EXECUTION COPY
CREDIT AGREEMENT
among
CHARTWELL LEISURE INC.
(formerly NATIONAL LODGING CORP.),
CHARTWELL CANADA CORP.,
VARIOUS BANKS,
THE BANK OF NOVA SCOTIA,
as SYNDICATION AGENT,
THE CHASE MANHATTAN BANK,
as ADMINISTRATIVE AGENT
_______________
Dated as of August 28, 1996
_______________
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TABLE OF CONTENTS
SECTION 1. Amount and Terms of Credit.............................. 1
1.01 The Commitments......................................... 1
1.02 Minimum Amount of Each Borrowing........................ 3
1.03 Notice of Borrowing..................................... 3
1.04 Disbursement of Funds................................... 4
1.05 Notes................................................... 4
1.06 Conversions............................................. 5
1.07 Pro Rata Borrowings..................................... 5
1.08 Interest................................................ 5
1.09 Interest Periods........................................ 6
1.10 Increased Costs, Illegality, etc........................ 7
1.11 Compensation............................................ 9
1.12 Change of Lending Office................................ 9
1.13 Replacement of Banks.................................... 10
1.14 Joint and Several Obligations........................... 10
SECTION 2. Letters of Credit....................................... 10
2.01 Letters of Credit....................................... 11
2.02 Minimum Stated Amount................................... 12
2.03 Letter of Credit Requests............................... 12
2.04 Letter of Credit Participations......................... 12
2.05 Agreement to Repay Letter of Credit Drawings............ 13
2.06 Increased Costs......................................... 14
SECTION 3. Fees: Reductions of Commitment.......................... 15
3.01 Fees.................................................... 15
3.02 Voluntary Termination of Unutilized Commitments......... 15
3.03 Mandatory Reduction of Commitments...................... 16
SECTION 4. Prepayments; Payments; Taxes............................ 18
4.01 Voluntary Prepayments................................... 18
4.02 Mandatory Payments...................................... 19
4.03 Method and Place of Payment............................. 20
4.04 Net Payments; Taxes..................................... 20
SECTION 5. Conditions Precedent to Extensions of Credit on
the Initial Borrowing Date.............................. 21
5.01 Execution of Agreement, Notes........................... 21
5.02 Officer's Certificate................................... 21
5.03 Fees, etc............................................... 21
5.04 Opinion of Counsel...................................... 21
5.05 Corporate Documents; Proceedings, etc................... 22
5.06 Refinancing............................................. 22
5.07 Pledge Agreement........................................ 22
5.08 Guaranties.............................................. 22
5.09 Adverse Change.......................................... 22
5.10 Litigation.............................................. 23
5.11 Solvency Certificate and Insurance Certificates......... 23
5.12 Pro Forma Financial Information; Projections............ 23
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5.13 Approvals, etc.......................................... 23
5.14 Cash on Hand............................................ 23
5.15 Absence of Downgrade.................................... 23
5.16 HFS Subordination Agreement............................. 24
5.17 Additional Equity....................................... 24
5.18 Additional Financial Statements......................... 24
SECTION 6. Conditions Precedent to Extensions of Credit on
the Canadian Borrowing Date............................. 24
6.01 Consummation of the Canadian Acquisition................ 24
6.02 Officer's Certificate................................... 25
6.03 Adverse Change.......................................... 25
6.04 Litigation.............................................. 25
6.05 Environmental Assessments............................... 25
6.06 Approvals, etc.......................................... 25
6.07 Security Agreement...................................... 25
SECTION 7. Conditions Precedent to All Credit Events............... 26
7.01 No Default; Representations and Warranties.............. 26
7.02 Adverse Change, etc..................................... 26
7.03 Litigation.............................................. 26
7.04 Notice of Borrowing; Letter of Credit Request........... 26
7.05 Certain Requirements With Respect to Loans
Incurred to Effect Permitted Hotel Acquisitions......... 27
SECTION 8. Representations and Warranties.......................... 27
8.01 Corporate and Partnership Status........................ 27
8.02 Corporate or Partnership Power and Authority............ 27
8.03 No Violation............................................ 27
8.04 Governmental Approvals.................................. 28
8.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections, etc............... 28
8.06 Litigation.............................................. 29
8.07 True and Complete Disclosure............................ 29
8.08 Use of Proceeds; Margin Regulations..................... 30
8.09 Tax Returns and Payments................................ 30
8.10 Compliance with ERISA................................... 30
8.11 The Security Documents.................................. 31
8.12 Representations and Warranties in Documents............. 31
8.13 Properties.............................................. 31
8.14 Capitalization.......................................... 32
8.15 Subsidiaries, Joint Ventures, Unrestricted
Subsidiaries............................................ 32
8.16 Compliance with Statutes, etc........................... 32
8.17 Investment Company Act.................................. 32
8.18 Public Utility Holding Company Act...................... 32
8.19 Environmental Matters................................... 32
8.20 Labor Relations......................................... 33
8.21 Patents, Licenses, Franchises and Formulas.............. 33
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8.22 Indebtedness............................................ 33
8.23 Canadian Acquisition; Recapitalization.................. 33
SECTION 9. Affirmative Covenants................................... 34
9.01 Information Covenants................................... 34
9.02 Books, Records and Inspections.......................... 36
9.03 Maintenance of Property, Insurance...................... 36
9.04 Corporate Franchises.................................... 37
9.05 Compliance with Statutes, etc........................... 37
9.06 Compliance with Environmental Laws...................... 37
9.07 ERISA................................................... 37
9.08 End of Fiscal Years; Fiscal Quarters.................... 38
9.09 Performance of Obligations.............................. 38
9.10 Payment of Taxes........................................ 38
9.11 Hotel Franchisors....................................... 38
9.12 Joint Venture Distributions............................. 38
9.13 Corporate Separateness.................................. 39
9.14 Management Agreements................................... 39
SECTION 10. Negative Covenants...................................... 39
10.01 Liens................................................... 39
10.02 Consolidation, Merger, Purchase or Sale of
Assets, etc............................................. 41
10.03 Restricted Payments..................................... 43
10.04 Indebtedness............................................ 44
10.05 Advances, Investments and Loans......................... 47
10.06 Transactions with Affiliates............................ 50
10.07 Capital Expenditures.................................... 51
10.08 Minimum Consolidated Net Worth.......................... 52
10.09 Consolidated Interest Coverage Ratio.................... 52
10.10 Consolidated Current Ratio.............................. 52
10.11 Total Leverage Ratio.................................... 52
10.12 Limitation on Payments of Certain Indebtedness,
Modifications of Certain Indebtedness,
Modifications of Certificate of Incorporation,
By-Laws and Certain Agreements, etc..................... 52
10.13 Limitation on Certain Restrictions on
Subsidiaries and Joint Ventures......................... 53
10.14 Limitation on Issuance of Capital Stock................. 53
10.15 Business................................................ 53
10.16 Limitation on Creation of Subsidiaries;
Unrestricted Subsidiaries and Joint Ventures............ 53
SECTION 11. Events of Default....................................... 54
11.01 Payments................................................ 54
11.02 Representations......................................... 54
11.03 Covenants............................................... 54
11.04 Default Under Other Agreements.......................... 54
11.05 Bankruptcy, etc......................................... 55
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11.06 ERISA................................................... 55
11.07 Security Documents...................................... 55
11.08 Guaranty................................................ 56
11.09 HFS Subordination Agreement............................. 56
11.10 Judgments............................................... 56
11.11 HFS Franchise Agreements, etc........................... 56
11.12 Total Unrestricted Subsidiary Leverage Ratio............ 56
11.13 Unrestricted Subsidiary Tax Payments.................... 56
SECTION 12. Definitions and Accounting Terms........................ 57
12.01 Defined Terms........................................... 57
SECTION 13. The Agents.............................................. 82
13.01 Appointment............................................. 82
13.02 Nature of Duties........................................ 82
13.03 Lack of Reliance on the Agents.......................... 82
13.04 Certain Rights of the Agents............................ 82
13.05 Reliance................................................ 82
13.06 Indemnification......................................... 83
13.07 The Agents in their Individual Capacities............... 83
13.08 Holders................................................. 83
13.09 Resignation by the Agents............................... 83
SECTION 14. Miscellaneous........................................... 84
14.01 Payment of Expenses, etc................................ 84
14.02 Right of Setoff......................................... 84
14.03 Notices................................................. 85
14.04 Benefit of Agreement.................................... 85
14.05 No Waiver; Remedies Cumulative.......................... 86
14.06 Payments Pro Rata....................................... 86
14.07 Calculations; Computations.............................. 87
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL............................. 87
14.09 Counterparts............................................ 88
14.10 Effectiveness........................................... 88
14.11 Headings Descriptive.................................... 88
14.12 Amendment or Waiver; etc................................ 88
14.13 Survival................................................ 89
14.14 Domicile of Loans....................................... 89
14.15 Confidentiality......................................... 89
14.16 Register................................................ 90
14.17 Limitation on Additional Amounts, etc................... 90
14.18 Certain Provisions Regarding Joint Ventures............. 90
14.19 Judgment; Currency...................................... 91
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SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III [INTENTIONALLY OMITTED]
SCHEDULE IV Real Property
SCHEDULE V Subsidiaries and Joint Ventures
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Certain Joint Ventures
SCHEDULE XI Litigation
SCHEDULE XII Identified Capital Expenditures
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT B-3 Revolving Canadian Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Officer's Certificate
EXHIBIT F Pledge Agreement
EXHIBIT G-1 HFS Guaranty
EXHIBIT G-2 Subsidiaries Guaranty
EXHIBIT G-3 Company Guaranty
EXHIBIT H Officer's Solvency Certificate
EXHIBIT I HFS Subordination Agreement
EXHIBIT J HFS Subordinated Note
EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L-1 Form of Travelodge Franchise Agreement
EXHIBIT L-2 Form of Ramada Franchise Agreement
EXHIBIT M-1 Form of Opinion of Counsel to HFS
EXHIBIT M-2 Form of Opinion of Counsel to the Borrowers
EXHIBIT M-3 Form of Opinion of General Counsel to the Borrower
EXHIBIT N Form of Permitted Subordinated Indebtedness
Subordination Provisions
EXHIBIT O Form of Security Agreement
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C/M 11752.0000 414856.1
CREDIT AGREEMENT, dated as of August 28, 1996, among CHARTWELL
LEISURE INC. (the "Company"), CHARTWELL CANADA CORP. (the "Canadian Borrower"),
the Banks party hereto from time to time, THE BANK OF NOVA SCOTIA, as
Syndication Agent, and THE CHASE MANHATTAN BANK, as Administrative Agent (all
capitalized terms used herein and defined in Section 12 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Company and the Canadian
Borrower the respective credit facilities provided for herein:
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees to make a loan or loans
(each a "Revolving $ Loan" and, collectively, the "Revolving $ Loans") to the
Company in an aggregate amount up to but not exceeding such Bank's Revolving
Loan Commitment, which Revolving $ Loans:
(i) shall be made at any time and from time to time on and after the
Initial Borrowing Date and prior to the Final Maturity Date;
(ii) shall, at the option of the Company, be $ Base Rate Loans or $
Eurodollar Loans, provided that, except as otherwise specifically provided
in Section 1.10(b), all Revolving $ Loans comprising the same Borrowing
shall at all times be of the same Type;
(iii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iv) shall not exceed for any Bank at any time outstanding the
Revolving Loan Commitment of such Bank at such time less the product of
(x) such Bank's Adjusted Percentage and (y) the sum of (I) the aggregate
amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the
borrowing of, Loans) at such time, (II) the aggregate principal amount of
all Swingline Loans then outstanding and (III) the Dollar Equivalent
Amount of Revolving Loans at such time; and
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(v) shall not exceed for all Banks at any time outstanding the Total
Revolving Loan Commitment at such time less the sum of (x) the aggregate
amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the
borrowing of, Loans) at such time, (y) the aggregate principal amount of
all Swingline Loans then outstanding and (z) the Dollar Equivalent Amount
of Revolving Loans at such time.
(b) Subject to and upon the terms and conditions herein set forth
Chase in its individual capacity agrees, at any time and from time to time
after the Initial Borrowing Date and prior to the Swingline Expiry Date, to
make a loan or loans (each a "Swingline Loan" and, collectively, the "Swingline
Loans") to the Company in an aggregate principal amount up to but not exceeding
the Swingline Commitment which Swingline Loans (i) shall be made and maintained
as $ Base Rate Loans, (ii) shall not exceed at any time outstanding the
Swingline Commitment, (iii) shall not exceed in aggregate principal amount at
any time outstanding the Total Revolving $ Loan Commitment then in effect less
(x) the Dollar Equivalent Amount of the aggregate principal amount of all
Revolving Loans then outstanding and (y) all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid at such time with the proceeds
of, and simultaneously with the occurrence of, the borrowing of Loans) at such
time, and (iv) may be repaid and reborrowed in accordance with the provisions
hereof. On the Swingline Expiry Date, all Swingline Loans shall be repaid in
full. Chase shall not make any Swingline Loan after receiving a written notice
from the Company or any Bank stating that a Default or an Event of Default
exists and is continuing until such time as Chase shall have received written
notice of (i) rescission of all such notices from the party or parties
originally delivering such notice (which notice of rescission such Person or
Persons shall deliver to Chase promptly upon the discontinuance of such Default
or Event of Default) or (ii) the waiver of such Default or Event of Default in
accordance with this Agreement. Also, Chase shall have no obligation to make
any Swingline Loan in the event a Bank Default exists unless Chase has entered
into arrangements satisfactory to it and the Company to eliminate Chase's risk
with respect to any such Defaulting Bank's or Banks' obligations to fund
Mandatory Borrowings, including by collateralizing such Defaulting Bank's or
Banks' Adjusted Percentages of the Swingline Loans outstanding from time to
time. On any Business Day, Chase may, in its sole discretion, give notice to
the Banks that all then outstanding Swingline Loans shall be funded with a
Borrowing of Revolving $ Loans (provided that such notice shall be deemed to
have been automatically given upon the occurrence of an Event of Default under
Section 11.05), in which case a Borrowing of Revolving $ Loans constituting $
Base Rate Loans (each such Borrowing, a
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"Mandatory Borrowing") shall be made on the immediately succeeding Business Day
by all Banks pro rata based on each such Banks's Adjusted Percentage and the
proceeds thereof shall be applied directly to Chase to repay such outstanding
Swingline Loans. Each Bank hereby irrevocably agrees to make such Revolving $
Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the
date specified to it in writing by Chase notwithstanding (i) that the amount of
the Mandatory Borrowing may not comply with the minimum amount for a Borrowing
specified in Section 1.02, (ii) whether any conditions specified in Section 5,
6 or 7 are then satisfied, (iii) the date of such Mandatory Borrowing and (iv)
any reduction in the Total Revolving Loan Commitment after any such Swingline
Loans were made. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code in respect of the Company), each Bank hereby agrees that it
shall forthwith purchase from Chase (without recourse or warranty), by
assignment, such outstanding Swingline Loans as shall be necessary to cause
such Banks to share in such Swingline Loans ratably based upon their respective
Adjusted Percentages, provided that, all interest payable on such Swingline
Loans shall be for the account of Chase until the date the respective purchase
is made and, to the extent attributable to such purchase, shall be payable to
such Bank purchasing same from and after such date of purchase.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank severally agrees to make a loan or loans (each a "Revolving C$ Loan"
and, collectively, the "Revolving C$ Loans") to the Canadian Borrower in an
aggregate amount up to but not exceeding such Bank's Revolving C$ Loan
Commitment, which Revolving C$ Loans:
(i) shall be made at any time and from time to time on and after the
Canadian Borrowing Date and prior to the Final Maturity Date;
(ii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iii) shall not exceed for any Bank at any time outstanding the
Revolving C$ Loan Commitment of such Bank at such time;
(iv) shall not exceed for all Banks at any time outstanding the Total
C$ Revolving Loan Commitment at such time;
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(v) shall have a Dollar Equivalent Amount which shall not exceed for
any Bank at any time outstanding the Revolving Loan Commitment of such
Bank at such time less the product of (x) such Bank's Adjusted Percentage
and (y) the sum of (I) the aggregate amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the borrowing of, Loans) at such
time, (II) the aggregate principal amount of all Swingline Loans then
outstanding and (III) the Revolving $ Loans at such time; and
(vi) shall have a Dollar Equivalent Amount which shall not exceed for
all Banks at any time outstanding the Total Revolving Loan Commitment at
such time less the sum of (x) the aggregate amount of the Letter of Credit
Outstandings at such time (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the borrowing of, Loans),
(y) the aggregate principal amount of all Swingline Loans then outstanding
and (z) the Revolving $ Loans at such time.
The Canadian Borrower may not borrow Revolving C$ Loans more than once in any
period of 30 consecutive days. The Revolving C$ Loans shall bear interest at
the rate set forth in Section 1.08(c) (subject to the provisions of Section
1.08(d)).
(d) Notwithstanding anything to the contrary contained herein, prior
to the Canadian Borrowing Date (i) the Total Outstandings shall not exceed
$85,000,000 and (ii) the Canadian Borrower may not borrow or have Letters of
Credit issued for its account under this Agreement.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of Revolving $ Loans shall not be less than $1,000,000
(except that Mandatory Borrowings shall be made in the amounts required by
Section 1.01(b)), and the aggregate principal amount of each Borrowing of
Swingline Loans shall not be less than $50,000. The aggregate principal amount
of each Borrowing of Revolving C$ Loans shall not be less than C$1,000,000.
More than one Borrowing may occur on the same date, but at no time shall there
be outstanding more than six Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever a Borrower desires to borrow
Revolving Loans hereunder, it shall give the Administrative Agent at its Notice
Office at least one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of each $ Base Rate Loan, at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each $ Eurodollar Loan to be made hereunder and at least four
Business Days' prior written
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notice (or telephone notice promptly confirmed in writing) of each Revolving C$
Loan to be made hereunder, provided that any such notice shall be deemed to
have been given on a certain day only if given before 11:00 A.M. (New York
time) on such day. Each such written notice or written confirmation of
telephonic notice (each a "Notice of Borrowing"), except as otherwise expressly
provided in Section 1.10, shall be irrevocable and shall be given by the
respective Borrower in the form of Exhibit A, appropriately completed to
specify (i) the name of such Borrower, (ii) the aggregate principal amount of
the Loans to be made pursuant to such Borrowing, (iii) the date of such
Borrowing (which shall be a Business Day), (iv) whether the Loans being made
pursuant to such Borrowing are Revolving $ Loans or Revolving C$ Loans, (v)
whether the Loans being made are to be initially maintained as $ Base Rate
Loans, $ Eurodollar Loans or C$ Eurodollar Loans and (vi) in the case of
Eurodollar Loans, the Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each Bank notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b) Whenever the Company desires to borrow Swingline Loans hereunder,
it shall give the Administrative Agent no later than 12:00 Noon (New York time)
on the day such Swingline Loan is to be made, written notice (or telephonic
notice promptly confirmed in writing) of such Borrowing. Each such notice shall
be irrevocable and specify in each case (i) the date of Borrowing (which shall
be a Business Day) and (ii) the aggregate principal amount of the Swingline
Loans to be made pursuant to such Borrowing. The Administrative Agent shall
promptly give Chase written notice (or telephonic notice promptly confirmed in
writing) of each proposed Borrowing of Swingline Loans and of the other matters
covered by the Notice of Borrowing.
(c) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(b), with the Company irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(d) Without in any way limiting the obligation of either Borrower to
confirm in writing any telephonic notice of any Borrowing, the Administrative
Agent may act without liability upon the basis of telephonic notice of such
Borrowing believed by the Administrative Agent in good faith to be from an
Authorized Officer of such Borrower prior to receipt of written confirmation.
In each such case, the Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of such telephonic notice.
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1.04 Disbursement of Funds. No later than 12:00 Noon (2:00 P.M. in
the case of Swingline Loans) (New York time) on the date specified in each
Notice of Borrowing (or, in the case of Swingline Loans, the notice delivered
under Section 1.03(b)), each Bank will make available its pro rata portion of
each Borrowing (or, in the case of Swingline Loans, Chase will make available
the entire amount of such Borrowing) requested to be made on such date. All
such amounts shall be made available in Dollars or Canadian Dollars, as the
case may be, and in immediately available funds at the Payment Office of the
Administrative Agent, and the Administrative Agent will make available to the
applicable Borrower at the Payment Office, in Dollars or Canadian Dollars, as
the case may be, and in immediately available funds, the aggregate of the
amounts so made available by the Banks. Unless the Administrative Agent shall
have been notified by any Bank prior to the date of Borrowing that such Bank
does not intend to make available to the Administrative Agent such Bank's
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Bank has made available such amount to the Administrative
Agent on such date of Borrowing and the Administrative Agent may, in reliance
upon such assumption, make available to the applicable Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Bank. If such Bank
does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
applicable Borrower and such Borrower, to the extent such Borrower has been
funded such amount, shall within one day thereafter pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or the applicable Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Administrative
Agent to such Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Bank (a) at the overnight Federal Funds Rate, in the case of Revolving $
Loans, and (b) at a rate determined by the Administrative Agent to represent
its cost of overnight or short-term funds in Canadian Dollars, in the case of
Revolving C$ Loans, and (ii) if recovered from a Borrower, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 1.08.
Nothing in this Section 1.04 shall be deemed to relieve any Bank from its
obligation to make Loans hereunder or to prejudice any rights which the
Borrower may have against any Bank as a result of any failure by such Bank to
make Loans hereunder.
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1.05 Notes. (a) The Company's obligation to pay the principal of, and
interest on, the Revolving $ Loans made to it by each Bank shall be evidenced
by (i) if Revolving $ Loans, a promissory note duly executed and delivered by
the Company substantially in the form of Exhibit B-1, with blanks appropriately
completed in conformity herewith (each a "Revolving $ Note" and, collectively,
the "Revolving $ Notes") and (ii) if Swingline Loans, by a promissory note duly
executed and delivered by the Company substantially in the form of Exhibit B-2,
with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Canadian Borrower's obligation to pay the principal of, and
interest on, the Revolving C$ Loans made by each Bank shall be evidenced by a
promissory note duly executed and delivered by the Canadian Borrower
substantially in the form of Exhibit B-3, with blanks appropriately completed
in conformity herewith (each a "Revolving C$ Note" and, collectively, the
"Revolving C$ Notes").
(c) The Revolving $ Note issued to each Bank shall (i) be executed by
the Company, (ii) be payable to the order of such Bank or its registered
assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal
amount equal to the Revolving Loan Commitment of such Bank and be payable in
the principal amount of the Revolving $ Loans evidenced thereby, (iv) mature on
the Final Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the $ Base Rate Loans and $ Eurodollar
Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary
repayment as provided in Section 4.01, and mandatory repayment as provided in
Section 4.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(d) The Swingline Note issued to Chase shall (i) be executed by the
Company, (ii) be payable to the order of Chase and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Swingline
Commitment and be payable in the outstanding principal amount of the Swingline
Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v) bear
interest as provided in Section 1.08(a) in respect of the $ Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory prepayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) The Revolving C$ Note issued to each Bank shall (i) be executed
by the Canadian Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Revolving C$ Loan Commitment of such Bank
and be
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payable in the outstanding principal amount of the Loans evidenced thereby,
(iv) mature on the Final Maturity Date, (v) bear interest as provided in
Section 1.08 in respect of Revolving C$ Loans evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 4.01 and mandatory
prepayment as provided in Section 4.02 and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect either Borrower's obligations in respect of such
Loans.
1.06 Conversions. (a) The Company shall have the option to convert,
on any Business Day, at least $1,000,000 of the outstanding principal amount of
Revolving $ Loans made to the Company pursuant to one or more Borrowings of one
or more Types of Revolving $ Loans into a Borrowing or Borrowings of another
Type of Revolving Loan, provided that (i) except as otherwise provided in
Section 1.10(b), $ Eurodollar Loans may be converted into $ Base Rate Loans
only on the last day of an Interest Period applicable to the Revolving $ Loans
being converted and no partial conversion of a Borrowing of $ Eurodollar Loans
shall reduce the outstanding principal amount of such $ Eurodollar Loans made
pursuant to a single Borrowing to less than $1,000,000; (ii) upon the
occurrence and during the continuance of any Event of Default, $ Base Rate
Loans may not be converted into $ Eurodollar Loans if the Administrative Agent
(acting at the instruction of the Required Banks) has notified the Company that
such conversions shall not be permitted during the continuance of an Event of
Default; and (iii) no conversion pursuant to this Section 1.06 shall result in
a greater number of Borrowings of Eurodollar Loans than is permitted under
Section 1.02. Each such conversion shall be effected by the Company by giving
the Administrative Agent at its Notice Office prior to 11:00 A.M. (New York
time) at least three Business Days' prior written notice (each a "Notice of
Conversion") specifying the Revolving $ Loans to be so converted, the
Borrowing(s) pursuant to which such Revolving $ Loans were made and, if to be
converted into $ Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Bank prompt notice
of any such proposed conversion. Upon any such conversion the proceeds thereof
will be deemed to be applied directly on the day of such conversion to prepay
the outstanding principal amount of the Revolving $ Loans being converted.
(b) Swingline Loans shall be made and maintained as $ Base Rate
Loans.
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1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under
this Agreement shall be incurred from the Banks pro rata on the basis of their
Revolving Loan Commitments. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Loans hereunder and
that each Bank shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Bank to make its Loans
hereunder.
1.08 Interest. (a) The Company agrees to pay interest in respect of
the unpaid principal amount of each $ Base Rate Loan made to the Company from
the date the proceeds thereof are made available to the Company until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such $
Base Rate Loan and (ii) the conversion of such $ Base Rate Loan to a $
Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Base Rate in effect from
time to time.
(b) The Company agrees to pay interest in respect of the unpaid
principal amount of each $ Eurodollar Loan made to the Company from the date
the proceeds thereof are made available to the Company until the earlier of (i)
the maturity (whether by acceleration or otherwise) of such $ Eurodollar Loan
and (ii) the conversion of such $ Eurodollar Loan to a $ Base Rate Loan
pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the
sum of the Applicable Margin plus the Eurodollar Rate for such Interest Period.
(c) The Canadian Borrower agrees to pay interest in respect of the
unpaid principal amount of each C$ Eurodollar Loan made to the Canadian
Borrower from the date the proceeds thereof are made available to the Canadian
Borrower until the earlier of (i) the maturity (whether by acceleration or
otherwise) of such C$ Eurodollar Loan and (ii) the conversion of such C$
Eurodollar Loan pursuant to Section 1.10, as applicable, at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the
sum of the Applicable Margin plus the Eurodollar Rate for such Interest Period.
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to $ Base Rate
Loans from time to time and (y) the rate which is 2% in excess of the rate then
borne by such Loan, in each case with such interest to be payable on demand.
9
C/M 11752.0000 414856.1
(e) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each $ Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(f) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for the respective Interest Period or
Interest Periods and shall promptly notify the applicable Borrower and the
Banks thereof. Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time it gives a Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day (or the fourth Business Day in the case of a C$
Eurodollar Loan) prior to the expiration of an Interest Period applicable to
such Eurodollar Loan (in the case of any subsequent Interest Period), the
applicable Borrower shall have the right to elect, by giving the Administrative
Agent notice thereof, the interest period (each an "Interest Period")
applicable to such Eurodollar Loan, which Interest Period shall, at the option
of such Borrower, be a one, two, three or six-month or, to the extent available
to each Bank, nine or twelve month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including, in
the case of $ Eurodollar Loans, the date of any conversion thereto from a
$ Base Rate Loan) and each Interest Period occurring thereafter in respect
of such Eurodollar Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
10
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(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
for a Eurodollar Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) upon the occurrence and during the continuance of any Event of
Default, no Interest Period may be selected if the Administrative Agent
(acting at the instruction of the Required Banks) has notified the
applicable Borrower that selections of Interest Periods shall not be
permitted during the continuance of an Event of Default;
(vi) no Interest Period in respect of any Borrowing of Loans shall be
selected which extends beyond the Final Maturity Date; and
(vii) no Interest Period in respect of any Borrowing of any Revolving
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of Revolving Loans will be required to be made under
Section 4.02(a), as a result of reductions to the Total Revolving Loan
Commitment pursuant to Section 3.03(b), unless the aggregate principal
amount of Revolving Loans which are $ Base Rate Loans or which have
Interest Periods which will expire on or before such date will be
sufficient to make such required repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of $ Eurodollar Loans, the Company has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such $ Eurodollar
Loans as provided above, the Company shall be deemed to have elected to convert
such $ Eurodollar Loans into $ Base Rate Loans, effective as of the expiration
date of such current Interest Period. If the Canadian Borrower has failed to
select an Interest Period for a C$ Eurodollar Loan at least four Business Days
prior to the expiration of the Interest Period applicable to such C$ Eurodollar
Loan, the Canadian Borrower shall be deemed to have selected a one month
Interest Period to apply such C$ Eurodollar Loan upon the expiration of the
current Interest Period therefor.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but with respect to
clause (i) below, may be made only by the Administrative Agent):
11
C/M 11752.0000 414856.1
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on the
Notes or any other amounts payable hereunder (except for changes with
respect to any tax imposed on, or measured by the net income or net
profits of such Bank, or any franchise tax based on the net income or net
profits of a Bank, in either case pursuant to the laws of the juris-
diction in which such Bank is organized or in which such Bank's principal
office or applicable lending office is located or any subdivision thereof
or therein), or (B) a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate and/or (y) other
circumstances since the date of this Agreement adversely affecting such
Bank or the interbank Eurodollar market or the position of such Bank in
such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good
faith with any governmental request (whether or not having force of law)
or (z) impracticable as a result of a contingency occurring after the date
of this Agreement which materially and adversely affects the interbank
Eurodollar market; or
(iv) at any time that Canadian Dollars are not available due to
market conditions in sufficient amounts, as determined in good faith by
such Bank, to fund any Borrowing of Revolving C$ Loans;
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the applicable Borrower and, except in the case of clause (i)
above, to the
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Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (w) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the applicable Borrower
and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the applicable Borrower with respect to Eurodollar Loans
which have not yet been borrowed (including by way of conversion) shall be
deemed rescinded by the applicable Borrower, (x) in the case of clause (ii)
above the applicable Borrower shall pay to such Bank, upon written demand
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Bank in its sole
discretion shall determine) as shall be required to compensate such Bank for
such increased costs or reductions in amounts received or receivable hereunder
(a written notice as to the additional amounts owed to such Bank, showing the
basis for the calculation thereof, submitted to the applicable Borrower by such
Bank in good faith shall, absent manifest error, be final and conclusive and
binding on all the parties hereto), (y) in the case of clause (iii) above, the
applicable Borrower shall take one of the actions specified in Section 1.10(b)
as promptly as possible and, in any event, within the time period required by
law and (z) in the case of clause (iv) above, Revolving C$ Loans shall no
longer be available until such time as the Administrative Agent notifies the
Canadian Borrower and the Banks that the circumstances giving rise to such
notice by the applicable Bank no longer exists, and any Notice of Borrower
given by the Canadian Borrower with respect to Revolving C$ Loans which have
not yet been borrowed shall be deemed rescinded by the Canadian Borrower. Each
of the Administrative Agent and each Bank agrees that if it gives notice to a
Borrower of any of the events described in clause (i), (iii) or (iv) above, it
shall promptly notify the applicable Borrower and, in the case of any such
Bank, the Administrative Agent, if such event ceases to exist. If any such
event described in clause (iii) above ceases to exist as to a Bank, the
obligations of such Bank to make Eurodollar Loans and to convert $ Base Rate
Loans into $ Eurodollar Loans on the terms and conditions contained herein
shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the applicable
Borrower may (and in the case of a Eurodollar Loan affected by the
circumstances described in Section 1.10(a)(iii) shall) either (x) if the
affected Eurodollar Loan is then being made initially or pursuant to a
conversion, cancel the respective Borrowing by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that such Borrower
was notified by the affected Bank or the Administrative Agent
13
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pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan
is then outstanding, upon at least three Business Days (four Business Days in
the case of Revolving C$ Loans) written notice to the Administrative Agent,
require the affected Bank to convert such Eurodollar Loan into a $ Base Rate
Loan, in the case of $ Eurodollar Loans, or a Loan denominated in Canadian
Dollars having an interest rate comparable to the Base Rate as determined in
the sole discretion of the affected Bank, in the case of C$ Eurodollar Loans,
as the case may be, provided that, if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant to this Section
1.10(b). If at any time the making or continuance of any Revolving C$ Loan, or
any giving effect to the obligations of a Bank in respect thereof, has been
made unlawful by any law coming into force or by any change since the date of
this Agreement in any applicable law or regulation or in the interpretation or
application thereof by any court or any statutory board or commission, then the
Canadian Borrower, upon at least three Business Days' written notice to the
Administrative Agent and the affected Bank, and subject to Section 4.02(b),
shall repay such Revolving C$ Loan in full.
(c) If at any time any Bank determines that the introduction after
the Effective Date of, or any change after the Effective Date in, any
applicable law or governmental rule, regulation, order, guideline, directive or
request (whether or not having the force of law) concerning capital adequacy,
or any change after the Effective Date in interpretation or administration
thereof by any governmental authority, central bank or comparable agency, will
have the effect of increasing the amount of capital required or expected to be
maintained by such Bank or any corporation controlling such Bank, based on the
existence of such Bank's Commitments hereunder or its obligations hereunder,
then the Company shall pay to such Bank, within 15 days after its written
demand therefor, such additional amounts as shall be required to compensate
such Bank or such other corporation for the increased cost to such Bank or such
other corporation or the reduction in the rate of return to such Bank or such
other corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Bank's reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Bank, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Company, which notice shall show the basis
for calculation of such additional amounts, although the failure to give any
such notice shall not release or diminish any Borrower's Obligations to pay
additional amounts pursuant to this Section
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1.10(c). A Borrower shall not be required to pay additional amounts pursuant to
this Section 1.10(c) unless it has received the written notice described in the
prior sentence (which notice need not be given during an Event of Default under
Section 11.05).
(d) In the event that any Bank shall determine (which determination
shall, absent manifest error, be final and conclusive and binding on all
parties hereto) at any time that such Bank is required to maintain reserves
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves required by applicable law) which have been established by
any Federal, state, local or foreign court or governmental agency, authority,
instrumentality or regulatory body with jurisdiction over such Bank (including
any branch, Affiliate or funding office thereof) in respect of any Revolving C$
Loans or any category of liabilities which includes deposits by reference to
which the interest rate on any Revolving C$ Loan is determined or any category
of extensions of credit or other assets which includes loans by a non-United
States office of any Bank to non-United States residents, then, unless such
reserves are included in the calculation of the interest rate applicable to
such Revolving C$ Loans or in Section 1.10(a)(ii), such Bank shall promptly
notify the Canadian Borrower in writing specifying the additional amounts
required to indemnify such Bank against the cost of maintaining such reserves
(such written notice to provide in reasonable detail in computation of such
additional amounts) and the Canadian Borrower shall pay to such Bank such
specified amounts as additional interest at the time that the Canadian Borrower
is otherwise required to pay interest in respect of such Revolving C$ Loan or,
if later, on written demand therefor by such Bank.
1.11 Compensation. Each applicable Borrower shall compensate each
Bank, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Bank to fund its Eurodollar Loans, but excluding any
loss of anticipated profit) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank or the Administrative Agent) a Borrowing of,
or conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the applicable Borrower or deemed withdrawn pursuant to Section
1.10(a)); (ii) if any repayment (including any repayment made pursuant to
Section 4.01 or 4.02 or as a result of an acceleration of the Revolving Loans
pursuant to Section 11), prepayment or conversion of any Eurodollar Loans
occurs on a date which is not the last day of an Interest Period
15
C/M 11752.0000 414856.1
with respect thereto; (iii) if any prepayment of any of the Eurodollar Loans is
not made on any date specified in a notice of prepayment given by the
applicable Borrower or on the date that such prepayment is required under this
Agreement; or (iv) as a consequence of any election made pursuant to Section
1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 1.10(d), Section 2.06 or Section 4.04 with
respect to such Bank, it will, if requested by the Company, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by such
event, provided that such designation is made on such terms that such Bank and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the
operation of such Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of any Borrower or the right of any Bank
provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank
or otherwise defaults in its obligations to make Loans or Mandatory Borrowings
or fund Unpaid Drawings, (y) upon the occurrence of any event giving rise to
the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or
Section 4.04 with respect to any Bank which results in such Bank charging to
any Borrower increased costs in excess of those being generally charged by the
other Banks, or (z) as provided in Section 14.12(b) in the case of certain
refusals by a Bank to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Banks, the Company shall have the right, if no Default or Event of
Default will exist immediately after giving effect to such replacement, to
replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferees, none of whom shall constitute a Defaulting Bank at the time of
such replacement (collectively, the "Replacement Bank"), and in the case of an
Eligible Transferee which is not then a Bank under this Agreement, each of whom
shall be required to be reasonably acceptable to the Administrative Agent,
provided, that:
(i) at the time of any replacement pursuant to this Section 1.13, the
Replaced Bank and the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 14.04(b) (and
with all fees payable pursuant to said Section 14.04(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall acquire the
Commitments and all outstanding Loans of, and in each case participations
in Letters of Credit by, the
16
C/M 11752.0000 414856.1
Replaced Bank and, in connection therewith, shall pay, in the applicable
Currency, to (x) the Replaced Bank in respect thereof an amount equal to
the sum of (A) an amount equal to the principal of, and are accrued
interest on, all outstanding Loans of the Replaced Bank, (B) an amount
equal to all Unpaid Drawings that have been funded by (and not reimbursed
to) such Replaced Bank, together with all then unpaid interest with
respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section
3.01, and (y) the Issuing Bank an amount equal to such Replaced Bank's
Adjusted Percentage (for this purpose, determined as if the adjustment
described in clause (y) of the immediately succeeding sentence had been
made with respect to such Replaced Bank) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) with respect to a Letter of Credit
issued by it to the extent such amount was not theretofore funded by such
Replaced Bank; and
(ii) all obligations of the Borrowers owing to the Replaced Bank
(other than those specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being,
paid) accrued through the date of replacement shall be paid in full to
such Replaced Bank concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (i) and (ii) above, and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Notes executed by the respective Borrowers, (x) the Replacement
Bank shall become a Bank hereunder and the Replaced Bank shall cease to
constitute a Bank hereunder, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04 and 14.01), which shall survive as to such Replaced Bank and (y) in the
case of a replacement of a Defaulting Bank with a Non-Defaulting Bank, the
Adjusted Percentages of the Banks shall be automatically adjusted at such time
to give effect to such replacement (and to give effect to the replacement of a
Defaulting Bank with one or more Non-Defaulting Banks).
1.14 Joint and Several Obligations. The Company shall be jointly and
severally obligated as a primary obligor for the obligations of the Canadian
Borrower under this Agreement.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, each Borrower may request the Issuing Bank to
issue, at any time and from time to
17
C/M 11752.0000 414856.1
time on and after the Initial Borrowing Date and prior to (i) the third
Business Day preceding the Final Maturity Date in the case of standby Letters
of Credit or (ii) the 30th day preceding the Final Maturity Date in the case of
trade Letters of Credit, (x) for the account of such Borrower and for the
benefit of any holder (or any trustee, agent or other similar representative
for any such holders) of L/C Supportable Indebtedness, irrevocable standby
letters of credit in a form customarily used by the Issuing Bank or in such
other form as has been approved by the Issuing Bank in support of such L/C
Supportable Indebtedness and (y) for the account of such Borrower and for the
benefit of sellers of goods to the Company or any of its Subsidiaries,
irrevocable sight trade letters of credit in a form customarily used by the
Issuing Bank or in such other form as has been approved by the Issuing Bank
(each such standby letter of credit and trade letter of credit, a "Letter of
Credit" and collectively, the "Letters of Credit"). All Letters of Credit shall
be denominated in Dollars.
(b) The Issuing Bank hereby agrees that it will (subject to the terms
and conditions contained herein), at any time and from time to time on and
after the Initial Borrowing Date and prior to (i) the third Business Day
preceding the Final Maturity Date in the case of standby Letters of Credit or
(ii) the 30th day preceding the Final Maturity Date in the case of trade
Letters of Credit, in each case following its receipt of the respective Letter
of Credit Request, issue for the account of a Borrower one or more Letters of
Credit in support of such sellers of goods referred to in Section 2.01(a)(y) or
such L/C Supportable Indebtedness as is permitted to remain outstanding without
giving rise to a Default or an Event of Default hereunder; provided that the
Issuing Bank shall be under no obli- gation to issue any Letter of Credit if at
the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over the Issuing Bank shall prohibit, or request that the Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuing Bank with respect
to such Letter of Credit any restriction or reserve or capital requirement
(for which the Issuing Bank is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Bank as of the
18
C/M 11752.0000 414856.1
date hereof and which the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) the Issuing Bank shall have received notice from the Required
Banks prior to the issuance of such Letter of Credit of the type described
in the last sentence of Section 2.03(b); or
(iii) a Bank Default exists unless the Issuing Bank has entered into
arrangements satisfactory to it and the Company to eliminate the Issuing
Bank's risk with respect to the Bank which is the subject of the Bank
Default, including by cash collateralizing such Bank's Adjusted Percentage
of the Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date
of, and prior to the issuance of, the respective Letter of Credit) at such
time, would exceed either (x) $50,000,000 or (y) when added to the Dollar
Equivalent Amount of the aggregate principal amount of all Revolving Loans
and Swingline Loans made by Non-Defaulting Banks then outstanding, an
amount equal to the Adjusted Total Revolving Loan Commitment then in
effect, (ii)(x) each standby Letter of Credit shall by its terms terminate
on or before the date which occurs twelve months after the date of the
issuance thereof (although each standby Letter of Credit may be extendable
for successive periods of up to twelve months, but not beyond the third
Business Day preceding the Final Maturity Date, on terms acceptable to the
Issuing Bank) and (y) each trade Letter of Credit shall by its terms
terminate on or before the date occurring not later than 180 days after
such trade Letter of Credit's date of issuance and (iii) (x) no standby
Letter of Credit shall have an expiry date occurring later than the third
Business Day preceding the Final Maturity Date and (y) no trade Letter of
Credit shall have an expiry date occurring later than 30 days prior to the
Final Maturity Date.
2.02 Minimum Stated Amount. The initial Stated Amount of each Letter
of Credit shall be not less than $100,000 or such lesser amount as is
acceptable to the Issuing Bank, provided that in each calendar quarter up to
five Letters of Credit may be issued having an initial Stated Amount of greater
than $10,000 and less than $100,000.
2.03 Letter of Credit Requests. (a) Whenever a Borrower desires that
a Letter of Credit be issued for its account, such Borrower shall give the
Administrative Agent and the Issuing Bank at least five Business Days' (or such
shorter period as is acceptable to the Issuing Bank in any given case)
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written notice prior to the proposed date of issuance (which shall be a
Business Day). Each notice shall be in the form of Exhibit C (each a "Letter of
Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the applicable Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.01(c). Unless the Issuing Bank has received notice from the
Required Banks before it issues a Letter of Credit that one or more of the
conditions specified in Section 5, 6 or 7, as the case may be, are not then
satisfied, or that the issuance of such Letter of Credit would violate Section
2.01(c), then the Issuing Bank shall issue the requested Letter of Credit for
the account of such Borrower in accordance with the Issuing Bank's usual and
customary practices.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be
deemed to have sold and transferred to each Bank, other than the Issuing Bank
(each such Bank, in its capacity under this Section 2.04, a "Participant"), and
each such Participant shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's
Adjusted Percentage, in such Letter of Credit, each substitute letter of
credit, each drawing made thereunder and the obligations of the Borrower for
whose account such Letter of Credit was issued under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto. Upon
any change in the Revolving Loan Commitments or Adjusted Percentages of the
Banks pursuant to Section 1.13 or 14.04 or as a result of a Bank Default, it is
hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings there shall be an automatic adjustment to the participations
pursuant to this Section 2.04 to reflect the new Adjusted Percentages of the
assignor and assignee Bank or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the Issuing Bank under or in connection with any Letter
of Credit issued by it, if taken or omitted in the absence of gross negligence
or willful misconduct, shall not create for the Issuing Bank any resulting
liability to the Borrower for whose account such Letter of Credit was issued or
any Bank.
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(c) In the event that the Issuing Bank makes any payment under any
Letter of Credit issued by it and the Borrower for whose account such Letter of
Credit was issued shall not have reimbursed such amount in full to the Issuing
Bank pursuant to Section 2.05(a), the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Participant's Adjusted Percentage of such unreimbursed payment in Dollars and
in same day funds. If the Administrative Agent so notifies, prior to 11:00 A.M.
(New York time) on any Business Day, any Participant required to fund a payment
under a Letter of Credit, such Participant shall make available to the
Administrative Agent at the Payment Office of the Administrative Agent for the
account of the Issuing Bank in Dollars such Participant's Adjusted Percentage
of the amount of such payment on such Business Day in same day funds. If and to
the extent such Participant shall not have so made its Adjusted Percentage of
the amount of such payment available to the Administrative Agent for the
account of the Issuing Bank, such Participant agrees to pay to the
Administrative Agent for the account of the Issuing Bank, forthwith on demand
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent for the account of the
Issuing Bank at the overnight Federal Funds Rate. The failure of any
Participant to make available to the Administrative Agent for the account of
the Issuing Bank its Adjusted Percentage of any payment under any Letter of
Credit issued by it shall not relieve any other Participant of its obligation
hereunder to make available to the Administrative Agent for the account of the
Issuing Bank its Adjusted Percentage of any such Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Administrative Agent
for the account of the Issuing Bank such other Participant's Adjusted
Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
the Issuing Bank any payments from the Participants pursuant to clause (c)
above, the Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay each Participant which has paid its
Adjusted Percentage thereof, in Dollars and in same day funds, an amount equal
to such Participant's share (based on the proportionate aggregate amount funded
by such Participant to the aggregate amount funded by all Participants) of the
principal amount of such reimbursement obligation and interest thereon accruing
after the purchase of the respective participations.
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(e) Immediately after the issuance of, or amendment to, a standby
Letter of Credit, the Issuing Bank shall immediately notify the Administrative
Agent and each Participant of such issuance or amendment, as the case may be,
and such notice shall be accompanied by a copy of the issued standby Letter of
Credit or amendment, as the case may be.
(f) The obligations of the Participants to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to
Letters of Credit issued by it shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
other Credit Document;
(ii) the existence of any claim, setoff, defense or other right which
the Company or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Bank, the Issuing Bank, any Participant, or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Company or any of its
Subsidiaries and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) Each Borrower
for whose account a Letter of Credit is issued hereby agrees to reimburse the
Issuing Bank, by making payment to the Administrative Agent in immediately
available funds at the Payment Office (or by making the payment directly to the
Issuing Bank at such location as may otherwise have been agreed upon by the
Company and the Issuing Bank), for any payment or dis- bursement made by the
Issuing Bank under such Letter of Credit (each such amount so paid until
reimbursed, an "Unpaid Drawing"),
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immediately after, and in any event on the date of, such payment or
disbursement, with interest on the amount so paid or disbursed by the Issuing
Bank, to the extent not reimbursed prior to 12:00 Noon (New York time) on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date the Issuing Bank is reimbursed by the
applicable Borrower therefor at a rate per annum which shall be the sum of the
Applicable Margin plus the Base Rate in effect from time to time, provided,
however, to the extent such amounts are not reimbursed prior to 12:00 Noon (New
York time) on the third Business Day following notice to the Company by the
Administrative Agent or the Issuing Bank of such payment or disbursement,
interest shall thereafter accrue on the amounts so paid or disbursed by the
Issuing Bank (and until reimbursed by the applicable Borrower) at a rate per
annum which shall be the sum of the Applicable Margin plus the Base Rate in
effect from time to time plus 2%, in each such case, with interest to be
payable on demand, it being understood and agreed, however, that the notice
referred to in the immediately preceding proviso shall not be required to be
given if a Default or an Event of Default under Section 11.05 shall have
occurred and be continuing (in which case the Unpaid Drawings shall bear
interest at the rate provided in the foregoing proviso from the third Business
Day following the respective payment or disbursement). The Issuing Bank shall
give the Company prompt notice of each Drawing under any Letter of Credit,
provided that the failure to give any such notice shall in no way affect,
impair or diminish either Borrower's obligations hereunder.
(b) The obligation of each applicable Borrower under this Section
2.05 to reimburse the Issuing Bank with respect to Unpaid Drawings (including,
in each case, interest thereon) shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Company or any of its Subsidiaries may have or have had
against any Bank (including in its capacity as Issuing Bank, or as
Participant), including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit (each a "Drawing") to conform to the
terms of such Letter of Credit or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing; provided, however, that a Borrower
shall not be obligated to reimburse the Issuing Bank for any wrongful payment
made by the Issuing Bank under a Letter of Credit issued by it as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of the Issuing Bank. Any action taken or omitted to be taken by the
Issuing Bank under or in connection with any Letter of Credit if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for the Issuing Bank any resulting liability to either Borrower.
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2.06 Increased Costs. If at any time the Issuing Bank or any
Participant determines that the introduction after the Effective Date of or any
change after the Effective Date in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by the Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law), or
any change after the Effective Date in generally acceptable accounting
principles shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against letters of credit
issued by the Issuing Bank or participated in by any Participant, or (ii)
impose on the Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement or any Letter of Credit, and the
result of any of the foregoing is to increase the cost to the Issuing Bank or
any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by the Issuing
Bank or any Participant hereunder with respect to Letters of Credit or reduce
the rate of return on its capital with respect to Letters of Credit, then, upon
demand to the Company by the Issuing Bank or any Participant (a copy of which
demand shall be sent by the Issuing Bank or such Participant to the
Administrative Agent), the Company shall pay to the Issuing Bank or such
Participant such additional amount or amounts as will compensate such Bank for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. The Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this
Section 2.06, will give prompt written notice thereof to the Company, which
notice shall include a certificate submitted to the Company by the Issuing Bank
or such Participant (a copy of which certificate shall be sent by the Issuing
Bank or such Participant to the Administrative Agent), setting forth in
reasonable detail the basis for the calculation of such additional amount or
amounts necessary to compensate the Issuing Bank or such Participant, although
failure to give any such notice shall not release or diminish the Company's
obligations to pay additional amounts pursuant to this Section 2.06. The
certificate required to be delivered pursuant to this Section 2.06 shall,
absent manifest error, be final, conclusive and binding on the Company. The
Company shall not be required to pay additional amounts pursuant to this
Section 2.06 unless it has received the written notice described in the second
preceding sentence (which notice need not be given during an Event of Default
under Section 11.05).
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SECTION 3. Fees: Reductions of Commitment.
3.01 Fees. (a) The Company agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Bank a commitment commission (the
"Commitment Commission") for the period from the Effective Date to but not
including the Final Maturity Date (or such earlier date as the Total Revolving
Loan Commitment shall have been terminated), computed at a rate per annum equal
to the rate set forth under the column captioned "Commitment Fee" in the
definition of "Applicable Margin" set forth in Section 12.01 hereof, as in
effect from time to time, on the Unutilized Revolving Loan Commitment of such
Non-Defaulting Bank as in effect from time to time. Accrued and unpaid
Commitment Commission shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Final Maturity Date or such earlier date upon
which the Total Revolving Loan Commitment is terminated.
(b) The Company agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Bank (based on their respective Adjusted
Percentages) a fee in respect of each Letter of Credit issued hereunder (the
"Letter of Credit Fee"), for the period from and including the date of issuance
of such Letter of Credit to and including the termination of such Letter of
Credit, computed at a rate per annum equal to the Applicable Margin for $
Eurodollar Loans, as in effect, from time to time, on the daily Stated Amount
of such Letter of Credit. Accrued and unpaid Letter of Credit Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
termination of the Total Revolving Loan Commitment or the first day thereafter
upon which no Letters of Credit remain outstanding.
(c) The Company agrees to pay to the Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued for its own
account hereunder (the "Facing Fee"), for the period from and including the
date of issuance of such Letter of Credit to and including the termination of
such Letter of Credit, equal to the higher of (i) $500 (the "Minimum Facing
Fee") and (ii) the rate per annum agreed to in writing by the Issuing Bank in
respect of such Letter of Credit, on the daily Stated Amount of such Letter of
Credit. The Minimum Facing Fee, if applicable, is due and payable on the date
of issuance of such Letter of Credit and each annual anniversary date or
extension date thereof. In addition, all other accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
termination of the Total Revolving Loan Commitment or the first day thereafter
upon which no Letters of Credit remain outstanding.
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(d) The Company agrees to pay to the Issuing Bank, for its own
account, upon each payment under, issuance of, or amendment to, any Letter of
Credit such amount as shall at the time of such event be the administrative
charge and expense which the Issuing Bank generally imposes in connection with
such occurrence with respect to letters of credit.
(e) The Company agrees to pay to each Agent, for such Agent's own
account, such other fees as have been agreed to in writing by the Company and
such Agent.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
least three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks),
the Company shall have the right, at any time or from time to time, without
premium or penalty, to terminate the Total Unutilized Revolving Loan
Commitment, in whole or in part, in integral multiples of $1,000,000 in the
case of partial reductions to the Total Unutilized Revolving Loan Commitment,
provided that (v) each reduction shall apply to reduce the then remaining
Scheduled Commitment Reductions pro rata based upon the then remaining amount
of such Scheduled Commitment Reductions after giving effect to all prior
reductions thereto, (w) each such reduction shall apply proportionately to
permanently reduce the Revolving Loan Commitment of each Bank, (x) the
reduction to the Total Unutilized Revolving Loan Commitment shall in no case be
in an amount which would cause the Revolving Loan Commitment of any Bank to be
reduced by an amount which exceeds the Unutilized Revolving Loan Commitment of
such Bank as in effect immediately before giving effect to such reduction, (y)
each such reduction of the Total Revolving Loan Commitment shall reduce the
Total Revolving C$ Loan Commitments ratably and (z) each such reduction shall
apply proportionately to permanently reduce the Revolving C$ Loan Commitment of
each Bank.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
14.12(b), the Company may, upon five Business Days' prior written notice to the
Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks) and subject to obtaining
the consents required by Section 14.12(b) terminate all of the Revolving Loan
Commitment of such Bank so long as all Loans, together with accrued and unpaid
interest, Fees and all other amounts owing to such Bank are repaid concurrently
with the effectiveness of such termination pursuant to Section 4.01(b) (at
which time Schedule I shall be deemed modified to reflect such changed
amounts), and at such
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time, such Bank shall no longer constitute a "Bank" for purposes of this
Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 14.01 and
14.06), which shall survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Revolving Loan
Commitment (and the Revolving Loan Commitment and Swingline Commitment of each
Bank) shall terminate in its entirety on August 30, 1996 unless the Initial
Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03 on each date set forth below, the Total Revolving Loan
Commitment shall be reduced by the amount set forth opposite such date (each
such reduction as the same may be reduced as provided in Sections 3.02(a) and
3.03(g), a "Scheduled Commitment Reduction" and each such date, a "Scheduled
Commitment Reduction Date"):
Scheduled Commitment Reduction Date Amount
August 15, 1998 $7,500,000
February 15, 1999 7,500,000
August 15, 1999 10,000,000
February 15, 2000 10,000,000
August 15, 2000 10,000,000
February 15, 2001 10,000,000
August 15, 2001 10,000,000
February, 2002 10,000,000
Final Maturity Date 75,000,000
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on and after the Effective Date upon which
any Subsidiaries of the Company or any Joint Ventures receives any proceeds
from any capital contribution or any sale or issuance of its equity (but
excluding proceeds from capital contributions to, or equity investments in, any
Subsidiary or Joint Venture of the Company to the extent made by the Company,
any other Subsidiary of the Company or the respective joint venture partner of
such Joint Venture), the Total Revolving Loan Commitment shall be permanently
reduced by an amount equal to 50% of the Net Cash Proceeds of the
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C/M 11752.0000 414856.1
respective capital contribution or sale or issuance (or in the case of any
capital contribution to, or any sale or issuance of equity by, any Joint
Venture, the Total Revolving Loan Commitment shall be permanently reduced by an
amount equal to 50% of the Company's Allocable Share of such Net Cash Proceeds
(but, in the case of a Joint Venture in which the Company or a Subsidiary
thereof does not control the timing of distributions by such Joint Venture,
only as and when such Net Cash Proceeds are distributed by such Joint Venture
to the Company or a Wholly-Owned Subsidiary thereof)), in each case in
accordance with the requirements of Section 3.03(g); provided that, so long as
no Default or Event of Default then exists, the Total Revolving Loan Commitment
shall not be required to be reduced pursuant to the requirements of this
Section 3.03(c) at any time to an amount which is less than the Guaranty Amount
then in effect.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on and after the Effective Date upon which
the Company or any of its Subsidiaries or Joint Ventures receives Cash Proceeds
from any Asset Sale, the Total Revolving Loan Commitment shall be permanently
reduced by an amount equal to 100% of the Net Cash Proceeds therefrom (or, in
the case of any Asset Sale by a Joint Venture, the Total Revolving Loan
Commitment shall be permanently reduced by an amount equal to 100% of the
Company's Allocable Share of such Net Cash Proceeds (but, in the case of a
Joint Venture in which the Company or a Subsidiary thereof does not control the
timing of distributions by such Joint Venture, only as and when such Net Cash
Proceeds are distributed by such Joint Venture to the Company or a Wholly-Owned
Subsidiary thereof)) in each case in accordance with the requirements of
Section 3.03(g), provided that so long as no Default or Event of Default then
exists, (i) the Net Cash Proceeds of any Asset Sale pursuant to Section
10.02(ii) shall not be required to reduce the Total Revolving Loan Commitment
on the date of receipt thereof to the extent that the Company has delivered a
certificate to the Administrative Agent on or prior to such date stating that
it intends to reinvest such Net Cash Proceeds in equipment or materials within
365 days after the respective date of sale or, in lieu thereof, commit to so
invest such Net Cash Proceeds within 365 days after such date of sale and
actually expend the funds pursuant to such commitment within 365 days after
such date of sale, and (ii) the Net Cash Proceeds from the sale of any Existing
Investment, the sale of the equity interests in any Joint Venture, the sale of
any Hotel Property or from any Recovery Event shall not be required to reduce
the Total Revolving Loan Commitment on the date of receipt thereof to the
extent that (A) the Company delivers a certificate to the Administrative Agent
stating that it intends to utilize the Net Cash Proceeds therefrom to make
Permitted Hotel Acquisitions pursuant to Sections 10.02(ix) and/or 10.05(viii)
(and/or, in the case of the Net Cash Proceeds from a
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C/M 11752.0000 414856.1
Recovery Event, to replace or restore any properties or assets in respect of
which such proceeds are paid), other Investments permitted under Section 10.05
or Capital Expenditures permitted under Section 10.07 within 365 days after the
date of the respective Asset Sale, or make Investment Commitments for a
Permitted Hotel Acquisition within 365 days after the date of the respective
Asset Sale and actually make the respective Permitted Hotel Acquisition (or
effect such replacement or restoration, as the case may be), Investment or
Capital Expenditure within 365 days after the date of the respective Asset Sale
and (B) after giving effect to any election pursuant to this clause (ii), the
Reinvestment Amount shall at no time outstanding exceed $25,000,000, provided,
further, that with respect to each of clauses (i) and (ii) of the immediately
preceding proviso, if all or any portion of the Net Cash Proceeds of the
respective Asset Sale are not in fact utilized for the purposes permitted by
said clauses within 365 days after the respective date of such Asset Sale (or
committed to be so used within 365 days and actually applied within 365 days
after the date of the respective Asset Sale), then on such 365th day after the
date of the respective Asset Sale, the amount of Net Cash Proceeds not actually
applied for the purposes permitted by said clauses (i) and (ii) shall be used
to permanently reduce the Total Revolving Loan Commitment as otherwise required
by this Section 3.03(d) in the absence of the immediately preceding proviso.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03. on the first date on and after the Effective Date on
which (i) the long term senior unsecured debt credit rating of HFS shall have
been reduced to a level equal to or below BBB- by S&P and/or be unrated by S&P
and (ii) the long term senior unsecured debt rating of the Company shall have
been reduced to a level equal to or below BBB- by S&P and/or be unrated by S&P,
both of which downgradings and/or failures to be rated shall have continued for
at least 30 consecutive days, the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to $37,500,000 in accordance with the
requirements of Section 3.03(g).
(f) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on the first date on and after the Effective Date on
which (i) the long term senior unsecured debt credit rating of HFS shall have
been reduced to a level below BBB- by S&P and/or be unrated by S&P and (ii) the
long term senior unsecured debt rating of the Company shall have been reduced
to a level below BBB- by S&P and/or be unrated by S&P, both of which
downgradings and/or failures to be rated shall have continued for at least 30
consecutive days, the Total Revolving Loan Commitment shall be permanently
reduced by an amount equal to $75,000,000 (less any amount by which the Total
Revolving Loan
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Commitment had already been reduced pursuant to clause (e) above) in accordance
with the requirements of Section 3.03(g).
(g) The amount of each reduction to the Total Revolving Loan
Commitment made as required by (A) Sections 3.03(c) and (d) shall be applied to
reduce the then remaining Scheduled Commitment Reductions pro rata based on the
then remaining amounts of such Scheduled Commitment Reductions after giving
effect to all prior reductions thereto and (B) Sections 3.03(e) and (f) shall
be applied to reduce the then remaining Scheduled Commitment Reductions in
inverse order of maturity.
(h) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate in its entirety on the Final
Maturity Date.
(i) The Swingline Commitment shall terminate on the Swingline Expiry
Date.
(j) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on the 15th day after each date on which any Change of
Control occurs, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate in its entirety, in each case unless
the Supermajority Banks otherwise agree in writing in their sole discretion.
(k) Each reduction to the Total Revolving Loan Commitment pursuant to
(i) this Section 3.03 shall be applied proportionately to reduce the Revolving
Loan Commitment of each Bank or (ii) Section 3.02 or this Section 3.03 shall
reduce the Swingline Commitment to the extent the Total Revolving Loan
Commitment would otherwise exceed the Swingline Commitment.
(l) Each reduction to the Total Revolving Loan Commitment shall (i)
reduce the Total Revolving C$ Loan Commitment ratably and (ii) be applied
proportionately to reduce the Revolving C$ Loan Commitment of each Bank. Each
termination of the Total Revolving Loan Commitment shall terminate the Total
Revolving C$ Loan Commitment (and the Revolving C$ Loan Commitment of each
Bank) in its entirety.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) Each Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions:
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C/M 11752.0000 414856.1
(i) the applicable Borrower shall give the Administrative Agent prior
to 12:00 Noon (New York time) at its Notice Office (x) at least one
Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of such Borrower's intent to prepay $ Base Rate
Loans (or 11:00 A.M. on the date of prepayment, in the case of Swingline
Loans), (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of such Borrower's intent
to prepay $ Eurodollar Loans and (z) at least four Business Days prior
written notice (or telephone notice promptly confirmed in writing) of such
Borrower's intent to prepay C$ Eurodollar Loans, the amount of such
prepayment and the Types of Revolving Loans to be prepaid, whether such
Loans are Revolving $ Loans, Revolving C$ Loans or Swingline Loans, and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice the Administrative Agent shall
promptly transmit to each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount of at
least (A) $500,000 in the case of Revolving $ Loans, (B) $50,000 in the
case of Swingline Loans and (C) C$500,000 in the case of Revolving C$
Loans; provided, that (A) if any partial prepayment of $ Eurodollar Loans
made pursuant to any Borrowing shall reduce the outstanding $ Eurodollar
Loans made pursuant to such Borrowing to an amount less than $1,000,000,
then such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of $ Base Rate Loans and any election of
an Interest Period with respect thereto given by the applicable Borrower
shall have no force or effect and (B) no such prepayment may be made which
reduces the outstanding C$ Eurodollar Loans made pursuant to a Borrowing
to less than C$ $1,000,000; and
(iii) each prepayment in respect of any Revolving Loans made pursuant
to a Borrowing shall be applied pro rata among such Revolving Loans,
provided that, at the applicable Borrower's election in connection with
any prepayment of Revolving Loans pursuant to this Section 4.01(a), such
prepayment shall not be applied to any Revolving Loan of a Defaulting
Bank.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
14.12(b), the Company shall have the right, upon five Business Days' prior
written notice to the Administrative Agent at its Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks) to repay
all Loans, together with accrued and
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unpaid interest, Fees, and other amounts owing to such Bank in accordance with
said Section 14.12(b) so long as (A) in the case of the repayment of Loans of
any Bank pursuant to this clause (b) the Commitments of such Bank are
terminated concurrently with such repayment pursuant to Section 3.02(b) (at
which time Schedule I shall be deemed modified to reflect the changed Revolving
Loan Commitments) and (B) the consents required by Section 14.12(b) in
connection with the repayment pursuant to this clause (b) have been obtained.
4.02 Mandatory Payments. (a) (i) On any day on which the sum of the
Dollar Equivalent Amount of the aggregate outstanding principal amount of
Swingline Loans and Revolving Loans made by Non-Defaulting Banks and the Letter
of Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as
then in effect, the Company shall prepay on such day principal of the Swingline
Loans and, after the Swingline Loans have been paid in full, Unpaid Drawings
and, after Unpaid Drawings have been paid in full, Revolving Loans of
Non-Defaulting Banks in an amount equal to such excess. If, after giving effect
to the prepayment of all Swingline Loans, Unpaid Drawings and Revolving Loans
of Non- Defaulting Banks, the aggregate amount of the Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then in
effect, the Company shall pay to the Administrative Agent at the Payment Office
on such date an amount of cash or Cash Equivalents equal to the amount of such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash or Cash Equivalents to be held as security for all
obligations of the Company to Non-Defaulting Banks hereunder in a cash
collateral account to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal amount
of Revolving C$ Loans made by Non-Defaulting Banks exceeds the Adjusted Total
Revolving C$ Loan Commitment as then in effect, the Canadian Borrower shall
prepay on such day principal of the Revolving C$ Loans of Non-Defaulting Banks
in an amount equal to such excess.
(iii) The Administrative Agent may determine the Dollar Equivalent
Amount of the Revolving Loans at any time. Each such determination shall,
absent manifest error, be final, conclusive and binding on the Canadian
Borrower.
(b) With respect to each repayment of Loans required by this Section
4.02, the applicable Borrower may designate the Types of Loans which are
required to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made, provided that: (i) if any
repayment of $ Eurodollar Loans made pursuant to a single Borrowing shall
reduce the outstanding $ Eurodollar Loans made pursuant to such Borrowing to
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an amount less than $1,000,000, such Borrowing shall be converted at the end of
the then current Interest Period into a Borrowing of $ Base Rate Loans, (ii) if
any repayment of C$ Eurodollar Loans made pursuant to a single Borrowing would
reduce the outstanding C$ Eurodollar Loans made pursuant to such Borrowing to
an amount less than C$1,000,000, the consent of the Required Banks to such
repayment shall be obtained and (iii) except for differing treatments of
Defaulting Banks and Non-Defaulting Banks as expressly provided in Section
4.02(a), each repayment of Revolving Loans made pursuant to a Borrowing shall
be applied pro rata among such Revolving Loans; provided, that no repayment
pursuant to Section 4.02(a) shall be applied to any Revolving Loans of a
Defaulting Bank at any time when the aggregate amount of the Revolving Loans of
any Non-Defaulting Bank exceeds such Non- Defaulting Bank's Adjusted Percentage
of Revolving Loans then outstanding. In the absence of a designation by the
Company as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion.
(c) In addition to any other mandatory repayments required pursuant
to this Section 4.02, on the 15th day after each date on which any Change of
Control occurs, all outstanding Loans shall be required to be immediately
repaid in full and all Letter of Credit Outstandings shall be cash
collateralized on terms similar to those described in the last sentence of
Section 4.02(a)(i), in each case unless the Supermajority Banks otherwise agree
in writing in their sole discretion.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Bank or Banks entitled
thereto not later than 12:00 Noon (New York time) on the date when due and
shall be made (i) in respect of all obligations other than principal and
interest in respect of Revolving C$ Loans, in Dollars in immediately available
funds at the Payment Office of the Administrative Agent and (ii) in respect of
principal and interest in respect of Revolving C$ Loans, in Canadian Dollars in
immediately available funds of the Payment Office of the Administrative Agent.
The principal of, and interest on, each Revolving C$ Loan shall be paid only in
Canadian Dollars. Whenever any payment to be made hereunder or under any Note
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest shall be payable at the applicable rate
during such extension.
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4.04 Net Payments; Taxes. (a) All payments made by each Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Bank, or any franchise tax based on the net income or net profits of a Bank
based solely on the amounts specified in the preceding sentence, in either case
pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees or other charges (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the applicable
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account
of any Taxes, will not be less than the amount provided for herein or in such
Note. If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the applicable Borrower agrees to reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net
income or net profits of such Bank, or any franchise tax based on the net
income or net profits of a Bank based solely on the amounts specified in the
preceding sentence, in either case pursuant to the laws of the jurisdiction in
which such Bank is organized or in which the principal office or applicable
lending office of such Bank is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Bank is
organized or in which the principal office or applicable lending office of such
Bank is located and for any withholding of income or similar taxes imposed by
the United States of America as such Bank shall determine are payable by, or
withheld from, such Bank in each case in respect solely to such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence. The
Company will furnish to the Administrative Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by such Borrower. Each Borrower agrees to
indemnify and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such
Bank.
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(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Company and the Administrative Agent on or
prior to the Effective Date, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or
14.04 (unless the respective Bank was already a Bank hereunder immediately
prior to such assignment or transfer), on the date of such assignment or
transfer to such Bank, (i) two accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001 (or successor forms) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments to be made under this Agreement and under any
Note, or (ii) if the Bank is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate substantially
in the form of Exhibit D (any such certificate, a "Section 4.04(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Bank agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver
to the Company and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001, or Form
W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of
such Bank to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Company and the Administrative Agent of its
inability to deliver any such Form or Certificate. Notwithstanding anything to
the contrary contained in Section 4.04(a), but subject to Section 14.04(b) and
the immediately succeeding sentence, (x) each Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, Fees or other amounts
payable hereunder for the account of any Bank which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes to the extent that such Bank has not provided to
the Company U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) neither Borrower shall be
obligated pursuant to Section 4.04(a) to gross-up payments to be made to a Bank
in respect of income or similar taxes imposed by the United States if (I) such
Bank has
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not provided to the Company the Internal Revenue Service Forms required to be
provided to the Company pursuant to this Section 4.04(b) or (II) in the case of
a payment, other than interest, to a Bank described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained
in the preceding sentence or elsewhere in this Section 4.04 and except as set
forth in Section 14.04(b), each Borrower agrees to pay additional amounts and
to indemnify each Bank in the manner set forth in Section 4.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any Taxes deducted or withheld by it as described in
the immediately preceding sentence as a result of any changes after the Initial
Borrowing Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such Taxes.
SECTION 5. Conditions Precedent to Extensions of Credit on the
Initial Borrowing Date. The obligation of each Bank to make its Loans, and the
obligation of the Issuing Bank to issue Letters of Credit, on the Initial
Borrowing Date, is subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions:
5.01 Execution of Agreement, Notes. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred, (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Banks the appropriate Revolving $ Note executed by the Company, in the amount,
maturity and as otherwise provided herein, (iii) there shall have been
delivered to the Administrative Agent for the account of Chase the Swingline
Note executed by the Company, in the amount, maturity and as otherwise provided
herein and (iv) there shall have been delivered to the Administrative Agent for
the amount of each of the Banks the appropriate Revolving C$ Note executed by
the Canadian Borrower, in the amount, maturity and as otherwise provided
herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Company by an Authorized Officer,
stating all of the conditions of 5.06, 5.13, 5.14, 5.15, 5.17, 7.01, 7.02 and
7.03 have been satisfied on such date.
5.03 Fees, etc. On the Initial Borrowing Date, the Company shall have
paid to the Agents and the Banks all costs, fees and expenses (including,
without limitation, legal fees and expenses) payable to the Agents and the
Banks to the extent then due.
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5.04 Opinion of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received opinions addressed to the Agents and
each of the Banks and dated the Initial Borrowing Date, from (i) Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel to HFS, which opinion shall cover the
matters addressed in Exhibit M-1 hereto (ii) Battle ▇▇▇▇▇▇ LLP, special counsel
to the Borrowers and the Subsidiary Guarantors, which opinion shall cover the
matters addressed in Exhibit M-2 hereto and (iii) the General Counsel to the
Borrowers and the Subsidiary Guarantors, which opinion shall cover the matters
addressed in Exhibit M-3 hereto.
5.05 Corporate Documents; Proceedings, etc. (a) On the Initial
Borrowing Date, the Administrative Agent shall have received a certificate,
dated the Initial Borrowing Date, signed by the President, any Vice President,
the Secretary or an Assistant Secretary of each Credit Party, in the form of
Exhibit E with appropriate insertions, together with copies of the certificate
of incorporation and by-laws or other organizational documents of each such
Credit Party and the resolutions of each such Credit Party referred to in such
certificates, and the foregoing shall be acceptable to the Administrative
Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be satisfactory in form and substance to the
Agents and the Required Banks, and the Administrative Agent shall have received
all information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams, if any, which the Agents may have requested in connection
therewith, such documents and papers where appropriate to be certified by
proper corporate or governmental authorities.
5.06 Refinancing. On the Initial Borrowing Date and after giving
effect to the Loans incurred on the Initial Borrowing Date, neither the Company
nor any of its Subsidiaries shall have any Indebtedness outstanding except for
(x) the Loans and Letters of Credit and (y) the Existing Indebtedness, which
Existing Indebtedness shall not exceed $10,000,000 in aggregate outstanding
principal amount. The Agents and the Required Banks shall be satisfied with the
amount of and the terms and conditions of (i) all Existing Indebtedness and
(ii) the repayment of all Indebtedness to be repaid in connection with the
transactions contemplated hereby (collectively, the "Refinancing") and the
amount of all accrued interest, premiums, fees, commissions and expenses owing
in connection with the Refinancing. The Refinancing shall have been effected in
accordance with the requirements of the immediately preceding sentence and all
Liens in connection with such refinanced Indebtedness shall have been
terminated (and all appropriate releases, termination statements
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or other instruments of assignment with respect thereto shall have been
obtained) to the satisfaction of the Agents and the Required Banks. The
Administrative Agent shall have received copies, certified as true and complete
by an appropriate officer of the Company, of all documents executed in
connection with the repayment of the Indebtedness and the release of the Liens
thereunder (collectively, the "Refinancing Documents").
5.07 Pledge Agreement. On the Initial Borrowing Date, each Credit
Party (other than HFS) shall have duly authorized, executed and delivered a
Pledge Agreement in the form of Exhibit F (as modified, supplemented or amended
from time to time, the "Pledge Agreement") and shall have delivered to the
Collateral Agent, as Pledgee, all the Pledged Securities (which Pledged
Securities shall be required to include (to the extent provided in the Pledge
Agreement), on the Initial Borrowing Date, all capital stock, partnership and
Joint Venture interests and promissory notes owned by the Company and each
Subsidiary Guarantor on the Initial Borrowing Date), if any, referred to
therein then owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with executed
and undated stock powers, in the case of capital stock constituting Pledged
Securities.
5.08 Guaranties. On the Initial Borrowing Date, (i) HFS shall have
duly authorized, executed and delivered a Guaranty in the form of Exhibit G-1
(as modified, amended or supplemented from time to time, the "HFS Guaranty"),
(ii) each Subsidiary Guarantor shall have duly authorized, executed and
delivered a Subsidiary Guaranty in the form of Exhibit G-2 (as modified,
amended or supplemented from time to time, the "Subsidiaries Guaranty") and
(iii) the Company shall have duly authorized, executed and delivered a Guaranty
in the form of Exhibit G-3 (as modified, amended or supplemented from time to
time, the "Company Guaranty").
5.09 Adverse Change. On the Initial Borrowing Date, since December
31, 1995 nothing shall have occurred (and the Banks shall not have become aware
of any facts, conditions or other information not previously known) which the
Agents or the Required Banks shall reasonably determine has had or could
reasonably expected to have a material adverse effect (i) on the Transaction,
(ii) on the rights or remedies of the Agents or the Banks, or on the ability of
any Credit Party to perform their respective obligations to the Agents and the
Banks, under the Credit Documents or (iii) on the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole.
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5.10 Litigation. On the Initial Borrowing Date, no litigation by any
Person (private or governmental) shall be pending or, to the knowledge of any
of the Credit Parties, threatened with respect to (i) the Canadian Acquisition,
the making of the Loans or the Credit Documents or any documentation executed
in connection therewith or the transactions contemplated thereby except as set
forth on Schedule XI or (ii) which the Agents or the Required Banks shall
reasonably determine could have a materially adverse effect on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
5.11 Solvency Certificate and Insurance Certificates. On or prior to
the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent:
(i) a solvency certificate in the form of Exhibit H, addressed to
each of the Agents and each of the Banks and dated the Initial Borrowing
Date from an Authorized Financial Officer of the Company providing the
opinion of such Authorized Financial Officer as to the solvency of each of
the Company and its Subsidiaries on a consolidated basis and the Canadian
Borrower, in each case, after giving effect to the Transaction and the
financing therefor; and
(ii) certificates of insurance complying with the requirements of
Section 9.03 for the business and properties of the Company and its
Subsidiaries, in scope, form and substance satisfactory to the Agents and
the Required Banks.
5.12 Pro Forma Financial Information; Projections. (a) On the Initial
Borrowing Date, the Banks shall have received the audited, the unaudited and
the pro forma financial information required by Section 8.05(a), which shall be
in form and substance satisfactory to the Agents and the Required Banks. In
addition, the Banks shall have received such comfort with respect to the
preparation of such pro forma financial information from the outside auditors
of the Company and/or CPLC referenced in Section 8.05(a) as may have been
requested by the Agents or the Required Banks, which comfort shall be
satisfactory in form and substance to the Agents and the Required Banks.
(b) On the Initial Borrowing Date, the Banks shall have received
consolidated financial projections for the Company and its Subsidiaries for the
six fiscal years ended after the Initial Borrowing Date (the "Projections"),
which Projections, and the supporting assumptions and explanations thereto,
shall be satisfactory in form and substance to the Agents and the Required
Banks.
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5.13 Approvals, etc. On or prior to the Initial Borrowing Date, all
necessary governmental (domestic and foreign) and third party approvals in
connection with the Refinancing, the transactions contemplated by this
Agreement and otherwise referred to herein shall have been obtained and remain
in effect, and all applicable waiting periods shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the making of the Loans and the
transactions contemplated by the Credit Documents. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the making of the
Loans or the transactions contemplated by the Credit Documents.
5.14 Cash on Hand. On the Initial Borrowing Date (and without giving
effect to any incurrence of Loans on such date), the Company shall have cash on
hand of at least $5,000,000.
5.15 Absence of Downgrade. From and after September 30, 1995, HFS
shall have suffered no rating downgrade (or at any time be unrated) by S&P and
shall not have been placed on "credit watch" with negative implications by S&P.
5.16 HFS Subordination Agreement. On the Initial Borrowing Date, HFS,
the Company and the Administrative Agent shall have duly authorized, executed
and delivered the HFS Subordination Agreement in the form of Exhibit I (the
"HFS Subordination Agreement"), pursuant to which HFS shall have agreed, among
other things, (i) notwithstanding anything to the contrary contained in any HFS
Agreement or otherwise, until the occurrence of the Bank Termination Date, HFS
will not terminate the Corporate Services Agreement for any reason whatsoever
without the prior written consent of the Required Banks, (ii) notwithstanding
anything to the contrary contained in any HFS Agreement or otherwise, until the
occurrence of the Bank Termination Date, fees owing pursuant to the various HFS
Agreements shall be payable only in accordance with the requirements of
Sections 10.03 and 10.06, (iii) to the extent that any fees or amounts are
owing to HFS or any of its Subsidiaries pursuant to any HFS Agreement or
otherwise as a result of the activities, operations or revenues of any
non-Wholly-Owned Subsidiary, Unrestricted Subsidiary or Joint Venture of the
Company, then neither the Company nor any of its Wholly-Owned Subsidiaries
shall have any liability to HFS or any of its Subsidiaries in respect of the
amounts so owed, and HFS or its respective Subsidiary shall have a claim for
the respective amounts owed to it only against the respective non-Wholly-Owned
Subsidiary, Unrestricted Subsidiary or Joint Venture, as the case may be,
provided that, notwithstanding the foregoing, the Company
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C/M 11752.0000 414856.1
may be liable for its Allocable Share of any such fees or amounts of only a
non-Wholly-Owned Subsidiary or Joint Venture (but not of an Unrestricted
Subsidiary) (as determined for the respective non-Wholly-Owned Subsidiary or
Joint Venture), (iv) HFS shall agree that all amounts payable to it by the
Company and its Subsidiaries (except the amounts expressly provided pursuant to
Sections 10.06(iii), (v), (x)(a) and (xi)) shall be subordinated to the payment
in full of the Obligations on the terms set forth in the HFS Subordination
Agreement and (v) HFS shall agree, and shall agree to cause its Subsidiaries,
not to accept any Restricted Payment which is not permitted to be paid pursuant
to the provisions of this Agreement and, if any amount is received by it which
constitutes a Restricted Payment in excess of the amounts permitted under this
Agreement (including as may occur pursuant to Section 10.06(vii)), then
promptly after HFS has actual knowledge of its receipt of such excess payment
(or promptly after it receives notice from any Bank thereof), HFS shall
reimburse the Company in cash for the amount by which the payments made to HFS
and its Subsidiaries exceed the respective amounts permitted to be paid in
accordance with the requirements of this Agreement.
5.17 Additional Equity. On or prior to the Initial Borrowing Date,
the Company shall have received at least $57,000,000 in gross proceeds from the
issuance of additional common stock of the Company to Chartwell and FNSL
pursuant to the Chartwell Stock Purchase Agreement, and the terms thereof shall
be satisfactory to the Required Banks.
5.18 Additional Financial Statements. On or prior to the Initial
Borrowing Date, the Company shall have delivered to the Agents for each
Material Joint Venture (a) a profit and loss statement for the portion of its
current fiscal year ending on or about July 31, 1996 and (b) its federal income
tax returns for its tax year most recently ended.
SECTION 6. Conditions Precedent to Extensions of Credit on the
Canadian Borrowing Date. The obligation of each Bank to make its Loans, and the
obligation of the Issuing Bank to issue Letters of Credit, on the Canadian
Borrowing Date, is subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions (which shall occur on or before December 31, 1996):
6.01 Consummation of the Canadian Acquisition. On or prior to the
Canadian Borrowing Date, there shall have been delivered to the Banks true and
correct copies of all Canadian Acquisition Documents, and all terms and
provisions of such Canadian Acquisition Documents shall be in form and
substance satisfactory to the Agents and the Required Banks and shall not be
amended in any material respect without the consent of the Required Banks. The
Canadian Acquisition, including all of the
41
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terms and conditions thereof, shall have been duly authorized by the board of
directors and (if required by applicable law) the shareholders of the Canadian
Borrower, and all Canadian Acquisition Documents shall have been duly executed
and delivered by the parties thereto and shall be in full force and effect. The
representations and warranties set forth in the Canadian Acquisition Documents
shall be true and correct in all material respects as if made on and as of the
Canadian Borrowing Date. Each of the conditions precedent to the Canadian
Borrower's obligations to consummate the Canadian Acquisition as set forth in
the Canadian Acquisition Documents shall have been satisfied to the
satisfaction of the Agents and the Required Banks or waived with the consent of
the Administrative Agent and the Required Banks and the Canadian Acquisition
shall have been consummated in accordance with all applicable law and the
respective Canadian Acquisition Documents (without giving effect to any
amendment or modification thereof or waiver with respect thereto unless
consented to by the Agents or the Required Banks). The consideration (exclusive
of fees) paid in the Canadian Acquisition shall not exceed C$ 98,000,000.
6.02 Officer's Certificate. On the Canadian Borrowing Date, the
Administrative Agent shall have received a certificate, dated the Canadian
Borrowing Date and signed on behalf of the Company by an Authorized Officer,
stating all of the conditions of 6.01, 7.01, 7.02 and 7.03 have been satisfied
on such date.
6.03 Adverse Change. On the Canadian Borrowing Date, since December
31, 1995 nothing shall have occurred (and the Banks shall not have become aware
of any facts, conditions or other information not previously known) which the
Agents or the Required Banks shall reasonably determine has had or could
reasonably expected to have a material adverse effect (i) on the Transaction,
(ii) on the rights or remedies of the Agents or the Banks, or on the ability of
any Credit Party to perform their respective obligations to the Agents and the
Banks, under the Credit Documents or (iii) on the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole.
6.04 Litigation. On the Initial Borrowing Date, no litigation by any
entity (private or governmental) shall be pending or, to the knowledge of any
of the Credit Parties, threatened with respect to (i) the Canadian Acquisition,
the making of the Loans or the Credit Documents or any documentation executed
in connection therewith or the transactions contemplated thereby except as set
forth on Schedule XI or (ii) which the Agents or the Required Banks shall
reasonably determine could have a materially adverse effect on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or
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otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole.
6.05 Environmental Assessments. On or prior to the Canadian Borrowing
Date, there shall have been delivered to the Administrative Agent the Phase I
environmental assessments from environmental consultants satisfactory to the
Agents and in form, scope and substance reasonably satisfactory to the Agents
and the Required Banks.
6.06 Approvals, etc. On or prior to the Canadian Borrowing Date, all
necessary governmental (domestic and foreign) and third party approvals in
connection with the Canadian Acquisition (excluding such immaterial approvals
which may not have been obtained in connection with the Canadian Acquisition),
shall have been obtained and remain in effect, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse conditions
upon the consummation of the Canadian Acquisition. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the Canadian
Acquisition.
6.07 Security Agreement. On the Canadian Borrowing Date, Chartwell
Lodging Inc. shall have duly authorized, executed and delivered a Security
Agreement substantially in the form of Exhibit O (as modified, supplemented or
amended from time to time in accordance with the terms thereof and hereof and
together with the security agreements required under Section , a "Security
Agreement" and collectively, the "Security Agreements") covering all of such
Credit Party's present and future interest in an Amended and Restated
Management Services and Franchise Development Agreement among Chartwell Hotels,
Inc., Royco Hotels & Resorts Ltd. and the Company, in each case together with:
(v) a legal opinion, from counsel and in form satisfactory to the
Agents, with respect to the execution, delivery and performance by such
Credit Party of the Security Agreement, accompanied by evidence as to the
signature of such Credit Party and its authority to execute, delivery and
perform the Security Agreement;
(w) executed copies of Financing Statement (Form UCC-1) in
appropriate form for filing under the UCC of each jurisdiction as may be
necessary to perfect the security interests purported to be created by the
Security Agreement;
(x) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of a recent
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date listing all effective financing statements that name such Credit
Party as debtor and that are filed in the jurisdictions referred to in
clause (w), together with copies of such financing statements (none of
which shall cover the Collateral except (i) those with respect to which
appropriate termination statements executed by the secured lender
thereunder have been delivered to the Administrative Agent and (ii) to the
extent evidencing Permitted Liens);
(y) evidence of the completion of, or arrangements to complete, all
other recordings and filings of, or with respect to, the Security
Agreement as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by the
Security Agreement; and
(z) evidence that all other actions reasonably necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by each Security
Agreement have been, or are in the process of being, taken.
SECTION 7. Conditions Precedent to All Credit Events. The obligation
of each Bank, to make Loans (including Loans made on the Initial Borrowing Date
and the Canadian Borrowing Date), and the obligation of the Issuing Bank to
issue any Letter of Credit, is subject, at the time of each such Credit Event
(except as hereinafter indicated), to the satisfaction of the following
conditions:
7.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct
in all material respects only as of such specified date).
7.02 Adverse Change, etc. Nothing shall have occurred (and the Banks
shall have become aware of no facts or conditions not previously known) which
could reasonably be expected to have a material adverse effect on (x) the
rights or remedies of the Banks or the Agents under the Credit Documents, (y)
on the ability of the Company or any other Credit Party to perform its
obligations to the Banks under the Credit Documents or (z) on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or
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the Company and its Subsidiaries taken as a whole from December 31, 1995 or
from the pro forma financial statements referred to in Section 8.05.
7.03 Litigation. At the time of each such Credit Event and also after
giving effect thereto, no litigation by any entity (private or governmental)
shall be pending or threatened with respect to this Agreement or any other
Credit Document or the transactions contemplated hereby or thereby or which
could reasonably be expected to have a materially adverse effect on the
business, operations, property, assets, nature of assets, liabilities,
condition (financial or otherwise) or prospects of the Company or the Company
and its Subsidiaries taken as a whole.
7.04 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan, the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03(a) or, in the case of a
Swingline Loan, the notice required by Section 1.03(b).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the Issuing Bank shall have received a Letter of
Credit Request meeting the requirements of Section 2.03(a).
7.05 Certain Requirements With Respect to Loans Incurred to Effect
Permitted Hotel Acquisitions. Prior to the making of any Loan the proceeds of
which are to be used to effect a Permitted Hotel Acquisition in which the total
consideration exceeds $2,000,000, the Company shall have satisfied the relevant
requirements of Section 10.02(ix) or 10.05(viii), as the case may be.
The occurrence of the Initial Borrowing Date and the acceptance of
the proceeds or benefits of each Credit Event shall constitute a representation
and warranty by the Borrowers to each of the Administrative Agent and each of
the Banks that all the conditions specified in Section 5, 6 and in this Section
7 and applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Sections 5 and 6 and in this Section 7, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account of
each of the Banks and, except for the Notes, in sufficient counterparts for
each of the Banks and shall be in form and substance reasonably satisfactory to
the Banks.
SECTION 8. Representations and Warranties. In order to induce the
Banks to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, the Borrowers make
the following representations,
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warranties and agreements, in each case after giving effect to the Canadian
Acquisition and the Recapitalization to be consummated on or before the
Canadian Borrowing Date, all of which shall survive the execution and delivery
of this Agreement and the Notes and the making of the Loans and issuance of the
Letters of Credit, with the occurrence of each Credit Event being deemed to
constitute a representation and warranty that the matters specified in this
Section 8 are true and correct on and as of the date of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct
in all material respects only as of such specified date):
8.01 Corporate and Partnership Status. Each of the Company and each
of its Subsidiaries (i) is a duly organized and validly existing corporation or
partnership, as the case may be, in good standing (if applicable) under the
laws of the jurisdiction of its organization, (ii) has the corporate or
partnership power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (iii)
is duly qualified and is authorized to do business and is in good standing (if
applicable) in each jurisdiction where the conduct of its business requires
such qualifications except for failures to be so qualified which, individually
or in the aggregate, could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, nature of assets,
liabilities, condition (▇▇▇▇▇- cial or otherwise) or prospects of the Company
or the Company and its Subsidiaries taken as a whole.
8.02 Corporate or Partnership Power and Authority. Each Credit Party
has the corporate or partnership power and authority to execute, deliver and
perform the terms and provisions of each of the Documents to which it is a
party and has taken all necessary corporate or partnership action to authorize
the execution, delivery and performance by it of each of such Documents. Each
Credit Party has duly executed and delivered each of the Documents to which it
is a party, and each of such Docu- ments constitutes the legal, valid and
binding obligation of such Credit Party enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
8.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene in any material
respect any provision of any applicable law, statute, rule or regulation or any
applicable
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order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the properties or
assets of any Credit Party or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement or loan agreement, or
any other material agreement, contract or instrument, to which any Credit Party
or any of its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject (excluding, in the case of the
Canadian Acquisition Documents and the Recapitalization Documents, from the
foregoing clauses (i) and (ii) such immaterial violations, which in no event
shall violate the provisions of this Agreement or otherwise be reasonably
expected to have a material adverse effect on (x) the Transaction, (y) the
rights or remedies of the Agents or the Banks under the Credit Documents, or on
the ability of any Credit Party to perform its obligations to the Agents and
the Banks under the Credit Documents or (z) on the business, operations,
properly, assets, nature of assets, liabilities or condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole) or (iii) will violate any provision of the certificate of
incorporation or by-laws (or similar organizational documents) of any Credit
Party or any of its Subsidiaries.
8.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the Canadian Acquisition, (ii) the Recapitalization, (iii) the
execution, delivery and performance of any Credit Document or (iv) the
legality, validity, binding effect or enforceability of any such Credit
Document.
8.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections, etc. (a)(i) The audited consolidated balance sheet of
the Company for the fiscal year ended in December 1995 and the related
consolidated statements of income and retained earnings and cash flows of the
Company for the fiscal year ended as of said date, which statements have been
audited by Deloitte & Touche LLP or its predecessor in interest, who delivered
an unqualified opinion with respect thereto and copies of which have heretofore
been delivered to each Bank, present fairly the consolidated financial position
of the respective entities at the dates of said statements and the results of
operations for the periods covered thereby, (ii) the
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unaudited consolidated balance sheet of the Company for the fiscal quarter
ended in June 1996 and the related unaudited consolidated statements of income
and retained earnings and cash flows of the Company for the fiscal quarter
ended as of said date, copies of which have heretofore been delivered to each
Bank, present fairly the consolidated financial position of the respective
entities at the dates of such statements and the results of operations for the
periods covered thereby, (iii) the audited consolidated balance sheets of CPLP
for the fiscal years ended September 30 1995, 1994 and 1993 and the related
consolidated statements of income, changes in equity and cash flows of CPLP for
the fiscal years ended as of said dates, which statements have been examined by
Deloitte & Touche, Chartered Accountants, or its predecessor in interest, who
delivered an unqualified opinion with respect thereto and copies of which have
heretofore been delivered to each Bank, present fairly the consolidated
financial position of CPLP at the dates of said statements and the results of
operations for the periods covered thereby and (iv) the unaudited consolidated
balance sheet of CPLP for the fiscal quarter ended in June 27, 1996 and the
related consolidated statements of income, changes in equity and cash flows of
CPLP for the fiscal quarter ended as of said date, copies of which have
heretofore been delivered to each Bank, present fairly the consolidated
financial position of CPLP at the dates of said statements and the results of
operations for the periods covered thereby. All financial statements referred
to in the preceding sentence have been prepared in accordance with generally
accepted accounting principles and practices consistently applied except (i) in
the case of the audited financial statements, to the extent provided in the
notes to said financial statements, (ii) in the case of the unaudited financial
statements, for the absence of footnotes and for the same being subject to
normal year-end audit adjustments and (iii) in the case of the financial
statements of CPLP, such financial statements have been prepared in accordance
with Canadian generally accepted accounting principles and practices
consistently applied and the Company has provided to the Banks a reconciliation
of such financial statements of CPLP to generally accepted accounting
principles in the United States. The unaudited pro forma consolidated balance
sheets and income statements of each of (i) the Company and its Subsidiaries
(including CPLP and its Subsidiaries) and (ii) the Canadian Borrower and its
subsidiaries prepared prior to the Initial Borrowing Date and designated by the
Company as the pro forma financial statements referred to in this Section
8.05(a), copies of which have been furnished to the Banks on or prior to the
Initial Borrowing Date, present fairly the consolidated pro forma financial
position and results of operations of the entities covered thereby as at March
31, 1996 (in the case of the pro forma consolidated balance sheets) or for the
twelve month period ended on such date (in the case of the pro forma
consolidated income statements), in each case based on the assumption that the
Canadian Acquisition, the Recapitalization,
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the related financing thereof and the other transactions contemplated pursuant
to this Agreement had been consummated on March 31, 1996 (in the case of the
pro forma consolidated balance sheets) or March 31, 1996 (in the case of the
pro forma consolidated income statements). The unaudited pro forma consolidated
financial statements referred to in the preceding sentence have been prepared
on a basis consistent with the financial statements of CPLP referred to in the
first sentence of this Section 8.05(a), and have been prepared in a manner
consistent with the requirements of Regulation S-X of the SEC which are
applicable to pro forma financial information prepared in accordance with the
requirements thereof but shall be subject to audit adjustments which shall not
materially change the information set forth in such unaudited pro forma
financial statements. Since December 31, 1995 (but after giving effect to the
Canadian Acquisition, the Recapitalization and the financing of the Canadian
Acquisition as if same had occurred prior thereto), there has been no material
adverse change in the business, operations, property, assets. nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
(b) On and as of each of the Initial Borrowing Date and the Canadian
Borrowing Date, on a pro forma basis after giving effect to the Canadian
Acquisition, the Recapitalization and all other transactions contemplated by
the Documents and to all Indebtedness (including the Loans and Letters of
Credit) being incurred or assumed and Liens created by each Credit Party in
connection therewith, (x) the sum of the assets, at a fair valuation, of the
Company and its Subsidiaries (taken as a whole) and each Borrower (on a
stand-alone basis) will exceed their respective debts, (y) the Company and its
Subsidiaries (taken as a whole) and each Borrower (on a stand-alone basis) have
not incurred and do not intend to incur, and do not believe that they will
incur, debts beyond their ability to pay such debts as such debts mature and
(z) the Company and its Subsidiaries (taken as a whole) and each Borrower (on a
stand-alone basis) have sufficient capital with which to conduct its business.
For purposes of this Section 8.05(b) "debt" means any liability on a claim, and
"claim" means (i) right to payment whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 8.05(a), there were as of the Initial Borrowing Date and
the Canadian Borrowing Date no
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liabilities or obligations with respect to the Company or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
would be material to the Company or to the Company and its Subsidiaries taken
as a whole. As of the Initial Borrowing Date and the Canadian Borrowing Date,
the Company knows of no basis for the assertion against it of any liability or
obligation of any nature that is not fully disclosed in the financial
statements delivered pursuant to Section 8.05(a) which, either individually or
in the aggregate, could reasonably be expected to be material to the Company or
the Company and its Subsidiaries taken as a whole.
(d) On and as of the Initial Borrowing Date, the Projections, which
include the projected results of the Canadian Acquired Assets and which have
been delivered to the Agents and the Banks on or prior to the Initial Borrowing
Date, have been prepared on a basis consistent with the pro forma financial
statements referred to in Section 8.05(a), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Borrower to be misleading or which fail to take into
account material information regarding the matters reported therein. On the
Initial Borrowing Date, the Borrower believes that the Projections were
reasonable and attainable (it being understood that the Borrower makes no
representation or warranty that the results projected in the Projections will
actually be attained).
8.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of either Borrower, threatened (i) with respect to
the Transaction or any Document except as set forth on Schedule XI or (ii) that
could reasonably be expected to materially and adversely affect the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
8.07 True and Complete Disclosure. All factual information (taken as
a whole) furnished by or on behalf of the Company or any of its Subsidiaries in
writing to any Agent or any Bank (including, without limitation, all
information contained in the Documents, but excluding the Projections and
assumptions contained therein, which are covered pursuant to preceding Section
8.05(d)) for purposes of or in connection with this Agreement, the other
Documents or any transaction contemplated herein or therein is, and all other
factual information (taken as a whole) hereafter furnished by or on behalf of
the Company or any of its Subsidiaries in writing to any Agent or any Bank will
be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a
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whole) not misleading at such time in light of the circumstances under which
such information was provided. The projections (including the Projections,
which include the projected results of the Canadian Acquired Assets) contained
in such materials are based on good faith estimates and assumptions believed by
the Company to be reasonable at the time made, it being recognized by the
Agents and the Banks that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered
thereby may differ from the projected results.
8.08 Use of Proceeds; Margin Regulations. (a) The proceeds of the
Revolving C$ Loans shall be used by the Canadian Borrower on the Canadian
Borrowing Date (i) to finance the purchase price of the Canadian Acquisition
and (ii) to pay fees and expenses related to the Canadian Acquisition and the
financing therefor. The proceeds of all other Loans shall be used by the
Company for the Company's and its Subsidiaries' and Joint Ventures' general
corporate and partnership purposes, including to finance the working capital
needs of the Company and its Subsidiaries and Joint Ventures and to finance
Permitted Hotel Acquisitions and to pay the fees and expenses in connection
therewith (but shall not be used to pay any portion of the purchase price of
the Canadian Acquisition, the fees and expenses related thereto or to effect
the Recapitalization).
(b) No part of any Credit Event (or the proceeds thereof) will be
used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
8.09 Tax Returns and Payments. (a) The Company and its Subsidiaries
have timely filed or caused to be timely filed, on the due dates thereof or
within applicable grace periods, with the appropriate taxing authority, all
Federal, state and other material returns, statements, forms and reports for
taxes (the "Returns") required to be filed by or with respect to the income,
properties or operations of the Company and/or its Subsidiaries and Material
Joint Ventures, as the case may be. The Returns accurately reflect in all
material respects all liability for taxes of the Company and its Subsidiaries
and Material Joint Ventures for the periods covered thereby. Each of the
Company and each of its Subsidiaries and Material Joint Ventures has paid all
material taxes payable by them other than taxes which are not delinquent, and
other than those contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting principles.
There is no material action, suit, proceeding, investigation, audit, or claim
now
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pending or, to the best knowledge of the Company, threatened by any authority
regarding any taxes relating to the Company or any of its Subsidiaries or
Material Joint Ventures. As of the Initial Borrowing Date, neither the Company
nor any of its Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Company or
any its Subsidiaries.
(b) As of the Initial Borrowing Date, the Company has, subject to
certain limitations and restrictions pursuant to the Code, available net
operating and capital loss carryovers within the meaning of Section 172(b) of
the Code in the amount of at least $15,000,000, which net operating and capital
loss carryovers expire beginning in the year 2009 and shall be made available
by the Company to offset future income of the Company and its Subsidiaries.
8.10 Compliance with ERISA. (i) Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency or has applied for an extension of any amortization period within
the meaning of Section 412 of the Code (other than where the failure to do so
would not result in a material liability to the Borrower or any Subsidiary);
all contributions required to be made with respect to a Plan and a Foreign
Pension Plan have been timely made; neither the Company nor any Subsidiary of
the Company nor any ERISA Affiliate has incurred any material liability to or
on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code which has not been satisfied or expects to incur any material
liability (including any indirect, contingent, or secondary liability) under
any of the foregoing Sections with respect to any Plan; no proceedings have
been instituted to terminate or appoint a trustee to administer any Plan; no
condition exists which presents a material risk to the Company or any
Subsidiary of the Company or any ERISA Affiliate of incurring a liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the
Code; using actuarial assumptions and computation methods consistent with Part
1 of subtitle E of Title IV of ERISA, the annual aggregate liabilities of the
Company and its Subsidiaries and its ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent Credit Event,
would not exceed $50,000; no lien imposed under the Code or ERISA on the assets
of the Company or any Subsidiary of the Company or any ERISA Affiliate exists
or is likely to arise on
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account of any Plan; and the Company and its Subsidiaries may cease
contributions to or terminate any employee benefit plan maintained by any of
them without incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
Company nor any of its Subsidiaries has incurred any obligation in connection
with the termination of or withdrawal from any Foreign Pension Plan. The
present value of the accrued benefit liabilities (whether or not vested) under
each Foreign Pension Plan, determined as of the end of the Company's most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
8.11 The Security Documents. (a) The security interests created in
favor of the Collateral Agent, as Pledgee, for the benefit of the Secured
Creditors under the Pledge Agreement constitute first priority perfected
security interests in the Pledged Securities described in the Pledge Agreement,
subject to no security interests of any other Person. No filings or recordings
are required in order to perfect (or maintain the perfection or priority of)
the security interests created in the Pledged Securities and the proceeds
thereof under the Pledge Agreement.
(b) The Security Agreement creates, as security for the Obligations
purported to be secured thereby, a valid and enforceable perfected security
interest in and Lien on all of the Collateral subject thereto, superior to and
prior to the rights of all third Persons and subject to no other Liens (except
that the Collateral may be subject to the security interests evidenced by
Permitted Liens relating thereto thereunder), in favor of the Collateral Agent
for the benefit of the Banks. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with the Security Agreement which
shall have been made, or for which satisfactory arrangements have been made,
upon or prior to the execution and delivery thereof.
8.12 Representations and Warranties in Documents. All representations
and warranties set forth in the other Documents were true and correct in all
material respects at the time as of which such representations and warranties
were made (or deemed made) and shall be true and correct in all material
respects as of the Initial Borrowing Date as if such representations or
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warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations or warranties shall
be true and correct in all material respects as of such earlier date.
8.13 Properties. Each of the Company and each of its Subsidiaries and
Material Joint Ventures has good and marketable title to all properties owned
respectively by it, including all property reflected in the consolidated
balance sheets referred to in Section 8.05(a) (except as sold or otherwise
disposed of since the date of such balance sheets in the ordinary course of
business), free and clear of all Liens, other than (i) as referred to in the
balance sheets or in the notes thereto or (ii) Permitted Liens. Schedule IV
contains a true and complete list of each parcel of Real Property owned or
leased by the Company and its Subsidiaries and Material Joint Ventures on the
Initial Borrowing Date, and the type of interest therein held by the Company or
such Subsidiary or Material Joint Venture. The Company and each of its
Subsidiaries and Material Joint Ventures have good and indefeasible title to
all fee-owned Real Properties and valid leasehold title to all Leaseholds.
8.14 Capitalization. On the Initial Borrowing Date, the Canadian
Borrowing Date and after giving effect to the Recapitalization and the other
transactions contemplated hereby, the authorized capital stock of the Company
shall consist of 100,000,000 shares of common stock, $0.01 par value per share
and 10,000,000 shares of preferred stock, $1.00 par value per share. As of the
Initial Borrowing Date and the Canadian Borrowing Date, 9,452,320 shares of
common stock of the Company are outstanding and no shares of preferred stock of
the Company are outstanding. All such outstanding shares of common stock have
been duly and validly issued, are fully paid and nonassessable and are free of
preemptive rights. As of the Initial Borrowing Date and the Canadian Borrowing
Date, except for options to purchase 1,635,000 shares of common stock of the
Company granted under its 1994 Stock Option Plan and the obligation of the
Company to issue up to 413,910 shares of its common stock under the
Distribution Agreement dated as of November 22, 1994, the Company does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character relating
to, its capital stock.
8.15 Subsidiaries, Joint Ventures, Unrestricted Subsidiaries. After
giving effect to the Canadian Acquisition, the Company will have no
Subsidiaries, Joint Ventures or Unrestricted Subsidiaries other than (i) those
Subsidiaries and Joint Ventures listed (and in each case identified as such) on
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Schedule V and (ii) new Subsidiaries, Joint Ventures and Unrestricted
Subsidiaries created in compliance with Section 10.16. On the Initial Borrowing
Date and the Canadian Borrowing Date, the Company has no Unrestricted
Subsidiaries. Schedule V correctly sets forth, as of the Initial Borrowing Date
(i) the percentage ownership (direct or indirect) of the Company in each class
of capital stock or other equity interest of each of its Subsidiaries and Joint
Ventures and also identifies the direct owner thereof and (ii) each Material
Joint Venture.
8.16 Compliance with Statutes, etc. Each of the Company and each of
its Subsidiaries and Joint Ventures is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
its business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, nature of assets, liabilities,
condition (financial or otherwise) or prospects of the Company or the Company
and its Sub- sidiaries taken as a whole.
8.17 Investment Company Act. Neither the Company nor any of its
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.
8.18 Public Utility Holding Company Act. Neither the Company nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
8.19 Environmental Matters. (a) Each of the Company and each of its
Subsidiaries and Joint Ventures has complied with all applicable Environmental
Laws and the requirements of any permits issued under such Environmental Laws.
There are no pending or threatened Environmental Claims against the Company or
any of its Subsidiaries or Joint Ventures or any Real Property owned or
operated by the Company or any of its Subsidiaries or Joint Ventures. There are
no facts, circumstances, conditions or occurrences on any Real Property owned
or operated by the Company or any of its Subsidiaries or Joint Ventures or on
any property adjoining or in the vicinity of any such Real Property that could
reasonably be expected (i) to form the basis of an Environmental Claim against
the Company or any of its Subsidiaries or Joint Ventures or any such Real
Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership,
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occupancy, use or transferability of such Real Property by the Company or any
of its Subsidiaries or Joint Ventures under any applicable Environmental Law.
(b) To the best knowledge of the Company, Hazardous Materials have
not at any time been generated, used, treated or stored on, or transported to
or from, or Released on or from, any Real Property owned or operated by the
Company or any of its Subsidiaries or Joint Ventures except in compliance with
all applicable Environmental Laws and reasonably required in connection with
the operation, use and maintenance of any such Real Property by the Company's,
such Subsidiary's or such Joint Venture's business.
(c) Notwithstanding anything to the contrary in this Section 8.19,
the representations made in this Section 8.19 shall only be untrue if the
aggregate effect of all failures and noncompliance of the types described above
could reasonably be expected to have a material adverse effect on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole.
8.20 Labor Relations. Neither the Company nor any of its Subsidiaries
or Joint Ventures is engaged in any unfair labor practice that could reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole. There is (i) no unfair labor practice complaint pending or,
to the best knowledge of the Company, threatened against the Company or any of
its Subsidiaries or Joint Ventures before the National Labor Relations Board
and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or threatened against the Company
or any of its Subsidiaries or Joint Ventures, (ii) no strike, labor dispute,
slowdown or stoppage is pending or, to the best knowledge of the Company,
threatened against the Company or any of its Subsidiaries or Joint Ventures and
(iii) to the best knowledge of the Company, no union representation question
exists with respect to the employees of the Company or any of its Subsidiaries
or Joint Ventures, except (with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the Company or the Company and its Subsidiaries taken as a
whole.
8.21 Patents, Licenses, Franchises and Formulas. Each of the Company
and each of its Subsidiaries and Joint Ventures
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owns all material patents, trademarks, permits, service marks, trade names,
copyrights, licenses, franchises and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, reasonably necessary for the present conduct of its business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, would result in a material adverse effect on
the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole.
8.22 Indebtedness. Schedule VI sets forth a true and complete list of
all Indebtedness of the Company and its Subsidiaries and Joint Ventures as of
the Initial Borrowing Date and the Canadian Borrowing Date (excluding the Loans
and any Indebtedness to be refinanced pursuant to the Refinancing, the
"Existing Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower and any other entity which
directly or indirectly guaranteed such debt.
8.23 Canadian Acquisition; Recapitalization. On the Canadian
Borrowing Date, the Canadian Acquisition and the Recapitalization shall have
been consummated in all respects in accordance with the terms of the respective
Documents and all applicable laws. At the time of consummation of the Canadian
Acquisition and the Recapitalization, all consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the Canadian Acquisition and the Recapitalization will have
been obtained, given, filed or taken and are or will be in full force and
effect (or effective judicial relief with respect thereto has been obtained),
except where the failure to so obtain, give, file or take would not have a
material adverse effect on the Canadian Acquisition or on the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as whole. All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without,
in all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the Canadian
Acquisition or the Recapitalization. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Canadian Acquisition or the Recapitalization, or the
occurrence of any Credit Event or the performance by any Credit Party of its
obligations under the respective Documents. All actions taken by the Credit
Parties pursuant to or in furtherance of the Canadian Acquisition and the
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Recapitalization have been taken in compliance with the respective Documents
and all applicable laws.
SECTION 9. Affirmative Covenants. The Company hereby covenants and
agrees that on and after the Effective Date and until the Total Revolving Loan
Commitment and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other obligations
incurred hereunder and thereunder, are paid in full:
9.01 Information Covenants. The Company will furnish to the
Administrative Agent (with sufficient copies for each of the Banks, and the
Administrative Agent will promptly forward to each of the Banks):
(a) Quarterly Reports. Within 60 days after the end of each fiscal
quarter of the Company, the quarterly management reports prepared by (or on
behalf of) the Company or the respective Subsidiary or Joint Venture for each
Hotel Property, which quarterly management reports shall contain the revenues
of such Hotel Property for such fiscal quarter (including room revenues, food
and beverage revenues and other revenues), the average occupancy rate for such
Hotel Property for such fiscal quarter, the average daily room rate for such
Hotel Property for such fiscal quarter and such other information as may be
reasonably requested by the Administrative Agent for such Hotel Property to the
extent reasonably available.
(b) Quarterly Financial Statements. Within 60 days after the close of
the first three quarterly accounting periods in each fiscal year of the Company
(beginning with the fiscal quarter ending on or about September 30, 1996), (i)
consolidated and consolidating balance sheets of the Company and its
consolidated Subsidiaries and Unrestricted Subsidiaries as at the end of such
quarterly accounting period and the related consolidated statements of income
and retained earnings and statement of cash flows, in each case for such
quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period, in each case
setting forth comparative figures for the related periods in the prior fiscal
year, all of which shall be certified by an Authorized Financial Officer of the
Company, subject to normal year-end audit adjustments and (ii) management's
discussion and analysis of the important operational and financial developments
during the quarterly accounting period and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Company, the consolidated and consolidating balance
sheets of the Company and its consolidated Subsidiaries and Unrestricted
Subsidiaries, as at the end of such fiscal year and the related consolidated
and consolidating
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statements of income and retained earnings and of cash flows for such fiscal
year setting forth comparative figures for the preceding fiscal year and
certified, in the case of the consolidated statements, by Deloitte & Touche LLP
or such other independent certified public accountants of recognized national
standing acceptable to the Administrative Agent, together with a report of such
accounting firm stating that in the course of its regular audit of the
financial statements of the Company and its Subsidiaries and Unrestricted
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm obtained no knowledge of any Default
or Event of Default which has occurred and is continuing under any of Sections
10.03, 10.06 through 10.11, inclusive, and Section 11.12, or, if in the opinion
of such accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(d) Budgets. No later than 30 days (90 days in the case of the
budgets delivered pursuant to clause (y) below) after the first day of each
fiscal year of the Company. budgets in form satisfactory to the Administrative
Agent (including, in any event, budgeted statements of cash flow and budgeted
debt and cash bal- ances) for (x) such fiscal year prepared in detail and (y)
each of the five years immediately following such fiscal year prepared in
summary form, in each case, of the Company and its Subsidiaries and Joint
Ventures, accompanied by the statement of an Authorized Financial Officer of
the Company to the effect that the budget is a reasonable estimate for the
period covered thereby.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 9.01(a), (b) and (c), a
certificate of an Authorized Financial Officer of the Company to the effect
that no Default or Event of Default has occurred and is continuing or, if any
Default or Event of Default has occurred and is continuing, specifying the
nature and extent thereof, which certificate, if delivered with the financial
statements required by Sections 9.01 (b) and (c), shall also (x) set forth the
calculations required to establish whether the Company was in compliance with
the provisions of Sections 3.03(d) (and shall show the calculation of the
Reinvestment Amount as of the last day of the period covered by such financial
statements), and 10.03 through 10.11, inclusive, at the end of such fiscal
quarter or year, as the case may be, as well as the calculations required to
establish compliance with the provisions of Section 11.12 at the end of such
fiscal quarter or year, as the case may be, (y) set forth the amounts (and
supporting calculations), as at the last day of the respective fiscal quarter
(but after giving effect to the making of any Restricted Payments pursuant to
Section 10.06(vii) in respect of such fiscal quarter or fiscal year, as the
case may be, and any Capital Expenditure made pursuant to Section 10.07(c) in
respect of such fiscal
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quarter or fiscal year, as the case may be), of the Cumulative Retained
Residual Excess Cash Flow Amount, as well as a description of all Restricted
Payments made during (or with respect to) the respective fiscal quarter or
fiscal year and showing the calculations establishing compliance with the
provisions of Section 10.03 and 10.06 and (z) if delivered with the financial
statements required by Section 10.01(c), set forth the amount of (and the
calculations required to establish Excess Cash Flow for the fiscal year covered
by such financial statements).
(f) Notice of Default or Litigation; HFS or Company Downgrade.
Promptly, and in any event within three Business Days after an officer of the
Company or any of its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default,
(ii) any litigation or governmental investigation or proceeding pending or
threatened (x) against the Company or any of its Subsidiaries which could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the Company or the Company and its Subsidiaries taken as a
whole, (y) with respect to any material Indebtedness of the Company or any of
its Subsidiaries or Joint Ventures or (z) with respect to any Document and
(iii) any downgrading or discontinuance of rating of HFS or the Company by S&P
or any other rating agency, and any placement by S&P or any other rating agency
of HFS or the Company on "credit watch" or any similar action.
(g) Management Letters. Promptly after receipt thereof by the Company
or any of its Subsidiaries, a copy of any "management letter" received by the
Company or any of its Subsidiaries from its certified public accountants and
the management's responses thereto.
(h) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other information and reports, if any, which
the Company or any of its Subsidiaries or Material Joint Ventures shall file
with the Securities and Exchange Commission or any successor thereto (the
"SEC") and copies of all notices and reports which the Company or any of its
Subsidiaries or Material Joint Ventures shall deliver to holders of its
Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within ten
Business Days after, an officer of the Company or any of its Subsidiaries
obtains knowledge thereof, notice of one or more of the following environmental
matters:
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(i) any pending or threatened material Environmental Claim against
the Company or any of its Subsidiaries or Joint Ventures or any Real
Property owned or operated by the Company or any of its Subsidiaries or
Joint Ventures;
(ii) any condition or occurrence on or arising from any Real Property
owned or operated by the Company or any of its Subsidiaries or Joint
Ventures that (a) results in non-compliance by the Company or any of its
Subsidiaries or Joint Ventures with any applicable Environmental Law or
(b) could reasonably be expected to form the basis of a material
Environmental Claim against the Company or any of its Subsidiaries or
Joint Ventures or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Company or any of its Subsidiaries or Material Joint
Ventures that could reasonably be expected to cause such Real Property to
be subject to any restrictions on the ownership, occupancy, use or
transferability by the Company or any of its Subsidiaries or Material
Joint Ventures of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by the Company or any of its Subsidiaries or Material
Joint Ventures as required by any Environmental Law or any governmental or
other administrative agency; provided that in any event the Company shall
deliver to each Bank all notices received by it or any of its Subsidiaries
from any government or governmental agency under, or pursuant to,
Environmental Law.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Company's or such Subsidiary's response or proposed response thereto. In
addition, the Company and any of its Subsidiaries and Material Joint Ventures
will provide the Administrative Agent with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all material communications with any Person relating to
Environmental Claims, and such detailed reports of any Environmental Claim as
may be requested by the Administrative Agent or any Bank.
(j) Annual Meetings with Banks. At the request of the Administrative
Agent, the Company shall within 120 days after the close of each fiscal year of
the Company, hold a meeting (at a mutually agreeable location and time) with
all of the Banks at which meeting shall be reviewed the financial results of
the previous fiscal year and the financial condition of the Company
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and the budgets presented for the current fiscal year of the Company and its
Subsidiaries and Material Joint Ventures.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Company or its
Subsidiaries or Joint Ventures as the Administrative Agent or any Bank (through
the Administrative Agent) may reasonably request.
9.02 Books, Records and Inspections. The Company will, and will cause
each of its Subsidiaries and Material Joint Ventures to, keep proper books of
record and account in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Company will, and will cause each of its Subsidiaries and Joint
Ventures to, permit officers and designated representatives of any Agent or the
Banks to visit and inspect, during regular business hours, upon reasonable
advance notice and under guidance of officers of the Company, such Subsidiary
or such Joint Venture, any of the properties of the Company or any of its
Subsidiaries or Joint Ventures, and to examine the books of account of the
Company and any of its Subsidiaries or Joint Ventures and discuss the affairs,
finances and accounts of the Company and any of its Subsidiaries or Joint
Ventures with, and be advised as to the same by, its and their respective
officers and independent accountants, all at such times and intervals and to
such extent as any Agent or the Banks may request.
9.03 Maintenance of Property, Insurance. (a) Schedule VII sets forth
a true and complete listing of all insurance maintained by, or on behalf of,
the Company and its Subsidiaries and Material Joint Ventures as of the Initial
Borrowing Date and the Canadian Borrowing Date. The Company will, and will
cause each of its Subsidiaries and Material Joint Ventures to, (i) keep all
property necessary in its business in good working order and condition, (ii)
maintain insurance on all its property in at least such amounts and against at
least such risks as is consistent and in accordance with industry practice and
(iii) furnish to the Administrative Agent, upon written request, full
information as to the insurance carried. In addition to the requirements of the
immediately preceding sentence, the Company will at all times cause insurance
of the types described in Schedule VII to be maintained (with the same scope of
coverage as that described in Schedule VII) at levels which are at least as
great as the respective amount described opposite the respective type of
insurance on Schedule VII. Such insurance shall include physical damage
insurance on all real and personal property (whether now owned or hereafter
acquired) on an all risk basis, covering the full repair and replacement costs
of all such property and
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business interruption insurance for the actual loss sustained. All such
insurance shall be provided by insurers having an A.M. Best general
policyholders service rating of not less than B+III.
(b) If the Company or any of its Subsidiaries or Material Joint
Ventures shall fail to maintain all insurance in accordance with this Section
9.03, the Administrative Agent and/or the Collateral Agent shall have the right
(but shall be under no obligation), upon at least 10 days' notice to the
Company, to procure such insurance, the Company agrees to reimburse the
Administrative Agent or the Collateral Agent, as the case may be, for all costs
and expenses of procuring such insurance.
9.04 Corporate Franchises. The Company will, and will cause each of
its Subsidiaries and Material Joint Ventures to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence
and its material rights, franchises, licenses and patents; provided, however,
that nothing in this Section 9.04 shall prevent (i) transactions permitted in
accordance with the applicable requirements of Sections 10.02 and 10.05 or (ii)
the withdrawal by the Company or any of its Subsidiaries or Material Joint
Ventures of its qualification as a foreign corporation in any jurisdiction
where such withdrawal could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
9.05 Compliance with Statutes, etc. The Company will, and will cause
each of its Subsidiaries and Joint Ventures to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
its business and the ownership of its property, except such noncompliances as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
9.06 Compliance with Environmental Laws. The Company will comply, and
will cause each of its Subsidiaries and Joint Ventures to comply, in all
material respects with all Environmental Laws applicable to the ownership or
use of its Real Property now or hereafter owned or operated by the Company or
any of its Subsidiaries or Joint Ventures, will promptly pay or cause to be
paid all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any
Liens imposed pursuant to such Environmental Laws, in each case except to the
extent that such noncompliance, failure to pay or failure to keep such Real
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Property free of Liens could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, liability, condition (financial or otherwise) or prospects of
the Company or the Company and its Subsidiaries taken as a whole. Neither the
Company nor any of its Subsidiaries or Joint Ventures will generate, use,
treat, store, release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of Hazardous Materials on any Real Property now or
hereafter owned or operated by the Company or any of its Subsidiaries or Joint
Ventures, or transport or permit the transportation of Hazardous Materials to
or from any such Real Property except for Hazardous Materials used or stored at
any such Real Properties in compliance with all applicable Environmental Laws
and reasonably required in connection with the operation, use and maintenance
of any such Real Property, in each case except to the extent that doing so
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liability, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
9.07 ERISA. As soon as possible and, in any event, within 15 days
after the Company, any Subsidiary of the Company or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Company
will deliver to each of the Banks a certificate of an Authorized Financial
Officer of the Company setting forth details as to such occurrence and the
action, if any, that the Company, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Company, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency has been incurred or an application has been made to the Secretary
of the Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan and
such action has not been dismissed within 30 days; that a contribution required
to be made to a Plan or Foreign Pension Plan has not been timely made; that a
Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA, that a Plan has an Unfunded Current
Liability giving rise to a lien under ERISA or the Code; that proceedings may
be or have been instituted to terminate or appoint a trustee to administer a
Plan. that a proceeding has been instituted against the Company, any Subsidiary
of the Company or any ERISA Affiliate pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan and such action has not been
dismissed within 30 days; that the Company. any Subsidiary of the Company or
any ERISA Affiliate will incur
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any liability (including any indirect, contingent, or secondary liability) to
or on account of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan
under Section 401 (a)(29), 4971, 4975 or 4980 of the Code or Section 409 or
502(i) or 502(l) of ERISA; or that the Company, or any Subsidiary of the
Company may incur any material unfunded liability pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA). Within 10 days after a request by the Administrative
Agent, the Company will deliver to each of the Banks a complete copy of the
annual report (Form 5500) of each Plan (including, to the extent required, the
related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of any
material notices received by the Company, any Subsidiary of the Company or any
ERISA Affiliate with respect to any Plan or Foreign Pension Plan shall be
delivered to the Banks no later than 10 days after the date such notice has
been received by the Company, the Subsidiary or the ERISA Affiliate, as
applicable.
9.08 End of Fiscal Years; Fiscal Quarters. The Company will cause (i)
each of its, and each of its Subsidiaries' and Joint Ventures', fiscal years to
end on December 31, and (ii) each of its, and each of its Subsidiaries', fiscal
quarters to end on the last day of each March, June, September and December.
9.09 Performance of Obligations. The Company will, and will cause
each of its Subsidiaries and Joint Ventures to, perform all of its obligations
under the terms of each mortgage, deed of trust, indenture, loan agreement or
credit agreement and each other material agreement, contract or instrument by
which it is bound, except such non-performances as could not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
the business, operations, property, assets, nature of assets, liabilities,
condition (financial or otherwise) or prospects of the Company or the Company
and its Subsidiaries taken as a whole.
9.10 Payment of Taxes. The Company will, and will cause each of its
Subsidiaries and Material Joint Ventures to, pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims for sums that have become due and payable
which, if unpaid, might become a lien or charge upon any properties of
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the Company, any such Subsidiary or any such Material Joint Venture, provided
that neither the Company nor any such Subsidiary or any Material Joint Venture
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with generally accepted
accounting principles.
9.11 Hotel Franchisors. The Company will take, and will cause each of
its Subsidiaries and Joint Ventures to take, all action necessary so that (x)
except as otherwise provided in Section 11.11, each Hotel Property owned or
leased by the Company and its Subsidiaries and Joint Ventures are at all times
operated as a "Travelodge", "Thriftlodge" or another nationally recognized
hotel brand which the Chairman of the Board of Directors and the chief
financial officer of the Company (in a certificate signed by them delivered to
the Agents) have determined to be in the best interests of the Company and (y)
except in connection with the sale of any Hotel Property pursuant to the terms
of this Agreement or as otherwise provided in Section 11.11, no Franchise
Agreement with respect to a Hotel Property is terminated, provided that,
notwithstanding the foregoing, at any date of determination Hotel Properties
representing less than 10% in the aggregate for all such Hotel Properties of
Total Hotel Revenues for the Test Period then most recently ended and less than
10% of the consolidated total assets of the Company and its Subsidiaries (after
reduction for minority interests) as calculated on the most recently ended
fiscal quarter of the Company shall not be required to be subject to this
Section 9.11.
9.12 Joint Venture Distributions. To the extent any Joint Venture
receives any Net Cash Proceeds from any of the events specified in Sections
3.03(c) and (d) then, to the extent such Net Cash Proceeds would have to be
applied to reduce the Total Revolving Loan Commitment in accordance with the
requirements of Sections 3.03(c), and/or (d), as the case may be, if received
by a Wholly-Owned Subsidiary of the Company, the Company will use its best
efforts to cause such Joint Venture to distribute to the Company or a
Wholly-Owned Subsidiary thereof, concurrently with or as soon after the
respective event as is practicable, the Company's Allocable Share of such Net
Cash Proceeds received by such Joint Venture.
9.13 Corporate Separateness. The Company will take, and will cause
each of its Subsidiaries, Joint Ventures and Unrestricted Subsidiaries to take,
all action as is necessary to keep the operations of the Company and its
Subsidiaries and Joint Ventures separate and apart from those of any
Unrestricted Subsidiaries including, without limitation, ensuring that all
customary formalities regarding their respective corporate existence including
holding regular board of directors' and
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shareholders' meetings and maintenance of corporate offices and records, are
followed. Neither the Company nor any of its Subsidiaries or Joint Ventures
shall make any payment to a creditor of any Unrestricted Subsidiary in respect
of any liability of any Unrestricted Subsidiary. All financial statements
provided to creditors shall clearly evidence the corporate separateness of the
Company and its Subsidiaries and Joint Ventures from any Unrestricted
Subsidiaries, and the Company and its Subsidiaries and Joint Ventures shall
maintain their own respective payroll (if any) and separate books of account
and bank accounts from Unrestricted Subsidiaries. Each Unrestricted Subsidiary
shall pay its respective liabilities, including all administrative expenses,
from its own separate assets, and assets of the Company and its Subsidiaries
and Joint Ventures shall at all times be separately identified and segregated
from the assets of Unrestricted Subsidiaries. Finally, neither the Company nor
any of its Subsidiaries, Joint Ventures or Unrestricted Subsidiaries shall take
any action, or conduct its affairs in a manner which is likely to result in the
corporate existence of any Unrestricted Subsidiary being ignored, or in the
assets and liabilities of any Unrestricted Subsidiary being substantively
consolidated with those of the Company or any of its Subsidiaries or Joint
Ventures in a bankruptcy, reorganization or other insolvency proceeding.
9.14 Management Agreements. (a) Cause each Management Agreement
entered into by the Company of any of its Subsidiaries or any Joint Venture
after the Initial Borrowing Date with a third-party (a "Third-Party Manager" to
be pledged as Collateral pursuant to the Security Agreement within 10 days of
the effectiveness of such Management Agreement, and the Company or the
applicable Subsidiary or Joint Venture, as the case may be, shall execute and
deliver to the Collateral Agent the Security Agreement, if it is not already a
party thereto, or an amendment to the Security Agreement, as the Collateral
Agent reasonably requests in order to grant to the Collateral Agent, for the
benefit of the Lenders, a security interest in such Management Agreement, and
take all actions reasonably requested by the Collateral Agent to grant to the
Collateral Agent, for the benefit of the Lenders, a security interest in such
Management Agreement, including without limitation, the filing of UCC financing
statements in such jurisdictions as may be required by the Security Agreement
or by law or as may be requested by the Administrative Agent; and deliver such
legal opinions and other documents, resolutions and evidence of authority as
the Agents may reasonably request; and (b) cause such Third-Party Manager to
subordinate its rights under such Management Agreements on terms satisfactory
to the Agents.
SECTION 10. Negative Covenants. The Company covenants and agrees that
on and after the Effective Date and
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until the Total Revolving Loan Commitment and all Letters of Credit have
terminated and the Loans, Notes and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder and thereunder, are paid in
full:
10.01 Liens. The Company will not, and will not permit any of its
Subsidiaries or Material Joint Ventures to, create, incur, assume or suffer to
exist any Lien upon or with respect to any property or assets (real or
personal, tangible or intangible) of the Company or any of its Subsidiaries or
Material Joint Ventures, whether now owned or hereafter acquired, or sell any
such property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable with recourse to the Company or any Subsidiary or Material Joint
Venture of the Company), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, provided that the
provisions of this Section 10.01 shall not prevent the creation, incurrence,
assumption or existence of the following (Liens described below are herein
referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles;
(ii) Liens in respect of property or assets of the Company or any of
its Subsidiaries or Material Joint Ventures imposed by law, which were
incurred in the ordinary course of business and do not secure Indebtedness
for borrowed money, such as carriers', warehousemen's, materialmen's and
mechanics' liens and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from
the value of the Company's, such Subsidiary's or such Material Joint
Venture's property or assets or materially impair the use thereof in the
operation of the business of the Company, such Subsidiary or such Material
Joint Venture or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule VIII
(which Schedule VIII need not set forth the Liens created pursuant to the
Security Documents), but only to the respective date, if any, set forth in
such Schedule
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VIII for the removal and termination of any such Liens, but no renewals or
extensions of such Liens shall be permitted;
(iv) Liens created pursuant to the Credit Documents;
(v) leases or subleases granted by the Company or any of its
Subsidiaries or Material Joint Ventures to other Persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or Material Joint
Ventures;
(vi) Liens upon assets subject to Capitalized Lease Obligations to
the extent such Capitalized Lease Obligations are permitted by Section
10.04, provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the
Lien encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset of the Company or any Subsidiary or
Material Joint Venture of the Company;
(vii) Liens placed upon equipment or machinery used in the ordinary
course of business of the Company or any of its Subsidiaries or Material
Joint Ventures at the time of acquisition thereof by the Company or any
such Subsidiary or Material Joint Venture or within 60 days thereafter to
secure Indebtedness incurred to pay all or a portion of the purchase price
thereof, provided that (x) the aggregate outstanding principal amount of
all Indebtedness secured by Liens permitted by this clause (vii) shall not
at any time exceed $4,000,000 and (y) in all events. the Lien encumbering
the equipment or machinery so acquired does not encumber any other asset
of the Company, such Subsidiary or such Material Joint Venture;
(viii) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and which do not materially interfere
with the conduct of the business of the Company or any of its Subsidiaries
or Material Joint Ventures;
(ix) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Company or any of its
Subsidiaries or Material Joint Ventures in the ordinary course of
business;
(x) statutory and common law landlords' liens under leases to which
the Company or any of its Subsidiaries or Material Joint Ventures is a
party;
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(xi) Liens (other than Liens created or imposed under ERISA) incurred
or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations,
surety bonds, operating leases, bids, government contracts, performance
and return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money);
(xii) Liens arising out of judgments, awards or decrees (other than
any judgment, award or decree that is described in Section 11.10) in
respect of which the Company or any of its Subsidiaries or Material Joint
Ventures shall in good faith be prosecuting an appeal or proceedings for
review in respect of which there shall have been secured a subsisting stay
of execution pending such appeal or proceedings, provided that the
Company, such Subsidiary or such Material Joint Venture shall have set
aside on its books adequate reserves, in accordance with GAAP, with
respect to such judgment or award;
(xiii) Liens on Real Property and other assets to finance the
purchase price thereof provided that (a) the obligations secured by such
Liens are recourse only to such assets and the holder(s) of such
obligations have expressly waived recourse against the Company and its
Subsidiaries and the Joint Ventures except to such assets, (b) any Event
of Default under this Agreement shall not constitute a default under such
obligations and (c) the aggregate principal amount of such obligations
does not exceed $15,000,000;
(xiv) Liens on Hotel Properties described in clause (xi) of Section
10.04 to secure the construction or renovation financing thereof;
(xv) Liens on ▇▇▇▇▇▇▇ Hotels securing Indebtedness of the Company and
its Subsidiaries permitted by Section 10.04(xiv) but only to the extent
such Liens are required in order to obtain such acquisition and
construction Indebtedness and do not secure any refinancing or other
Indebtedness; and
(xvi) Liens securing the Indebtedness described in Section
10.05(xiii).
10.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The
Company will not, and will not permit any of its Subsidiaries or Material Joint
Ventures to, wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or
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consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale leaseback transactions, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property
or assets (other than purchases or other acquisitions of inventory, materials
and equipment in the ordinary course of business) of any Person, except that:
(i) Capital Expenditures (including payments in respect of
Capitalized Lease Obligations) by the Company and its Subsidiaries and
Material Joint Ventures shall be permitted to the extent not in violation
of Section 10.07:
(ii) the Company and each of its Subsidiaries and Material Joint
Ventures may in the ordinary course of business, sell, lease (as lessor)
or otherwise dispose of equipment and materials which, in the reasonable
opinion of such Person, are obsolete, uneconomic or no longer useful in
the conduct of such Person's business, provided that (x) except to the
extent the respective equipment or materials are transferred in like-kind
exchanges and/or trade-in-value is received on purchases of like-kind
assets, at least 80% of the consideration therefor (taking the amount of
cash and the fair market value of any non-cash consideration or, if
greater, the principal amount of any non-cash consideration) shall be in
the form of cash, (y) the aggregate Net Cash Proceeds of all assets sold
or otherwise disposed of pursuant to this clause (ii) shall not exceed
$2,000,000 in any fiscal year of the Company and (z) the Net Cash Proceeds
from each Asset Sale pursuant to this clause (ii) are applied in
accordance with the requirements of Section 3.03(d);
(iii) Investments (including by loans and advances) may be made to
the extent permitted by Section 10.05;
(iv) the Company and each of its Subsidiaries and Material Joint
Ventures may lease (as lessee) real or personal property in the ordinary
course of business (so long as any such lease does not create a
Capitalized Lease Obligation unless permitted by clause (i) of this
Section 10.02);
(v) the Company and each of its Subsidiaries and Material Joint
Ventures may make sales of inventory in the ordinary course of business;
(vi) the Canadian Acquisition shall be permitted as contemplated in
the Canadian Acquisition Documents;
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(vii) the Company and its Subsidiaries may sell any Specified
Existing Investment, so long as (i) each sale is in an arms' length
transaction and the Company or the respective Subsidiary receives at least
fair market value (as determined in good faith by the Board of Directors
of the Company or any authorized committee of such Board of Directors) and
(ii) the Net Cash Proceeds from each Asset Sale pursuant to this clause
(vii) are applied in accordance with the requirements of Section 3.03(d);
(viii) the Company and each of its Subsidiaries and Material Joint
Ventures may sell Hotel Properties (or the entire equity interests of such
Person in any Subsidiary or Joint Venture owning or leasing the respective
Hotel Properties), so long as (i) no Default or Event of Default then
exists or would result therefrom, (ii) each sale is in an arms' length
transaction and the Company or the respective Subsidiary or Material Joint
Venture receives at least fair market value (as determined in good faith
by the Board of Directors of the Company or any authorized committee of
such Board of Directors), (iii) the total consideration received by the
Company or such Subsidiary is at least 75% in cash with respect to the
sale of any wholly-owned Hotel Property of the Company or a Wholly-Owned
Subsidiary thereof (or with respect to the sale of any Wholly-Owned
Subsidiary of the Company) or with respect to the sale of any Joint
Venture (or any Hotel Property of such Joint Venture) set forth on
Schedule X, provided that, (x) in lieu of receiving cash in any sale of
the entire equity interest in any Joint Venture existing on the Initial
Borrowing Date, the Company or the respective Subsidiary may exchange the
entire equity interest of such Joint Venture for equity interests (not
theretofore owned, directly or indirectly, by the Company) of one or more
other Joint Ventures existing on the Initial Borrowing Date so long as the
effect of any such exchange is to increase the Company's direct or
indirect, as the case may be, equity interests in the Joint Venture or
Joint Ventures so acquired and (y) with respect to the sale of any Joint
Venture (or any Hotel Property owned by such Joint Venture) (other than
with respect to the sale of any Joint Venture (or any Hotel Property owned
by such Joint Venture) listed on Schedule X) the aggregate amount of all
non-cash consideration held at any one time shall not exceed $10,000,000
(taking the face amount of debt and the fair market value of all other
non-cash collateral, and determined without regard to any writedowns or
write-offs thereof), (iv) the aggregate Net Cash Proceeds of all assets
sold pursuant to this clause (viii) shall not exceed $25,000,000 in any
fiscal year of the Company and (v) the Net Cash Proceeds from each Asset
Sale pursuant to this clause (viii) are applied in accordance with the
requirements of Section 3.03(d);
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(ix) the Company and each of its Wholly-Owned Subsidiaries may
acquire Hotel Properties (including by purchasing 90% or more of the
capital stock or partnership interests of the Person that owns such Hotel
Properties) so long as (i) such Hotel Properties are at least 90% owned by
the Company or such Wholly-Owned Subsidiary, (ii) such Hotel Properties
are located in the United States, Canada, Mexico or Puerto Rico, provided
that, notwithstanding the foregoing, at any date of determination Hotel
Properties representing less than 10% of Total Hotel Revenues for the Test
Period then most recently ended and less than 10% of the consolidated
total assets of the Company and its Subsidiaries (after reduction for
minority interests) as calculated on the most recently ended fiscal
quarter of the Company shall not be required to be subject to this clause
(ii), (iii) prior to the date of acquisition of any such Hotel Property,
the Company shall have delivered to each of the Banks a Phase I
environmental assessment on such Hotel Property from an environmental
firm, certified to and in form, scope and substance, reasonably
satisfactory to the Administrative Agent, (iv) with respect to the
acquisition of any Hotel Property subject to a Leasehold (and which will
not be owned by the Company or the respective Wholly-Owned Subsidiary in
fee), such Hotel Property may be acquired only if the respective Leasehold
shall have a remaining term (including a right of extension by the Company
or such Wholly-Owned Subsidiary) of at least 15 years, (v) at least 10
Business Days prior to the consummation of any acquisition of any Hotel
Property the Company shall have delivered to each of the Banks the
Information Package relating to such Hotel Property, and in the case of
any acquisition of any Hotel Property or group of related Hotel Properties
in which the total consideration exceeds $15,000,000, the Required Banks
shall have not informed the Company in writing prior to the end of 15
Business Days after the Bank's receipt of the respective Information
Package that they do not approve of such acquisition, (vi) except to the
extent otherwise permitted by Section 9.11, each Hotel Property shall be
operated as a "Travelodge", a "Thriftlodge" or another nationally
recognized hotel brand which the Chairman of the Board of Directors and
the chief financial officer of the Company (in a certificate signed by
them delivered to the Agents) have determined to be in the best interests
of the Company and shall be subject to a Franchise Agreement, a copy of
which Franchise Agreement shall be delivered to each of the Banks on or
prior to the date of the consummation of the acquisition of such Hotel
Property, and (vii) in the case of any acquisition of any Hotel Property
or group of related Hotel Properties in which the total consideration
exceeds $3,000,000, (I) based on calculations made by the Company on a Pro
Forma Basis after giving effect to the respective
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acquisition, no Default or Event of Default will exist under, or would
have existed during the period of four consecutive fiscal quarters last
reported (or required to be reported pursuant to Section 9.01(b) or (c),
as the case may be) prior to the date of the respective acquisition under,
the financial covenants contained in Sections 10.08 through 10.11,
inclusive, (II) based on good faith projections prepared by the Company
for the period from the date of the consummation of the acquisition to the
date which is one year thereafter or based on the historical financial
statements (but after giving effect to all Scheduled Commitment Reductions
that will occur during the one year period after the date of the
consummation of the respective acquisition) delivered in the Information
Package for such Hotel Property or Hotel Properties calculated on a Pro
Forma Basis after giving effect to the respective acquisition, the level
of financial performance measured by the covenants set forth in Sections
10.08 through 10.11, inclusive, shall be better than or equal to such
level as would be required to provide that no Default or Event of Default
will exist under the financial covenants contained in such Sections 10.08
through 10.11, inclusive, as compliance with such covenants will be
required through the date which is one year from the date of the
consummation of the respective acquisition, and (III) the Company shall
have delivered to the Administrative Agent an officer's certificate
executed by an Authorized Financial Officer of the Company, certifying to
the best of such officer's knowledge, compliance with the requirements of
this clause (vii) and containing the calculations (in reasonable detail)
required by this clause (vii);
(x) [INTENTIONALLY OMITTED];
(xi) the Company may make the Mexican Investment in accordance with
clause (xv) of Section 10.06; and
(xii) the Company and its Subsidiaries may sell the Gaming Assets.
To the extent the Required Banks waive the provisions of this Section
10.02 with respect to the sale of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 10.02, such
Collateral shall be sold or otherwise transferred or disposed of free and
clear of the Liens created by the Security Documents and the
Administrative Agent and the Collateral Agent shall be authorized to take
any actions deemed appropriate in order to effect the foregoing.
10.03 Restricted Payments. The Company will not, and will not permit
any of its Subsidiaries or Material Joint
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Ventures to, authorize, declare or pay any Restricted Payments, except:
(i) any Subsidiary or Material Joint Venture of the Company may make
Restricted Payments to the Company or any Wholly-Owned Subsidiary of the
Company;
(ii) any Subsidiary of the Company which is not a Wholly-Owned
Subsidiary of the Company or any Material Joint Venture of the Company may
make Restricted Payments so long as the Company and each Subsidiary of the
Company which has an ownership interest in such non-Wholly-Owned
Subsidiary or Material Joint Venture receives a portion of such Restricted
Payment which is at least as great as the percentage ownership interest of
the Company or such other Subsidiary of the Company in the respective
Subsidiary or Material Joint Venture which is making the Restricted
Payment;
(iii) after the execution and delivery of any HFS Subordinated Note
in accordance with the requirements of Section 10.04(vii), the Company may
make regularly scheduled payments of interest in respect thereof (at the
interest rate described in Section 10.04(vii)), so long as (x) no Default
or Event of Default shall exist at the time of the making of such payment
or immediately after giving effect thereto and (y) the respective payment
is permitted in accordance with the HFS Subordination Agreement;
(iv) the Company may make Restricted Payments as specifically
permitted by clauses (iii) through (xi) of Section 10.06;
(v) after the issuance of any Redeemable Capital Stock in accordance
with the requirements of Section 10.04(viii), the Company may pay cash
dividends to HFS in respect thereof at times that the Company could have
paid interest on any HFS Subordinated Note (i.e., such dividends shall be
permitted to be paid at the end of each successive three-month Interest
Period with respect thereto), so long as (x) no Default or Event of
Default shall exist at the time of the making of such payment or
immediately after giving effect thereto, (y) the respective payment is
permitted in accordance with the HFS Subordination Agreement and (z) the
amount of dividends paid in cash with respect to the HFS Redeemable
Capital Stock shall not exceed the amounts permitted to be paid pursuant
to Section 10.04(viii)(y) (after giving effect to the proviso thereto);
(vi) [INTENTIONALLY OMITTED];
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(vii) after the issuance of any Chartwell Preferred
Stock/Subordinated Debt, the Company may pay cash dividends or make cash
interest payments, as the case may be, to Chartwell in respect thereof, so
long as (x) no Default or Event of Default shall exist at the time of the
making of such payment or immediately after giving effect thereto, (y) the
aggregate amount of Restricted Payments made pursuant to this clause (vii)
does not exceed the Cumulative Unrestricted Subsidiary Dividend Amount as
in effect immediately prior to the making of such payment, and (z) the
terms of such Chartwell Preferred Stock/Subordinated Debt satisfy the
requirements of Section 10.04(ix); and
(viii) after the issuance of any Permitted Subordinated Indebtedness,
the Company may make regularly scheduled payments of interest in respect
thereof (at the stated non- default interest rate set forth in such
Permitted Subordinated Indebtedness), so long as (x) no Default or Event
of Default shall exist at the time of the making of such payment or
immediately after giving effect thereto, (y) the respective payment is
permitted in accordance with the subordination provisions of such
Permitted Subordinated Indebtedness and (z) such payments are made no more
frequently than semi-annually and are made only in respect of unpaid
accrued interest.
10.04 Indebtedness. The Company will not, and will not permit any of
its Subsidiaries or Material Joint Ventures to, contract, create, incur, assume
or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Existing Indebtedness to the extent the same is listed on
Schedule VI, but no refinancing or renewals thereof, provided that (a) the
Bank of America Facility may be refinanced and (b) in no event shall the
aggregate outstanding principal amount of Indebtedness under the Bank of
America Facility exceed $15,000,000 at any one time;
(iii) (a) Indebtedness under Interest Rate Protection Agreements
entered into with respect to Indebtedness outstanding under the Agreement
and other Indebtedness (i.e., to provide protection against fluctuations
in floating interest rates with respect to a notional amount not to
exceed, at the time of the entering into of the respective Interest Rate
Protection Agreement, the aggregate principal amount of the underlying
Indebtedness outstanding); and (b) Indebtedness under Other Hedging
Agreements entered into with respect to foreign currency owned or
projected to be owned by
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the Company or any of its Subsidiaries or Material Joint Ventures (i.e.,
to provide protection against fluctuations in currency exchange rates with
respect to a notional amount not to exceed, at the time of the entering
into of the respective Agreement, the amount of foreign currency owned or
projected to be owned by the Company or any of its Subsidiaries of
Material Joint Ventures); provided that no such transaction described in
this paragraph (iii) is entered into for speculative purposes;
(iv) Indebtedness of the Company and its Subsidiaries and Material
Joint Ventures evidenced by Capitalized Lease Obligations entered into
after the Initial Borrowing Date, in each case so long as the respective
Capitalized Lease Obligation relates to an acquisition of assets made
after the Initial Borrowing Date in accordance with Section 10.07 and the
Liens arising as a result thereof are permitted pursuant to Section 10.01,
and so long as the aggregate outstanding principal amount of Capitalized
Lease Obligations incurred on or after the date hereof at no time exceeds
$10,000,000;
(v) Indebtedness of the Company and its Subsidiaries and Material
Joint Ventures subject to Liens permitted under Section 10.01(vii), so
long as the aggregate principal amount of Indebtedness outstanding
pursuant to this clause is limited as provided in said Section 10.01(vii);
(vi) intercompany Indebtedness among the Company and its Subsidiaries
and Material Joint Ventures to the extent permitted by Section 10.05;
(vii) unsecured subordinated Indebtedness of the Company issued to
HFS upon a downgrading of each of HFS' and the Company's long-term senior
unsecured debt credit rating by S&P triggering a mandatory commitment
reduction pursuant to Section 3.03(e) or (f) (the "HFS Subordinated
Indebtedness") so long as (x) the aggregate outstanding principal amount
of HFS Subordinated Indebtedness does not exceed the aggregate cash
proceeds actually loaned by HFS to the Company to enable it to make
mandatory repayments of Loans pursuant to Section 4.02(a) as a result of a
reduction to the Total Revolving Loan Commitment pursuant to Sections
3.03(e) and/or (f)), (y) the HFS Subordinated Indebtedness shall not be
guaranteed and shall be evidenced by a subordinated promissory note or
notes (subject to the limitation on the aggregate outstanding principal
amount thereof provided in preceding clause (x)) in the form of Exhibit J,
which shall mature not earlier than the date which occurs one year after
the Final Maturity Date and shall bear interest at a rate per annum not to
exceed the Eurodollar Rate (as determined for successive interest periods
of 3 months) plus the Applicable Margin as in effect
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from time to time (each an "HFS Subordinated Note") and (z) 100% of the
cash proceeds loaned to the Company as evidenced by the HFS Subordinated
Indebtedness shall be used for the purposes described in preceding clause
(x);
(viii) Redeemable Capital Stock of the Company issued to HFS upon a
downgrading of each of HFS' and the Company's long-term senior unsecured
debt credit rating by S&P triggering a mandatory reduction pursuant to
Section 3.03(e) or (f) (the "HFS Redeemable Capital Stock") so long as (x)
the aggregate amount thereof does not exceed the aggregate cash proceeds
invested by HFS in the Company by way of such Redeemable Capital Stock
investment to enable it to make mandatory repayments of Loans pursuant to
Section 4.02(a) as a result of the reduction to the Total Revolving Loan
Commitment pursuant to Sections 3.03(e) and/or (f)), (y) the HFS
Redeemable Capital Stock shall not be guaranteed and shall have no
required redemptions and no required offers to purchase same by the
Company or any of its Subsidiaries or Joint Ventures, whether through the
lapse of time, the occurrence of certain contingencies or otherwise, at
any time prior to the date which occurs one year after the Final Maturity
Date and such HFS Redeemable Capital Stock shall accrue dividends at a
rate per annum not to exceed the Eurodollar Rate (as determined for
successive interest periods of 3 months) plus the Applicable Margin as in
effect from time to time, provided that the amount of dividends permitted
to be paid in cash on any HFS Redeemable Capital Stock issued pursuant to
this clause (viii) at the end of any such interest period shall not exceed
an amount equal to the dividends which would accrue on such HFS Redeemable
Capital Stock for such interest period at the rate described above
multiplied by an amount equal to 1 minus the then Current Consolidated Tax
Rate of the Company during such period, with any dividends which is not
permitted to be paid in cash for any interest period because of the
immediately preceding proviso to be deferred (with no additional dividends
to accrue on such deferred amounts) until after the Bank Termination Date,
and (z) 100% of the cash proceeds invested by the Company in return for
the issuance of the HFS Redeemable Capital Stock shall be used for the
purposes described in preceding clause (x);
(ix) Chartwell Preferred Stock/Subordinated Debt issued to Chartwell
so long as (u) the aggregate amount thereof does not exceed the aggregate
cash proceeds invested by Chartwell in the Company by way of a Chartwell
Preferred Stock investment (provided that, in any event, the aggregate
amount of Chartwell Preferred Stock/Subordinated Debt shall not exceed
$50,000,000 less the aggregate principal amount of Permitted Subordinated
Indebtedness outstanding under clause
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(x) below), in each case except to the extent such excess has resulted
from the accrual of dividends or interest thereon (as the case may be),
(v) the Chartwell Preferred Stock/Subordinated Debt shall be issued by the
Company, shall not be guaranteed and shall have no required redemptions or
amortization and no required offers to purchase same by the Company or any
of its Subsidiaries or Joint Ventures, whether through the lapse of time,
the occurrence of certain contingencies or otherwise, at any time prior to
the date which occurs one year after the Final Maturity Date, (w) the
Chartwell Preferred Stock/Subordinated Debt shall accrue dividends or
interest, as the case may be, at a rate per annum not to exceed 8.5%, (x)
the Chartwell Preferred Stock/Subordinated Debt shall not have any
covenants restricting the business or operations of the Company or any of
its Subsidiaries or Joint Ventures and shall expressly provide that any
payments in respect thereof, whether in respect of accrued dividends or
interest, mandatory redemptions or payments of principal, may only be made
to the extent permitted by the terms of this Agreement (including Sections
10.03, 10.04 and 10.06), as same may be amended, supplemented, amended and
restated, or refinanced from time to time, and (z) Chartwell Subordinated
Debt may be issued only upon the conversion thereto of outstanding
Chartwell Preferred Stock theretofore issued in accordance with the
requirements of this Agreement, and prior to (and the Chartwell Preferred
Stock shall provide that as a condition to) the conversion of the
Chartwell Preferred Stock into Chartwell Subordinated Debt, the prior
written consent of the Required Banks is obtained;
(x) subordinated Indebtedness of the Company in a principal amount
not to exceed $50,000,000, less the aggregate amount of Chartwell
Preferred Stock/Subordinated Debt outstanding under clause (ix) above
(excluding Chartwell Preferred Stock/Subordinated Debt consisting of
accrual of dividends or interest thereon), provided, that (a) the
subordination provisions contain the terms set forth in Exhibit N; (b) no
such Indebtedness shall mature (whether by scheduled payment or mandatory
prepayment) earlier than the date which occurs one year after the Final
Maturity Date; (c) payment of such Indebtedness may not be accelerated or
come due prior to the date which occurs one year after the Final Maturity
Date unless payment of the Loans has previously been accelerated in
accordance with Section 12; and (d)(i) based on calculations made by the
Company on a Pro Forma Basis after giving effect to the incurrence of such
Indebtedness, no Default or Event of Default will exist under, or would
have existed during the period of four consecutive fiscal quarters last
reported (or required to be reported pursuant to Section 9.01(b) or (c),
as the case may be) prior to the
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date of the incurrence of such Indebtedness under, the financial covenants
contained in Sections 10.08 through 10.11, inclusive, (ii) based on good
faith projections prepared by the Company for the period from the date of
the incurrence of such Indebtedness to the date which is one year
thereafter (but after giving effect to all Scheduled Commitment Reductions
that will occur during the one year period after the date of the
incurrence of such Indebtedness calculated on a Pro Forma Basis after
giving effect to the incurrence of such Indebtedness, the level of
financial performance measured by the covenants set forth in Sections
10.08 through 10.11, inclusive, shall be better than or equal to such
level as would be required to provide that no Default or Event of Default
will exist under the financial covenants contained in such Sections 10.08
through 10.11, inclusive, as compliance with such covenants will be
required through the date which is one year from the date of the
incurrence of such Indebtedness, and (iii) the Company shall have
delivered to the Administrative Agent an officer's certificate executed by
an Authorized Financial Officer of the Company, certifying to the best of
such officer's knowledge, compliance with the requirements of this clause
(d) and containing the calculations (in reasonable detail) required by
this clause (d);
(xi) Indebtedness consisting of guaranties by the Company of
obligations of its Subsidiaries and Material Joint Ventures incurred
solely to finance the construction or renovation of Hotel Properties,
provided that the aggregate amount of the obligations guaranteed by the
Company pursuant to this clause (xi) shall not exceed $20,000,000 less the
aggregate amount paid by the Company pursuant to such guaranties, and
provided, further, that the aggregate principal amount of Indebtedness
incurred pursuant to this clause (xi) and clause (xiv) of this Section
10.04 shall not exceed $30,000,000;
(xii) Indebtedness of Material Joint Ventures permitted by clause
(xiv) of Section 10.05;
(xiii) non-recourse Indebtedness in an aggregate principal amount not
to exceed $15,000,000 as described in clause (xiii) of Section 10.01;
(xiv) Indebtedness of the Company in an aggregate principal amount
not to exceed $20,000,000 incurred to finance the acquisition and
construction of ▇▇▇▇▇▇▇ Hotels, provided that the aggregate principal
amount of Indebtedness incurred pursuant to this clause (xiv) and clause
(xi) of this Section 10.04 shall not exceed $30,000,000; and
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(xv) Indebtedness (from and after the execution of the Las Vegas
Lease described below) consisting of a guaranty by the Company of the
obligations of the tenant under the Las Vegas Lease with respect to the
Hotel Property and adjoining real property located at Las Vegas South
Strip (in the vicinity of, and including, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇),
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (the "Las Vegas Lease") which leasehold interest is to
be acquired by Chartwell Lodging Inc. (formerly NL Hotels, Inc.) pursuant
to a right of first refusal pursuant to Article XXII of the existing
Travelodge lease for ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, provided that the
Company may not guarantee payment of more than $2,000,000 per year under
the Las Vegas Lease.
Notwithstanding anything to the contrary contained in (A) clauses (vii) and
(viii) above, the sum of the aggregate principal amount of HFS Subordinated
Indebtedness incurred pursuant to such clause (vii) and the aggregate
liquidation preference of all HFS Redeemable Capital Stock issued pursuant to
such clause (viii) shall in no event exceed the aggregate repayments
theretofore made pursuant to Section 4.02(a) (as a result of reductions to the
Total Revolving Loan Commitment pursuant to Sections 3.03(e) and/or (f)) made
with funds provided to the Company by HFS (except to the extent the increase in
the aggregate liquidation preference of any such HFS Redeemable Capital Stock
is attributable to the accrual of dividends with respect thereto) and (B)
clause (ix) above, the sum of the aggregate principal amount of Chartwell
Subordinated Debt plus the aggregate liquidation preference of all Chartwell
Preferred Stock (excluding Chartwell Preferred Stock theretofore converted into
Chartwell Subordinated Debt) shall in no event exceed the aggregate cash
investments made by Chartwell in the Company (except to the extent that any
increase in the aggregate principal amount of any Chartwell Subordinated Debt
or any increase in the aggregate liquidation preference of any such Chartwell
Preferred Stock is attributable to the accrual of dividends or interest, as the
case may be, with respect thereto).
10.05 Advances, Investments and Loans. The Company will not, and will
not permit any of its Subsidiaries or Material Joint Ventures to, directly or
indirectly, lend money or credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person, or purchase or own a
futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures
contract, (collectively, "Investments"), or permit any Investment to remain
outstanding, or agree or commit to make any Investment (any such agreement or
commitment an "Investment Commitment"), except that the following shall be
permitted (but only so long as no Default or Event of Default exists at the
time of the making of the respective Investment or
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Investment Commitment (or would exist immediately after giving effect thereto)
in the case of Investments or Investment Commitments described in following
clauses (viii) through (xii), inclusive):
(i) the Company and its Subsidiaries and Material Joint Ventures may
acquire and hold accounts receivables owing to any of them, if created or
acquired in the ordinary course of business and payable or dischargeable
in accordance with customary terms;
(ii) the Company and its Subsidiaries and Material Joint Ventures may
acquire and hold cash and Cash Equivalents;
(iii) the Company may enter into Interest Rate Protection Agreements
and Other Hedging Agreements to the extent permitted by Section
10.04(iii);
(iv) (x) any Subsidiary or Material Joint Venture of the Company may
make intercompany loans of cash to the Company or to any Wholly-Owned
Subsidiary of the Company, any Wholly-Owned Subsidiary of the Company may
make cash equity investments in any other Wholly-Owned Subsidiary of the
Company, and the Company may make intercompany loans of cash to, or cash
equity investments in, its Wholly-Owned Subsidiaries, provided that to the
extent that any such intercompany loan is evidenced by a promissory note,
such promissory note shall be pledged to the Collateral Agent pursuant to
the Pledge Agreement and (y) the Company or any of its Wholly-Owned
Subsidiaries may make intercompany loans to, cash capital contributions
in, guaranty the obligations of, or have Letters of Credit issued for the
benefit of, any Material Joint Venture of the Company (other than any
Material Joint Venture that constitutes a Specified Existing Investment)
or any joint venture partner of such Material Joint Venture, provided that
(i) the aggregate amount of all such Investments (including, without
limitation, the maximum amount of all guarantees, the maximum amount of
all Letters of Credit and the amount of all intercompany loans and capital
contributions as described in following clause (ii)) outstanding at any
one time shall not exceed $15,000,000 (determined without regard to any
write-downs or write-offs thereof), (ii) the aggregate amount of all such
intercompany loans and cash capital contributions outstanding at any one
time shall not exceed $5,000,000 (determined without regard to any
write-downs or write-offs thereof) and (iii) to the extent that any such
intercompany loan is evidenced by promissory note, such promissory note
shall be pledged to the Collateral Agent pursuant to the Pledge Agreement;
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(v) non-cash consideration received by the Company or any of its
Subsidiaries in connection with Asset Sales permitted pursuant to Sections
10.02(ii), (vii) and (viii), provided that the amount of such non-cash
consideration shall not exceed the limitations provided in Section
10.02(ii) or (viii), as the case may be;
(vi) the Company and its Subsidiaries and Material Joint Ventures may
make loans and advances in the ordinary course of business to their
respective employees so long as the aggregate principal amount thereof at
any time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $1,000,000;
(vii) the Company and its Subsidiaries and Material Joint Ventures
may permit to remain outstanding the Investments that were made prior to
the Initial Borrowing Date to the extent that same are set forth on
Schedule IX (the "Existing Investments") (provided that any additional
Investments with respect thereto (other than the acquisition of additional
equity in any Joint Venture existing as of the Initial Borrowing Date if
no Default or Event of Default exists or would result therefrom) shall be
permitted only if independently justified under the other provisions of
this Section 10.05);
(viii) in addition to Investments made as otherwise permitted
pursuant to this Section 10.05, the Company and its Wholly-Owned
Subsidiaries may make Investments in Hotel Properties (including by making
the respective investment in the Person (other than an Unrestricted
Subsidiary) which owns the respective Hotel Property but which shall not
be a Wholly-Owned Subsidiary of the Company) that are not wholly-owned by
the Company or any of its Wholly-Owned Subsidiaries so long as (i) no
Default or Event of Default then exists or would result therefrom, (ii)
all of the applicable requirements of Section 10.02(ix) (other than clause
(i) thereof) are satisfied with respect to such Investment and (iii) the
aggregate amount of Investments made pursuant to this Section 10.05(viii)
in any fiscal year of the Company does not exceed $10,000,000 in the
aggregate and $5,000,000 in any fiscal year;
(ix) the Company and its Wholly-Owned Subsidiaries may make
Investment Commitments from time to time so long as (i) the respective
Investment Commitment is in respect of an Investment of the type described
in clause (viii) of this Section 10.05, (ii) the respective Investment
Commitment expressly provides that the Company or its respective
Wholly-Owned Subsidiary has no obligation to make the respective
Investment unless same is in compliance with this
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Agreement (and so long as the Company shall suffer no penalty or loss of
funds as a result of any failure to make the Investment for the reasons
set forth above in this clause (ii)), (iii) all of the applicable
conditions set forth in Section 10.05(viii) are satisfied with respect to
the Investment to be made pursuant to the respective Investment Commitment
(but only to the extent that such Investment is made) and (iv) the maximum
amount which could be required to be invested pursuant to the respective
Investment Commitment in any fiscal year of the Company shall not exceed
that amount set forth in clause (viii) of this Section 10.05, and with any
amount so invested pursuant to the respective Investment Commitment to be
considered an Investment made pursuant to clause (viii) of this Section
10.05;
(x) the Company may establish Subsidiaries, Joint Ventures and
Unrestricted Subsidiaries to the extent permitted by Section 10.16;
(xi) the Company and its Wholly-Owned Subsidiaries may (i) make
Investments (other than Investments in Unrestricted Subsidiaries) so long
as all consideration therefor paid by the Company and its Subsidiaries in
respect of such Investment consists solely of Qualified Capital Stock of
the Company and the proceed thereof and (ii) enter into commitments or
agreements to make Investments ("Qualified Equity Commitments") so long as
all consideration to be paid for the respective Investment pursuant to the
Qualified Equity Commitment consists solely of Qualified Capital Stock of
the Company;
(xii) the Company and its Wholly-Owned Subsidiaries may make cash
Investments in Unrestricted Subsidiaries so long as the aggregate amount
of all such Investments does not exceed the aggregate Net Cash Proceeds
(including. for this purpose, net of any amounts paid by the Company to
HFS pursuant to Section 10.06(viii)) received by the Company from cash
equity investments by Chartwell after the Closing Date (other than the
equity investment described in Section 6.07);
(xiii) the Canadian Borrower may consummate the Canadian Acquisition,
it being agreed that (i) in accordance with the Canadian Acquisition
Documents, as consideration for the Canadian Acquisition, Bear Financial
Corp., a Wholly-Owned Subsidiary of the Company, will acquire, for
C$87,500,000, the secured Indebtedness which encumbers the Canadian
Acquired Assets and the Canadian Borrower will assume such Indebtedness
and (ii) payment of such Indebtedness will be subordinated to payment of
the obligations of the Canadian Borrower under the Loan Documents on terms
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satisfactory to the Agents and, at the option of the Agents, such
Indebtedness will be pledged to the Collateral Agent;
(xiv) the Company may make loans to, or guaranty loans of, the Joint
Ventures of the Company, provided that (i) the aggregate principal amount
of such loans and guaranties shall not exceed $15,000,000, (ii) such loans
and guaranties are made in connection with a financing program for the
Joint Ventures that is not, in the aggregate, materially less favorable to
the Company than the Bank of America Facility and (iii) no such loan may
be made if a Default or Event of Default has occurred and is continuing;
and
(xv) the Company may make the Mexican Investment;
(xvi) the Company and each of its Wholly-Owned Subsidiaries may make
Permitted Hotel Acquisitions to the extent permitted by Section 10.02(ix);
(xvii) the Company (directly or through any Subsidiary or Joint
Venture) may make an Investment in the Las Vegas Lease to the extent
permitted by Section 10.04(xv); and
(xviii) the Company and its Subsidiaries may make equity investment
of up to $7,000,000 (not to exceed $1,000,000 per ▇▇▇▇▇▇▇ Hotel) in
connection with obtaining acquisition and construction financing for
▇▇▇▇▇▇▇ Hotels and, to the extent required by any source providing
acquisition or construction financing for such ▇▇▇▇▇▇▇ Hotels, the Company
and its Subsidiaries may deliver environmental and construction guarantees
in connection therewith.
Notwithstanding the foregoing, the proceeds of the sale of common stock of the
Company described in Section 5.17 may be used solely to fund the Canadian
Acquisition or for other purposes to be approved by the Required Banks (and,
pending such application, may be invested in Cash Equivalents). The Company
agrees that Bear Financial Corp. will not assign or transfer, or create or
suffer to exist a Lien on, any of the Indebtedness described in clause (xiii)
above and will not permit any amendment or waiver of or to such Indebtedness
without the consent of the Agents.
10.06 Transactions with Affiliates. The Company will not, and will
not permit any of its Subsidiaries or Material Joint Ventures to, enter into
any transaction or series of related transactions with any Affiliate of the
Company or any of its Subsidiaries or Material Joint Ventures, other than in
the ordinary course of business and on terms and conditions substantially as
favorable to the Company, such Subsidiary or such Material Joint Venture as
would reasonably be obtained by the
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Company, such Subsidiary or such Material Joint Venture at that time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that the following transactions, whether or not such transactions would
otherwise be permitted by this Section 10.06, shall be permitted:
(i) Restricted Payments may be paid to the extent provided in Section
10.03 (excluding clause (iv) thereof);
(ii) loans may be made and other transactions may be entered into by
the Company and its Subsidiaries and Material Joint Ventures to the extent
permitted by Sections 10.04 and 10.05;
(iii) the Company may make quarterly payments (in advance) of the
Corporate Services Fee, provided that the aggregate amount permitted to be
paid pursuant to this clause (iii) in any fiscal quarter of the Company
shall not exceed $375,000;
(iv) [INTENTIONALLY OMITTED];
(v) the Company and its Subsidiaries and Material Joint Ventures may
pay to HFS or a Subsidiary thereof the Marketing and Reservation Fee as
and when due pursuant to the terms of the respective HFS Franchise
Agreement, and the Company and its Subsidiaries and Material Joint
Ventures may pay to HFS or a Subsidiary thereof the Licensing Fee as and
when due pursuant to the terms of the HFS Master License Agreement;
(vi) [INTENTIONALLY OMITTED];
(vii) [INTENTIONALLY OMITTED];
(viii) [INTENTIONALLY OMITTED];
(ix) so long as no Default or Event of Default then exists, the
Company may pay to HFS an annual guaranty fee (payable quarterly in
arrears) (the "Guaranty Fee") pursuant to the Financing Agreement in an
aggregate amount not to exceed 2% of the Guaranty Amount then in effect,
provided that such Guaranty Fee shall otherwise be subject to the terms of
the HFS Subordination Agreement;
(x) (a) the Company and its Subsidiaries and Material Joint Ventures
may pay to HFS or a Subsidiary thereof the Standard Termination Fees set
forth in the HFS Franchise Agreements and (b) so long as no Default or
Event of Default then exists, the Company and its Subsidiaries and
Material Joint Ventures may pay to HFS or a Subsidiary thereof the Excess
Termination Fees set forth in the HFS Franchise
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Agreements, provided that such Excess Termination Fees shall otherwise be
subject to the terms of the HFS Subordination Agreement;
(xi) the Company and its Subsidiaries and Material Joint Ventures may
pay to HFS or a Subsidiary thereof pursuant to the respective HFS
Franchise Agreements such other customary and arm's length charges and
expenses that HFS charges (and on the same basis on which HFS charges) to
its other similarly situated franchisees; and
(xii) the Company may make payments to ▇▇▇▇▇▇ 40th & 3rd Company and
Hawaiian Realty Inc. pursuant to the lease of its corporate headquarters
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ as long as the aggregate
annual payments thereunder do not exceed $600,000 plus the operating cost
and tax escalator increases as set forth therein on the date hereof.
Except as expressly permitted by clauses (i) through (xii) above, neither the
Company nor any of its Subsidiaries or Material Joint Ventures shall pay any
management, consultant, advisory or other fees to HFS or any Subsidiary of HFS,
and neither the Company nor any of its Subsidiaries or Material Joint Ventures
shall pay any management, consultant, advisory or similar fees to any other
Affiliate of the Company or HFS (excluding payments made by Subsidiaries of the
Company to the Company or a Wholly-Owned Subsidiary of the Company).
10.07 Capital Expenditures. (a) The Company will not, and will not
permit any of its Subsidiaries or Material Joint Ventures to, make any Capital
Expenditures, except that during any fiscal year of the Company, the Company
and its Subsidiaries and Material Joint Ventures may make Capital Expenditures
so long as the aggregate amount of Capital Expenditures made by the Company and
its Wholly-Owned Subsidiaries in any such fiscal year when added to the
Company's Allocable Share of the Capital Expenditures made by its Material
Joint Ventures for such fiscal year, does not exceed an amount equal to 6% of
Total Hotel Revenues for such fiscal year.
Notwithstanding anything to the contrary contained above, to the extent that
Capital Expenditures made during any fiscal year of the Company are less than
the amount permitted to be made for such fiscal year as set forth above such
unused amount may be carried forward to the immediately succeeding fiscal year
and utilized to make Capital Expenditures of the type permitted above in this
Section 10.07 in excess of the amount permitted above in the following fiscal
year, provided that (x) any amounts carried forward from the immediately
preceding fiscal year shall be deemed to be utilized during the current fiscal
year before the relevant amount for such current fiscal year shall be deemed to
be utilized
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to make Capital Expenditures during such fiscal year and (y) no amounts once
carried forward to the next fiscal year may be carried forward to fiscal years
thereafter. In addition to the foregoing, the Company and its Subsidiaries may
make additional Capital Expenditures to the extent that any Permitted Hotel
Acquisition made as permitted by Section 10.02(ix) and/or 10.05(viii)
constitutes Capital Expenditures.
(b) In addition to the Capital Expenditures permitted to be made
pursuant to clause (a) of this Section 10.07 and the following clause (c) of
this Section 10.07, the amount of insurance proceeds received by the Company
and its Subsidiaries from any Recovery Event may be used by the Company and its
Subsidiaries to make Capital Expenditures to replace or restore any properties
or assets in respect of which such proceeds were paid, in each case to the
extent such proceeds are not used to make Permitted Hotel Acquisitions or are
not required to be applied pursuant to Section 3.03(d), provided that any
proceeds that are so used to make Capital Expenditures pursuant to this clause
(b) are, to the extent required by Section 3.03(d) used within the period of
time as is set forth in such Section 3.03(d).
(c) In addition to the Capital Expenditures permitted to be made
pursuant to clauses (a) and (b) of this Section 10.07, the Company and its
Wholly-Owned Subsidiaries may make Capital Expenditures in any fiscal year of
the Company beginning with its fiscal year commencing on January 1, 1997 in an
amount equal to the Cumulative Retained Residual Excess Cash Amount as in
effect immediately prior to the making of the respective Capital Expenditure.
(d) The Company may consummate the Canadian Acquisition for a
purchase price (including assumed debt but excluding fees relating thereto) not
to exceed C$98,000,000, and such amounts so expended shall not be counted as
expenditures under paragraph (a) above.
(e) The Company may make the Capital Expenditure set forth on
Schedule XII, and such amounts shall not be counted as expenditures under
paragraph (a) above.
10.08 Minimum Consolidated Net Worth. The Company will not permit
Consolidated Net Worth at any time to be less than the sum of (a) $125,000,000
and (b) if positive, 50% of Consolidated Net Income for the period from July 1,
1996 through the last day of the most recent fiscal quarter ending prior to
such time.
10.09 Consolidated Interest Coverage Ratio. The Company will not
permit the Consolidated Interest Coverage Ratio for any Test Period ended on
the last day of a fiscal quarter to
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be less than (a) 2.0 to 1.0 for each fiscal quarter ending on or prior to
September 30, 1999 and (b) 3.0 to 1.0 for each fiscal quarter thereafter.
10.10 Consolidated Current Ratio. The Company will not permit the
Consolidated Current Ratio at any time to be less than 1.0 to 1.0.
10.11 Total Leverage Ratio. The Company will not permit the Total
Leverage Ratio on the last day of any fiscal quarter to be greater than (a) 5.0
to 1.0 on and prior to September 30, 1999 and (b) 4.0 to 1.0 thereafter.
10.12 Limitation on Payments of Certain Indebtedness, Modifications
of Certain Indebtedness, Modifications of Certificate of Incorporation, By-Laws
and Certain Agreements, etc. The Company will not, and will not permit any of
its Subsidiaries or Material Joint Ventures to, (i) make (or give any notice in
respect of) any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result of any
change of control or similar event of including, in each case without
limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due any HFS Subordinated
Indebtedness, any Chartwell Subordinated Debt or any Permitted Subordinated
Indebtedness, (ii) amend or modify, or permit the amendment or modification of,
any provision of the Bank of America Facility, any HFS Subordinated
Indebtedness, any Chartwell Subordinated Debt or any Permitted Subordinated
Indebtedness or any agreement (including, without limitation, any HFS
Subordinated Note) related thereto, (iii) amend or modify. or permit the
amendment or modification of, any provision of any Canadian Acquisition
Document, Management Agreement, Tax Sharing Agreement, HFS Agreement or
Affiliate Agreement (other than any amendment or modification thereto which
would not violate or be inconsistent with any of the terms or provisions of
this Agreement and the other Credit Documents and could not be adverse to the
interests of the Banks in any respect as determined by the Agents) or enter
into any new agreement which would have constituted a Tax Sharing Agreement,
HFS Agreement or Affiliate Agreement if same had been in effect on the Initial
Borrowing Date except for Unrestricted Subsidiary Tax Sharing Agreements
entered into in compliance with Section 10.16(c) and additional HFS Franchise
Agreements in connection with the acquisition of new Hotel Properties, (iv)
amend, modify or change its certificate of incorporation (including, without
limitation, by the filing or modification of any certificate of designation) or
by-laws, or any agreement entered into by it, with respect to its capital stock
(including the Chartwell Stock Purchase Agreement), or enter into any new
agreement with respect to its capital stock, other than any amendments,
modifications or changes pursuant to this clause
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(iv) or any such new agreements pursuant to this clause (iv) which would not
violate or be inconsistent with any of the terms of this Agreement and the
other Credit Documents and could not in any way adversely affect the interests
of the Banks, (v) amend or modify, or permit the amendment or modification of,
any Joint Venture Agreement in any material respect (it being agreed that
acting under any Joint Venture Agreement in accordance with its terms,
including as to termination rights and buyout provisions, shall not be
restricted by this clause (v)) or (vi) retain or engage, or permit the
retention or engagement of, any Person to manage a Hotel Property in which the
Company and its Subsidiaries have a controlling interest unless the consent of
the Real Estate Committee is obtained, such consent not to be unreasonably
withheld or (vii) consent to or acquiesce in the pledge or assignment by HFS of
any HFS Subordinated Notes.
10.13 Limitation on Certain Restrictions on Subsidiaries and Joint
Ventures. The Company will not, and will not permit any of its Subsidiaries or
Material Joint Ventures to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary or Material Joint Venture of the Company to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Company or any of its
Subsidiaries or Material Joint Ventures, or pay any Indebtedness owed to the
Company or any Subsidiary or Material Joint Venture of the Company, (b) make
loans or advances to the Company or any Subsidiary or Material Joint Venture of
the Company, (c) transfer any of its properties or assets to the Company or any
of its Subsidiaries or Joint Ventures or (d) create Liens on its property,
except in each case for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Company or any Subsidiary or
Material Joint Venture of the Company, (iv) customary provisions restricting
assignment of any licensing agreement entered into by the Company or any
Subsidiary or Material Joint Venture of the Company in the ordinary course of
business, and (v) restrictions on the transfer or encumbrance of any assets
subject to a Lien permitted by this Agreement.
10.14 Limitation on Issuance of Capital Stock. (a) The Company will
not issue (i) any class of preferred stock (except (x) preferred stock of the
Company issued in accordance with the requirements of Sections 10.04(viii) and
(ix) and (y) any class of preferred stock which has no required redemptions and
no required offers to purchase same by the Company or any of its Subsidiaries
or Material Joint Ventures, whether through the lapse of time, the occurrence
of certain contingencies or otherwise) or
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(ii) any class of redeemable (except at the sole option of the Company) common
stock.
(b) The Company will not permit any of its Subsidiaries or Material
Joint Ventures to issue any capital stock (including by way of sales of
treasury stock) or any options or warrants to purchase, or securities
convertible into, capital stock, except (i) for transfers and replacements of
then outstanding shares of capital stock, (ii) for stock splits, stock
dividends and similar or additional issuances which do not decrease the
percentage ownership of the Company or any of its Subsidiaries in any class of
the capital stock of such Subsidiary or Material Joint Venture, (iii) stock
options issued to employees provided that such options and the capital stock
issuable upon the exercise of such stock options are not mandatorily redeemable
prior to the first anniversary of the Final Maturity Date, and (iv) to qualify
directors to the extent required by applicable law.
10.15 Business. The Company will not, and will not permit any of its
Subsidiaries or Joint Ventures to, engage (directly or indirectly) in any
business other than the businesses in which the Company and its Subsidiaries
and Joint Ventures are engaged on the Initial Borrowing Date and reasonable
extensions thereof and businesses incidental thereto, provided that the Company
(x) may not expand or develop any gaming business or venture after the Initial
Borrowing Date and (y) may wind down its existing gaming business and related
Specified Existing Investments.
10.16 Limitation on Creation of Subsidiaries; Unrestricted
Subsidiaries and Joint Ventures. (a) The Company will not, and will not permit
any of its Subsidiaries or Joint Ventures to, establish, create or acquire any
additional Subsidiaries or Joint Ventures, except that the Company and its
Wholly-Owned Subsidiaries shall be permitted to establish, create or acquire
(x) Joint Ventures as provided in Section 10.16(b) and (y) at least 90% owned
Subsidiaries in connection with Permitted Hotel Acquisitions and Permitted
Business Acquisitions so long as (i) all of the capital stock of such new
Subsidiary (to the extent that same is a corporation) is pledged pursuant to
(and to the extent required by) the Pledge Agreement and the certificates
representing such stock, together with stock powers duly executed in blank, are
delivered to the Collateral Agent, (ii) all of the partnership interests of
such new Subsidiary (to the extent that same is a partnership) are pledged and
assigned pursuant to (and to the extent required by) the Pledge Agreement and
(iii) any such new domestic Subsidiary executes a counterpart of the
Subsidiaries Guaranty and the Pledge Agreement. In addition, each such new
domestic Subsidiary shall execute and deliver, or cause to be executed and
delivered all other relevant documentation of the type described in Section 5
as such new domestic Subsidiary would
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have had to deliver if such new domestic Subsidiary were a Credit Party on the
Initial Borrowing Date.
(b) The Company will not, and will not permit any of its Subsidiaries
or Joint Ventures to, establish, create or acquire any additional Joint
Ventures after the Initial Borrowing Date, except that the Company or any
Wholly-Owned Subsidiary of the Company referenced in following clause (z) may
establish, create or acquire Joint Ventures in connection with Investments
permitted by Section 10.05 from time to time, in each case so long as (x) no
Default or Event of Default exists at the time of the establishment, creation
or acquisition of the respective Joint Venture or shall exist immediately after
giving effect thereto, (y) all Investments therein are permitted pursuant to
Section 10.05 and (z) all equity interests in each Joint Venture are owned
directly by the Company or a Wholly-Owned Subsidiary of the Company which
engages in no business or activities other than the holding of ownership
interests in one or more Joint Ventures and all equity interests therein are
pledged pursuant to (and to the extent required by) the Pledge Agreement,
provided that if any Joint Venture is in the form of a partnership, joint
venture or other business form other than a corporation, the equity interests
therein shall not be directly owned by the Company (but shall be owned by a
Wholly-Owned Subsidiary thereof as referenced above in this clause (z)).
(c) The Company will not, and will not permit any of its Subsidiaries
or Joint Ventures to, establish, create or acquire any Unrestricted Subsidiary,
except that any Wholly-Owned Domestic Subsidiary of the Company referenced in
following clause (z) may establish, create or acquire Unrestricted Subsidiaries
solely in connection with Investments permitted by Section 10.05(xii) from time
to time, in each case so long as (w) no Default or Event of Default exists at
the time of the establishment, creation or acquisition of the respective
Unrestricted Subsidiary or shall exist immediately after giving effect thereto,
(x) all Investments therein (including as a result of the designation thereof
as provided in the definition of Unrestricted Subsidiary) are permitted
pursuant to Section 10.05(xii), (y) all equity interests in each Unrestricted
Subsidiary are owned directly by a Wholly-Owned Domestic Subsidiary of the
Company which engages in no business or activities other than the holding of
ownership interests in one or more Unrestricted Subsidiaries and all equity
interests therein are pledged pursuant to (and to the extent required by) the
Pledge Agreement and (z) each such Unrestricted Subsidiary enters into, or
becomes a party to, an Unrestricted Subsidiary Tax Sharing Agreement on terms
and conditions satisfactory to the Required Banks.
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SECTION 11. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
11.01 Payments. The Company shall (i) default in the payment when due
of any principal of any Loan or any Note, (ii) default in the payment of any
Unpaid Drawing for three or more Business Days after the date the respective
Drawing was made or, if no Default or Event of Default exists pursuant to
Section 11.05 for three or more Business Days after the receipt by the Company
of notice of the respective Drawing by the Administrative Agent or the Issuing
Bank or (iii) default, and such default shall continue unremedied for three or
more Business Days, in the payment when due of any interest on any Loan or Note
or Unpaid Drawing, or any Fees or any other amounts owing hereunder or under
any other Credit Document; or
11.02 Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
11.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 9.11 or Section 10 or (ii) default in the due performance or observance
by it of any other term, covenant or agreement contained in this Agreement and
such default shall continue unremedied for a period of 30 days after written
notice to the Company by the Administrative Agent or any Bank; or
11.04 Default Under Other Agreements. (i) The Company or any of its
Subsidiaries or Material Joint Ventures shall (x) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (y) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations) or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (determined without regard to whether any notice is
required), any such Indebtedness to become due prior to its stated maturity, or
(ii) any Indebtedness (other than the Obligations) of the Company or any of its
Subsidiaries or Material Joint Ventures 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 provided
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that it shall not be a Default or an Event of Default under this Section 11.04
unless the aggregate principal amount of all Indebtedness as described in
preceding clauses (i) and (ii) is at least $1,000,000; or
11.05 Bankruptcy, etc. The Company or any of its Subsidiaries or
Material Joint Ventures shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter
in effect, or any successor thereto (the "Bankruptcy Code"), or an involuntary
case is commenced against the Company or any of its Subsidiaries or any such
Material Joint Ventures and the petition is not controverted within 10 days, or
is not dismissed within 60 days, after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge of, all
or substantially all of the property of the Company or any of its Subsidiaries
or any such Material Joint Ventures or the Company or any of its Subsidiaries
or any such Material Joint Ventures commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or any of its
Subsidiaries or any such Material Joint Ventures, or there is commenced against
the Company or any of its Subsidiaries or any such Material Joint Ventures any
such proceeding which remains undismissed for a period of 60 days, or the
Company or any of its Subsidiaries or any such Material Joint Ventures is
adjudicated insolvent or bankrupt, or any order of relief or other order
approving any such case or proceeding is entered and is not vacated or stayed
within 60 days, or the Company or any of its Subsidiaries or any such Material
Joint Ventures suffers any appointment of any custodian or the like for it or
any substantial part of its property to continue undischarged or unstayed for a
period of 60 days, or the Company or any of its Subsidiaries or any such
Material Joint Ventures makes a general assignment for the benefit of
creditors, or any partnership and/or corporate action is taken by the Company
or any of its Subsidiaries or any such Material Joint Ventures for the purpose
of effecting any of the foregoing; or
11.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code, any Plan shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan is, shall have been or is likely to
be terminated or to be the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability a contribution required to be
made to a Plan or a Foreign Pension Plan has not been timely made, the Company
or any Subsidiary of the Company or any ERISA Affiliate has incurred or
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is likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code, or the Company or any of
its Subsidiaries has incurred or is likely to incur liabilities pursuant to one
or more employee welfare benefit plans (as defined in Section 3(1) of ERISA)
that provide benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or employee pension benefit plans (as
defined in Section 3(2) of ERISA) or Foreign Pension Plans; (b) there shall
result from any such event or events the imposition of a lien, the granting of
a security interest, or a liability or a material risk of incurring a
liability; (c) which lien, security interest or liability, individually and/or
in the aggregate, in the opinion of the Required Banks, could reasonably be
expected to have a material adverse effect upon the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Company or the Company and its Subsidiaries
taken as a whole; or
11.07 Security Documents. Any Security Document shall cease to be in
full force and effect, or shall cease to give the Collateral Agent for the
benefit of the Secured Creditors, the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral), in favor of the
Collateral Agent superior to and prior to the rights of all third Persons, and
subject to no other Liens, or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to such Security Document and such default shall
continue beyond any grace period specifically applicable thereto pursuant to
the terms of such Security Document; or
11.08 Guaranty. Any Guaranty shall cease to be in full force or
effect as to the relevant Guarantor, or any Guarantor or Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under the relevant Guaranty, or any Guarantor Event of Default shall occur, or
at any time the Maximum Guaranteed Amount for any reason whatsoever shall be
less than an amount equal to the remainder of (x) $75,000,000 less (y) the
aggregate amount of cash actually loaned by HFS to the Company after the
Initial Borrowing Date pursuant to Section 10.04(vii) and/or invested by HFS in
the Company pursuant to Qualified Equity Investments as described in the
definition thereof contained herein, so long as all such cash loaned or
invested was actually used by the Company to repay the principal of Loans
pursuant to the requirements of Section 4.02(a) (as a result of a reduction to
the Total Revolving Loan Commitment pursuant to Sections 3.03(e) and (f)); or
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11.09 HFS Subordination Agreement. The HFS Subordination Agreement
shall cease to be in full force or effect for any reason, or HFS or any Person
acting by or on behalf of HFS shall deny or disaffirm HFS's obligations
thereunder or HFS shall default, and such default shall continue unremedied for
a period of 10 days after written notice to HFS by the Administrative Agent or
any Bank, in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant thereto; or
11.10 Judgments. One or more judgments or decrees shall be entered
against the Company or any of its Subsidiaries or Material Joint Ventures
involving in the aggregate for the Company and its Subsidiaries and any such
Material Joint Ventures a liability (not fully covered by a reputable and
solvent insurance company or not paid) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 60 consecutive days, and the
aggregate amount of all such judgments exceeds $1,000,000; or
11.11 HFS Franchise Agreements, etc. (i) Any Franchise Agreement
shall be terminated or any event or condition shall exist which would enable
any party to such Franchise Agreement to terminate or suspend its obligations
thereunder or (ii) at any time any Hotel Property shall be operated as other
than a "Travelodge", "Thriftlodge" or any other nationally recognized hotel
brand which the Chairman of the Board of Directors and the chief financial
officer of the Company (in a certificate signed by them delivered to the
Agents) have determined to be in the best interests of the Company, provided
that (A) a Hotel Property shall not be deemed to be subject to the events
described in preceding clause (i) or (ii) if the respective Hotel Property, in
the ordinary course of business and with the approval of the Board of Directors
of the Company (or an authorized committee of such Board), is being changed to
another nationally recognized hotel brand, and in connection with the
change-over, the respective Hotel Property is for a period, in no event to
exceed 90 days, operating other than under a nationally recognized hotel brand
and (B) it shall not be a Default or an Event of Default under clause (i) or
(ii) of this Section 11.11 so long as all Hotel Properties subject to any of
the events described above in this Section 11.11 (after giving effect to
preceding clause (A)) at any time do not represent either more than 10% of the
total assets of the Company and its Subsidiaries (after reduction for minority
interests) as of the last day of the most recently ended fiscal quarter of the
Company or more than 10% of the Total Hotel Revenues of the Company and its
Subsidiaries (after reduction for minority interests) for the Test Period then
most recently ended; or
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11.12 Total Unrestricted Subsidiary Leverage Ratio. The Total
Unrestricted Subsidiary Leverage Ratio at any time is greater than 5.00: 1.00;
or
11.13 Unrestricted Subsidiary Tax Payments. Any Unrestricted
Subsidiary of the Company shall not pay any amounts owing by it under any
Unrestricted Subsidiary Tax Sharing Agreement to which it is a party and such
failure shall continue unremedied for 10 or more days;
Then, and in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Banks, shall by written notice to the Company, take any
or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Bank or the holder of any Note to enforce its claims
against any Credit Party (provided, that, if an Event of Default specified in
Section 11.05 shall occur with respect to a Borrower or if a Guarantor Event of
Default specified in Section 14(d) of the HFS Guaranty shall occur with respect
to HFS, the result which would occur upon the giving of written notice by the
Administrative Agent to the Company as specified in clauses (i) and (ii) below
shall occur automatically without the giving of any such notice): (i) declare
the Total Revolving Loan Commitment terminated, whereupon the Revolving Loan
Commitment and Revolving C$ Loan Commitment of each Bank shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and the Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit, which may be terminated, in accordance with its
terms; (iv) direct the Company to pay (and the Company agrees that upon receipt
of such notice, or upon the occurrence of an Event of Default specified in
Section 11.05 with respect to the Company, it will pay) to the Collateral Agent
at the Payment Office such additional amount of cash, to be held as security by
the Collateral Agent, as is equal to the aggregate Stated Amount of all Letters
of Credit issued for the account of the Company and then outstanding; (v)
enforce, as Collateral Agent, all of the Liens and security interests created
pursuant to the Pledge Agreement; and (vi) take any of the actions specified in
clause (ii) of the proviso to Sections 1.06(a) and (b) or in clause (v) of the
proviso to Section 1.09.
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SECTION 12. Definitions and Accounting Terms.
12.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled
"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any week,
the weekly average offering rate determined by the Administrative Agent on the
basis of quotations for such certificates received by it from three certificate
of deposit dealers in New York of recognized standing or, if such quotations
are unavailable, then on the basis of other sources reasonably selected by the
Administrative Agent, by (y) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements as specified in Regulation D
applicable on such day to a three-month certificate of deposit of a member bank
of the Federal Reserve System in excess of $100,000 (including, without
limitation, any marginal, emergency, supplemental, special or other reserves),
plus (2) the then daily net annual assessment rate as estimated by the
Administrative Agent for determining the current annual assessment payable by
the Administrative Agent to the Federal Deposit Insurance Corporation for
insuring three-month certificates of deposit.
"Adjusted Consolidated Company EBITDA" for any period shall mean
Adjusted Consolidated EBITDA of the Company for such period, provided that in
determining Consolidated EBITDA (as required pursuant to the definition of
Adjusted Consolidated EBITDA) of the Company for such period, Consolidated
Company Net Income (and not Consolidated Net Income) shall be used, with the
term "Consolidated Company Net Income" being deemed inserted in lieu of the
term "Consolidated Net Income" in each place such term is used in the
definition of Consolidated EBITDA contained herein.
"Adjusted Consolidated EBITDA" any Person for any period shall mean
Consolidated EBITDA of such Person for such period, but without giving effect
to any gains or losses from sales of assets other than inventory in the
ordinary course of business.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom
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all cash and Cash Equivalents) less Consolidated Current Liabilities at such
time.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non- Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments, the Adjusted Total Revolving Loan
Commitment and the Adjusted Total Revolving C$ Loan Commitment at a time when
the Total Revolving Loan Commitment, Adjusted Total Revolving Loan Commitment
or the Adjusted Total Revolving C$ Loan Commitment, as the case may be, has
been terminated shall be references to the Revolving Loan Commitments, Adjusted
Total Revolving Loan Commitment or the Adjusted Total Revolving C$ Loan
Commitment, as the case may be, in effect immediately prior to such
termination, provided that (A) no Bank's Adjusted Percentage shall change upon
the occurrence of a Bank Default from that in effect immediately prior to such
Bank Default if after giving effect to such Bank Default, and any repayment of
Loans at such time pursuant to Section 4.02(a) or otherwise, the sum of (i) the
Dollar Equivalent Amount of the aggregate outstanding principal amount of Loans
of all Non- Defaulting Banks plus (ii) the Letter of Credit Outstandings,
exceeds the Adjusted Total Revolving Loan Commitment; (B) the changes to the
Adjusted Percentage that would have become effective upon the occurrence of a
Bank Default but that did not become effective as a result of the preceding
clause (A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (i) the Dollar Equivalent Amount of
the aggregate outstanding principal amount of the Loans of all Non-Defaulting
Banks plus (ii) the Letter of Credit Outstandings is equal to or less than the
Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting
Bank's Adjusted Percentage is changed pursuant to the preceding clause (B) and
(ii) any repayment of such Bank's Loans, or of Unpaid Drawings with respect to
Letters of Credit, that were made during the period commencing after the date
of the relevant Bank Default and ending on the date of such change to its
Adjusted Percentage must be returned to the Company or the Canadian Borrower,
as the case may be, as a preferential or similar payment in any bankruptcy or
similar proceeding of the Company or the Canadian Borrower, as the case may be,
then the change to such Non- Defaulting Bank's Adjusted Percentage effected
pursuant to said clause (B) shall be reduced to that positive change, if any,
as would have been made to its Adjusted Percentage if (x) such repayments had
not been made and (y) the maximum change to its Adjusted Percentage would have
resulted in the sum of the Dollar Equivalent Amount of the outstanding
principal of Loans made by
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such Bank plus such Bank's new Adjusted Percentage of Letter of Credit
Outstandings equalling such Bank's Revolving Loan Commitment at such time.
"Adjusted Total Revolving C$ Loan Commitment" shall mean, at any
time, the Total Revolving C$ Loan Commitment at such time less the aggregate
Revolving C$ Loan Commitments of all Defaulting Banks at such time.
"Adjusted Total Revolving Loan Commitment" shall mean, at any time,
the Total Revolving Loan Commitment at such time less the aggregate Revolving
Loan Commitments of all Defaulting Banks at such time.
"Administrative Agent" shall mean The Chase Manhattan Bank, in its
capacity as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 13.09.
"Affiliate" shall mean, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors, officers and partners of such Person) controlled by, or under direct
or indirect common control with such Person or (ii) that directly or indirectly
owns more than 5% of any class of the voting securities or capital stock of or
equity interests in such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly the power to direct or
cause the direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract or otherwise.
Notwithstanding anything to the contrary contained above, for all purposes of
this Agreement, HFS and its Subsidiaries and Affiliates shall be deemed to be
Affiliates of the Company and its Subsidiaries.
"Agent" shall mean and include the Administrative Agent, the
Collateral Agent and the Syndication Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed, refinanced or replaced from
time to time.
"Allocable Share" shall mean, with respect to any Joint Venture and
non-Wholly-Owned Subsidiary and event or circumstance under this Agreement that
requires the determination thereof, that percentage of such Joint Venture's or
non-Wholly-Owned Subsidiary's equity interests that are owned (directly or
indirectly) by the Company.
"Applicable Margin" shall mean on any day with respect to any (i) $
Eurodollar Loan, (ii) Commitment Fee or (iii) C$
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Eurodollar Loan, the applicable margin set forth below under the respective
captions "$ Eurodollar Margin", "Commitment Fee" or "C$ Eurodollar Margin", as
applicable:
$ C$
Total Eurodollar Commitment Eurodollar
Outstandings Margin Fee Margin
Equal or
less than
$75 million 0.400% 0.200% 0.400%
Equal or
less than
$85 million 0.500% 0.200% 0.500%
Equal or
less than
$95 million 0.600% 0.250% 0.600%
Equal or
less than
$105 million 0.650% 0.250% 0.650%
Equal or
less than
$115 million 0.700% 0.300% 0.700%
Equal or
less than
$125 million 0.750% 0.300% 0.750%
Equal or
less than
$150 million 0.875% 0.375% 0.875%
Notwithstanding anything to the contrary contained in this definition:
(a) the Applicable Margin shall be increased by .25% per annum on
that portion of the Total Outstandings which exceeds the Guaranty Amount
if the Consolidated Interest Coverage Ratio for any Test Period ended on
the last day of a fiscal quarter is less than 3.0 to 1.0, any such
increase to be effective on the date of delivery of the Company's
financial statements under Section 9.01(b) or (c), as the case may be, and
the related officer's certificate under Section 9.01(e) and to remain
effective until the date of delivery of the Company's financial statements
under Section 9.01(b) or (c) and the related officer's certificate under
Section 9.01(e) for the next fiscal period (it being agreed that (i) the
Applicable Margins shall not be increased by more than .25% per annum at
any time pursuant to this paragraph (a) and the Applicable Margin on that
portion of
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the Total Outstandings which exceeds the Guaranty Amount shall
automatically be increased by .25% per annum on the date that the Company
is required and fails to deliver its financial statements and related
officer's certificate for any fiscal period pursuant to Sections 9.01(b),
(c) and (e) until such statements and certificates are delivered and (ii)
the specific Loans and Letters of Credit to which such increased
Applicable Margin shall apply shall be determined by the Administrative
Agent in its sole discretion);
(b) the Applicable Margin shall be increased by the per annum
percentage, if any, by which applicable margin for eurodollar loans under
HFS's primary bank credit agreement exceeds or would exceed .40% per
annum; and
(c) to the extent that the Applicable Margin for Eurodollar Loans
exceeds 1.00%, the Applicable Margin for $ Base Rate Loans shall be such
Applicable Margin for $ Eurodollar Loans less 1.00%
"Approved Bank" shall have the meaning provided in the definition of
"Cash Equivalents."
"Asset Sale" shall mean (i) any Recovery Event or (ii) any sale,
transfer or other disposition by the Company or any of its Subsidiaries or
Joint Ventures to any Person other than the Company or a Wholly-Owned
Subsidiary of the Company of any asset (including, without limitation, any
capital stock or other securities of another Person) of the Company or any of
its Subsidiaries or Joint Ventures other than (x) any sale, transfer or
disposition permitted by Sections 10.02(v) and (xii) and (y) any sale, transfer
or disposition where the fair market value of the consideration therefor is
less than or equal to $100,000.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Authorized Financial Officer" of any Credit Party shall mean any of
the Chief Financial Officer, the Treasurer or the Chief Accounting Officer of
such Credit Party.
"Authorized Officer" of any Credit Party shall mean any of the
President, any Authorized Financial Officer or any Vice- President of such
Credit Party or any other officer of such Credit Party which is designated in
writing to the Administrative Agent by any of the foregoing officers of such
Credit Party as being authorized to give such notices under this Agreement.
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"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to Section
14.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing in
violation of this Agreement or (ii) a Bank having notified in writing the
Company and/or the Administrative Agent that it does not intend to comply with
its obligations under Section 1.01 or 2.04 including, without limitation, as a
result of any takeover of such Bank by any regulatory authority or agency.
"Bank of America Facility" shall mean the credit facilities made
available by Bank of America National Trust & Savings Association to Joint
Ventures of FHI pursuant to the terms of that certain Letter Loan Agreement,
dated June 17, 1994, among Bank of America National Trust & Savings
Association, FHI, Forte (U.K.), Limited Forte Plc and certain affiliates
thereof, as in effect on the Initial Borrowing Date.
"Bank Termination Date" shall mean that date occurring after the
Effective Date upon which the Total Revolving Loan Commitment and all Letters
of Credit shall have terminated and all Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full to the Banks; provided that if any amount so
received by the Banks must be disgorged by them, then the Bank Termination Date
shall be deemed to have not occurred until such future time as the foregoing
conditions are once again satisfied.
"Bankruptcy Code" shall have the meaning provided in Section 11.05.
"Base Rate" at any time shall mean the highest of (i) the rate which
is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of
1% in excess of Federal Funds Rate and (iii) the Prime Lending Rate.
"BNS" shall mean The Bank of Nova Scotia in its individual capacity.
"Borrower" shall mean each of the Company and the Canadian Borrower.
"Borrowing" shall mean (i) the borrowing of one Type of Revolving
Loan from all the Banks on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans of such Type
the same Interest Period, provided that $ Base Rate Loans or Revolving C$ Loans
made at an
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alternate rate of interest incurred pursuant to Section 1.10(b) shall be
considered part of the related Borrowing of Eurodollar Loans and (ii) the
borrowing of a Swingline Loan.
"Business Day" shall mean (i) for all purposes other than as covered
by clauses (ii) and (iii) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close, (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in the New York interbank Eurodollar market and (iii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Revolving C$ Loans, any day which is a Business Day
described in clauses (i) and (ii) above and which is not a Saturday, Sunday or
other day which shall be in Toronto, Ontario a legal holding or a day on which
banking institutions are authorized or required by law or other government
actions to close.
"Calculation Period" shall mean the period of four consecutive fiscal
quarters last ended before the date of the respective Permitted Hotel
Acquisition or incurrence of Permitted Subordinated Indebtedness which requires
calculations to be made on a Pro Forma Basis.
"Canadian Acquired Assets" shall mean the property purchased by the
Canadian Borrower under the Canadian Acquisition Documents, generally
consisting of 20 hotels and a 50% interest in another hotel, all operating
under the "Travelodge" franchise, and related assets.
"Canadian Acquisition" shall mean the purchase by the Canadian
Borrower of the Canadian Acquired Assets pursuant to the Canadian Acquisition
Documents.
"Canadian Acquisition Documents" shall mean the collective reference
to the (i) the Contract of Sale dated as of July 16, 1996 among CPLP, as
seller, the Canadian Borrower, as purchaser, and certain others and (ii) all
other documents entered into or delivered in connection with the Canadian
Acquisition.
"Canadian Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Canadian Borrowing Date" shall mean the first date on which the
Canadian Borrower is entitled to borrow or have a Letter of Credit issued for
its account under this Agreement,
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which shall be the date on which the Canadian Acquisition is consummated and
the conditions therefor set forth in Section 6 are satisfied.
"Canadian Dollars" and the sign "C$" shall each mean freely
transferable lawful money of Canada.
"C$ Eurodollar Loans" shall mean Eurodollar Loans denominated in
Canadian Dollars.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and the amount of Capitalized Lease
Obligations incurred by such Person.
"Capital Stock" of any Person means all shares, interests,
participations, partnership interests or other equivalents (however designated)
of such Persons' capital stock or other equity interests.
"Capitalized Interest" shall mean interest that is capitalized and is
not counted as interest expense in accordance with GAAP.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken
at the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Bank or
(y) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent
thereof (any such bank or Bank, an "Approved Bank"), in each case with
maturities of not more than six months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at
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least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within six
months after the date of acquisition, (iv) marketable direct obligations issued
by any state of the United States of America or any political subdivision of
any such state or any public instrumentality thereof maturing within six months
from the date of acquisition thereof and, at the time of acquisition, having
one of the two highest ratings obtainable from either S&P or Moody's and (v)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred
payment, pursuant to a note, receivable or otherwise, in connection with such
Asset Sale, but only as and when so received) received by the Company or any of
its Subsidiaries or Joint Ventures from such Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. Sec. 9601 et seq.
"Change of Control" shall mean (i) the direct or indirect acquisition
by any Person or a group (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act), other than (x) HFS and its Subsidiaries and/or (y)
Chartwell and/or (z) FSNL (collectively, the "Designated Persons"), of
beneficial ownership (as such term is defined in Rule 13D-3 promulgated under
the Securities Exchange Act), of more of the outstanding shares of common stock
of the Company (on a fully diluted basis) than is collectively beneficially
owned by the Designated Persons or (ii) the Board of Directors of the Company
shall not consist of a majority of Continuing Directors or (iii) prior to the
date of the first widely distributed primary public offering by the Company of
its nonredeemable common stock after the Initial Borrowing Date (the "Public
Offering Date"), the Designated Persons collectively shall fail to have
beneficial ownership of shares representing at least a majority of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Company or (iv) after the Public Offering Date, the
Designated Persons collectively shall fail to have beneficial ownership of
shares representing at least 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Company or (v)
Chartwell or FSNL shall sell or dispose of any common stock of the Company or
convert any common stock of the Company into any other class of Capital Stock.
For purposes of this definition of "Change of
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Control", shares of common stock of the Company shall be deemed to be
beneficially owned by Chartwell and/or FSNL only if Chartwell effectively has
sole voting control of such shares (or FSNL is required to vote its shares in
the same way that Chartwell votes its shares).
"Chartwell" shall mean Chartwell Leisure Associates, L.P., any other
partnership controlled by one or more of the existing partners of Chartwell
Leisure Associates, L.P. on the Initial Borrowing Date, Chartwell Leisure
Associates ▇.▇. ▇▇ or any Affiliate thereof or other investors therein in each
case reasonably acceptable to the Administrative Agent.
"Chartwell Preferred Stock" shall mean the class of the Company's
preferred stock issued to Chartwell satisfying the applicable requirements of
Section 10.04(ix) and containing such other terms as are reasonably acceptable
to the Administrative Agent.
"Chartwell Preferred Stock/Subordinated Debt" shall mean, as the
context may require, the Chartwell Preferred Stock and/or the Chartwell
Subordinated Debt.
"Chartwell Stock Purchase Agreement" shall mean the Amended and
Restated Stock Purchase Agreement dated as of March 14, 1996 among the Company
and the purchasers named therein.
"Chartwell Subordinated Debt" shall mean the subordinated debt of the
Company issued upon conversion of any outstanding shares of Chartwell Preferred
Stock in accordance with the terms thereof, it being understood and agreed,
however, that (i) the Chartwell Preferred Stock may not be so converted (and
shall expressly provide that no such conversion shall be effective) without the
prior written consent of the Required Banks (which consent may be granted or
withheld by the Banks in their sole discretion), (ii) the Chartwell
Subordinated Debt shall satisfy the applicable requirements of Section
10.04(ix) and (iii) all terms and conditions of the Chartwell Subordinated Debt
shall be required to be satisfactory in form and substance to the Required
Banks.
"Chase" shall mean The Chase Manhattan Bank in its individual
capacity.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and ruling issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement, and to any
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subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to the Pledge Agreement or the Security Agreement.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Pledge Agreement.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Commitments" shall mean the collective reference to the Revolving
Loan Commitments, the Revolving C$ Loan Commitments and the Swingline
Commitment.
"Company" shall have the meaning provided in the first paragraph of
this Agreement.
"Company Guaranty" shall have the meaning specified in Section 5.08.
"Consolidated Company Net Income" shall mean, for any period, the net
income (or loss) of the Company and its Subsidiaries for such period,
determined on a consolidated basis; provided that (i) the net income (if
positive) for such period of any other Person which is not a Wholly-Owned
Subsidiary of the Company or is accounted for by the Company by the equity
method of accounting shall be included only to the extent of the amount of
dividends or distributions actually paid by such Person during such period to
the Company or a Wholly-Owned Subsidiary of the Company (provided that any such
payments made in January 1997 shall, for purposes of this Agreement, be treated
as though made in December 1996), (ii) the net income (or loss) of any other
Person acquired by the Company or a Subsidiary of the Company in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, (iii) Consolidated Net Income shall, without duplication, be
reduced by the aggregate amount of fees and payments by the Company or its
Subsidiaries pursuant to Section 10.06(iii), (v), (vii), (ix), (x) and (xi),
but shall not be reduced by any other fees paid by the Company and its
Subsidiaries to HFS as otherwise permitted by this Agreement and (iv) the net
income of each Unrestricted Subsidiary shall be wholly excluded.
"Consolidated Current Assets" shall mean, at any time, the amounts
that would be classified as consolidated current assets of the Company and its
Subsidiaries in accordance with
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generally accepted accounting principles in a consolidated balance sheet.
"Consolidated Current Liabilities" shall mean, at any time, the
amounts that would be classified as consolidated current liabilities of the
Company and its Subsidiaries at such time in accordance with generally accepted
accounting principles in a consolidated balance sheet, but excluding the
current portion of any Indebtedness under this Agreement and the current
portion of any other long-term Indebtedness which would otherwise be included
therein.
"Consolidated Current Ratio" at any date shall mean the ratio of
Consolidated Current Assets to Consolidated Current Liabilities of such date,
provided, however, any non-cash write- offs with respect to, and any losses
from the disposition of, the Gaming Assets shall be excluded in determining the
Consolidated Current Ratio.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Company and its Wholly-Owned Subsidiaries plus, without duplication, the
Company's Allocable Share of any Indebtedness of a Joint Venture, in either
case as would be required to be reflected on the liability side of a balance
sheet as prepared in accordance with generally accepted accounting principles
and as determined on a consolidated basis, but including, in any event, (w) the
Guaranty Inclusion Amount, (x) all Loans and Letters of Credit, (y) the
aggregate amount of Indebtedness then outstanding as evidenced by Redeemable
Capital Stock (including any such Redeemable Capital Stock issued in accordance
with Section 10.04(viii)) and (z) the amount of outstanding HFS Subordinated
Indebtedness and Permitted Subordinated Indebtedness, if any, provided that,
notwithstanding the foregoing, the term Consolidated Debt shall exclude all
outstanding Chartwell Preferred Stock/Subordinated Debt and up to $2,000,000
per year of the Company's guaranty obligations in respect of the Las Vegas
Lease permitted by Section 10.04(xv).
"Consolidated EBITDA" shall mean, for any Person and period, (A) the
sum of the amounts for such Person and period of (i) Consolidated Net Income,
(ii) consolidated interest expense of such Person for such period, to the
extent same reduced Consolidated Net Income for such period, (iii) provisions
for taxes based on income, to the extent same reduced Consolidated Net Income
for such period, (iv) depreciation expense, to the extent same reduced
Consolidated Net Income for such period, (v) amortization expense, to the
extent same reduced Consolidated Net Income for such period, (vi) any other
non-cash items reducing the Consolidated Net Income of such Person for such
period, and (vii) any cash receipts of such Person or a Wholly-Owned Subsidiary
of such Person during such period that represent items
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included in Consolidated Net Income of such Person for a prior period which
were excluded from Consolidated EBITDA of such Person for such prior period by
virtue of clause (B)(i) of this definition, minus (B) the sum of (i) all
non-cash items increasing the Consolidated Net Income of such Person for such
period and (ii) any cash expenditures of such Person during such period to the
extent such cash expenditures (x) did not reduce the Consolidated Net Income of
such Person for such period and (y) were applied against reserves that
constituted non-cash items which reduced the Consolidated Net Income of such
Person during prior periods, all as determined on a consolidated basis for such
Person and its Subsidiaries in accordance with GAAP, provided, however, any
non-cash write-offs with respect to, and any losses from the disposition of,
the Gaming Assets shall be excluded in determining Consolidated EBITDA.
"Consolidated Interest Coverage Ratio" shall mean, for any period,
the ratio of (x) Adjusted Consolidated EBITDA of the Company for such period to
(y) Consolidated Interest Expense of the Company for such period, provided,
however that (i) for the purposes of calculating the Consolidated Interest
Coverage Ratio for the Test Period ending on (a) March 31, 1997, Adjusted
Consolidated EBITDA of the Company shall be the Adjusted Consolidated EBITDA of
the Company for such Test Period divided by 85% and (b) June 30, 1997, Adjusted
Consolidated EBITDA of the Company shall be the Adjusted Consolidated EBITDA of
the Company for such Test Period divided by 95% and (ii) any non-cash write-
offs with respect to, and any losses from the disposition of, the Gaming Assets
shall be excluded in determining the Consolidated Interest Coverage Ratio.
"Consolidated Interest Expense" shall mean, for any Person and
period, the total consolidated interest expense of such Person and its
Wholly-Owned Subsidiaries and the Allocable Share of the interest expense of
such Person's non-Wholly-Owned Subsidiaries and Joint Ventures for such period
(calculated without regard to any limitations on the payment thereof) plus,
without duplication, that portion of Capitalized Lease Obligations of such
Person and its Wholly-Owned Subsidiaries representing the interest factor for
such period and the Allocable Share of that portion of Capitalized Lease
Obligations of such Person's non-Wholly-Owned Subsidiaries and Joint Ventures
representing the interest factor for such period, but excluding the
amortization of any deferred financing costs incurred in connection with this
Agreement, less interest income of such Person and its Wholly-Owned
Subsidiaries and the Allocable Share of the interest income of such Person's
non-Wholly-Owned Subsidiaries and Joint Ventures for such period.
Notwithstanding anything to the contrary contained elsewhere in this Agreement
or the requirements of generally accepted accounting principles, in calculating
Consolidated Interest Expense of the Company, (v) the
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amount of Capitalized Interest incurred during any period shall be added as a
component of Consolidated Interest Expense, (w) the amount of the Guaranty Fee
paid or accrued during any period shall be added as a component of Consolidated
Interest Expense, (x) accrued dividends on any Redeemable Capital Stock
(excluding accrued dividends on the Chartwell Preferred Stock) shall be added
as a component of Consolidated Interest Expense, and (y) the interest expense
on the Chartwell Subordinated Debt shall be excluded.
"Consolidated Net Income" shall mean, for any Person and period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis; provided that (i) in determining
Consolidated Net Income of the Company, the net income of any other Person
which is not a Wholly-Owned Subsidiary of the Person or is accounted for by
such specified Person by the equity method of accounting shall be included only
to the extent of the Company's direct or indirect equity interests in such net
income (taking the Company's direct or indirect distributable share thereof),
in each case reduced to the extent that the declaration or payment of dividends
or distributions by such other Person during such period is not at the time
permitted by operation of the terms of its charter or any other agreement or
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such other Person or requires the consent of any other Person
other than the specified Person as a Wholly-Owned Subsidiary thereof, (ii) the
net income (or loss) of any other Person acquired by such specified Person or a
Subsidiary of such Person in a pooling of interests transaction for any period
prior to the date of such acquisition shall be excluded, (iii) Consolidated Net
Income of the Company shall, without duplication, be reduced by the aggregate
amount of fees and payments by the Company or its Subsidiaries pursuant to
Sections 10.06(iii), (v), (vii), (ix), (x) and (xi), but shall not be reduced
by any other fees paid by the Company and its Subsidiaries to HFS as otherwise
permitted by this Agreement and (iv) in determining Consolidated Net Income of
the Company. the net income of each Unrestricted Subsidiary shall be wholly
excluded.
"Consolidated Net Worth" shall mean, at any time, all items which
would be included under shareholders' equity on a consolidated balance sheet of
the Company in accordance with generally accepted accounting principles,
provided, however, any non-cash write-offs with respect to the Gaming Assets
shall be excluded in determining Consolidated Net Worth.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general
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partner, and any obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any obligation
of such Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (x) for the purchase or payment of any such
primary obligation or (y) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of the Company on the
Effective Date and each other director, if such other director's nomination for
election to the Board of Directors of the Company is recommended by a majority
of the then Continuing Directors or is recommended by a committee of the Board
of Directors a majority of which is composed of the then Continuing Directors.
"Corporate Services Agreement" shall mean the Amended and Restated
Corporate Services Agreement, dated as of January 24, 1996, between the Company
and HFS.
"Corporate Services Fee" shall mean an annual fee equal to $1,500,000
which Corporate Services Fee shall be payable on a quarterly basis in advance
of the services to be performed.
"CPLP" shall mean Capital Partners Limited Partnership, a limited
partnership formed under the laws of the Province of Ontario.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, the
Pledge Agreement, the Security Agreement, each Guaranty and the HFS
Subordination Agreement.
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"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean HFS, the Borrowers, and each Subsidiary
Guarantor.
"Cumulative Retained Residual Excess Cash Flow Amount" shall
initially be $0, provided that the Cumulative Retained Residual Excess Cash
Flow Amount shall be (i) increased on each April 15, commencing April 15, 1998,
by an amount equal to 50% of the Residual Excess Cash Flow for the immediately
preceding fiscal year (or if Residual Excess Cash Flow is a negative amount for
such fiscal year, the Cumulative Retained Residual Excess Cash Flow Amount
shall be reduced by 100% of such amount) and (ii) reduced, on each date upon
which (x) any Restricted Payment is made pursuant to Section 10.03(vi), by the
amount of such Restricted Payment and (y) any Capital Expenditures are made
pursuant to Section 10.07(c), by the amount of such Capital Expenditure.
"Cumulative Unrestricted Subsidiary Dividend Amount" shall mean, at
any time, the aggregate amount of cash dividends or distributions received by
the Company or a Wholly-Owned Subsidiary thereof from all Unrestricted
Subsidiaries (other than any such dividends or distributions the proceeds of
which are to pay any such Unrestricted Subsidiary's portion of any taxes
payable by the Company or a Wholly-Owned Subsidiary thereof), with the
Cumulative Unrestricted Subsidiary Dividend Amount to be reduced on each date
on which, and in the amount by which, the Company makes a Restricted Payment
pursuant to Section 10.03(vii).
"Currency" shall mean the collective reference to Dollars and
Canadian Dollars.
"Current Consolidated Tax Rate" means, with respect to any Person for
any period, the combined highest marginal U.S. federal, state and local income
tax rate (calculated by (i) taking into account the deductibility of state and
local income taxes for U.S. federal income tax purposes and (ii) using the
highest marginal state income tax rate imposed by any state in which the
Company is doing business) during such period on any incremental ordinary
income (i.e., income in excess of the income generated by such Person during
the respective period) of such Person.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
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"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividends" with respect to any Person shall mean that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of such Person) or cash to its
stockholders or partners as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class
of its capital stock or any partnership interests outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect
to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership interests of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect
to its capital stock). Without limiting the foregoing, "Dividends" with respect
to any Person shall also include all payments made or required to be made by
such Person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes, in each case except to the extent the
payments described in this sentence are booked as an expense which reduces
Consolidated Net Income.
"Documents" shall mean the Credit Documents, the Canadian Acquisition
Documents and the Recapitalization Documents.
"$ Base Rate Loan" shall mean each Loan designated or deemed
designated as such by the Company at the time of the incurrence thereof or
conversion thereto, including each Swingline Loan.
"Dollar Equivalent Amount" shall mean with respect to (i) any amount
of Canadian Dollars on any date, the equivalent amount in Dollars of such
amount of Canadian Dollars, as determined by the Administrative Agent using the
Exchange Rate and (ii) any amount in Dollars, such amount.
"$ Eurodollar Loans" shall mean Eurodollar Loans denominated in
Dollars.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Drawing" shall have the meaning provided in Section 2.05.
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"Effective Date" shall have the meaning provided in Section 14.10.
"Eligible Transferee" shall mean, with respect to any Bank party to
this Agreement on the date hereof or that becomes a Bank pursuant to Sections
1.13 or 14.04, a commercial bank, financial institution or other "accredited
investor" as defined in Regulation D of the Securities Act.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations, orders or proceedings
relating in any way to any Environmental Law (hereafter "Claims") or any permit
issued under any such law, including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgement relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
Sec. 2601 et seq., the Clean Air Act, 42 U.S.C. Sec. 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Sec. 3803 et seq.; the Oil Pollution Act of 1990,
33 U.S.C. Sec. 2701 et seq., the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. Sec. 11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. Sec. 1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. Sec. 651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Company or Subsidiary of the Company or HFS
would be deemed to be a "single employer" (i) within the meaning of Section
414(b),(c), (m) or (o) of the Code or (ii) as a result of the Company, or a
Subsidiary of the Company or HFS being or having been a general partner of such
person.
"Eurodollar Loan" shall mean each Revolving Loan designated as such
by the applicable Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean, with respect to any Currency (a) the
offered quotation to first-class banks in the New York interbank Eurodollar
market by Chase for deposits of amounts of such Currency in immediately
available funds comparable to the outstanding principal amount of the
Eurodollar Loan of Chase with maturities comparable to the Interest Period
applicable to such Eurodollar Loan commencing two Business Days thereafter as
of 10:00 A.M. (New York time) on the date which is two Business Days prior to
the commencement of such Interest Period, divided (and rounded off to the
nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next highest
1/16 of 1%) by (b) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any
successor category of liabilities under Regulation D); provided, in the event
that the Administrative Agent has made any determination pursuant to Section
1.10(a)(i) in respect of Revolving C$ Loans, the Eurodollar Rate for Revolving
C$ Loans determined pursuant to clause (a) of this definition shall instead be
the rate determined by Chase as the all-in cost of funds for Chase to fund such
Revolving C$ Loan with maturities comparable to the Interest Period applicable
thereto.
"Event of Default" shall have the meaning provided in Section 11.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Adjusted Consolidated EBITDA of the Borrower for such period and
(ii) the decrease, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such period, minus (b) the sum of (i) the amount
of Capital Expenditures made by the Borrower and its Wholly-Owned Subsidiaries
during such period plus, without duplication, the Borrower's Allocable Share of
Capital Expenditures made by Joint Ventures during such period (but excluding
Capital Expenditures (x) financed with the proceeds of Indebtedness or equity
or with
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the proceeds of Asset Sales or (y) made pursuant to the last sentence of
Section 10.07(a) or pursuant to Section 10.07(b) or (c)), (ii) the aggregate
amount of permanent principal payments of Indebtedness for borrowed money of
the Borrower and its Wholly-Owned Subsidiaries (but excluding payments pursuant
to the Refinancing and repayments of Loans, provided that repayments of Loans
shall be deducted in determining Excess Cash Flow if such repayments were (A)
required as a result of a Scheduled Commitment Reduction under Section 3.03(b)
(but not as a reduction to the amount of Scheduled Commitment Reductions
pursuant to another provision of this Agreement) or (B) made as a voluntary
prepayment pursuant to Section 4.01(a) with internally generated funds during
such period (but only to the extent accompanied by a voluntary reduction to the
Total Revolving Loan Commitment pursuant to Section 3.02(a)), (iii) the amount
of Consolidated Interest Expense (excluding payments of dividends in respect of
Redeemable Capital Stock) actually paid in cash during such period, (iv) the
amount of cash taxes actually paid during such period (excluding cash taxes
which must be paid, or reimbursed to the Borrower or its Wholly-Owned
Subsidiaries, by one or more Unrestricted Subsidiaries, whether pursuant to the
Unrestricted Subsidiary Tax Sharing Agreements or otherwise) and (v) the
increase, if any, in Adjusted Consolidated Working Capital from the first day
to the last day of such period (excluding any increase attributable to the
receipt of proceeds of Capital Stock).
"Excess Termination Fees" shall mean, with respect to any HFS
Franchise Agreement entered into in connection with any Hotel Property existing
on the Initial Borrowing Date, any Termination Fee payable pursuant to such HFS
Franchise Agreement in excess of 2% of the total gross revenues for the
respective Hotel Property for the immediately preceding twelve month period in
respect of which such Termination Fee is paid. It is acknowledged and agreed
that Excess Termination Fees shall not be payable in connection with Hotel
Properties acquired after the Initial Borrowing Date, unless expressly
consented to by the Required Banks.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
"Exchange Rate" shall mean, with respect to Canadian Dollars on any
date, the rate at which such Canadian Dollars may be exchanged into Dollars, as
set forth on such date on the relevant Reuters currency page at or about 11:00
A.M. New York City time on such date. In the event that such rate does not
appear on any Reuters currency page, the "Exchange Rate" with respect to such
Canadian Dollars shall be determined by reference to such other publicly
available service for displaying exchange
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rates as may be agreed upon by the Administrative Agent and the Company or, in
the absence of such agreement, such "Exchange Rate" shall instead be the
Administrative Agent's spot rate of exchange in the interbank market where its
foreign currency exchange operations in respect of such Foreign Currency are
then being conducted, at or about 10:00 A.M., local time, at such date for the
purchase of Dollars with such Canadian Dollars, for delivery two Business Days
later; provided that if at the time of any such determination, no such spot
rate can reasonably be quoted, the Administrative Agent may use any reasonable
method as it deems applicable to determine such rate, and such determination
shall be conclusive absent manifest error (without prejudice to the
determination of the reasonableness of such method).
"Existing Indebtedness" shall have the meaning provided in Section
8.22.
"Existing Investment Agreements" shall mean all agreements
evidencing, or relating to, any Existing Investments (including all Joint
Ventures).
"Existing Investments" shall have the meaning provided in Section
10.05(vii).
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate 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 such day on
such transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"FHI" shall mean Forte Hotels, Inc., a Delaware corporation, which
has changed its name to NL Hotels, Inc.
"Final Maturity Date" shall mean August 28, 2002.
"Financing Agreement" shall mean the Amended and Restated Financing
Agreement, dated as of July 24, 1996, between the Company and HFS.
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"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Company or any one or
more of its Subsidiaries primarily for the benefit of employees of the Company
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Franchise Agreement" shall mean (i) with respect to any Hotel
Property in which HFS is the franchisor, an HFS Franchise Agreement and (ii)
with respect to any other Hotel Property, a franchise agreement that the
respective franchisor customarily uses with respect to similarly situated
franchises.
"FSNL" shall mean FSNL LLC, a Connecticut limited liability company.
"Gaming Assets" shall mean the gambling, casino, riverboat and other
gaming assets of the Company and its Subsidiaries owned on the Initial
Borrowing Date.
"Guarantor" shall mean HFS, the Company and each Subsidiary
Guarantor.
"Guarantor Event of Default" shall have the meaning provided in the
HFS Guaranty.
"Guaranty" shall mean the HFS Guaranty and the Subsidiaries Guaranty.
"Guaranty Amount" shall mean the amount of the HFS Guaranty then in
effect.
"Guaranty Fee" shall have the meaning provided in Section 10.06(ix).
"Guaranty Inclusion Amount" at any date shall mean the product of (i)
.5 and (ii) the aggregate amount of all obligations supported by guarantees
made by the Company pursuant to clause (xi) of Section 10.04.
"Hazardous Materials" shall mean (a) oil as defined by the Oil
Pollution Act of 1990, 33 U.S.C. Sec. 2701 et seq., (b) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; and (b) any chemicals,
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materials or substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "restricted hazardous
materials," "extremely hazardous wastes," "restrictive hazardous wastes,"
"toxic substances," "toxic pollutants," "contaminants" or "pollutants," or
words of similar meaning and regulatory effect under any applicable
Environmental Law.
"HFS" shall mean HFS Incorporated, a Delaware corporation.
"HFS Agreements" shall mean the Financing Agreement, the Corporate
Services Agreement and all HFS Franchise Agreements, as well as any other
agreements of the Borrower and any of its Subsidiaries with HFS or any of its
Subsidiaries.
"HFS Franchise Agreement" shall mean a Travelodge license agreement
in the form of Exhibit L-1 or such other form of Travelodge license agreement
which at the time is in substantially the same form as is then being offered by
HFS or a Subsidiary thereof in the then current form of Uniform Franchise
Offering Circular for Travelodge license agreements, or a Ramada Plaza license
agreement in the form of Exhibit L-2, or a license agreement for any HFS
affiliated hotel or motel franchise system substantially in the form then being
offered to prospective licensees in the then current Uniform Franchise Offering
Circular for the applicable HFS affiliated franchise system.
"HFS Guaranty" shall have the meaning provided in Section 5.08.
"HFS Master License Agreement" shall mean the License Agreement,
dated as of January 23, 1996, between Bear Acquisition Corp. (which is a
Subsidiary of HFS) and FHI.
"HFS Subordinated Indebtedness" shall have the meaning provided in
Section 10.04.
"HFS Subordinated Note" shall have the meaning provided in Section
10.04.
"HFS Subordination Agreement" shall have the meaning provided in
Section 5.16.
"Hotel Property" shall mean each hotel or motel owned or leased by
the Company or any of its Subsidiaries or Joint Ventures (including the
furniture, fixtures and equipment thereon).
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest,
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fees and charges) of such Person for borrowed money or for the deferred
purchase price of property or services (but excluding accrued expenses and
current trade accounts payable incurred in the ordinary course of business),
(ii) the maximum amount available to be drawn under all letters of credit
issued for the account of such Person and all unpaid drawings in respect of
such letters of credit, (iii) all Indebtedness of the types described in clause
(i), (ii), (iv), (v), (vi), (vii) or (viii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person, (iv) the aggregate amount required to be
capitalized under leases under which such Person is the lessee, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person, (vii) all
obligations under any Interest Protection Agreement or Other Hedging Agreement
or under any similar type of agreement or arrangement and (viii) all Redeemable
Capital Stock and, without duplication, any Chartwell Preferred Stock of such
Person valued at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends. For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with the terms
of such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Agreement and, if such price is based upon, or measured by,
the fair market value of such Redeemable Capital Stock, such fair market value
shall be determined in good faith by the board of directors of the Company.
Notwithstanding and without duplication of the foregoing, Indebtedness shall
include the Guaranty Inclusion Amount from time to time.
"Information Package" shall mean, with respect to each Hotel
Property, in an information package consisting of (i) a description of the
respective Hotel Property, (ii) management's discussion and analysis of the
respective Hotel Property and discussing any improvements or changes to be made
with respect thereto, (iii) historical financial statements (which may be
unaudited) for the respective Hotel Property for at least the two full fiscal
years most recently ended and the latest 12-month period ended with the last
day of the fiscal quarter last ended, (iv) projections for the respective Hotel
Property for the four years after the respective acquisition and (v) any other
information which the Company determines should be furnished so that the
Information Package for the respective Hotel Property is true and correct in
all material respects and is not incomplete by omitting to state any fact
necessary to make the information (taken as a whole) contained therein not
misleading in any material respect, which Information Package shall include an
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officer's certificate of the Company certifying (i) the cost to acquire the
respective Hotel Property, (ii) the purchase of related working capital in
connection with the acquisition of such Hotel Property, (iii) the amount
expected to be used to pay fees and expenses in connection with the acquisition
of the respective Hotel Property, and (iv) the amount anticipated to be spent
within one year after the date of the acquisition of the respective Hotel
Property to pay preopening costs and to make improvements of the respective
Hotel Property so acquired.
"Initial Borrowing Date" shall mean the date occurring on or after
the Effective Date on which the initial Borrowing of Revolving Loans hereunder
occurs.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Expense" shall mean, with respect to any Joint Venture, the
total interest expense of such Joint Venture for such period, adjusted by (x)
excluding any interest expense owing to the Company or one or more of its
Wholly-Owned Subsidiaries and (y) including as interest expense any accrued
dividends payable on any Redeemable Capital Stock of such Joint Venture.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement, interest rate floor agreement or other similar
agreement or arrangement.
"Investment" shall have the meaning provided in Section 10.05.
"Investment Commitment" shall have the meaning provided in Section
10.05.
"Issuing Bank" shall mean Chase or any of its Affiliates or BNS or
any of its Affiliates, in its capacity as issuer of a Letter of Credit.
"Joint Venture" shall mean any Person (other than an Unrestricted
Subsidiary) in which the Company or any Subsidiary of the Company owns,
directly or indirectly (except through one or more Unrestricted Subsidiaries),
more than 5% but less than
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100% of the voting or equity interests or in which the Company or a Subsidiary
of the Company has general partnership liability.
"Joint Venture Agreement" shall mean each partnership agreement,
other organizational agreement or agreement governing the management or
ownership of a Joint Venture.
"Las Vegas Lease" shall have the meaning provided in Section
10.04(xv).
"L/C Supportable Indebtedness" shall mean obligations of the Company
or any of its Subsidiaries or Joint Ventures incurred in the ordinary course of
business permitted to exist pursuant to this Agreement, including obligations
under the Bank of America Facility.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Licensing Fee" shall mean the licensing fees paid pursuant to the
HFS Master License Agreement, which Licensing Fee is generally based on up to
4.5% of revenues of the respective Hotel Property.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other) or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loans" shall mean the Revolving Loans and the Swingline Loans.
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"Management Agreements" shall mean all agreements with members of, or
with respect to, the management of the Borrower or any of its Subsidiaries, any
of the Joint Ventures or any Hotel Properties.
"Mandatory Borrowing" shall have the meaning specified in Section
1.01(b).
"Marketing and Reservation Fee" shall mean the separate fee or
payment to cover the marketing and reservation services referred to in the
respective HFS Franchise Agreement, which Marketing and Reservation Fee is
generally based on up to 4.5% of revenues of the respective Hotel Property.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Joint Venture" shall mean (i) any Non- Subsidiary Joint
Venture that at any time of determination has contributed in excess of $150,000
to the Company's Consolidated EBITDA for the Test Period then most recently
ended and (ii) each other Non-Subsidiary Joint Venture designated by the
Company in writing to the Administrative Agent as a Material Joint Venture,
provided that in any event at all time at least the 25 Non-Subsidiary Joint
Ventures which had the largest contribution to the Company's Consolidated
EBITDA for the Test Period then most recently ended shall be deemed to be
Material Joint Ventures provided further that, in addition, (a) each Joint
Venture which has obligations which are recourse to the Company or any of its
Subsidiaries or other Joint Ventures shall be a Material Joint Venture and (b)
each Joint Venture which is or becomes a Material Joint Venture shall continue
to be a Material Joint Venture notwithstanding that it no longer satisfies the
tests specified above.
"Maximum Guaranteed Amount" shall have the meaning provided in the
HFS Guaranty.
"Mexican Investment" shall mean the investment by the Company and its
Subsidiaries of up to $10,000,000 in the aggregate to form a joint venture for
the purpose of developing and operating, or franchising others to operate,
lodging facilities in Mexico under the "Travelodge" and "Thriftlodge"
tradenames, as described in the Memorandum of Understanding with Grupo Piasa, a
Mexican hotel company, as in effect on the date hereof, provided that there
shall be no partner, member or investor in such joint venture other than those
that exist on the date hereof.
"Minimum Facing Fee" shall have the meaning provided in Section
3.01(c).
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"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Cash Proceeds" shall mean, with (i) respect to any Asset Sale,
the Cash Proceeds resulting therefrom net of (x) cash expenses of sale
(including, without limitation, brokerage and attorneys' fees, if any, and
payment of principal, premium and interest of Indebtedness other than the Loans
required to be repaid as a result of such Asset Sale) and (y) incremental taxes
paid or payable as a result thereof and (ii) with respect to any issuance of
debt or equity, the Cash Proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from such event, net of transaction costs
(including, as applicable, any underwriting, brokerage or other customary
commissions and reasonable legal and other fees and expenses associated
therewith) incurred in connection therewith.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Non-Subsidiary Joint Venture" shall mean any Joint Venture of the
Company that is not also a Subsidiary of the Company.
"Notes" shall mean the Revolving Notes and the Swingline Notes.
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent or any Bank pursuant to the terms of this Agreement
or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04.
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"Payment Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as
the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of
such Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time, provided that if the Percentage of any Bank is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Hotel Acquisition" shall mean an acquisition of a Hotel
Property (or the equity interest of the Person owning such Hotel Property)
pursuant to Sections 10.02(ix) and/or 10.05(viii).
"Permitted Liens" shall have the meaning provided in Section 10.01.
"Permitted Subordinated Indebtedness" shall mean Indebtedness of the
Company permitted under clause (x) of Section 10.04.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of), the Company or a Subsidiary
of the Company or an ERISA Affiliate, and each such plan for the five-year
period immediately following the latest date on which, the Company or a
Subsidiary of the Company or an ERISA Affiliate maintained, contributed to or
had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 6.09.
"Pledged Securities" shall have the meaning provided in the Pledge
Agreement.
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"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which Chase announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. Chase may make commercial loans or other loans at
rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, with respect to any Permitted Hotel
Acquisition or the incurrence of any Permitted Subordinated Indebtedness, the
calculation of the consolidated results of the Company and its Subsidiaries
otherwise determined in accordance with this Agreement as if the respective
Permitted Hotel Acquisition or Permitted Subordinated Indebtedness (and all
Indebtedness incurred or Permitted Hotel Acquisitions effected during the
respective Calculation Period or thereafter and on or prior to the date of
determination) (each such date, a "Determination Date") had been effected or
incurred on the first day of the respective Calculation Period; provided that
all such calculations shall take into account the following assumptions:
(i) except as provided in following clause (ii), pro forma effect
shall be given to (1) any Indebtedness incurred subsequent to the end of
the Calculation Period and prior to the date of determination, (2) any
Indebtedness incurred during such period to the extent such Indebtedness
is outstanding at the date of determination and (3) any Indebtedness to be
incurred on the date of determination, in each case as if such
Indebtedness had been incurred on the first day of such Calculation Period
and after giving effect to the application of the proceeds thereof;
(ii) in calculating interest expense attributable to Loans, it shall
be assumed that (x) the average principal amount of Loans actually
outstanding during the Calculation Period (or, if the Initial Borrowing
Date occurs after the first day of the Calculation Period, during the
period from the Initial Borrowing Date to the respective Determination
Date) had been outstanding at all times during the period from the first
day of the Calculation Date until the Determination Date and (y) in
addition to the outstandings as calculated pursuant to preceding clause
(x), to the extent that any Loans were incurred during the Calculation
Period or thereafter but on or prior to the date of determination to
finance Permitted Hotel Acquisitions, such Loans will be deemed to have
been outstanding from the first day of the respective Calculation Period
until the date of
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the incurrence thereof (or if earlier, the last day of the respective
Calculation Period);
(iii) interest expense attributable to interest on any Indebtedness
(whether existing or being incurred) bearing a floating interest rate
shall be computed as if the rate in effect on the date of computation
(taking into account any Interest Rate Protection Agreement applicable to
such Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months) had been the applicable rate for
the entire period;
(iv) except as provided in preceding clause (ii), there shall be
excluded from interest expense any interest expense related to any amount
of Indebtedness that was outstanding during such Calculation Period or
thereafter but that is not outstanding or is to be permanently repaid on
the date of determination; and
(v) pro forma effect shall be given to all sales of Hotel Properties
and Permitted Hotel Acquisitions (by excluding or including, as the case
may be, the historical financial results for the respective Hotel
Properties) that occur during such Calculation Period or thereafter and on
or prior to the Determination Date (including any Indebtedness assumed or
acquired in connection therewith) as if they had occurred on the first day
of such Calculation Period.
"Projections" shall have the meaning provided in Section 5.12(b).
"Qualified Capital Stock" of any Person shall mean all Capital Stock
of such Person which is not Redeemable Capital Stock.
"Qualified Equity Commitment" shall have the meaning provided in
Section 10.05.
"Qualified Equity Investment" shall mean any equity investment made
by HFS in the Company (including in return for Redeemable Capital Stock issued
as permitted by Section 10.04(viii) and/or Qualified Capital Stock of the
Company) so long as 100% of the Net Cash Proceeds thereof are actually used by
the Company to make mandatory repayments of Loans as a result of a reduction to
the Total Revolving Loan Commitment pursuant to Sections 3.03(e) and/or (f).
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December occurring after the Initial Borrowing Date.
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"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. Sec. 6901 et seq.
"Real Estate Committee" shall mean Chase and The Bank of Nova Scotia.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recapitalization" shall mean collectively (i) the Refinancing and
(ii) the receipt by the Company of at least $57,000,000 from the issuance of
its common stock as described in Section 5.17.
"Recapitalization Documents" shall mean collectively (i) the
Refinancing Documents and (ii) the Chartwell Stock Purchase Agreement.
"Recovery Event" shall mean the receipt by the Company or any of its
Subsidiaries or Joint Ventures of any cash insurance proceeds (other than from
business interruption insurance) or condemnation award payable (i) by reason of
theft, loss, physical destruction, damage or taking or any other similar event
with respect to any property or assets of the Company or any of its
Subsidiaries or Joint Ventures and (ii) under any policy of insurance required
to be maintained under Section 9.03.
"Redeemable Capital Stock" means any Capital Stock that, either by
its terms, by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of any event of passage of
time would be, required to be redeemed or repurchased, or is redeemable or
required to be repurchased at the option of the holder thereof, or is
convertible into or exchangeable for debt securities at any time (unless solely
at the option of the Company).
"Refinancing" shall have the meaning provided in Section 5.06.
"Refinancing Documents" shall have the meaning provided in Section
5.06.
"Register" shall have the meaning provided in Section 14.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in
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effect and any successor to all or a portion thereof establishing reserve
requirements.
"Regulation G" shall mean Regulation G 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.
"Regulation T" shall mean Regulation T 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.
"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.
"Regulation X" shall mean Regulation X 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.
"Reinvestment Amount" shall mean the aggregate amount of Net Cash
Proceeds received from Asset Sales which would have been required to be applied
in accordance with Section 3.03(d) (absent clause (ii) of the first proviso to
such Section 3.03(d)), but which have not been applied to reduce the Total
Revolving Loan Commitment pursuant to Section 3.03(d) because the Company has
elected to reinvest such Net Cash Proceeds pursuant to clause (ii) of the first
proviso of such Section 3.03(d), with the Reinvestment Amount to be reduced on
each date on which, and in the amount by which, such Net Cash Proceeds have
been reinvested as provided in clause (ii) of the first proviso of such Section
3.03(d) or have been applied to reduce the Total Revolving Loan Commitment
pursuant to the second proviso of such Section 3.03(d).
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
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"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Revolving Loan Commitments (or after the termination thereof, the
Dollar Equivalent Amount of outstanding Loans and Adjusted Percentage of Letter
of Credit Outstandings) represent an amount greater than 50% of the Adjusted
Total Revolving Loan Commitment (or after the termination thereof, the sum of
the then Dollar Equivalent Amount of total outstanding Loans of Non-Defaulting
Banks and the aggregate Adjusted Percentages of all Non-Defaulting Banks of the
total Letter of Credit Outstandings at such time). If any Affiliate of the
Company (other than any Person that would qualify as an Affiliate of the
Company solely by reason of its status as a creditor of the Company or any
Affiliate thereof or by the exercise of any remedies under the Security
Documents) holds any Loans or Revolving Loan Commitments, then, unless such
Affiliates own 100% of all outstanding Loans and Revolving Loan Commitments,
(x) no such Affiliate shall be included as a Bank for purposes of this
definition and (y) the amount of such Loans or Revolving Loan Commitments shall
be subtracted from the total amounts of such Loan or Revolving Loan Commitments
based on which the calculation of Required Banks is made.
"Residual Excess Cash Flow" shall mean, for any fiscal year of the
Company, Excess Cash Flow for such fiscal year less the aggregate amount of
payments of fees made with respect to such fiscal year as permitted by Section
10.06(vii).
"Restricted Payment" shall mean (a) any authorization, declaration or
payment of any Dividends with respect to the Company or any of its Subsidiaries
or Joint Ventures, (b) the making (or the giving of any notice in respect
thereof) by the Company or any of its Subsidiaries or Joint Ventures of any
voluntary or mandatory payment, purchase, acquisition or redemption, whether by
the making of any payments of the principal, interest or otherwise, in respect
of any loan, advance or extension of credit made to the Company or any of its
Subsidiaries or Joint Ventures by, or in respect of any guarantee or Contingent
Obligation made for the benefit of the Company or any of its Subsidiaries or
Joint Ventures by, or in respect of any other obligation of the Company or any
of its Subsidiaries or Joint Ventures owed to, any Affiliate of the Company
(excluding the Company and its Wholly-Owned Subsidiaries) and (c) the payment
of any fees or expenses (including the reimbursement thereof by the Company or
any of its Subsidiaries or Joint Ventures) to any Affiliate of the Company
(excluding the Company and its Wholly-Owned Subsidiaries), it being understood
that, in any event, any payment on or in respect of, any Chartwell Preferred
Stock/Subordinated Debt, any HFS Subordinated Indebtedness or any Permitted
Subordinated Indebtedness shall be a Restricted Payment.
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"Returns" shall have the meaning provided in Section 8.09.
"Revolving C$ Loan Commitment" shall mean for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Revolving C$ Loan Commitment," as the same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03 and/or 11 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to
Section 1.13 or 14.04(b). The Revolving C$ Loan Commitment of a Bank shall be a
subfacility of the Revolving Loan Commitment of such Bank.
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as the same may be (x) reduced from time
to time pursuant to Sections 3.02, 3.03 and/or 11 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to 1.13 or
14.04(b).
"Revolving Loans" shall be the collective reference to Revolving $
Loans and Revolving C$ Loans.
"Revolving $ Loans" shall have the meaning provided in Section 1.01.
"Revolving C$ Loans" shall have the meaning provided in Section 1.01.
"Revolving C$ Note" and "Revolving C$ Notes" shall have the meanings
provided in Section 1.05(b).
"Revolving $ Note" and "Revolving $ Notes" shall have the meanings
provided in Section 1.05(a).
"Revolving Notes" shall mean the collective reference to the
Revolving C$ Notes and the Revolving $ Notes.
"S&P" shall mean Standard & Poor's Ratings Group.
"Scheduled Commitment Reduction" shall have the meaning provided in
Section 3.03(b).
"Scheduled Commitment Reduction Date" shall have the meaning provided
in Section 3.03(b).
"SEC" shall have the meaning provided in Section 9.01(h).
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"Security Agreement" shall have the meaning provided in Section 6.07.
"Security Documents" shall be the collective reference to the Pledge
Agreement and the Security Agreement.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning provided in the respective
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Shareholders' Agreements" shall mean all agreements entered into by
the Borrower or any of its Subsidiaries governing the terms and relative rights
of its capital stock and any agreement entered into by shareholders relating to
any such entity with respect to its capital stock.
"Specified Existing Investments" shall mean those Existing
Investments that relate to the Company's previous gaming businesses and
designated as such on Schedule IX.
"Standard Termination Fee" shall mean (x) with respect to any HFS
Franchise Agreement entered into in connection with any Hotel Property existing
on the Initial Borrowing Date, any Termination Fee payable pursuant to such HFS
Franchise Agreement up to 2% of the total gross revenues for the respective
Hotel Property for the immediately preceding twelve month period in respect of
which such Termination Fee is paid and (y) with respect to any HFS Franchise
Agreement entered into in connection with any Hotel Property acquired after the
Initial Borrowing Date, that portion of the Termination Fee with respect to
such Hotel Property which equals that amount customarily charged by HFS to
other similarly situated franchisees.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.08.
"Subsidiary" shall mean, as to any Person, (i) any corporation 50% or
more of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of
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whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person and/or one or more
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has a 50% or greater equity interest at the time. Notwithstanding
the foregoing (and except for purposes of the definition of Unrestricted
Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not to
be a Subsidiary of the Company or any of its other Subsidiaries for purposes of
this Agreement. Unless the context otherwise requires, all references herein to
"Subsidiaries" shall be to Subsidiaries of the Company.
"Subsidiary Guarantor" shall mean each Wholly-Owned Domestic
Subsidiary of the Company.
"Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement if
the percentage "50%" contained therein were changed to "66-2/3%."
"Swingline Commitment" shall mean $5,000,000.
"Swingline Expiry Date" shall mean the date which is one Business Day
prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning specified in Section 1.01(b).
"Swingline Note" shall have the meaning specified in Section 1.05(a).
"Syndication Agent" shall mean The Bank of Nova Scotia, in its
capacity as Syndication Agent for the Banks hereunder.
"Tax Sharing Agreements" shall mean all tax sharing, tax allocation
and other similar agreements entered into by the Borrower or any of its
Subsidiaries.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Termination Fee" shall mean any fees (whether in the form of
liquidated damages or otherwise) that is due and payable by the Company or any
of its Subsidiaries or Joint Ventures to HFS pursuant to Section Paragraph
30(k) an existing HFS Franchise Agreement or the equivalent section of any
other HFS Franchise Agreement.
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"Test Period" shall mean each period of four consecutive fiscal
quarters of the Company (or, if shorter, the period beginning on July 1, 1996
and ending on the last day of a fiscal quarter of the Company ended after the
Initial Borrowing Date), in each case taken as one accounting period, ended
after the Initial Borrowing Date.
"Total Hotel Revenues" shall mean, for any period, the sum of (i) the
gross total revenues of all wholly-owned Hotel Properties owned or leased by
the Company and its Wholly-Owned Subsidiaries plus (ii) the Company's Allocable
Share of the gross total revenues of all non-wholly-owned Hotel Properties
owned or leased by the Company and its Subsidiaries and Joint Ventures plus
(iii) the Company's Allocable Share of the gross total revenues from the retail
operations at the Fisherman's Wharf Travelodge located in San Francisco, it
being understood that Total Hotel Revenues shall include results of operations
of Hotel Properties only for periods after the acquisition thereof by the
Company or the respective Subsidiary or Joint Venture.
"Total Leverage Ratio" shall mean, at any time, the ratio of (x)
Consolidated Debt at such time to (y) Adjusted Consolidated EBITDA of the
Company for the Test Period then last ended, provided that (i) for purposes of
calculating the Total Leverage Ratio for the Test Period ending on (a) December
31, 1996, Adjusted Consolidated EBITDA of the Company shall be the Adjusted
Consolidated EBITDA of the Company for such Test Period divided by 45%, (b)
March 31, 1997, Adjusted Consolidated EBITDA of the Company shall be the
Adjusted Consolidated EBITDA of the Company for such Test Period divided by 55%
and (c) June 30, 1997, Adjusted Consolidated EBITDA of the Company shall be the
Adjusted Consolidated EBITDA of the Company for such Test Period divided by
85%, (ii) for purposes of calculating Consolidated Debt at any time, any
outstanding principal amount of Indebtedness under the Bank of America Facility
shall be included and the amount of any Letter of Credit supporting payment of
the Bank of America Facility shall be excluded and (iii) any non-cash
write-offs with respect to the Gaming Assets shall be excluded in determining
the Total Leverage Ratio.
"Total Outstandings" at any time shall mean the sum of the aggregate
principal amount of the Dollar Equivalent Amount of Loans then outstanding plus
the aggregate amount of Letter of Credit Outstandings at such time.
"Total C$ Revolving Loan Commitment" shall mean, at any time, the sum
of the Revolving C$ Loan Commitments of each of the Banks.
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"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
"Total Unrestricted Subsidiary Leverage Ratio" shall mean, at any
time, the ratio of (x) all Indebtedness of all Unrestricted Subsidiaries at
such time as would be required to be reflected on the liability side of a
balance sheet as prepared in accordance with generally accepted accounting
principles and as determined on a consolidated basis plus, without duplication,
the amount of all Redeemable Capital Stock of all Unrestricted Subsidiaries
(determined in accordance with the definition of Indebtedness contained herein)
to (y) Adjusted Consolidated EBITDA of all Unrestricted Subsidiaries
(calculated by using the Adjusted Consolidated EBITDA of the parent
Unrestricted Subsidiary or, if more than one Unrestricted Subsidiary is
directly owned by the Company or a Wholly-Owned Domestic Subsidiary thereof, by
calculating the Adjusted Consolidated EBITDA of the Unrestricted Subsidiaries
on a combined basis) for the Test Period then last ended.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment, less (y) the sum of the Dollar Equivalent Amount of the aggregate
principal amount of Loans outstanding plus the then aggregate amount of Letter
of Credit Outstandings.
"Transaction" shall mean the Canadian Acquisition and the
Recapitalization.
"Type" shall mean the type of Revolving Loan determined with regard
to the interest option applicable thereto, i.e., whether a $ Base Rate Loan, a
$ Eurodollar Loan or a C$ Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement
of Financial Accounting Standards No. 87, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of
America.
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"Unpaid Drawing" shall have the meaning provided for in Section 2.05.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Company
created or acquired after the Initial Borrowing Date that, at the time of such
creation or acquisition, shall be an Unrestricted Subsidiary (as designated by
the Company, as provided below) provided that such Subsidiary does not and
shall not engage, to any substantial extent, in any line or lines of business
activity other than as provided in Section 10.15.
The Company may designate any such Person to be an Unrestricted
Subsidiary if (a) no Default or Event of Default is existing or will occur as a
consequence thereof, (b) such Subsidiary, at the time of designation thereof,
has no assets (except assets which could be invested in such Unrestricted
Subsidiary at the time of designation as described in the immediately
succeeding sentence), (c) such Subsidiary does not own any equity interests in,
or hold any Lien on any property of, the Company or any other Subsidiary or
Joint Venture of the Company (excluding other Unrestricted Subsidiaries) and
(d) the designation of the respective Unrestricted Subsidiary shall be made in
compliance with any additional requirements contained in Section 10.16(c) . The
only asset that may be invested in any such Unrestricted Subsidiary by the
Company in any of its other Subsidiaries or Joint Ventures is the Net Cash
Proceeds of the Chartwell Preferred Stock. The Company may designate any
Unrestricted Subsidiary to be a Subsidiary, provided that no Default or Event
of Default is existing or will occur as a consequence thereof and all actions
which would be required to be taken pursuant to Section 10.16(a) in connection
with the creation or acquisition of a new Subsidiary are taken at the time of
the respective such designation. Each such designation shall be evidenced by
filing with the Administrative Agent a certified copy of the resolution giving
effect to such designation and an officers' certificate of an Authorized
Officer of the Company certifying that such designation complied with the
foregoing conditions.
"Unrestricted Subsidiary Tax Sharing Agreement" shall mean any tax
sharing agreement entered into by the Company with an Unrestricted Subsidiary
pursuant to the requirements of Section 10.16(c), with the terms and conditions
of any such tax sharing agreement to be required to be in form and substance
satisfactory to the Required Banks, and with any changes thereto made after the
entering into of any such tax sharing agreement to be required to be
satisfactory to the Required Banks.
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less
the sum of (i) the Dollar Equivalent
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Amount of the aggregate outstanding principal amount of Revolving Loans made by
such Bank and (ii) such Bank's Adjusted Percentage of the total Letter of
Credit Outstandings at such time, provided that for purposes of Section 3.01(a)
outstanding Swingline Loans shall be deemed not to be outstanding.
"Wholly-Owned Domestic Subsidiary" shall mean any Wholly-Owned
Subsidiary of the Company that is incorporated or organized in the United
States or any state or territory thereof.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 13. The Agents.
13.01 Appointment. The Banks hereby designate The Chase Manhattan
Bank as Administrative Agent (for purposes of this Section 13, the term
"Administrative Agent" shall include Chase in its capacity as Collateral Agent
pursuant to the Pledge Agreement) to act as specified herein and in the other
Credit Documents. The Banks hereby designate The Bank of Nova Scotia Bank as
Syndication Agent to act as specified herein and in the other Credit Documents.
Each Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, each Agent to
take such action on its behalf under the provisions of this Agreement, the
other Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such other duties
hereunder and thereunder as are specifically delegated to or required of each
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. Each Agent may perform any of its duties hereunder by or
through its respective officers, directors, agents, employees or affiliates.
13.02 Nature of Duties. Neither Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. Neither Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of each Agent shall be mechanical
and administrative in nature; neither Agent shall have by reason of this
Agreement or any other
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Credit Document a fiduciary relationship in respect of any Bank or the holder
of any Note; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
any Agent any obligations in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.
13.03 Lack of Reliance on the Agents. Independently and without
reliance upon any Agent, each Bank and the holder of each Note, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of each of HFS
and the Company and its Subsidiaries and Joint Ventures in connection with the
making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the
creditworthiness of each of HFS and the Company and its Subsidiaries and Joint
Ventures and, except as expressly provided in this Agreement, neither Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Bank or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. Neither Agent shall be
responsible to any Bank or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of HFS or the Company and its Subsidiaries
and Joint Ventures or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of HFS or
the Company and its Subsidiaries and Joint Ventures or the existence or
possible existence of any Default or Event of Default.
13.04 Certain Rights of the Agents. If any Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, such Agent shall be entitled to refrain from such act or
taking such action unless and until such Agent shall have received instructions
from the Required Banks; and neither Agent shall incur liability to any Person
by reason of so refraining. Without limiting the foregoing, no Bank or the
holder of any Note shall have any right of action whatsoever against either
Agent as a result of such Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Banks.
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13.05 Reliance. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent believed to be the proper Person, and, with respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by
such Agent.
13.06 Indemnification. To the extent any Agent is not reimbursed and
indemnified by the Company, the Banks will reimburse and indemnify such Agent,
in proportion to their respective "percentages" as used in determining the
Required Banks, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agent in performing its respective duties hereunder
or under any other Credit Document, in any way relating to or arising out of
this Agreement or any other Credit Document; provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct.
13.07 The Agents in their Individual Capacities. With respect to its
obligation to make Loans and issue Letters of Credit under this Agreement, each
Agent shall have the rights and powers specified herein for a "Bank" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Banks," "Required Banks," "holders of Revolving
Notes", "Issuing Bank" or any similar terms shall, unless the context clearly
otherwise indicates, include each Agent in its individual capacity. Each Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with any Credit Party or any Affiliate of any
Credit Party as if they were not performing the duties specified herein, and
may accept fees and other consideration from the Company or any other Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
13.08 Holders. Each Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Administrative Agent. Any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee,
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assignee or indorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor.
13.09 Resignation by the Agents. (a) The Administrative Agent may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 15 Business Days' prior
written notice to the Company and the Banks, and such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below. The Syndication Agent
may resign from the performance of all of its functions and duties hereunder
and/or under the other Credit Documents at any time by giving written notice
thereof to the Company and the Banks, and such resignation shall take effect
immediately.
(b) Upon any such notice of resignation by the Administrative Agent,
the Required Banks shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably
acceptable to the Company.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with
the consent of the Company (which consent shall not be unreasonably withheld),
shall then appoint a commercial bank or trust company with capital and surplus
of not less than $250,000,000 as successor Administrative Agent who shall serve
as Administrative Agent hereunder or thereunder until such time, if any, as the
Required Banks appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
SECTION 14. Miscellaneous.
14.01 Payment of Expenses, etc. The Company shall: (i) whether or not
the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of each Agent (including, without limitation,
the reasonable fees and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments
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referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto, of each Agent in connection with its syndication efforts
with respect to this Agreement and of each Agent and, following and during the
continuation of an Event of Default, each of the Banks in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for each Agent and, following
and during the continuation of an Event of Default, for each of the Banks);
(ii) pay and hold each of the Banks harmless from and against any and all
present and future stamp, excise and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iii)
indemnify each Agent and each Bank, and each of their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed
against any of them as a result of, or arising out of, or in any way related
to, or by reason of, (a) any investigation, litigation or other proceeding
(whether or not any Agent or any Bank is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use of any Letter of Credit or the proceeds of any Loans hereunder or
the consummation of any transactions contemplated herein (including, without
limitation, the Canadian Acquisition or the Recapitalization) or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, or (b) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned or at any time operated by the
Company or any of its Subsidiaries, Joint Ventures or Unrestricted
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials at any location, whether or not owned or operated by the
Company or any of its Subsidiaries, Joint Ventures or Unrestricted
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim
asserted against the Company or any of its Subsidiaries, Joint Ventures or
Unrestricted Subsidiaries or any Real Property owned or at any time operated by
the Company or any of its Subsidiaries, Joint Ventures or Unrestricted
Subsidiaries (but excluding, in each case, any losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross
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negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify,
pay or hold harmless any Agent or any Bank set forth in the
preceding sentence may be unenforceable because it is violative
of any law or public policy, the Company shall make the maximum
contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable
law.
14.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the Company
or any Subsidiary Guarantor or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special, time or demand, provisional or final) and any
other Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches, agencies or affiliates of such Bank wherever located)
to or for the credit or the account of the Company or any Subsidiary Guarantor
against and on account of the Obligations and liabilities of the Company or
such Subsidiary Guarantor to such Bank under this Agreement or under any of the
other Credit Documents, including, without limitation, all interests in
Obligations purchased by such Bank pursuant to Section 14.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
14.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Company, at
the Company's address specified opposite its signature below; if to any Bank,
at its address specified opposite its name on Schedule II; and if to the
Administrative Agent, at its Notice Office; or, as to any Credit Party or any
Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Bank, at such other address
as shall be designated by such Bank in a written notice to the Company and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent
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by telex or telecopier, except that notices and communications to each Agent
and the Company shall not be effective until received by such Agent or the
Company, as the case may be.
14.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Credit Party may assign or
transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of the Required Banks
(or all Banks in the case of the Company or HFS) and, provided further, that,
although any Bank may transfer, assign or grant participations in its rights
hereunder, such Bank shall remain a "Bank" for all purposes hereunder (and may
not transfer or assign all or any portion of its Revolving Loan Commitments
hereunder except as provided in Section 14.04(b)) and the transferee, assignee
or participant, as the case may be, shall not constitute a "Bank" hereunder
and, provided further, that no Bank shall transfer or grant any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final scheduled maturity of any Loan,
Note or Letter of Credit (unless such Letter of Credit is not extended beyond
the Final Maturity Date) in which such participant is participating, or reduce
the rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Revolving Loan Commitment shall not constitute
a change in the terms of such participation, and that an increase in the
Revolving Loan Commitment shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by a Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Company hereunder
shall be determined as if such Bank had not sold such participation.
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(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) to its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (y) assign all or, if
less than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Bank or assigning Banks, of such Revolving Loan Commitments (and
related outstanding Obligations) hereunder to one or more Eligible Transferees,
each of which assignees shall become a party to this Agreement as a Bank by
execution of an Assignment and Assumption Agreement, provided that, (i) at such
time Schedule I shall be deemed modified to reflect the Revolving Loan
Commitments and Revolving C$ Loan Commitments of such new Bank and of the
existing Banks, (ii) new Notes will be issued, at the Company's expense, to
such new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Revolving Loan Commitments and Revolving C$ Loan Commitments, (iii)
the consent of each of the Administrative Agent, the Company and the Issuing
Bank shall be required in connection with any such assignment pursuant to
clause (y) above (which consent, in each case, shall not be unreasonably
withheld) and (iv) the Administrative Agent shall receive at the time of each
such assignment, from the assigning or assignee Bank, the payment of a
non-refundable assignment fee of $3,500. To the extent of any assignment
pursuant to this Section 14.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Revolving Loan Commitment
and Revolving C$ Loan Commitment. At the time of each assignment pursuant to
this Section 14.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall, to the extent legally entitled to do so, provide to the
Company and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable, a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b). To the extent that an assignment of all or any portion of a
Bank's Revolving Loan Commitment and related outstanding Obligations pursuant
to Section 1.13 or this Section 14.04(b) would, at the time of such assignment,
result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from those
being charged by the respective assigning Bank prior to such assignment, then
the Company shall not be obligated to pay such increased costs (although the
Company shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
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(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
(d) The parties hereto acknowledge and agree that HFS has certain
rights to repurchase the Loans and Revolving Loan Commitments in full as
provided in Section 5 of the HFS Subordination Agreement.
(e) Any sale or transfer of a Revolving Loan Commitment by any Bank
shall also constitute a sale or transfer by such Bank of a ratable portion of
its Revolving C$ Loan Commitment.
14.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of any Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course
of dealing between the Company or any other Credit Party, any Agent or any Bank
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Agent or any Bank or
the holder of any Note to any other or further action in any circumstances
without notice or demand.
14.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Company in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker' s lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal
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of, or interest on, the Loans, Unpaid Drawings, Commitment Commission or Letter
of Credit Fees, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligation
then owed and due to such Bank bears to the total of such Obligation then owed
and due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Credit Party to such Banks in such amount as shall result in a proportional
participation by all the Banks in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 14.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non- Defaulting Banks as opposed to Defaulting Banks.
14.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Company to the Banks);
provided that, (i) as provided in the definition of Subsidiary, Unrestricted
Subsidiaries shall not be included for any purposes of this Agreement
(including the computations and calculations described in the immediately
succeeding clause (ii)) as Subsidiaries of the Company, (y) except as otherwise
specifically provided herein, all computations of Excess Cash Flow and the
Cumulative Retained Residual Excess Cash Flow Amount, and all computations
determining compliance with Sections 10.03 and 10.05 through 10.11, inclusive,
shall utilize accounting principles and policies in conformity with those used
to prepare the historical pro forma financial statements delivered to the Banks
pursuant to Section 8.05(a) and (iii) for purposes of determining compliance
with Sections 10.10 and 11.12 only, Adjusted Consolidated EBITDA of the Company
or the Unrestricted Subsidiaries, as the case may be, shall be determined
giving pro forma effect to sales and acquisitions of Hotel Properties and
Acquired Businesses on the same basis as is provided in clause (v) of the
definition of Pro Forma Basis contained herein.
(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the
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first day but excluding the last day) occurring in the period for which such
interest, Commitment Commission or Fees are payable.
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH BORROWER, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS,
THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH BORROWER. EACH BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT
ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR
UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID
OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT UNDER THIS
AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(b) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
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14.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Company and the
Administrative Agent.
14.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which each Borrower and each of the Banks shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered the same to the Administrative Agent at its Notice
Office or, in the case of the Banks, shall have given to the Administrative
Agent telephonic (confirmed in writing), written or telex notice (actually
received) at such office that the same has been signed and mailed to it. The
Administrative Agent will give the Company and each Bank prompt written notice
of the occurrence of the Effective Date.
14.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
14.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Credit Parties party thereto and the
Required Banks (or, as contemplated by Section 13(b) of the HFS Guaranty, by
the Agents), provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Final Maturity Date, or reduce the
rate or extend the time of payment of interest or Fees thereon, or reduce the
principal amount thereof (except to the extent repaid in cash), (ii) release
all or substantially all of the Collateral (except as expressly provided in the
Credit Documents), (iii) release HFS from its payment obligations pursuant to
the HFS Guaranty (except as expressly provided therein), (iv) amend, modify or
waive any provision of this Section 14.12, (v) reduce the percentage specified
in the definition of Required Banks (it being understood that, with the consent
of the Required Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Revolving Loan Commitments
are included on the Effective Date) or (vi) consent to the assignment or
transfer by
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the Company or HFS of any of its rights and obligations under this Agreement or
the HFS Guaranty, as the case may be; provided further, that no such change,
waiver, discharge or termination shall (v) increase the Revolving Loan
Commitment or Revolving C$ Loan Commitment of any Bank over the amount thereof
then in effect without the consent of such Bank (it being understood that
waivers or modifications of conditions precedent, covenants, Defaults or Events
of Default or of a mandatory reduction in the Total Revolving Loan Commitment
or Total Revolving C$ Loan Commitment shall not constitute an increase of the
Revolving Loan Commitment or Total Revolving C$ Loan Commitment of any Bank,
and that an increase in the available portion of the Revolving Loan Commitment
or Revolving C$ Loan Commitment of any Bank shall not constitute an increase in
the Revolving Loan Commitment or Revolving C$ Loan Commitment of such Bank),
(w) without the consent of the Issuing Bank, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (x) without the consent of the applicable Agent, amend,
modify or waive any provision of Section 13 as same applies to such Agent or
any other provision as same relates to the rights or obligations of such Agent,
(y) without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent or (z)
without the consent of the Supermajority Banks, amend, modify or waive any
Scheduled Commitment Reduction.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (vi), inclusive, of the first proviso to Section 14.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Company
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Bank's
Revolving Loan Commitment and Revolving C$ Loan Commitment in accordance with
Sections 3.02(b) and/or 4.01(b), provided that, unless the Revolving Loan
Commitment and Revolving C$ Loan Commitment terminated and Loans repaid
pursuant to preceding clause (B) are immediately replaced in full at such time
through the addition of new Banks or the increase of the Revolving Loan
Commitments and Revolving C$ Loan Commitments of existing Banks (who in each
case must specifically consent thereto), then in the case of any action
pursuant to preceding clause (B) the Required Banks (determined after giving
effect to the proposed action) shall specifically consent thereto, provided
further, that in any event the Company shall not have the right
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to replace a Bank, terminate its Revolving Loan Commitment and Revolving C$
Loan Commitment or repay its Loans solely as a result of the exercise of such
Bank's rights (and the withholding of any required consent by such Bank)
pursuant to the second proviso to Section 14.12(a).
(c) It is understood and agreed by the parties hereto that, to the
extent (and only to the extent) expressly provided in Section 2.06 of the HFS
Subordination Agreement, certain amendments to the Credit Agreement shall, to
the extent provided in said Section 2.06, require the consent of HFS.
14.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall, survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Loans.
14.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 14.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Company shall not be obligated to pay such increased costs (although the
Company shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
14.15 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 14.15, each Bank agrees that it will not disclose without the
prior consent of the Company (other than to its employees, auditors, advisors
or counsel or to another Bank if the Bank or such Bank's holding or parent
company in its sole discretion determines that any such party should have
access to such information, provided such Persons shall be subject to the
provisions of this Section 14.15 to the same extent as such Bank) any
information with respect to the Company or any of its Subsidiaries which is now
or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by the Company to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as
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may be required or appropriate in respect to any summons or subpoena or in
connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank, (e) to any Agent or the
Collateral Agent or any Bank and (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of
any of the Notes or Revolving Loan Commitments or any interest therein by such
Bank, provided, that such prospective transferee agrees to be bound by the
provisions contained in this Section.
(b) The Company hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Company or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Company and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 14.15 to the same extent as such Bank.
14.16 Register. Each Borrower hereby designates the Administrative
Agent to serve as such Borrower's agent, solely for purposes of this Section
14.16, to maintain a register (the "Register") on which it will record the
Revolving Loan Commitments and Revolving C$ Loan Commitments from time to time
of each of the Banks, the Loans made by each of the Banks and each repayment in
respect of the principal amount of the Loans of each Bank. Failure to make any
such recordation, or any error in such recordation shall not affect a
Borrower's obligations in respect of such Loans. With respect to any Bank, the
transfer of the Revolving Loan Commitment and Revolving C$ Loan Commitment of
such Bank and the rights to the principal of, and interest on, any Loan made
pursuant to such Revolving Loan Commitment or Revolving c$ Loan Commitment
shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such
Revolving Loan Commitment and Revolving C$ Loan Commitment and Loans and prior
to such recordation all amounts owing to the transferor with respect to such
Revolving Loan Commitment and Revolving C$ Loan Commitment and Loans shall
remain owing to the transferor. The registration of assignment or transfer of
all or part of the Revolving Loan Commitment and the Revolving C$ Loan
Commitment and the Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
14.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank.
152
C/M 11752.0000 414856.1
The Company agrees to indemnify the Administrative Agent from and against any
and all losses, claims, damages and liabilities of whatsoever nature which may
be imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 14.16 other than those resulting from
the Administrative Agent's willful misconduct or gross negligence.
14.17 Limitation on Additional Amounts, etc. Notwithstanding anything
to the contrary contained in Section 1.10, 1.11, 2.06 or 4.04, unless a Bank
gives notice to the Company that it is obligated to pay an amount under any
such Section within 180 days after the later of (x) the date the Bank incurs
the respective increased costs, Taxes, loss, expense or liability, reduction in
amounts received or receivable or reduction in return on capital or (y) the
date such Bank has actual knowledge of its incurrence of the respective
increased costs, Taxes, loss, expense or liability, reductions in amounts
received or receivable or reduction in return on capital, then such Bank shall
only be entitled to be compensated for such amount by the Company pursuant to
said Section 1.10, 1.11, 2.06 or 4.04, as the case may be, to the extent the
costs, Taxes, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs 180 days prior to such Bank giving notice to the
Company that it is obligated to pay the respective amounts pursuant to said
Section 1.10, 1.11, 2.06 or 4.04, as the case may be. This Section 14.17 shall
have no applicability to any Section of this Agreement other than said Sections
1.10, 1.11, 2.06 and 4.04.
14.18 Certain Provisions Regarding Joint Ventures. Notwithstanding
anything to the contrary contained in this Agreement, (i) no Default or Event
of Default shall arise under Section 11.02 or 11.03 as a result of any action
(or failure to take any action) by any Non-Subsidiary Joint Venture, or as a
result of any event, condition, fact or circumstance with respect to any
Non-Subsidiary Joint Venture, in each case to the extent that neither the
Company nor any of its Subsidiaries have voting or management control with
respect to the affairs of such Non- Subsidiary Joint Venture and neither the
Company nor any such Subsidiary thereof consented to any such action (or
failure to act), (ii) neither the Company nor any of its Subsidiaries will
relinquish voting or management control over any Material Joint Venture in
which it has such control other than in connection with the sale of the
Company's or such Subsidiary's entire equity interest in such Material Joint
Venture, (iii) neither the Company nor any of its Subsidiaries will reduce
their ownership interest in any Material Joint Venture in which they own a
greater than 50% interest to an ownership interest of 50% or less in such
Material Joint Venture and (iv) neither the Company nor any of its Subsidiaries
shall consent to any action to be taken
153
C/M 11752.0000 414856.1
by any Joint Venture if such action would give rise to a Default or an Event of
Default hereunder.
14.19 Judgment; Currency. (a) If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder in one
Currency into another Currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.
(b) The obligation of a Borrower in respect of any sum due to any
Bank or the Administrative Agent hereunder shall, notwithstanding any judgment
in or receipt of a currency (the "Alternate Currency") other than that in which
such sum is denominated in accordance with the applicable provisions of this
Agreement or the other Credit Documents (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by
such Bank or the Administrative Agent (as the case may be) of any such sum so
due in the Alternate Currency such Bank or the Administrative Agent (as the
case may be) may in accordance with normal banking procedures purchase the
Agreement Currency with the Alternate Currency; if the amount of the Agreement
Currency so purchased is less than the sum originally due to such Bank or the
Administrative Agent (as the case may be) in the Agreement Currency, each
Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Administrative Agent (as the case may
be) against such loss, and if the amount of the Agreement Currency so purchased
exceeds the sum originally due to any Bank or the Administrative Agent (as the
case may be), such Bank or the Administrative Agent (as the case may be) agrees
to remit to the applicable Borrower such excess.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ CHARTWELL LEISURE INC.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
154
C/M 11752.0000 414856.1
Address: CHARTWELL CANADA CORP.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Treasurer
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
THE CHASE MANHATTAN BANK,
Individually and as
Administrative Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
THE BANK OF NOVA SCOTIA,
Individually and as
Syndication Agent
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice-President
BANQUE PARIBAS
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant
Vice President
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title: Assistant Vice
President
Title: Group Vice
President
CIBC, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Associate Director
MELLON BANK, N.A.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice
President
NATIONSBANK, N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
155
C/M 11752.0000 414856.1
SCHEDULE I
COMMITMENTS
Revolving Revolving C$
Loan Loan
Bank Commitment Commitment
The Chase Manhattan Bank $34,000,000 C$21,533,334
The Bank of Nova Scotia $34,000,000 C$21,533,334
Banque Paribas $15,000,000 C$9,500,000
CIBC, Inc. $25,000,000 C$15,833,333
Mellon Bank, N.A. $25,000,000 C$15,833,333
NationsBank, N.A. $17,000,000 C$10,766,666
TOTAL: ___________ ___________
$150,000,000 C$95,000,000
C/M 11752.0000 414856.1
SCHEDULE II
BANK ADDRESSES
The Chase Manhattan Bank ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
Chase Agent Bank Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
The Bank of Nova Scotia ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ or
225-5091
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Banque Paribas ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
CIBC, Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Mellon Bank, N.A. ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
C/M 11752.0000 414856.1
NationsBank, N.A. NationsBank NC1-007-20-01
▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
C/M 11752.0000 414856.1
SCHEDULE III
[INTENTIONALLY OMITTED]
C/M 11752.0000 414856.1
SCHEDULE VII
C/M 11752.0000 414856.1