Exhibit 10.40
[Conformed Copy with Exhibits G and F
Conformed as Executed]
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AMENDED AND RESTATED CREDIT AGREEMENT
among
HOST MARRIOTT CORPORATION,
HOST MARRIOTT, L.P.,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as Administrative Agent
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Dated as of June 19, 1997
and
Amended and Restated as of August 5, 1998
and further
Amended and Restated as of May 31, 2000
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DEUTSCHE BANK SECURITIES INC.,
as ARRANGER AND SOLE BOOKRUNNER,
CREDIT LYONNAIS NEW YORK BRANCH,
as SYNDICATION AGENT and
a CO-AGENT,
THE BANK OF NOVA SCOTIA,
as DOCUMENTATION AGENT
and
a CO-AGENT,
and
BANK OF AMERICA, N.A.,
SOCIETE GENERALE, SOUTHWEST AGENCY,
and ▇▇▇▇▇ FARGO BANK, N.A.,
as SENIOR MANAGING AGENTS
TABLE OF CONTENTS
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Page
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SECTION 1. Amount and Terms of Credit.........................................1
1.01 The Commitments.................................................1
1.02 Minimum Amount of Each Borrowing................................2
1.03 Notice of Borrowing.............................................2
1.04 Disbursement of Funds...........................................2
1.05 Notes...........................................................3
1.06 Conversions.....................................................4
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............................................9
1.14 Additional Revolving Loan Commitments..........................10
SECTION 2. Fees; Reductions of Commitment....................................12
2.01 Fees...........................................................12
2.02 Voluntary Termination of Unutilized Commitments................12
2.03 Mandatory Termination of Commitments...........................13
SECTION 3. Prepayments; Payments; Taxes......................................13
3.01 Voluntary Prepayments..........................................13
3.02 Mandatory Repayments and Commitment Reductions.................14
3.03 Method and Place of Payment....................................17
3.04 Net Payments; Taxes............................................17
SECTION 4. Conditions Precedent to Loans.....................................19
4.01 Execution of Agreement; Notes..................................19
4.02 Fees, etc......................................................19
4.03 Opinions of Counsel............................................19
4.04 Organizational Documents; Proceedings; etc.....................19
4.05 Pledge and Security Agreement..................................20
4.06 Subsidiaries Guaranty..........................................21
4.07 Adverse Change, etc............................................21
4.08 Litigation.....................................................21
4.09 Original Credit Agreement......................................21
4.10 Solvency Certificate; Insurance Certificates...................21
4.11 Financial Statements; Projections..............................22
4.12 No Default; Representations and Warranties.....................22
(i)
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SECTION 5. Conditions Precedent to All Loans.................................22
5.01 Effective Date.................................................22
5.02 No Default; Representations and Warranties.....................22
5.03 Notice of Borrowing............................................23
SECTION 6. Representations and Warranties....................................23
6.01 Status.........................................................23
6.02 Power and Authority............................................23
6.03 No Violation...................................................24
6.04 Governmental Approvals.........................................24
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc..................................24
6.06 Litigation.....................................................25
6.07 True and Complete Disclosure...................................25
6.08 Use of Proceeds; Margin Regulations............................25
6.09 Tax Returns and Payments.......................................26
6.10 Compliance with ERISA..........................................26
6.11 The Pledge and Security Agreement; Equity Pledges..............27
6.12 Properties.....................................................28
6.13 Subsidiaries...................................................28
6.14 Compliance with Statutes, etc..................................28
6.15 Investment Company Act.........................................28
6.16 Public Utility Holding Company Act.............................28
6.17 Environmental Matters..........................................29
6.18 Labor Relations................................................29
6.19 Intellectual Property..........................................29
6.20 Indebtedness...................................................30
6.21 Management Agreements, Franchise Agreements, Operating
Leases, Ground Leases..........................................30
6.22 Status as REIT.................................................30
6.23 Facility Managers; Approved Lessees............................30
SECTION 7. Affirmative Covenants.............................................31
7.01 Information Covenants..........................................31
7.02 Books, Records and Inspections; Annual Meetings................34
7.03 Maintenance of Property and Insurance..........................34
7.04 Corporate Franchises...........................................38
7.05 Compliance with Statutes, etc..................................38
7.06 Compliance with Environmental Laws.............................39
7.07 ERISA..........................................................39
7.08 End of Fiscal Years; Fiscal Quarters...........................40
7.09 Performance of Obligations.....................................40
7.10 Payment of Taxes...............................................41
7.11 Certain Subsidiaries...........................................41
7.12 Management Agreements; Operating Leases........................41
(ii)
Page
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7.13 REIT Requirements..............................................42
7.14 Contributions..................................................42
7.15 Foreign Subsidiaries Security..................................42
7.16 Additional Subsidiary Guarantors; Release of Subsidiary
Guarantors and Collateral......................................43
7.17 Capital Expenditures...........................................44
7.18 Certain Inventory, Fixed Asset Supplies and Working
Capital Receivables............................................44
SECTION 8. Negative Covenants................................................45
8.01 Liens..........................................................45
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.........48
8.03 Dividends......................................................52
8.04 Indebtedness...................................................53
8.05 Advances, Investments and Loans................................55
8.06 Transactions with Affiliates...................................57
8.07 Capital Expenditures...........................................57
8.08 Minimum Consolidated Interest Coverage Ratio; Minimum
Unsecured Interest Coverage Ratio..............................58
8.09 Minimum Fixed Charge Coverage Ratio............................58
8.10 Tangible Net Worth.............................................58
8.11 Maximum Leverage Ratio.........................................58
8.12 Unencumbered EBITDA Ratio......................................58
8.13 Limitation on Payments of Certain Indebtedness;
Modifications of Certain Indebtedness; Modifications
of Certificate of Incorporation, By-Laws and Certain
Agreements; etc................................................58
8.14 Limitation on Certain Restrictions on Subsidiaries.............59
8.15 Limitation on Issuance of Capital Stock........................60
8.16 Business.......................................................61
8.17 Limitation on Creation of Subsidiaries.........................61
8.18 The Courtyard Settlement.......................................62
SECTION 9. Events of Default.................................................62
9.01 Payments.......................................................62
9.02 Representations, etc...........................................62
9.03 Covenants......................................................62
9.04 Default Under Other Agreements.................................63
9.05 Bankruptcy, etc................................................63
9.06 ERISA..........................................................63
9.07 Pledge and Security Agreement..................................64
9.08 Subsidiaries Guaranty..........................................64
9.09 Judgments......................................................64
9.10 Management Agreements..........................................65
9.11 Operating Leases...............................................65
9.12 Change of Control..............................................65
9.13 Trademark Permission...........................................65
9.14 REIT Status....................................................65
(iii)
Page
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9.15 General Partner Status........................................65
9.16 Certain FF&E..................................................65
SECTION 10. Definitions and Accounting Terms.................................66
10.01 Defined Terms.................................................66
SECTION 11. The Administrative Agent.........................................97
11.01 Appointment...................................................97
11.02 Nature of Duties..............................................97
11.03 Lack of Reliance on the Administrative Agent..................98
11.04 Certain Rights of the Administrative Agent....................98
11.05 Reliance......................................................98
11.06 Indemnification...............................................98
11.07 The Administrative Agent in its Individual Capacity...........99
11.08 Holders.......................................................99
11.09 Resignation by the Administrative Agent; Removal of
the Administrative Agent......................................99
SECTION 12. Miscellaneous...................................................100
12.01 Payment of Expenses, etc.....................................100
12.02 Right of Setoff..............................................101
12.03 Notices......................................................101
12.04 Benefit of Agreement.........................................102
12.05 No Waiver; Remedies Cumulative...............................103
12.06 Payments Pro Rata............................................104
12.07 Calculations; Computations...................................104
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.........................................105
12.09 Counterparts.................................................106
12.10 Effectiveness................................................106
12.11 Headings Descriptive.........................................106
12.12 Amendment or Waiver; etc.....................................107
12.13 Survival.....................................................108
12.14 Domicile of Loans............................................108
12.15 Confidentiality..............................................108
12.16 Register.....................................................109
12.17 Commercial Loan Transactions.................................109
12.18 Limitations on Recourse......................................110
(iv)
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Pledge of Equity Interests
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Certain Section 7.11(b) Exceptions
SCHEDULE VII Existing Liens
SCHEDULE VIII Certain Assets and Liabilities of Holdings
SCHEDULE IX Certain Existing General Partnership Interests
SCHEDULE X Courtyard Settlement Terms
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Form of Term Note
EXHIBIT B-2 Form of Revolving Note
EXHIBIT C Section 3.04(b)(ii) Certificate
EXHIBIT D-1 Opinion of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., General Counsel
EXHIBIT D-2 Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
EXHIBIT E Officers' Certificate
EXHIBIT F Amended and Restated Pledge and Security Agreement
EXHIBIT G Amended and Restated Subsidiaries Guaranty
EXHIBIT H Officer's Solvency Certificate
EXHIBIT I Assignment and Assumption Agreement
EXHIBIT J Additional Revolving Loan Commitment Agreement
EXHIBIT K Subordination Provisions
(v)
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 19, 1997, and
amended and restated as of August 5, 1998, and further amended and restated as
of May 31, 2000, among HOST MARRIOTT CORPORATION, a Maryland corporation
("Holdings"), HOST MARRIOTT, L.P., a Delaware limited partnership (the
"Borrower"), the Banks party hereto from time to time, and BANKERS TRUST
COMPANY, as Administrative Agent (all capitalized terms used herein and defined
in Section 10 are used herein as therein defined).
WITNESSETH:
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WHEREAS, Holdings, the Borrower, the lenders party thereto on (and
immediately before giving effect to) the Effective Date and the Administrative
Agent are parties to a Credit Agreement, dated as of June 19, 1997 and amended
and restated as August 5, 1998 (as the same has been further amended, modified
or supplemented to, but not including, the Effective Date, the "Original Credit
Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Original Credit
Agreement in its entirety in the form of this Agreement;
NOW, THEREFORE, the parties hereto agree that, from and after the Effective
Date, the Original Credit Agreement shall be and hereby is amended and restated
in its entirety as follows:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and conditions set
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forth herein, each Bank with a Term Loan Commitment severally agrees to make, on
the Effective Date, a term loan or term loans (each, a "Term Loan" and,
collectively, the "Term Loans") to the Borrower, which Term Loans (i) shall, at
the option of the Borrower, be incurred and maintained as, and/or converted
into, Base Rate Loans or Eurodollar Loans, provided that, except as otherwise
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specifically provided in Section 1.10(b), all Term Loans comprising the same
Borrowing shall at all times be of the same Type, and (ii) shall not exceed for
any such Bank, in aggregate principal amount, that amount which equals the Term
Loan Commitment of such Bank on the Effective Date (before giving effect to the
termination thereof on such date pursuant to Section 2.03(b)). Once repaid, Term
Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Bank with a Revolving Loan Commitment severally agrees to make, at any time and
from time to time on and after the Effective Date and prior to the Maturity
Date, a revolving loan or revolving loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans (i)
shall, at the option of the Borrower, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans, provided that, except as
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otherwise specifically provided in Section 1.10(b), all Revolving Loans
comprising the same Borrowing shall at all times be of the same Type, (ii) may
be repaid and reborrowed at any time in accordance with the provisions hereof,
and (iii) shall not exceed for any such Bank at any time
outstanding that aggregate principal amount which equals the Revolving Loan
Commitment of such Bank at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
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each Borrowing of Loans under a respective Tranche shall not be less than the
Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing
may occur on the same date, but at no time shall there be outstanding more than
ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur a
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Borrowing of Loans hereunder, the Borrower shall give the Administrative Agent
at the Notice Office at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Base Rate Loan to be
incurred hereunder and at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of each Eurodollar Loan to be
incurred hereunder, provided that any such notice shall be deemed to have been
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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 Borrower in the
form of Exhibit A, appropriately completed to specify (i) the aggregate
principal amount of the Loans to be incurred pursuant to such Borrowing, (ii)
the date of such Borrowing (which shall be a Business Day), (iii) the specific
uses to be made of the proceeds of the Loans, (iv) whether the Loans being
incurred pursuant to such Borrowing shall constitute Term Loans or Revolving
Loans, and (v) whether the Loans being incurred pursuant to such Borrowing are
to be initially maintained as Base Rate Loans or, to the extent permitted
hereunder, Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. The Administrative Agent shall promptly give
each Bank which is required to make Loans specified in the respective Notice of
Borrowing facsimile or other written notice (i) of such proposed Borrowing, (ii)
of such Bank's proportionate share thereof and (iii) of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing. Notwithstanding anything to the contrary contained in this
Agreement, unless the Administrative Agent otherwise agrees, no more than four
Notices of Borrowing may be given in any 30 consecutive day period.
(b) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice of any Borrowing of Loans, 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 the Borrower prior to receipt of written confirmation. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice of such
Borrowing.
1.04 Disbursement of Funds. No later than 1:00 P.M. (New York time) on the
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date specified in each Notice of Borrowing, each Bank with a Commitment for the
respective Tranche of Loans and which has received the notice referred to in the
next to last sentence of Section 1.03(a) will disburse its pro rata portion of
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each Borrowing requested to be made on such date. All such amounts shall be
disbursed in Dollars and in immediately available funds at the Payment Office,
and the Administrative Agent will promptly disburse to the Borrower at the
Payment Office, in Dollars and in immediately available funds, the aggregate of
the amounts so
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made available by the Banks. Unless the Administrative Agent shall have been
notified by any Bank prior to the time of Borrowing that such Bank does not
intend to disburse 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 disbursed such amount to the Administrative Agent on such date of
Borrowing and the Administrative Agent may, in reliance upon such assumption,
disburse to the Borrower a corresponding amount. If such corresponding amount
is not in fact disbursed 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 Borrower and, to the extent such corresponding
amount has previously been disbursed to the Borrower, the Borrower shall, within
one Business Day after such notice, pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Bank or the 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 the 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, the overnight Federal
Funds Rate for the first three days and the interest rate applicable to Loans of
the respective Tranche maintained as Base Rate Loans for each day thereafter,
and (ii) if recovered from the 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.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
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interest on, the Loans made by each Bank to the Borrower shall be evidenced in
the Register maintained by the Administrative Agent pursuant to Section 12.16
and, subject to the provisions of clause (e) of this Section 1.05, also shall be
evidenced (i) if Term Loans, by a promissory note duly executed and delivered
by the Borrower substantially in the form of Exhibit B-1 with blanks
appropriately completed in conformity herewith (each, a "Term Note" and,
collectively, the "Term Notes"), and (ii) if Revolving Loans, by a promissory
note duly executed and delivered by the Borrower substantially in the form of
Exhibit B-2, with blanks appropriately completed in conformity herewith (each, a
"Revolving Note" and, collectively, the "Revolving Notes").
(b) The Term Note issued to each Bank with a Term Loan Commitment or with
outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable
to the order of such Bank or its registered assigns and be dated the Effective
Date (or, in the case of Term Notes issued to an Eligible Transferee pursuant to
an Assignment and Assumption Agreement after the Effective Date, be dated the
date of the issuance thereof), (iii) be in a stated principal amount equal to
the Term Loans made by such Bank on the Effective Date (or, in the event such
Bank has entered into an Assignment and Assumption Agreement after the Effective
Date, the amount of the Term Loans set forth for such Bank therein) and be
payable in the principal amount of the Term Loans evidenced thereby, (iv) mature
on the 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 prepayment as provided
in Section 3.01, and mandatory repayment as provided in Section 3.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
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(c) The Revolving Note issued by the Borrower to each Bank with a
Revolving Loan Commitment or outstanding Revolving Loans shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank or its registered
assigns and be dated the Effective Date (or, if issued to an Eligible Transferee
pursuant to an Assignment and Assumption Agreement after the Effective Date, be
dated the date of the issuance thereof), (iii) be in a stated principal amount
equal to the Revolving Loan Commitment of such Bank (or, if issued after the
termination of such Revolving Loan Commitment, be in a stated principal amount
equal to the outstanding Revolving Loans, if any, of such Bank at such time)
and be payable in the principal amount of the outstanding Revolving Loans
evidenced thereby, (iv) mature on the 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 prepayment as provided in Section 3.01, and mandatory
repayment as provided in Section 3.02, and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(d) 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 properly endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
(or any error in such notation) shall not affect the Borrower's obligations to
the holder from time to time of each Note in respect of such Loans.
(e) Notwithstanding anything to the contrary contained above or elsewhere
in this Agreement, Term Notes and Revolving Notes shall only be delivered to
Banks with Loans or Commitments of the respective Tranches which at any time
specifically request the delivery of such Notes. No failure of any Bank to
request or obtain a Note evidencing its Loans of any Tranche shall affect or in
any manner impair the obligations of the Borrower to pay the Loans (and all
related Obligations) which would otherwise be evidenced thereby in accordance
with the requirements of this Agreement, and shall not in any way affect the
security or guaranties therefor provided pursuant to the various Credit
Documents. Any Bank which does not have a Note evidencing its outstanding Loans
shall in no event be required to make the notations otherwise described in
preceding clause (d). At any time when any Bank requests the delivery of a Note
to evidence its Loans of any Tranche, the Borrower shall promptly execute and
deliver to the respective Bank the requested Note or Notes in the appropriate
amount or amounts to evidence such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on any
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Business Day occurring after the Effective Date, all or a portion equal to at
least the applicable Minimum Borrowing Amount of the outstanding principal
amount of Loans made pursuant to one or more Borrowings of one or more Types of
Loans under a single Tranche into a Borrowing or Borrowings of another Type of
Loan under such Tranche, provided that, (i) except as otherwise provided in
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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 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 the Minimum Borrowing Amount applicable thereto, (ii)
unless the Required Banks otherwise agree, Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion, 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
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1.02. Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at the Notice Office prior to 11:00 A.M. (New York time) at
least three Business Days' prior written notice (or one Business Day's prior
written notice in the case of a conversion of Eurodollar Loans into Base Rate
Loans) (each a "Notice of Conversion") specifying the Loans to be so converted,
the Borrowing(s) pursuant to which such 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 affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans shall be incurred
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from the Banks pro rata on the basis of their Term Loan Commitments. All
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Borrowings of Revolving Loans 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 Borrower agrees to pay interest in respect of the
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unpaid principal amount of each Base Rate Loan from the date of Borrowing
thereof 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 each as in
effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Loan from the date of Borrowing thereof 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 as in effect from time to time during such Interest
Period plus the Eurodollar Rate for such Interest Period.
(c) 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
Loans (without giving effect to any increase in the rate borne by such Loans as
a result of the operation of this clause (c)), in each case with such interest
to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable in respect
of each Loan, (i) monthly in arrears on the last Business Day of each calendar
month and (ii) on the date of any repayment or prepayment thereof (on the amount
repaid or prepaid), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand, provided, that in the case of Base Rate Loans,
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interest shall not be payable pursuant to the preceding clause (ii) at the time
of any repayment or prepayment thereof (but shall otherwise be payable as
provided in the preceding clause (i)) unless the respective repayment or
prepayment is made in conjunction with
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the repayment or prepayment (or required repayment or prepayment) in full of all
Loans of the respective Tranche.
(e) Upon each Interest Determination Date, the Administrative Agent shall
determine the respective Eurodollar Rate for the respective Interest Period or
Interest Periods to be applicable to the respective Eurodollar Loans and shall
promptly notify the 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 the Borrower gives any 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 prior to 11:00 A.M. (New York time) on the third Business Day prior
to the expiration of an Interest Period applicable to such Eurodollar Loan (in
the case of any subsequent Interest Period), the 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 the Borrower, be a one, two, three or six-month
period, provided that:
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(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 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;
(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
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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) unless the Required Banks otherwise agree, no Interest Period may
be selected at any time when a Default or an Event of Default is then in
existence; and
(vi) no Interest Period in respect of any Borrowing of Eurodollar
Loans shall be selected which extends beyond the Maturity Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower 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 Borrower shall be
-6-
deemed to have elected to convert such Eurodollar Loans into Base Rate Loans
effective as of the expiration date of such current Interest Period.
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):
(i) on any Interest Determination Date that, by reason of any
changes arising after the Effective Date 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 Effective Date 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 such Eurodollar Loan
or any other amounts payable hereunder (except for changes in the rate of
tax on, or determined by reference to, 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 jurisdiction 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 Effective Date 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 Effective
Date which materially and adversely affects the interbank Eurodollar
market;
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 Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Administrative Agent notifies the Borrower and the Banks that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing, Notice of Conversion or notice given
under Section 1.09 delivered by the Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to
-7-
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 Borrower by such Bank in good faith shall, absent manifest
error, be final and conclusive and binding on all the parties hereto) and (z) in
the case of clause (iii) above, the 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. Each of the Administrative Agent and each Bank
agrees that if it gives notice to the Borrower of any of the events described in
clause (i) or (iii) above, it shall promptly notify the 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. In addition, if the Administrative Agent gives notice to the
Borrower that the events described in clause (i) above cease to exist, then the
obligations of the Banks to make Eurodollar Loans and to convert Base Rate
Loans into Eurodollar Loans on the terms and conditions contained herein (but
subject to clause (iii) above) also 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 Borrower may (and in the case of
a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii) the Borrower 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 the Borrower was notified by the affected Bank or
the Administrative Agent 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'
written notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan, 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).
(c) If at any time any Bank determines that, after the Effective Date, the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law and including, without limitation, those announced or published
prior to the Effective Date) concerning capital adequacy, or any change 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 Borrower shall pay to such
Bank, upon 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
-8-
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall show the basis
for calculation of such additional amounts. In addition, each such Bank, upon
determining that the circumstances giving rise to the payment of additional
amounts pursuant to this Section 1.10(c) cease to exist, will give prompt
written notice thereof to the Borrower.
1.11 Compensation. The 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 or continuation of, or conversion from
or into, Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing, in a Notice of Conversion or in a notice delivered under
Section 1.09 (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any repayment
made pursuant to Section 3.01 or 3.02 or as a result of an acceleration of the
Loans pursuant to Section 9) or conversion of any Eurodollar Loans occurs on a
date which is not the last day of an Interest Period with respect thereto; (iii)
if any prepayment of any Eurodollar Loans is not made on any date specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any
other default by the Borrower to repay the Loans when required by the terms of
this Agreement or any Note held by such Bank or (y) 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) or Section 3.04 with respect to such Bank, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Bank) to designate another lending office for any Loans 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 the Borrower or the right of any Bank provided in Sections
1.10 and 3.04.
1.13 Replacement of Banks. (a) (x) If any Bank (i) becomes a Defaulting
--------------------
Bank or (ii) refuses to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Banks as (and to the extent) provided in Section 12.12(b), or (y) upon
the occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii), Section 1.10(c) or Section 3.04 with respect to any Bank which results
in such Bank charging to the Borrower increased costs in excess of those being
generally charged by the other Banks, the Borrower shall have the right, in
accordance with the requirements of Section 12.04(b), 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 reasonably acceptable to the Administrative Agent, none of whom
shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank"), 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 12.04(b) (and with all fees payable pursuant to said
-9-
Section 12.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and all of the outstanding
Loans of the Replaced Bank and, in connection therewith, shall pay to the
Replaced Bank in respect thereof an amount equal to the sum of (1) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans of
the Replaced Bank at such time and (2) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section 2.01 and
(ii) all obligations of the Borrower owing to the Replaced Bank (other than
those specifically described in clause (i) above of this proviso in respect of
which the assignment purchase price has been, or is concurrently being, paid)
shall be paid in full to such Replaced Bank concurrently with such replacement.
(b) Upon the execution of the respective Assignment and Assumption
Agreements, the recordation thereof in the Register by the Administrative Agent,
the payment of amounts referred to in clauses (i) and (ii) of the proviso of
Section 1.13(a) and, if so requested by the Replacement Bank, delivery to the
Replacement Bank of the appropriate Note or Notes executed by the Borrower, 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 for periods when such Bank was a "Bank" under
this Agreement (including, without limitation, Sections 1.10, 1.11, 3.04, 12.01
and 12.06), which shall survive as to such Replaced Bank. Upon the Replaced Bank
ceasing to be a Bank hereunder, such Replaced Bank agrees to promptly return to
the Borrower any Note or Notes theretofore delivered to such Replaced Bank
pursuant to this Agreement marked "canceled", or if such Replaced Bank has lost
or cannot find any such Note or Notes, such Replaced Bank will execute and
deliver to the Borrower a customary lost note and indemnity agreement in form
and substance reasonably satisfactory to the Borrower.
1.14 Additional Revolving Loan Commitments. (a) So long as no Default or
-------------------------------------
Event of Default then exists or would result therefrom, the Borrower shall have
the right at any time and from time to time on or prior to April 30, 2003 and
upon at least 15 Business Days prior written notice to the Administrative Agent
(which shall promptly notify each of the Banks), to request on up to five
occasions that one or more Banks (and/or one or more other Persons which will
become Banks as provided below) provide Additional Revolving Loan Commitments
and, subject to the applicable terms and conditions contained in this Agreement,
make Revolving Loans pursuant thereto, it being understood and agreed, however,
that (i) no Bank shall be obligated to provide an Additional Revolving Loan
Commitment as a result of any such request by the Borrower, (ii) until such
time, if any, as such Bank has agreed in its sole discretion to provide an
Additional Revolving Loan Commitment and executed and delivered to the
Administrative Agent an Additional Revolving Loan Commitment Agreement in
respect thereof as provided in Section 1.14(b) and such Additional Revolving
Loan Commitment Agreement has become effective, such Bank shall not be obligated
to fund any Revolving Loans in excess of its Revolving Loan Commitment as in
effect prior to giving effect to such Additional Revolving Loan Commitments
provided pursuant to this Section 1.14, (iii) any Bank (or, in the circumstances
contemplated by clause (vii) below, any other Person which will qualify as an
Eligible Transferee) may so provide an Additional Revolving Loan Commitment
without the consent of any other Bank but with the prior consent of the
Administrative Agent (which consent shall not be unreasonably withheld), (iv)
each provision of Additional Revolving Loan Commitments on a given date pursuant
to this Section 1.14 shall be in a minimum aggregate amount (for all Banks
(including, in the circumstances contemplated by clause (vii) below,
-10-
Eligible Transferees who will become Banks)) of at least $25,000,000 and in
integral multiples of $1,000,000 in excess thereof, (v) the aggregate amount of
all Additional Revolving Loan Commitments permitted to be provided pursuant to
this Section 1.14 shall not exceed $225,000,000, (vi) the fees payable to any
Bank (including, in the circumstances contemplated by clause (vii) below, any
Eligible Transferee who will become a Bank) providing an Additional Revolving
Loan Commitment shall be as set forth in the relevant Additional Revolving Loan
Commitment Agreement, (vii) if, after the Borrower has requested the then
existing Banks (other than Defaulting Banks) to provide Additional Revolving
Loan Commitments pursuant to this Section 1.14 on the terms to be applicable
thereto, the Borrower has not received Additional Revolving Loan Commitments in
an aggregate amount equal to that amount of the Additional Revolving Loan
Commitments which the Borrower desires to obtain pursuant to such request (as
set forth in the notice provided by the Borrower to the Administrative Agent as
provided above), then the Borrower may request Additional Revolving Loan
Commitments from Persons which would qualify as Eligible Transferees hereunder
in an aggregate amount equal to such deficiency on terms which are no more
favorable to such Eligible Transferee in any respect than the terms offered to
the Banks, provided that any such Additional Revolving Loan Commitments provided
--------
by any such Eligible Transferee which is not already a Bank shall be in a
minimum amount (for such Eligible Transferee) of at least $10,000,000, and
(viii) all actions taken by the Borrower pursuant to this Section 1.14(a) shall
be done in coordination with the Administrative Agent.
(b) At the time of any provision of Additional Revolving Loan Commitments
pursuant to this Section 1.14, (i) the Borrower, the Administrative Agent and
each Bank or other Eligible Transferee (each, an "Additional Revolving Loan
Bank") which agrees to provide an Additional Revolving Loan Commitment shall
execute and deliver to the Administrative Agent an Additional Revolving Loan
Commitment Agreement substantially in the form of Exhibit J (appropriately
completed), subject to such modifications in form and substance reasonably
satisfactory to the Administrative Agent as may be necessary or appropriate
(with the effectiveness of such Additional Revolving Loan Bank's Additional
Revolving Loan Commitment to occur upon delivery of such Additional Revolving
Loan Commitment Agreement to the Administrative Agent, the payment of any fees
required in connection therewith and the satisfaction of the other conditions
in this Section 1.14(b) to the reasonable satisfaction of the Administrative
Agent), (ii) the Borrower shall, in coordination with the Administrative Agent,
repay outstanding Revolving Loans of certain of the Banks, and incur additional
Revolving Loans from certain other Banks, in each case so that all of the Banks
participate in each outstanding Borrowing of Revolving Loans pro rata on the
--- ----
basis of their respective Revolving Loan Commitments (after giving effect to any
increase in the Total Revolving Loan Commitment pursuant to this Section 1.14)
and with the Borrower being obligated to pay to the respective Banks the costs
of the type referred to in Section 1.11 in connection with any such repayment
and/or Borrowing and (iii) the Borrower shall deliver to the Administrative
Agent an opinion, in form and substance reasonably satisfactory to the
Administrative Agent, from counsel to the Borrower reasonably satisfactory to
the Administrative Agent and dated such date, covering such matters similar to
those set forth in the opinions of counsel delivered to the Administrative Agent
on the Effective Date pursuant to Section 4.03 and such other matters as the
Administrative Agent may reasonably request. The Administrative Agent shall
promptly notify each Bank as to the occurrence of each Additional Revolving Loan
Commitment Date, and (x) on each such date, the Total Revolving Loan Commitment
under, and for all purposes of, this Agreement shall be increased by the
aggregate
-11-
amount of such Additional Revolving Loan Commitments, and (y) on each such date
Schedule I shall be deemed modified to reflect the revised Revolving Loan
Commitments of the affected Banks.
SECTION 2. Fees; Reductions of Commitment.
------------------------------
2.01 Fees. (a) The Borrower agrees to pay to the Administrative Agent for
----
distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Commitment Commission") for the period from the
Effective Date to but not including the Maturity Date (or until such earlier
date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate per annum equal to the Applicable Commitment Commission
Percentage on the daily average Unutilized Revolving Loan Commitment of such
Non-Defaulting Bank. Accrued Commitment Commission shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the Maturity Date or
such earlier date upon which the Total Revolving Loan Commitment shall have been
terminated.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower with
the Administrative Agent.
2.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least two
-----------------------------------------------
Business Days' prior written notice to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Banks), the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate or partially reduce the Total
Unutilized Revolving Loan Commitment, in a minimum amount of $5,000,000 in the
case of partial reductions; provided that each such reduction shall apply
proportionately to permanently reduce the Revolving 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 (and to the extent)
provided in Section 12.12(b), the Borrower may, upon five Business Days' written
notice to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), terminate
the entire 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 con-currently with the effectiveness of such termination pursuant to
Section 3.01(b) (at which time Schedule I shall be deemed modified to reflect
such changed amounts), and at such time, such Bank shall no longer constitute a
"Bank" for purposes of this Agreement, except with respect to indemnifications
under this Agreement for periods when such Bank was a "Bank" under this
Agreement (including, without limitation, Sections 1.10, 1.11, 3.04, 12.01 and
12.06), which shall survive as to such repaid Bank.
2.03 Mandatory Termination of Commitments. (a) The Total Commitment (and
------------------------------------
the Term Loan Commitment and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety on June 30, 2000, unless the Effective Date shall have
occurred on or prior to such date.
-12-
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 2.03, the Total Term Loan Commitment (and the Term Loan Commitment
of each Bank) shall terminate in its entirety on the Effective Date (after
giving effect to the incurrence of the Term Loans on such date).
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 2.03, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate in its entirety on the Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 2.03, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate in its entirety on the date on which a
Change of Control shall occur.
(e) In addition to any other mandatory commitment reductions pursuant to
this Section 2.03, the Total Revolving Loan Commitment shall be permanently
reduced from time to time to the extent required by Section 3.02. Each reduction
to the Total Revolving Loan Commitment pursuant to this Section 2.03(e) shall be
applied proportionately to permanently reduce the Revolving Loan Commitment of
each Bank.
SECTION 3. Prepayments; Payments; Taxes.
----------------------------
3.01 Voluntary Prepayments. (a) The 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: (i) the Borrower shall give
the Administrative Agent prior to 12:00 Noon (New York time) at the Notice
Office (x) at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of the Borrower's intent to prepay Base
Rate Loans and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of the Borrower's intent to
prepay Eurodollar Loans, whether Term Loans or Revolving Loans shall be prepaid,
the amount of such prepayment and the Types of Loans to be prepaid and, in the
case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to
which such Eurodollar Loans were made, which notice the Administrative Agent
shall promptly transmit to each of the Banks; (ii) each prepayment of Loans made
pursuant to this Section 3.01(a) shall be in an aggregate principal amount of at
least $5,000,000, provided that 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 the Minimum Borrowing
Amount applicable thereto, then such Borrowing may not be continued as a
Borrowing of Eurodollar Loans and any election of an Interest Period with
respect thereto given by the Borrower shall have no force or effect, but instead
such Borrowing shall be converted automatically to a Borrowing of Base Rate
Loans; (iii) each prepayment made pursuant to this Section 3.01(a) in respect of
any Loans made pursuant to a Borrowing shall be applied pro rata among such
--- ----
Loans, provided that at the Borrower's election in connection with any
--------
prepayment of Revolving Loans pursuant to this Section 3.01(a), such prepayment
shall not, so long as no Default or Event of Default then exists, be applied to
any Revolving Loans of a Defaulting Bank; and (iv) at the time of any prepayment
of Eurodollar Loans pursuant to this Section 3.01(a) on any date other than the
last day of the Interest Period applicable thereto, the Borrower shall pay the
amounts required pursuant to Section 1.11.
-13-
(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 (and to the extent)
provided in Section 12.12(b), the Borrower may, upon five Business Days' prior
written notice to the Administrative Agent at the Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks), repay
all Loans, together with accrued and unpaid interest, Fees and all other amounts
owing to such Bank under this Agreement (including under Section 1.11) in
accordance with said Section 12.12(b) so long as (A) in the case of the
repayment of any Revolving Loans of any Bank pursuant to this Section 3.01(b),
the Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment pursuant to Section 2.02(b) (at which time Schedule I shall be deemed
modified to reflect the changed Revolving Loan Commitments) and (B) the consents
required by Section 12.12(b) in connection with the repayment pursuant to this
Section 3.01(b) have been obtained.
3.02 Mandatory Repayments and Commitment Reductions. (a) On any day on
----------------------------------------------
which the aggregate outstanding principal amount of Revolving Loans exceeds the
Total Revolving Loan Commitment then in effect, the Borrower shall prepay on
such day principal of Revolving Loans in an amount equal to such excess.
(b) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 3.02, within five Business Days after each date on or
after the Effective Date upon which Holdings or any of its Subsidiaries receives
any cash proceeds from any incurrence by Holdings or any of its Subsidiaries of
Secured Indebtedness and/or Subsidiary Indebtedness, an amount equal to 100% of
the Net Debt Proceeds from such Secured Indebtedness and Subsidiary Indebtedness
shall be applied within such five Business Day period as a mandatory repayment
and/or commitment reduction in accordance with the requirements of Section
3.02(e); provided, however, the provisions of this Section 3.02(b) shall not
-------- -------
apply to either (x) the first $200,000,000 in the aggregate of Secured
Indebtedness and Subsidiary Indebtedness incurred on or after the Effective Date
or (y) the refinancing of any Secured Indebtedness and/or Subsidiary
Indebtedness existing on the Effective Date (without giving effect to any
increases thereof after the Effective Date) or the refinancing of any Acquired
Indebtedness (without giving effect to any increases thereof after the
assumption thereof), in either case with new Secured Indebtedness and/or
Subsidiary Indebtedness up to the aggregate principal amount of the existing
Secured Indebtedness (including Acquired Indebtedness) and/or Subsidiary
Indebtedness outstanding at the time of such refinancing plus the amount of any
costs, fees (including prepayment penalties, but excluding interest) and
expenses associated with any refinancing of Secured Indebtedness or Subsidiary
Indebtedness existing on the Effective Date.
(c) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 3.02, in the event that the aggregate Net Sale
Proceeds received by Holdings or any of its Subsidiaries from one or more Asset
Sales occurring on or after June 1, 1999 in any period of 12 consecutive months
exceed 1% of Total Assets (determined as of the date closest to the commencement
of such 12-month period for which a consolidated balance sheet of the Borrower
and its Subsidiaries has been filed with the SEC or delivered to the Banks
pursuant to Section 7.01), an amount equal to 100% of the Net Sale Proceeds from
all Asset Sales effected during such 12 month period shall be applied at such
time as a mandatory repayment and/or commitment reduction in accordance with the
requirements of Section 3.02(e);
-14-
provided, however, that the Net Sale Proceeds from any such Asset Sale shall not
-------- -------
be required to be so applied on such date so long as no Specified Default or
Event of Default then exists and (i) such Net Sale Proceeds shall be used or
contractually committed to be used pursuant to a binding agreement (subject
only to reasonable, customary closing conditions) (A) to purchase fixed assets
and property (other than notes, bonds, obligations and securities) which in the
good faith reasonable judgment of the Board of Directors of the Borrower will
immediately constitute or be part of a business of the Borrower or such
Subsidiary (if it continues to be a Subsidiary of the Borrower) permitted under
Section 8.16(a), (B) to make Permitted Designated Investments of the type
described in clause (i) of the definition thereof and/or (C) to purchase at
least a controlling interest in the capital stock or other equity of a Person
engaged in a business permitted under Section 8.16(a) and pursuant to a
transaction otherwise permitted under this Agreement (provided that,
concurrently with a purchase described in this clause (C), such Person becomes a
Subsidiary of the Borrower), in each case within 364 days (or earlier to the
extent required to be so applied pursuant to the terms of any other outstanding
Indebtedness) following the date of such Asset Sale, it being understood,
however, that (I) if all or any portion of such Net Sale Proceeds are not so
-------
used (or contractually committed to be used) within such 364 day period (or
earlier period, as the case may be) or (II) if all or any portion of such Net
Sale Proceeds is contractually committed to be used as provided above within the
364 day period (or earlier period, as the case may be) and is not actually used
within an additional 180 day period, such remaining portion (in either case)
shall be applied on the last day of the respective period as a mandatory
repayment and/or commitment reduction in accordance with the requirements of
Section 3.02(e); and provided further, that so long as no Specified Default or
-------- -------
Event of Default then exists, no mandatory repayment or commitment reduction
shall be required pursuant to this Section 3.02(c) until the date on which the
aggregate Net Sale Proceeds not so reinvested within the time periods specified
above equals or exceeds $25,000,000.
(d) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 3.02, within 30 days following each date on or after
the Effective Date upon which Holdings or any of its Subsidiaries receives any
cash proceeds from any Casualty Event or Taking (other than a Casualty Event or
Taking in which the aggregate cash proceeds so received is less than
$1,000,000), an amount equal to 100% of the Net Insurance/Condemnation Proceeds
from such Casualty Event or Taking shall be applied as a mandatory repayment
and/or commitment reduction in accordance with the requirements of Section
3.02(e); provided, however, that so long as no Default or Event of Default then
-------- -------
exists under Section 9.01 or 9.05, such Net Insurance/Condemnation Proceeds
shall not be required to be so applied on such date to the extent that such Net
Insurance/Condemnation Proceeds shall be used (or be contractually committed to
be used) to replace or restore any properties or assets in respect of which
such Net Insurance/Condemnation Proceeds were paid within 364 days (or earlier
to the extent required to be so applied pursuant to terms of any other
outstanding Indebtedness) following the date of such Casualty Event or Taking
and, provided further, that (I) if all or any portion of such Net
-------- -------
Insurance/Condemnation Proceeds not required to be applied as a mandatory
repayment and/or commitment reduction pursuant to the preceding proviso are not
so used (or contractually committed to be used) within 364 days (or earlier to
the extent required to be so applied pursuant to terms of any other outstanding
Indebtedness) after the date of receipt of the Net Insurance/Condemnation
Proceeds from the respective Casualty Event or Taking, then, such remaining
portion not used shall be applied on the date which is 364 days (or earlier to
the extent required to be so applied pursuant to the terms of any other
outstanding Indebtedness) following the date
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of receipt of such Net Insurance/Condemnation Proceeds from the respective
Casualty Event or Taking in accordance with the requirements of Section 3.02(e),
and (II) if all or any portion of such Net Insurance/Condemnation Proceeds not
required to be applied as a mandatory repayment and/or commitment reduction
pursuant to the preceding proviso because such amount is contractually committed
to be used and subsequent to such date such contract is terminated or expires
without such portion being so used, then such remaining portion shall be applied
on the date of such termination or expiration in accordance with the
requirements of Section 3.02 (e).
(e) Each amount required to be applied pursuant to Sections 3.02(b), (c)
and (d) in accordance with this Section 3.02(e) shall be applied to repay the
principal of outstanding Term Loans and/or to permanently reduce the Total
Revolving Loan Commitment allocated between such Tranches in a manner to be
determined by the Borrower upon written notice to the Administrative Agent
(which shall promptly notify each of the Banks); provided, however, if at the
-------- -------
time that any amount is required to be applied pursuant to this Section 3.02(e)
a Specified Default or an Event of Default then exists, such amount shall be
applied (i) first, to repay the principal of outstanding Term Loans, and (ii)
second, to the extent that such amount is in excess of the amount required to be
applied pursuant to preceding clause (i), to permanently reduce the Total
Revolving Loan Commitment and accompanied by a corresponding repayment of
principal of outstanding Revolving Loans (whether or not such repayment of
Revolving Loans would be required at such time by operation of Section 3.02(a)).
(f) With respect to each repayment of Loans required by this Section 3.02,
the Borrower may designate the Types of Loans of the respective Tranche 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) repayments of
--------
Eurodollar Loans pursuant to this Section 3.02 may only be made on the last day
of an Interest Period applicable thereto unless all Eurodollar Loans with
Interest Periods ending on such date of required repayment and all Base Rate
Loans have been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto, such Borrowing shall be converted at the end of the
then current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of Loans made pursuant to the same Borrowing shall be applied pro rata
among such Loans. In the absence of a designation by the Borrower as described
in the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion.
(g) Notwithstanding anything to the contrary contained in this Agreement,
the Borrower shall repay in full all outstanding Loans on the earlier of (i) the
Maturity Date and (ii) the date on which a Change of Control occurs.
3.03 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 in
Dollars in immediately available funds at the Payment Office. 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
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succeeding Business Day and, with respect to payments of principal, interest
shall be payable at the applicable rate during such extension.
3.04 Net Payments; Taxes. (a) All payments made by the Borrower hereunder
-------------------
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 3.04(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, in either
case pursuant to the laws of the jurisdiction in which such Bank 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 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
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, 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 reasonably determine are payable by, or withheld from, such
Bank in respect of 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 Borrower 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 or other
documentation reasonably acceptable to the Administrative Agent, evidencing such
payment by the Borrower. The 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.
(b) Each Bank that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower 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 12.04 (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 W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) (or successor forms)
certifying to such Bank's entitlement as of such date to a complete exemption
from United States withholding tax with respect to
-17-
payments to be made under this Agreement and under any Note, or (ii) if such
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 W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) pursuant to clause
(i) above, (x) a certificate substantially in the form of Exhibit C (any such
certificate, a "Section 3.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN (or
successor form) (with respect to the portfolio interest exemption) certifying to
such Bank's entitlement as of such date 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 invalid or inaccurate in any
material respect, such Bank will promptly deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits
of an income tax treaty) or Form W-8BEN (with respect to the portfolio interest
exemption) and a Section 3.04(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 promptly notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Bank shall
not be required to deliver any such Form or Certificate pursuant to this Section
3.04(b). Notwithstanding anything to the contrary contained in Section 3.04(a),
but subject to Section 12.04(b) and the immediately succeeding sentence, (x) the
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 Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to any provision of Section 3.04(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 not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 3.04(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
3.04 and except as set forth in Section 12.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in Section
3.04(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 that
are effective after the Effective 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 4. Conditions Precedent to Loans. The occurrence of the Effective
-----------------------------
Date pursuant to Section 12.10, and the obligation of each Bank to make Loans
hereunder on the Effective Date is subject at the time of the occurrence of the
Effective Date to the satisfaction of the following conditions:
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4.01 Execution of Agreement; Notes. On or prior to the Effective Date,
-----------------------------
(i) this Agreement shall have been executed and delivered as provided in Section
12.10 and (ii) there shall have been delivered to the Administrative Agent for
the account of each of the Banks (subject to Section 1.05(e)) the appropriate
Term Note and/or Revolving Note executed by the Borrower, in each case in the
amount and maturity and with other terms as otherwise provided herein.
4.02 Fees, etc. On the Effective Date, the Borrower shall have paid to
---------
the Administrative Agent, the Co-Agents and the Banks all costs, fees and
expenses (including, without limitation, reasonable legal fees and expenses of
the Administrative Agent) payable to the Administrative Agent, the Co-Agents and
the Banks to the extent then due.
4.03 Opinions of Counsel. On the Effective Date, the Administrative
-------------------
Agent shall have received (i) from ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., General Counsel
to Holdings, and counsel to the Borrower, an opinion addressed to the
Administrative Agent and each of the Banks and dated the Effective Date
covering the matters set forth in Exhibit D-1 and such other matters incident
to the transactions contemplated herein as the Administrative Agent may
reasonably request and (ii) from ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., special counsel to the
Credit Parties, an opinion addressed to the Administrative Agent and each of the
Banks and dated the Effective Date covering the matters set forth in Exhibit
D-2 and such other matters incident to the transactions contemplated herein as
the Administrative Agent may reasonably request.
4.04 Organizational Documents; Proceedings; etc. (a) On the Effective
------------------------------------------
Date, the Administrative Agent shall have received a certificate, dated the
Effective Date, signed by the Secretary or an Assistant Secretary of each Credit
Party (or from the Secretary or an Assistant Secretary of the general partner of
each Credit Party that is a limited partnership), in the form of Exhibit E with
appropriate insertions, together with copies of the declaration of trust,
certificate of incorporation and by-laws or other organizational documents
(including partnership agreements and certificates of partnership and limited
liability company agreements and certificates of limited liability company) of
each such Credit Party and the resolutions of each Credit Party referred to in
such certificate (in each case, only to the extent that any such certificates,
organizational documents and/or resolutions have not previously been delivered
with respect to any Credit Party pursuant to the Original Credit Agreement), and
the foregoing shall be reasonably acceptable to the Administrative Agent.
(b) All trust, corporate, partnership, limited liability company and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other documents in effect on
the Effective Date shall be reasonably satisfactory in form and substance to
the Administrative Agent and the Required Banks, and the Administrative Agent
shall have received all information and copies of all documents and papers,
including records of corporate and partnership proceedings, governmental
approvals, good standing certificates and bring-down telegrams, if any, which
the Administrative Agent may have reasonably requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate,
partnership or governmental authorities.
(c) On the Effective Date, the Administrative Agent shall have
received a certificate, dated the Effective Date and signed by an Authorized
Officer of the Borrower,
-19-
certifying that all of the applicable conditions set forth in Sections 4.07,
4.08, 4.09 and 4.12 have been satisfied as of the Effective Date (except to the
extent that any such conditions require a determination to be made by the
Administrative Agent and/or the Required Banks).
4.05 Pledge and Security Agreement. On the Effective Date, each Credit
-----------------------------
Party shall have duly authorized, executed and delivered an amended and restated
Pledge and Security Agreement in the form of Exhibit F (as modified,
supplemented or amended from time to time, the "Pledge and Security Agreement")
covering all of such Credit Party's present and future Pledge and Security
Agreement Collateral, together with (to the extent not theretofore delivered
pursuant to the Original Credit Agreement):
(a) all of the certificated Pledged Securities, if any, referred to
therein and then owned by such Credit Party, together with executed and
undated stock powers in blank or such other instruments of transfer as may
be reasonably requested by the Administrative Agent;
(b) proper financing statements (Form UCC-1) fully executed for filing
under the UCC or other appropriate filing offices of each jurisdiction as
may be necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by the
Pledge and Security Agreement;
(c) certified copies of requests for information or copies (Form UCC-
11), or equivalent reports, listing all effective financing statements that
name such Credit Party as debtor and that are filed in the jurisdictions
referred to in clause (b) above, together with copies of such other
financing statements that name any such Credit Party as debtor (none of
which shall cover the Pledge and Security Agreement Collateral except to
the extent evidencing Permitted Liens or in respect of which the Collateral
Agent shall have received termination statements (Form UCC-3 or such other
termination statements as shall be required by local law) fully executed
for filing);
(d) evidence of the completion of (or the Administrative Agent shall
be reasonably satisfied that arrangements are in place to complete) all
other recordings and filings of, or with respect to, the Pledge and
Security Agreement as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests intended to
be created by the Pledge and Security Agreement; and
(e) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Pledge and Security
Agreement have been taken (or the Administrative Agent shall be reasonably
satisfied that arrangements are in place to perfect and protect such
security interests).
4.06 Subsidiaries Guaranty. On the Effective Date, each Subsidiary
---------------------
Guarantor (as listed on Part I of Schedule IV) shall have duly authorized,
executed and delivered an amended and restated Subsidiaries Guaranty in the form
of Exhibit G (as modified, amended or supplemented from time to time, the
"Subsidiaries Guaranty").
-20-
4.07 Adverse Change, etc. (a) Since December 31, 1999, nothing shall
-------------------
have occurred (and neither the Administrative Agent nor the Banks shall have
become aware of any facts, conditions or other information not previously known)
which the Administrative Agent or the Required Banks shall determine has had, or
believe could reasonably be expected to have, a Material Adverse Effect.
(b) On or prior to the Effective Date, all necessary governmental
(domestic and foreign) and material third party approvals and consents in
connection with the transactions contemplated by the Credit Documents to occur
on or prior to the Effective Date and otherwise referred to herein or therein
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 transactions contemplated by such 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
transactions contemplated by the Credit Documents to occur on or prior to the
Effective Date.
4.08 Litigation. On the Effective Date, no litigation by any entity
----------
(private or governmental) shall be pending or threatened (i) with respect to any
Credit Document or the transactions contemplated thereby or (ii) which the
Administrative Agent or the Required Banks shall determine could reasonably be
expected to have a Material Adverse Effect.
4.09 Original Credit Agreement. On the Effective Date, (i) all
-------------------------
outstanding loans under the Original Credit Agreement shall be prepaid in full,
together with interest thereon and all other amounts owing pursuant to the
Original Credit Agreement (whether or not any such amounts are due on the
Effective Date pursuant to the terms thereof) and (ii) all outstanding
commitments under the Original Credit Agreement shall be terminated.
4.10 Solvency Certificate; Insurance Certificates. On or prior to the
--------------------------------------------
Effective Date, there shall have been delivered to the Administrative Agent:
(a) a solvency certificate in the form of Exhibit H, addressed to the
Administrative Agent and each of the Banks and dated the Effective Date
from an Authorized Financial Officer of the Borrower providing the opinion
of such Authorized Financial Officer as to the solvency of the Borrower and
its Subsidiaries taken as a whole and the Borrower on a stand-alone basis;
and
(b) to the extent not theretofore delivered pursuant to the Original
Credit Agreement, certificates of insurance complying with the requirements
of Section 7.03 for the business and properties of Holdings and its
Subsidiaries, in scope, form and substance reasonably satisfactory to the
Administrative Agent.
4.11 Financial Statements; Projections. On or prior to the Effective
---------------------------------
Date, the Administrative Agent shall have received the financial statements and
the Projections referred to in Section 6.05(a), all of which shall be in form
and substance reasonably satisfactory to the Administrative Agent and the
Required Banks.
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4.12 No Default; Representations and Warranties. On the Effective
------------------------------------------
Date, (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
Effective Date (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).
The occurrence of the Effective Date shall constitute a representation
and warranty by each of Holdings and the Borrower to the Administrative Agent
and each of the Banks that all the conditions specified in this Section 4 exist
as of the Effective Date (except to the extent that any of the conditions
specified in this Section 4 are required to be satisfactory to or determined by
any Bank, the Required Banks, the Collateral Agent and/or the Administrative
Agent or otherwise expressly calls for a subjective determination to be made by
any Bank, the Required Banks, the Collateral Agent and/or the Administrative
Agent). All of the Notes, certificates, legal opinions and other documents and
papers referred to in this Section 4, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the benefit of
each of the Banks and shall be in form and substance reasonably satisfactory to
the Banks.
SECTION 5. Conditions Precedent to All Loans. The obligation of each
---------------------------------
Bank to make Loans (including any Loans made on the Effective Date) is subject,
at the time of each such Loan (except as hereinafter indicated), to the
satisfaction of the following conditions:
5.01 Effective Date. The Effective Date shall have occurred.
--------------
5.02 No Default; Representations and Warranties. At the time of each
------------------------------------------
such Loan 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 Loan (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).
5.03 Notice of Borrowing. 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).
The acceptance of the proceeds of each Loan shall constitute a
representation and warranty by each of Holdings and the Borrower to the
Administrative Agent and each of the Banks that all the conditions specified in
this Section 5 and applicable to such Loan exist as of that time.
SECTION 6. Representations and Warranties. In order to induce the
------------------------------
Banks to enter into this Agreement and to make the Loans as provided herein,
each of Holdings and the Borrower makes (as to itself and each of its
Subsidiaries) the following representations, warranties and agreements, in each
case after giving effect to the Effective Date, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
-22-
Loans, with the occurrence of the Effective Date and the incurrence of each Loan
on or after the Effective Date being deemed to constitute a representation and
warranty that the matters specified in this Section 6 are true and correct on
and as of the Effective Date and on the date of each such Loan (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).
6.01 Status. Each of Holdings and each of its Subsidiaries (i) is a
------
duly organized and validly existing real estate investment trust, corporation,
partnership or limited liability company, as the case may be, in good standing
(if applicable) under the laws of the jurisdiction of its organization, (ii) has
the trust, corporate, partnership or limited liability company power and
authority, as the case may be, to own or lease 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 in each jurisdiction where the conduct of its business requires such
qualifications except for failures to be so qualified which, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
6.02 Power and Authority. Each Credit Party has the trust, corporate,
-------------------
partnership or limited liability company power and authority, as the case may
be, to execute, deliver and perform the terms and provisions of each of the
Credit Documents to which it is a party and has taken all necessary trust,
corporate, partnership or limited liability company action, as the case may be,
to authorize the execution, delivery and performance by it of each of such
Credit Documents. Each Credit Party has duly executed and delivered each of the
Credit Documents to which it is a party, and each of such Credit Documents
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 (but only with respect to any guaranties or security
interests given by a Subsidiary Guarantor), reorganization or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (i) will contravene any provision
of any applicable law, statute, rule or regulation or any applicable 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 Pledge and Security Agreement) upon any of the
properties or assets of Holdings 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
Holdings 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 or (iii) will violate
any provision of the declaration of trust, certificate of incorporation,
partnership agreement, certificate of partnership, limited liability company
agreement or by-laws, as the case may be, of Holdings or any of its
Subsidiaries.
-23-
6.04 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 execution, delivery and performance of any Credit Document or (ii)
the legality, validity, binding effect or enforceability of any Credit Document.
6.05 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections; etc. (a) The consolidated balance sheets of each of
-----------------------------
Holdings and its Subsidiaries and the Borrower and its Subsidiaries for the
fiscal year ended December 31, 1999 and the fiscal quarter ended March 24, 2000,
and the related consolidated statements of income, cash flows and shareholders'
equity of such Persons for the fiscal year and fiscal quarter ended on such
dates, as the case may be, copies of which have been furnished to the Banks on
or prior to the Effective Date, present fairly in all material respects the
consolidated financial position of each of Holdings and its Subsidiaries and
the Borrower and its Subsidiaries at the date of such balance sheets and the
consolidated results of the operations of such Persons for the periods covered
thereby. All of the foregoing financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied.
Since December 31, 1999, nothing has occurred that has had, or could reasonably
be expected to have, a Material Adverse Effect.
(b) On and as of the Effective Date and on the date on which each Loan
is made, on a Pro Forma Basis after giving effect to all Indebtedness (including
--- -----
the Loans) 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
Borrower and its Subsidiaries (taken as a whole) and the Borrower (on a
stand-alone basis) will exceed their respective debts, (y) the Borrower and its
Subsidiaries (taken as a whole) and the 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 Borrower and its Subsidiaries (taken as a whole) and the Borrower (on a
stand-alone basis) have sufficient capital with which to conduct its business.
For purposes of this Section 6.05(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 6.05(a) or in the Schedules to this Agreement, there were as
of the Effective Date no liabilities or obligations with respect to Holdings or
any of its Subsidiaries (whether absolute, accrued, contingent or otherwise and
whether or not due) of a nature required to be set forth in a balance sheet or
footnote thereto prepared in accordance with generally accepted accounting
principles which, either individually or in the aggregate, would be material to
Holdings, Holdings and its Subsidiaries taken as a whole, the Borrower or the
Borrower and its Subsidiaries taken as a whole. As of the Effective Date,
neither Holdings nor the Borrower knows of any liability or obligation of itself
or any of its Subsidiaries of any such nature that is not fully disclosed in the
financial statements delivered pursuant to Section 6.05(a) or in the
-24-
footnotes thereto which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(d) On and as of the Effective Date, the Projections previously
delivered to the Administrative Agent and the Banks have been prepared on a
basis consistent in all material respects with the financial statements referred
to in Section 6.05(a) (other than as set forth or presented in such
Projections), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to Holdings or the
Borrower to be misleading in any material respect or which fail to take into
account known material information regarding the matters reported therein. On
the Effective Date, each of Holdings and the Borrower believes that the
Projections are reasonable and attainable.
6.06 Litigation. There are no actions, suits or proceedings pending
----------
or, to the best knowledge of each of Holdings and the Borrower, threatened (i)
which purports to affect the legality, validity or enforceability of any Credit
Document or (ii) that could reasonably be expected to have a Material Adverse
Effect.
6.07 True and Complete Disclosure. All factual information (taken as a
----------------------------
whole) furnished by or on behalf of Holdings or any of its Subsidiaries in
writing to the Administrative Agent or any Bank (including, without limitation,
all information contained in the Credit Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any of the other
transactions contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Holdings
or any of its Subsidiaries in writing to the Administrative 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, to the best of each of Holdings' and the
Borrower's knowledge, not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information is or
was provided.
6.08 Use of Proceeds; Margin Regulations. (a) The proceeds of all
-----------------------------------
Loans shall be used by the Borrower and its Subsidiaries, subject to the other
restrictions set forth in this Agreement, for their working capital and general
corporate, partnership or limited liability company purposes.
(b) No part of the proceeds of any Loan 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 will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
6.09 Tax Returns and Payments. Each of Holdings and each of its
------------------------
Subsidiaries has 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 Holdings and/or its Subsidiaries. The
Returns accurately reflect in all material respects all material liability for
taxes of Holdings and its Subsidiaries for the periods covered thereby except
for amounts for which adequate reserves have been
-25-
established in accordance with generally accepted accounting principles. Each
of Holdings and each of its Subsidiaries 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 action,
suit, proceeding, investigation, audit, or claim now pending or, to the best
knowledge of each of Holdings and the Borrower, threatened by any authority
regarding any taxes relating to Holdings or any of its Subsidiaries which,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. As of the Effective Date, Holdings and each of its
Subsidiaries have properly accrued adequate reserves in accordance with
generally acceptable accounting principles for any amount of taxes in dispute
for a Return which is the subject of any waiver extending the statute of
limitations relating to the payment or collection of taxes of Holdings or any of
its Subsidiaries.
6.10 Compliance with ERISA. (i) Each Plan that is a single employer
---------------------
plan as defined in Section 4001(a)(15) of ERISA (a "Single Employer Plan") is in
substantial compliance with ERISA and the Code; no Reportable Event has occurred
with respect to a Single Employer Plan; no Single Employer Plan is insolvent or
in reorganization; to the best knowledge of each of Holdings and the Borrower,
no Multiemployer Plan is insolvent or in reorganization; no Single Employer Plan
has an Unfunded Current Liability; no Single Employer Plan which is subject to
Section 412 of the Code or Section 302 of ERISA has an accumulated funding
deficiency, within the meaning of such Sections of the Code or ERISA, or has
applied for or received an extension of any amortization period within the
meaning of Section 412 of the Code or Section 303 or 304 of ERISA; all
contributions required to be made by Holdings or any of its Subsidiaries or any
ERISA Affiliate with respect to a Plan and a Foreign Pension Plan have been
timely made; neither Holdings nor any of its Subsidiaries 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 or
reasonably 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 Single Employer Plan; to the best knowledge
of each of Holdings and the Borrower, no proceedings have been instituted to
terminate or appoint a trustee to administer any Multiemployer Plan; no
condition exists which presents a substantial risk to Holdings or any of its
Subsidiaries or any ERISA Affiliate of incurring a material liability to or on
account of a Single Employer Plan pursuant to the foregoing provisions of ERISA
and the Code; to the best knowledge of each of Holdings and the Borrower, no
condition exists which presents a substantial risk to Holdings or any of its
Subsidiaries or any ERISA Affiliate of incurring any material liability to or on
account of a Multiemployer Plan pursuant to the foregoing provisions of ERISA
and the Code; each of Holdings and the Borrower believes that the aggregate
liabilities of Holdings and its Subsidiaries and its ERISA Affiliates to all
Multiemployer Plans in the event of a withdrawal therefrom, as of the close of
the most recent fiscal year of each such Plan ended prior to the date of the
incurrence of any Loan, could not reasonably be expected to have a Material
Adverse Effect; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of Holdings or any of its Subsidiaries or any ERISA Affiliate has at
all times been operated in substantial compliance with the provisions of Part 6
of subtitle B of Title I of ERISA and Section 4980B of the Code; no lien imposed
under the Code or ERISA on the assets of Holdings or any of its Subsidiaries or
any ERISA Affiliate
-26-
exists or, to the best knowledge of each of Holdings and the Borrower, is likely
to arise on account of any Plan; and Holdings and its Subsidiaries do not
maintain or contribute to (A) any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or (B) any
Plan, the obligations with respect to which could reasonably be expected to
have a Material Adverse Effect.
(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
Holdings nor or 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 Holdings' most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is reasonable, does not exceed the current value of the assets of each Foreign
Pension Plan allocable to such benefit liabilities, in the aggregate, by a
material amount.
6.11 The Pledge and Security Agreement; Equity Pledges. (a) The Pledge
-------------------------------------------------
and Security Agreement creates (after all steps required under Articles 8 and 9
of the New York UCC have been taken) in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of each Credit Party in the Pledge and
Security Agreement Collateral described therein and owned by such Credit Party
on any date on which this representation and warranty is made or deemed made to
the extent that a security interest therein can be created pursuant to the UCC,
which security interest shall, (i) upon delivery to the Collateral Agent of any
certificates evidencing any Pledged Securities, (ii) upon the filing of
appropriate financing statements under the UCC in respect of any uncertificated
Pledged Securities that constitute a "general intangible" under the New York UCC
or (iii) upon the completion of such other actions as may be required under the
applicable provisions of the UCC (which delivery, filings and/or other actions
have been done and remain in full force and effect as to the Pledge and Security
Agreement Collateral owned by any Credit Party on any date on which this
representation and warranty is made or deemed made), constitute a fully
perfected first lien on, and security interest in, all right, title and interest
of such Credit Party in all of the Pledge and Security Agreement Collateral
described therein, subject to no security interests of any other Person.
(b) Schedule III sets forth, as of the Effective Date, whether the
capital stock or other equity interests in each Subsidiary listed on Schedule IV
is pledged (as of the Effective Date) pursuant to the Pledge and Security
Agreement, and to the extent any such interest is not so pledged, Schedule III
indicates the reason therefor.
6.12 Properties. Each of Holdings and each of its Subsidiaries has
----------
good and marketable title to all material properties owned by them, including
all material property reflected in the balance sheets referred to in Section
6.05(a) (except as sold or otherwise disposed of since the date of such balance
sheets, free and clear of all Liens, other than Permitted Liens).
-27-
6.13 Subsidiaries. (a) Holdings has no Subsidiaries other than (i) the
------------
Borrower and its Subsidiaries and (ii) Permitted REIT Subsidiaries. The
Borrower has no Subsidiaries other than (i) those Subsidiaries listed on
Schedule IV and (ii) new Subsidiaries created or acquired in compliance with
Section 8.17. Schedule IV correctly sets forth, as of the Effective Date, the
percentage ownership (direct or indirect) of Holdings and the Borrower in each
class of capital stock or other equity of each of their respective Subsidiaries
existing on the Effective Date and also identifies the direct owner thereof.
(b) Part I of Schedule IV sets forth, as of the Effective Date, each
Subsidiary Guarantor as of such date. Part II of Schedule IV sets forth, as of
the Effective Date, each Subsidiary of the Borrower which is not a Subsidiary
Guarantor on the Effective Date, which Part II of Schedule IV also shall specify
the reason the respective Subsidiary is not required to be a Subsidiary
Guarantor.
6.14 Compliance with Statutes, etc. Each of Holdings and each of its
-----------------------------
Subsidiaries 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, without limitation, applicable statutes,
regulations, orders and restrictions relating to zoning compliance and
environmental standards and controls), except such noncompliances as could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.15 Investment Company Act. Neither Holdings 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.
6.16 Public Utility Holding Company Act. Neither Holdings 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.
6.17 Environmental Matters. (a) To the best knowledge of each of
---------------------
Holdings and the Borrower, each of Holdings and each of its Subsidiaries has
complied with all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. To the best knowledge of each of
Holdings and the Borrower, there are no pending or threatened Environmental
Claims against Holdings or any of its Subsidiaries or any Real Property owned,
leased or operated by Holdings or any of its Subsidiaries. To the best knowledge
of each of Holdings and the Borrower, there are no facts, circumstances,
conditions or occurrences on any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries 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 Holdings or any of its Subsidiaries
or any such Real Property or (ii) to cause any such Real Property to be subject
to any restrictions on the ownership, occupancy, use or transferability of such
Real Property by Holdings or any of its Subsidiaries under any applicable
Environmental Law.
(b) To the best knowledge of each of Holdings and the Borrower,
Hazardous Materials have not at any time been generated, used, treated or stored
on, or transported to or
-28-
from, or Released on or from, any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries 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 Holdings or such Subsidiary's
business.
(c) Notwithstanding anything to the contrary in this Section 6.17, the
representations made in this Section 6.17 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.
6.18 Labor Relations. Neither Holdings nor any of its Subsidiaries,
---------------
and to the best knowledge of each of Holdings and the Borrower, no Facility
Manager or Approved Lessee, is engaged in any unfair labor practice with respect
to any Hotel Property or other Real Property owned or leased by Holdings or any
of its Subsidiaries that could reasonably be expected to have a Material Adverse
Effect. To the best knowledge of each of Holdings and the Borrower, there is (i)
no unfair labor practice complaint pending or reasonably expected to arise
against Holdings any of its Subsidiaries, any Facility Manager or any Approved
Lessee before the National Labor Relations Board and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending or reasonably expected to arise against
Holdings, any of its Subsidiaries, any Facility Manager or any Approved Lessee,
(ii) no strike, labor dispute, slowdown or stoppage is pending or reasonably
expected to arise against Holdings, any of its Subsidiaries, any Facility
Manager or any Approved Lessee and (iii) no union representation question exists
with respect to the employees of Holdings, any of its Subsidiaries, any Facility
Manager or any Approved Lessee, in each case with respect to the Hotel
Properties and/or other Real Properties owned or leased by Holdings or any of
its Subsidiaries, 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.
6.19 Intellectual Property. Each of Holdings and each of its
---------------------
Subsidiaries owns or has the right to use all trademarks, permits, service
marks, trade names, licenses and franchises necessary for the conduct of its
respective businesses, except such as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.20 Indebtedness. Schedule V sets forth a true and complete list of
------------
all Indebtedness of Holdings and its Subsidiaries as of the Effective Date and
which is to remain outstanding after giving effect thereto (excluding the Loans,
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 (it being understood that
Schedule V does not have to set forth immaterial items of Indebtedness that do
not otherwise constitute Indebtedness under clause (I) of the definition of
Consolidated Total Debt, although such items of immaterial Indebtedness will
still constitute Existing Indebtedness). On the Effective Date, Holdings is
current on all interest payments due on the QUIPs Debt.
6.21 Management Agreements, Franchise Agreements, Operating Leases,
--------------------------------------------------------------
Ground Leases. (a) Each Management Agreement, Franchise Agreement and Operating
-------------
Lease with respect to any Hotel Property owned or leased by Holdings or any of
its Subsidiaries is in full
-29-
force and effect in accordance with its terms and has not been terminated,
modified or amended without the consent of the Administrative Agent (other than
in accordance with its terms) and no party thereto has denied or disaffirmed any
of its material obligations thereunder or has defaulted in the due performance
or observance of any material term, covenant or agreement on its part to be
performed or observed pursuant thereto, in each case except to the extent that
(i) Holdings or its relevant Subsidiary is diligently attempting to replace any
such agreement that has been terminated and (ii) the result of any such
termination, amendment, denial, disaffirmation or default (as applicable) could
not, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) Each ground lease with respect to any Hotel Property which is a
Leasehold is in full force and effect in accordance with its terms and no party
thereto has denied or disaffirmed any of its material obligations thereunder or
has defaulted in the due performance or observance of any material term,
covenant or agreement on its part to be performed or observed pursuant thereto.
6.22 Status as REIT. Holdings is qualified as a real estate investment
--------------
trust under the Code and its proposed methods of operation will enable it to
continue to be so qualified.
6.23 Facility Managers; Approved Lessees. To the best knowledge of
-----------------------------------
each of Holdings and the Borrower, each Facility Manager has full power and
authority and the legal right to manage and operate the properties it operates
and to conduct the business in which it is currently engaged with respect to any
Hotel Property owned or leased by Holdings or any of its Subsidiaries,
including, without limitation, to be a party to a Management Agreement. To the
best knowledge of each of Holdings and the Borrower, each Approved Lessee has
full power and authority and the legal right to lease, manage and operate the
properties it operates and to conduct the business in which it is currently
engaged with respect to any Hotel Property owned or leased by Holdings or any of
its Subsidiaries, including, without limitation, to be the lessee under an
Operating Lease and a party to a Management Agreement.
SECTION 7. Affirmative Covenants. Each of Holdings and the Borrower
---------------------
hereby covenants and agrees (as to itself and each of its Subsidiaries) that
from and after the Effective Date and until the Total Commitment has terminated
and the Loans and Notes, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
7.01 Information Covenants. Holdings and/or the Borrower will furnish
---------------------
to the Administrative Agent and each of the Banks:
(a) Quarterly Financial Statements and Reports. (A) Within 60 days
after the close of each of the first three quarterly accounting periods in
each fiscal year of Holdings and the Borrower (commencing with the
quarterly accounting period ending closest to June 30, 2000), (i) a
consolidated balance sheet of each of Holdings and its Subsidiaries and the
Borrower and its Subsidiaries as at the end of such quarterly accounting
period, (ii) the related consolidated statements of income for such
quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period and (iii) the
related consolidated statements of cash flows for the elapsed portion of
the fiscal year ended with the last day of such quarterly accounting
-30-
period, in each case setting forth comparative figures for the
corresponding fiscal periods in the prior fiscal year, all of which shall
be in reasonable detail and certified by an Authorized Financial Officer of
Holdings or the Borrower, as the case may be, that, to the best of such
officer's knowledge after due inquiry, they fairly present, in all material
respects, the financial condition of each of Holdings and its Subsidiaries
and the Borrower and its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments, provided that, in
--------
satisfying the requirements of this Section 7.01(a), if at the time the
financial statements referenced herein are to be delivered, Holdings owns
no capital stock of any Person other than the Borrower and has no other
material assets or liabilities (other than pursuant to the Credit
Documents), then only the consolidated financial statements of Holdings and
its Subsidiaries need to be delivered pursuant to this Section 7.01(a) so
long as any differences in the consolidated financial statements of
Holdings and its Subsidiaries from those of the Borrower and its
Subsidiaries are indicated by footnotes in the respective consolidated
financial statements of Holdings and its Subsidiaries.
(B) Within 60 days after the end of each quarterly accounting period
in each fiscal year of Holdings, an operating statement in form and detail
reasonably satisfactory to the Administrative Agent, for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period for all Hotel Properties then subject to Operating
Leases.
(b) Annual Financial Statements. Within 105 days after the close of
---------------------------
each fiscal year of Holdings and the Borrower, the consolidated balance
sheet of each of Holdings and its Subsidiaries and the Borrower and its
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income and shareholders' equity and of cash flows for such
fiscal year setting forth comparative figures for the preceding fiscal year
and certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P. or such other independent certified
public accountants of recognized national standing reasonably 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 each of Holdings and its Subsidiaries and the Borrower and its
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 8.07 through 8.12, inclusive, or, if in the opinion of such
accounting firm such a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof, provided that, in
--------
satisfying the requirements of this Section 7.01(b), if at the time the
financial statements referenced herein are to be delivered, Holdings owns
no capital stock of any Person other than the Borrower and has no other
material assets or liabilities (other than pursuant to the Credit
Documents), then only the consolidated financial statements of Holdings and
its Subsidiaries need to be delivered pursuant to this Section 7.01(b) so
long as any differences in the consolidated financial statements of
Holdings and its Subsidiaries from those of the Borrower and its
Subsidiaries are indicated by footnotes in the respective consolidated
financial statements.
-31-
(c) Budgets. No later than 60 days after the first day of each fiscal
-------
year of Holdings, budgets in form reasonably satisfactory to the
Administrative Agent (including, in any event, budgeted statements of cash
flow and Capital Expenditures and budgeted debt and cash balances) for such
fiscal year prepared in detail, with respect to Holdings and its
Subsidiaries, accompanied by a statement of an Authorized Financial Officer
of Holdings to the effect that, to the best of such officer's knowledge,
the budget is a reasonable estimate of the period covered thereby.
(d) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 7.01(a) and (b), a
certificate of an Authorized Financial Officer of the Borrower to the
effect that, to the best of such officer's knowledge, 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 shall (x) set forth (in reasonable detail) the
calculations required to establish whether Holdings and its Subsidiaries
were in compliance with the provisions of Sections 8.02(ix), 8.02(x),
8.02(xi), 8.02(xiv), 8.02(xv), 8.02(xviii), 8.03, 8.04, 8.05 and 8.07
through 8.12, inclusive, at the end of such fiscal quarter or year, as the
case may be, and (y) set forth (in reasonable detail) the calculations and
other determinations required to establish whether Holdings and its
Subsidiaries were in compliance with the provisions of Sections 3.02(c) and
(d) during, and for the 12 month period ending on the last day of, such
quarterly accounting period or fiscal year, as the case may be.
(e) Notice of Default or Litigation. Promptly, and in any event within
-------------------------------
three Business Days after the President, the Chief Executive Officer, any
Vice President or any Authorized Financial Officer of any Credit Party
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default and (ii) any litigation or
governmental investigation or proceeding pending or threatened (x) against
Holdings or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, (y) with respect to any material
Indebtedness of Holdings or any of its Subsidiaries or (z) with respect to
any Credit Document.
(f) Management Letters. Promptly after any Credit Party's receipt
------------------
thereof, a copy of any "management letter" received by any such Credit
Party from its certified public accountants and management's responses, if
any, thereto.
(g) Other Reports and Filings. Promptly, and without duplication of
-------------------------
any documents or information delivered pursuant to another clause of this
Section 7.01, copies of all financial information, proxy materials and
other information and reports, if any, which Holdings or any of its
Subsidiaries shall file with the Securities and Exchange Commission or any
successor thereto (the "SEC") (it being understood, however, that with
respect to any preliminary filings made with the SEC, Holdings need only
deliver a certificate describing such filing) and copies of all notices and
reports which Holdings or any of its Subsidiaries shall deliver to holders
of the Senior Notes pursuant to the terms of the documentation governing
such Indebtedness (or any trustee, agent or other representative therefor).
-32-
(h) Environmental Matters. Promptly upon, and in any event within ten
---------------------
Business Days after the President, the Chief Executive Officer, any Vice
President or any Authorized Financial Officer of any Credit Party,
obtaining knowledge thereof, notice of one or more of the following
environmental matters to the extent that any such environmental matters,
either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim against
Holdings or any of its Subsidiaries or any Real Property owned, leased
or operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned, leased or operated by Holdings or any of its
Subsidiaries that (a) results in non-compliance by Holdings or any of
its Subsidiaries with any applicable Environmental Law or (b) could
reasonably be expected to form the basis of an Environmental Claim
against Holdings or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned,
leased or operated by Holdings or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to
any restrictions on the ownership, lease, occupancy, use or
transferability by Holdings or any of its Subsidiaries 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, leased or operated by Holdings or any of its
Subsidiaries as required by any Environmental Law or any governmental
or other administrative agency.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and Holdings' or such Subsidiary's response or proposed response thereto.
(i) Other Information. From time to time, such other information or
-----------------
documents (financial or otherwise) with respect to Holdings and/or any of
its Subsidiaries as the Administrative Agent or any Bank (through the
Administrative Agent) may reasonably request.
7.02 Books, Records and Inspections; Annual Meetings. (a) Holdings
-----------------------------------------------
will, and will cause each of its Subsidiaries 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. Holdings
will, and will cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or any Bank to visit and inspect,
upon reasonable advance notice, during regular business hours and under guidance
of officers of Holdings or such Subsidiary, any of the properties of Holdings
or any of its Subsidiaries, and to examine the books of account of Holdings and
any of its Subsidiaries and discuss the affairs,
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finances and accounts of Holdings and any of its Subsidiaries with, and be
advised as to the same by, its and their respective Presidents, Chief Executive
Officers, Vice Presidents, Authorized Financial Officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the Administrative Agent or any Bank may reasonably request, provided
--------
that any Bank's rights under this Section 7.02 may not be exercised more than
once in any fiscal quarter of Holdings.
(b) Annual Meetings with Banks. At the request of the Administrative
--------------------------
Agent or the Required Banks, Holdings and the Borrower shall, at least once
during each fiscal year of Holdings, hold a meeting (at a mutually agreeable
location and time) with all of the Banks at which meeting the financial results
of the previous fiscal year and the financial condition of Holdings and its
Subsidiaries and the budgets presented for the current fiscal year of Holdings
and its Subsidiaries shall be reviewed, with each Bank bearing its own travel,
lodging, food and other costs associated with attending any such meeting.
7.03 Maintenance of Property and Insurance. (a) Holdings will, and
-------------------------------------
will cause each of its Subsidiaries, Approved Lessees and Facility Managers (as
appropriate) to, (i) maintain all of their material property in good working
order and condition (ordinary wear and tear and damage by casualty excepted),
(ii) maintain with financially sound and reputable insurance companies or
qualified self-insurers, insurance on itself and its properties in commercially
reasonable amounts and, with respect to Hotel Properties, in accordance with
clause (b) of this Section 7.03, and with respect to other properties, against
such risks as are consistent for companies similarly situated and owning similar
properties, and (iii) furnish to the Administrative Agent and the Banks from
time to time, upon written request, certificates of insurance reasonably
acceptable to the Administrative Agent and required under this Agreement and the
other Credit Documents and such other information relating to such insurance as
the Administrative Agent or any Bank may reasonably request.
(b) With respect to each Hotel Property, Holdings and its
Subsidiaries, as applicable, shall obtain and maintain, or cause to be
maintained, insurance providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements on each Hotel
Property and the Personal Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements, in each case (A) in an amount equal to 100% of
the "Full Replacement Cost," which for purposes of this Agreement shall
mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of
depreciation; (B) containing an agreed amount endorsement with respect to
the Improvements owned or leased by Holdings or such Subsidiary and
Personal Property or a waiver of all co-insurance provisions; (C) with
deductibles in such amounts as may be carried by operators of similar
facilities or as required by the insurance carrier; and (D) containing an
"Ordinance or Law Coverage" or "Enforcement" endorsement if any of the
Improvements or the use of the Hotel Property shall at any time constitute
legal non-conforming structures or uses. The Full Replacement Cost shall be
redetermined from time to time (but not more frequently than once in any
twelve (12) calendar months) at the request of the Administrative Agent by
an appraiser or contractor designated and paid
-34-
by Holdings or such Subsidiary and approved by the Administrative Agent, or
by an engineer or appraiser in the regular employ of the insurer.
Notwithstanding the foregoing, if such redetermination is based on an
appraisal, the cost thereof shall be paid by Holdings or the related
Subsidiary. After the first appraisal, additional appraisals may be based
on construction cost indices customarily employed in the trade or as
determined by the respective insurance carrier and shall be Holdings' or
the related Subsidiary's expense. Such appraisals will not be required so
long as the policy is written on a blanket full replacement cost basis with
an agreed amount endorsement. No omission on the part of the Administrative
Agent to request any such ascertainment shall relieve Holdings or any
Subsidiary of any of its obligations under this Section 7.03(b)(i). In
addition, Holdings and its Subsidiaries shall obtain (x) flood hazard
insurance if any portion of the Improvements is currently or at any time in
the future located in a federally designated "special flood hazard area"
and (y) earthquake insurance in amounts and in form and substance
reasonably satisfactory to the Administrative Agent (but in no event less
than the "Probable Maximum Loss" determined by consultants reasonably
satisfactory to the Administrative Agent) in the event the Hotel Property
is located in an area with a high degree of seismic activity, or otherwise
as required by the Administrative Agent, provided that the insurance
pursuant to preceding clauses (x) and (y) shall be on terms consistent with
the comprehensive all risk insurance policy required under this Section
7.03(b)(i), except that the deductible on wind insurance if the Hotel
Property is located in a coast line area, shall not be in excess of seven
and one-half percent (7.5%) of the appraised value of the Hotel Property;
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in
or about the Hotel Property, including "Dram Shop" or other liquor
liability coverage if alcoholic beverages are sold from or may be consumed
at any such Hotel Properties, such insurance (A) to be on the so-called
"occurrence" form with a combined single limit of not less than $1,000,000
or such greater amount as may be generally required by institutional
lenders for hotels or facilities comparable to the Hotel Property; (B) to
continue at not less than the aforesaid limit until required to be changed
by the Administrative Agent or the Required Banks in writing by reason of
changed economic conditions making such protection inadequate; and (C) to
cover at least the following hazards: (1) premises and operations; (2)
products and completed operations on an "if any" basis; (3) independent
contractors; and (4) blanket contractual liability for all written and
oral contracts;
(iii) business income and rent loss insurance (A) covering all risks
required to be covered by the insurance provided for in Section 7.03(b)(i);
(B) containing an extended period of indemnity endorsement which provides
that from and after the physical loss to the Improvements on each Hotel
Property and Personal Property has been repaired, the continued loss of
income will be insured until such income either returns to the same level
it was at prior to the loss, or the expiration of twelve (12) months from
the original date of the loss, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period; and (C) in an
amount equal to 100% of the projected house profits plus fixed expenses, to
include interest on fixed indebtedness from the Hotel Property for a
period of twelve (12) months, determined prior to the date hereof and at
least once each year thereafter based on the greater of: (x) Holdings'
reasonable
-35-
estimate of the house profits plus fixed expenses, to include interest on
fixed indebtedness from the Hotel Property, which estimate shall be
reasonably satisfactory to the Administrative Agent and (y) the house
profits plus fixed expenses, to include interest on fixed indebtedness
set forth in the financial statements delivered to the Banks in accordance
with this Agreement;
(iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements on each Hotel
Property (A) contractor's liability insurance covering claims not covered
by or under the terms or provisions of the above mentioned commercial
general liability insurance policy; and (B) the insurance provided for in
Section 7.03(b)(i) written in a so-called builder's risk completed value
form (1) on a non-reporting basis, (2) against all risks insured against
pursuant to Section 7.03(b)(i), (3) including permission to occupy such
Hotel Property, and (4) with an agreed amount endorsement or a waiver of
co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of the
jurisdiction (domestic or foreign) in which the respective Hotel Property
is located, and employer's liability insurance (A) with a limit per
accident and per disease per employee, and (B) in an amount for disease
aggregate in respect of any work or operations on or about such Hotel
Property, or in connection with such Hotel Property or its operation (if
applicable), in each case reasonably required by the Administrative Agent;
(vi) comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by the Administrative Agent on
terms consistent with the comprehensive all risk insurance policy required
under Section 7.03(b)(i);
(vii) umbrella liability insurance in an amount not less than
$100,000,000 per occurrence or such greater amount as may be generally
required by institutional lenders for hotels comparable to the respective
Hotel Properties on terms consistent with the commercial general liability
insurance policy required under Section 7.03(b)(ii);
(viii) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits
per occurrence of $1,000,000 and an umbrella liability insurance of not
less than $4,000,000;
(ix) a blanket fidelity bond coverage insuring, among other things,
against losses resulting from dishonest or fraudulent acts including losses
from acts committed by (A) Holdings' or any of its Subsidiaries' personnel
or (B) temporary contract employees or student interns;
(x) such other insurance and in such amounts as are required pursuant
to any franchise agreements or as the Administrative Agent from time to
time may reasonably request against such other insurable hazards which are
generally required by institutional lenders for hotels or senior living
facilities comparable to the respective Hotel Properties or which are
commonly insured against for property similar to the respective Hotel
Properties located in or around the region in which the respective Hotel
Properties are located;
-36-
(xi) insurance against terrorist acts in amounts reasonably
satisfactory to the Administrative Agent, which may be covered by a
standard all-risk policy to the extent available on commercially reasonable
terms; and
(xii) fiduciary liability insurance and directors and officers
liability insurance in amounts and in form and substance reasonably
satisfactory to the Administrative Agent.
(c) All insurance provided for in Section 7.03(b) hereof shall be
obtained under valid and enforceable policies (the "Policies"), and shall be
subject to the reasonable approval of the Administrative Agent as to insurance
companies, amounts, forms and deductibles. The Policies shall be issued by
financially sound and responsible insurance companies authorized to do business
in the jurisdiction (domestic or foreign) in which each Hotel Property is
located and approved by the Administrative Agent. Such insurance company must
have a general policy rating of A- or better and a financial class of VII or
better by A.M. Best Company, Inc., or another financial size rating reasonably
acceptable to the Administrative Agent considering market conditions (each such
insurer shall be referred to below as a "Qualified Insurer"). Not less than
thirty (30) days prior to the expiration dates of the Policies theretofore
furnished to the Administrative Agent pursuant to Section 7.03(b), accompanied
by evidence reasonably satisfactory to the Administrative Agent of payment of
the premiums due thereunder (the "Insurance Premiums"), shall be delivered by
Holdings and its Subsidiaries to the Administrative Agent; provided, however,
-------- -------
that in the case of renewal Policies, Holdings and its Subsidiaries may furnish
the Administrative Agent with certificates of insurance reasonably acceptable
to the Administrative Agent therefor to be followed by the original Policies
when issued.
(d) In the event Holdings or any of its Subsidiaries obtains
separate insurance or an umbrella or a blanket Policy, Holdings or such
Subsidiary shall notify the Administrative Agent of the same and shall cause
certified copies of certificates of insurance reasonably acceptable to the
Administrative Agent to be delivered as required in Section 7.03(b). Any blanket
insurance Policy shall be written on an occurrence basis for the coverages
required hereunder.
(e) All Policies of insurance provided for in Section 7.03(b) shall
contain clauses or endorsements to the effect that:
(i) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least 30
days' written notice to the Administrative Agent and any other party named
therein as an additional insured and 10 days notice for non-payment of
premium; and
(ii) each Policy shall provide that the issuers thereof shall give
written notice to the Administrative Agent if the Policy has not been
renewed thirty (30) days prior to its expiration.
(f) Holdings will furnish to the Administrative Agent and to each
Bank, on or before thirty (30) days after the renewal of any Policy, a
certificate of insurance indicating the amounts of insurance maintained in
compliance herewith, of the risks covered by such insurance and of the insurance
company or companies which carry such insurance, and, if requested by
-37-
Administrative Agent or the Required Banks, verification of the adequacy of such
insurance by an independent insurance broker or appraiser acceptable to the
Administrative Agent.
7.04 Corporate Franchises. Holdings will, and will cause each of its
--------------------
Subsidiaries 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 7.04 shall
-------- -------
prevent (i) any of the transactions permitted in accordance with Section 8.02 or
(ii) the withdrawal by Holdings or any of its Subsidiaries of its qualification
as a foreign corporation, partnership or limited liability company, as the case
may be, in any jurisdiction where such withdrawal could not, either individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
7.05 Compliance with Statutes, etc. Holdings will, and will cause each
-----------------------------
of its Subsidiaries and, to the extent it has the power or right to do so
(whether by contract or otherwise) each Approved Lessee and Facility Manager
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, including, without limitation, any requirements of any federal, state
or local department of health, except such noncompliances as could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Holdings will, and will cause each of its Subsidiaries and each
Approved Lessee and Facility Manager to, maintain in good standing all material
licenses, certifications, accreditations and other approvals applicable to it or
to any Hotel Property which it owns, leases, manages or operates.
7.06 Compliance with Environmental Laws. (a) Holdings will comply, and
----------------------------------
will cause each of its Subsidiaries to comply, with all Environmental Laws
applicable to the ownership or use of its Real Property now or hereafter owned,
leased or operated by Holdings or any of its Subsidiaries, except such
noncompliances as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and 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.
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time after (i) the Administrative Agent
receives notice under Section 7.01(h) of any event for which notice is required
to be delivered for any Real Property or (ii) Holdings or any of its
Subsidiaries are not in compliance with Section 7.06(a) with respect to any Real
Property, Holdings and the Borrower will provide, at their sole cost and
expense, an environmental site assessment report concerning any such Real
Property now or hereafter owned, leased or operated by Holdings or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with any Hazardous Materials on such Real Property. If Holdings or the Borrower
fails to provide the same within 90 days after such request was made, the
Administrative Agent may order the same, and Holdings and the Borrower shall
grant and hereby grant, to the Administrative Agent and the Banks and their
agents access to such Real Property and specifically grants the Administrative
-38-
Agent and the Banks an irrevocable non-exclusive license, subject to the rights
of tenants, to undertake such an assessment, all at the Borrower's expense.
7.07 ERISA. Within 15 Business Days after Holdings, any Subsidiary of
-----
Holdings or any ERISA Affiliate knows or has reason to know of the occurrence of
any of the following events to the extent that such events, either individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, Holdings will deliver to the Administrative Agent a certificate of an
Authorized Financial Officer of Holdings setting forth details as to such
occurrence and the action, if any, that Holdings, 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 Holdings, such Subsidiary, such
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, within the meaning of Section 412 of the Code or Section 302
of ERISA, has been incurred or an application may reasonably be expected to be
or 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 or Section
303 or 304 of ERISA with respect to a Single Employer Plan; that any
contribution required to be made by Holdings, any Subsidiary of Holdings or any
ERISA Affiliate to a Plan or Foreign Pension Plan has not been timely made; that
a Plan has been or may reasonably be expected to 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 on the assets of Holdings, any
Subsidiary of Holdings or any ERISA Affiliate under ERISA or the Code; that
proceedings may reasonably be expected to be or have been instituted to
terminate or appoint a trustee to administer a Plan; that a proceeding has been
instituted against Holdings, any Subsidiary of Holdings or any ERISA Affiliate
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
that Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or may
reasonably be expected to incur or has incurred 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
with respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code under Section 4980B of the Code; or that
Holdings or any Subsidiary of Holdings may incur any 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). Holdings will deliver to the Administrative
Agent (with sufficient copies for each Bank) (i) a complete copy of the annual
report (Form 5500) of each Single Employer 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 by Holdings or any of its Subsidiaries with the Internal Revenue
Service and (ii) copies of any records, documents or other information that must
be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA. In addition to any certificates or notices delivered to the
Administrative Agent pursuant to the first sentence hereof, copies of annual
reports and any material notices received by Holdings, any Subsidiary of
Holdings or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan
shall be delivered to the Administrative Agent (with sufficient copies for each
Bank) no later than 15 Business Days after the date such report has
-39-
been filed with the Internal Revenue Service or such notice has been received by
Holdings, such Subsidiary or such ERISA Affiliate, as applicable.
7.08 End of Fiscal Years; Fiscal Quarters. Holdings and the Borrower
------------------------------------
will cause (i) each of its, and each of its Subsidiaries', fiscal years to end
on the Friday closest to December 31 and (ii) each of its, and each of its
Subsidiaries', first three fiscal quarters to end on the last day of the 12th,
24th and 36th week, respectively, of each fiscal year and the fourth fiscal
quarter to end on the Friday closest to December 31, it being understood that
(x) if any Hotel Property owned or leased by a Subsidiary of Holdings is managed
or leased by an Approved Lessee or a Facility Manager other than Crestline, any
Wholly-Owned Subsidiary of Crestline, Marriott International or any Wholly-Owned
Subsidiary of Marriott International, Holdings and the Borrower shall cause such
Subsidiary's fiscal years and fiscal quarters to end on dates as close as
reasonably practicable to the dates set forth above in this Section 7.08 and (y)
Holdings and the Borrower may elect to change each of its and each of its
Subsidiaries fiscal quarters to end on March 31, June 30, September 30 and
December 31.
7.09 Performance of Obligations. Holdings will, and will cause each of
--------------------------
its Subsidiaries to, perform all of its obligations under the terms of each
ground lease, each Operating Lease and each mortgage, deed of trust, indenture,
loan agreement or credit agreement and each other material agreement, contract
or instrument by which it or any Real Property owned or leased by Holdings or
any of its Subsidiaries is bound, except such non-performances as could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Holdings will, and will cause each of its Subsidiaries
to, enforce the provisions of each Operating Lease so as to cause each Approved
Lessee to abide by the terms of, and enforce the obligations under, each
Management Agreement, each Franchise Agreement and each other material
agreement, contract or instrument to which such Approved Lessee is a party or by
which such Approved Lessee is bound and which affects the ownership, leasing,
management or operation of any Real Property owned or leased by Holdings or any
of its Subsidiaries, except such non-performances as could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
7.10 Payment of Taxes. Holdings will, and will cause each of its
----------------
Subsidiaries 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, prior to the date on which any penalties attach
thereto, 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 Holdings or any
such Subsidiary; provided that neither Holdings nor any such Subsidiary shall be
--------
required to pay any such tax, assessment, charge, levy or claim which is
immaterial or 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.
7.11 Certain Subsidiaries. (a) Holdings and the Borrower will ensure
--------------------
that at all times either the Borrower or a Wholly-Owned Subsidiary of the
Borrower that is a Subsidiary Guarantor is (i) the sole general partner of any
Subsidiary Guarantor that is a partnership, or (ii) the sole managing member (or
has the sole right to designate members of the Board of Managers) of any
Subsidiary Guarantor that is a limited liability company.
-40-
(b) Except as set forth on Schedule VI, Holdings and the Borrower
will ensure that at all times (i) either the Borrower or a Wholly-Owned
Subsidiary of the Borrower that is a Subsidiary Guarantor owns 100% of the
equity interests in each Look-Through Subsidiary (although Holdings or a
Permitted REIT Subsidiary may hold a de minimis interest in a Look-Through
-- -------
Subsidiary) and (ii) the equity interests owned by the Borrower (directly or
indirectly) in each Subsidiary of the Borrower that is not a Look-Through
Subsidiary are owned by a Look-Through Subsidiary of the Borrower that is a
Subsidiary Guarantor.
(c) To the extent that an Approved Lessee of a Hotel Property that
is wholly-owned by the Borrower or a Wholly-Owned Subsidiary thereof is a
Taxable REIT Subsidiary, Holdings and the Borrower will ensure that such Taxable
REIT Subsidiary will be a Wholly-Owned Subsidiary of the Borrower.
7.12 Management Agreements; Operating Leases. Unless the Required
---------------------------------------
Banks otherwise agree in writing, Holdings will take, and will cause each of its
Subsidiaries to take, all action necessary so that (i) each Hotel Property is at
all times man-aged by a Permitted Facility Manager pursuant to a Management
Agreement, and (ii) each Hotel Property that is leased is at all times leased to
an Approved Lessee pursuant to an Operating Lease; provided, however, that
-------- -------
Holdings and its Subsidiaries shall not be deemed to be in breach of the
covenants set forth in this Section 7.12 by virtue of a failure to so maintain a
Management Agreement or Operating Lease, so long as (x) Holdings or its relevant
Subsidiary is diligently pursuing engaging a replacement Permitted Facility
Manager or Approved Lessee pursuant to a Management Agreement or Operating
Lease, as applicable, and (y) the failure to have maintained such Management
Agreement or Operating Lease could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.13 REIT Requirements. Holdings shall operate its business at all
-----------------
times so as to satisfy all requirements necessary to qualify as a real estate
investment trust under Sections 856 through 860 of the Code. Holdings will
maintain adequate records so as to comply with all record-keeping requirements
relating to the qualification of Holdings as a real estate investment trust as
required by the Code and applicable regulations of the Department of the
Treasury promulgated thereunder and will properly prepare and timely file with
the IRS all returns and reports required thereby. Holdings will request from its
shareholders all shareholder information required by the Code and applicable
regulations of the Department of Treasury promulgated thereunder.
7.14 Contributions. Holdings will contribute as an equity contribution
-------------
to the capital of the Borrower within 15 days following its receipt thereof, any
cash proceeds received by Holdings from any asset sale, any incurrence of
Indebtedness, any Insurance Proceeds or Condemnation Proceeds, any sale or
issuance of its equity, any cash capital contributions received by Holdings or
any cash Dividends received from the Borrower or a Permitted REIT Subsidiary to
the extent not promptly used by Holdings to make a distribution to its
shareholders as permitted under Section 8.03, to pay its general corporate
overhead expenses and other liabilities or to make an Investment in a Permitted
REIT Subsidiary otherwise permitted under this Agreement.
-41-
7.15 Foreign Subsidiaries Security. If following a change in the
-----------------------------
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for
Holdings reasonably acceptable to the Administrative Agent does not within 30
days after a request from the Administrative Agent or the Required Banks deliver
evidence, in form and substance mutually satisfactory to the Administrative
Agent and Holdings, with respect to any Foreign Subsidiary that is not a
Look-Through Subsidiary which has not already had all of its stock pledged
pursuant to the Pledge and Security Agreement, that (i) a pledge of 66-2/3% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, and (ii) the entering into by such Foreign
Subsidiary of a guaranty in substantially the form of the Subsidiaries Guaranty,
in any such case could reasonably be expected to cause (I) the undistributed
earnings of such Foreign Subsidiary as deter-mined for Federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary's United
States parent for Federal income tax purposes or (II) other material adverse
Federal income tax consequences to the Credit Parties, then (in each case,
subject to any restrictions described in Section 7.16) in the case of a failure
to deliver the evidence described in clause (i) above, that portion of such
Foreign Subsidiary's outstanding capital stock not theretofore pledged pursuant
to (and to the extent required by) the Pledge and Security Agreement shall be
pledged to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Pledge and Security Agreement (or another pledge agreement in
substantially similar form, if needed), and in the case of a failure to deliver
the evidence described in clause (ii) above, such Foreign Subsidiary (to the
extent that same is a Wholly-Owned Subsidiary) shall execute and deliver (x) the
Subsidiaries Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the Borrower under the Credit Documents
and under any Interest Rate Protection Agreement or Other Hedging Agreement and
(y) the Pledge and Security Agreement (or another pledge agreement in
substantially similar form, if needed) securing such Foreign Subsidiary's
obligations under the Subsidiaries Guaranty, in each case to the extent that the
entering into such Pledge and Security Agreement or Subsidiaries Guaranty is
permitted by the laws of the respective foreign jurisdiction and with all
documents delivered pursuant to this Section 7.15 to be in form and substance
reasonably satisfactory to the Administrative Agent.
7.16 Additional Subsidiary Guarantors; Release of Subsidiary
-------------------------------------------------------
Guarantors and Collateral. (a) (A) If at any time after the Effective Date, (x)
-------------------------
Holdings or the Borrower (directly or indirectly) acquires, establishes or
creates any Wholly-Owned Subsidiary that is a Look-Through Subsidiary (or in the
circumstances contemplated by Section 7.15, any other Wholly-Owned Foreign
Subsidiary), other than a Permitted REIT Subsidiary, or (y) any Subsidiary of
Holdings or the Borrower guaranties the obligations of the Borrower under the
Senior Notes or under any other Indebted-ness of the Borrower, such Subsidiary
shall be required, within 30 days thereafter, to execute and deliver
counter-parts of the Subsidiaries Guaranty and, to the extent that such
Wholly-Owned Subsidiary is a Look-Through Subsidiary of the type described in
clause (i) of the definition thereof, the Pledge and Security Agreement, at
which time such Subsidiary shall become a Subsidiary Guarantor.
(B) Notwithstanding anything to the contrary contained above in
this Section 7.16(a) or anything else in this Agreement or in any other Credit
Document, (I) no Subsidiary of Holdings or the Borrower shall be required to
become a Subsidiary Guarantor (and thereby execute a counterpart of the
Subsidiaries Guaranty and/or the Pledge and Security Agreement)
-42-
pursuant to clause (x) of Section 7.16(a)(A), (II) in the event that any
Subsidiary of Holdings or the Borrower is a Subsidiary Guarantor, such
Subsidiary may, except as otherwise provided in clause (y) of Section
7.16(a)(A), be released from its obligations under the Subsidiaries Guaranty
and/or the Pledge and Security Agreement upon notice by the Borrower to the
Administrative Agent (so long as such Subsidiary is simultaneously released from
all guaranties of Indebtedness of the Borrower), and (III) no capital stock or
other equity of a Subsidiary of Holdings or the Borrower shall be required to be
pledged under the Pledge and Security Agreement and, to the extent theretofore
pledged, may be released from the Pledge and Security Agreement upon notice by
the Borrower to the Collateral Agent, in each case under one or more of the
following circumstances:
(i) such Subsidiary's only assets consist of $5,000 or less in
cash; or
(ii) such Subsidiary, or the direct or indirect parent company or
general partner of such Subsidiary whose only significant asset (in each
case) is the equity ownership of such Subsidiary (or the direct or indirect
parent company of such Subsidiary), enters into (or is a party to) a
material contract pursuant to a transaction otherwise permitted under this
Agreement and the terms of which prohibit or restrict (x) such Subsidiary
from executing a counterpart of the Subsidiaries Guaranty and/or the Pledge
and Security Agreement or (y) the capital stock or other equity of such
Subsidiary from being pledged under the Pledge and Security Agreement.
(b) (A) Each Wholly-Owned Subsidiary of Holdings or the Borrower
that is a Look-Through Subsidiary but is not a party to the Subsidiaries
Guaranty and the Pledge and Security Agreement (or has been released from its
obligations under the Subsidiaries Guaranty and/or the Pledge and Security
Agreement) because of the restrictions described in Part II of Schedule IV or
under the circumstances described in Section 7.16(a)(B) shall promptly (and in
any event within 30 days) following the termination of such restrictions (unless
new restrictions are imposed under a material contract entered into pursuant to
a transaction otherwise permitted under this Agreement) or acquiring assets
(including additional cash) in addition to at least $5,000 in cash execute and
deliver counterparts of the Subsidiaries Guaranty and, to the extent that such
Wholly-Owned Subsidiary is a Look-Through Subsidiary of the type described in
clause (i) of the definition thereof, the Pledge and Security Agreement.
(B) The capital stock or other equity of each Subsidiary of
Holdings or the Borrower that has not been pledged under the Pledge and Security
Agreement (or has been released from the Pledge and Security Agreement) because
of the restrictions described in Schedule III or under the circumstances
described in Section 7.16(a)(B) shall promptly (and in any event within 30 days)
following the termination of such restrictions (unless new restrictions are
imposed under a material contract entered into pursuant to a transaction
otherwise permitted under this Agreement) or such Subsidiary acquiring assets
(including additional cash) in addition to at least $5,000 in cash be pledged
pursuant to (and to the extent required by) the Pledge and Security Agreement.
(c) On or before the 60th day following the Effective Date,
Holdings and the Borrower will cause (i) each of the Wholly-Owned Subsidiaries
designated with a double asterisk on Part II of Schedule IV to execute and
deliver a counterpart of the Subsidiaries
-43-
Guaranty (but not the Pledge and Security Agreement) to the extent that the
terms of any existing Indebtedness or other material contract of any such
Wholly-Owned Subsidiary do not otherwise prohibit such Wholly-Owned Subsidiary
from entering into the Subsidiaries Guaranty and (ii) each of the Wholly-Owned
Subsidiaries designated with a triple asterisk on Part II of Schedule IV to
execute and deliver a counterpart of the Subsidiaries Guaranty and the Pledge
and Security Agreement.
(d) Each Subsidiary required to take actions pursuant to the
preceding Sections 7.16(a), (b) and (c) shall execute and deliver, or cause to
be executed and delivered, all other relevant documentation of the type
described in Section 4 (including without limitation, opinions of counsel) as
such Subsidiary would have had to deliver if such Subsidiary were a Credit Party
on the Effective Date, with all actions to be taken pursuant to this Section
7.16 to be taken to the reasonable satisfaction of the Administrative Agent.
7.17 Capital Expenditures. Holdings and its Subsidiaries shall, during
--------------------
each fiscal year of Holdings and the Borrower, expend in respect of maintenance
Capital Expenditures at the Hotel Properties (or to the extent not spent, place
in a reserve) an amount equal to at least 4% of the combined total Gross
Revenues from the Hotel Properties for such fiscal year.
7.18 Certain Inventory, Fixed Asset Supplies and Working Capital
-----------------------------------------------------------
Receivables. Holdings will, and will cause each of its Subsidiaries to, ensure
-----------
that each Operating Lease relating to a Hotel Property, pursuant to which all or
any portion of the inventory, fixed asset supplies and/or working capital
receivables have been sold to the related Approved Lessee as provided in Section
8.02(viii), provides to the Borrower or its Subsidiary owning the related Hotel
Property a right to repurchase all of the inventory, fixed asset supplies and/or
working capital receivables upon any termination or expiration of the related
Operating Lease related to such Hotel Property for a purchase price not greater
than the fair market value thereof. Holdings will, and will cause each of its
Subsidiaries to, exercise each such repurchase option upon the termination or
expiration of each such Operating Lease.
SECTION 8. Negative Covenants. Each of Holdings and the Borrower
------------------
hereby covenants and agrees (as to itself and each of its Subsidiaries) that
from and after the Effective Date and until the Total Commitment has terminated
and the Loans and Notes, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
8.01 Liens. Holdings will not, and will not permit any of its
-----
Subsidiaries 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
Holdings or any of its Subsidiaries, 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 Holdings or any of its Subsidiaries), or
assign any right to receive income (other than in connection with a sale
permitted under Section 8.02) 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 8.01 shall not
--------
prevent the creation, incurrence, assumption or existence of the following Liens
(collectively, "Permitted Liens"):
-44-
(i) inchoate Liens (other than Liens created or imposed under
ERISA) 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 Holdings or any of
its Subsidiaries 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 Holdings' or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of Holdings or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings and for which
adequate reserves have been established, 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 Effective Date which are listed, and
the property subject thereto described, in Schedule VII, but only to the
respective date, if any, set forth in such Schedule VII for the removal and
termination of any such Liens, plus renewals, replacements, refinancings
and extensions of such Liens to the extent permitted by Section 8.04(vi),
provided that any such renewal, replacement, refinancing or extension does
--------
not encumber any additional assets or properties of Holdings or any of its
Subsidiaries, although the Borrower may, in connection with the existing
commercial mortgaged-backed securities transaction listed in Schedule V,
substitute Hotel Properties to be subject to such transaction so long as
(i) such substitution is part of a transaction that does not violate any
provision of this Agreement and no Default or Event of Default then exists
or would result therefrom and (ii) based on calculations made by Holdings
or the Borrower on a Pro Forma Basis as if the respective substitution had
--- -----
occurred on the first day of the respective Calculation Period, no Default
or Event of Default will exist in respect of, or would have existed during
the period beginning on the first day of the respective Calculation Period
and ended on the Determination Date in respect of, the financial covenants
contained in Section 8.08 through 8.12, inclusive;
(iv) Liens created pursuant to the Pledge and Security Agreement;
(v) leases or subleases granted to merchants, vendors, other
providers of services and other Persons in the ordinary course of business
and not materially interfering with the conduct of the business of Holdings
or any of its Subsidiaries;
(vi) to the extent that the respective Secured Indebtedness is
permitted to be incurred at such time pursuant to Section 8.04(vi), (A)
Liens upon equipment or machinery subject to Capitalized Lease Obligations,
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 such Capitalized Lease Obligation
does not encumber any other asset of Holdings or any of its Subsidiaries
and (B) Liens placed upon equipment or machinery used in the ordinary
course of business of
-45-
Holdings or any of its Subsidiaries at the time of acquisition thereof by
Holdings or any such Subsidiary or within 90 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price
thereof, provided, that the Lien encumbering the asset giving rise to the
--------
purchase money Indebtedness does not encumber any other asset of Holdings
or any of its Subsidiaries;
(vii) to the extent that the respective Secured Indebtedness is
permitted to be incurred at such time pursuant to Section 8.04(vi), Liens
securing Permitted Non-Recourse Indebtedness of Specified Subsidiaries as
and to the extent permitted by the definition of "Permitted Non-Recourse
Indebtedness";
(viii) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments and other similar charges or encumbrances,
and minor title deficiencies, in each case not securing Indebtedness and
not materially interfering with the conduct of the business of Holdings or
any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement
filings in respect of operating leases;
(x) statutory and common law landlords' liens under leases to which
Holdings or any of its Subsidiaries is a party;
(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, 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 the existence of judgments, decrees or
awards not constituting an Event of Default under Section 9.09, provided
--------
that the aggregate amount of any cash and the fair market value of all
property pledged or deposited to secure all such judgments, decrees and
awards shall not exceed $50,000,000 at any time outstanding;
(xiii) Liens on property or assets acquired pursuant to an acquisition
permitted under Section 8.02(x), (xiv) or (xv) or pursuant to an
Investment made under Section 8.05(xii) or (xiii) (so long as, in the case
of such clause (xiii), such Liens do not attach to any FF&E of a
Non-Controlled Entity unless such Liens are part of an existing blanket
Lien on all assets so acquired (in which case the FF&E may be contributed
to a Non-Controlled Entity subject to such Lien)), or on property or assets
of a Subsidiary of Holdings acquired pursuant to such an acquisition or
pursuant to such an Investment, in each case in existence at the time such
acquisition or Investment is consummated, provided that (i) any Acquired
Indebtedness that is secured by such Liens is permitted to exist under
Section 8.04(vi) and (ii) such Liens are not incurred in connection with or
in contemplation or anticipation of such acquisition or Investment and do
not attach to any other asset of Holdings or any of its Subsidiaries;
-46-
(xiv) (w) Liens in favor of the Borrower or any Subsidiary Guarantor
granted by any Subsidiary of the Borrower, (x) Liens in favor of any
Wholly-Owned Subsidiary of the Borrower (other than a Specified Subsidiary)
that is not a Subsidiary Guarantor granted by any other Wholly-Owned
Subsidiary of the Borrower that is not a Subsidiary Guarantor, (y) Liens in
favor of any non-Wholly-Owned Subsidiary of the Borrower that is an
Approved Lessee under an Operating Lease granted by another
non-Wholly-Owned Subsidiary of the Borrower to secure such latter
non-Wholly-Owned Subsidiary's obligations under the respective Operating
Lease, and (z) Liens on the assets of a Taxable REIT Subsidiary as an
Approved Lessee under an Operating Lease securing Secured Indebtedness of
the Specified Subsidiary that is the lessor of the Hotel Property for which
such Operating Lease relates so long as such Secured Indebtedness is
otherwise permitted under this Agreement; and
(xv) to the extent that the respective Secured Indebtedness is
permitted to be incurred at such time pursuant to Section 8.04(vi), Liens
in favor of a Facility Manager in connection with loans or advances made by
such Facility Manager to renovate a Hotel Property managed by such Facility
Manager.
Except for the Obligations, any obligations under an Interest Rate Protection
Agreement or Other Hedging Agreement entered into with a Bank (or any affiliate
thereof) and for the obligations under the existing Senior Notes, the only other
Indebtedness that may be secured by the Pledge and Security Agreement shall be
Specified Senior Indebtedness issued by the Borrower (and which may be
guaranteed by the Subsidiary Guarantors).
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings
------------------------------------------------------
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of 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 (or
agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures (including payments in respect of
Capitalized Lease Obligations) by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Sections 8.01(vi)(A) and
8.07;
(ii) Holdings and its Subsidiaries may sell, exchange or otherwise
dispose of equipment and materials in the ordinary course of business;
(iii) Holdings and its Subsidiaries may make sales or other
dispositions of inventory in the ordinary course of business and consistent
with past practice;
(iv) Holdings and its Subsidiaries may grant leases or sub-leases to
merchants, vendors, other providers of services and other Persons in the
ordinary course of business so long as such lease or sub-lease does not
materially interfere with the conduct of the business of Holdings or any of
its Subsidiaries;
-47-
(v) the Borrower and its Subsidiaries may enter into Operating
Leases with an Approved Lessee and the Non-Controlled Entities may enter
into FF&E Leases with an Approved Lessee;
(vi) the Borrower and the Subsidiary Guarantors may sell or
otherwise transfer property to one another;
(vii) Holdings and its Subsidiaries may sell, transfer or otherwise
dispose of assets (other than the capital stock or other equity interests
in the Borrower or in any Subsidiary Guarantor) with a fair market value
(as determined in good faith by Holdings or such Subsidiary, as the case
may be) not in excess of $10,000,000 in any transaction or series of
related transactions;
(viii) the Borrower and its Subsidiaries may sell inventory, fixed
asset supplies and working capital receivables relating to a Hotel Property
to the Approved Lessee under the Operating Lease relating to such Hotel
Property for a purchase price equal to no less than the fair market value
thereof (with a purchase price equal to the book value thereof being deemed
to meet this standard) (and the consideration therefor shall be in the
form of cash and/or a promissory note), so long as the Borrower or the
related Subsidiary is granted a Lien upon such inventory, fixed asset
supplies and working capital receivables pursuant to the related Operating
Lease as security for the obligations of the Approved Lessee thereunder;
(ix) Holdings and its Subsidiaries may sell Hotel Properties and
other assets (including the capital stock or other equity interests
(including by way of merger) of the Person or Persons owning such Hotel
Properties or other assets, but specifically excluding the capital stock of
the Borrower) so long as (i) no Default or Event of Default then exists or
would result therefrom, (ii) each such sale is at fair market value (as
determined in good faith by Holdings or such Subsidiary, as the case may
be), (iii) the consideration received by Holdings or such Subsidiary is
either (a) at least 75% cash and/or Cash Equivalents and is received at the
time of the consummation of such sale, and with the balance of such con-
sideration to be in the form of promissory notes, real estate assets
(including related FF&E) and/or equity interests of Persons owning real
estate assets, or (b) a combination of cash, Cash Equivalents and/or
Permitted Like-Kind Exchange Property so long as the aggregate fair market
value of all assets sold in exchange for Permitted Like-Kind Exchange
Properties shall not exceed $500,000,000 in any fiscal year of Holdings;
provided, however, that an Asset Sale (A) to either a non-Wholly Owned
-------- -------
Subsidiary of the Borrower or to an Unconsolidated Entity in which the
Borrower (directly or indirectly) owns an equity interest may be made for
less than 75% cash and/or Cash Equivalents or (B) involving the sale of
less than all of the stock or other equity interest of a Subsidiary
Guarantor may be made (in either case) so long as the aggregate amount of
all non-cash and/or non-Cash Equivalent consideration received in respect
of all such Asset Sales (which are made for less than 75% cash and/or Cash
Equivalents), when added to the aggregate amount of all non-cash Permitted
Designated Investments made pursuant to Section 8.05(xii), does not exceed
$300,000,000;
-48-
(x) from and after January 1, 2001, the Crestline Exchanges shall
be permitted so long as (i) no Specified Default or Event of Default then
exists or would result therefrom, (ii) the Crestline Exchanges are at fair
market value (as determined in good faith by the Borrower or the applicable
Subsidiary, as the case may be), and (iii) based on calculations made by
Holdings and/or the Borrower on a Pro Forma Basis after giving effect to
each such Crestline Exchange (or all such Crestline Exchanges occurring
contemporaneously) and as if such Crestline Exchange (and/or Crestline
Exchanges, as the case may be) had occurred on the first day of the
respective Calculation Period, no Default or Event of Default will exist in
respect of, or would have existed during the Test Period last reported (or
required to be reported pursuant to Section 7.01(a) or (b), as the case may
be) prior to the date of the respective Crestline Exchange (and/or
Crestline Exchanges, as the case may be) in respect of, the financial
covenants contained in Sections 8.08 through 8.12, inclusive;
(xi) the Borrower and its Subsidiaries may sell the FF&E at a Hotel
Property to a Non-Controlled Entity so long as (i) the Borrower shall have
reasonably determined in good faith that each such sale is necessary in
order to avoid the characterization for tax purposes of any portion of the
rent payable under the related Operating Lease as rent not attributable to
real property (allowing reasonable margins with respect to applicable
limitations), (ii) such FF&E is leased by such Non-Controlled Entity to the
Approved Lessee under the related Operating Lease pursuant to an FF&E
lease containing market terms for similar FF&E and with provisions
protecting the interests of the owner of the applicable Hotel Property in
a form reasonably acceptable to the Administrative Agent, (iii) the related
Approved Lessee shall have assigned its interest (as lessee) in such FF&E
lease to the Borrower or its Subsidiary owning the related Hotel Property
as security for such Approved Lessee's obligations under the Operating
Lease and the Borrower or such Subsidiary (or any successor Approved Lessee
of such Hotel Property) shall have the right to acquire the interests of
the tenant under such FF&E lease (if it is then in effect) upon a
termination of the related Operating Lease, (iv) the purchase price paid
for such FF&E shall be equal to at least the fair market value of such FF&E
(with a purchase price equal to the book value thereof being deemed to meet
this standard) (and the consideration paid shall be in the form of cash
and/or a promissory note), and (v) no more than $200,000,000 of such FF&E
is sold in any fiscal year of the Borrower less the sum of (I) the
aggregate amount of FF&E otherwise purchased by Non-Controlled Entities
during such fiscal year from Persons other than the Borrower or a
Subsidiary thereof for use at a Hotel Property of the Borrower or a
Subsidiary thereof and (II) the aggregate amount of all Investments made
pursuant to Section 8.05(xiii) during such fiscal year;
(xii) Investments may be made to the extent permitted by Section
8.05;
(xiii) Holdings and its Subsidiaries 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
Section 8.01(iii), (vi) or (xiii));
(xiv) the Borrower and its Wholly-Owned Subsidiaries may acquire
Hotel Properties (or all of the capital stock or other equity interests of
the Person or Persons owning such Hotel Properties (including by way of
merger)) so long as (i) no Specified
-49-
Default or Event of Default then exists or would result therefrom, (ii)
based on calculations made by Holdings and/or the Borrower on a Pro Forma
--- -----
Basis after giving effect to such acquisition and as if such acquisition
had occurred on the first day of the respective Calculation Period, no
Default or Event of Default will exist under, or would have existed during
the Test Period last reported (or required to be reported pursuant to
Section 7.01(a) or (b), as the case may be) prior to the date of the
respective acquisition under, the financial covenants contained in Sections
8.08 through 8.12, inclusive, and (iii) such Hotel Property is a Full
Service Hotel, provided that (x) limited service Hotel Properties also may
be acquired pursuant to this Section 8.02(xiv) so long as on a Pro Forma
Basis the portion of Consolidated EBITDA attributed to such limited service
Hotels, when added to the portion of Consolidated EBITDA attributed to all
other limited service Hotels acquired pursuant to this Section 8.02(xiv)
(excluding the limited service Hotels so acquired in which the Borrower
(directly or indirectly) owns a general partnership interest on the
Effective Date as set forth on Schedule IX), does not exceed 3.5% of the
Consolidated EBITDA for the most recently ended Test Period, and (y)
Qualified Full Service Hotel Properties may only be acquired pursuant to
this Section 8.02(xiv) so long as on a Pro Forma Basis the portion of
Consolidated EBITDA attributed to such Qualified Full Service Hotels, when
added to the portion of Consolidated EBITDA attributed to all other
Qualified Full Service Hotels acquired pursuant to this Section 8.02(xiv),
does not exceed 5% of the Consolidated EBITDA for the most recently ended
Test Period;
(xv) the Borrower and its Subsidiaries may acquire high quality real
estate consistent with the quality of the Borrower's and its Subsidiaries'
existing portfolio of Hotel Properties and may acquire other assets
constituting Related Businesses (or all or a portion of the equity
interests of a Person owning such real estate or Related Businesses
(including (in either case) by way of merger)) so long as (i) no Specified
Default or Event of Default then exists or would result therefrom, (ii)
based on calculations made by Holdings and/or the Borrower on a Pro Forma
--- -----
Basis after giving effect to such acquisition and as if such acquisition
had occurred on the first day of the respective Calculation Period, no
Default or Event of Default will exist under, or would have existed during
the Test Period last reported (or required to be reported pursuant to
Section 7.01(a) or (b), as the case may be) prior to the date of the
respective acquisition under, the financial covenants contained in
Sections 8.08 through 8.12, inclusive, and (iii) the aggregate amount of
all acquisitions made pursuant to this Section 8.02(xv), when added to the
aggregate amount of all Investments made pursuant to Section 8.05(xii),
does not exceed $1,500,000,000;
(xvi) in addition to mergers constituting an Asset Sale or an asset
acquisition pursuant to Sections 8.02(ix), (xiv) and (xv), as applicable,
any Subsidiary of the Borrower (other than a Specified Subsidiary that has
out-standing Permitted Non-Recourse Indebtedness) may be merged with and
into the Borrower or any Subsidiary Guarantor so long as (i) in the case of
any merger involving the Borrower, the Borrower is the surviving Person,
(ii) in the case of any merger involving a Subsidiary Guarantor, a
Subsidiary Guarantor is the surviving Person, and (iii) in the case of any
merger involving a non-Wholly-Owned Subsidiary, the only consideration paid
to third parties in connection therewith is (I) cash, (II) the assumption
of Indebtedness, (III) equity interests
-50-
in the surviving Person so long as such Person is not a Subsidiary
Guarantor and/or (IV) equity in Holdings or OP Units, provided that, in the
case of a merger described in preceding clause (iii), any such cash payment
shall be treated as an Investment made (and shall reduce the aggregate
amount of Investments permitted to be made) under Section 8.05(xii) and
such cash payment may only be made to the extent that an Investment may be
made at such time under such Section 8.05(xii);
(xvii) in addition to mergers constituting an Asset Sale or an asset
acquisition pursuant to Sections 8.02(ix), (xiv) and (xv), as applicable,
any Subsidiary of Holdings (other than the Borrower or a Specified
Subsidiary that has outstanding Permitted Non-Recourse Indebtedness) that
is not a Subsidiary Guarantor may be merged with and into any other
Subsidiary of Holdings (other than the Borrower or a Specified Subsidiary
that has outstanding Permitted Non-Recourse Indebtedness) that is not a
Subsidiary Guarantor so long as in the case of any merger involving a
non-Wholly-Owned Subsidiary of Holdings, the only consideration paid to
third parties in connection therewith is (I) cash, (II) the assumption of
Indebtedness, (III) equity interests in the surviving Person so long as
such Person is not a Subsidiary Guarantor and/or (IV) equity in Holdings or
OP Units, provided that, in the event that the surviving Person is not a
Wholly-Owned Subsidiary of the Borrower, any such cash payment shall be
treated as an Investment made (and shall reduce the aggregate amount of
Investments permitted to be made) under Section 8.05(xii) and such cash
payment may only be made to the extent that an Investment may be made at
such time under such Section 8.05(xii); and
(xviii) Subsidiaries of the Borrower which are not Subsidiary
Guarantors and otherwise have no material assets or material liabilities
may be liquidated.
To the extent the Required Banks or all of the Banks, as the case may be, waive
the provisions of this Section 8.02 with respect to the sale of any Pledge and
Security Agreement Collateral, or any Pledge and Security Agreement Collateral
is sold or otherwise disposed of as permitted by this Section 8.02, such Pledge
and Security Agreement Collateral shall be sold or otherwise disposed of free
and clear of the Liens created by the Pledge and Security Agreement, and the
Administrative Agent and the Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
8.03 Dividends. Holdings will not, and will not permit any of its
---------
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower;
(ii) any non-Wholly-Owned Subsidiary of the Borrower may pay cash
Dividends to its shareholders, members or partners generally so long as the
Borrower or its respective Subsidiary which owns the equity interest or
interests in the Subsidiary paying such Dividends receives at least its
proportionate share thereof (based upon its relative holdings of equity
interests in the Subsidiary paying such Dividends and taking into
-51-
account the relative preferences, if any, of the various classes of equity
interests in such Subsidiary);
(iii) Permitted REIT Subsidiaries which are Subsidiaries of Holdings
(but not of the Borrower) may pay cash Dividends to Holdings or any such
other Permitted REIT Subsidiary of Holdings;
(iv) so long as (x) no Specified Default or Event of Default then
exists or would exist immediately after giving effect thereto and (y)
Holdings qualifies, or has taken all actions necessary to qualify, as a
"real estate investment trust" under the Code, during any fiscal year of
Holdings, the Borrower may pay cash Dividends to Holdings and all other
holders of OP Units generally when and to the extent necessary for Holdings
to distribute, and Holdings may so distribute, cash Dividends to its
shareholders generally in an aggregate amount not to exceed the greater of
(A) 85% of the Adjusted Funds From Operations for such fiscal year and (B)
the minimum amount necessary for Holdings to maintain its tax status as a
real estate investment trust and to satisfy the distributions required to
be made by Notice 88-19 under the Code (or Treasury regulations issued
pursuant thereto) by reason of Holdings making the election provided for
therein; provided, however, to the extent that the amount referred to in
-------- -------
preceding clause (A) is greater than the amount referred to in preceding
clause (B) for any such fiscal year, then in lieu of paying the entire
amount as a cash Dividend generally during such fiscal year, Holdings and
the Borrower may use the amount not so paid (and required to be paid) as a
general cash Dividend to repurchase capital stock of Holdings, OP Units of
the Borrower and/or the QUIPs and/or redeem outstanding QUIPs Debt so long
as (i) no Default or Event of Default then exists or would exist
immediately after giving effect thereto, (ii) the aggregate amount of all
such repurchases and redemptions during any fiscal year of Holdings does
not exceed $150,000,000, (iii) the aggregate amount of all such repurchases
and redemptions made after the Effective Date does not exceed $300,000,000
and (iv) the Leverage Ratio at the time of any such repurchase and/or
redemption (and immediately after giving effect thereto) does not exceed
5.35:1.00;
(v) so long as no Default or Event of Default then exists or would
result therefrom, cash Dividends may be paid on the QUIPs generally to the
holders thereof;
(vi) so long as no Specified Default or Event of Default then exists
or would result therefrom, the Borrower may pay cash Dividends to Holdings
so long as the proceeds therefrom are promptly used by Holdings to pay (x)
any Permitted Tax Payments at the time and to the extent actually due and
payable (but without duplication of any tax payments permitted to be made
pursuant to clause (iv) above to satisfy the distribution required to be
made by Notice 88-19 under the Code (or Treasury regulations issued
pursuant thereto)) and (y) any general corporate and other overhead
expenses and liabilities incurred by it to the extent not otherwise
prohibited by this Agreement;
(vii) so long as no Specified Default or Event of Default then exists
or would result therefrom, the Borrower may pay cash Dividends to Holdings
in an aggregate amount not to exceed $10,000,000 so long as (x) Holdings
promptly thereafter uses such proceeds to make Investments in Permitted
REIT Subsidiaries and (y) such Permitted REIT
-52-
Subsidiaries promptly thereafter use such proceeds to make Investments
pursuant to Section 8.05(x); and
(viii) the Borrower may pay cash Dividends to Holdings to enable
Holdings to (and Holdings may and agrees that it shall promptly thereafter)
repurchase shares of its capital stock and/or the QUIPs and/or redeem the
QUIPs Debt, and the Borrower may repurchase OP Units, in each case so long
as (i) no Default or Event of Default then exits or would result therefrom,
(ii) the aggregate amount of all repurchases and redemptions made pursuant
to this Section 8.03(viii) in any fiscal year of Holdings does not exceed
an amount equal to the lesser of (A) 65% of the gross cash proceeds
received by the Borrower and its Subsidiaries from Asset Sales effected
during such fiscal year and (B) 100% of such gross cash proceeds from such
Asset Sales minus the aggregate principal amount of all Indebtedness
associated with (and required to be repaid with the proceeds from) the
assets sold pursuant to such Asset Sales and (iii) the Leverage Ratio at
the time of any such repurchase and/or redemption (and immediately after
giving effect thereto) does not exceed 5.35:1.00 (although nothing in this
Section 8.03(viii) shall relieve the Borrower from its obligations, under
Section 3.02(c)).
8.04 Indebtedness. Holdings will not, and will not permit any of its
------------
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Existing Indebtedness to the extent the same is listed on
Schedule V;
(ii) accrued expenses and current trade accounts payable incurred in
the ordinary course of business;
(iii) intercompany Indebtedness exclusively between or among the
Borrower and its Subsidiaries, provided that (i) any intercompany
--------
Indebtedness owed by a Credit Party to a Subsidiary of the Borrower which
is not a Credit Party shall be subject to the subordination provisions set
forth on Exhibit K, whether or not such subordination provisions are
attached to any note evidencing such intercompany Indebtedness, although
the Borrower agrees to cause each such note or other document evidencing
such intercompany Indebtedness to incorporate by reference (and be subject
to) such subordination provisions, and (ii) any intercompany Indebtedness
owed by a Subsidiary of the Borrower which is not a Credit Party to a
Credit Party shall only be permitted to the extent provided in Section
8.05(xii);
(iv) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Agreement;
(v) accrued and deferred management fees under any Management
Agreement; and
(vi) additional Indebtedness of the Borrower and its Subsidiaries
(including Indebtedness incurred under this Agreement and Acquired
Indebtedness), in each case so long as (i) no Default or Event of Default
then exists or would result therefrom, and (ii) based on calculations
made by Holdings or the Borrower on a Pro Forma Basis as if the incurrence
--- -----
of such Indebtedness had occurred on the first day of the respective
-53-
Calculation Period relating to such incurrence, no Default or Event of
Default will exist in respect of, or would have existed during the period
beginning on the first day of the respective Calculation Period and ended
on the Determination Date in respect of, the financial covenants contained
in Sections 8.08 through 8.12, inclusive; provided that, subject to the
--------
foregoing restrictions, (x) the aggregate outstanding principal amount of
all Subsidiary Indebtedness and Secured Indebtedness incurred under this
Section 8.04(vi) shall not exceed $400,000,000 at any time (but determined
without taking into account either (A) Acquired Indebtedness secured by a
Lien permitted under Section 8.01(xiii) (without taking into account any
increases thereto after the assumption thereof) or (B) the refinancing of
Secured Indebtedness or Subsidiary Indebtedness existing on the Effective
Date (without taking into account any increases thereto after the Effective
Date) up to the aggregate outstanding principal amount thereof at the time
of such refinancing plus the amount of any costs, fees (including
prepayment penalties, but excluding interest) and expenses associated with
any such refinancing), (y) all Secured Indebtedness incurred under this
Section 8.04(vi) shall be in the form of Permitted Non-Recourse
Indebtedness, secured management loans or advances from a Permitted
Facility Manager in connection with a renovation project at a Hotel
Property managed by such Facility Manager, Acquired Indebtedness,
Capitalized Lease Obligations and/or purchase money Indebtedness in respect
of equipment and materials, and (z) Secured Indebtedness in the form of
Permitted Non-Recourse Indebtedness and Subsidiary Indebtedness only be
incurred by Specified Subsidiaries.
Notwithstanding anything to the contrary contained in this Section 8.04 or
else-where in this Agreement, in no event shall any Non-Controlled Entity which
owns any FF&E at a Hotel Property owned or leased by Holdings or any of its
Subsidiaries incur any Indebtedness for borrowed money or enter into any
guaranties in respect thereof (other than in the form of an intercompany loan
from the Borrower or a Subsidiary Guarantor).
8.05 Advances, Investments and Loans. Holdings will not, and will not
-------------------------------
permit any of its Subsidiaries 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, or hold any cash or Cash Equivalents
(each of the foregoing an "Investment" and, collectively, "Investments"), except
that the following shall be permitted:
(i) Holdings and its Subsidiaries 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) Holdings and its Subsidiaries may acquire and hold cash and
Cash Equivalents, provided, to the extent that Holdings holds any cash or
Cash Equivalents, Holdings shall comply with the requirements of Section
7.14;
(iii) the Borrower and its Subsidiaries may enter into Interest Rate
Protection Agreements to the extent permitted by Section 8.04(iv);
-54-
(iv) (x) the Borrower and the Subsidiary Guarantors may make
Investments in and to one another, (y) subject to Section 8.04(iii),
Subsidiaries of the Borrower that are not Subsidiary Guarantors may make
Investments in the Borrower and in the Subsidiary Guarantors, and (z)
Subsidiaries of Holdings which are not Subsidiaries of the Borrower may
make Investments in and to another;
(v) Holdings may make equity contributions to the Borrower;
(vi) Holdings and its Subsidiaries may hold the Investments held by
them on the Effective Date, without giving effect to any additions thereto
or replacements thereof, except to the extent permitted to be made pursuant
to another clause in this Section 8.05;
(vii) Holdings and its Subsidiaries may make Investments as, and to
the extent, permitted by Section 8.02;
(viii) Holdings and its Subsidiaries may create Subsidiaries pursuant
to Section 8.17 (although any Investments made in such Subsidiaries shall
only be permitted if independently justified under another provision of
this Section 8.05);
(ix) Holdings and its Subsidiaries may hold the stock or other
equity interests in their respective Subsidiaries;
(x) Permitted REIT Subsidiaries may make Investments in (i) other
Permitted REIT Subsidiaries, (ii) OP Units, (iii) de minimis interests in
Subsidiaries of the Borrower and (iv) de minimis equity interests in
Persons other than Subsidiaries of Holdings; provided, that (A) in the case
--------
of preceding clause (iv), Investments in such Persons shall only be made
for the purpose of effecting an acquisition by the Borrower or a Subsidiary
thereof permitted under this Agreement and immediately following the
consummation of such acquisition the applicable Permitted REIT Subsidiary
shall not own any Investment other than those described in clauses (i),
(ii) and (iii) of the definition of Permitted REIT Subsidiary and (B) the
aggregate value of all Investments described in preceding clauses (iii) and
(iv) at any time outstanding (measured by the book value thereof as of the
date each such Investment is made) shall not exceed $10,000,000;
(xi) Holdings may make Investments in Permitted REIT Subsidiaries
with cash Dividends received from the Borrower pursuant to Section
8.03(vii), provided that immediately following any such Investment (and
related transactions) the applicable Permitted REIT Subsidiary does not own
any Investment other than those described in clauses (i), (ii) and (iii) of
the definition of Permitted REIT Subsidiary;
(xii) the Borrower and its Subsidiaries may make Permitted Designated
Investments so long as (i) no Default or Event of Default then exists or
would result therefrom, (ii) the aggregate amount of all Investments made
pursuant to this Section 8.05(xii), when added to the aggregate amount of
all acquisitions made pursuant to Section 8.02(xv), shall not exceed
$1,500,000,000 in the aggregate at any time outstanding (determined without
regard to any write-downs or write-offs thereof), (iii) the aggregate
amount of all Investments made pursuant to this Section 8.05(xii) with
property other than cash, when added to the aggregate amount of all
non-cash consideration received from Asset Sales
-55-
described in the proviso to Section 8.02(ix), shall not exceed
$300,000,000, (iv) based on calculations made by Holdings or the Borrower
on a Pro Forma Basis after giving effect to such Investment and as if such
--- -----
Investment had occurred on the first day of the respective Calculation
Period, no Default or Event of Default will exist in respect of, or would
have existed during the Test Period last reported (or required to be
reported pursuant to Section 7.01(a) or (b), as the case may be) prior to
the date of the respective Investment in respect of, the financial
covenants contained in Sections 8.08 through 8.12, inclusive, and (v) no
Permitted Designated Investments are made pursuant to this Section
8.05(xii) to, in and/or for the benefit of any Non-Controlled Entity; and
(xiii) the Borrower and its Subsidiaries may make Investments in
Non-Controlled Entities, the assets of which principally consist of
Non-Conforming Assets, so long as (i) no Default or Event of Default then
exists or would result therefrom, (ii) the aggregate amount of all
Investments made pursuant to this Section 8.05(xiii) does not exceed
$200,000,000 in any fiscal year of the Borrower (it being understood that
the amount of any FF&E invested pursuant to this Section 8.05(xiii) shall
be contributed at the fair market value thereof) (with a price equal to the
book value thereof being deemed to meet this standard)) less the sum of (I)
the aggregate amount of FF&E otherwise purchased by Non-Controlled Entities
during such fiscal year from Persons other than the Borrower or a
Subsidiary thereof for use at a Hotel Property of the Borrower or a
Subsidiary thereof and (II) the aggregate amount of all Asset Sales made
pursuant to Section 8.02(xi) during such fiscal year, and (iii) based on
calculations made by Holdings or the Borrower on a Pro Forma Basis after
giving effect to such Investment and as if such Investment had occurred on
the first day of the respective Calculation Period, no Default or Event of
Default will exist in respect of, or would have existed during the Test
Period last reported (or required to be reported pursuant to Section
7.01(a) or (b), as the case may be) prior to the date of the respective
Investment in respect of, the financial covenants contained in Sections
8.08 through 8.12, inclusive.
8.06 Transactions with Affiliates. Holdings will not, and will not
----------------------------
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions with any Affiliate of Holdings or any of its Subsidiaries,
other than in the ordinary course of business and on terms and conditions
substantially as favorable to Holdings or such Subsidiary as would reasonably be
obtained by Holdings or such Subsidiary at that time in a comparable
arm's-length transaction with a Person other than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section 8.03;
(ii) loans may be made and other transactions may be entered into by
Holdings and its Subsidiaries to the extent permitted by Sections 8.02,
8.04 and 8.05;
(iii) Permitted Sharing Arrangements and payments made pursuant
thereto shall be permitted to the extent that such transactions are not
otherwise prohibited or restricted pursuant to this Agreement;
-56-
(iv) the Borrower and its Subsidiaries, on the one hand, and the
Approved Lessees, on the other, may enter into, and perform the terms of,
the Operating Leases and the FF&E Leases; and
(v) the payment of reasonable and customary fees and expenses to
members of the Board of the Borrower who are not employees of the Borrower
shall be permitted.
8.07 Capital Expenditures. Holdings will not, and will not permit any
--------------------
of its Subsidiaries to, make any Capital Expenditures, except:
(i) the Borrower and its Subsidiaries may make acquisitions of Hotel
Properties and/or other assets in accordance with the requirements of
Sections 8.02(xiv) and (xv) and may make Investments pursuant to Sections
8.05(v), (vi), (vii), (xii) and (xiii), in each case to the extent that
same constitute Capital Expenditures;
(ii) in addition to Capital Expenditures permitted by the preceding
clause (i) and the following clauses (iii), (iv) and (v), the Borrower and
its Subsidiaries may make maintenance Capital Expenditures with respect to
their Hotel Properties and other high quality real estate (other than
Capital Expenditures consisting of expansions and construction) so long as
(x) the aggregate amount of all such Capital Expenditures in any fiscal
year of the Borrower does not exceed an amount equal to 8% of the Gross
Revenues from all such Hotel Properties and other high quality real estate
for such fiscal year (or such higher amount as may be required pursuant to
the respective Management Agreement) plus any amounts then being held on
deposit for such Capital Expenditures for Hotel Properties or high quality
real estate, as the case may be, to the extent deposited in a prior fiscal
year, and (y) all such Capital Expenditures are made in accordance with the
terms of the respective Management Agreement for such Hotel Properties or
high quality real estate, as the case may be;
(iii) in addition to Capital Expenditures permitted by the preceding
clauses (i) and (ii) and the following clauses (iv) and (v), the Borrower
and its Subsidiaries may make additional Capital Expenditures to the extent
permitted by Section 3.02(d);
(iv) in addition to Capital Expenditures permitted by the preceding
clauses (i), (ii) and (iii) and the following clause (v), the Borrower and
its Subsidiaries may make payments in respect of Capitalized Lease
Obligations to the extent such Capitalized Lease Obligations are otherwise
permitted under Section 8.04(i) or (vi); and
(v) in addition to the Capital Expenditures permitted to be made
pursuant to clauses (i), (ii), (iii) and (iv), the Borrower and its
Subsidiaries may make additional Capital Expenditures (A) for the purpose
of expanding or constructing Improvements with respect to Hotel Properties
and for the purpose of constructing new Hotel Properties so long as the
aggregate amount of all such Capital Expenditures does not exceed
$200,000,000 in any fiscal year of the Borrower and (B) for the purpose of
completing the expansion and/or construction of the Naples Spa and the
Naples Golf Resort substantially in accordance with the current budget
therefor.
-57-
8.08 Minimum Consolidated Interest Coverage Ratio; Minimum Unsecured
---------------------------------------------------------------
Interest Coverage Ratio. (a) Holdings and the Borrower will not permit the
-----------------------
Consolidated Interest Coverage Ratio for any Test Period to be less than
2.15:1.00.
(b) Holdings and the Borrower will not permit the Unsecured Interest
Coverage Ratio for any Test Period to be less than 1.80:1.00.
8.09 Minimum Fixed Charge Coverage Ratio. Holdings and the Borrower
-----------------------------------
will not permit the Consolidated Fixed Charge Coverage Ratio for any Test Period
to be less than 1.40:1.00.
8.10 Tangible Net Worth. Holdings and the Borrower will not permit
------------------
Tangible Net Worth at any time to be less than Minimum Tangible Net Worth.
8.11 Maximum Leverage Ratio. Holdings and the Borrower will not permit
----------------------
the Leverage Ratio at any time to be greater than 5.50:1.00.
8.12 Unencumbered EBITDA Ratio. Holdings and the Borrower will not
-------------------------
permit the Unencumbered EBITDA Ratio for any Test Period to be less than
0.40:1.00.
8.13 Limitation on Payments of Certain Indebtedness; Modifications of
-----------------------------------------------------------------
Certain Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
--------------------------------------------------------------------------------
Certain Agreements; etc. Holdings will not, and will not permit any of its
-----------------------
Subsidiaries 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 asset sale, 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, the Senior Notes, the QUIPs Debt or any
Limited Partner Notes, provided that (x) so long as no Default or Event of
Default then exists or would result therefrom, the Borrower may voluntarily
prepay Limited Partner Notes and may prepay such Limited Partner Notes from the
sale of any asset in respect of which such Limited Partner Note relates to the
extent that such prepayment is required by the terms of such Limited Partner
Note, and (y) so long as no Default or Event of Default then exists or would
result therefrom, Holdings may prepay or redeem the QUIPs Debt either (A) with
Net Equity Proceeds received after the Effective Date from any sale or issuance
of its equity and (B) to the extent permitted by Sections 8.03(iv) and (viii),
(ii) amend or modify, or permit the amendment or modification of, the QUIPs
Debt, the Limited Partner Notes or the Senior Notes or any agreement (including,
without limitation, any purchase agreement, indenture or loan agreement) related
thereto (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 could not reasonably be expected to be adverse to the interests of the Banks
in any material respect), (iii) amend or modify, or permit the amendment or
modification of, any provision of any Management Agreement or Operating Lease
(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 reasonably be expected to be adverse to the
interests of the Banks in any material respect), or (iv) amend, modify or change
its designation of trust, certificate of incorporation (including, without
limitation, by the filing or modification of any certificate of designation),
by-laws, certificate of partnership, partnership
-58-
agreement or any equivalent organizational document, or any agreement entered
into by it, with respect to its capital stock or other equity interests, or
enter into any new agreement with respect to its capital stock or other equity
interests, other than any amendments, modifications or changes pursuant to this
clause (iv) or any such new agreements in each case which are not adverse to the
interests of the Banks in any material respect. Notwithstanding anything to the
contrary contained in this Agreement, at any time that a Default or an Event of
Default exists, no payment of principal, interest or otherwise may be made on
the QUIPs Debt.
8.14 Limitation on Certain Restrictions on Subsidiaries. Holdings will
--------------------------------------------------
not, and will not permit any of its Subsidiaries 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 of the Borrower 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 Borrower or any of its
Subsidiaries, or pay any Indebtedness owed to the Borrower or any Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower, 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) the Senior Note Documents, (iv)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or any Subsidiary of the Borrower, (v)
customary provisions restricting assignment of any licensing agreement entered
into by the Borrower or any Subsidiary of the Borrower in the ordinary course of
business, (vi) customary provisions restricting the transfer of assets subject
to Liens permitted under Section 8.01, (vii) restrictions contained in the terms
of any Indebtedness or any agreement pursuant to which such Indebtedness was
issued if (A) the encumbrance or restriction applies only in the event of a
payment default or a default with respect to a financial covenant contained in
such Indebtedness or agreement, (B) the encumbrance or restriction is not
materially more disadvantageous to the Banks than is customary in comparable
financings (as determined in good faith by the Borrower) and (C) the Borrower
determines in good faith that any such encumbrance or restriction will not
materially affect its ability to make principal, interest or other payments in
respect of the Obligations, (viii) restrictions assumed pursuant to the
acquisition by the Borrower or any Subsidiary of the Borrower of any Person or
of any property or assets, so long as such encumbrances or restrictions exist at
the time of such acquisition and are not incurred in contemplation thereof, and
such encumbrances or restrictions are not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets so acquired, (ix) restrictions under an agreement that has been entered
into for the sale or disposition of all or substantially all of the capital
stock of, or property and assets of, a Subsidiary of the Borrower, so long as
such encumbrances or restrictions apply solely to such Subsidiary, (x)
replacements of restrictions imposed pursuant to clause (viii) of this Section
8.14 in connection with and pursuant to a refinancing of the Indebtedness giving
rise to such restrictions to the extent such refinancing is permitted under this
Agreement and so long as such replacement restrictions are not more restrictive
than those being replaced and do not apply to any other Person or assets other
than those that would have been covered by the restrictions in the Indebtedness
so refinanced, and (xi) customary restrictions on the transfer of assets owned
by, or loans and advances made by, a non-Wholly Owned Subsidiary of the Borrower
to the extent such restrictions are set forth in the joint venture agreement,
partnership agreement or other organizational documents relating thereto.
-59-
8.15 Limitation on Issuance of Capital Stock. (a) Holdings will not
---------------------------------------
permit any of its Subsidiaries to issue any capital stock (including by way of
sales of treasury stock) or other equity interests or any options or warrants to
purchase, or securities convertible into, capital stock or other equity
interests, except (i) for OP Units issued by the Borrower to the extent that no
Event of Default under Section 9.12 then exists or will result therefrom, (ii)
for transfers and replacements of then outstanding shares of capital stock or
other equity interests, (iii) for stock splits, stock dividends and similar or
additional issuances which do not decrease the percentage ownership of Holdings
or any of its Subsidiaries in any class of the capital stock or other equity
interests of such Subsidiary, (iv) to qualify directors to the extent required
by applicable law, (v) for issuances by newly created or acquired Subsidiaries
in accordance with the terms of this Agreement and (vi) for additional issuances
by non-Wholly-Owned Subsidiaries which are limited partnerships as required
pursuant to the terms of their respective partnership agreements, (vii) for
issuances by Subsidiaries in connection with the transfer or sale of partial
equity interests in such Subsidiaries as otherwise permitted under Section 8.02,
and (viii) for the exchange of an outside partner's partnership interest in a
non-Wholly-Owned Subsidiary of the Borrower which is a limited partnership for a
percentage of a different class of partnership interest in such Subsidiary as a
result of amendments or recapitalizations of the partnership interests of a
non-Wholly-Owned Subsidiary in existence on the Effective Date and in a
transaction that does not violate any provision of this Agreement and would not
result in a Default or an Event of Default.
(b) Holdings will not, and will not permit any of its Subsidiaries to,
issue any class of redeemable common stock or other redeemable common equity
interests or any class of preferred stock other than (i) redeemable common OP
Units issued by the Borrower which are redeemable into stock of Holdings or, at
the option of Holdings, into cash, (ii) Qualified Preferred Stock of Holdings
and OP Units of the Borrower that constitute preference shares or OP Units to
the extent such shares or OP Units may be issued under Section 8.15(a) and (iii)
interests in non-Wholly-Owned Subsidiaries that are redeemable, at the option of
the Borrower or a Subsidiary thereof, for cash, OP Units or stock of Holdings.
8.16 Business. (a) Holdings will not, and will not permit any of its
--------
Subsidiaries to, engage (directly or indirectly) in any business other than the
businesses in which the Borrower and its Subsidiaries are engaged on the
Effective Date and Related Businesses other than the ownership of the assets
listed on Schedule VIII.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Holdings (i) will not engage in any business activities, (ii) will
not have any significant assets other than (x) any or all of the assets listed
in Part I or Part II of Schedule VIII, (y) the ownership of the OP Units of the
Borrower and equity interests in Permitted REIT Subsidiaries (or interests in
Subsidiaries whose assets are OP Units, including, without limitation, those
Subsidiaries listed in Part I of Schedule VIII) and (z) de minimis equity
-- -------
interests in Subsidiaries of the Borrower, and (iii) will not have any
significant liabilities other than (x) those under this Agreement, (y)
pre-existing liabilities (including contingent liabilities) of Holdings at the
time that Holdings was converted into a real estate investment trust (which
liabilities have been assumed by the Borrower but which may still remain
liabilities of Holdings) and (z) liabilities relating to the assets set forth in
Part I or Part II of Schedule VIII, provided, however, that Holdings will not
-------- -------
become liable in respect of any new Indebtedness for borrowed money with respect
to such
-60-
assets other than in respect of any refinancing of Indebtedness existing on the
Effective Date and associated with such assets. Notwithstanding anything to the
contrary contained in this Agreement, Holdings will not (i) make any Capital
Expenditures, (ii) enter into any merger, consolidation or similar transaction,
(iii) incur (or permit to remain outstanding) any Indebtedness (other than (x)
in respect of outstanding QUIPs Debt, (y) as otherwise permitted by the
immediately preceding sentence and (z) liabilities of the Borrower for which
Holdings is liable solely by virtue of it being the general partner of the
Borrower (although any such liabilities in respect of Indebtedness for borrowed
money, Capitalized Lease Obligations, purchase money Indebtedness, letters of
credit and guarantees of any of the foregoing shall provide that such
liabilities are non-recourse to Holdings except under circumstances similar to
those contained in Section 12.18)), (iv) grant any Liens except under the Credit
Documents or (v) make any Investment except as otherwise permitted under the
first sentence of this clause (b).
8.17 Limitation on Creation of Subsidiaries. (a) Except as otherwise
--------------------------------------
specifically provided in following clauses (b) and (c), Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Effective Date any Subsidiary; provided that, (i) the Borrower and its
--------
Wholly-Owned Subsidiaries shall be permitted to establish or create, and to the
extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries so long as
the capital stock or other equity interests of such new Subsidiary that is owned
by any Credit Party is, unless otherwise provided in Section 7.16(a)(B), pledged
pursuant to, and to the extent required by, the Pledge and Security Agreement
(and so long as any actions required to be taken by the Pledge and Security
Agreement in connection therewith are in fact taken), (ii) such new Subsidiary
to the extent that same is a Look-Through Subsidiary, unless otherwise provided
in Section 7.16(a)(B), executes a counterpart of the Subsidiaries Guaranty and,
to the extent that such Wholly-Owned Subsidiary is a Look-Through Subsidiary of
the type described in clause (i) of the definition thereof, the Pledge and
Security Agreement and (iii) such new Subsidiary, to the extent requested by the
Administrative Agent or the Required Banks, takes all actions required pursuant
to Section 7.16. In addition, each such new Wholly-Owned Subsidiary shall
execute and deliver, or cause to be executed and delivered, all other relevant
documentation of the type described in Section 4 as such new Subsidiary would
have had to deliver if such new Subsidiary were a Credit Party on the Effective
Date. Without prejudice to the preceding provisions of this Section 8.17(a), the
Collateral Agent may require that the capital stock of a new Subsidiary (in the
case of a Foreign Subsidiary, subject to limitations on the percentage of voting
stock required to be pledged which are consistent with the limitations provided
in the Pledge and Security Agreement as originally in effect) be pledged
pursuant to an agreement in a form suitable for enforcement in the jurisdiction
in which the new Subsidiary is incorporated.
(b) In addition to Subsidiaries created pursuant to preceding clause
(a) or the following clause (c), the Borrower and its Subsidiaries may establish
or acquire one or more Subsidiaries after the Effective Date as a result of
Investments expressly permitted to be made pursuant to Section 8.05; provided
--------
that (x) all capital stock or other equity interests of each such Subsidiary
shall, unless otherwise provided in section 7.16(a)(B), be pledged by any Credit
Party which owns same to the extent required by the Pledge and Security
Agreement and (y) if any such Subsidiary is, or becomes, a Wholly-Owned
Subsidiary of the Borrower that is a Look-Through Subsidiary, such Subsidiary
shall at such time take all actions as would otherwise be required pursuant to
Section 8.17(a) in connection with the creation of a new Wholly-Owned
Subsidiary.
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(c) Holdings and Permitted REIT Subsidiaries may establish, create or,
to the extent otherwise permitted under this Agreement, acquire Permitted REIT
Subsidiaries.
8.18 The Courtyard Settlement. Notwithstanding anything to the
------------------------
contrary contained in Sections 8.01, 8.02, 8.04, 8.05 and 8.06, Holdings and its
Subsidiaries shall be permitted to consummate the transactions that constitute
the Courtyard Settlement as, and to the extent, described on Schedule X, and
such transactions shall not otherwise be counted for purposes of the dollar
limitations set forth in such Sections 8.01, 8.02, 8.04, 8.05 and/or 8.06.
SECTION 9. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when due
--------
of any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for two or more Business Days, in the payment when due of
any interest on any Loan or Note, or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or statement
--------------------
made or deemed 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
9.03 Covenants. Any Credit Party shall (i) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(e)(i), 7.12, 7.14, 7.16 or 7.18 or Section 8 or (ii) default in the
due performance or observance by it of any other term, covenant or agreement
contained in this Agreement (other than as provided in Section 9.01) and such
default shall continue unremedied for a period of 30 days after written notice
to the Borrower by the Administrative Agent or the Required Banks; or
9.04 Default Under Other Agreements. (i) Holdings or any of its
------------------------------
Subsidiaries 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 Holdings or any of its Subsidiaries 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 that it
shall not be a Default or an Event of Default under clauses (i) or (ii) of this
Section 9.04 unless the aggregate outstanding principal amount of all
Indebtedness as described in such clauses (i) and (ii) is at least $25,000,000;
or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
---------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy,"
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as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code");
or an involuntary case is commenced against Holdings or any of its Subsidiaries
and the petition is not controverted within 10 days, or is not dismissed within
30 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 Holdings or any of its Subsidiaries or Holdings or any of its
Subsidiaries 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 Holdings or any of its Subsidiaries, or there is commenced
against Holdings or any of its Subsidiaries any such proceeding which remains
undismissed for a period of 30 days, or Holdings or any of its Subsidiaries 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 30 days; or Holdings or any of its Subsidiaries 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 30 days; or Holdings or any of
its Subsidiaries makes a general assignment for the benefit of creditors; or any
partnership and/or corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing (it being
understood that the provisions of this Section 9.05 shall not apply to any
Designated Immaterial Subsidiary); or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation 4043.61 (without regard to subparagraph (b)(1)
thereof) and an event described in subsection .62, .63, .64., .▇▇, .▇▇, .▇▇ ▇▇
.▇▇ ▇▇ ▇▇▇▇ Regulation Section 4043 shall be reasonably expected to occur with
respect to such Plan within the following 30 days, 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 by Holdings, any Subsidiary of Holdings or any
ERISA Affiliate to a Plan or a Foreign Pension Plan has not been timely made,
Holdings or any of its Subsidiaries or ERISA Affiliates has incurred or is
likely to incur a liability to or on account of a Plan under 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 or on account of a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) under Section 4980B of the Code, or Holdings or any of its Subsidiaries or
ERISA Affiliates 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;
and (c) such lien, security interest or liability, either individually and/or in
the aggregate, in the reasonable opinion of the Required Banks, will have a
Material Adverse Effect; or
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9.07 Pledge and Security Agreement. At any time after the execution
-----------------------------
and delivery thereof, the Pledge and Security Agreement 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 Pledge and Security Agreement
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 the Pledge and
Security Agreement and such default shall continue beyond any grace period
specifically applicable thereto pursuant to the terms of the Pledge and Security
Agreement; or
9.08 Subsidiaries Guaranty. The Subsidiaries Guaranty shall cease to
---------------------
be in full force or effect (other than in accordance with its terms) as to any
Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting by or on
behalf of such Subsidiary Guarantor shall deny or disaffirm such Subsidiary
Guarantor's obligations under the Subsidiaries Guaranty or any Subsidiary
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Subsidiaries Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
---------
against Holdings or any of its Subsidiaries involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or not fully covered by a
reputable and solvent insurance company) 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 30 consecutive days, and the
aggregate amount of all such judgments equals or exceeds $15,000,000; or
9.10 Management Agreements. Any Management Agreement or any material
---------------------
provision thereof shall cease to be in full force and effect or any party
thereto shall deny or disaffirm its material obligations thereunder or shall
default in the due performance or observance of any material term, covenant or
agreement on its part to be performed or observed pursuant thereto after the
expiration of any applicable cure period, other than those failures, defaults or
modifications which could not, either individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect; or
9.11 Operating Leases. Any Operating Lease or any material provision
----------------
thereof shall cease to be in full force and effect or otherwise be amended or
modified without the consent of the Administrative Agent or any party thereto
shall deny or disaffirm its material obligations thereunder or shall default in
the due performance or observance of any material term, covenant or agreement on
its part to be performed or observed pursuant thereto after the expiration of
any applicable cure period, other than those failures, defaults or modifications
which could not, either individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect; or
9.12 Change of Control. A Change of Control shall occur; or
-----------------
9.13 Trademark Permission. At any time Hotel Properties which account
--------------------
for more than 15% of Consolidated EBITDA for the Test Period then most recently
ended shall be
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operated without the use of the "Marriott", "Renaissance", "Hyatt", "Swissotel",
"Four Seasons" or "▇▇▇▇-▇▇▇▇▇▇▇" or other nationally recognized luxury or
upscale chain name or trademark or shall not be permitted to use any such name
or trademark in any advertising incident thereto; or
9.14 REIT Status. Holdings shall cease, for any reason, to be a real
-----------
estate investment trust under Sections 856 through 860 of the Code; or
9.15 General Partner Status. Holdings shall cease at any time to be
----------------------
the sole general partner of the Borrower; or
9.16 Certain FF&E. Any Person, other than the Borrower or a Subsidiary
-------------
thereof, shall have any consensual Lien on the FF&E owned by a Non-Controlled
Entity (other than Liens existing on the Effective Date or as otherwise
specifically provided in Section 8.01(vii), (xiii) or (xiv)(y));
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 Borrower, 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 9.05
--------
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent to the Borrower as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment terminated,
whereupon the Commitments 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 other 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; and (iii) enforce, as Collateral Agent,
all of the Liens and security interests created pursuant to the Pledge and
Security Agreement.
SECTION 10. Definitions and Accounting Terms.
--------------------------------
10.01 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):
"Acquired Indebtedness" shall mean Indebtedness of the Borrower or any
of its Subsidiaries acquired pursuant to an acquisition made under Section
8.02(x), (xiv) or (xv) or pursuant to an Investment made under Section 8.05(xii)
or (xiii) (or Indebtedness assumed at the time of any such acquisition or
Investment and secured by the asset so acquired), in each case so long as such
Indebtedness existed at the time of such acquisition or Investment and was not
incurred in connection with or in contemplation or anticipation of such
acquisition or Investment.
"Additional Revolving Loan Bank" shall have the meaning provided in
Section 1.14(b).
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"Additional Revolving Loan Commitment" shall mean, for each Additional
Revolving Loan Bank, any commitment to make Revolving Loans by such Bank
pursuant to Section 1.14, in such amount as agreed to by such Bank in the
respective Additional Revolving Loan Commitment Agreement; provided that on the
--------
Additional Revolving Loan Commitment Date upon which an Additional Revolving
Loan Commitment of any Additional Revolving Loan Bank becomes effective, such
Additional Revolving Loan Commitment of such Additional Revolving Loan Bank
shall be added to (and thereafter become a part of) the Revolving Loan
Commitment of such Additional Revolving Loan Bank for all purposes of this
Agreement as contemplated by Section 1.14.
"Additional Revolving Loan Commitment Agreement" shall mean an
Additional Revolving Loan Commitment Agreement substantially in the form of
Exhibit J (appropriately completed).
"Additional Revolving Loan Commitment Date" shall mean each date upon
which an Additional Revolving Loan Commitment under an Additional Revolving Loan
Commitment Agreement becomes effective as provided in Section 1.14(b).
"Adjusted Funds From Operations" shall mean, for any period,
Consolidated Net Income for such period plus (a) the sum of the following
amounts for such period (without duplication) to the extent deducted in the
determination of Consolidated Net Income for such period: (i) depreciation
expense, (ii) amortization expense and other non-cash charges of Holdings and
its Subsidiaries with respect to their real estate assets for such period, (iii)
losses from Asset Sales, losses resulting from restructuring of Indebtedness and
other extraordinary losses, (iv) amortization of financing cost, and (v)
minority interest expense; less (b) the sum of the following amounts to the
extent included in the determination of Consolidated Net Income for such period:
(i) gains from Asset Sales, gains resulting from restructuring of Indebtedness
and other extraordinary gains, (ii) the applicable share of Consolidated Net
Income of Holdings' Unconsolidated Entities, and (iii) minority partner adjusted
funds from operations; plus (without duplication of any amounts referred to in
clause (a) above in this definition) (c) Holdings' pro rata share of Adjusted
Funds From Operations of Holdings' Unconsolidated Entities based upon Holdings'
percentage ownership interest in such Unconsolidated Entities.
"Administrative Agent" shall mean BTCo, in its capacity as
Administrative Agent for the Banks hereunder, and shall include any successor to
the Administrative Agent appointed pursuant to Section 11.09.
"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 general 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 10% of the total voting power normally entitled to
vote in the election of directors, managers or trustees, as applicable, 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, provided that the right to
designate a member of the board of directors or managers of a Person will not,
by itself, be
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deemed to constitute control. Notwithstanding the foregoing, neither Marriott
International nor any of its Subsidiaries shall be considered to be Affiliates
of Holdings or any of its Subsidiaries.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed, refinanced or replaced from
time to time.
"Applicable Commitment Commission Percentage" shall mean, with respect
to any quarterly period occurring between successive Quarterly Payment Dates
(or, if shorter, the period through the termination of the Total Revolving Loan
Commitment) during which the daily average outstanding principal amount of
Revolving Loans is (i) less than 26% of the Total Revolving Loan Commitment,
.50%, (ii) greater than or equal to 26%, but less than 50%, of the Total
Revolving Loan Commitment, .45%, (iii) greater than or equal to 50%, but less
than 75%, of the Total Revolving Loan Commitment, .35%, and (iv) greater than or
equal to 75% of the Total Revolving Loan Commitment, .25%.
"Applicable Margin" shall mean, from and after any Start Date to and
including the corresponding End Date, the respective percentage per annum set
forth below under the respective Type of Loan and opposite the respective ▇▇▇▇▇
(▇.▇., ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, Level IV, Level V or Level VI, as the case
may be) indicated to have been achieved on the applicable Test Date for such
Start Date (as shown on the respective officer's certificate delivered pursuant
to Section 7.01(d) or the first proviso below):
Base Eurodollar
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- -----------
Level I less than 3.50:1.00 0.375% 1.375%
Level II greater than or equal to 3.50:1.00 but
less than 4.00:1.00 0.500% 1.50%
Level III greater than or equal to 4.00:1.00 but
less than 4.50:1.00 1.00% 2.00%
Level IV greater than or equal to 4.50:1.00 but
less than 5.00:1.00 1.25% 2.25%
Level V greater than or equal to 5.00:1.00 but
less than 5.25:1.00 1.50% 2.50%
Level VI greater than or equal to 5.25:1.00 1.875% 2.875%
; provided, however, that if the Borrower fails to deliver the financial
-------- -------
statements required to be delivered pursuant to Section 7.01(a) or (b)
(accompanied by the officer's certificate required to be delivered pursuant to
Section 7.01(d) showing the applicable Leverage Ratio on the relevant Test Date)
on or prior to the respective date required by such Sections, then Level VI
pricing shall apply until such time, if any, as the financial statements
required as set forth above and the accompanying officer's certificate have been
delivered showing the pricing for the respective Margin Reduction Period is at a
level which is less than Level VI (it being understood that, in the case of any
late delivery of the financial statements and officer's certificate as so
required, any
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reduction in the Applicable Margin shall apply only from and after the date of
the delivery of the complying financial statements and officer's certificate);
provided further, that Level VI pricing shall apply at any time when any
-------- -------
Specified Default or Event of Default is in existence. Notwithstanding anything
to the contrary contained in the immediately preceding sentence (other than the
second proviso thereof), Level IV pricing shall apply for the period from the
Effective Date to but not including the date which is the first Start Date after
the Effective Date.
"Approved Lessee" shall mean (i) Crestline or a Subsidiary thereof, as
lessee under an Operating Lease, (ii) a Taxable REIT Subsidiary or (iii) another
lessee under an Operating Lease approved by the Administrative Agent and the
Required Banks (which approval shall not be unreasonably withheld).
"Asset Sale" shall mean (i) any sale, transfer or other disposition by
Holdings or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to the Borrower or a Wholly-Owned
Subsidiary of the Borrower of any asset (including, without limitation, any
capital stock or other securities of, or equity interest in, another Person)
other than sales or other dispositions of assets pursuant to Sections 8.02(ii),
(iii), (iv), (v), (vi), (vii) and (viii), or (ii) any "Asset Sale" under, and as
defined in, the Senior Note Indenture.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit I (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 or any other officer of such Credit Party designated in
writing to the Administrative Agent by any of the foregoing officers of such
Credit Party as being authorized to act in such capacity so long as the other
officer is a financial person who works in such Credit Party's controller's or
accounting office.
"Authorized Officer" of any Credit Party shall mean any of the Chief
Executive Officer, the President, the Chief Operating Officer, 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 notices under this Agreement.
"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to Section 1.14(b)
or 12.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or failure 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
Borrower and/or the Administrative Agent that it does not intend to comply with
its obligations under Section 1.01, including, without limitation, as a result
of any takeover of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" shall mean, at any time, the higher of (i) the rate which
is 1/2 of 1% in excess of the Federal Funds Rate and (ii) the Prime Lending
Rate.
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"Base Rate Loan" shall mean each Loan designated or deemed designated
as such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from Banks having Commitments of the respective Tranche on a given date
(or resulting from a conversion or conversions on such date) having in the case
of Eurodollar Loans the same Interest Period, provided that Base Rate Loans
--------
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual capacity,
and any successor thereto by merger or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) 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 and (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.
"Calculation Period" shall mean the period of four consecutive fiscal
quarters last ended before the date of the respective event or incurrence which
requires calculations to be made on a Pro Forma Basis and for which financial
--- -----
information of the kind referred to in Sections 7.01(a) and (b) is available.
"Capital Expenditures" shall mean, with respect to any Person, without
duplication, 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, without
duplication, the amount of Capitalized Lease Obligations of such Person.
"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 of such Person 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 one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Bank or (y)
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any bank whose short-term commercial paper rating from S&P is at least A-2 or
the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-2 or the equivalent thereof
(any such bank or Bank, an "Approved Bank"), in each case with maturities of not
more than one year 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 least A-2 or the
equivalent thereof by S&P or at least P-2 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 one year after the date of
acquisition, (iv) marketable direct obligations issued by the District of
Columbia or any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year 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.
"Casualty Event" shall mean any theft, loss, physical destruction,
damage or similar event with respect to any Hotel Property or any other Real
Property owned or leased by Holdings or any of its Subsidiaries (or in each case
any portion thereof).
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 ▇.▇.▇▇. ss. 9601 et seq.
-- ---
"Change of Control" shall mean (i) Holdings shall at any time cease to
own 100% of the general partnership interests of the Borrower, (ii) the direct
or indirect acquisition by any Person or a group (as such term is defined in
Section 13(d)(3) of the Exchange Act), other than Marriott Family Members, of
beneficial ownership (as such term is defined in Rule 13D-3 promulgated under
the Securities Exchange Act) of 40% or more of the outstanding shares of common
stock of Holdings, (iii) the Board of Directors of Holdings shall not consist of
a majority of Continuing Directors or (iv) any "change of control" or similar
event shall occur under any Qualified Preferred Stock, the Senior Notes or any
other Indebtedness (other than Permitted Non-Recourse Indebtedness) of Holdings
or the Borrower with an aggregate principal amount of $25,000,000 or more.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Co-Agent" shall mean each of The Bank of Nova Scotia and Credit
Lyonnais New York Branch.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder. Section references to
the Code are to the Code, as in effect on the Effective Date, and to any
subsequent provision of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
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"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Pledge and Security
Agreement.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
---
whether the Term Loan Commitment or Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in Section
2.01(a).
"Condemnation Proceeds" shall mean all compensation, awards, damages,
rights of action and proceeds awarded to Holdings or any of its Subsidiaries by
reason of any Taking.
"Consolidated EBITDA" shall mean, for any period, the Consolidated Net
Income of the Borrower for such period adjusted (A) to add thereto the sum of
(I) (to the extent deducted in determining Consolidated Net Income for such
period), without duplication, the sum of the amounts for such period of (i)
Consolidated Interest Expense, (ii) provisions for taxes based on income, (iii)
depreciation and amortization expense (provided that the depreciation and
amortization expense of a non-Wholly-Owned Subsidiary shall be included only to
the extent of the equity interest of such Person in such non-Wholly-Owned
Subsidiary), (iv) any other noncash items reducing Consolidated Net Income of
the Borrower for such period (except to the extent that such noncash items
relate to the write-off or write-down of any item included in Consolidated Net
Income in a prior period), (v) the one time costs incurred as part of the
Courtyard Settlement and (vi) any cash receipts of such Person or a Subsidiary
thereof during such period that represent items included in Consolidated Net
Income of the Borrower for a prior period which were excluded from Consolidated
EBITDA in such prior period by virtue of clause (B) of this definition, and (II)
to the extent not already included in the determination of Consolidated EBITDA
for such period, cash interest expense of an Unconsolidated Entity in which the
Borrower has an equity Investment in an aggregate amount not to exceed the
Designated Cash Interest Expense Amount for such Unconsolidated Entity, (B) to
subtract therefrom, without duplication, the sum of the amounts for such period
of (i) all noncash items increasing Consolidated Net Income of the Borrower for
such period and (ii) any cash expenditures of the Borrower and its Subsidiaries
during such period to the extent that such cash expenditures (x) did not reduce
Consolidated Net Income of the Borrower for such period and (y) were applied
against reserves or accruals that constituted noncash items reducing
Consolidated Net Income of the Borrower when reserved or accrued for in a prior
period and (C) as provided in the definition of Pro Forma Basis; provided that
--- ----- --------
Consolidated EBITDA shall be determined without giving effect to any
extraordinary gains or losses (including any taxes attributable to any such
extraordinary gains or losses) or gains or losses from sales of assets other
than from sales of inventory (excluding Real Property) in the ordinary course of
business. Notwithstanding anything to the contrary contained in this Agreement,
for purposes of determining compliance with Sections 8.08, 8.09, 8.11 and 8.12
and for purposes of determining the Applicable Margin, to the extent that the
portion of Consolidated EBITDA for any period attributable to Non-Controlled
Entities exceeds 16% (or, for any period on or after consummation of the initial
Crestline Exchange, 8%) of the total Consolidated EBITDA for such period, such
excess shall be ignored in making such determinations.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Fixed
Charges for such period.
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"Consolidated Fixed Charges" shall mean, for any period, the sum of
(i) Consolidated Interest Expense for such period, (ii) to the extent that same
does not otherwise constitute Consolidated Interest Expense, all interest
expense on the QUIPs Debt for such period, (iii) preferred stock dividends (or
the equivalent thereof) accrued and/or paid in cash by the Borrower during such
period, (iv) 5% of Gross Revenues during such period received from all Hotel
Properties and (v) 3% of Gross Revenues during such period received from all
other high quality real estate.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower 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 Subsidiaries representing the interest factor for such period, but excluding
the amortization of any deferred financing costs; provided that (i) any interest
--------
expense on the QUIPs Debt shall be excluded as Consolidated Interest Expense to
the extent that same would otherwise have been included therein for such period
and (ii) Consolidated Interest Expense shall be adjusted as provided in the
definition of Pro Forma Basis. Notwithstanding anything to the contrary
contained elsewhere in this Agreement or the requirements of GAAP, the amount of
Capitalized Interest incurred during any period shall be added as a component of
Consolidated Interest Expense.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis; provided that (i) net income (or loss) of (x) any other
--------
Person which is accounted for by such specified Person by the equity method of
accounting or (y) any Subsidiary of such Person that is restricted from
declaring or paying dividends or other distributions, directly or indirectly, by
operation of the terms of its charter, any applicable agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation or otherwise
shall (in each case) be included only to the extent of the amount of cash
dividends or distributions paid to the specified Person or a Wholly-Owned
Subsidiary of such Person, (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) to the extent Consolidated Net Income reflects amounts
attributable to minority interests in Subsidiaries that are not Wholly-Owned
Subsidiaries of the Borrower, Consolidated Net Income shall be reduced by the
amounts attributable to such minority interests and (iv) Consolidated Net Income
shall be calculated without giving effect to any Operating Lease termination fee
paid in connection with the Crestline Exchanges to the extent that any such
termination fee would otherwise have reduced Consolidated Net Income in the
respective period.
"Consolidated Total Debt" shall mean, at any time, the sum of (without
duplication) (I) the amount of all Indebtedness of the Borrower and its
Subsidiaries 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 at such time, including, in
any event, all Loans, all Senior Notes, all Limited Partner Notes, all
Capitalized Lease Obligations, all purchase money Indebtedness and all Permitted
Non-Recourse
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Indebtedness, (II) the amount of all Indebtedness of the Borrower and its
Subsidiaries of the type described in clauses (ii), (iii) and (vi) of the
definition of Indebtedness issued or given in support of Indebtedness or other
payment obligations of any third Person (other than guaranties of operating
leases for equipment and restaurant facilities to the extent such guaranties
constitute Existing Indebtedness) and (III) to the extent not otherwise included
in preceding clauses (I) and (II), the amount of all obligations of the Borrower
and its Subsidiaries owed to a Facility Manager in connection with a renovation
project of a Hotel Property in the event that such obligations are secured by a
Lien on any asset of the Borrower or any of its Subsidiaries and the aggregate
amount of such obligations (and the fair market value of all property subject to
such Liens) equals or exceeds 2.5% of the fair market value (as determined by
the Borrower) of the respective Hotel Property; provided, however, (x)
-------- -------
Consolidated Total Debt shall exclude (i) Specified Bottom Guaranties in an
aggregate amount not to exceed $300,000,000 at any time outstanding for all such
Specified Bottom Guaranties and (ii) Specified Credit Worthy Supported Debt in
an aggregate amount not to exceed $250,000,000 at any time outstanding for all
such Specified Credit Worthy Supported Debt and (y) Consolidated Total Debt
shall be further adjusted as provided in the definition of Pro Forma Basis.
---------
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee (including, without
limitation, 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 partner) 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 (x) endorsements of instruments for deposit or
collection in the ordinary course of business or (y) liabilities of Holdings or
any of its Subsidiaries arising solely as a result of their being a general
partner in a Person which is not a Subsidiary to the extent such liabilities are
of the type described in Section 8.04(ii) or are in respect of other
Indebtedness which provides that recourse thereunder is limited to those
circumstances of the type described in Section 12.18. 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 Holdings on the
Effective Date and each other director, if such other director's nomination for
election to the Board of Directors of Holdings 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.
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"Courtyard Settlement" shall mean the transactions described in, and
entered into in connection with the settlement of the lawsuit described in,
Schedule X.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, the
Pledge and Security Agreement, the Subsidiaries Guaranty and each Additional
Revolving Loan Commitment Agreement.
"Credit Party" shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
"Credit Worthy Person" shall mean a Person which meets (and continues
to meet) all of the criteria set forth in either clause (A) or (B) below in this
definition:
(A) the long-term senior unsecured Indebtedness of such Person is
rated at least BBB- by S&P and at least Baa3 by ▇▇▇▇▇'▇; or
(B) such Person meets all of the following criteria:
(i) such Person has a minimum consolidated net worth of at least
$500,000,000 (and taking into account any Permitted Pro Forma
--- -----
Adjustments);
(ii) such Person has at least $100,000,000 of consolidated cash
flow (i.e., net income plus interest expense, taxes, depreciation and
---
amortization (without taking into account any extraordinary items))
for each period of four consecutive fiscal quarters for which such
determination is required to be made (and taking into account any
Permitted Pro Forma Adjustments); and
--- -----
(iii) such Person's consolidated leverage ratio as of the end of
each fiscal quarter is no greater than 4.50:1.00 (with such leverage
ratio being defined as the ratio of (x) consolidated indebtedness as
of the end of each such fiscal quarter to (y) consolidated cash flow
(as determined in clause (ii) above) for the four consecutive fiscal
quarters ending on the last day of such fiscal quarter (and taking
into account any Permitted Pro Forma Adjustments)).
--- -----
All financial calculations required to be made pursuant to clause (B) above
shall be made in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved.
"Crestline" shall mean Crestline Capital Corporation, a Maryland
corporation.
"Crestline Exchanges" shall mean one or more transactions the end
result of which is that the Borrower or one or more of its Subsidiaries acquires
the Operating Leases from Crestline, any Subsidiary of Crestline or any other
Person that is an existing Approved Lessee (or acquires (including by merger)
the equity interests of the respective Approved Lessees), which acquisition also
may consist of the related purchase of the equity interests of the Person or
Persons which own the FF&E which is used at the Hotel Properties for which such
Operating Leases relate, provided that the following conditions are also
--------
satisfied:
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(i) the consideration to be paid by the Borrower and its Subsidiaries
shall consist of a combination of cash, Hotel Properties (and related assets),
the HPT Leases, the equity interests of the Person or Persons owning such Hotel
Properties, the equity interests of Unconsolidated Entities and/or the equity
interests of the Person or Persons who own the HPT Leases; provided, however, in
-------- -------
no event shall the aggregate fair market value of all non-cash consideration
paid in respect of all Crestline Exchanges (as determined in good faith by the
Borrower) exceed $350,000,000 (it being understood that, in making the foregoing
calculation, to the extent that the Borrower or any Subsidiary of the Borrower
contributes less than all of its interest in an asset as part of a Crestline
Exchange, the fair market value of the Borrower's or such Subsidiary's entire
interest in such asset (including any portion thereof retained by the Borrower
or such Subsidiary) shall be counted towards, and applied against, the
$350,000,000 limitation set forth above in this proviso);
(ii) the new Approved Lessee under each such Operating Lease is a
Taxable REIT Subsidiary or a Non-Controlled Entity that, within 60 days after
such Crestline Exchange, becomes a Taxable REIT Subsidiary; and
(iii) any Indebtedness and associated Liens that become Indebtedness
of, and Liens granted by, a Subsidiary of the Borrower as part of a Crestline
Exchange are Indebtedness and associated Liens that (x) are existing at the time
of (and are not created in contemplation or anticipation of) such Crestline
Exchange (other than a Lien required to be granted by the Borrower or such
Subsidiary to a lender to which the Borrower and/or any such Subsidiary is
already indebted to in respect of Secured Indebtedness otherwise permitted under
this Agreement), (y) are owed to the Borrower or a then existing Subsidiary of
the Borrower and/or to a lender to which the Borrower and/or any such Subsidiary
is already indebted to in respect of such assumed Indebtedness as otherwise
permitted under this Agreement, and (z) in the case of such Liens, they do not
encumber any other asset of the Borrower or any of its Subsidiaries.
"Customary Non-Recourse Exclusions" shall mean exceptions by reason of
(i) any fraudulent misrepresentation made by Holdings or any of its other
Subsidiaries in or pursuant to any document evidencing any Indebtedness or other
liabilities of any Designated Immaterial Subsidiary or any Specified Subsidiary,
as applicable, (ii) any unlawful act on the part of Holdings or any of its other
Subsidiaries in respect of the Indebtedness or other liabilities of any
Designated Immaterial Subsidiary or any Specified Subsidiary, (iii) any
misappropriation of funds by Holdings or any of its other Subsidiaries in
contravention of the provisions of the Indebtedness or other liabilities of any
Designated Immaterial Subsidiary or any Specified Subsidiary, as applicable, or
(iv) customary environmental indemnities associated with the Real Property of
any Designated Immaterial Subsidiary or any Specified Subsidiary, as applicable.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Designated Cash Interest Expense Amount" shall mean, in respect of
any Unconsolidated Entity in which the Borrower has an equity Investment, that
amount of cash
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interest expense of such Unconsolidated Entity that is actually paid in cash
during the respective period multiplied by a fraction, the numerator of which is
equal to the aggregate exposure of the Borrower under any guaranty of the
Indebtedness of such Unconsolidated Entity for which such cash interest expense
relates to and the denominator of which is equal to aggregate principal amount
of such Indebtedness.
"Designated Immaterial Subsidiary" shall mean each of FIBM One LLC, a
Delaware limited liability company, RIBM One LLC, a Delaware limited liability
company, and RIBM Two LLC, a Delaware limited liability company, in each case
only so long as (i) the only material asset of such Subsidiary is (A) in the
case of FIBM One LLC, a 1% general partnership interest and a 10% limited
partnership interest in Fairfield Inn by Marriott Limited Partnership, a
Delaware limited partnership, (B) in the case of RIBM One LLC, a 1% general
partnership interest and a de minimis limited partnership interest in Marriott
-- -------
Residence Inn Limited Partnership, and (C) in the case of RIBM Two LLC, a 1%
general partnership interest and a de minimis limited partnership interest in
-- -------
Marriott Residence Inn II Limited Partnership, and (ii) there is no recourse,
whether contractual, by operation of law or otherwise, against Holdings or any
of its Subsidiaries in respect of the Indebtedness and other liabilities of any
such partnership (other than in respect of Customary Non-Recourse Exclusions).
"Determination Date" shall have the meaning provided in the definition
of "Pro Forma Basis."
"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,
partners or members or authorized or made any other distribution, payment or
delivery of property (other than common stock or other common equity interests
of such Person or Qualified Preferred Stock of Holdings or the Borrower) or cash
to its stockholders, partners or members in their capacity 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 other equity
interests outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock or other equity
interest), 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
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 or
other equity interest).
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings
incorporated or organized in the United States or any State or territory
thereof.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, any fund that invests in loans or any other "accredited
investor" (as defined in Regulation D under the Securities Act).
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"End Date" shall mean, for any Margin Reduction Period, the last day
of such Margin Reduction Period.
"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 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 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 judgment relating to the environment, Hazardous
Materials or employee health or safety relating to Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control
Act, 33 U.S.CA.ss.2601 et seq., the Clean Air Act, 42 ▇.▇.▇▇.▇▇. 7401 et seq.;
-- --- -- ---
the Safe Drinking Water Act, 42 ▇.▇.▇▇.▇▇. 3803 et seq.; the Oil Pollution Act
-- ---
of 1990, 33 ▇.▇.▇▇.▇▇. 2701 et seq.; the Emergency Planning and the Community
-- ---
Right-to-Know Act of 1986, 42 ▇.▇.▇▇.▇▇. 11001 et seq., the Hazardous Material
-- ---
Transportation Act, 49 ▇.▇.▇▇.▇▇. 1801 et seq. and the Occupational Safety and
-- ---
Health Act, 29 U.S.CA.ss.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 on the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b),(c), (m)
or (o) of the Code.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo 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%)
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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).
"Event of Default" shall have the meaning provided in Section 9.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Indebtedness" shall have the meaning provided in Section
6.20.
"Facility Manager" shall mean each manager of a Hotel Property or
other Real Property pursuant to a Management Agreement.
"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 2.01.
"FF&E" shall mean, with respect to any Hotel Property, any furniture,
fixtures and equipment, including any beds, lamps, bedding, tables, chairs,
sofas, curtains, carpeting, smoke detectors, mini bars, paintings, decorations,
televisions, telephones, radios, desks, dressers, towels, bathroom equipment,
heating, cooling, lighting, laundry, incinerating, loading, swimming pool,
landscaping, garage and power equipment, machinery, engines, vehicles, fire
prevention, refrigerating, ventilating and communications apparatus, carts,
dollies, elevators, escalators, kitchen appliances, restaurant equipment,
computers, reservation systems, software, cash registers, switchboards, cleaning
equipment or other items of furniture, fixtures and equipment typically used in
hotel properties (including furniture, fixtures and equipment used in guest
rooms, lobbies and common areas (other than those items of furniture, fixtures
and equipment owned by the occupant or tenant in any such room)).
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings or any one or more
of its Affiliates primarily for the benefit of employees of Holdings or such
Affiliates 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, and as to which
plan neither the Borrower nor any other Credit Party has any material liability.
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"Foreign Subsidiary" shall mean each Subsidiary of Holdings other than
a Domestic Subsidiary.
"Franchise Agreements" shall mean all franchise or similar agreements
entered into with respect to a Hotel Property.
"Full-Service Hotel" shall mean (i) a Hotel (including an all-suites
Hotel) which may reasonably be categorized as one which offers customary food
and beverage facilities and room service and (ii) a metropolitan Marriott
Courtyard, Residence Inn or another nationally branded chain of equal of higher
quality, in each case (in the case of this clause (ii)) with 200 or more rooms
and which is served by a restaurant facility.
"Gross Revenues" shall mean, for any Hotel Property or other high
quality real estate, all revenues and receipts of every kind derived from
operating such Hotel Property or other high quality real estate and parts
thereof, including, but not limited to: income (from both cash and credit
transactions), before commissions and discounts for prompt or cash payments,
from rentals or sales of rooms, stores, offices, meeting space, exhibit space or
sales space of every kind; license, lease and concession fees and rentals (not
including gross receipts of licensees, lessees and concessionaires); net income
from vending machines; health club membership fees; food and beverage sales;
sales of merchandise (other than proceeds from the sale of FF&E no longer
necessary to the operation of such Hotel Property or other high quality real
estate); service charges, to the extent not distributed to the employees at such
Hotel Property or other high quality real estate as, or in lieu of, gratuities;
and proceeds, if any, from business interruption or other loss of income
insurance; provided, however, that Gross Revenues shall not include the
-------- -------
following: gratuities to employees of such Hotel Property or other high quality
real estate, federal, state or municipal excise, sales, use or similar taxes
collected directly from tenants, patrons or guests or included as part of the
sales price of any goods or services; insurance proceeds (other than proceeds
from business interruption or other loss of income insurance); condemnation
proceeds; or any proceeds from any sale of such Hotel Property or other high
quality real estate.
"Hazardous Materials" shall mean (a) 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, 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.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Hotel" shall mean any Real Property (including Improvements thereon
and any retail, golf, tennis, spa or other resort amenities appurtenant thereto)
comprising an operating facility offering hotel or lodging services.
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"Hotel Property" shall mean each Hotel owned or leased by Holdings or
any of its Subsidiaries (including the furniture, fixture and equipment
thereon), provided that the term "Hotel Property" shall not include any casino
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or gaming hotel.
"HPT Leases" shall mean (a) the Master Lease Agreement, dated as of
April 30, 1999, by and among Hospitality Properties Trust and HPTCY Properties
Trust, as landlord, and HMH HPT Courtyard LLC, as tenant, and (b) the Master
Lease Agreement, dated as of April 30, 1999, by and among HPTRI Properties
Trust, as landlord, and HMH HPT Residence Inn LLC, as tenant.
"Improvements" shall mean all buildings, structures, fixtures, tenant
improvements and other improvements of every kind and description now or
hereafter located in or on or attached to any Real Property, including all
building materials, water, sanitary and storm sewers, drainage, electricity,
steam, gas, telephone and other utility facilities, parking areas, roads,
driveways, walks and other site improvements; and all additions and betterments
thereto and all renewals, substitutions and replacements thereof.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (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) or (vii) 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, and (vii) all
obligations of such Person under any Interest Rate Protection Agreement or Other
Hedging Agreement or under any similar type of agreement or arrangement.
"Insurance Premiums" shall have the meaning provided in Section
7.03(c).
"Insurance Proceeds" shall mean all insurance proceeds, damages,
claims and rights of action and the right thereto under any insurance policies
relating to any portion of any Hotel Property or other Real Property.
"Intangible Asset" shall mean, with respect to any Person, a
long-lived asset that is useful in the operations of such Person, that is not
directly used in revenue generation and is not held for sale, and is without
physical qualities, including but not limited to patents, copyrights, trademarks
and goodwill, but excluding capitalized costs associated with the acquisition of
brand names, franchises and trademarks, franchise agreements and management
agreements.
"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 Period" shall have the meaning provided in Section 1.09.
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"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 8.05.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under any lease or
license of land, improvements and/or fixtures.
"Leverage Ratio" shall mean, at any time, the ratio of (x)
Consolidated Total Debt at such time to (y) Consolidated EBITDA for the Test
Period then last ended.
"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).
"Limited Partner Note" shall mean an existing unsecured note of the
Borrower issued prior to the Effective Date to certain limited partners of a
previous public partnership in which Holdings or a Subsidiary thereto was a
general partner, each of which Limited Partner Notes does not have any maturity
or amortization prior to December 15, 2005 (except in connection with the sale
of assets formerly owned, directly or indirectly, by the public partnership to
which such Limited Partner Note relates as contemplated by the definition of
"Net Sale Proceeds").
"Loan" shall mean (i) each Term Loan and (ii) each Revolving Loan.
"Look-Through Subsidiary" shall mean (i) a Wholly-Owned Subsidiary of
the Borrower that is not recognized as existing and is treated as part of the
Borrower for federal income tax purposes (such as, but not limited to, a single
member limited liability company or a partnership in which the sole partners are
the Borrower and/or other Look-Through Subsidiaries of the Borrower) or (ii)(A)
a Wholly-Owned Subsidiary of the Borrower that is treated as a partnership for
federal income tax purposes or (B) a Wholly-Owned Subsidiary of an entity
described in clause (ii)(A) of this definition that is not recognized as
existing and is treated as part of such entity described in such clause (ii)(A)
for federal income tax purposes.
"Management Agreements" shall mean all agreements with respect to the
management of a Hotel Property or other Real Property owned or leased by
Holdings or any of its Subsidiaries. With respect to each Hotel Property
acquired after the Effective Date, the terms and conditions of the Management
Agreement with respect thereto shall be consistent with those contained in
Management Agreements as in effect on the Effective Date, with any material
differences to be reasonably approved by the Administrative Agent, and the
manager thereunder shall be a Permitted Facility Manager.
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"Margin Reduction Period" shall mean each period which shall commence
on the date occurring after the Effective Date on which the respective officer's
certificates are delivered pursuant to Section 7.01(d) (together with the
related financial statements pursuant to Section 7.01(a) or (b), as the case may
be) and which shall end on the earlier of (i) the date of actual delivery of the
next officer's certificates pursuant to Section 7.01(d) (together with the
related financial statements) and (ii) the latest date on which the next
officer's certificates are required to be delivered pursuant to Section 7.01(d)
(together with the related financial statements).
"Margin Stock" shall have the meaning provided in Regulation U.
"Marriott Family Members" shall mean any of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (deceased),
▇.▇. Marriott, Jr., ▇▇▇▇▇▇▇ ▇. Marriott, any brother or sister of ▇.▇. Marriott,
Sr. (deceased), any children or grandchildren of any of the foregoing, any
spouses of any of the foregoing, or any trust or other entity established
primarily for the benefit of one or more of the foregoing.
"Marriott International" shall mean Marriott International, Inc., a
Delaware corporation.
"Material Adverse Effect" shall mean (i) a material adverse effect on
the business, operations, properties, assets, liabilities, condition (financial
or otherwise) or prospects of Holdings, Holdings and its Subsidiaries taken as a
whole, the Borrower or the Borrower and its Subsidiaries taken as a whole or
(ii) a material adverse effect (x) on the rights or remedies of the Banks or the
Administrative Agent hereunder or under any other Credit Document or (y) on the
ability of any Credit Party to perform its obligations to the Lenders or the
Administrative Agent hereunder or under any other Credit Document.
"Maturity Date" shall mean August 5, 2003.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$5,000,000, and (ii) for Term Loans, $10,000,000.
"Minimum Tangible Net Worth" shall mean, at any time, the sum of (i)
75% of Tangible Net Worth as of the Effective Date plus (ii) 75% of the
aggregate Net Equity Proceeds received by Holdings (to the extent contributed to
the Borrower) or the Borrower (without duplication) after the Effective Date in
connection with any issuance of Stock, Stock Equivalents or any OP Units, in
each case to any Person other than Holdings or any Subsidiary thereof.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA subject to Title IV of ERISA.
"Naples Golf Resort" shall mean the ▇▇▇▇-▇▇▇▇▇▇▇ Hotel golf resort
currently under construction by the Borrower or a Subsidiary thereof in Naples,
Florida.
"Naples Spa" shall mean the health spa located at the Borrower's
existing ▇▇▇▇-▇▇▇▇▇▇▇ Hotel in Naples, Florida.
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"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other costs associated therewith) received by the
respective Person from the respective incurrence of such Indebtedness for
borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or
sale of any equity by any Person or any capital contribution to such Person, the
cash proceeds (net of underwriting discounts and commissions and other costs
associated therewith) received by such Person from the respective sale or
issuance of its equity or from the respective capital contribution.
"Net Insurance/Condemnation Proceeds" shall mean all Insurance
Proceeds on account of any Casualty Event to any Hotel Property or other Real
Property owned or leased by Holdings or any of its Subsidiaries or all
Condemnation Proceeds in respect of any Taking of any Hotel Property or any such
other Real Property, net of (i) the reasonable cost, if any, of recovering such
proceeds and of paying out such proceeds, including reasonable attorneys' fees
and costs allocable to inspecting the Work and the plans and specifications
therefor, and (ii) the amount of such Insurance Proceeds or Condemnation
Proceeds required to be used to repay any Indebtedness which is secured by the
respective property which is the subject of such Casualty Event or Taking.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross 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 from any
Asset Sale, net of (i) reasonable transaction costs (including, without
limitation, any underwriting, brokerage or other customary selling commissions
and reasonable legal, advisory and other fees and expenses, including title and
recording expenses, associated therewith), (ii) the amount of such gross cash
proceeds required to be used to repay any Indebtedness (other than the Loans,
the Senior Notes or any other Indebtedness secured pursuant to the Pledge and
Security Agreement) which is secured by the respective assets which were sold,
or, in the case of the Limited Partner Notes, the amount of such gross cash
proceeds which is required to be used to repay such Limited Partner Notes as a
result of such Asset Sale, (iii) the estimated marginal increase in income taxes
which will be payable by Holdings' consolidated group with respect to the fiscal
year in which the sale occurs as a result of such Asset Sale, and (iv) unless
taxes thereon are paid by Holdings or any of its Subsidiaries as set forth in
clause (iii) above in this definition, amounts required to be distributed as a
result of the realization of gains from the respective Asset Sale in order to
maintain or preserve Holdings' status as a real estate investment trust.
"Non-Conforming Assets" shall mean various assets (principally
comprising partnership or other interests in Hotels which are not leased,
certain international hotels in which Holdings or its Subsidiaries own
interests, and certain FF&E relating to Hotels owned by the Borrower and its
Subsidiaries) which assets, if owned by the Borrower, could jeopardize Holdings'
status as a real estate investment trust or otherwise could cause significant
adverse tax consequences to Holdings and its Subsidiaries.
"Non-Controlled Entity" shall mean any corporation, limited
partnership or limited liability corporation in which Holdings and its
Subsidiaries own at least 94% of the
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economic interests of such entity and no more than 6% of the voting rights or
controlling interests of such entity and whose assets consist primarily of
Non-Conforming Assets.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Term Note and each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"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 or person 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, any Co-Arranger, the Collateral Agent or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Operating Lease" shall mean a lease or sublease between the Borrower
or any Subsidiary thereof, as lessor, and an Approved Lessee, as lessee, which
lease shall be reasonably satisfactory to the Administrative Agent and shall
provide for rent payments which provide an economic return to the lessor
thereunder generally comparable to the economic returns provided to the lessors
from the rent payments under the Operating Leases originally delivered to and
approved by the Administrative Agent prior to the Effective Date. With respect
to each Hotel Property acquired after the Effective Date, the terms and
conditions of the Operating Lease with respect thereto shall be consistent with
those contained in Operating Leases as in effect on the Effective Date, with any
material differences to be reasonably approved by the Administrative Agent, and
the lessee thereunder shall be an Approved Lessee.
"OP Units" shall mean the partnership units of the Borrower.
"Original Credit Agreement" shall have the meaning provided in the
first WHEREAS clause of this Agreement.
"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.
"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.
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"Permitted Designated Investments" shall mean and include (i) any
equity investment in and/or loan to a Person (other than a Subsidiary of
Holdings or the Borrower) engaged primarily in the ownership of hotel properties
or other high quality real estate consistent with the quality of the Borrower's
and its Subsidiaries' existing portfolio of Hotel Properties or in a Related
Business, or (ii) any equity investment in and/or loan to a Subsidiary of the
Borrower that is not a Subsidiary Guarantor.
"Permitted Facility Manager" shall mean, with respect to each Hotel
Property, Marriott International, a Wholly-Owned Subsidiary of Marriott
International, Interstate Hotels Corporation (or a successor thereto (so long as
such successor remains a first-class nationally recognized hotel management
company)), a Wholly-Owned Subsidiary of Interstate Hotels Corporation (or such
successor), Hyatt Corporation, a Wholly-Owned Subsidiary of Hyatt Corporation,
Four Seasons Hotel Limited, a Wholly-Owned Subsidiary of Four Seasons Hotel
Limited, Swissotel Management (US) LLC, Crestline, a Wholly-Owned Subsidiary of
Crestline or another first-class nationally recognized hotel management company
in good standing reasonably acceptable to the Administrative Agent.
"Permitted Liens" shall have the meaning provided in Section 8.01.
"Permitted Like-Kind Exchange Property" shall mean, with respect to
any sale of real estate property (and related personal property), one or more
other real estate assets (and related personal property) with a fair market
value reasonably equivalent to the property sold (either by itself or together
with cash paid for such assets), so long as (i) such other real estate assets
(and related personal property) is designated to be received as consideration
for such sale within 45 days of the consummation of such sale and (b) such other
real estate assets (and related personal property) are actually received by the
Borrower or its respective Subsidiary within 180 days of the consummation of
such sale.
"Permitted Non-Recourse Indebtedness" shall mean, with respect to any
Specified Subsidiary, Indebtedness permitted to be incurred by such Specified
Subsidiary pursuant to Sections 8.04(i) and (vi), which Indebtedness (i) shall
be secured only by the assets of such Specified Subsidiary, (ii) shall be made
expressly non-recourse to Holdings and its other Subsidiaries (other than in
respect of a Customary Non-Recourse Exclusion) and (iii) shall have (A) a final
maturity date of not earlier than August 5, 2004 and (B) a remaining
amortization schedule based upon a schedule of no less than 20 years.
"Permitted Pro Forma Adjustments" shall mean that the calculations
---------
required by clauses (i), (ii) and (iii) of the definition of Credit Worthy
Person may be calculated on a pro forma basis to give effect to (A) any
incurrence, acquisition or assumption of Indebtedness with a principal amount of
$5,000,000 or more which has been incurred on or prior to the last day of the
applicable fiscal quarter of the respective Credit Worthy Person or in
connection with the acquisition of the specified asset or assets from the
respective Specified Subsidiary, in each case as if such Indebtedness had been
incurred, acquired or assumed on the first day of the applicable consecutive
four quarter period, and (B) any acquisition or sale of any assets with a fair
market value of $5,000,000 or more which was made on or prior to the last day of
the applicable fiscal quarter of the respective Credit Worthy Person or as part
of the acquisition of the specified asset or assets from the respective
Specified Subsidiary, in each case as if such acquisition or sale had
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occurred on the first day of the applicable consecutive four quarter period,
provided that the foregoing adjustments shall only be permitted if the Borrower
--------
has delivered to the Administrative Agent with each set of financial information
required by clauses (v) and (vi) of the definition of Specified Credit Worthy
Supported Debt (which financial information shall contain in reasonable detail
such pro forma adjustments), a certificate (which may be relied upon by the
--- -----
Administrative Agent and the Borrower) of the respective Credit Worthy Person's
independent certified public accountants (who must be of recognized national
standing and reasonably acceptable to the Administrative Agent) certifying as to
the accuracy of such Credit Worthy Person's pro forma adjustments in making the
--- -----
required calculations.
"Permitted REIT Subsidiary" shall mean a Wholly-Owned Subsidiary of
Holdings which engages in no significant business, has no material liabilities
and otherwise has no material assets other than (i) equity interests in other
Permitted REIT Subsidiaries, (ii) de minimis interests in Subsidiaries of the
Borrower, (iii) OP Units or (iv) Investments made pursuant to Section 8.05(x).
"Permitted Sharing Arrangements" shall mean any contracts, agreements
or other arrangements between the Borrower and/or one or more of its
Subsidiaries and Holdings and/or one or more other Subsidiaries of Holdings,
pursuant to which such Persons share centralized services, establish joint
payroll arrangements, procure goods or services jointly or otherwise make
payments with respect to goods or services on a joint basis, or allocate
corporate expenses (other than taxes based on income) (provided that (i) such
--------
Permitted Sharing Arrangements are, in the determination of management of the
Borrower, the Subsidiary Guarantors or their Subsidiaries in the best interests
of the Borrower, the Subsidiary Guarantors or their Subsidiaries and (ii) the
liabilities of the Borrower, the Subsidiary Guarantors and their Subsidiaries
under such Permitted Sharing Arrangements are determined in good faith and on a
reasonable basis).
"Permitted Tax Payments" shall mean payment of any liability of
Holdings, the Borrower or any of their respective Subsidiaries for all Federal,
state, local and foreign taxes, and other assessments of a similar nature
(whether imposed directly or through withholding), including any interest,
additions to tax, or penalties applicable thereto, imposed by any domestic or
foreign governmental authority responsible for the administration of any such
taxes.
"Person" shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Personal Property" shall mean, for any Person, to the extent owned by
such Person, all machinery, equipment, fixtures (including but not limited to
all heating, air conditioning, plumbing, lighting, communications, elevator
fixtures, inventory, and goods), inventory and articles of personal property and
accessions thereof and renewals, replacements thereof and substitutions,
therefor (including, but not limited to, beds, bureaus, chiffoniers, chests,
chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes,
draperies, curtains, shades, venetian blinds, screens, paintings, hangings,
pictures, divans, couches, luggage carts, luggage racks, stools, sofas,
chinaware, linens, pillows, blankets, glassware, silverware, foodcarts,
cookware, dry cleaning facilities, dining room wagons, keys or other entry
systems, bars, bar fixtures, liquor and other drink dispensers, icemakers,
radios, television sets, intercom
-86-
and paging equipment, electric and electronic equipment, dictating equipment,
private telephone systems, medical equipment, potted plants, heating, lighting
and plumbing fixtures, fire prevention and extinguishing apparatus, cooling and
air-conditioning systems, elevators, escalators, fittings, plants, apparatus,
stoves, ranges, refrigerators, laundry machines, tools, machinery, engines,
dynamos, motors, boilers, incinerators, switchboards, conduits, compressors,
vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call
systems, brackets, electrical signs, bulbs, bells, ash and fuel, conveyors,
cabinets, lockers, shelving, spotlighting equipment, dishwashers, garbage
disposals, washers and dryers), other customary hotel equipment and other
tangible property of every kind and nature whatsoever, now or hereafter located
upon the Hotel Properties and the other Real Property owned or leased by
Holdings or any of its Subsidiaries, or appurtenances thereto, or usable in
connection with the present or future operation and occupancy of the Hotel
Properties and such other Real Property and all building equipment, materials
and supplies of any nature whatsoever, now or hereafter located upon the Hotel
Properties and such other Real Property.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings or any of its Subsidiaries or ERISA
Affiliates, and each such plan for the five-year period immediately following
the latest date on which Holdings or any of its Subsidiaries or ERISA Affiliates
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge and Security Agreement" shall have the meaning provided in
Section 4.05.
"Pledge and Security Agreement Collateral" shall mean all "Collateral"
as defined in the Pledge and Security Agreement.
"Pledged Securities" shall have the meaning provided in the Pledge and
Security Agreement.
"Pledgor" shall have the meaning provided in the Pledge and Security
Agreement.
"Policies" shall have the meaning provided in Section 7.03(c).
"Prime Lending Rate" shall mean the rate which BTCo 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. BTCo 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 (i) any incurrence,
--- -----
acquisition or assumption of Indebtedness, (ii) any acquisition or sale of a
Hotel Property or other assets with a fair market value of $5,000,000 or more
(or the equity interest of the Person or Persons owning such Hotel Property or
other assets), (iii) any substitution of a Hotel Property as permitted by
Section 8.01(iii) or (iv) any Crestline Exchange in each case occurring (or that
has occurred) on or after the Borrower's fiscal quarter beginning closest to
April 1, 1999, the calculation of the consolidated results of the Borrower and
its Subsidiaries otherwise determined in accordance with this Agreement as if
the respective Indebtedness, acquisition, sale, substitution or Crestline
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Exchanges (and all other Indebtedness incurred or assumed or other such
acquisitions, sales, substitutions or Crestline Exchanges 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 on the
first day of the respective Calculation Period; provided that all such
calculations shall take into account the following assumptions:
(i) pro forma effect shall be given to (1) any Indebtedness incurred
--- -----
subsequent to the end of the Calculation Period and prior to the
Determination Date, (2) any Indebtedness incurred during such period to the
extent such Indebtedness is outstanding at the Determination Date and (3)
any Indebtedness to be incurred on the Determination Date, 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
(but excluding normal fluctuations in revolving Indebtedness incurred for
working capital purposes and not to finance any acquisition or Investment);
(ii) interest expense attributable to interest or dividends 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;
(iii) 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 Determination Date; and
(iv) pro forma effect shall be given to all sales and acquisitions of
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Hotel Properties and other assets with a fair market value of $5,000,000 or
more (by excluding or including, as the case may be, the historical
financial results for the respective Hotel Properties and/or such other
assets) 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, provided that in connection with any such
acquisitions, pro forma effect (for periods prior to such acquisition)
shall be given to the management fees payable pursuant to the respective
Management Agreement as if such management fees had been payable throughout
the Calculation Period.
"Projections" shall mean the Projections prepared by Holdings and
which are contained in the Confidential Information Memorandum, dated April
2000, and delivered to the Banks prior to the Effective Date.
"Qualified Full Service Hotel" shall mean a Full Service Hotel of the
type described in clause (ii) of the definition thereof.
"Qualified Insurer" shall have the meaning provided in Section
7.03(c).
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"Qualified Preferred Stock" shall mean any preferred stock or other
preference shares of Holdings or the Borrower, so long as the terms of such
preferred stock or other preference shares (i) do not provide any collateral
security, (ii) do not provide any guaranty or other support by Holdings or any
of its Subsidiaries, (iii) do not require any cash dividends or cash
distributions (other than dividends or distributions payable when and if
declared by the Board of Directors of Holdings or the Borrower) or contain any
mandatory put, redemption, repayment, sinking fund or other similar provision in
each case occurring before August 5, 2004 (other than any such provision that
can be satisfied, at the election of Holdings or the Borrower, by the issuance
of OP Units or common stock or Qualified Preferred Stock of Holdings), (iv) do
not contain any covenants other than periodic reporting requirements, (v) do not
grant the holders thereof any voting rights expect for (x) voting rights
required to be granted to such holders under applicable law or listing
requirements and (y) limited customary voting rights on fundamental matters such
as mergers, consolidations, sales of all or substantially all of the assets of
Holdings, liquidations involving Holdings or dividend arrearages, and (vi) do
not provide for the conversion into, or the exchange for (unless at the sole
discretion of the issuer thereof), debt securities.
"Quarterly Payment Date" shall mean the last Business Day of each
February, May, August and November.
"QUIPs" shall mean the 63/4% Convertible Preferred Securities issued
by Host Financial Trust, a statutory business trust and a Subsidiary of
Holdings.
"QUIPs Debt" shall mean the $567,000,000 aggregate principal amount of
63/4% convertible subordinated debentures due 2026 of Holdings, held by Host
Marriott Financial Trust, a statutory business trust and a Subsidiary of
Holdings.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"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.
"Register" shall have the meaning provided in Section 12.16.
"Regulation D" shall mean Regulation D 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 establishing reserve requirements.
"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.
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"Related Businesses" shall mean any and all businesses (including real
estate related businesses) that in the good faith judgment of the Borrower's
Board of Directors are materially related to the businesses conducted by the
Borrower and its Subsidiaries on the Effective Date.
"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 Single Employer Plan other than those events as to which
the 30-day notice period is waived under subsection .22, .23, .25, .27 or .28 of
PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans) represent at least 50.1% of the sum of all
outstanding Term Loans of Non-Defaulting Banks and the Total Revolving Loan
Commitment less the Revolving Loan Commitments of Defaulting Banks at such time
(or after the termination of the Total Revolving Loan Commitment, the then total
outstanding Revolving Loans of all Non-Defaulting Banks).
"Returns" shall have the meaning provided in Section 6.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"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 same may be (x) reduced from time to time
pursuant to Sections 2.02, 2.03 and/or 9, (y) increased from time to time
pursuant to Section 1.14 or (z) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Section 1.13 or 12.04(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"S&P" shall mean Standard & Poor's Ratings Services.
"SEC" shall have the meaning provided in Section 7.01(g).
"Section 3.04(b)(ii) Certificate" shall have the meaning provided in
Section 3.04(b).
"Secured Creditors" shall have the meaning provided in the Pledge and
Security Agreement.
"Secured Indebtedness" shall mean any Indebtedness secured by a Lien
(other than a Lien under the Pledge and Security Agreement and a Lien in favor
of the Borrower or any Subsidiary Guarantor) upon the property of the Borrower
or any of its Subsidiaries.
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"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Senior Note Documents" shall mean the Senior Note Indenture, the
Senior Notes and each other document or agreement relating to the issuance of
the Senior Notes.
"Senior Note Indenture" shall mean the Indenture, dated as of August
5, 1998, among the Borrower, the subsidiary guarantors named therein and Marine
Midland Bank as Trustee, in connection with the Senior Notes.
"Senior Notes" shall mean each of the Borrower's (i) $500,000,000
7-7/8% Series A Senior Notes due August 2005, (ii) $1,200,000,000 7-7/8% Series
B Senior Notes due August 2008, (iii) $500,000,000 8.45% Series C Senior Notes
due December 2008, (iv) $300,000,000 8-3/8% Series E Senior Notes due February
2006, and (v) any other issue of senior notes issued pursuant to the Senior Note
Indenture.
"Single Employer Plan" shall have the meaning set forth in Section
7.10.
"Specified Assets" shall mean, without duplication, (i) Hotel
Properties, (ii) other real estate assets, (iii) income attributable to FF&E
Leases and non-real estate Related Businesses and (iv) cash interest income on
unrestricted cash.
"Specified Bottom Guaranty" shall mean an unsecured guaranty given by
the Borrower in support of secured Indebtedness for borrowed money of an
Unconsolidated Entity in which the Borrower has an equity Investment so long as
(i) such guaranty only guaranties that the asset securing such Indebtedness
would be sold for a minimum amount, (ii) the amount of such guaranty does not
exceed 50% of the fair market value of such asset (as determined in good faith
by the Borrower) and (iii) such guaranty is only given by the Borrower to
preserve an outside limited partner's tax basis in such asset.
"Specified Credit Worthy Supported Debt" shall mean that portion of
any Indebtedness incurred under a commercial mortgage-backed securities
transaction entered into by a Specified Subsidiary which is attributable to a
Hotel Property and any office properties associated therewith subject to such
transaction and which is subsequently sold to a Person which is not the Borrower
or a Subsidiary thereof so long as all of the following conditions are (and
remain) satisfied:
(i) such portion of such Indebtedness remains on the consolidated
balance sheet of the Borrower;
(ii) such portion of such Indebtedness is guaranteed (and continues to
be guaranteed) on an irrevocable and unconditional basis by a Credit Worthy
Person, which guaranty shall be a guaranty of payment and not of
collection;
(iii) the Specified Credit Worthy Supported Debt is only created as
part of the sale of a Hotel Property and any office properties associated
therewith to a Credit Worthy Person;
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(iv) the respective Credit Worthy Person (directly or indirectly) has
an economic and equity interest of at least 25% in the asset so acquired
(or in the Person owning such asset);
(v) within 20 days after the creation of any Specified Credit Worthy
Supported Debt, the Borrower shall notify the Administrative Agent thereof,
which notice shall be accompanied by such financial statements and other
supporting financial and other information as to the respective Credit
Worthy Person sufficient to demonstrate to the Administrative Agent's
reasonable satisfaction that such Credit Worthy Person meets the
requirements of the definition thereof; and
(vi) so long as such Specified Credit Worthy Supported Debt remains in
effect, the Borrower shall deliver to the Administrative Agent, within 60
days after the end of each of the first three fiscal quarters of the
respective Credit Worthy Person and within 100 days after the end of each
fiscal year of such Credit Worthy Person, such financial statements and
other supporting financial and other information as to the respective
Credit Worthy Person sufficient to demonstrate to the Administrative
Agent's reasonable satisfaction that such Credit Worthy Person continues to
meet the requirements of the definition thereof.
"Specified Default" shall mean any Default under Sections 9.01, 9.03
(solely as a result of a failure to comply with Section 7.01(a), 7.01(b), or
7.01(d)), 9.05 or 9.09.
"Specified Senior Indebtedness" shall mean Indebtedness permitted to
be issued by the Borrower pursuant to Section 8.04(vi) which (i) is either
issued (x) pursuant to an effective registration statement under the Securities
Act or Rule 144A thereunder or (y) in a private placement transaction to
institutional lenders, (ii) has no amortization, maturity, sinking fund or
similar payment requirement prior to January 4, 2004 and (iii) is otherwise
unsecured.
"Specified Subsidiary" shall mean any Subsidiary of the Borrower so
long as such Subsidiary has no material assets other than Hotel Properties,
other Real Property and assets of a Related Business encumbered, or to be
encumbered, with Permitted Non-Recourse Indebtedness incurred pursuant to
Section 8.04(i) or (vi) or which has incurred Subsidiary Indebtedness.
"Start Date" shall mean, with respect to any Margin Reduction Period,
the first day of such Margin Reduction Period.
"Stock" shall mean shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" shall mean all securities (other than Stock)
convertible into or exchangeable for Stock and all warrants, options or other
rights to purchase or subscribe for any stock, whether or not presently
convertible, exchangeable or exercisable.
"Subsidiaries Guaranty" shall have the meaning provided in Section
4.06.
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"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% 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 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, limited liability
company, association, joint venture or other entity (other than a corporation)
in which such Person and/or one or more Subsidiaries of such Person has more
than a 40% equity interest at the time and in which such Person or one or more
Subsidiaries of such Person is, at the time, a general partner, managing member
or similar Person and which is controlled by such Person in a manner sufficient
to permit its financial statements to be consolidated with the financial
statements of such Person in conformance with generally accepted accounting
principles and the financial statements of which are so consolidated, provided
that (x) the term Subsidiary shall include for all purposes of this Agreement
(A) in the case of Holdings, the Borrower and its Subsidiaries, and (B) in the
case of the Borrower, each Non-Controlled Entity (including its Subsidiaries for
this purpose) so long as the terms of the organizational documents of such
Non-Controlled Entity expressly require that at any time that an Event of
Default exists and is continuing, such Non-Controlled Entity will pay, and will
cause each of its Subsidiaries to pay, on a quarterly basis, the maximum amount
of cash Dividends that such Non-Controlled Entity is permitted to pay under
applicable law and under contractual restrictions contained in any agreement or
instrument evidencing, securing or relating to Indebtedness for borrowed money
to which such Non-Controlled Entity or any Subsidiary thereof is a party or by
which any of its assets are subject or bound and which is permitted to be
incurred under this Agreement (although each such Non-Controlled Entity thereof
may retain, and not pay as a Dividend, cash in an amount that such
Non-Controlled Entity reasonably determines is necessary to meet its current
liabilities and expenses as well as to make current anticipated Capital
Expenditures) and (y) the term Subsidiary shall not include One Broadway Hotel
Venture, Rockledge Pavilion LLC and Tecon Hotel Corporation in each case only so
long as (A) the only material asset of such Persons is the Hotel located at One
Broadway, St. Louis, Missouri, and related Personal Property or equity interests
in One Broadway Hotel Venture, and (B) there is no recourse, whether
contractual, by operation of law or otherwise, against Holdings or any its
Subsidiaries in respect of the Indebtedness and other liabilities of such
Persons (other than in respect of Customary Non-Recourse Exclusions).
"Subsidiary Guarantor" shall mean each Subsidiary of Holdings (other
than the Borrower) or the Borrower which executes and delivers the Subsidiaries
Guaranty, or a counterpart thereof, as required by Sections 4.06 or 7.16 or any
other provision of this Agreement; provided that any such Subsidiary shall cease
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to be a Subsidiary Guarantor at such time, if any, as it is released from the
Subsidiaries Guaranty in accordance with the express provisions hereof and
thereof.
"Subsidiary Indebtedness" shall mean unsecured Indebtedness incurred
by a Subsidiary of the Borrower that is not a Subsidiary Guarantor (other than
unsecured Indebtedness incurred under Section 8.04(ii) or owed to a Facility
Manager under Section 8.04(v) or in connection with a renovation project of a
Hotel Property).
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"Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement if
the percentage "50.1%" contained therein were changed to "66-2/3%".
"Taking" shall mean the taking or appropriation (including by deed in
lieu of condemnation or by voluntary sale or transfer under threat of
condemnation or while legal proceedings for condemnation are pending) of any
Hotel Property or other Real Property owned or leased by Holdings or any of its
Subsidiaries, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of any public
improvement or condemnation proceeding, or in any other manner or any damage or
injury or diminution in value through condemnation, inverse condemnation or
other exercise of the power of eminent domain. The term "Taken" used as a verb
has a correlative meaning.
"Tangible Net Worth" shall mean, at any time, (a) the value of all OP
Units minus (b) the sum of all Intangible Assets (net of accumulated
amortization) of the Borrower and its Subsidiaries, each as shown on the
consolidated balance sheet of the Borrower as at such time; provided, however,
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Tangible Net Worth shall be calculated without giving effect to any Operating
Lease termination fee paid in connection with the Crestline Exchanges to the
extent that the payment of any such termination fee would otherwise have reduced
Tangible Net Worth.
"Taxable REIT Subsidiary" shall mean any Subsidiary of the Borrower
that is a "taxable REIT subsidiary" within the meaning of Section 856(l) of the
Code on or after January 1, 2001.
"Taxes" shall have the meaning provided in Section 3.04(a).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Term Loan Commitment", as same may be terminated pursuant to Sections
2.03 and/or 9.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean the four consecutive fiscal quarters of
Holdings then last ended, in each case taken as one accounting period.
"Total Assets" shall mean, at any time, the sum of (i) Undepreciated
Real Estate Assets at such time and (ii) all other assets (excluding
intangibles) of the Borrower and its Subsidiaries determined on a consolidated
basis at such time (it being understood that the accounts of Subsidiaries which
are not Wholly-Owned Subsidiaries shall be consolidated with those of the
Borrower only to the extent of the Borrower's proportionate interest therein).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
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"Total Term Loan Commitment" shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the Total Revolving Loan Commitment then
in effect less (y) the aggregate principal amount of Revolving Loans outstanding
at such time.
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being two separate Tranches, i.e., (i)
---
Term Loans and (ii) Revolving Loans.
"Treasury Regulation" shall mean regulations promulgated under the
Code.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
----
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unconsolidated Entity" shall mean, with respect to any Person, at any
date, any other Person in whom such Person holds an Investment, and whose
financial results would not be consolidated under generally accepted accounting
principles with the financial results of such Person on the consolidated
financial statements of such Person, if such statements were prepared as of such
date.
"Undepreciated Real Estate Assets" shall mean, as of any date, the
cost (being the original cost to the Borrower or any its Subsidiaries plus
capital improvements) of real estate assets of the Borrower and its Subsidiaries
on such date, before depreciation and amortization of such real estate assets,
determined on a consolidated basis (it being understood that the accounts of
Subsidiaries which are not Wholly-Owned Subsidiaries shall be consolidated with
those of the Borrower only to the extent of the Borrower's proportionate
interest therein).
"Unencumbered Consolidated EBITDA" shall mean, for any period, that
portion of Consolidated EBITDA for such period attributable to those Specified
Assets which are not encumbered by Liens securing Secured Indebtedness or which
are owned by Subsidiaries of the Borrower that have not incurred Subsidiary
Indebtedness.
"Unencumbered EBITDA Ratio" shall mean, for any period, the ratio of
(x) Unencumbered Consolidated EBITDA for such period to (y) Consolidated EBITDA
for such period.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
such 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. 35, based upon the actuarial
assumptions used by such Plan's actuary in the most recent annual valuation of
such Plan.
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"United States" and "U.S." shall each mean the United States of
America.
"Unsecured Consolidated Interest Expense", shall mean, for any period,
that portion of Consolidated Interest Expense attributable to Indebtedness that
is not Secured Indebtedness or is not Subsidiary Indebtedness.
"Unsecured Interest Coverage Ratio" shall mean, for any period, the
ratio of (x) Unencumbered Consolidated EBITDA for such period to (y) Unsecured
Consolidated Interest Expense for such period.
"Unutilized Revolving Loan Commitment" with respect to any Bank at any
time shall mean such Bank's Revolving Loan Commitment at such time, if any, less
the aggregate outstanding principal amount of all Revolving Loans made by such
Bank at such time.
"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, limited liability company,
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 (it being understood that a Subsidiary of the Borrower that otherwise meets
the requirements of a Wholly-Owned Subsidiary set forth above shall still
constitute a Wholly-Owned Subsidiary of the Borrower even though Holdings or a
Permitted REIT Subsidiary owns a de minimis equity interest in such Subsidiary).
SECTION 11. The Administrative Agent.
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11.01 Appointment. The Banks hereby designate BTCo as Administrative
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Agent (for purposes of this Section 11, the term "Administrative Agent" shall
include BTCo in its capacity as Collateral Agent pursuant to the Pledge and
Security Agreement) 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, the
Administrative 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 duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
11.02 Nature of Duties. The Administrative Agent shall not have any
----------------
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents. Neither the Administrative 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 (as determined by a court of
competent jurisdiction in a final and non-appealable decision). The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have
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by reason of this Agreement or any other 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 the Administrative Agent
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
11.03 Lack of Reliance on the Administrative Agent. Independently and
--------------------------------------------
without reliance upon the Administrative 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 Credit Party and each of their Subsidiaries 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
Credit Party and each of its Subsidiaries and, except as expressly provided in
this Agreement, the Administrative Agent shall not 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. The Administrative Agent shall not 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 any Credit Party or any of its Subsidiaries 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 any Credit Party or any of its Subsidiaries or the
existence or possible existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
------------------------------------------
Administrative 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, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks
or, if required by Section 12.12, the Supermajority Banks or all of the Banks,
as the case may be; and the Administrative Agent shall not 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 the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks or, if required by
Section 12.12, the Supermajority Banks or all of the Banks, as the case may be.
11.05 Reliance. The Administrative Agent shall be entitled to rely,
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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 the Administrative 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 the Administrative Agent.
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11.06 Indemnification. To the extent the Administrative Agent is not
---------------
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to its "percentage" 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 the Administrative 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 the Administrative Agent's gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).
11.07 The Administrative Agent in its Individual Capacity. With
---------------------------------------------------
respect to its obligation to make Loans under this Agreement, the Administrative
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 Notes" or
any similar terms shall, unless the context clearly otherwise indicates, include
the Administrative Agent in its individual capacity. The Administrative Agent
may accept deposits from, lend money to, make equity investments in, 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 Borrower or any other Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the payee
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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, assignee or endorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Administrative Agent; Removal of the
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Administrative Agent. (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 30 Business Days' prior written notice to
the Borrower and the Banks. 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.
(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 Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 30 Business Day period, the Administrative Agent, with the
consent of the Borrower, shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent
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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 35th 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.
(e) In addition, the Required Banks shall have the right to remove the
Administrative Agent and appoint a successor Administrative Agent who shall be a
commercial bank or trust company reasonably acceptable to the Borrower in the
event that the Administrative Agent has been grossly negligent or has willfully
misconducted itself in performing its functions and duties under this Agreement
or any other Credit Document (as determined by a court of competent jurisdiction
in a final and non-appealable decision).
SECTION 12. Miscellaneous.
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12.01 Payment of Expenses, etc. The Borrower agrees that it shall: (i)
-------------------------
whether or not the transactions contemplated herein are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of White &
Case LLP, local counsel and environmental, engineering, real estate and
insurance independent consultants retained by the Administrative Agent) in
connection with the preparation, execution, delivery and performance of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein, any amendment, waiver or consent relating hereto
or thereto, of the Administrative Agent in connection with its syndication
efforts with respect to this Agreement and, upon the occurrence and during the
continuance of an Event of Default, the reasonable costs and expenses of 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 the Administrative Agent and, following an Event of Default, for
each of the Banks) (it being understood that the provisions of this clause (i)
does not include the normal administrative charges of the Administrative Agent
in administering the Loans (which amounts are included in a separate letter with
the Administrative Agent)); (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 the Administrative Agent and each Bank, and each of
their respective officers, directors, employees, representatives, affiliates 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 the Administrative Agent or any Bank is a party
thereto) related to the entering into and/or performance of this
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Agreement or any other Credit Document or the use or proposed use of the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein 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,
leased or at any time operated by Holdings or any of its Subsidiaries, the
Release, generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned, leased or operated by Holdings
or any of its 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 Holdings, any of its Subsidiaries or any
Real Property owned, leased or at any time operated by Holdings or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified (as determined by a court of competent jurisdiction in a final and
non-appealable decision)). To the extent that the undertaking to indemnify, pay
or hold harmless the Administrative Agent or any Bank set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law.
12.02 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 any Credit
Party 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)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located or by
any Person controlling such Bank) to or for the credit or the account of any
Credit Party against and on account of the Obligations and liabilities of such
Credit Party 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 12.06(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.
12.03 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 Borrower, at
the Borrower's address specified opposite its signature below; if to Holdings,
at Holdings' 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 the Notice Office; or, as to the Borrower, the
Administrative 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
Borrower and
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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 by
telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be (or when the
addressee refuses to accept delivery).
12.04 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, that neither Holdings nor the
-------- -------
Borrower 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 Banks 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 Commitments hereunder except as provided in Section 12.04(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 or Note 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 (it being
understood that any amendment or modification to the financial definitions in
this Agreement or to Section 12.07(a) shall not constitute a reduction in any
rate of interest or Fees for purposes of this clause (i), so long as the primary
purpose of the respective amendments or modifications to the financial
definitions or to Section 12.07(a) was not to reduce the interest or Fees
payable hereunder), 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 Commitment
shall not constitute a change in the terms of such participation, and that an
increase in any Commitment or Loan 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 the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Pledge and Security Agreement Collateral under the
Pledge and Security Agreement (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 Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(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) and/or its
outstanding Term Loans to (i) 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 (ii) in the case of any Bank that is a fund that invests
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in loans, any other fund that invests in loans and is managed or advised by the
same investment advisor of such Bank or by an Affiliate of such investment
advisor or (y) assign all or a portion of all of the assigning Bank's Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or
outstanding Term Loans to an Eligible Transferee, and, in the case of a partial
assignment of such Revolving Loan Commitment and/or outstanding Term Loans, such
assignment shall be in a minimum amount of $5,000,000 or such lesser amount as
is acceptable to the Administrative Agent (and the assignor shall maintain a
minimum amount of $5,000,000 for its own account unless the assignor shall
assign its entire interest), and all 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/or outstanding Term Loans, as the case may
be, of such new Bank and of the existing Banks, (ii) upon surrender of the old
Notes, if any, new Notes will be issued to such new Bank and to the assigning
Bank (to the extent requested by such Banks), 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/or
outstanding Terms Loans, as the case may be, (iii) the consent of the
Administrative Agent shall be required in connection with any such assignment
pursuant to clause (y) above (which consent 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 and, provided further, that such transfer or assignment
-------- -------
will not be effective until recorded by the Administrative Agent on the Register
pursuant to Section 12.16. The Administrative Agent will promptly give the
Borrower notice of any assignment to an Eligible Transferee pursuant to clause
(y) of the first sentence of this Section 12.04(b), although the failure to give
any such notice shall not affect such assignment or result in any liability by
the Administrative Agent. To the extent of any assignment pursuant to this
Section 12.04(b), the assigning Bank shall be relieved of its obligations
hereunder with respect to its assigned Revolving Loan Commitments and/or its
assigned outstanding Term Loans. At the time of each assignment pursuant to this
Section 12.04(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
provide to the Borrower and the Administrative Agent the appropriate Internal
Revenue Service Forms (and, if applicable a Section 3.04(b)(ii) Certificate)
described in Section 3.04(b). To the extent that an assignment of all or any
portion of a Bank's Revolving Loan Commitments and related outstanding
Obligations and/or outstanding Term Loans pursuant to Section 1.13 or this
Section 12.04(b) would, at the time of such assignment, result in increased
costs under Section 1.10, 1.11 or 3.04 from those being charged by the
respective assigning Bank prior to such assignment, then the Borrower shall not
be obligated to pay or reimburse such increased costs (although the Borrower
shall be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(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 and, with the
consent of the Administrative Agent, any Bank which is a fund may pledge all or
any portion of its Loans and Notes to its trustee in support of its obligations
to its trustee. No pledge pursuant to this clause (c) shall release the
transferor Bank from any of its obligations hereunder.
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12.05 No Waiver; Remedies Cumulative. No failure or delay on the part
------------------------------
of the Administrative 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 Borrower or any other Credit Party and the
Administrative 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 the Administrative 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 the Administrative Agent or any Bank or the holder of any Note to any other
or further action in any circumstances without notice or demand.
12.06 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 Borrower 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 of, or interest
on, the Loans or Commitment Commission, 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 12.06(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.
12.07 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 Borrower to the Banks);
provided that, except as otherwise specifically provided herein, all
--------
computations used in determining compliance with Sections 8.07 through 8.12,
inclusive, shall utilize
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accounting principles and policies in conformity with those used to prepare the
historical financial statements referred to in Section 6.05(a). Notwithstanding
anything to the contrary contained in this Agreement, to the extent that
Holdings has any Indebtedness, liabilities, operating expenses or taxes, such
Indebtedness, liabilities, operating expenses or taxes, as applicable, shall be
treated as obligations of the Borrower for the purposes of calculating
compliance with the financial covenants contained in Sections 8.08 through 8.12,
inclusive, as well as for purposes of determining the Applicable Margin.
(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 first day but excluding the last day) occurring in the
period for which such interest, Commitment Commission or other Fees are payable.
12.08 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, IN EACH CASE WHICH ARE LOCATED IN THE
CITY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH CREDIT PARTY,
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 CREDIT PARTY. EACH OF
HOLDINGS AND THE 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 CREDIT PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF HOLDINGS AND THE
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 THE ADMINISTRATIVE AGENT, 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 HOLDINGS OR THE BORROWER IN ANY OTHER
JURISDICTION.
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(b) EACH OF HOLDINGS AND THE 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 OF THE PARTIES TO THIS AGREEMENT 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.
12.09 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 Borrower and the
Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on the date
-------------
(the "Effective Date") on which (i) Holdings, the Borrower, the Administrative
Agent and each of the Banks set forth on Schedule I shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered the same to the Administrative Agent at the Notice Office or, in the
case of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing) or written notice at such office that the same has been
signed and mailed to it, and (ii) the conditions contained in Section 4 are met
to the satisfaction of the Administrative Agent and the Required Banks. Unless
the Administrative Agent has received actual notice from any Bank that the
conditions described in clause (ii) of the preceding sentence have not been met
to its satisfaction, upon the satisfaction of the condition described in clause
(i) of the immediately preceding sentence and upon the Administrative Agent's
good faith determination that the conditions described in clause (ii) of the
immediately preceding sentence have been met, then the Effective Date shall have
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto had not been met (although the occurrence of the
Effective Date shall not release the Borrower from any liability for failure to
satisfy one or more of the applicable conditions contained in Section 4). The
Administrative Agent will give Holdings, the Borrower and each Bank prompt
written notice of the occurrence of the Effective Date.
12.11 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.
12.12 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
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terminated unless such change, waiver, discharge or termination is in writing
signed by the respective Credit Parties party thereto and the Required Banks,
provided that no such change, waiver, discharge or termination shall, without
--------
the consent of each Bank having Obligations being directly affected thereby
(other than a Defaulting Bank), (i) extend the final scheduled maturity of any
Loan or Note, 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) (it being understood that any amendment or modification to the
financial definitions in this Agreement or to Section 12.07(a) shall not
constitute a reduction in any rate of interest or Fees for purposes of this
clause (i), so long as the primary purpose of the respective amendments or
modifications to the financial definitions or to Section 12.07(a) was not to
reduce the interest or Fees payable hereunder), (ii) release all or
substantially all of the Pledge and Security Agreement Collateral or Subsidiary
Guarantors from the Subsidiaries Guaranty (except (in either case) as expressly
provided in the Credit Documents), (iii) amend, modify or waive any provision of
this Section 12.12 (except for technical amendments with respect to additional
extensions of credit pursuant to this Agreement which afford the protections to
such additional extensions of credit of the type provided to the Term Loans and
the Revolving Loan Commitments on the Effective Date), (iv) reduce the
percentage specified in the definition of Required Banks or Supermajority Bank
(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 and the Supermajority Banks on substantially
the same basis as the extensions of Term Loans and Revolving Loan Commitments
are included on the Effective Date) or (v) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement;
provided further, that no such change, waiver, discharge or termination shall
----------------
(w) increase the Commitments 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 Commitment shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of the Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank), (x) without the consent of the Administrative Agent,
amend, modify or waive any provision of Section 11 as same applies to the
Administrative Agent or any other provision as same relates to the rights or
obligations of the Administrative 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, (A) amend, modify or waive any provision of Section 8.08,
8.09 or 8.11 or (B) amend or modify the definition of Change of Control or waive
any Default or Event of Default under Section 9.12.
(b) If, in connection with any proposed change, waiver, discharge or
termination with respect to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 12.12(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 Borrower shall have the right, so long as no Default or Event of
Default has occurred and is continuing and 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 repay such non-consenting Bank's outstanding Loans
in accordance with
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Sections 2.02(b) and/or 3.01(b), provided that, unless the Revolving Loan
--------
Commitments are terminated, and Loans repaid, pursuant to the 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/or outstanding Loans
of existing Banks (who in each case must specifically consent thereto), then in
the case of any action pursuant to the preceding clause (B) the Required Banks
(determined before giving effect to the proposed action) shall specifically
consent thereto, provided further, that in any event the Borrower shall not have
----------------
the right to replace a Bank, terminate its Revolving 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 12.12(a).
12.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 3.04, 12.01 and 12.06 shall survive the
execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Loans.
12.14 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 12.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11 or 3.04 from those
being charged by the respective Bank prior to such transfer, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective transfer).
12.15 Confidentiality. (a) Subject to the provisions of clause (b) of
---------------
this Section 12.15, each Bank agrees that it will use its reasonable efforts not
to disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another Bank if such Bank or such
Bank's holding or parent company in its reasonable good faith discretion
determines that any such party should have access to such information, provided
such Persons shall be subject to the provisions of this Section 12.15 to the
same extent as such Bank) any information with respect to any Credit Party or
any of its Subsidiaries which has been, is now or in the future furnished
pursuant to this Agreement or any other Credit Document and which is designated
by any Credit Party 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 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 the Administrative Agent or the Collateral
Agent, (f) any direct or indirect contractual counterparty in swap agreements or
such contractual counterparty's professional advisor (so long as such
contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section 12.15(a)), or
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Bank and (g) to any prospective or actual transferee or
participant in connection with any contemplated transfer or
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participation of any of the Notes, Commitments or Loans or any interest therein
by such Bank, provided, that such prospective transferee agrees to be subject to
--------
the provisions of this Section 12.15(a).
(b) Holdings and the Borrower hereby acknowledge and agree that each
Bank may share with any of its affiliates any information related to Credit
Parties or any of their respective Subsidiaries (including, without limitation,
any nonpublic customer information regarding the creditworthiness of the Credit
Parties and their respective Subsidiaries, provided such Persons shall be
subject to the provisions of this Section 12.15 to the same extent as such
Bank), it being understood that for purposes of this Section 12.15(b), the term
"affiliate" shall mean any direct or indirect holding company of a Bank as well
as any direct or indirect Subsidiary of such holding company.
12.16 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as the Borrower's agent, solely for purposes of this Section
12.16, to maintain a register (the "Register") on which it will record the
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 the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and 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
12.04(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. The Borrower 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 12.16, provided that the
Borrower shall have no obligation to indemnify the Administrative Agent for any
loss, claim, damage, liability or expense which resulted solely from the gross
negligence or willful misconduct of the Administrative Agent.
12.17 Commercial Loan Transactions. Each of the Banks acknowledges
----------------------------
that the making of its Loans and the issuance by the Borrower of a Note to such
Bank are in the nature of a commercial loan transaction, and that no such Bank
shall assert that such actions are a securities transaction regulated under the
Exchange Act, the Securities Act or any other Federal or state securities laws,
it being understood that nothing in this Section 12.17 shall limit the rights of
the Banks pursuant to Section 12.01 or 12.04.
-108-
12.18 Limitations on Recourse. (a) Notwithstanding anything to the
-----------------------
contrary set forth in this Agreement or in any of the other Credit Documents,
but subject to the last sentence of this Section 12.18(a) and clause (b) of this
Section 12.18, the Borrower's Obligations hereunder and under the other Credit
Documents shall be limited recourse obligations of the Borrower, enforceable
against the Borrower (and its assets) only and not against any constituent
partner in the Borrower. The foregoing provisions of this Section 12.18 shall
not impair the liability of the Subsidiary Guarantors under the Subsidiaries
Guaranty or the liens and security interests created by the Pledge and Security
Agreement which were granted as security for the Obligations of the Borrower and
the Guaranteed Obligations (as defined in the Subsidiaries Guaranty) of the
Subsidiary Guarantors.
(b) Notwithstanding the foregoing provisions of clause (a) of this
Section 12.18, (x) the Administrative Agent and the Banks shall have recourse to
Holdings (in its capacity as the general partner in the Borrower) to the extent
(but only to the extent) of any loss, cost, damage, expense or liability
incurred by the Administrative Agent or any of the Banks by reason of (i) any
fraudulent misrepresentation made by Holdings in or pursuant to the Credit
Documents, (ii) any unlawful act on the part of Holdings, or (iii) any
misappropriation of funds by Holdings in contravention of the provisions of the
Credit Documents and (y) Holdings shall automatically be and become jointly and
severally obligated with the Borrower in respect of all of the Obligations from
and after any breach by Holdings of the covenant contained in Section 8.16(b).
Additionally, upon the occurrence of the event specified in clause (y) of the
preceding sentence, the Pledge and Security Agreement shall be reinstated as to
Holdings for purposes of securing the joint and several liability of Holdings in
respect of the Obligations. At the request of the Administrative Agent, Holdings
shall (at its expense) take all actions deemed reasonably necessary by the
Administrative Agent to confirm the provisions of this Section 12.18(b).
* * *
-109-
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:
-------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ HOST MARRIOTT CORPORATION
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel, Dept. 923 By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Treasurer
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer, Dept. 916
10400 Fernwood Road HOST MARRIOTT, L.P.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: Host Marriott Corporation,
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ its General Partner
Attention: General Counsel, Dept. 923
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Treasurer
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer, Dept. 916
BANKERS TRUST COMPANY,
Individually and as Administrative
Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Managing Director
BANK LEUMI USA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
--------------------------------
Title: Vice President
BANK OF HAWAII
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Director
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
By: /s/ ▇▇▇▇ Rennion
--------------------------------
Title: First Vice President
FIRST COMMERCIAL BANK, NEW YORK
AGENCY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇
--------------------------------
Title: SVP & ▇▇
▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
DLJ CAPITAL FUNDING, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Managing Director
BANK ONE, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: First Vice President
THE INTERNATIONAL COMMERCIAL BANK
OF CHINA, NEW YORK AGENCY
By: /s/ Wen-▇▇▇ ▇▇▇▇
--------------------------------
Title: AVP & Deputy ▇▇
▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
KZH CNC LLC
By: /s/ ▇▇▇▇▇ ▇▇▇
--------------------------------
Title: Authorized Agent
WINGED FOOT FUNDING TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Authorized Agent
▇▇▇▇▇ ▇▇▇ COMMERCIAL BANK, LTD.,
NEW YORK BRANCH
By: /s/ Wan-Tu Yeh
--------------------------------
Title: VP & General Manager
SCHEDULE I
----------
COMMITMENTS
-----------
Term Loan Revolving
--------- ---------
Bank Commitment Loan Commitment
---- ---------- ---------------
Bankers Trust Company $15,580,645.16 $64,919,354.84
Credit Lyonnais New York Branch 15,483,870.97 64,516,129.03
The Bank of Nova Scotia 15,483,870.97 64,516,129.03
Bank Leumi USA 1,354,838.71 5,645,161.29
Bank of Hawaii 1,935,483.87 8,064,516.13
Fleet National Bank 9,677,419.35 40,322,580.65
▇▇▇▇▇ ▇▇▇ Commercial Bank, Ltd., New York Agency 2,903,225.81 12,096,774.19
Erste Bank der Oesterreichischen Sparkassen AG 3,870,967.74 16,129,032.26
First Commercial Bank, New York Agency 3,870,967.74 16,129,032.26
▇▇▇▇▇▇ Financial, Inc. 4,838,709.68 20,161,290.32
Bank of America, N.A. 14,516,129.03 60,483,870.97
Societe Generale, Southwest Agency 14,516,129.03 60,483,870.97
The Bank of New York 9,677,419.35 40,322,580.65
Bank One, N.A. 9,677,419.35 40,322,580.65
The International Commercial Bank of China, New York Agency 4,838,709.68 20,161,290.32
▇▇▇▇▇ Fargo Bank, N.A. 14,516,129.03 60,483,870.97
KZH CNC LLC 1,209,677.42 5,040,322.58
Winged Foot Funding Trust 1,209,677.42 5,040,322.58
DLJ Capital Funding, Inc. 4,838,709.68 20,161,290.32
----------- -----------
TOTAL: $150,000,000 $625,000,000
SCHEDULE II
-----------
BANK ADDRESSES
--------------
Bank Address
---- -------
Bankers Trust Company ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Lyonnais New York Branch 1301 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of Nova Scotia ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Bank Leumi USA ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of Hawaii ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet National Bank ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule II
Page 2
Bank Address
---- -------
▇▇▇▇▇ ▇▇▇ Commercial Bank, Ltd., New One World Trade Center, Suite 3211
York Branch New York, New York 10048
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (212) 390-7040 ext. 48
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Erste Bank der Oesterreichischen ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
First Commercial Bank, New York Agency Two ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Financial, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of America, N.A. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Societe Generale, Southwest Agency ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of New York ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule II
Page 3
Bank Address
---- -------
Bank One, N.A. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The International Commercial Bank of ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ Agency ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇-▇▇▇▇ ▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo Bank, N.A. ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
KZH CNC LLC ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Winged Foot Funding Trust Conseco Capital Management, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇/
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Winged Foot Funding Trust
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
DLJ Capital Funding, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule II
Page 4
SCHEDULE III
------------
PLEDGE OF EQUITY INTERESTS
--------------------------
SCHEDULE IV
-----------
SUBSIDIARIES
------------
Subsidiary Owner Percentage Owned
---------- ----- ----------------
SCHEDULE V
----------
EXISTING INDEBTEDNESS
---------------------
SCHEDULE VI
-----------
CERTAIN SECTION 7.11(b) EXCEPTIONS
----------------------------------
None.
SCHEDULE VII
------------
EXISTING LIENS
--------------
SCHEDULE VIII
-------------
CERTAIN ASSETS AND LIABILITIES OF HOLDINGS
------------------------------------------
SCHEDULE IX
-----------
CERTAIN EXISTING
GENERAL PARTNERSHIP INTERESTS
-----------------------------
As of the Effective Date, the Borrower owns, directly or indirectly,
an interest in the general partner of each of the following partnerships:
Courtyard by Marriott Limited Partnership
Courtyard by ▇▇▇▇▇▇▇ ▇▇ Limited Partnership (and its Subsidiaries)
Marriott Residence Inn Limited Partnership
Marriott Residence Inn II Limited Partnership
Fairfield Inn by Marriott Limited Partnership
SCHEDULE X
----------
COURTYARD SETTLEMENT TERMS
--------------------------
As used in the Credit Agreement, "Courtyard Settlement" shall mean
those transactions contemplated to be entered into by the Borrower and any of
its Subsidiaries under the Settlement Agreement, dated as of March 9, 2000, as
the same may be amended by the parties thereto or further requirements imposed
in any court order approving the Settlement Agreement, in each case so long as
the effect of any such amendments or further requirements do not materially
increase the economic obligations of the Borrower and its Subsidiaries and could
not reasonably be expected to have a Material Adverse Effect (collectively, the
"Settlement Agreement"). The principal economic requirements of the Settlement
Agreement as the same relate to the Borrower and its Subsidiaries consist of (i)
the Borrower paying up to $125,000,000 in cash (plus associated transaction
costs and imputed interest) and (ii) the Borrower contributing up to $65,000,000
in cash (plus associated transaction costs) to CBM JV to permit CBM2 to
repurchase its senior notes as further described below.
The Borrower's obligations in respect of the Settlement Agreement as
described above may be consummated through the following transactions:
(i) the formation of a joint venture ("CBM JV") between Rockledge
Hotel Properties, Inc. ("Rockledge"), or one or more Subsidiaries of
Rockledge, and Marriott International, Inc. ("MII"), or one or more
Subsidiaries of MII, the contribution by the Borrower of cash or the making
by the Borrower of loans to Rockledge in amounts sufficient to fund the
obligations of Rockledge under the Settlement Agreement and the operating
agreement of CBM JV (including any funds required to fund any repurchase of
senior notes of CBM2 as described below), and the contribution to CBM JV of
cash and equity interests in one or more Subsidiaries of Rockledge whose
primary assets consist of cash, equity interests in Courtyard by Marriott
Limited Partnership ("CBM1"), CBM One LLC, Courtyard by Marriott II Limited
Partnership ("CBM2"), or CBM Two LLC, in each case in amounts necessary to
consummate the transactions contemplated by the Settlement Agreement,
including the acquisition of all equity interests in CBM1 and CBM2 and the
repurchase of any senior notes of CBM2 that may be tendered by holders
thereof to CBM2 as a result of a change of control offer made by CBM2 by
reason of the consummation of the transactions contemplated in the
Settlement Agreement;
(ii) guaranties required to be entered by the Borrower or any of its
Subsidiaries of Customary Non-Recourse Exclusions contained in Indebtedness
of CBM JV or any of its Subsidiaries (provided that similar guaranties are
given by MII and its Subsidiaries);
(iii) performance by Rockledge and its Subsidiaries of their
respective obligations under the organizational documents of CBM JV,
provided that any contributions by Rockledge and its Subsidiaries to the
capital of CBM JV in excess of the amounts necessary to consummate the
transactions contemplated by the Settlement Agreement and the change of
control offer referred to above shall be deemed to be Permitted Designated
Schedule X
Page 2
Investments made pursuant to (and subject to the limitations contained in)
Section 8.05(xii) of the Credit Agreement; and
(iv) any Liens and Indebtedness incurred and/or assumed as part of the
Settlement Agreement consist of Indebtedness of, and encumber assets of,
CBM JV and any Subsidiary thereof and for which there is no recourse to
Holdings, the Borrower or any of their respective Subsidiaries (other than
in respect of Customary Non-Recourse Exclusions).
Notwithstanding anything to the contrary in the definition of
"Subsidiary" contained in the Credit Agreement, following the consummation of
the transactions described above, none of CBM JV or any Subsidiary of CBM JV
shall be deemed to be a Subsidiary of the Borrower or Rockledge so long as (i)
Rockledge and its Subsidiaries do not own more than a 50% equity interest in CBM
JV and the Borrower does not hold any direct or indirect equity interest in CBM
JV and its Subsidiaries other than a 50% or less equity interest in CBM JV and a
1% or less equity interest in CBM One LLC, CBM Two LLC, or their respective
successors or assigns and (ii) there is no recourse, whether contractual, by
operation of law or otherwise, against Holdings or any of its Subsidiaries in
respect of the Indebtedness and other liabilities of CBM JV and its Subsidiaries
(other than in respect of Customary Non-Recourse Exclusions).