent may assume
that such Lender has made its Revolving Share or Term Share, as
applicable, of such Borrowing available to the Administrative Agent on
the date of such Borrowing in accordance with paragraph (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made
its Revolving Share or Term Share, as applicable, of such Borrowing
available to the Administrative Agent, such Lender and the Borrower
severally agree to immediately repay to the Administrative Agent on
demand such corresponding amount, together with interest on such
amount, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable
on each such day to Advances comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate for each such day. If such
Lender shall repay to the Administrative Agent such corresponding
amount and interest as provided above, such corresponding amount so
repaid shall constitute such Lender's Advance as part of such Borrowing
for purposes of this Agreement even though not made on the same day as
the other Advances comprising such Borrowing.
(f) LENDER OBLIGATIONS SEVERAL. The failure of any Lender
to make the Advance to be made by it as part of any Borrowing shall not
relieve any other Lender of its obligation, if any, to make its Advance
on the date of such Borrowing. No Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such
other Lender on the date of any Borrowing.
(g) NOTES. The indebtedness of the Borrower to each
Lender resulting from Dollar Revolving Advances owing to such Lender
shall be evidenced by a Dollar Revolving Note of the Borrower payable
to the order of such Lender in substantially the form of Exhibit A-1.
The indebtedness of the Borrower to each Lender resulting from Term
Advances owing to such Lender shall be evidenced by a Term Note of the
Borrower payable to the order of such Lender in substantially the form
of Exhibit A-2. The indebtedness of the Borrower to the Alternate
Currency Swing Line Lender resulting from Eurocurrency Rate Advances
shall be evidenced by a Euro Note of the Borrower payable to the order
of the Alternate Currency Swing Line Lender in substantially the form
of Exhibit A-3. The indebtedness of the Borrower to the Alternate
Currency Swing Line Lender resulting from Pound Rate Advances shall be
evidenced by a Pound Note of the Borrower payable to the order of the
Alternate Currency Swing Line Lender in substantially the form of
Exhibit A-4.
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Section 2.03 FEES.
(a) COMMITMENT FEES. For the period from the Closing Date
until the Revolving Maturity Date the Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on
the average daily amount by which such Lender's Revolving Commitment
exceeds the sum of such Lender's Revolving Share of the Revolving
Exposure at a rate per annum equal to the Applicable Margin (computed
on the actual number of days elapsed, including the first day and
excluding the last, based upon a 360-day year). Such fees shall be due
and payable quarterly in arrears (i) on the date which is 30 days
following the end of the last Business Day of each March, June,
September and December and (ii) on the Revolving Maturity Date.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay to
the Administrative Agent for the benefit of the Lenders, fees in
respect of all Letters of Credit outstanding at a rate per annum equal
to the Applicable Margin (computed on the actual number of days
elapsed, including the first day and excluding the last, based upon a
360-day year) on the average daily amount of the aggregate undrawn
maximum amount of each Letter of Credit outstanding, payable in arrears
(i) on the date which is 30 days following the last Business Day of
each March, June, September and December and (ii) on the Revolving
Maturity Date. In addition, the Borrower agrees to pay to the Issuing
Bank for its own account a fee on the average daily amount of the
aggregate undrawn maximum face amount of each Letter of Credit issued
by such Issuing Bank at a rate per annum equal to one-quarter of one
percent (.25%), such fees due and payable quarterly in arrears (i) on
the date which is 30 days following the last Business Day of each
March, June, September and December and (ii) on the Maturity Date.
(c) ADMINISTRATIVE AGENT'S FEES. The Borrower agrees to
pay to the Administrative Agent for its benefit the fees set forth in
the Administrative Agent Fee Letter as and when the same are due and
payable pursuant to the terms of the Administrative Agent Fee Letter.
Section 2.04 REDUCTION OF THE REVOLVING COMMITMENTS.
(a) VOLUNTARY. The Borrower may, upon at least three (3)
Business Days' prior notice to the Administrative Agent, permanently
terminate in whole or permanently reduce ratably in part the Revolving
Commitments of the Lenders; PROVIDED, HOWEVER, that (i) each partial
reduction shall be in the aggregate amount of not less than $5,000,000
or an integral multiple of $1,000,000 in excess thereof, (ii) no such
reduction shall result in an overdraft status as provided in Section
2.07(c)(ii), and (iii) no such reduction shall result in the total
aggregate Revolving Commitments of the Lenders being less than
$25,000,000.
(b) MANDATORY. At the time of any mandatory repayments of
Revolving Advances pursuant to the provisions of Section 2.07(c)
(except for any mandatory repayments in connection with the repayment
of any Permitted Owned Hospitality Property Obligations within one
hundred eighty (180) days of the incurrence thereof
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excluding the repayment of the Permitted Owned Hospitality Property
Obligations related to the Pittsburgh Property which shall in all cases
require the Revolving Commitment reduction contemplated by this Section
2.04(b)), the Revolving Commitments of the Lenders shall be permanently
reduced ratably by an amount equal to (i) the amount of any Dollar
Revolving Advances so repaid and (ii) the Dollar Equivalent of any
Alternate Currency Swing Line Advances; PROVIDED that the aggregate
Revolving Commitments of the Lenders shall never be reduced pursuant to
the provisions of this Section 2.04(b) to an amount of less than
$25,000,000.
Section 2.05 REPAYMENT OF ADVANCES ON MATURITY DATE; EXTENSION.
(a) The Borrower shall repay the outstanding principal
amount of each Advance on the Maturity Date.
(b) The Borrower shall have one option, exercisable as
hereinafter provided, to extend the original Revolving Maturity Date
for an additional one-year period to the first anniversary of the
original Revolving Maturity Date upon the completion by the Borrower of
the following conditions (unless waived or modified in writing by the
Revolving Required Lenders) prior to or as of the original Revolving
Maturity Date to the satisfaction of the Administrative Agent:
(i) No Event of Default or Default under any of
the covenants of Article VII shall have occurred which has not
been cured or waived in writing by the Administrative Agent as
set forth in Section 9.01.
(ii) The Administrative Agent shall have received
no later than ninety (90) days prior to the original Revolving
Maturity Date written notice from the Borrower that it intends
to exercise its option to extend the Maturity Date.
(iii) The Borrower shall have paid to the
Administrative Agent for the account of each Lender on or
prior to the Revolving Maturity Date an extension fee equal to
the product of (A) one-quarter of one percent (1/4%) times (B)
the aggregate amount of such Lender's Revolving Commitment as
of the original Revolving Maturity Date.
(iv) The Borrower shall have repaid all Term
Advances and, if the Borrower is obligated to repay any
Revolving Advances at or prior to the original Revolving
Maturity Date, the Borrower shall have repaid such Revolving
Advances.
(v) The representations and warranties of the
Borrower, the Parent and the Guarantors in the Credit
Documents remain true and correct in all material respects as
of the Revolving Maturity Date, as changed based upon events
or activities permitted by the Credit Documents.
Under no circumstances may the Revolving Maturity Date be extended beyond the
fourth anniversary of the Closing Date.
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(c) The Borrower shall not have any option to extend the
Term Maturity Date.
Section 2.06 INTEREST, LATE PAYMENT FEE. The Borrower shall pay
interest on the unpaid principal amount of each Advance made by each Lender from
the date of such Advance until such principal amount shall be paid in full, at
the following rates per annum:
(a) ADJUSTED BASE RATE ADVANCES. If such Advance is an
Adjusted Base Rate Advance, a rate per annum (computed on the actual
number of days elapsed, including the first day and excluding the last,
based on a 365 day year) equal at all times to the lesser of (i) the
Adjusted Base Rate in effect from time to time PLUS the Applicable
Margin and (ii) the Maximum Rate, payable in arrears on the first
Business Day of each calendar month and on the date such Adjusted Base
Rate Advance shall be paid in full, PROVIDED that during the
continuance of an Event of Default, Adjusted Base Rate Advances shall
bear interest at a rate per annum equal at all times to the lesser of
(i) the rate required to be paid on such Advance had such Event of
Default not occurred PLUS three percent (3%) and (ii) the Maximum Rate.
(b) FIXED RATE ADVANCES. If such Advance is a Fixed Rate
Advance, a rate per annum (computed on the actual number of days
elapsed, including the first day and excluding the last, based on a 360
day year) equal at all times during the Interest Period for such
Advance to the lesser of (i) the Applicable Fixed Rate for such Advance
for such Interest Period PLUS the Applicable Margin and (ii) the
Maximum Rate, payable in arrears on the last day of such Interest
Period, and on the date such Fixed Rate Advance shall be paid in full,
and, with respect to Fixed Rate Advances having an Interest Period in
excess of 30 days, the first Business Day of each calendar month during
such Interest Period excluding the month in which such Fixed Rate
Advance shall be paid in full; PROVIDED that during the continuance of
an Event of Default, Fixed Rate Advances shall bear interest at a rate
per annum equal at all times to the lesser of (i) the rate required to
be paid on such Advance had such Event of Default not occurred PLUS
three percent (3%) and (ii) the Maximum Rate. Until the Lenders
purchase participations in the Alternate Currency Swing Line Advances
as provided in Section 2.01(a), all interest paid on Alternate Currency
Swing Line Advances shall be solely for the benefit of the Alternate
Currency Swing Line Lender.
(c) USURY RECAPTURE. In the event the RATE of interest
chargeable under this Agreement or the Notes at any time is greater
than the Maximum Rate, the unpaid principal amount of the Notes shall
bear interest at the Maximum Rate until the total amount of interest
paid or accrued on the Notes equals the amount of interest which would
have been paid or accrued on the Notes if the stated rates of interest
set forth in this Agreement had at all times been in effect. In the
event, upon payment in full of the Notes, the total amount of interest
paid or accrued under the terms of this Agreement and the Notes is less
than the total amount of interest which would have been paid or accrued
if the rates of interest set forth in this Agreement had, at all times,
been in effect, then the Borrower shall, to the extent permitted by
applicable law, pay the Administrative Agent for the account of the
Lenders an amount equal to the difference between (i) the lesser of (A)
the amount of interest which would have been charged on the Notes if
the Maximum
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Rate had, at all times, been in effect and (B) the amount of interest
which would have accrued on the Notes if the rates of interest set
forth in this Agreement had at all times been in effect and (ii) the
amount of interest actually paid or accrued under this Agreement on the
Notes. In the event the Lenders ever receive, collect or apply as
interest any sum in excess of the Maximum Rate, such excess amount
shall, to the extent permitted by law, be applied to the reduction of
the principal balance of the Notes, and if no such principal is then
outstanding, such excess or part thereof remaining shall be paid to the
Borrower.
(d) OTHER AMOUNTS OVERDUE. If any amount payable under
this Agreement other than the Advances is not paid when due and
payable, including without limitation, accrued interest and fees, then
such overdue amount shall accrue interest hereon due and payable on
demand at a rate per annum equal to the Adjusted Base Rate PLUS three
percent (3%), from the date such amount became due until the date such
amount is paid in full.
(e) LATE PAYMENT FEE. Subject to the provisions of
Section 10.11, if any interest payable under this Agreement is not paid
when due and payable (after taking into account any applicable grace
period), then the Borrower will pay to the Lenders contemporaneously
with the payment of such past due interest a late payment fee equal to
an amount equal to the product of (i) such overdue interest TIMES (ii)
four percent (4%).
Section 2.07 PREPAYMENTS.
(a) RIGHT TO PREPAY. The Borrower shall have no right to
prepay any principal amount of any Advance except as provided in this
Section 2.07.
(b) OPTIONAL PREPAYMENTS. The Borrower may elect to
prepay any of the Advances, after giving by 11:00 a.m. (Dallas, Texas
time) (i) in the case of Eurodollar Rate Advances, at least three (3)
Business Days', (ii) in the case of Alternate Currency Swing Line
Advances, at least four (4) Business Days', or (iii) in case of
Adjusted Base Rate Advances, at least one (1) Business Day's prior
written notice to the Administrative Agent, stating the proposed date
and aggregate principal amount of such prepayment, and if applicable,
the relevant Interest Period for the Advances to be prepaid. If any
such notice is given, the Borrower shall prepay Advances comprising
part of the same Borrowing in whole or ratably in part in an aggregate
principal amount equal to the amount specified in such notice, and
shall also pay accrued interest to the date of such prepayment on the
principal amount prepaid and amounts, if any, required to be paid
pursuant to Section 2.08 as a result of such prepayment being made on
such date; PROVIDED, HOWEVER, that each partial prepayment shall be in
an aggregate principal amount not less than $500,000 and in integral
multiples of $100,000.
(c) MANDATORY PREPAYMENTS.
(i) REPAYMENT EVENT. Upon the occurrence of any
Repayment Event, the Borrower shall prepay Advances on the
Business Day the Net Cash Proceeds
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from such Repayment Event are received by the Borrower or the
Parent, as applicable, in an amount equal to the lesser of (A)
the amount of the outstanding Advances on such Business Day
and (B) 100% of the Net Cash Proceeds of such Repayment Event.
Such prepayments shall be applied (A) first, to interest as
provided in Section 2.07(c)(iv), (B) second, to Term Advances
in the reverse order of maturity, and (C) third, to Revolving
Advances; PROVIDED that the first $57,000,000 of Net Cash
Proceeds raised from a Permitted Subordinate Refinancing
Indebtedness may be used by the Borrower to refinance in its
entirety the MHC Indebtedness; PROVIDED FURTHER that to the
extent any Permitted Owned Hospitality Property Obligations
are repaid within one hundred eighty (180) days of the
incurrence thereof, such repayments shall be applied (A)
first, to interest as provided in Section 2.07(c)(iv), (B)
second, to Revolving Advances, and (C) third, to Term Advances
in the reverse order of maturity.
(ii) TERM ADVANCES. Commencing on January 1, 2003
and on each April 1, July 1, October 1 and January 1
thereafter, the Borrower shall repay the Term Advances by an
amount equal to $406,250.
(iii) OVERDRAFT. On any date on which the
outstanding principal amount of the Revolving Advances plus
the Letter of Credit Exposure exceeds the aggregate Revolving
Commitments, the Borrower agrees to make a prepayment of the
Revolving Advances in the amount of such excess, and if all
the Revolving Advances have been then repaid, then to deposit
with the Administrative Agent into the Cash Collateral Account
an amount equal to the lesser of (A) the Letter of Credit
Exposure or (B) the amount of such excess less the amount of
Revolving Advances then repaid.
(iv) ACCRUED INTEREST. Each prepayment pursuant
to this Section 2.07(c) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment
and amounts, if any, required to be paid pursuant to Section
2.08 as a result of such prepayment being made on such date.
(v) AVOIDANCE OF BREAKAGE COSTS. In the event
that the amount of any mandatory prepayment of Advances under
this Section 2.07(c) exceeds the aggregate principal amount of
Advances which consist of Adjusted Base Rate Advances (the
amount of such excess being the "EXCESS AMOUNT"), the Borrower
shall have the right, in lieu of making such prepayment in
full, to prepay such outstanding Advances which are Adjusted
Base Rate Advances and to deposit an amount equal to the
Excess Amount with the Administrative Agent in the Cash
Collateral Account maintained by and in the sole dominion and
control of the Administrative Agent for the ratable benefit of
the Lenders. Any amount so deposited shall be held by the
Administrative Agent as collateral for the Obligations, earn
interest on behalf of the Borrower and be applied to the
prepayment of Advances which are Fixed Rate Advances at the
end of the current Interest Period(s) applicable thereto. On
any day on which amounts collected in the Cash Collateral
Account remain on deposit in or to the credit of the Cash
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Collateral Account after giving effect to the payment made on
such day pursuant to this Section 2.07(c), and the Borrower
shall have delivered to the Administrative Agent a written
request or a telephonic request (which shall be promptly
confirmed in writing) prior to 11:00 am (Dallas, Texas time)
that such remaining collected amounts be invested in cash
equivalents specified in such request, the Administrative
Agent shall invest such funds, to the extent the
Administrative Agent is reasonably able to do so, in such cash
equivalents as are acceptable to, and with no risk to, the
Administrative Agent on an overnight basis or with maturities
such that amounts will be available to pay the Obligations
secured thereby as they become due, whether at maturity, by
acceleration or otherwise; provided, HOWEVER, that any loss
resulting from such investments shall be charged to and be
immediately payable by the Borrower on demand by the
Administrative Agent.
(vi) REPAYMENT OF REVOLVING ADVANCES. Any
mandatory repayments of Revolving Advances pursuant to this
Section 2.07(c) shall be applied (A) if no Default or Event of
Default exists, then to Revolving Advances comprising the same
Borrowing or Borrowings, at the Borrower's option, and (B) if
a Default or Event of Default exists, then (1) first, to all
Alternate Currency Swing Line Advances pro rata based upon the
amount of outstanding Alternate Currency Swing Line Advances
and (2) second, to all Dollar Revolving Advances pro rata
based upon the amount of outstanding Dollar Revolving
Advances.
(d) RATABLE PAYMENTS. Each payment of any Advance
pursuant to this Section 2.07 or any other provision of this Agreement
shall be made in a manner such that all Advances comprising part of the
same Borrowing are paid in whole or ratably in part.
(e) EFFECT OF NOTICE. All notices given pursuant to this
Section 2.07 shall be irrevocable and binding upon the Borrower.
(f) PAYMENTS WITH RESPECT TO LIENS ON AN OWNED
HOSPITALITY PROPERTY. Notwithstanding anything in this Agreement or any
other Credit Document to the contrary, except in connection with the
release of Liens on an Owned Hospitality Property contemplated by the
provisions of Section 5.09, each payment of any Advance pursuant to
this Section 2.07 or any other provision of this Agreement shall be
made in a manner such that all Advances secured by a Lien on an Owned
Hospitality Property shall be deemed the last Advances repaid.
Section 2.08 BREAKAGE COSTS. If (a) any payment of principal of
any Fixed Rate Advance is made other than on the last day of the Interest Period
for such Advance as a result of any payment pursuant to Section 2.07 or the
acceleration of the maturity of the Notes pursuant to Article VIII or otherwise;
(b) any Conversion of a Fixed Rate Advance is made other than on the last day of
the Interest Period for such Advance pursuant to Section 2.12 or otherwise; or
(c) the Borrower fails to make a principal or interest payment with respect to
any Fixed Rate Advance on the date such payment is due and payable, the Borrower
shall, within 10 days of any written demand sent by any Lender to the Borrower
through the Administrative Agent, pay to the
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Administrative Agent for the account of such Lender any amounts (without
duplication of any other amounts payable in respect of breakage costs) required
to compensate such Lender for any additional losses, out-of-pocket costs or
expenses which it may reasonably incur as a result of such payment or
nonpayment, including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Lender to fund or maintain such Advance.
Section 2.09 INCREASED COSTS.
(a) FIXED RATE ADVANCES. If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation (except with respect to Taxes or Other Taxes) following the
date of this Agreement or (ii) the compliance with any guideline or
request from any central bank or other Governmental Authority (whether
or not having the force of law) not complied with prior to the date of
this Agreement, there shall be any increase in the cost to any Lender
of agreeing to make or making, funding or maintaining Fixed Rate
Advances (including, without limitation, (A) additional interest to
compensate such Lender for reserve costs actually incurred by such
Lender associated with Eurocurrency Liabilities, such additional
interest to be calculated by subtracting (1) the Applicable Fixed Rate
for the relevant Advance from (2) the rate obtained by dividing such
applicable interest rate for such Advance (excluding the Applicable
Margin) by a percentage equal to one minus the applicable Fixed Rate
Reserve Percentage of such Lender for such Interest Period and (B) any
Applicable Mandatory Costs), then the Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the
Administrative Agent), immediately pay to the Administrative Agent for
the account of such Lender additional amounts (without duplication of
any other amounts payable in respect of increased costs) sufficient to
compensate such Lender for such increased cost; PROVIDED, HOWEVER,
that, before making any such demand, each Lender agrees to use
commercially reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost and
would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender (except that no Lender shall be required
to redesignate its Applicable Lending Office to avoid the incurrence of
increased costs associated with additional interest required to be paid
by the Borrowers to any Lender in connection with reserve costs
attributable to Eurocurrency Liabilities). A certificate as to the
amount of such increased cost and detailing the calculation of such
cost submitted to the Borrower and the Administrative Agent by such
Lender at the time such Lender demands payment under this Section shall
be conclusive and binding for all purposes, absent manifest error.
(b) CAPITAL ADEQUACY. If any Lender or the Issuing Bank
determines in good faith that compliance with any law or regulation or
any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) implemented or
effective after the date of this Agreement affects or would affect the
amount of capital required or expected to be maintained by such Lender
or the Issuing Bank and that the amount of such capital is increased by
or based upon the existence of such Lender's commitment to lend or the
Issuing Bank's commitment to issue Letters of
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Credit or any Lender's commitment to risk participate in Letters of
Credit and other commitments of this type, then, upon 30 days prior
written notice by such Lender or the Issuing Bank (with a copy of any
such demand to the Administrative Agent), the Borrower shall
immediately pay to the Administrative Agent for the account of such
Lender or to the Issuing Bank, as the case may be, from time to time as
specified by such Lender or the Issuing Bank, additional amounts
(without duplication of any other amounts payable in respect of
increased costs) sufficient to compensate such Lender or the Issuing
Bank, in light of such circumstances, (i) with respect to such Lender,
to the extent that such Lender reasonably determines such increase in
capital to be allocable to the existence of such Lender's commitment to
lend under this Agreement or its commitment to risk participate in
Letters of Credit and (ii) with respect to the Issuing Bank, to the
extent that such Issuing Bank reasonably determines such increase in
capital to be allocable to the issuance or maintenance of the Letters
of Credit. A certificate as to such amounts and detailing the
calculation of such amounts submitted to the Borrower and the
Administrative Agent by such Lender or the Issuing Bank shall be
conclusive and binding for all purposes, absent manifest error.
(c) LETTERS OF CREDIT. If any change in any law or
regulation (except with respect to Taxes or Other Taxes) or in the
interpretation thereof by any court or administrative or Governmental
Authority charged with the administration thereof following the date of
this Agreement shall either (i) impose, modify, or deem applicable any
reserve, special deposit, or similar requirement against letters of
credit issued by, or assets held by, or deposits in or for the account
of, Issuing Bank or any Lender or (ii) impose on Issuing Bank or any
Lender any other condition regarding the provisions of this Agreement
relating to the Letters of Credit or any Letter of Credit Obligations,
and the result of any event referred to in the preceding clause (i) or
(ii) shall be to increase the cost to Issuing Bank of issuing or
maintaining any Letter of Credit, or increase the cost to such Lender
of its risk participation in any Letter of Credit (which increase in
cost shall be determined by Issuing Bank's or such Lender's reasonable
allocation of the aggregate of such cost increases resulting from such
event), then, upon demand by Issuing Bank or such Lender (with a copy
sent to the Administrative Agent), as the case may be, the Borrower
shall pay to the Administrative Agent for the account of Issuing Bank
or Lender, as the case may be, from time to time as specified by
Issuing Bank or such Lender, additional amounts which shall be
sufficient to compensate such Issuing Bank or such Lender for such
increased cost. Issuing Bank and each Lender agrees to use commercially
reasonable efforts (consistent with internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending
Office for the booking of its Letters of Credit or risk participations
if the making of such designation would avoid the effect of this
paragraph and would not, in the reasonable judgment of Issuing Bank or
such Lender, be otherwise disadvantageous to Issuing Bank or such
Lender, as the case may be. A certificate as to such increased cost
incurred by Issuing Bank or such Lender, as the case may be, as a
result of any event mentioned in clause (i) or (ii) above, and
detailing the calculation of such increased costs submitted by Issuing
Bank or such Lender to the Borrower and the Administrative Agent, shall
be conclusive and binding for all purposes, absent manifest error.
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(d) SPECIAL PROVISIONS REGARDING APPLICABLE MANDATORY
COSTS. Each Lender shall supply any information required by the
Administrative Agent for the purpose of calculating its Applicable
Mandatory Cost. In particular, but without limitation, each Lender
shall supply the following information in writing on or prior to the
date on which it becomes a Lender: (a) its jurisdiction of
incorporation and the jurisdiction of its Applicable Lending Offices;
and (b) any other information that the Administrative Agent may
reasonably require for such purpose. Each Lender shall promptly notify
the Administrative Agent in writing of any change to the information
provided by it pursuant to this paragraph. The percentages or rates of
charge of each Lender for the purpose of determining "A" in the
definition of "Applicable Mandatory Cost" shall be determined by the
Administrative Agent based upon the information supplied to it pursuant
hereto and on the assumption that, unless a Lender notifies the
Administrative Agent to the contrary, each Lender's obligations in
relation to the Fees Regulations are the same as those of a typical
bank from its jurisdiction of incorporation with an Applicable Lending
Office in the same jurisdiction as its Applicable Lending Office. The
Administrative Agent shall have no liability to any person if such
determination results in an Applicable Mandatory Cost which over or
under compensates any Lender and shall be entitled to assume that the
information provided by any Lender pursuant hereto is true and correct
in all respects. The Administrative Agent shall distribute the
additional amounts received as a result of the Applicable Mandatory
Cost to the Lenders on the basis of the Applicable Mandatory Cost for
each Lender based on the information provided by each Lender pursuant
hereto. Any determination by the Administrative Agent pursuant to this
Agreement in relation to a formula, an Applicable Mandatory Cost or any
amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding. The Administrative Agent may from time to time,
after consultation with the Borrower and the Lenders, determine and
notify to all parties hereto any amendments which are required to be
made to this Agreement in order to comply with any change in law,
regulation or any requirements from time to time imposed by the Bank of
England, the Financial Services Authority or the European Central Bank
(or, in any case, any other Governmental Authority which replaces all
or any of its functions) and any such determination shall, in the
absence of manifest error, be conclusive and binding on all parties.
Section 2.10 PAYMENTS AND COMPUTATIONS.
(a) PAYMENT PROCEDURES. Except if otherwise set forth
herein, the Borrower shall make each payment under this Agreement and
under the Notes not later than 11:00 a.m. (Dallas, Texas time) on the
day when due in the Applicable Currency to the Administrative Agent at
the location referred to in the Notes (or such other location as the
Administrative Agent shall designate in writing to the Borrower) in
same day funds without set-off, deduction or counterclaim. Except for
(i) amounts payable solely to the Administrative Agent, the Issuing
Banks, the Alternate Currency Swing Line Lender, or a specific Lender
pursuant to Section 2.03(b), 2.03(c), 2.06(b), 2.08, 2.09, 2.11, 2.12,
or 2.13(c) but after taking into account payments effected pursuant to
Section 10.04, and (ii) payments with respect to the Alternate Currency
Swing Line Advances, which will be solely for the benefit of the
Alternate Currency Swing Line Lender unless Lenders have purchased
participations in the Alternate Currency Swing Line Advances as
provided in
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Section 2.01(d)(iii), the Administrative Agent will on the same day
cause to be distributed like funds relating to the payment of
principal, interest or fees ratably to the Lenders in accordance with,
in the case of a payment made in respect of a Borrowing, each Lender's
Revolving Share or Term Share, as applicable, for the account of their
respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender or Issuing Bank for
the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement.
(b) COMPUTATIONS. All computations of interest based on
the Adjusted Base Rate shall be made by the Administrative Agent on the
basis of a year of 365 days and all computations of fees and interest
based on the Applicable Fixed Rate and the Federal Funds Rate shall be
made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day, but
excluding the last day) occurring in the period for which such interest
or fees are payable. Each determination by the Administrative Agent of
an interest rate shall be conclusive and binding for all purposes,
absent manifest error.
(c) NON-BUSINESS DAY PAYMENTS. Whenever any payment shall
be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of
interest or fees, as the case may be; provided, however, that if such
extension would cause payment of interest on or principal of Eurodollar
Rate Advances to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.
(d) ADMINISTRATIVE AGENT RELIANCE. Unless the
Administrative Agent shall have received written notice from the
Borrower prior to the date on which any payment is due to the Lenders
that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment
in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to
each Lender on such date an amount equal to the amount then due such
Lender. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each Lender shall repay to
the Administrative Agent forthwith on demand such amount distributed to
such Lender, together with interest, for each day from the date such
amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the Federal Funds Rate for
each such day.
(e) APPLICATION OF PAYMENTS. Unless otherwise specified
in Section 2.07 hereof, whenever any payment received by the
Administrative Agent under this Agreement is insufficient to pay in
full all amounts then due and payable under this Agreement and the
Notes, such payment shall be distributed and applied by the
Administrative Agent and the Lenders in the following order: FIRST, to
the payment of fees and expenses due and payable to the Administrative
Agent under and in connection with this Agreement or any other Credit
Document; SECOND, to the payment of all
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expenses due and payable under Section 2.11(c), ratably among the
Lenders in accordance with the aggregate amount of such payments owed
to each such Lender; THIRD, to the payment of fees due and payable to
the Issuing Bank pursuant to Section 2.03(b); FOURTH, to the payment of
all other fees due and payable under Section 2.03; FIFTH, to the
payment of the interest accrued on and the principal amount of the Euro
Note and the Pound Note pro rata based on the respective Alternate
Currency Swing Line Advances outstanding; and SIXTH, to the payment of
the interest accrued on and the principal amount of all of the other
Notes and the interest accrued on and all Letter of Credit Obligations,
regardless of whether any such amount is then due and payable, ratably
among the Lenders in accordance with the aggregate accrued interest
plus the aggregate principal amount owed to such Lender.
(f) REGISTER. The Administrative Agent shall record in
the Register the Commitment and the Advances from time to time of each
Lender and each repayment or prepayment in respect to the principal
amount of such Advances of each Lender. Any such recordation shall be
conclusive and binding on the Borrower and each Lender, absent manifest
error; PROVIDED HOWEVER, that failure to make any such recordation, or
any error in such recordation, shall not affect the Borrower's
obligations hereunder in respect of such Advances.
Section 2.11 TAXES.
(a) NO DEDUCTION FOR CERTAIN TAXES. Any and all payments
by the Borrower shall be made, in accordance with Section 2.10, free
and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, (i) in the case of each
Lender, Issuing Bank, and the Administrative Agent, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender, Issuing Bank, or the
Administrative Agent (as the case may be) is organized or carries on
business (other than as a result of a connection arising primarily from
the Lender, Issuing Bank, or the Administrative Agent (as the case may
be) having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement) or any political
subdivision or taxing authority of such jurisdictions (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "TAXES") and, (ii) in
the case of each Lender and Issuing Bank, Taxes by the jurisdiction of
such Lender's Applicable Lending Office or any political subdivision of
such jurisdiction. If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable to any Lender, Issuing
Bank, or the Administrative Agent, (i) the sum payable shall be
increased as may be necessary so that, after making all required
deductions (including deductions applicable to additional sums payable
under this Section 2.11), such Lender, Issuing Bank, or the
Administrative Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made;
PROVIDED, however, that if the Borrower's obligation to deduct or
withhold Taxes is caused solely by such Lender's, Issuing Bank's, or
the Administrative Agent's failure to provide the forms described in
paragraph (e) of this Section 2.11 and such Lender, Issuing Bank, or
the Administrative Agent could have provided such forms
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or if such Lender, Issuing Bank, or the Administrative Agent (as the
case may be) fails to comply with Section 2.11(g), no such increase
shall be required; (ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable
Legal Requirements.
(b) OTHER TAXES. In addition, the Borrower agrees to pay
any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment
made or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement, the Notes, or the other Credit
Documents (hereinafter referred to as "OTHER TAXES").
(c) INDEMNIFICATION. The Borrower will indemnify each
Lender, Issuing Bank, and the Administrative Agent for the full amount
of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any Governmental Authority on amounts payable
under this Section 2.11) paid by such Lender, Issuing Bank, or the
Administrative Agent (as the case may be) and any liability (including
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted. Each payment required to be made by the Borrower in respect
of this indemnification shall be made to the Administrative Agent for
the benefit of any party claiming such indemnification within 30 days
from the date the Borrower receives written demand detailing the
calculation of such amounts therefor from the Administrative Agent on
behalf of itself as Administrative Agent, Issuing Bank, or any such
Lender. If any Lender, the Administrative Agent, or Issuing Bank
receives a refund, offset, credit or deduction in respect of any Taxes
or Other Taxes paid by the Borrower under this paragraph (c), such
Lender, the Administrative Agent, or Issuing Bank, as the case may be,
shall promptly pay to the Borrower the Borrower's share of such refund,
offset, credit or deduction, received by or credited to the Lender, the
Administrative Agent, or Issuing Bank, as the case may be, (reduced by
any Taxes imposed on the Lender, the Administrative Agent, or Issuing
Bank, as the case may be, by reason of the receipt, accrual or payment
of such refund, offset, credit or deduction).
(d) EVIDENCE OF TAX PAYMENTS. The Borrower will pay prior
to delinquency all Taxes and Other Taxes payable in respect of any
payment. Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address
referred to in Section 10.02, the original or a certified copy of a
receipt evidencing payment of such Taxes or Other Taxes.
(e) FOREIGN LENDER WITHHOLDING EXEMPTION. Each Lender and
Issuing Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the
Borrower and the Administrative Agent on the date of this Agreement or
upon the effectiveness of any Assignment and Acceptance two duly
completed copies of the Prescribed Forms, as the case may be,
certifying in each case that such Lender is entitled to receive
payments under this Agreement and the Notes payable to it, without
deduction or withholding of any United States federal income taxes.
Each
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Lender which delivers to the Borrower and the Administrative Agent a
Prescribed Form further undertakes to deliver to the Borrower and the
Administrative Agent on or before the date that any such form expires
or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the
Borrower and the Administrative Agent two further copies of a
replacement Prescribed Form. If an event (including without limitation
any change in treaty, law or regulation) has occurred prior to the date
on which any delivery required by the preceding sentence would
otherwise be required which renders all such forms inapplicable or
which would prevent any Lender from duly completing and delivering any
such letter or form with respect to it and such Lender advises the
Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Prescribed Form
establishing an exemption from, or a reduced rate of, United States
backup withholding tax, such Lender shall not be required to deliver
such forms. The Borrower shall withhold tax at the rate and in the
manner required by the laws of the United States with respect to
payments made to a Lender failing to timely provide the Prescribed
Forms.
(f) Nothing in this Section 2.11 shall require any
Lender, the Alternate Currency Swing Line Lender, or the Administrative
Agent to make available any of its tax returns (or any other
information that it deems to be confidential or proprietary, in its
sole discretion).
(g) If the Issuing Bank or any Lender claims any
additional amounts payable pursuant to this Section 2.11, then such
Issuing Bank or Lender (as the case may be) shall use its reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that would be payable
or may thereafter accrue and would not be otherwise disadvantageous to
such Issuing Bank or Lender.
Section 2.12 ILLEGALITY. If any Lender shall notify the
Administrative Agent and the Borrower that the introduction of or any change in
or in the interpretation of any Legal Requirement makes it unlawful, or that any
central bank or other Governmental Authority asserts that it is unlawful for
such Lender or its Applicable Lending Office to perform its obligations under
this Agreement to maintain any Fixed Rate Advances of such Lender then
outstanding hereunder, then, notwithstanding anything herein to the contrary,
the Borrower shall, if demanded by such Lender by notice to the Borrower and the
Administrative Agent no later than 11:00 a.m. (Dallas, Texas time), (a) if not
prohibited by Legal Requirement to maintain such Fixed Rate Advances for the
duration of the Interest Period, on the last day of the Interest Period for each
outstanding Fixed Rate Advance of such Lender or (b) if prohibited by Legal
Requirement to maintain such Fixed Rate Advances for the duration of the
Interest Period, on the second Business Day following its receipt of such notice
from such Lender, Convert all such affected Fixed Rate Advances of such Lender
then outstanding to Adjusted Base Rate Advances, and pay accrued interest on the
principal amount Converted to the date of such Conversion and amounts, if any,
required to be paid pursuant to Section 2.08 as a result of such Conversion
being made on such date. Each Lender agrees to use commercially reasonable
efforts (consistent with
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its internal policies and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such designation would
avoid the effect of this paragraph and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender.
Section 2.13 LETTERS OF CREDIT.
(a) ISSUANCE. From time to time from the date of this
Agreement until three months before the Maturity Date, at the request
of the Borrower, the Issuing Bank shall, on any Business Day and on the
terms and conditions hereinafter set forth, issue, increase, decrease,
amend, or extend the expiration date of Letters of Credit for the
account of the Borrower (for its own benefit or for the benefit of any
of its Subsidiaries). No Letter of Credit will be issued, increased, or
extended (i) if such issuance, increase, extension or conversion would
cause the Letter of Credit Exposure to exceed the lesser of (x)
$10,000,000 or (y) an amount equal to (A) the aggregate Revolving
Commitments LESS (B) the sum of the aggregate Revolving Exposure at
such time; (ii) unless such Letter of Credit has an Expiration Date not
later than the earlier of (A) one year after the date of issuance
thereof and (B) one day prior to the Maturity Date; (iii) unless such
Letter of Credit is in form and substance acceptable to the Issuing
Bank; (iv) unless such Letter of Credit is a standby letter of credit
not supporting the repayment of indebtedness for borrowed money of any
Person; (v) unless the Borrower has delivered to the Issuing Bank the
completed and executed Letter of Credit Documents (other than the
Letter of Credit) on such Issuing Bank's standard form, which shall
contain terms no more restrictive than the terms of this Agreement;
(vi) unless such Letter of Credit is governed by the International
Standby Practices (1998) ("ISP") or any successor to the ISP; and (vii)
unless no Default has occurred and is continuing or would result from
the issuance of such Letter of Credit. If the terms of any of the
Letter of Credit Documents referred to in the foregoing clause (v)
conflicts with the terms of this Agreement, the terms of this Agreement
shall control.
(b) PARTICIPATIONS. On the date of the issuance or
increase of any Letter of Credit on or after the Effective Date,
Issuing Bank shall be deemed to have sold to each other Lender and each
other Lender shall have been deemed to have purchased from such Issuing
Bank a participation in the Letter of Credit Exposure related to the
Letters of Credit issued by such Issuing Bank equal to such Lender's
Revolving Share at such date and such sale and purchase shall otherwise
be in accordance with the terms of this Agreement. Issuing Bank shall
promptly notify each such participant Lender by telex, telephone, or
telecopy of each Letter of Credit of such Issuing Bank issued,
increased or decreased, and the actual dollar amount of such Lender's
participation in such Letter of Credit. Each Lender's obligation to
purchase participating interests pursuant to this Section and to
reimburse the Issuing Bank for such Lender's Revolving Share of any
payment under a Letter of Credit by such Issuing Bank not reimbursed in
full by the Borrower shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (i) any
of the circumstances described in paragraph (d) below, (ii) the
occurrence and continuance of a Default, (iii) an adverse change in the
financial condition of the Borrower or any Guarantor, or (iv) any other
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circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing, except for any such circumstance, happening or
event constituting or arising from gross negligence or willful
misconduct on the part of such Issuing Bank.
(c) REIMBURSEMENT. The Borrower shall have the right (but
not the obligation) to pay promptly on demand to Issuing Bank in
respect of each Letter of Credit issued by such Issuing Bank an amount
equal to any amount paid by such Issuing Bank under or in respect of
such Letter of Credit. In the event any Issuing Bank makes a payment
pursuant to a request for draw presented under a Letter of Credit and
such payment is not promptly reimbursed by the Borrower upon demand,
such Issuing Bank shall give notice of such payment to the
Administrative Agent and, upon receipt of such notice, the
Administrative Agent shall give notice of such payment to the Lenders,
and each Lender shall promptly reimburse such Issuing Bank for such
Lender's Revolving Share of such payment, and such reimbursement shall
be deemed for all purposes of this Agreement to constitute an Adjusted
Base Rate Advance to the Borrower from such Lender. If such
reimbursement is not made by any Lender to any Issuing Bank on the same
day on which such Issuing Bank shall have made payment on any such
draw, such Lender shall pay interest thereon to such Issuing Bank for
each such day from the date such payment should have been made until
the date repaid at a rate per annum equal to the Federal Funds Rate for
each such day. The Borrower hereby unconditionally and irrevocably
authorizes, empowers, and directs the Administrative Agent and the
Lenders to record and otherwise treat each payment under a Letter of
Credit not immediately reimbursed by the Borrower as a Borrowing
comprised of Adjusted Base Rate Advances to the Borrower.
(d) OBLIGATIONS UNCONDITIONAL. The obligations of the
Borrower under this Agreement in respect of each Letter of Credit shall
be absolute, unconditional and irrevocable, and shall be paid strictly
in accordance with the terms of this Agreement under all circumstances,
notwithstanding the following circumstances:
(i) any lack of validity or enforceability of
any Letter of Credit Documents;
(ii) any amendment or waiver of or any consent to
departure from any Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense
or other right which the Borrower or any Lender or any other
Person may have at any time against any beneficiary or
transferee of such Letter of Credit (or any Persons for whom
any such beneficiary or any such transferee may be acting),
the Issuing Bank or any other Person or entity, whether in
connection with this Agreement, the transactions contemplated
in this Agreement or in any Letter of Credit Documents or any
unrelated transaction;
(iv) any statement or any other document
presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or
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any statement therein being untrue or inaccurate in any
respect to the extent the Issuing Bank would not be liable
therefor pursuant to the following paragraph (e);
(v) payment by the Issuing Bank under such
Letter of Credit against presentation of a draft or
certificate which does not comply with the terms of such
Letter of Credit; or
(vi) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.
(e) LIABILITY OF ISSUING BANKS. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. No
Issuing Bank, nor any other Lender, nor any of their respective
officers or directors shall be liable or responsible for:
(i) the use which may be made of any Letter of
Credit or any acts or omissions of any beneficiary or
transferee in connection therewith;
(ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged;
(iii) payment by such Issuing Bank against
presentation of documents which do not comply with the terms
of a Letter of Credit, including failure of any documents to
bear any reference or adequate reference to the relevant
Letter of Credit; or
(iv) any other circumstances whatsoever in making
or failing to make payment under any Letter of Credit
(including such Issuing Bank's own negligence),
EXCEPT that the Borrower shall have a claim against such Issuing Bank,
and such Issuing Bank shall be liable to, and shall promptly pay to,
the Borrower, to the extent of any direct, as opposed to consequential,
damages suffered by the Borrower which the Borrower proves were caused
by (A) such Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under a Letter of Credit comply
with the terms of such Letter of Credit or (B) such Issuing Bank's
gross negligence in failing to make lawful payment under any Letter of
Credit after the presentation to it of a draft and certificate strictly
complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, any Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
Section 2.14 DETERMINATION OF LEVERAGE RATIO AND SENIOR LEVERAGE
RATIO. In addition to the determination of the Leverage Ratio and the Senior
Leverage Ratio in a Compliance Certificate, the Leverage Ratio and the Senior
Leverage Ratio shall be determined by the Administrative Agent, as follows:
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(a) ADJUSTMENTS. Following each making, acquisition or
disposition by the Parent or its Subsidiary of an Investment or any
Non-Replaced Property with an Investment Amount in excess of $5,000,000
or the incurrence by the Parent or its Subsidiary of additional
Indebtedness (excluding any Obligations) in excess of $5,000,000 (an
"ADJUSTMENT EVENT"), and the Administrative Agent's receipt of an
Adjustment Report with respect thereto, the Administrative Agent shall
adjust the Leverage Ratio and the Senior Leverage Ratio accordingly.
(b) NOTICE OF LEVERAGE RATIO AND SENIOR LEVERAGE RATIO
CHANGE. Promptly following any date the Leverage Ratio and the Senior
Leverage Ratio is determined in accordance with the preceding
paragraph, the Administrative Agent shall give notice to the Lenders
and the Borrower of the new Leverage Ratio and Senior Leverage Ratio.
Section 2.15 LENDER REPLACEMENT.
(a) RIGHT TO REPLACE. The Borrower shall have the right
to replace each Lender either (i) affected by a condition under Section
2.02(c)(vi), 2.09, 2.11, or 2.12 for more than 60 days or (ii) that
refuses to consent to a proposed change, waiver, discharge or
termination with respect to this Agreement which has been approved by
51% or more of the Non-Defaulting Lenders entitled to vote on such
proposed change, waiver, discharge or termination, as (and to the
extent) provided in Section 10.01 (each such affected or non-consenting
Lender, an "AFFECTED LENDER") in accordance with the procedures in this
Section 2.15 and provided that no reduction of the total Commitments
occurs as a result thereof.
(b) REPLACEMENT ALLOCATION.
(i) Upon the occurrence of any condition
permitting the replacement of a Lender, the Administrative
Agent in its sole discretion shall have the right to
reallocate the amount of the Commitments of the Affected
Lenders, including without limitation to Persons which are not
already party to this Agreement but which qualify as Eligible
Assignees, which election shall be made by written notice
within 30 days after the date such condition occurs.
(ii) If the aggregate amount of the reallocated
Commitments is less than the Commitments of the Affected
Lenders, (A) the respective Commitments of the Lenders which
have received such reallocated Commitments shall be increased
by the respective amounts of their proposed reallocations, and
(B) the Borrower shall have the right to add additional
Lenders which are Eligible Assignees to this Agreement to
replace such Affected Lenders, which additional Lenders would
have aggregate Commitments no greater than those of the
Affected Lenders MINUS the amounts of the Commitments already
reallocated.
(iii) Notwithstanding any provision in this
Section 2.15 to the contrary, no Lender except for an Affected
Lender may have such Lender's Commitment
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increased or decreased pursuant to the provisions of this
Section 2.15 without such Lender's written consent.
(c) PROCEDURE. Any assumptions of Commitments pursuant to
this Section 2.15 shall be (i) made by the purchasing Lender or
Eligible Assignee and the selling Lender entering into an Assignment
and Assumption and by following the procedures in Section 10.06 for
adding a Lender. In connection with the reallocation of the Commitments
of any Lender pursuant to the foregoing paragraph (b), each Lender with
a reallocated Commitment shall purchase from the Affected Lenders at
par such Lender's Revolving Share or Term Share, as applicable, of the
outstanding Advances of the Affected Lenders and assume such Lender's
Revolving Share of the Affected Lenders' Letter of Credit Exposure and
obligations with respect to Alternate Currency Swing Line Advances.
Section 2.16 SHARING OF PAYMENTS, ETC. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off or otherwise) on account of the Advances (excluding Alternate
Currency Swing Line Advances) made by it in excess of its Revolving Share or
Term Share, as applicable, of payments or collateral on account of the Advances
or Letter of Credit Obligations obtained by all the Lenders, such Lender shall
notify the Administrative Agent and forthwith purchase from the other Lenders
such participations in the Advances, as applicable, made by them or Letter of
Credit Obligations held by them as shall be necessary to cause such purchasing
Lender to share the excess payment or benefits of such collateral or proceeds
ratably in accordance with the requirements of this Agreement with each of them;
PROVIDED, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such Lender's ratable share (according to the
proportion of (a) the amount of the participation sold by such Lender to the
purchasing Lender as a result of such excess payment to (b) the total amount of
such excess payment) of such recovery, together with an amount equal to such
Lender's ratable share (according to the proportion of (a) the amount of such
Lender's required repayment to the purchasing Lender to (b) the total amount of
all such required repayments to the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.16 may, to the fullest extent
permitted by Legal Requirement, unless and until rescinded as provided above,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The
obligation of each Lender to make any Advance hereunder and of the Issuing Bank
to issue any Letter of Credit are subject to the following conditions precedent
being satisfied on or prior to September 15, 2002:
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(a) DOCUMENTATION. The Administrative Agent shall have
received counterparts of this Agreement executed by the Borrower and
the Lenders, and the following duly executed by all the parties
thereto, in form and substance satisfactory to the Administrative
Agent, and, with respect to this Agreement, all Guaranties and
Environmental Indemnities, in sufficient copies for each Lender:
(i) the Notes, the Guaranties and the
Environmental Indemnities;
(ii) the Security Documents to the extent
applicable executed by the Borrower, the Parent and the other
Guarantors granting to the Administrative Agent for the
benefit of the Lenders an Acceptable Lien in the Collateral,
together with stock certificates, stock powers executed in
blank, UCC-1 financing statements and any other documents,
agreements or instruments necessary or desirable to create an
Acceptable Lien in the Collateral, PROVIDED that in the
Administrative Agent's discretion certain Security Documents
necessary for the granting to the Administrative Agent for the
benefit of the Lenders of an Acceptable Lien in Ownership
Interests in Persons which are domiciled outside the United
States may be executed and delivered within ten (10) Business
Days of the Closing;
(iii) a certificate from a Responsible Officer of
the Parent on behalf of the Borrower dated as of the Closing
Date stating that as of the Closing Date (A) all
representations and warranties of the Borrower set forth in
this Agreement and the Credit Documents are true and correct
in all material respects; (B) no Default has occurred and is
continuing; (C) the conditions in this Section 3.01 have been
met or waived in writing; and (D) to the best of the
Borrower's knowledge there are no claims, defenses,
counterclaims or offsets against the Lenders under the Credit
Documents;
(iv) a certificate of the Secretary or an
Assistant Secretary of the Parent on behalf of the Borrower
and each corporation that is either a Guarantor or a general
partner or manager of a Guarantor dated as of the date of this
Agreement certifying as of the Closing Date (A) the names and
true signatures of officers or authorized representatives of
the Parent and such other Persons authorized to sign the
Credit Documents to which such Person is a party in the
capacity therein indicated, (B) resolutions of the Board of
Directors or the members of the Parent and such other Persons
with respect to the transactions herein contemplated, (C)
either (x) the copies of the organizational documents of the
Parent and such other Persons delivered to the Lenders are
still true and correct and have not been amended or modified
since such date or (y) copies of any modification or amendment
to the organizational documents of the Parent or any such
other Persons made since such date, (D) a true and correct
copy of the partnership agreement for the Borrower and each
Guarantor which is a partnership, (E) a true and correct copy
of all partnership, corporate or limited liability company
authorizations necessary or desirable in connection with the
transactions herein contemplated, and (F) a true and correct
copy of the Intercompany Agreement, the
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Merger Agreement and the other principal documents being
executed in consummation of the Merger, and the documents
which evidence the MHC Indebtedness;
(v) a certificate of the Secretary or an
Assistant Secretary of MHRI certifying the current (A)
resolutions of the Board of Directors of such Person and the
shareholders' vote with respect to the transactions
contemplated in the Merger Agreement and the Registration
Statements, and (B) charter and bylaws of MHRI and any
modification or amendment to the articles or certificate of
incorporation or bylaws of MHRI;
(vi) a certificate of the Secretary or an
Assistant Secretary of IHC certifying the current (A)
resolutions of the Board of Directors of such Person and the
shareholders' vote with respect to the transactions
contemplated in the Merger Agreement and the Registration
Statements, and (B) charter and bylaws of IHC and any
modification or amendment to the articles or certificate of
incorporation or bylaws of IHC;
(vii) (A) one or more favorable written opinions
of ▇▇▇▇▇▇▇, Diamond & Ash, special counsel for the Borrower,
the Parent, and their Subsidiaries, in a form reasonably
acceptable to the Administrative Agent, in each case dated as
of the Closing Date and with such changes as the
Administrative Agent may approve, and (B) such other legal
opinions as either of the Administrative Agent shall
reasonably request, in each case dated as of the Closing Date
and with such changes as the Administrative Agent may approve,
PROVIDED that in the Administrative Agent's discretion certain
legal opinions related to Persons which are domiciled outside
the United States may be executed and delivered within ten
(10) Business Days of the Closing;
(viii) a Compliance Certificate dated as of the
Closing Date reflecting for the financial tests covered
therein the financial performance for the Borrower for the
Rolling Period ended June 30, 2002, together with a
certificated pro forma balance sheet of the Parent as of the
Closing Date assuming the Merger was consummated and the
Pre-Existing Designated Senior Indebtedness had been repaid,
duly completed and executed by the Chief Financial Officer or
Treasurer of the Parent;
(ix) evidence reasonable satisfactory to the
Administrative Agent that the Merger and the other
transactions contemplated by the Merger Agreement and the
Registration Statements have been consummated in accordance
with the terms of the Merger Agreement, all Legal Requirements
and all corporate and partnership governance requirements;
(x) the Equity Inns Letter and the MHC Letter;
and
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(xi) such other documents, governmental
certificates, agreements, lien searches as the Administrative
Agent may reasonably request.
(b) MERGER. The Merger and the other transactions
contemplated by the Merger Agreement and the Registration Statements
shall have been consummated in accordance with the terms of the Merger
Agreement, all Legal Requirements and all corporate and partnership
governance requirements.
(c) REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in Article IV hereof, the Security Agreement,
the Guaranties and the Environmental Indemnities shall be true and
correct in all material respects.
(d) CERTAIN PAYMENTS. The Borrower shall have paid or
repaid, as applicable, (i) the fees required to be paid as of the
execution of this Credit Agreement pursuant to the Fee Letter and the
Co-Lead Arranger Fee Letter and (ii) the Pre-Existing Designated Senior
Indebtedness.
(e) SECURITY DOCUMENTS. Except as expressly contemplated
by the provisions of Section 3.01(a)(ii) above, the Administrative
Agent shall have received all appropriate evidence required by the
Administrative Agent in its reasonable discretion necessary to
determine that the Administrative Agent has an Acceptable Lien in the
Collateral, including, without limitation, lien searches conducted on
the Borrower and the Guarantors and lien releases with respect to any
Collateral currently subject to a Lien other than Permitted
Encumbrances.
Section 3.02 CONDITIONS PRECEDENT FOR EACH BORROWING OR LETTER OF
CREDIT. The obligation of each Lender to fund an Advance on the occasion of each
Borrowing (other than the Conversion or continuation of any existing Borrowing)
and of any Issuing Bank to issue or increase or extend any Letter of Credit
shall be subject to the further conditions precedent that on the date of such
Borrowing or the issuance, increase or extension of such Letter of Credit:
(a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing and the acceptance by
the Borrower of the proceeds of such Borrowing or the issuance or
increase or extension of such Letter of Credit shall constitute a
representation and warranty by the Borrower that on the date of such
Borrowing or the issuance or increase or extension of such Letter of
Credit such statements are true):
(i) the representations and warranties contained
in Article IV hereof, the Security Agreement, the Guaranties,
the Environmental Indemnities and the other Credit Documents,
as such representations and warranties may change based upon
events or activities permitted by this Agreement, are correct
in all material respects on and as of the date of such
Borrowing or the issuance or increase or extension of such
Letter of Credit, before and after giving effect to such
Borrowing or to the issuance or increase or extension of such
Letter of
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Credit and to the application of the proceeds from such
Borrowing, as though made on and as of such date; and
(ii) no Default has occurred and is continuing or
would result from such Borrowing or from the application of
the proceeds therefrom, as evidenced by a Compliance
Certificate executed and delivered by the Borrower to the
Administrative Agent dated as of the date of the Notice of
Borrowing; PROVIDED that the financial tests in such
Compliance Certificate do not need to be updated from the last
Compliance Certificate delivered by the Borrower except for an
update of the Leverage Ratio and the Senior Leverage Ratio if
an Adjustment Event has occurred since the date of such
Compliance Certificate and the Borrower has not yet delivered
the Adjustment Report in connection with such Adjustment
Event; and
(b) the Administrative Agent shall have received such
other approvals, opinions or documents deemed necessary or desirable by
any Lender or the Administrative Agent as such party may reasonably
request.
Section 3.03 CONDITIONS AS COVENANTS. If the Lenders make any
Advances, or the Issuing Bank issues a Letter of Credit, prior to the
satisfaction of all conditions precedent set forth in Sections 3.01 and
3.02., the Borrower shall nevertheless cause such condition or
conditions to be satisfied within two (2) Business Days (ten (10)
Business Days for those items for which the Borrower is permitted such
time period pursuant to the provisions of Section 3.01) after the date
of the making of such Advances or the issuance of such Letter of
Credit.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01 EXISTENCE; QUALIFICATION; PARTNERS; SUBSIDIARIES.
(a) The Borrower is a limited partnership duly organized,
validly existing, and in good standing under the laws of Delaware and
in good standing and qualified to do business in each jurisdiction
where its ownership or lease of property or conduct of its business
requires such qualification, except where the failure to so qualify
would not cause a Material Adverse Change to the Borrower.
(b) The Parent is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware and in good
standing and qualified to do business in each jurisdiction where its
ownership or lease of property or conduct of its business requires such
qualification, except where the failure to so qualify would not cause a
Material Adverse Change to the Parent. The Parent is the survivor by
merger of IHC into MHRI, as more particularly described in the
Registration Statements, and has had its name legally changed to
"Interstate Hotels & Resorts, Inc.". The Merger and the other
transactions contemplated by the Merger Agreement have been consummated
in
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accordance with the terms of the Merger Agreement, all Legal
Requirements and all corporate and partnership governance requirements.
(c) The Parent is duly listed on the New York Stock
Exchange, Inc. and the Parent has timely filed all reports required to
be filed by it with the New York Stock Exchange, Inc. and the
Securities and Exchange Commission.
(d) The Parent owns approximately 97% of the partnership
interest in the Borrower and is the sole general partner of the
Borrower. The only Material Subsidiaries of the Parent are the Borrower
and Subsidiaries of the Borrower. The Parent has no first tier
Subsidiaries except for the Borrower.
(e) Upon completion of the reverse stock split
contemplated by the Registration Statements, the entire authorized
capital stock of the Parent consists of (i) 50,000,000 shares of Parent
common stock of which approximately 20,127,000 shares of Parent common
stock are duly and validly issued and outstanding, fully paid and
nonassessable as of July 31, 2002 and (ii) 1,000,000 shares of Parent
preferred stock of which no shares are issued or outstanding.
(f) Each Subsidiary of the Borrower is a limited
partnership, general partnership or limited liability company duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of formation and in good standing and qualified to do
business in each jurisdiction where conduct of its business requires
such qualification, except where the failure to so qualify would not
cause a Material Adverse Change to such Subsidiary. Except for the
Beverage Entities and the Dissolving Subsidiaries, the Parent has no
Subsidiaries on the date of this Agreement other than the Borrower and
the Subsidiaries listed on the attached Schedule 4.01, and Schedule
4.01 lists the jurisdiction of formation, and the address of the
principal office of each such Subsidiary existing on the date of this
Agreement. As of the date of this Agreement, the Parent or the Borrower
owns, directly or indirectly, at least the percentage interests in each
such Subsidiary listed on the attached Schedule 4.01.
(g) Except for those Material Subsidiaries domiciled in a
jurisdiction outside the United States, each of the Borrower, the
Parent and each of the Material Subsidiaries is domiciled in the State
of Delaware.
Section 4.02 PARTNERSHIP AND CORPORATE POWER. The execution,
delivery, and performance by the Borrower and each Guarantor of the
Credit Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby (a) are within such
Persons' partnership, limited liability company and corporate powers,
as applicable, (b) have been duly authorized by all necessary
corporate, limited liability company and partnership action, as
applicable, (c) do not contravene (i) such Person's certificate or
articles, as the case may be, of incorporation or by-laws, operating
agreement or partnership agreement, as applicable, or (ii) any law or
any contractual restriction binding on or affecting any such Person,
the contravention of which could reasonably be expected to cause a
Material Adverse Change, and (d) will not result in or require the
creation or imposition of any Lien prohibited by this
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Agreement. At the time of each Borrowing, such Borrowing and the use of
the proceeds of such Borrowing will be within the Borrower's
partnership ▇▇▇▇▇▇, ▇▇▇▇ have been duly authorized by all necessary
partnership action, (a) will not contravene (i) the Borrower's
partnership agreement or (ii) any law or any contractual restriction
binding on or affecting the Borrower, the contravention of which could
reasonably be expected to cause a Material Adverse Change, and (b) will
not result in or require the creation or imposition of any Lien
prohibited by this Agreement.
Section 4.03 AUTHORIZATION AND APPROVALS. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority is required for the due execution, delivery and performance by the
Borrower or any Guarantor of the Credit Documents to which it is a party or the
consummation of the transactions contemplated thereby. At the time of each
Borrowing, no authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority will be required for such Borrowing or
the use of the proceeds of such Borrowing the absence of which could reasonably
be expected to cause a Material Adverse Change.
Section 4.04 ENFORCEABLE OBLIGATIONS. This Agreement, the Notes,
and the other Credit Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower; each Guaranty and the other Credit
Documents to which each Guarantor and the Parent is a party have been duly
executed and delivered by such Guarantor; and the Environmental Indemnity and
Security Agreement have been duly executed and delivered by the respective
parties thereto. Each Credit Document is the legal, valid, and binding
obligation of the Borrower, the Parent, and each Guarantor which is a party to
it enforceable against the Borrower, the Parent, and each such Guarantor in
accordance with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors' rights generally and by general principles of equity
(whether considered in proceeding at law or in equity).
Section 4.05 FINANCIAL STATEMENTS. The respective Consolidated
balance sheets, statements of operations, shareholders' equity and cash flows of
MHRI and its Subsidiaries and IHC and its Subsidiaries contained in their
respective Financial Statements and Registration Statements, and the
corresponding pro forma financial statements for the Parent and its
Subsidiaries, fairly present the financial condition in all material respects
and reflects the Indebtedness of such Person and such Person's Subsidiaries on a
Consolidated basis as of the dates indicated in the Financial Statements and the
Registration Statements and the respective results of the operations for the
periods indicated, and such balance sheets and statements were prepared in
accordance with GAAP, subject to year-end adjustments. Since the date of such
statements, no Material Adverse Change has occurred.
Section 4.06 TRUE AND COMPLETE DISCLOSURE. No representation,
warranty, or other statement made by the Borrower (or on behalf of the Borrower)
in this Agreement or any other Credit Document contains any untrue statement of
a material fact or omits to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which they were made as of the date of this Agreement. There is no fact known to
any Responsible Officer of the Borrower or the Parent on the date of this
Agreement that has
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not been disclosed to the Administrative Agent which could reasonably be
expected to cause a Material Adverse Change. All projections, estimates, and pro
forma financial information furnished by the Borrower and/or the Parent or on
behalf of the Borrower were prepared on the basis of assumptions, data,
information, tests, or conditions believed to be reasonable at the time such
projections, estimates, and pro forma financial information were furnished. No
representation, warranty or other statement made in MHRI's or IHC's latest 10K,
10Q or annual report or the Registration Statements contains any untrue
statement of material fact or omits to state any material fact necessary to make
the statements contained therein not misleading in light of the circumstances in
which they were made as of the date same were made. Borrower and/or Parent has
made all filings required by the Exchange Act.
Section 4.07 LITIGATION. Except as set forth in the attached
Schedule 4.07, there is no pending or, to the best knowledge of the Borrower,
threatened investigation, action or proceeding affecting the Borrower or the
Parent or any of their respective Subsidiaries by or before any court,
Governmental Authority or arbitrator either (a) in which in Borrower's good
faith judgment the anticipated loss is over $500,000 (PROVIDED that with respect
to the giving of this representation after the date of this Agreement, the
representation shall only be deemed to apply to those matters for which
Administrative Agent would have been entitled to notice under Section 5.05(k))
or (b) which in Borrower's good faith judgment would result in criminal
penalties against the Parent, the Borrower or their respective Subsidiaries
which could reasonably be expected to cause a Material Adverse Change.
Section 4.08 USE OF PROCEEDS AND LETTERS OF CREDIT.
(a) ADVANCES. The proceeds of the Advances shall be used
by the Borrower for (i) working capital and general corporate purposes,
(ii) the making of Permitted New Investments pursuant to the provisions
of Section 6.06, (iii) the repayment of MHC Indebtedness within 3 days
of the Closing Date in an amount of up to $3,000,000 in the aggregate,
(iv) the repayment of Pre-Existing Designated Senior Indebtedness, and
(v) for costs incurred in connection with the Merger and with the
Parent's or any of its Subsidiary's sale or issuance of equity
securities or incurrence of Indebtedness issued or incurred in
compliance with this Agreement.
(b) REGULATIONS. No proceeds of Advances will be used to
purchase or carry any Margin Stock or be used in violation of
Regulations T, U or X of the Federal Reserve Board, as the same is from
time to time in effect, and all official rulings and interpretations
thereunder or thereof. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin
Stock.
(c) LETTERS OF CREDIT. The Letters of Credit shall be
used by the Borrower in connection with (i) the making of Permitted New
Investments pursuant to the provisions of Section 6.06 and (ii) the
Borrower's Hospitality Management Business and ancillary activities.
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Section 4.09 INVESTMENT COMPANY ACT. Neither the Borrower, the
Parent nor any of their respective Subsidiaries is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Section 4.10 TAXES. All federal, state, local and foreign tax
returns, reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Parent, the Borrower, their
respective Subsidiaries, or any member of a Controlled Group have been filed
with the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed, and where the failure
to file could reasonably be expected to cause a Material Adverse Change, except
where contested in good faith and by appropriate proceedings; and all taxes and
other impositions due and payable (which are material in amount) have been
timely paid prior to the date on which any fine, penalty, interest, late charge
or loss (which are material in amount) may be added thereto for non-payment
thereof except where contested in good faith and by appropriate proceedings. As
of the date of this Agreement, neither the Parent, the Borrower, any of their
respective Subsidiaries nor any member of a Controlled Group has given, or been
requested to give, a waiver of the statute of limitations relating to the
payment of any federal, state, local or foreign taxes or other impositions. None
of the Property owned by the Parent, the Borrower, any of their respective
Subsidiaries or any other member of a Controlled Group is Property which the
Parent, the Borrower, any of their respective Subsidiaries or any member of a
Controlled Group is required to be treated as being owned by any other Person
pursuant to the provisions of Section 168(f)(8) of the Code. Proper and accurate
amounts have been withheld by the Parent, the Borrower, their respective
Subsidiaries and all members of each Controlled Group from their employees for
all periods to comply in all material respects with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law. Timely payment of all material sales and use taxes required by
applicable law have been made by the Parent, the Borrower, their respective
Subsidiaries and all other members of each Controlled Group, the failure to
timely pay of which could reasonably be expected to cause a Material Adverse
Change. The amounts shown on all tax returns to be due and payable have been
paid in full or adequate provision therefor is included on the books of the
appropriate members of the applicable Controlled Group.
Section 4.11 PENSION PLANS. All Plans are in compliance in all
material respects with all applicable provisions of ERISA. No Termination Event
has occurred with respect to any Plan, and each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. No Reportable Event has occurred with respect to
any Multiemployer Plan, and to the Borrower's actual knowledge each
Multiemployer Plan has complied with and been administered in all material
respects with applicable provisions of ERISA and the Code. Neither the Borrower,
nor any member of a Controlled Group has had a complete or partial withdrawal
from any Multiemployer Plan for which there is any material withdrawal
liability. As of the most recent valuation date applicable thereto, neither the
Borrower nor any member of a Controlled Group has received notice that any
Multiemployer Plan is insolvent or in reorganization.
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Section 4.12 INSURANCE. The Borrower and each of its Subsidiaries
carry the insurance required pursuant to the provisions of Section 5.07.
Section 4.13 NO BURDENSOME RESTRICTIONS; NO DEFAULTS.
(a) Except in connection with Indebtedness which is (i)
either permitted pursuant to the provisions of Section 6.02, or (ii)
being repaid with the proceeds of the initial Borrowing, neither the
Borrower nor any of its Subsidiaries is a party to any indenture, loan
or credit agreement. Neither the Borrower, the Parent nor any of their
respective Subsidiaries is a party to any agreement or instrument or
subject to any charter or corporate restriction or provision of
applicable law or governmental regulation which could reasonably be
expected to cause a Material Adverse Change. Neither the Borrower, nor
the Parent, nor their respective Subsidiaries has entered into or
suffered to exist any agreement (other than this Agreement and the
Credit Documents and as set forth in the Permitted Property Agreements
and the Permitted Housing Agreements) (i) prohibiting the creation or
assumption of any Lien upon the Properties of the Parent, the Borrower
or any of their respective Subsidiaries (except for Properties of and
Ownership Interests in the Permitted Other Subsidiaries), whether now
owned or hereafter acquired, or (ii) requiring an obligation to be
secured if some other obligation is or becomes secured.
(b) Neither the Borrower, the Parent nor any of their
Subsidiaries is in default under or with respect to any contract or
agreement which could reasonably be expected to cause a Material
Adverse Change. Neither the Borrower, the Parent nor any of their
Subsidiaries has received any notice of default under any material
contract or agreement which is continuing and which, if not cured,
could reasonably be expected to cause a Material Adverse Change.
(c) No Default has occurred and is continuing (or with
respect to the giving of this representation after the date of this
Agreement, as otherwise disclosed to the Administrative Agent in
writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section 4.14 ENVIRONMENTAL CONDITION.
(a) Except as disclosed in Schedule 4.14 (or with respect
to the giving of this representation after the date of this Agreement,
as otherwise disclosed to the Administrative Agent in writing after the
date of this Agreement and prior to the date such representation is
deemed given), to the knowledge of the Borrower, the Borrower, the
Parent and their respective Subsidiaries (i) have obtained all
Environmental Permits material for the operation of their respective
Properties and the conduct of their respective businesses; (ii) have
been and are in material compliance with all terms and conditions of
such Environmental Permits and with all other requirements of
applicable Environmental Laws; (iii) have not received notice of any
violation or alleged violation of any Environmental Law or
Environmental Permit; and (iv) are not subject to any actual or
contingent Environmental Claim.
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(b) Except as disclosed in Schedule 4.14, to the
knowledge of Borrower, no Property which is presently or previously
owned or operated by the Borrower, the Parent or of any of their
respective present or former Subsidiaries, wherever located, (i) has
been placed on or proposed to be placed on the National Priorities
List, the Comprehensive Environmental Response Compensation Liability
Information System list, or their state or local analogs, or have been
otherwise investigated, designated, listed, or identified as a
potential site for removal, remediation, cleanup, closure, restoration,
reclamation, or other response activity under any Environmental Laws
which could reasonably be expected to cause a Material Adverse Change;
(ii) is subject to a Lien, arising under or in connection with any
Environmental Laws, that attaches to any revenues or to any Property
operated by the Borrower, the Parent or any of their respective
Subsidiaries, wherever located; (iii) has been the site of any Release,
use or storage of Hazardous Substances or Hazardous Wastes from present
or past operations except for Permitted Hazardous Substances, which
Permitted Hazardous Substances have not caused at the site or at any
third-party site any condition that has resulted in or could reasonably
be expected to result in the need for Response or (iv) none of the
Improvements are constructed on land designated by any Governmental
Authority having land use jurisdiction as wetlands.
Section 4.15 LEGAL REQUIREMENTS, ZONING. Except as set forth on
Schedule 4.15 attached hereto, the current use and operation of each Property
which is presently owned or operated by the Borrower, the Parent or of any of
their respective Subsidiaries, wherever located, (a) constitutes a legal use
under applicable zoning regulations (as the same may be modified by special use
permits or the granting of variances) and (b) complies in all material respects
with all Legal Requirements, and does not violate in any material respect any
material approvals, material restrictions of record or any material agreement
affecting any such Property (or any portion thereof) except for non-legal use or
non-compliance which in the aggregate would not cause a Material Adverse Change.
The Borrower, the Parent and their respective Subsidiaries possess all
certificates of public convenience, authorizations, permits, licenses, patents,
patent rights or licenses, trademarks, trademark rights, trade names rights and
copyrights (collectively "PERMITS") required by Governmental Authority to own or
operate Properties, as applicable, the Properties they own or operate, except
for those Permits that if not obtained would not cause a Material Adverse
Change. The Borrower, the Parent and their respective Subsidiaries own and
operate their business in material compliance with all applicable Legal
Requirements except for non-compliance which in the aggregate would not cause a
Material Adverse Change.
Section 4.16 EXISTING INDEBTEDNESS AND INTEREST RATE AGREEMENTS;
SOLVENCY.
(a) Except for the Obligations, the only Indebtedness or
Interest Rate Agreements of the Borrower or any of its Subsidiaries
existing as of the Effective Date are set forth on Schedule 4.16
attached hereto. No "default" or "event of default", however defined,
has occurred and is continuing under any such Indebtedness or Interest
Rate Agreement (or with respect to the giving of this representation
after the date of this Agreement, as otherwise disclosed to the
Administrative Agent in writing after the date of this Agreement and
prior to the date such representation is deemed given).
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(b) To the best of the Borrower's knowledge, after giving
effect to the consummation of the Merger, (i) the fair value and
present fair saleable value on a going concern basis of the Property of
the Parent, the Borrower and their respective Subsidiaries, on a
Consolidated basis, exceeds the amount that will be required to pay the
probable liabilities of such Persons, on a Consolidated basis, on their
Indebtedness, as such Indebtedness becomes absolute and matured, (ii)
the Parent, the Borrower and their respective Subsidiaries, on a
Consolidated basis, will have sufficient cash flow to enable them to
pay their debts as they mature, and (iii) the Parent, the Borrower and
their respective Subsidiaries, on a Consolidated basis, are able to pay
their Indebtedness as it matures in the normal course of business.
Section 4.17 LEASING ARRANGEMENTS. The only material leases for
which either the Borrower or a Guarantor is a lessee are the Existing
Participating Leases and office leases. The Existing Participating Leases are in
full force and effect; no monetary defaults by the Borrower or any Guarantor, or
to the actual knowledge of the Borrower by any other party thereto, exist
thereunder; and no other defaults by the Borrower or any Guarantor, or to the
actual knowledge of the Borrower by any other party thereto, exist thereunder
which could reasonably be expected to cause a Material Adverse Change (or with
respect to the giving of this representation after the date of this Agreement,
as otherwise disclosed to the Administrative Agent in writing after the date of
this Agreement and prior to the date such representation is deemed given).
Section 4.18 MANAGEMENT AGREEMENTS. The only management agreements
for which either the Borrower or a Guarantor is a manager are the Existing
Management Agreements. The Existing Management Agreements are in full force and
effect; no monetary defaults by the Borrower or any Guarantor, or to the actual
knowledge of the Borrower by any other party thereto, exist thereunder; and no
other defaults by the Borrower or any Guarantor, or to the actual knowledge of
the Borrower by any other party thereto, exist thereunder which could reasonably
be expected to cause a Material Adverse Change (or with respect to the giving of
this representation after the date of this Agreement, as otherwise disclosed to
the Administrative Agent in writing after the date of this Agreement and prior
to the date such representation is deemed given). The Existing Management
Agreements with MHC and MHC's Subsidiaries do not provide for any performance
standards for the years 2001 or 2002.
Section 4.19 INTERCOMPANY AGREEMENT. The Intercompany Agreement is
in full force and effect and no material defaults by the Borrower or any
Guarantor, or to the actual knowledge of the Borrower by any other party
thereto, exist thereunder (or with respect to the giving of this representation
after the date of this Agreement, as otherwise disclosed to the Administrative
Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section 4.20 FRANCHISE AGREEMENTS. The only franchise agreements
or license agreements to which the Borrower or a Guarantor are a party are those
certain agreements disclosed to the Administrative Agent in writing. Any such
franchise and license agreements are in full force and effect and no material
defaults by the Borrower or any Subsidiary exist thereunder (or with respect to
the giving of this representation after the date of this Agreement,
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as otherwise disclosed to the Administrative Agent in writing after the date of
this Agreement and prior to the date such representation is deemed given).
Section 4.21 OWNED HOSPITALITY PROPERTIES. Except as set forth on
Schedule 4.21 attached hereto, neither the Borrower, the Parent nor of any of
their respective Subsidiaries owns any Owned Hospitality Properties; PROVIDED
that such Persons do own Ownership Interests in Unconsolidated Entities which
own Owned Hospitality Properties. None of the Owned Hospitality Properties have
been or are subject to a condemnation proceeding or a casualty which
individually or in the aggregate could cause a Material Adverse Change.
Section 4.22 APPROVED INTER-COMPANY INDEBTEDNESS. The only
inter-company Indebtedness between the Parent, the Borrower and any of their
respective Subsidiaries is the Approved Inter-Company Indebtedness. The Approved
Inter-Company Indebtedness Loan Documents listed on Schedule 1.01(b) are all of
the documents evidencing or securing the Approved Inter-Company Indebtedness or
executed by the applicable parties in connection with the Approved Inter-Company
Indebtedness. The Borrower has provided the Administrative Agent with a true,
correct and complete copy of the Approved Inter-Company Indebtedness Loan
Documents and such documents have not been amended or modified except as set
forth in Schedule 1.01(b). The outstanding amount of the Approved Inter-Company
Indebtedness as of the date hereof is set forth on Schedule 1.01(b).
Section 4.23 INSURANCE BUSINESS.
(a) INSURANCE COMPANIES, INSURANCE LICENSES AND DEPOSITED
SECURITIES. Each Insurance Company is listed in Schedule 4.23(a).
Schedule 4.23(a) hereto lists all of the jurisdictions in which each
Insurance Company holds a Insurance License and is authorized to
transact insurance business as of the Closing Date and the line or
lines of insurance in which each Insurance Company is engaged. No
Insurance License held by any Insurance Company, the loss of which
could reasonably be expected to cause a Material Adverse Change, is the
subject of a proceeding for suspension or revocation. To the knowledge
of the Borrower, the Parent or any of their respective Subsidiaries,
there is not a sustainable basis for such suspension or revocation, and
no such suspension or revocation has been threatened by any
Governmental Authority. Each of the Insurance Companies has filed all
reports, statements, documents, registrations, filings or submissions
required to be filed by it with any applicable Governmental Authority,
which filings conform in all material respects to any applicable Legal
Requirements, except where the failure to so file or conform could not,
individually or in the aggregate, be reasonably expected to cause a
Material Adverse Change. Schedule 4.23(a) sets forth a true, correct
and complete listing of all securities deposited with state insurance
departments and other Governmental Authority, which deposits have been
completed in accordance with the schedule of deposits set forth in each
Insurance Company's December 31, 2001 Insurance Annual Statement.
(b) SAP FINANCIAL STATEMENTS, EXAMINATION REPORTS AND
LOSS RUNS. The Borrower has previously delivered to the Administrative
Agent for distribution to each of the Lenders true and complete copies
of the SAP Financial Statements as filed with the
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domiciliary state insurance departments of each Insurance Company as of
and for the years ended December 31, 2001, 2000 and 1999, prepared in
compliance with GAAP. Each of the SAP Financial Statements fairly
presents in all material respects the results of operations of the
applicable Insurance Company for the period therein set forth, in each
case in accordance with SAP. The schedules included in the SAP
Financial Statements, when considered in relation to the basic
statutory financial statements included therein, present fairly in all
material respects the information shown therein. Each of the SAP
Financial Statements was correct in all material respects when filed
and did not omit to state any material facts required to be stated or
necessary in order to make the SAP Financial Statements not misleading.
The Borrower has previously delivered to the Administrative Agent for
distribution to each of the Lenders true and complete copies of all
examination reports of insurance departments and any insurance
regulatory agencies since December 31, 2001 relating to the Insurance
Companies. The loss runs for the years ended December 31, 2001, 2000
and 1999, which the Borrower has previously delivered to the
Administrative Agent for distribution to each of the Lenders in
writing, are true, correct and complete in all material respects.
(c) INVESTMENT PORTFOLIOS. The Borrower has previously
delivered to the Administrative Agent for distribution to each of the
Lenders true and complete lists as of December 31, 2001 of all assets
held in the investment portfolios of the Insurance Companies. None of
the investments included in such investment portfolios is in default
with respect to the payment of principal, interest or dividends thereon
or is materially impaired. All such investments comply with all
applicable Legal Requirements except for non-compliance which in the
aggregate would not cause a Material Adverse Change. Each Insurance
Company owns assets which qualify as admitted assets under applicable
state insurance Legal Requirements in an amount at least equal to the
sum of all of its Insurance Reserve Liabilities and minimum statutory
capital and Insurance Surplus reflected on the latest SAP Financial
Statements.
(d) INSURANCE RESERVE LIABILITIES AND ADEQUATE
PROVISIONS. All Insurance Reserve Liabilities as established or
reflected in the SAP Financial Statements (i) were determined in
accordance with generally accepted actuarial standards consistently
applied, (ii) are fairly stated in accordance with sound actuarial
principles, (iii) are based on actuarial assumptions that are in
accordance with those called for by the relevant Insurance Contract and
the related Reinsurance Contract and (iv) meet in all material respects
the requirements of all applicable insurance Legal Requirements.
Adequate provision for such Insurance Reserve Liabilities has been made
(under generally accepted actuarial principles consistently applied) to
cover the total amount of all reasonably anticipated matured and
unmatured benefits, dividends, claims and other liabilities of the
Insurance Companies under all Insurance Contracts and Reinsurance
Contracts on the date of such SAP Financial Statement based on then
current information that forms a reasonable basis for such
determination. Each of the Insurance Companies owns assets that qualify
as legal reserve assets under applicable insurance Legal Requirements
in an amount at least equal to all of such Insurance Company's
Insurance Reserve Liabilities. Adequate provision has been made for all
estimated losses, settlements, costs and
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expenses from pending suits, actions and proceedings contemplated by
the SAP Financial Statements.
(e) INSURANCE CONTRACTS AND REINSURANCE CONTRACTS. Each
outstanding Insurance Contract issued, reinsured or underwritten by an
Insurance Company is listed in Schedule 4.23(e), together with the
maximum amount payable by an Insurance Company thereunder. All
outstanding Reinsurance Contracts with respect to such Insurance
Contracts are listed in Schedule 4.23(e), together with the maximum
amount payable by an Insurance Company thereunder. All Insurance
Contracts, Reinsurance Contracts and any and all marketing materials
are, to the extent required under applicable Legal Requirements, on
forms approved by the insurance regulatory authority of the
jurisdiction where issued or filed and have not been objected to by
such authority within the period provided for objection and have been
filed or registered as required with all other applicable Governmental
Authorities. As to premium rates established by each Insurance Company
and required to be filed or approved, the premiums charged comply with
the applicable Legal Requirements. In addition, there is no pending or,
to the knowledge of the Borrower, the Parent or any of their respective
Subsidiaries, threatened charge by any insurance regulatory authority
that any of the Insurance Companies has violated, nor any pending or,
to the knowledge of the Borrower, the Parent or any of their respective
Subsidiaries, threatened investigation by any insurance regulatory
authority with respect to possible violations of, any applicable Legal
Requirements where such violations would, individually or in the
aggregate, cause a Material Adverse Change. All Insurance Contracts and
Reinsurance Contracts have been marketed, sold and issued in compliance
with all applicable Legal Requirements, except as could not reasonably
be expected to cause a Material Adverse Change, including, without
limitation, in compliance with (i) all applicable prohibitions against
"redlining" or withdrawal of business lines, (ii) all applicable
requirements relating to the disclosure of the nature of insurance
products as policies of insurance and (iii) all applicable requirements
relating to insurance product projections and illustrations.
(f) PAYMENT OF BENEFITS. All benefits payable with
respect to each Insurance Contract by a Insurance Company or, to the
knowledge of the Borrower, the Parent or any of their respective
Subsidiaries, by any other person that is a party to or bound by such
Insurance Contract, have in all material respects been paid in
accordance with the terms of such Insurance Contract. All benefits
payable with respect to each Reinsurance Contract, have in all material
respects been paid in accordance with the terms of such Reinsurance
Contract.
(g) NOTICE OF LIKELY DEFAULTS. No Insurance Company has
received any written, or to the knowledge of the Borrower, the Parent
or any of their respective Subsidiaries, oral information that would
cause it to believe that the financial condition of any other party to
any Insurance Contract or Reinsurance Contract is so impaired as to be
reasonably likely to result in a default by such party under such
contract which could reasonably be expected to cause a Material Adverse
Change.
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Section 4.24 PERMITTED HOUSING BUSINESS LEASING. Schedule 4.24
sets forth a true and accurate summary of the Units currently leased by the
Parent and the Parent's Subsidiaries', together with (a) a description of the
market for such Units, (b) the breakdown of whether the term of the applicable
lease of such Units is less than or equal to 1 year, greater than 1 year but
less than 5 years, or equal to or greater than 5 years, and (c) the occupancy
level by market for such Units as of the Effective Date.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall
remain unpaid, any Letter of Credit shall remain outstanding, or any Lender
shall have any Commitment hereunder, the Borrower agrees to comply with the
following covenants.
Section 5.01 COMPLIANCE WITH LAWS. The Borrower will comply, and
cause the Parent and each of its Subsidiaries to comply, in all material
respects with all Legal Requirements.
Section 5.02 PRESERVATION OF EXISTENCE; SEPARATENESS, ETC.
(a) The Borrower will preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its partnership,
limited liability company or corporate (as applicable) existence,
rights, franchises and privileges in the jurisdiction of its formation,
and qualify and remain qualified, and cause each such Subsidiary to
qualify and remain qualified, as a foreign partnership, corporation or
limited liability company, as applicable in each jurisdiction in which
qualification is necessary or desirable in view of its business and
operations or the ownership of its properties, and, in each case, where
failure to qualify or preserve and maintain its rights and franchises
could reasonably be expected to cause a Material Adverse Change.
(b) The Parent common stock shall at all times be duly
listed on the New York Stock Exchange, Inc. and (ii) the Parent shall
timely file all reports required to be filed by it with the New York
Stock Exchange, Inc. and the Securities and Exchange Commission.
(c) The Borrower shall cause the PErmitted Other
Subsidiaries which have Indebtedness to, (i) maintain financial
statements, accounting records and other corporate records and other
documents separate from all non-Permitted Other Subsidiaries, (ii)
maintain their own bank accounts in their own name, separate from all
non-Permitted Other Subsidiaries, (iii) pay their own expenses and
other liabilities from their own assets and incur (or endeavor to
incur) obligations to other Persons based solely upon their own assets
and creditworthiness and not upon the creditworthiness of each other or
any other Person, and (iv) file their own tax returns or, if part of a
consolidated group, join in the consolidated tax return of such group
as a separate member thereof.
(d) The Borrower shall, and shall cause the Permitted
Other Subsidiaries which have Indebtedness to, take all actions
necessary to keep such Permitted Other Subsidiaries, separate from the
Borrower and the Borrower's other Subsidiaries,
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including, without limitation, (i) the taking of action under the
direction of the Board of Directors, members or partners, as
applicable, of such Permitted Other Subsidiaries and, if so required by
the Certificate of Incorporation or the Bylaws, operating agreement or
partnership agreement, as applicable, of such Permitted Other
Subsidiaries or by any Legal Requirement, the approval or consent of
the stockholders, members or partners, as applicable, of such Permitted
Other Subsidiaries, (ii) the preparation of corporate, partnership or
limited liability company minutes for or other appropriate evidence of
each significant transaction engaged in by such Permitted Other
Subsidiaries, (iii) the observance of separate approval procedures for
the adoption of resolutions by the Board of Directors or consents by
the partners, as applicable, of such Permitted Other Subsidiaries, on
the one hand, and of the Borrower and the Borrower's other
Subsidiaries, on the other hand, and (iv) preventing the cash, cash
equivalents, credit card receipts or other revenues of the Hospitality
Properties owned by such Permitted Other Subsidiaries or any other
assets of such Permitted Other Subsidiaries from being commingled with
the cash, cash equivalents, credit card receipts or other revenues
collected by the Borrower or the Borrower's other Subsidiaries.
(e) The Borrower shall take all steps reasonably
necessary to avoid (i) misleading any other Person as to the identity
of the entity with which such Person is transacting business or (ii)
implying that the Borrower is, directly or indirectly, absolutely or
contingently, responsible for the Indebtedness or other obligations of
the Permitted Other Subsidiaries or any other Person.
(f) The Borrower shall cause all the transactions
contemplated by the Merger Agreement and the Registration Statements
that have not been consummated prior to the initial Borrowing under
this Agreement to be promptly consummated in accordance with the terms
of the Merger Agreement, all Legal Requirements and all corporate and
partnership governance requirements, including without limitation the
conversion of Indebtedness of and preferred stock in IHC or IHC's
Subsidiaries into Ownership Interests of the Parent or the Borrower,
all as evidenced to the reasonable satisfaction of the Administrative
Agent.
Section 5.03 PAYMENT OF TAXES, ETC. The Borrower will pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent (a) all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or Property that are
material in amount, prior to the date on which penalties attach thereto and (b)
all lawful claims that are material in amount which, if unpaid, might by Legal
Requirement become a Lien upon its Property; PROVIDED, HOWEVER, that neither the
Borrower nor any such Subsidiary shall be required to pay or discharge any such
tax, assessment, charge, levy, or claim (a) which is being contested in good
faith and by appropriate proceedings, (b) with respect to which reserves in
conformity with GAAP have been provided, (c) such charge or claim does not
constitute and is not secured by any ▇▇▇▇▇▇ ▇▇▇▇ on any portion of any Owned
Hospitality Property and no portion of any Owned Hospitality Property is in
jeopardy of being sold, forfeited or lost during or as a result of such contest,
(d) neither the Administrative Agent nor any Lender could become subject to any
civil fine or penalty or criminal fine or penalty, in
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each case as a result of non-payment of such charge or claim and (e) such
contest does not, and could not reasonably be expected to, result in a Material
Adverse Change.
Section 5.04 VISITATION RIGHTS; LENDER MEETING. Subject to the
rights of the owners of the Hospitality Properties for which there are Permitted
Property Agreements, at any reasonable time and from time to time and so long as
any visit or inspection will not unreasonably interfere with the Borrower's or
any of its Subsidiary's operations, upon reasonable notice, the Borrower will
permit the Administrative Agent and any Lender or any of its agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit and inspect at its reasonable
discretion the Properties owned or operated by the Borrower and any of its
Subsidiaries, to discuss the affairs, finances and accounts of such Persons with
any of their respective officers or directors. Without in any way limiting the
foregoing, the Borrower will, upon the request of the Administrative Agent,
participate in a meeting with the Administrative Agent and the Lenders once
during each calendar year to be held at the Borrower's office in the District of
Columbia or Dallas, Texas (or such other location as may be agreed to by the
Borrower and the Administrative Agent) at such time as may be agreed to by the
Borrower and the Administrative Agent.
Section 5.05 REPORTING REQUIREMENTS. The Borrower will furnish to
the Administrative Agent, with respect to those items set forth in clauses
(a)-(c) and (i), and each Lender:
(a) QUARTERLY FINANCIALS. As soon as available and in any
event not later than 50 days after the end of each Fiscal Quarter of
the Parent (except for the Fiscal Quarter which ends on the date the
Fiscal Year ends), the unaudited Consolidated balance sheets of the
Parent and its Subsidiaries as of the end of such quarter and the
related unaudited statements of income, shareholders' equity and cash
flows of the Parent and its Subsidiaries for such Fiscal Quarter and
the period commencing at the end of the previous year and ending with
the end of such Fiscal Quarter, and the corresponding figures as at the
end of, and for, the corresponding periods in the preceding Fiscal
Year, all duly certified with respect to such statements (subject to
year-end audit adjustments) by a Responsible Officer of the Parent as
having been prepared in accordance with GAAP, together with (i) a
Compliance Certificate duly executed by a Responsible Officer of the
Parent; PROVIDED that the Parent's Total Indebtedness used to calculate
the Leverage Ratio and the Senior Leverage Ratio in such Compliance
Certificate shall be the Parent's Total Indebtedness as of the Status
Reset Date during the Fiscal Quarter in which such Compliance
Certificate was delivered, and (ii) a report certified by a Responsible
Officer of the Parent setting forth for each Hospitality Property owned
or operated by the Parent or any of its Subsidiaries as of the end of
such Fiscal Quarter the Adjusted EBITDA for such Hospitality Property
for the Rolling Period then ended, both in total and by Fiscal Quarter
for such Rolling Period; PROVIDED that for those Hospitality Properties
for which the Parent or any of its Subsidiaries is only a manager, the
Borrower shall only be obligated to use the Borrower's commercially
reasonable efforts to provide the information required by this clause
(ii) and shall not be obligated to disclose any confidential
information.
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(b) ANNUAL FINANCIALS. As soon as available and in any
event not later than 95 days after the end of each Fiscal Year of the
Parent, a copy of the Consolidated balance sheets of the Parent and its
Subsidiaries as of the end of such Fiscal Year and the related
Consolidated statements of income, shareholders' equity and cash flows
of the Parent and its Subsidiaries for such Fiscal Year, and the
corresponding figures as at the end of, and for, the preceding Fiscal
Year, and audited and certified by KPMG, L.L.P. or other independent
certified public accountants of nationally recognized standing
reasonably acceptable to the Administrative Agent in an opinion,
without qualification as to the scope, and including, if requested by
the Administrative Agent, any management letters delivered by such
accountants to the Parent in connection with such audit, together with
(i) the documents required in clauses (i) and (ii) of the preceding
Section 5.05(a) and (ii) a certificate duly executed by a Responsible
Officer of the Parent which reflects in detail reasonably acceptable to
the Administrative Agent the financial performance of the applicable
Person related to the financial covenants contained in the
documentation for any Permitted Other Indebtedness. As soon as
available and in any event not later than 50 days after the end of each
Fiscal Year of the Parent, the Borrower will furnish to the
Administrative Agent a draft Compliance Certificate duly executed by a
Responsible Officer of the Parent for such end of Fiscal Year financial
statements. Such draft Compliance Certificate will be used for purposes
of re-determining Status at the Status Reset Date following the end of
such Fiscal Year. If the final Compliance Certificate delivered in
connection with the financial statements for the end of such Fiscal
Year reflects a different Status than that reflected in the draft
Compliance Certificate, then (a) the Borrower shall be deemed to have
been at the Status set forth in the final Compliance Certificate since
the Status Reset Date following the end of the Fiscal Year and (b)
within five (5) Business Days following delivery of such final
Compliance Certificate, either the Borrower will pay to the Lenders or
the Lenders will pay to the Borrower, as applicable, the amount of the
adjustment of interest and fees payable by the Borrower under this
Agreement because of such adjustment in Status.
(c) SECURITIES LAW FILINGS. Promptly and in any event
within 15 days after the sending or filing thereof, copies of all proxy
material, reports and other information which the Borrower, the Parent
or any of their respective Subsidiaries sends to or files with the
United States Securities and Exchange Commission or sends to all of the
shareholders of the Parent or partners of the Borrower.
(d) DEFAULTS. As soon as possible and in any event within
five days after the occurrence of each Default known to a Responsible
Officer of the Parent, the Borrower or any of their respective
Subsidiaries, a statement of an authorized financial officer or
Responsible Officer of the Borrower setting forth the details of such
Default and the actions which the Borrower has taken and proposes to
take with respect thereto.
(e) ERISA NOTICES. As soon as possible and in any event
(i) within 30 days after the Parent, the Borrower or any of a
Controlled Group knows to know that any Termination Event described in
clause (a) of the definition of Termination Event with respect to any
Plan has occurred, (ii) within 10 days after the Parent, the Borrower
or any of a Controlled Group knows that any other Termination Event
with respect to any Plan
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has occurred, a statement of the Chief Financial Officer of the Parent
describing such Termination Event and the action, if any, which the
Parent, the Borrower or such member of such Controlled Group proposes
to take with respect thereto; (iii) within 10 days after receipt
thereof by the Parent, the Borrower or any of a Controlled Group from
the PBGC, copies of each notice received by the Parent, the Borrower or
any such member of such Controlled Group of the PBGC's intention to
terminate any Plan or to have a trustee appointed to administer any
Plan; and (iv) within 10 days after receipt thereof by the Parent, the
Borrower or any member of a Controlled Group from a Multiemployer Plan
sponsor, a copy of each notice received by the Parent, the Borrower or
any member of such Controlled Group concerning the imposition or amount
of withdrawal liability pursuant to Section 4202 of ERISA.
(f) ENVIRONMENTAL NOTICES. Promptly upon the knowledge of
any Responsible Officer of the Borrower of receipt thereof by the
Borrower or any of its Subsidiaries, a copy of any form of notice,
summons or citation received from the United States Environmental
Protection Agency, or any other Governmental Authority concerning (i)
violations or alleged violations of Environmental Laws, which seeks to
impose liability therefor, (ii) any action or omission on the part of
the Parent or the Borrower or any of their present or former
Subsidiaries in connection with Hazardous Waste or Hazardous Substances
which, based upon information reasonably available to the Borrower,
could reasonably be expected to cause a Material Adverse Change or an
Environmental Claim in excess of $1,000,000, (iii) any notice of
potential responsibility under CERCLA, or (iv) concerning the filing of
a Lien upon, against or in connection with the Parent, Borrower, their
present or former Subsidiaries, or any of their leased, owned or
operated Property, wherever located.
(g) OTHER GOVERNMENTAL NOTICES OR ACTIONS. Promptly and
in any event within five Business Days after receipt thereof by the
Parent, Borrower or any of their respective Subsidiaries, (i) a copy of
any notice, summons, citation, or proceeding seeking to adversely
modify in any material respect, revoke, or suspend any license, permit,
or other authorization from any Governmental Authority, which action
could reasonably be expected to cause a Material Adverse Change, and
(ii) any revocation or involuntary termination of any license, permit
or other authorization from any Governmental Authority, which
revocation or termination could reasonably be expected to cause a
Material Adverse Change.
(h) REPORTS AFFECTING THE LEVERAGE RATIO AND THE SENIOR
LEVERAGE RATIO. On or prior to the 15th day following any Adjustment
Event, an Adjustment Report with respect to such Adjustment Event.
(i) PRESS RELEASES. Promptly and in any event within 5
days after the sending or releasing thereof, copies of all press
releases or other releases of information to the public by the
Borrower, the Parent or any of their respective Subsidiaries or
releases of information to the Parent's shareholders.
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(j) CORPORATE ACTIVITY. Promptly following any merger or
dissolution of any Subsidiary of the Borrower which is permitted
hereunder or event which would make any of the representations in
Section 4.01-4.04 untrue, notice thereof.
(k) MATERIAL LITIGATION. As soon as possible and in any
event within five days of any Responsible Officer of the Borrower, the
Parent or any of their respective Subsidiaries having knowledge
thereof, notice of any litigation, claim or any other event which could
reasonably be expected to cause a Material Adverse Change.
(l) OPERATING INFORMATION. As soon as available and in
any event not later than 50 days after the end of each Fiscal Quarter
of the Parent, the Borrower shall provide the Administrative Agent (for
distribution to the Lenders) liquidity, cash flow and summary operating
information for such fiscal month and detailed information related to
the Borrower's Permitted Housing Business and Permitted Property
Agreements, with all such information prepared by the Borrower in a
form reasonably satisfactory to the Required Lenders.
(m) INSURANCE INFORMATION. As soon as available and in
any event not later than 95 days after the end of each Fiscal Year of
the Parent, the Borrower shall provide the Administrative Agent copies
of the unaudited Insurance Annual Statement of each Insurance Company,
certified by a Responsible Officer of the Parent as fairly presenting
the financial condition and results of operations of such Insurance
Company in accordance with SAP consistently applied throughout the
periods reflected therein. As soon as available and in any event not
later than 50 days after the end of each Fiscal Quarter of the Parent,
the Borrower shall provide the Administrative Agent with a schedule of
the Insurance Contracts and Reinsurance Contracts existing as of the
last day of such Fiscal Quarter, together with the maximum amount
payable by the Insurance Company thereunder. Within 10 days of request
by the Administrative Agent, the most recent examination reports and
loss run sheets of the Insurance Companies.
(n) BUDGET. On or prior to January 31st of each Fiscal
Year, the Borrower shall provide the Administrative Agent (for
distribution to the Lenders) an operating budget for the Parent and its
Subsidiaries on a Consolidated basis for such Fiscal Year, including
without limitation pro forma balance sheet, income statement, cash flow
and financial covenant compliance.
(o) OTHER INFORMATION. Such other information respecting
the business or Properties, or the condition or operations, financial
or otherwise, of the Borrower, the Parent or any of their respective
Subsidiaries, as any Lender through the Administrative Agent may from
time to time reasonably request.
Section 5.06 MAINTENANCE OF PROPERTY. The Borrower will, and will
cause each of the Parent and its Subsidiaries to (a) maintain their Owned
Hospitality Properties in a manner consistent for Hospitality Properties and
related property of the same quality and character and shall keep or cause to be
kept every part thereof and its other properties in good condition and repair,
reasonable wear and tear excepted, and make all reasonably necessary repairs,
renewals or
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replacements thereto as may be reasonably necessary to conduct the business of
the Borrower and its Subsidiaries, (b) not knowingly or willfully permit the
commission of waste or other injury, or the occurrence of pollution,
contamination or any other condition in, on or about any of their Owned
Hospitality Properties, (c) substantially maintain and repair each of their
Owned Hospitality Properties as required by any franchise agreement, license
agreement, management agreement or ground lease for such Owned Hospitality
Property, and (d) perform such Person's obligations under the Permitted Property
Agreements and the Permitted Housing Agreements to which such Person is a party
except where the non-performance thereof in the aggregate would not reasonably
be expected to cause a Material Adverse Change.
Section 5.07 INSURANCE. The Borrower will maintain, and cause each
of its Subsidiaries to maintain, the insurance required pursuant to Schedule
5.07.
Section 5.08 USE OF PROCEEDS AND LETTERS OF CREDIT. The Advances
and Letters of Credit shall be used by the Borrower for the purposes set forth
in Section 4.08.
Section 5.09 COLLATERAL; RELEASES. Subject to the time periods set
forth in Section 5.10 and Section 6.06(d) for executing Security Documents in
connection with the acquisition of Permitted New Investments and subject to the
time periods set forth in Section 3.01(a)(ii) with respect to satisfying certain
conditions precedent related to Ownership Interests in Persons domiciled outside
the United States, the Parent, the Borrower and the Subsidiaries (a) will cause
at all times the Administrative Agent to have an Acceptable Lien in the
Collateral, (b) will cause at all times all material provisions of the Security
Documents to be valid and binding on the Persons executing such Security
Documents and (c) shall execute or re-execute such Security Documents and take
such other actions as the Administrative Agent shall reasonably request in order
for the Administrative Agent to maintain or create an Acceptable Lien in the
Collateral, including without limitation any Collateral acquired by the Borrower
the Parent, or any of the other Guarantors after the Closing Date. Without
limiting the foregoing, on the Closing Date the Parent will grant to the
Administrative Agent an Acceptable Lien in the Parent's Ownership Interests in
the Borrower at the time of granting such Acceptable Lien and thereafter
maintain such Acceptable Lien. Notwithstanding the foregoing, upon request of
the Borrower to the Administrative Agent, the Administrative Agent will release
from the Liens of the Security Documents in conjunction with any repayment of
Advances required under this Agreement in connection therewith (a) the Property
which is the subject of a Permitted Asset Disposition and (b) any Owned
Hospitality Property and the Ownership Interests in the Permitted Other
Subsidiary which owns such Owned Hospitality Property in connection with the
incurrence of Permitted Other Indebtedness to be secured by such Collateral for
which the Net Cash Proceeds are equal to or greater than and are used to repay
the Permitted Owned Hospitality Property Obligations for such Collateral. If the
Property released in connection with any such Permitted Asset Disposition
includes all or substantially all of the Ownership Interests in a Guarantor, or
if a Permitted Other Subsidiary incurring Permitted Other Indebtedness is a
Guarantor, then, upon request of the Borrower to the Administrative Agent, at
the time of such Permitted Asset Disposition or the incurrence of such Permitted
Other Indebtedness, as applicable, the Administrative Agent shall release such
Guarantor from the Guaranty and the other Credit Documents to which such
Guaranty is a party. To the extent that a Dissolving Subsidiary is dissolved by
the date thirty (30) days following the Closing Date, any Lien of a Security
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Document on the Ownership Interests in such Dissolving Subsidiary shall be
deemed released as of the date of such Dissolving Subsidiaries dissolution
without any further action by the Administrative Agent or the Lenders.
Section 5.10 NEW SUBSIDIARIES. Except with respect to a Permitted
Other Subsidiary that has incurred or issued Permitted Other Indebtedness,
within ten (10) Business Days after either (a) the date that any Subsidiary of
the Parent that was not a Material Subsidiary becomes a Material Subsidiary, or
(b) the purchase by the Parent or any of its Subsidiaries of the Ownership
Interests of any Person, which purchase results in such Person becoming a
Material Subsidiary the Parent shall, in each case, cause (i) such Material
Subsidiary to execute and deliver to the Administrative Agent either (A) a
Guaranty, an Environmental Indemnity and a Security Agreement or (B) an
Accession Agreement, (ii) any of the Borrower and any Guarantor who is a direct
owner of the Ownership Interests of such Material Subsidiary to execute and
deliver to the Administrative Agent a Security Agreement, if necessary, and such
other documents as are necessary to create an Acceptable Lien in the Ownership
Interests in the Material Subsidiary owned by such Person (and such other
Security Documents as the Administrative Agent may reasonably request) and (iii)
the Persons who are party to the documents delivered pursuant to the provisions
of this Section 5.10 to provide such evidence of authority to enter into such
documents as the Administrative Agent may reasonably request. To the extent that
a Dissolving Subsidiary is not dissolved by the date thirty (30) days following
the Closing Date, such Subsidiary shall be deemed a new Material Subsidiary for
purposes of the provisions of this Section 5.10; PROVIDED that the ten (10)
Business Day period referred to above shall be deemed to expire on the date
thirty (30) days following the Closing Date.
Section 5.11 INSURANCE BUSINESS.
(a) The Borrower will cause each of the Insurance
Companies to (i) carry on and conduct its business only in
substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted, (ii) only engage in the
insurance business or the business of a holding company owning entities
engaged in the insurance business or the business of insurance or
reasonably incidental activities, (iii) do all things necessary to
renew, extend and continue in effect all Insurance Licenses which may
at any time and from time to time be necessary for each Insurance
Company to conduct business in compliance with all applicable Legal
Requirements, including, if applicable, the filing of all appropriate
Insurance Annual Statements and SAP Financial Statements; PROVIDED,
that each Insurance Company may withdraw from one or more states (other
than its state of domicile) as an admitted insurer if such withdrawal
is determined by the Insurance Company's Board of Directors to be in
the best interest of the Insurance Companies and could not reasonably
be expected to cause a Material Adverse Change.
(b) The Borrower will not permit the Insurance Surplus,
as of the last day of each Fiscal Quarter, to be less than that
required by applicable Legal Requirements. The Borrower will not permit
the maximum amount payable by all Insurance Companies under Insurance
Contracts or Reinsurance Contracts, as of the last day of each Fiscal
Quarter, to be greater than $10,000,000.
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Section 5.12 INTEREST RATE AGREEMENTS. From the date 60 days
following the Closing Date until the Maturity Date, the Borrower shall cause the
Parent to obtain and thereafter maintain Interest Rate Agreements reasonably
satisfactory to the Administrative Agent, sufficient to ensure that 50% of the
Parent's Total Indebtedness, measured as of each day during such period, shall
be covered by such Interest Rate Agreements or shall have a fixed rate of
interest. Any Interest Rate Agreements for the Parent shall be provided by
either a Lender or a bank or other financial institution whose long-term debt
rating is equal to or greater than "A"; provided that the Lenders will have a
right of first refusal, but not an obligation, to provide any Interest Rate
Agreements for the Parent on substantially such terms as the Parent would be
able to obtain from any such non-Lender. To the extent that any Interest Rate
Agreement is provided by a Lender, the obligations of the Parent or its
Subsidiary under such Interest Rate Agreement may be secured by the Collateral
pari passu with the Obligations. However, the pledge of any Collateral to secure
any Interest Rate Agreement from any non-Lender shall be subject to the written
approval of the Designated Lenders.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall
remain unpaid, any Letter of Credit shall remain outstanding, or any Lender
shall have any Commitment, the Borrower agrees to comply with the following
covenants.
Section 6.01 LIENS, ETC. The Borrower, the Parent and their
respective Subsidiaries will not create, assume, incur or suffer to exist, any
Lien on or in respect of any of its Property whether now owned or hereafter
acquired, or assign any right to receive income, except that the Borrower and
its Subsidiaries may create, incur, assume or suffer to exist Liens:
(a) securing the Obligations;
(b) for taxes, assessments or governmental charges or
levies on Property of the Borrower or any Guarantor to the extent not
required to be paid pursuant to Sections 5.03;
(c) imposed by law (such as landlords', carriers',
warehousemen's and mechanics' liens or otherwise arising from
litigation) (i) which are being contested in good faith and by
appropriate proceedings, (ii) with respect to which reserves in
conformity with GAAP have been provided, (iii) which have not resulted
in any Collateral being in jeopardy of being sold, forfeited or lost
during or as a result of such contest, (iv) neither the Administrative
Agent nor any Lender could become subject to any civil fine or penalty
or criminal fine or penalty, in each case, as a result of non-payment
of such charge or claim and (v) such contest does not, and could not
reasonably be expected to, result in a Material Adverse Change;
(d) on leased personal property to secure solely the
lease obligations associated with such property;
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(e) on the Property of or Ownership Interests in a
Permitted Other Subsidiary securing Indebtedness set forth in paragraph
(b) of the definition of "Permitted Other Indebtedness" incurred by
such Permitted Other Subsidiary to the extent such Indebtedness is
permitted pursuant to the provisions of Section 6.02;
(f) on the Ownership Interests in an Unconsolidated
Entity securing Permitted Non-Recourse Unconsolidated Entity
Indebtedness incurred by such Unconsolidated Entity;
(g) granted to the owner of a Hospitality Property
subject to a Permitted Property Agreement on the accounts receivable,
inventory, cash or other property owned by the Borrower or the
Borrower's Subsidiary in connection with such Hospitality Property;
(h) on the Collateral (or on other assets of the Parent
and its Subsidiaries which are approved by the Administrative Agent as
additional security for the Obligations) to secure Additional
Designated Senior Indebtedness, PROVIDED that such Liens (i) also
secure the Obligations on an equal and ratable basis with such
Indebtedness, and (ii) if not already granted by the Security
Documents, then are granted pursuant to documentation (including
documentation granting Liens to secure the Obligations on an equal and
ratable basis) reasonably acceptable to the Administrative Agent and
the Borrower; and
(i) easements, rights of way, covenants, restrictions,
zoning and similar restrictions and other similar charges or
encumbrances not interfering with the ordinary conduct of the business
of the Borrower or its Subsidiaries and which do not detract materially
from the value of any of the Owned Hospitality Properties to which they
attach or impair materially the use thereof by the Borrower or the
Borrower's Subsidiaries.
Section 6.02 INDEBTEDNESS. The Borrower, the Parent and their
respective Subsidiaries will not incur or permit to exist any Indebtedness other
than the Obligations and the following:
(a) Permitted Other Indebtedness in an amount that does
not cause a breach at any time of the covenants contained in Article
VII;
(b) Capital Leases for Personal Property;
(c) Interest Rate Agreements; PROVIDED that (i) such
agreements shall be unsecured except as provided in Section 10.18 and
the Security Agreement, (ii) the dollar amount of indebtedness subject
to such agreements and the indebtedness subject to Interest Rate
Agreements in the aggregate shall not exceed the sum of the amount of
the Commitments and the amount of the other Indebtedness of the
Borrower or its Affiliates which bears interest at a variable rate, and
(iii) the agreements shall be at such interest rates and otherwise in
form and substance reasonably acceptable to the Administrative Agent;
and
(d) Any of the following Indebtedness incurred by the
Parent or the Borrower:
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(i) guaranties in connection with Permitted
Other Indebtedness secured by an Owned Hospitality Property or
interest in a Person owning a Hospitality Property of (A) if
the Hospitality Property is subject to a ground lease, the
payment of rent and performance of obligations under such
ground lease, (B) real estate taxes relating to such
Hospitality Property, and (C) capital reserves required under
such Indebtedness;
(ii) customary indemnities for acts of
malfeasance, misappropriation and misconduct and an
environmental indemnity for the lender under Indebtedness
permitted under this Agreement;
(iii) guaranties of franchise and license
agreements in connection with Hospitality Properties; and
(iv) guaranties of obligations of the Parent's
Subsidiaries or Unconsolidated Entities with respect to
Permitted Property Agreements and Permitted Housing
Agreements; and
(e) extensions, renewals and refinancing of any of the
Indebtedness specified in paragraphs (a) - (d) above so long as the
principal amount of such Indebtedness is not thereby increased.
Section 6.03 AGREEMENTS RESTRICTING DISTRIBUTIONS FROM
SUBSIDIARIES. The Borrower will not, nor will it permit any of its Subsidiaries
(other than Permitted Other Subsidiaries) to, enter into any agreement (other
than a Credit Document) which limits distributions to or any advance by any of
the Borrower's Subsidiaries to the Borrower.
Section 6.04 RESTRICTED PAYMENTS. Neither the Parent, nor the
Borrower, nor any of their respective Subsidiaries, will make any Restricted
Payment, except that:
(a) provided that no Default has occurred and is
continuing or would result therefrom, the Borrower shall be entitled to
make cash distributions to its partners, including the Parent, which
distributions for partners other than the Parent and the Parent's
Subsidiaries do not in the aggregate in any Fiscal Year exceed
$100,000;
(b) a Subsidiary of the Borrower may make a Restricted
Payment to the Borrower;
(c) the limited partners of the Borrower shall be
entitled to exchange limited partnership interests in the Borrower for
the Parent's common stock;
(d) the Parent or the Borrower shall be entitled to make
a one-time payment to Wyndham of approximately $450,000 to redeem
Wyndham's interest in Interstate Hotels, LLC;
(e) provided that no Default has occurred and is
continuing or would result therefrom, the Parent or the Borrower shall
be entitled to make payments to repay the
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Designated Redemption Indebtedness if such Person is contractually
obligated to make such repayment at such time;
(f) the Borrower shall be entitled to issue limited
partnership interests in the Borrower in exchange for Ownership
Interests in Subsidiaries and Unconsolidated Entities to the extent
such Investment is permitted pursuant to the provisions of Section
6.06; and
(g) provided that no monetary Default or Default in the
covenants set forth in Article VII has occurred and is continuing or
would result therefrom, then the Borrower shall be entitled to pay (i)
interest, but not principal (except only as permitted by clause (ii) of
this subsection (g)), of Subordinate Indebtedness permitted pursuant to
this Agreement, and (ii) principal of (A) Approved Inter-Company
Indebtedness; PROVIDED that any such principal payments (1) are made to
a Guarantor, (2) are either retained by such Guarantor or distributed
to the Borrower, the Parent or another Guarantor and (3) are used in
accordance with the provisions of this Agreement and (B) MHC
Indebtedness within 3 days of the Closing Date in an amount of up to
$3,000,000 in the aggregate.
Section 6.05 FUNDAMENTAL CHANGES; ASSET DISPOSITIONS. Neither the
Parent, the Borrower, nor any of their respective Subsidiaries (other than the
Permitted Other Subsidiaries), will (a) merge or consolidate with or into any
other Person, unless (i) a Guarantor is merged into the Borrower and the
Borrower is the surviving Person or a Subsidiary (other than a Permitted Other
Subsidiary which has Indebtedness other than the Obligations) is merged into any
Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other
than the Obligations), and (ii) immediately after giving effect to any such
proposed transaction no Default would exist; (b) sell, transfer, or otherwise
dispose of all or any of such Person's material Property except for a Permitted
Asset Disposition, or dispositions or replacements of personal property in the
ordinary course of business; (c) enter into, as lessor, a lease (other than a
lease which qualifies as a Permitted Asset Disposition) of all or substantially
all of any Owned Hospitality Property with any Person without the consent of the
Administrative Agent; (d) sell or otherwise dispose of any material Ownership
Interests of any Subsidiary (except for a Permitted Other Subsidiary or a sale
which qualifies as a Permitted Asset Disposition); (e) except for (i)
Capitalization Events for which the consideration is principally cash or cash
equivalents and for which the Net Cash Proceeds are applied in accordance with
the provisions of Section 2.07(c) and (ii) the issuance of limited partnership
interests in the Borrower in exchange for Ownership Interests in Subsidiaries
and Unconsolidated Entities to the extent permitted pursuant to the provisions
of Section 6.04, materially alter the corporate, capital or legal structure of
any such Person (except for a Permitted Other Subsidiary); (f) enter into any
forward sales of the Parent common stock or Ownership Interests in the Borrower;
(g) liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) PROVIDED that nothing herein shall prohibit the Borrower from
dissolving any Subsidiary which has no assets on the date of dissolution, (h)
enter into any leases of Property or management agreements for any Property
except (1) Permitted Property Agreements, (2) Permitted Housing Agreements, (3)
leases of office space for the use of the Parent's and the Parent's
Subsidiaries' employees, and (4) the leases of personal property permitted by
this Agreement or (i) materially alter the character of their respective
businesses
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from that conducted as of the date of this Agreement or otherwise engage in any
material business activity outside of the Hospitality Management Business.
Section 6.06 INVESTMENTS AND OTHER PROPERTY. Neither the Parent,
the Borrower, nor any of their respective Subsidiaries, shall acquire by
purchase or otherwise any Investments or other Property, except the following:
(a) Investments or Properties owned by such Persons as of
the Closing Date;
(b) Liquid Investments;
(c) trade and customer accounts receivable which are for
goods furnished or services rendered in the ordinary course of business
and are payable in accordance with customary trade terms, and
receivables purchased in connection with the acquisition of an Owned
Hospitality Property;
(d) Investments in Permitted New Investments or
Subsidiaries making Permitted New Investments; PROVIDED that (i) within
ten (10) Business Days of the acquisition by the Parent or any of the
Parent's Subsidiaries of any Collateral for which the Administrative
Agent on behalf of the Lenders does not already have an Acceptable
Lien, the Borrower, the Parent and the other Guarantors will execute
such Security Documents as are necessary or desirable for the
Administrative Agent on behalf of the Lenders to have an Acceptable
Lien in such Collateral and (ii) within twenty (20) Business Days of
the acquisition of an Owned Hospitality Property by the Parent or any
of the Parent's Subsidiaries, the Borrower shall deliver to the
Administrative Agent a Title Policy for such Owned Hospitality
Property;
(e) other assets, including Capital Expenditures,
acquired or made in the ordinary course of (i) owning the Parent's and
the Parent's Subsidiaries' existing Investments and Properties and any
Permitted New Investments and (ii) operating a Hospitality Management
Business; and
(f) loans to employees of the Parent or its Subsidiaries
which in the aggregate do not exceed $100,000.
Notwithstanding the foregoing, neither the Borrower, nor the Parent, nor their
respective Subsidiaries shall make an Investment, acquire any other Property, or
enter into any Permitted Property Agreement or Permitted Housing Agreement which
would (a) cause a Default, (b) cause or result in the Borrower or the Parent
failing to comply with any of the financial covenants contained herein, or (c)
cause or result in the aggregate Adjusted EBITDA in any Rolling Period derived
from all Permitted Property Agreements, Permitted Housing Agreements or other
Investments related to Hospitality Properties which are not full-service or
limited service hotels to exceed 35% of the Parent's Adjusted EBITDA for such
Rolling Period. In addition, neither the Borrower, nor the Parent, nor their
respective Subsidiaries shall enter into any agreements to purchase Investments
or other Property, unless with respect to such purchase such Person at all times
has available sources of funds equal to pay in full the cost of the purchase of
such Investments or other Property (to the extent that the payment of such cost
of purchase
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constitutes a recourse obligation of the Parent, the Borrower or its
Subsidiary), which available sources of funds may include Advances to the extent
that the Borrower may borrow the same for the purposes required or other
Indebtedness permitted by the terms of this Agreement.
Section 6.07 AFFILIATE TRANSACTIONS. Except for certain liquor
license agreements, the Borrower will not, and will not permit any of its
Subsidiaries to, make, directly or indirectly: (a) any transfer, sale, lease,
assignment or other disposal of any assets to any Affiliate of the Borrower
which is not a Guarantor or any purchase or acquisition of assets from any such
Affiliate except for purchases of new personal property (i) which in any
calendar year do not exceed $1,000,000 in the aggregate and (ii) for which the
sales price is the actual cost to the party selling; or (b) any arrangement or
other transaction directly or indirectly with or for the benefit of any such
Affiliate (including without limitation, guaranties and assumptions of
obligations of an Affiliate), other than in the ordinary course of business and
at market rates.
Section 6.08 SALE OR DISCOUNT OF RECEIVABLES. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
sell with recourse, or discount or otherwise sell for less than the face value
thereof, any of its notes or accounts receivable.
Section 6.09 MATERIAL DOCUMENTS. The Borrower will not, nor will
it permit any of its Subsidiaries to (a) amend the Borrower's partnership
agreement in any material respect, (b) admit a new general partner to the
Borrower, (c) enter into any termination or material modification or amendment
of Permitted Property Agreements which singly or in the aggregate could
reasonably be expected to cause a Material Adverse Change, (d) enter into any
modification or amendment of any of the Permitted Property Agreements with MHC
or MHC's Subsidiaries which would provide in any such Permitted Property
Agreements performance standards for the years 2001 or 2002, (e) increase the
interest rate under the agreements executed by the Borrower evidencing the MHC
Indebtedness to a rate in excess of the sum of (i) the Eurodollar Rate (as such
rate varies) PLUS (ii) six and three-quarters percent (6 3/4%); PROVIDED that a
default interest rate for the MHC Indebtedness can be three percent (3%) in
excess of such rate, (f) modify the agreements executed by the Borrower
evidencing the MHC Indebtedness to accelerate the scheduled repayment date of
any principal, or (g) modify the Approved Inter-Company Indebtedness Loan
Documents in any way that is materially adverse to the Lenders.
Any termination, modification or amendment prohibited under this
Section 6.09 without the Required Lender's written consent shall, to the extent
permitted by applicable law, be void and of no force and effect.
Section 6.10 NO FURTHER NEGATIVE PLEDGES. Neither the Borrower,
nor the Parent, nor their respective Subsidiaries shall enter into or suffer to
exist any agreement (other than this Agreement and the Credit Documents and as
set forth in the Permitted Property Agreements and the Permitted Housing
Agreements) (a) prohibiting the creation or assumption of any Lien upon the
Properties of the Parent, the Borrower or any of their respective Subsidiaries
(except for Properties of and Ownership Interests in the Permitted Other
Subsidiaries), whether now owned or hereafter acquired, or (b) requiring an
obligation to be secured if some other obligation is or becomes secured;
PROVIDED that in connection with the incurrence of Additional Designated Senior
Indebtedness, the Parent and its Subsidiaries may enter into such agreements
which (y)
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are in form and substance acceptable to the Administrative Agent in its
reasonable discretion, and (z) would require that assets of the Parent and its
Subsidiaries which secure the Obligations also secure on an equal and ratable
basis such Additional Designated Senior Indebtedness.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
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ARTICLE VII
FINANCIAL COVENANTS
So long as any Note or any amount under any Credit Document shall
remain unpaid, any Letter of Credit shall remain outstanding, or any Lender
shall have any Commitment hereunder, unless the Required Lenders shall otherwise
consent in writing, the Borrower agrees to comply and cause the Parent and the
Parent's Subsidiaries to comply with the following covenants:
Section 7.01 INTEREST COVERAGE RATIO. The Parent shall maintain at
the end of each Rolling Period (a) for the Rolling Periods ending on June 30,
2002 through September 30, 2002, an Interest Coverage Ratio of not less than
1.75 to 1.00, (b) for the Rolling Periods ending on December 31, 2002 through
September, 2003, an Interest Coverage Ratio of not less than 2.25 to 1.00, and
(c) for any Rolling Period thereafter, an Interest Coverage Ratio of not less
than 2.50 to 1.00.
Section 7.02 SENIOR INTEREST COVERAGE RATIO. The Parent shall
maintain at the end of each Rolling Period (a) for the Rolling Period ending on
June 30, 2002, a Senior Interest Coverage Ratio of not less than 2.75 to 1.00,
(b) for the Rolling Period ending on September 30, 2002, a Senior Interest
Coverage Ratio of not less than 3.00 to 1.00, and (c) for any Rolling Period
thereafter, a Senior Interest Coverage Ratio of not less than 3.50 to 1.00.
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Section 7.03 LEVERAGE RATIO. The Parent shall not on any date
permit the Leverage Ratio to exceed during the applicable period indicated in
the following chart the amount set forth in such chart for such period:
-----------------------------------------------------------------------
Beginning Date of Ending Date of Applicable Leverage Ratio
Applicable Period Period
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date The day immediately prior 5.50 to 1.00
to the Status Reset Date
during the Fiscal Quarter
commencing October 1,
2002
-----------------------------------------------------------------------
The Status Reset Date The day immediately prior 5.00 to 1.00
during the Fiscal to the Status Reset Date
Quarter commencing during the Fiscal Quarter
October 1, 2002 commencing January 1,
2003
-----------------------------------------------------------------------
The Status Reset Date The day immediately prior 4.75 to 1.00
during the Fiscal to the Status Reset Date
Quarter commencing during the Fiscal Quarter
January 1, 2003 commencing July 1, 2003
-----------------------------------------------------------------------
The Status Reset Date The day immediately prior 4.25 to 1.00
during the Fiscal to the Status Reset Date
Quarter commencing during the Fiscal Quarter
July 1, 2003 commencing October 1,
2003
-----------------------------------------------------------------------
The Status Reset Date The day immediately prior 4.00 to 1.00
during the Fiscal to the Status Reset Date
Quarter commencing during the Fiscal Quarter
October 1, 2003 commencing January 1,
2004
-----------------------------------------------------------------------
The Status Reset Date No ending date 3.50 to 1.00
during the Fiscal
Quarter commencing
January 1, 2004
-----------------------------------------------------------------------
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Section 7.04 SENIOR LEVERAGE RATIO. The Parent shall not on any
date permit the Senior Leverage Ratio to exceed during the applicable period
indicated in the following chart the amount set forth in such chart for such
period:
-----------------------------------------------------------------------
Beginning Date of Ending Date of Applicable Senior Leverage
Applicable Period Period Ratio
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Closing Date The day immediately prior 4.00 to 1.00
to the Status Reset Date
during the Fiscal Quarter
commencing January 1,
2003
-----------------------------------------------------------------------
The Status Reset Date The day immediately prior 3.25 to 1.00
during the Fiscal to the Status Reset Date
Quarter commencing during the Fiscal Quarter
January 1, 2003 commencing January 1,
2004
-----------------------------------------------------------------------
The Status Reset Date No ending date 2.50 to 1.00
during the Fiscal
Quarter commencing
January 1, 2004
-----------------------------------------------------------------------
Section 7.05 MAINTENANCE OF NET WORTH. The Parent shall at all
times maintain an Adjusted Net Worth of not less than the Minimum Net Worth.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01 EVENTS OF DEFAULT. The occurrence of any of the
following events shall constitute an "EVENT OF DEFAULT" under any Credit
Document:
(a) PRINCIPAL PAYMENT OR LETTER OF CREDIT OBLIGATION
PAYMENT. The Borrower or any Guarantor shall fail to pay any principal
of any Note or any Letter of Credit Obligation when the same becomes
due and payable as set forth in this Agreement;
(b) INTEREST OR OTHER OBLIGATION PAYMENT. The Borrower or
any Guarantor shall fail to pay any interest on any Note or any fee or
other amount payable hereunder or under any other Credit Document when
the same becomes due and payable as set forth in this Agreement or such
other Credit Document, as applicable, PROVIDED however that the
Borrower and the Guarantors will have a grace period of five (5) days
after the payments covered by this Section 8.01(b) becomes due and
payable for the first two defaults of such Persons collectively under
this Section 8.01(b) in every calendar year;
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(c) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made or deemed to be made (i) by the Borrower in this
Agreement or in any other Credit Document, (ii) by the Borrower (or any
of its officers) in connection with this Agreement or any other Credit
Document, or (iii) by any Guarantor in any Credit Document shall prove
to have been incorrect in any material respect when made or deemed to
be made;
(d) COVENANT BREACHES. (i) The Borrower shall fail to
perform or observe any covenant contained in Section 5.02, Article VI
or Article VII of this Agreement, (ii) the Borrower shall fail to
perform or observe, or shall fail to cause any Guarantor to perform or
observe any covenant in any Credit Document beyond any notice and/or
cure period for such default expressly provided in such Credit Document
or (iii) the Borrower or any Guarantor shall fail to perform or observe
any term or covenant set forth in any Credit Document which is not
covered by clause (i) or (ii) above or any other provision of this
Section 8.01, in each case if such failure shall remain unremedied for
thirty (30) days after the earlier of the date written notice of such
default shall have been given to the Borrower or such Guarantor by the
Administrative Agent or any Lender or the date a Responsible Officer of
the Borrower or any Guarantor has actual knowledge of such default,
unless such default in this clause (iii) cannot be cured in such thirty
(30) day period and the Borrower is diligently proceeding to cure such
default, in which event the cure period shall be extended to ninety
(90) days; PROVIDED that the Borrower shall not be entitled to more
than the aforementioned thirty (30) day period to cure a default under
Section 5.09 of this Agreement;
(e) CROSS-DEFAULTS. With respect to any Indebtedness of
the Borrower, the Parent or any of their respective Subsidiaries (but
excluding Indebtedness evidenced by the Notes) which is outstanding in
a principal amount of at least $5,000,000 individually or when
aggregated with all such Indebtedness of the Borrower, the Parent or
any of their respective Subsidiaries any of the following:
(i) any such Indebtedness shall be declared to
be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof,
(ii) such Person shall fail to pay any principal
of or premium or interest of any of such Indebtedness (whether
by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after
the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or
(iii) any other event shall occur or condition
shall exist under any agreement or instrument relating to such
Indebtedness, and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to permit the holders
of such Indebtedness to accelerate the maturity of such
Indebtedness;
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(f) INSOLVENCY. The Borrower, the Parent or any of their
respective Material Subsidiaries shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the
Borrower, the Parent or any of their respective Material Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against the Borrower, the Parent or any of their
respective Material Subsidiaries, either such proceeding shall remain
undismissed for a period of 60 days or any of the actions sought in
such proceeding shall occur; or the Borrower, the Parent or any of
their respective Material Subsidiaries shall take any corporate action
to authorize any of the actions set forth above in this paragraph (f);
(g) JUDGMENTS. Any judgment or order for the payment of
money in excess of $2,500,000 or the Dollar Equivalent thereof (reduced
for purposes of this paragraph for the amount in respect of such
judgment or order that a reputable insurer has acknowledged being
payable under any valid and enforceable insurance policy) shall be
rendered against the Borrower, the Parent or any of their respective
Subsidiaries which, within 30 days from the date such judgment is
entered, shall not have been discharged or execution thereof stayed
pending appeal;
(h) ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is likely to result in the termination of such
Plan for purposes of Title IV of ERISA, unless such Reportable Event,
proceedings or appointment are being contested by the Borrower in good
faith and by appropriate proceedings, (iv) any Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any member of a
Controlled Group shall incur any liability in connection with a
withdrawal from a Multiemployer Plan or the insolvency (within the
meaning of Section 4245 of ERISA) or reorganization (within the meaning
of Section 4241 of ERISA) of a Multiemployer Plan, unless such
liability is being contested by the Borrower in good faith and by
appropriate proceedings, or (vi) any other event or condition shall
occur or exist, with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could subject the Borrower or any
Guarantor to any tax, penalty or other liabilities in the aggregate
exceeding $10,000,000;
(i) GUARANTY. Any provision of any Guaranty shall for any
reason cease to be valid and binding on any Guarantor or any Guarantor
shall so state in writing;
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(j) ENVIRONMENTAL INDEMNITY. Any Environmental Indemnity
shall for any reason cease to be valid and binding on any Person party
thereto or any such Person shall so state in writing;
(k) PARENT COMMON STOCK; REPAYMENT EVENT The Parent at
any time hereafter fails to (i) cause the Parent common stock to be
duly listed on the New York Stock Exchange, Inc. and (ii) file timely
all reports required to be filed by the Parent with the New York Stock
Exchange, Inc. and the Securities and Exchange Commission and, with
respect to a failure under clause (ii), such failure remains uncured on
the date which is the earlier of (A) the date 30 days following the
initial occurrence of such failure and (B) the date specified by the
New York Stock Exchange, Inc. or the Securities and Exchange Commission
as the date such failure needs to be cured by. Upon the receipt by the
Parent of any Net Cash Proceeds from a Repayment Event, (a) the Parent
fails to immediately make a capital contribution or advance to the
Borrower or a Subsidiary of the Borrower in the aggregate amount of
such Net Cash Proceeds, or otherwise apply the Net Cash Proceeds from
such Repayment Event in accordance with the provisions of this
Agreement or (b) the Borrower fails to apply such Net Cash Proceeds in
accordance with the provisions of this Agreement;
(l) CHANGE IN OWNERSHIP OR MANAGEMENT. Any of the
following occur without the written consent of the Required Lenders:
(i) a Change in Control occurs for either the Parent or the Borrower;
(ii) the Parent and any wholly-owned Subsidiary of the Parent
collectively owns less than 70% of the legal or beneficial interest in
the Borrower; (iii) unless a Specified Change of Control Event shall
have occurred, the Parent and MHC shall cease to have at least 4 of the
same individuals serving on their respective Boards of Directors; or
(iv) unless a Specified Change of Control Event shall have occurred,
the Parent and MHC shall cease to have at least 2 of the same
individuals serving as a Responsible Officer of the Parent and MHC,
and, within 120 days following such occurrence for any reason, another
person acceptable to the Required Lenders in their sole discretion is
not employed as one of such Responsible Officers by the Parent and MHC;
(m) PERMITTED PROPERTY AGREEMENTS. Any of the following
occur: (i) sufficient Permitted Property Agreements shall for any
reason cease to be valid and binding on MHC, MHC OP or other Person
party thereto, or MHC, MHC OP or such other Person party thereto shall
so state in writing, that it could reasonably be expected to cause a
Material Adverse Change; or (ii) a default by the Parent, the Borrower
or any of their respective Subsidiaries shall occur under sufficient
Permitted Property Agreements that such default could reasonably be
expected to cause a Material Adverse Change; or
(n) LETTERS. Any provision of the Equity Inns Letter or
the MHC Letter shall for any reason cease to be valid and binding on
any Person, or any Person shall so state in writing.
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Section 8.02 OPTIONAL ACCELERATION OF MATURITY; OTHER ACTIONS. If
any Event of Default (other than an Event of Default pursuant to paragraph (f)
of Section 8.01) shall have occurred and be continuing, then, and in any such
event,
(a) the Administrative Agent (i) shall at the request, or
may with the consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Advances and
the obligation of Issuing Bank to issue, increase, or extend Letters of
Credit to be terminated, whereupon the same shall forthwith terminate,
and (ii) shall at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the Notes, all interest
thereon, the Letter of Credit Obligations, and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon
the Notes, all such interest, all such Letter of Credit Obligations and
all such amounts shall become and be forthwith due and payable in full,
without presentment, demand, protest or further notice of any kind
(including, without limitation, any notice of intent to accelerate or
notice of acceleration), all of which are hereby expressly waived by
the Borrower,
(b) the Borrower shall, on demand of the Administrative
Agent at the request or with the consent of the Required Lenders,
deposit into the Cash Collateral Account an amount of cash equal to the
Letter of Credit Exposure as security for the Obligations to the extent
the Letter of Credit Obligations are not otherwise paid at such time,
and
(c) the Administrative Agent shall at the request of, or
may with the consent of, the Required Lenders proceed to enforce its
rights and remedies under the Credit Documents for the ratable benefit
of the Lenders by appropriate proceedings.
Section 8.03 AUTOMATIC ACCELERATION OF MATURITY. If any Event of
Default pursuant to paragraph (f) of Section 8.01 shall occur,
(a) the obligation of each Lender to make Advances and
the obligation of Issuing Bank to issue, increase, or extend Letters of
Credit shall immediately and automatically be terminated and the Notes,
all interest on the Notes, all Letter of Credit Obligations, and all
other amounts payable under this Agreement shall immediately and
automatically become and be due and payable in full, without
presentment, demand, protest or any notice of any kind (including,
without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrower
and
(b) to the extent permitted by law or court order, the
Borrower shall deposit with the Administrative Agent into the Cash
Collateral Account an amount of cash equal to the outstanding Letter of
Credit Exposure as security for the Obligations to the extent the
Letter of Credit Obligations are not otherwise paid at such time.
Section 8.04 CASH COLLATERAL ACCOUNT.
(a) PLEDGE. The Borrower hereby pledges, and grants to
the Administrative Agent for the benefit of the Lenders, a security
interest in all funds held in the Cash
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Collateral Account maintained with the Administrative Agent from time
to time, and all proceeds thereof, as security for the payment of the
Obligations, including without limitation all Letter of Credit
Obligations owing to any Issuing Bank or any other Lender due and to
become due from the Borrower to any Issuing Bank or any other Lender
under this Agreement in connection with the Letters of Credit and the
Borrower agrees to execute all cash management or cash collateral
agreements and UCC-1 Financing Statements requested by the
Administrative Agent as needed or desirable for the Administrative
Agent to have an Acceptable Lien in the Cash Collateral Account.
(b) APPLICATION AGAINST LETTER OF CREDIT OBLIGATIONS. The
Administrative Agent may, at any time or from time to time, apply funds
then held in the Cash Collateral Account to the payment of any Letter
of Credit Obligations owing to any Issuing Bank, in such order as the
Administrative Agent may elect, as shall have become or shall become
due and payable by the Borrower to any Issuing Bank under this
Agreement in connection with the Letters of Credit.
(c) DUTY OF CARE. The Administrative Agent shall exercise
reasonable care in the custody and preservation of any funds held in
the Cash Collateral Account and the Administrative Agent shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative Agent accords
its own property, it being understood that the Administrative Agent
shall not have any responsibility for taking any necessary steps to
preserve rights against any parties with respect to any such funds.
Section 8.05 NON-EXCLUSIVITY OF REMEDIES. No remedy conferred upon
the Administrative Agent or the Lenders is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.
Section 8.06 RIGHT OF SET-OFF.
(a) Upon (i) the occurrence and during the continuance of
any Event of Default pursuant to paragraph (f) of Section 8.01 or (ii)
the making of the request or the granting of the consent, if any,
specified by Section 8.02 to authorize the Administrative Agent to
declare the Notes and any other amount payable hereunder due and
payable pursuant to the provisions of Section 8.02 or the automatic
acceleration of the Notes and all amounts payable under this Agreement
pursuant to Section 8.03, each Lender and Affiliate thereof is hereby
authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or any Affiliate
thereof to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing
under this Agreement, the Note held by such Lender, and the other
Credit Documents, irrespective of whether or not such Lender shall have
made any demand under this Agreement, such Note, or such other Credit
Documents, and although such obligations may be unmatured. Each Lender
agrees to promptly notify the Borrower after any such set-off and
application made by such Lender or its Affiliate, PROVIDED that the
failure to give such notice shall not affect the validity of such
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set-off and application. The rights of each Lender under this Section
are in addition to any other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
(b) The Borrower waives any right of set-off, defense or
counterclaim the Borrower has or may have against any Lender to apply
any amounts owed the Borrower by such Lender or any Affiliate thereof
against the Obligations hereunder.
ARTICLE IX
AGENCY AND ISSUING BANK PROVISIONS
Section 9.01 AUTHORIZATION AND ACTION. Each Lender hereby appoints
and authorizes the Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers under this Agreement and the
other Credit Documents as are delegated to the Administrative Agent by the terms
hereof and of the other Credit Documents, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
PROVIDED, however, that the Administrative Agent shall not be required to take
any action which exposes the Administrative Agent to personal liability or which
is contrary to this Agreement, any other Credit Document, or applicable law. The
functions of the Administrative Agent are administerial in nature and in no
event shall the Administrative Agent have a fiduciary or trustee relation in
respect of any Lender by reason of this Agreement or any other Credit Document.
Within five (5) Business Days of the Administrative Agent receiving actual
knowledge (without any duty to investigate) of a Default, the Administrative
Agent will provide written notice of such Default to the Lenders.
Section 9.02 ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken (including such
Person's own negligence) by it or them under or in connection with this
Agreement or the other Credit Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or the other Credit Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or any other
Credit
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Document on the part of the Borrower, the Parent or their respective
Subsidiaries or to inspect the property (including the books and records) of the
Borrower, the Parent or their respective Subsidiaries; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Credit Document other than with respect to the Administrative Agent's execution
of the documents to which the Administrative Agent is a party; and (f) shall
incur no liability under or in respect of this Agreement or any other Credit
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telecopier, telegram, cable or telex) believed by it to
be genuine and signed or sent by the proper party or parties.
Section 9.03 EACH AGENT AND ITS AFFILIATES. With respect to its
Commitment, the Advances made by it and the Notes issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not an Agent.
The term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include the Administrative Agent in its individual capacity as a Lender. The
Administrative Agent, the Lenders and their respective Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower or any of its Subsidiaries,
and any Person who may do business with or own securities of the Borrower or any
such Subsidiary, all as if the Administrative Agent were not an Administrative
Agent hereunder or the Lenders were not Lenders hereunder and without any duty
to account therefor to the Lenders.
Section 9.04 LENDER CREDIT DECISION. Each Lender acknowledges that
it has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements referred to in Section 4.07
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent 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 this Agreement.
Section 9.05 INDEMNIFICATION. The Lenders severally agree to
indemnify the Administrative Agent, the Alternate Currency Swing Line Lender,
and Issuing Bank (to the extent not reimbursed by the Borrower), according to
their respective Pro Rata Shares from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent, the Alternate
Currency Swing Line Lender, or such Issuing Bank in any way relating to or
arising out of this Agreement or any action taken or omitted by the
Administrative Agent, the Alternate Currency Swing Line Lender, or such Issuing
Bank under this Agreement or any other Credit Document (including the
Administrative Agent's, the Alternate Currency Swing Line Lender's, or such
Issuing Bank's own negligence), PROVIDED that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's, the Alternate Currency Swing Line Lender's, or such
Issuing Bank's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand
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for its Pro Rata Share of any out-of-pocket expenses (including counsel fees)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement or any
other Credit Document, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower.
Section 9.06 SUCCESSOR AGENT, THE ALTERNATE CURRENCY SWING LINE
LENDER AND ISSUING BANKS. The Administrative Agent, the Alternate Currency Swing
Line Lender or any Issuing Bank may resign at any time by giving written notice
thereof to the Lenders and the Borrower and may be removed at any time with
cause by the Required Lenders upon receipt of written notice from the Required
Lenders to such effect. Upon receipt of notice of any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent, Alternate Currency Swing Line Lender or Issuing Bank. If
no successor Administrative Agent, Alternate Currency Swing Line Lender or
Issuing Bank shall have been so appointed, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's, Alternate
Currency Swing Line Lender's or Issuing Bank's giving of notice of resignation
or the Required Lenders' removal of the retiring Administrative Agent, Alternate
Currency Swing Line Lender or Issuing Bank, then the retiring Administrative
Agent, Alternate Currency Swing Line Lender or Issuing Bank, as applicable, may,
on behalf of the Lenders and the Borrower, appoint a successor Administrative
Agent, Alternate Currency Swing Line Lender or Issuing Bank, which shall be a
commercial bank meeting the financial requirements of an Eligible Assignee and,
in the case of the Alternate Currency Swing Line Lender or an Issuing Bank, a
Lender. Upon the acceptance of any appointment as Administrative Agent, the
Alternate Currency Swing Line Lender or Issuing Bank by a successor
Administrative Agent, Alternate Currency Swing Line Lender or Issuing Bank, such
successor Administrative Agent, Alternate Currency Swing Line Lender or Issuing
Bank shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, Alternate Currency
Swing Line Lender or Issuing Bank, as applicable, and the retiring
Administrative Agent, Alternate Currency Swing Line Lender or Issuing Bank shall
be discharged from its duties and obligations under this Agreement and the other
Credit Documents, except that the retiring Issuing Bank shall remain an Issuing
Bank with respect to any Letters of Credit issued by such Issuing Bank and
outstanding on the effective date of its resignation or removal and the
provisions affecting such Issuing Bank with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Bank until the termination of
all such Letters of Credit. After any retiring Administrative Agent's, Alternate
Currency Swing Line Lender's or Issuing Bank's resignation or removal hereunder
as Administrative Agent, Alternate Currency Swing Line Lender or Issuing Bank,
the provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was such Administrative Agent, the
Alternate Currency Swing Line Lender or Issuing Bank under this Agreement and
the other Credit Documents. At the time of any replacement of the Alternate
Currency Swing Line Lender, the replacement Alternate Currency Swing Line Lender
shall purchase from the retiring Alternate Currency Swing Line Lender all
outstanding Alternate Currency Swing Line Advances, together with the accrued
interest thereon.
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Section 9.07 JOINT LEAD ARRANGERS, BOOK RUNNERS, CO-SYNDICATION
AGENTS AND DOCUMENTATION AGENT. Under the Credit Documents ▇▇ ▇▇▇▇▇ shall be
named Joint Lead Arranger and Book Runner; SSB shall be named Joint Lead
Arranger, Book Runner and Co-Syndication Agent; ▇▇▇▇▇▇ Brothers, Inc. shall be
named Joint Lead Arranger, Book Runner and Co-Syndication Agent; Credit Lyonnais
New York Branch shall be named Documentation Agent, but such Persons in such
capacities shall have no right or duty to act as agent on behalf of the Lenders.
ARTICLE X
MISCELLANEOUS
Section 10.01 AMENDMENTS, ETC.
(a) No amendment or waiver of any provision of this
Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Guarantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by
the Administrative Agent, as specified in the particular provisions of
the Credit Documents, and the Borrower, and then such waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, however, that no amendment shall
increase the Commitment of any Lender without the prior written consent
of such Lender, and no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders whose Commitments or Advances are
directly modified thereby, do any of the following: (i) increase the
aggregate Commitments of the Lenders except as permitted by Section
2.01(c), (ii) reduce the principal of, or interest on, the Notes or any
fees or other amounts payable hereunder or under any other Credit
Document or otherwise release the Borrower from any Obligations, (iii)
postpone any date fixed for any payment of principal of, or interest
on, the Notes or any fees or other amounts payable hereunder, (iv)
amend this Section 10.01, (v) amend the definition of "Required
Lenders", (vi) release the Parent or any Subsidiary of the Parent or
the Borrower having Property or annual revenues in excess of $7,500,000
from its obligations under the Guaranty except as contemplated by the
provisions of Section 5.09,, (vii) release all or substantially all of
the Collateral or (viii) release as Collateral all or substantially all
of the Ownership Interests in any Subsidiary of the Parent or the
Borrower having Property or annual revenues in excess of $7,500,000
except as contemplated by the provisions of Section 5.09; and PROVIDED,
FURTHER, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent, or any Issuing Bank in addition
to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent or such Issuing Bank, as the case
may be, under this Agreement or any other Credit Document. In addition,
the definition of "Revolving Required Lenders" cannot be amended
without the unanimous written consent of all Lenders holding Revolving
Commitments. In addition, no amendment, waiver or consent shall, unless
in writing and signed by the Alternate Currency Swing Line Lender,
amend, modify or waive any provision pertaining to the Alternate
Currency Swing Line Lender, Alternate Currency Swing Line Commitment or
the Alternate Currency Swing Line Advances, or otherwise affect any
right or duty of the Alternate Currency Swing Line Lender.
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(b) In addition, none of the following decisions shall be
made without the prior written consent of the Required Lenders:
(i) release any Guarantor (except the Parent or
any Subsidiary of the Parent or the Borrower having Property
or annual revenues in excess of $7,500,000) from its
obligations under any of the Guaranties except as contemplated
by the provisions of Section 5.09, PROVIDED that the
Administrative Agent can, if no Default then exists, release
any Subsidiary of the Borrower which no longer is a party to
any Permitted Property Agreement or any Permitted Housing
Agreement or no longer owns any Investments or other Property;
(ii) release any material Collateral from its
Lien securing the Obligations except as contemplated by the
provisions of Sections 10.01(a)(vii), 10.01(a)(viii) and 5.09;
(iii) any determination (A) to make a Borrowing
after the occurrence and during the continuance of an Event of
Default or (B) to waive or modify a material condition
precedent to the funding of an Advance or the issuance of a
Letter of Credit;
(iv) any (A) determination to send notice to the
Borrower of, or otherwise declare, an Event of Default
pursuant to Section 8.01 of this Agreement, (B) determination
to accelerate the Obligations pursuant to Section 8.02 of this
Agreement, (C) exercise of remedies under any Credit Document,
(D) material decision regarding the operation, maintenance,
sale or other disposition of any Property after the
foreclosure upon such Property, PROVIDED that Administrative
Agent shall be able to take any action it determines necessary
to preserve or maintain any such Property and provided further
that if the Required Lenders cannot agree on the sale or
disposition of such Property, the Administrative Agent shall
not sell or dispose of such Property, but shall continue to
hold such Property for the benefit of the Lenders;
(v) any waiver or any amendment to the financial
covenants contained in Article VII of this Agreement or any
definitions used therein;
(vi) any amendment of any of the definitions that
are used in the definition of "Leverage Ratio" or "Senior
Leverage Ratio;"
(vii) any other material waiver or modification of
the Credit Documents not referred to in this Section 10.01,
PROVIDED that if within ten (10) Business Days of the
Administrative Agent's approval of a non-material waiver or
modification of the Credit Documents the Required Lenders
object in writing to such waiver or modification, then such
waiver or modification shall then not be effective and shall
be subject to the written consent of the Required Lenders; and
(viii) any amendment of any other provision of a
Credit Document which expressly requires the consent of the
Required Lenders.
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(c) Any amendment to a covenant of the Parent or any of
its Subsidiaries or amendment to a definition shall require the
Borrower's written consent.
(d) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement
which requires unanimous consent of the Lenders or of a Class of the
Lenders, the consent of 51% or more of the Non-Defaulting Lenders
entitled to vote on such proposed change, waiver, discharge or
termination is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described below, to
replace each such non-consenting Lender or Lenders with one or more
Eligible Assignees pursuant to Section 2.15 so long as at the time of
such replacement, each such Eligible Assignee consents to the proposed
change, waiver, discharge or termination, PROVIDED FURTHER, that in any
event the Borrower shall not have the right to replace a Lender solely
as a result of the exercise of such Lender's rights (and the
withholding of any required consent by such Lender) to increase any of
such Lender's Commitments.
(e) Notwithstanding the foregoing, the Administrative
Agent and the Borrower (without the consent of any other Lender, the
Issuing Bank or the Alternate Currency Swing Line Lender) may enter
into amendments of any Credit Document solely with respect to
corrections of formal defects not having any economic impact.
Section 10.02 NOTICES, ETC. All notices and other communications
shall be in writing (including telecopy or telex) and mailed, telecopied,
telexed, hand delivered or delivered by a nationally recognized overnight
courier, (a) if to the Borrower, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attn: Mr. ▇▇▇▇ ▇▇▇▇▇; (b) if to any Lender, at its
Applicable Lending Office; (c) if to the Administrative Agent or the Issuing
Bank, at its address at 4900 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. Day, Managing Director (telecopy: (214)
▇▇▇-▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇); or, (d) as to each party, at such other
address or teletransmission number as shall be designated by such party in a
written notice to the other parties. All such notices and communications shall,
when mailed, telecopied, telexed or hand delivered or delivered by overnight
courier, be effective three days after deposited in the mails, when telecopy
transmission is completed, when confirmed by telex answer-back or when
delivered, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or Article IX shall not be effective
until received by the Administrative Agent.
Section 10.03 NO WAIVER; REMEDIES. No failure on the part of any
Lender, any Agent, or any Issuing Bank to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in this Agreement and the other Credit Documents are cumulative and not
exclusive of any remedies provided by law.
Section 10.04 COSTS AND EXPENSES. The Borrower agrees to pay on
demand all out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation,
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execution, delivery, due diligence, administration, modification and amendment
of this Agreement, the Notes and the other Credit Documents and syndication of
the Obligations including, without limitation, (a) the reasonable fees and
out-of-pocket expenses of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel for the
Administrative Agent, and (b) all reasonable out-of-pocket costs and expenses,
if any, of the Administrative Agent, Issuing Bank, and each Lender (including,
without limitation, reasonable counsel fees and expenses of the Administrative
Agent, such Issuing Bank, and each Lender) in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this Agreement
and the other Credit Documents, and (d) to the extent not included in the
foregoing, the costs of any local counsel, travel expenses, Appraisals,
Engineering Reports, Environmental Reports, Title Policies, mortgage and
intangible taxes (if any), and any title or Uniform Commercial Code search
costs, any flood plain search costs, insurance consultant costs and other costs
usual and customary in connection with a credit facility of this type.
Section 10.05 BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent,
and when the Administrative Agent shall have, as to each Lender, either received
a counterpart hereof executed by such Lender or been notified by such Lender
that such Lender has executed it and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Administrative Agent, Issuing Bank, and each
Lender and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or delegate its duties under this
Agreement or any interest in this Agreement without the prior written consent of
each Lender.
Section 10.06 LENDER ASSIGNMENTS AND PARTICIPATIONS.
(a) ASSIGNMENTS. Any Lender may assign to one or more
banks or other entities all or any portion of its rights and
obligations under this Agreement (including, without limitation, all or
a portion of its Commitments, the Advances owing to it, the Notes held
by it, and the participation interest in the Letter of Credit
Obligations held by it); PROVIDED, HOWEVER, that:
(i) each such assignment shall be of a constant,
and not a varying, percentage of all of such Lender's rights
and obligations under this Agreement for a particular Class
and shall involve a ratable assignment of such Lender's
Commitment and Advances for a particular Class,
(ii) the amount of the resulting Commitments and
Advances of the assigning Lender (unless it is assigning all
its Commitments and Advances) and the assignee Lender pursuant
to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000 in total [provided
that with respect to assignments of Term Advances by an
Approved Fund to a Related Fund only, the amount of the
resulting Term Advances for the assigning Approved Fund and
the assignee Related Fund may be for less than $5,000,000 if
(A) the amount of the resulting Term Advances for the
assigning Approved Fund and the assignee Related Fund are not
less than $1,000,000, (B) the amount of the aggregate
resulting Term
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Advances for the assigning Approved Fund and its Related Funds
are not less than $5,000,000 and (C) such Approved Fund and
all of its Related Funds shall only be entitled collectively
to one notice for all purposes under the Credit Documents],
shall in no event be less than $1,000,000 for each Class
assigned and shall be an integral multiple of $1,000,000,
(iii) each such assignment shall be to an Eligible
Assignee,
(iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and
Acceptance, together with the Notes subject to such
assignment,
(v) the Administrative Agent (and in the case of
assignments of all or a portion of a Lender's Revolving
Commitments, the Issuing Bank for each Letter of Credit issued
after the date of this Agreement and the Alternate Currency
Swing Line Lender) shall consent to such assignment, which
consent shall not be unreasonably withheld or delayed, and
(vi) each Eligible Assignee (other than an
Eligible Assignee which is an Affiliate of the assigning
Lender) shall pay to the Administrative Agent a $3,500
administrative fee; PROVIDED that, in the case of
contemporaneous assignments by a Lender to more than one
Related Fund (which Related Funds are not then Lenders
hereunder), only a single $3,500 such fee shall be payable for
all such contemporaneous assignments.
Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which
effective date shall be at least three Business Days after the
execution thereof or earlier such earlier date as agreed to by the
Administrative Agent, (A) the assignee thereunder shall be a party
hereto for all purposes and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and
(B) such Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of such Lender's
rights and obligations under this Agreement, such Lender shall cease to
be a party hereto). Notwithstanding anything herein to the contrary,
(i) any Lender may assign or pledge, as collateral or otherwise, any of
its rights under the Credit Documents to any Federal Reserve Bank and
(ii) any Lender that is an Approved Fund or Related Fund may, without
the consent of the Administrative Agent or the Borrower, pledge all or
any portion of its Advances and Notes to any trustee for, or any other
representative of, holders of obligations owed, or securities issued,
by such Approved Fund or Related Fund, as security for such obligations
or securities; PROVIDED that (A) any foreclosure or similar action by
such trustee or representative shall be subject to the provisions of
this Section 10.06(a) concerning assignments, including without
limitation the requirement that any assignee of such Notes and Advances
must qualify as an Eligible Assignee and
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(B) such Lender shall not require such trustee's or representative's
consent to any matter under this Agreement, except (1) for a change in
the principal amount of any Note which has been so pledged, reductions
in fees or interest, or extending the Maturity Date except as permitted
in this Agreement or (2) as otherwise consented to by the
Administrative Agent.
(b) TERM OF ASSIGNMENTS. By executing and delivering an
Assignment and Acceptance, the Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Acceptance, such Lender makes no representation or warranty 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
of value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the Guarantors or the performance or
observance by the Borrower or the Guarantors of any of their
obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the
financial statements referred to in Sections 4.06 and 5.05, if
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Administrative Agent, such Lender 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 this Agreement; (v) such assignee
appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as
are delegated to the Administrative Agent by the terms hereof, together
with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement are required to
be performed by it as a Lender.
(c) THE REGISTER. The Administrative Agent shall maintain
at its address referred to in Section 10.02 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Advances owing to, each
Lender from time to time (the "REGISTER"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Administrative Agent, the Issuing Banks,
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 or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) PROCEDURES. Upon its receipt of an Assignment and
Acceptance executed by a Lender and an Eligible Assignee, together with
the Note or Notes subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been
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completed and is in substantially the form of the attached Exhibit C,
(i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, and (iii) give prompt notice thereof
to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to
the Administrative Agent in exchange for the surrendered Note or Notes,
a new Note or Notes payable to the order of such Eligible Assignee in
amount equal to, respectively, the Commitments and the outstanding
Advances assumed by it pursuant to such Assignment and Acceptance, and
if the assigning Lender has retained any Commitments hereunder, a new
Note or Notes payable to the order of such Lender in an amount equal
to, respectively, the Commitments and the outstanding Advances retained
by it hereunder. Such new Notes shall be dated the date of the original
Notes executed pursuant to this Agreement and shall otherwise be in
substantially the form of the attached Exhibits ▇-▇, ▇-▇, ▇-▇, or A-4,
as applicable.
(e) PARTICIPATIONS. Each Lender may sell participations
to one or more banks or other entities in or to all or a portion of its
rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to
it, its participation interest in the Letter of Credit Obligations, and
the Notes held by it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement (including, without limitation, its
Commitments to the Borrower hereunder) shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Notes for all purposes of this Agreement, (iv)
the Borrower, the Administrative Agent, and the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
this Agreement, (v) such Lender shall not require the participant's
consent to any matter under this Agreement, except for change in the
principal amount of any Note in which the participant has an interest,
reductions in fees or interest, or extending the Maturity Date except
as permitted in this Agreement, and (vi) such Lender shall give prompt
notice to the Borrower of each such participation sold by such Lender.
The Borrower hereby agrees that participants shall have the same rights
under Sections 2.08, 2.09, 2.11(c), and 10.07 hereof as the Lender to
the extent of their respective participations.
(f) CONFIDENTIALITY. Each Lender agrees to preserve the
confidentiality of any confidential information relating to the Parent,
the Borrower and their respective Subsidiaries received by Lender;
provided that each Lender may furnish any such confidential information
in the possession of such Lender from time to time to (i) assignees and
participants (including prospective assignees and participants), (ii)
its attorneys, accountants, regulators, the National Association of
Insurance Commissioners, governmental authorities and any
self-governing organization to which is a member, (iii) any direct or
indirect contractual counterparty to such Lender in swap agreements or
such contractual counterparty's professional advisor and (iv) the
Related Funds, Affiliates, directors, partners, officers, employees of
such Person or its Affiliates or Related Funds; PROVIDED that, prior to
any such disclosure, such Person shall agree in writing to preserve the
confidentiality of any confidential information relating to the
Borrower and its Subsidiaries received by it from or on behalf of such
Lender.
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Section 10.07 INDEMNIFICATION. The Borrower shall indemnify the
Administrative Agent, the Lenders (including any lender which was a Lender
hereunder prior to any full assignment of its Commitment), any assignees and
participants permitted hereunder, the Issuing Banks, and each affiliate thereof
and their respective directors, officers, employees and agents from, and
discharge, release, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject, insofar
as such losses, liabilities, claims or damages arise out of or result from (i)
any actual or proposed use by the Borrower or any Affiliate of the Borrower of
the proceeds of any Advance, (ii) any breach by the Borrower or any Guarantor of
any provision of this Agreement or any other Credit Document, (iii) any
investigation, litigation or other proceeding (including any threatened
investigation or proceeding) relating to the foregoing, or (iv) any
Environmental Claim or requirement of Environmental Laws concerning or relating
to the present or previously-owned or operated properties, or the operations or
business, of the Borrower or any of its Subsidiaries, and the Borrower shall
reimburse the Administrative Agent, Issuing Bank, and each Lender, and each
affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any reasonable out-of-pocket expenses (including legal
fees) incurred in connection with any such investigation, litigation or other
proceeding; and expressly including any such losses, liabilities, claims,
damages, or expense incurred by reason of such indemnified Person's own
negligence, but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified.
Section 10.08 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 10.09 SURVIVAL OF REPRESENTATIONS, INDEMNIFICATIONS, ETC.
All representations and warranties contained in this Agreement or made in
writing by or on behalf of the Borrower in connection herewith shall survive the
execution and delivery of this Agreement and the Credit Documents, the making of
the Advances and any investigation made by or on behalf of the Lenders, none of
which investigations shall diminish any Lender's right to rely on such
representations and warranties. All obligations of the Borrower provided for in
Sections 2.08, 2.09, 2.11(c), 9.05 and 10.07 shall survive any termination of
this Agreement and repayment in full of the Obligations.
Section 10.10 SEVERABILITY. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired thereby.
Section 10.11 USURY NOT INTENDED. It is the intent of the Borrower
and each Lender in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Lender
including such applicable laws of the State of New York and the United States of
America from time to time in effect. In furtherance thereof, the Lenders and the
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement
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or the other Credit Documents shall ever be construed to create a contract to
pay, as consideration for the use, forbearance or detention of money, interest
at a rate in excess of the Maximum Rate and that for purposes hereof "interest"
shall include the aggregate of all charges which constitute interest under such
laws that are contracted for, charged or received under this Agreement; and in
the event that, notwithstanding the foregoing, under any circumstances the
aggregate amounts taken, reserved, charged, received or paid on the Advances,
include amounts which by applicable law are deemed interest which would exceed
the Maximum Rate, then such excess shall be deemed to be a mistake and each
Lender receiving same shall credit the same on the principal of its Notes (or if
such Notes shall have been paid in full, refund said excess to the Borrower). In
the event that the maturity of the Notes is accelerated by reason of any
election of the holder thereof resulting from any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest may never include more than
the Maximum Rate and excess interest, if any, provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable Notes
(or, if the applicable Notes shall have been paid in full, refunded to the
Borrower). In determining whether or not the interest paid or payable under any
specific contingencies exceeds the Maximum Rate, the Borrower and the Lenders
shall to the maximum extent permitted under applicable law amortize, prorate,
allocate and spread in equal parts during the period of the full stated term of
the Notes all amounts considered to be interest under applicable law at any time
contracted for, charged, received or reserved in connection with the
Obligations. The provisions of this Section shall control over all other
provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.
Section 10.12 GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED, AND ANY DISPUTE BETWEEN
THE BORROWER, THE ADMINISTRATIVE AGENT, ANY LENDER, OR ANY INDEMNITEE ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
CREDIT DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK; PROVIDED
THAT THE PERFECTION OF THE LIENS OF THE ADMINISTRATIVE AGENT ON THE COLLATERAL
AND THE EXERCISE OF REMEDIES AGAINST THE COLLATERAL SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE APPLICABLE
JURISDICTION.
Section 10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY
TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN
SUBSECTION (B), EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES
AMONG THEM ARISING OUT OF, CONNECTED WITH,
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RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES
BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT ANY
AGENT, ANY LENDER OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED
AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE
BORROWER OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN
FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
SUBSECTION (B).
(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL
SERVICE OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR
PROCEEDING BY THE MAILING THEREOF BY ANY AGENT OR THE LENDERS BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER
ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED
TO LIMIT THE ABILITY OF ANY AGENT OR THE LENDERS TO SERVE ANY SUCH
WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE
LAW. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
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RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF
ANY BOND OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY
JUDICIAL PROCESS OR PROCEEDING TO REALIZE ON THE COLLATERAL ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER,
PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO
EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND,
SPECIFICALLY, THE PROVISIONS OF THIS SECTION 10.13 AND SECTION 10.20,
WITH ITS COUNSEL.
Section 10.14 KNOWLEDGE OF BORROWER. For purposes of this
Agreement, "knowledge of the Borrower" means the actual knowledge of any of the
executive officers and all other Responsible Officers of the Parent.
Section 10.15 LENDERS NOT IN CONTROL. None of the covenants or
other provisions contained in the Credit Documents shall or shall be deemed to,
give the Lenders the rights or power to exercise control over the affairs and/or
management of the Borrower, any of its Subsidiaries or any Guarantor, the power
of the Lenders being limited to the right to exercise the remedies provided in
the Credit Documents; PROVIDED, however, that if any Lender becomes the owner of
any Ownership Interests in any Person, whether through foreclosure or otherwise,
such Lender shall be entitled (subject to requirements of law) to exercise such
legal rights as it may have by being owner of such Ownership Interests in such
Person.
Section 10.16 HEADINGS DESCRIPTIVE. The headings of the several
Sections and paragraphs of the Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
Section 10.17 TIME IS OF THE ESSENCE. Time is of the essence under
the Credit Documents.
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Section 10.18 LENDER INTEREST RATE AGREEMENTS. As more fully set
forth in the Guaranty and the Security Agreement, if any Lender enters into an
Interest Rate Agreement with the Borrower or the Parent, the obligations of such
Person to such Lender under such Interest Rate Agreement shall (a) be pari passu
with the Obligations and (b) be secured by the Collateral pursuant to the
Security Agreement.
Section 10.19 JUDGMENT CURRENCY. The obligations of the Borrowers
hereunder and under the Notes to make payments in Dollars, in Euros, or in
Pounds (the "OBLIGATION CURRENCY") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency except to the extent to which such
tender or recovery shall result in the effective receipt by the Lenders or the
Alternate Currency Swing Line Lender, as applicable, of the full amount of the
Obligation Currency expressed to be payable hereunder and under the Notes, and
accordingly such obligations of the Borrowers shall be enforceable as an
alternate or additional cause of action for the purpose of recovery in the
Obligation Currency of the amount (if any) by which such effective receipt shall
fall short of the full amount of the Obligation Currency expressed to be payable
hereunder and under the Notes and shall not be affected by judgment being
obtained for any other sums due under this Agreement and the Notes.
Section 10.20 NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING
CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT, EACH PERSON
PARTY HERETO FOR ITSELF AND ON BEHALF OF ITS AFFILIATES AGREES THAT THE RECOVERY
OF ANY DAMAGES SUFFERED OR INCURRED AS A RESULT OF ANY BREACH BY ANY PERSON OF
ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS UNDER THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR
INCURRED AS A RESULT OF THE BREACH BY THE BREACHING PARTY OF ITS
REPRESENTATIONS, WARRANTIES OR OBLGIATIONS HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT AND IN NO EVENT SHALL THE BREACHING PARTY BE LIABLE TO ANY
NON-BREACHING PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR
PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST
PROFITS OR OPPORTUNITIES OR LOST OR DELAYED PRODUCTION) SUFFERED OR INCURRED BY
THE NON-BREACHING PARTY AS A RESULT OF THE BREACH BY THE BREACHING PARTY OF ANY
OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER OR UNDER ANY OTHER
CREDIT DOCUMENT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE PAGE OF SENIOR SECURED CREDIT AGREEMENT
EXECUTED as of the date first referenced above.
BORROWER:
MERISTAR H & R OPERATING COMPANY, L.P.
By: Interstate Hotels & Resorts, Inc. (fka
MeriStar Hotels & Resorts, Inc.), its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
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Title: President & COO
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SIGNATURE PAGE OF SENIOR SECURED CREDIT AGREEMENT
SOCIETE GENERALE, individually as a Lender
and as Administrative Agent, the Issuing Bank
and the Alternate Currency Swing Line Lender
By: /s/ ▇▇▇▇▇▇ ▇. Day
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▇▇▇▇▇▇ ▇. Day
Managing Director
SIGNATURE PAGE OF SENIOR SECURED CREDIT AGREEMENT
CITICORP REAL ESTATE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
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SIGNATURE PAGE OF SENIOR SECURED CREDIT AGREEMENT
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Authorized Signatory
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SIGNATURE PAGE OF SENIOR SECURED CREDIT AGREEMENT
CREDIT LYONNAIS NEW YORK BRANCH, individually
as a Lender and as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
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SIGNATURE PAGE OF SENIOR SECURED CREDIT AGREEMENT
THE BANK OF NOVA SCOTIA, ACTING THROUGH ITS
NEW YORK AGENCY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Managing Director
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