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EXHIBIT 10.31
$140,000,000.00
SYNDICATED CREDIT AGREEMENT
dated as of
January 15, 1999,
among
WINSTON HOTELS, INC., ▇▇▇▇ LIMITED PARTNERSHIP,
THE BANKS LISTED HEREIN,
and
WACHOVIA BANK, N.A.,
as Agent
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TABLE OF CONTENTS
SYNDICATED CREDIT AGREEMENT..........................................................................1
ARTICLE I
DEFINITIONS.....................................................................................1
SECTION 1.01. Definitions......................................................................1
SECTION 1.02. Accounting Terms and Determinations.............................................22
SECTION 1.03. Use of Defined Terms............................................................22
SECTION 1.04. Terminology.....................................................................22
SECTION 1.05. References......................................................................22
SECTION 1.06. "Borrower" References; Joint and Several Obligations; Notice....................23
ARTICLE II
REVOLVING CREDIT FACILITY......................................................................23
SECTION 2.01. Commitments to Make Loans; Maximum Advance;
Borrowing Base Value........................................................23
SECTION 2.02. Method of Borrowing.............................................................26
SECTION 2.03. Restrictions on Use of Loan Proceeds Generally..................................28
SECTION 2.04. Notes...........................................................................30
SECTION 2.05. Termination Date, Repayment of Loans, Extension of Term.........................30
SECTION 2.06. Interest Rates..................................................................31
SECTION 2.07. Fees............................................................................33
SECTION 2.08. Mandatory Termination of Commitments............................................34
SECTION 2.09. Optional and Mandatory Prepayments..............................................34
SECTION 2.10. Mandatory Prepayments...........................................................35
SECTION 2.11. General Provisions as to Payments...............................................35
SECTION 2.12. Computation of Interest and Fees................................................36
SECTION 2.13. Facility Limit Reduction or Termination by Borrower.............................36
SECTION 2.14. Term Loans Secured by Hotels in Specific States.................................37
ARTICLE III
SECURITY AND COLLATERAL FOR THE LOANS;
CONDITIONS TO BORROWINGS.......................................................................38
SECTION 3.01. Typology of Hotels..............................................................38
SECTION 3.02. Collateral Release Provisions...................................................40
SECTION 3.03. Conditions of Closing and to First Borrowing....................................42
SECTION 3.04. Conditions to All Borrowings....................................................44
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................................................................45
SECTION 4.01. Existence and Power.............................................................45
SECTION 4.02. Corporate, Partnership and Governmental Authorization;
No Contravention.............................................................45
SECTION 4.03. Binding Effect..................................................................45
SECTION 4.04. Financial Information...........................................................45
SECTION 4.05. Litigation......................................................................46
SECTION 4.06. Compliance with ERISA...........................................................46
SECTION 4.07. Taxes...........................................................................46
SECTION 4.08. Subsidiaries....................................................................46
SECTION 4.09. Not an Investment Company.......................................................47
SECTION 4.10 Public Utility Holding Company Act..............................................47
SECTION 4.11. Ownership of Property; Liens....................................................47
SECTION 4.12. No Default......................................................................47
SECTION 4.13. Full Disclosure.................................................................47
SECTION 4.14. Environmental Matters..........................................................47
SECTION 4.15. Compliance with Laws............................................................48
SECTION 4.16. Capital Stock...................................................................48
SECTION 4.17. Margin Stock....................................................................48
SECTION 4.18. Insolvency......................................................................48
SECTION 4.19. Americans with Disabilities Act.................................................49
SECTION 4.20. Compliance with Certain Lease Provisions........................................49
SECTION 4.21. Condemnation Awards.............................................................49
ARTICLE V
AFFIRMATIVE COVENANTS..........................................................................49
SECTION 5.01. Information.....................................................................49
SECTION 5.02. Inspection of Property, Books and Records.......................................51
SECTION 5.03. Required Room Reserves..........................................................52
SECTION 5.04. Maintenance of Property.........................................................52
SECTION 5.05. Maintenance of Existence........................................................52
SECTION 5.06. Sole General Partner............................................................52
SECTION 5.07. Compliance with Laws; Payment of Taxes..........................................52
SECTION 5.08. Insurance.......................................................................53
SECTION 5.09. Environmental Notices...........................................................53
SECTION 5.10. Environmental Reports; Environmental Release....................................53
SECTION 5.11. Upstream of Cash Flow from Special Purpose Entity...............................54
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SECTION 5.12. Special Purpose Entity to Remain a Subsidiary Consolidated with the Borrower....54
SECTION 5.13. Intercompany Transactions.......................................................54
SECTION 5.14. Notice of Exercise of Remedies Under Deeds of Trust.............................54
SECTION 5.15. Notice of Default of any Lease..................................................54
SECTION 5.16. Guaranty by Subsidiaries........................................................54
ARTICLE VI
NEGATIVE COVENANTS.............................................................................54
SECTION 6.01. Base Rent and Percentage Rent of Hotel Leases...................................55
SECTION 6.02. Prohibition of Secured Debt on Borrowing Base Hotels............................55
SECTION 6.03. Contingent Liabilities..........................................................55
SECTION 6.04. Limitation on Hotels under Development..........................................55
SECTION 6.05. No Material Modifications to Permitted Operating Leases;
Percentage of Rooms Leased Under Permitted Operating Leases................55
SECTION 6.06. Limitations on Foreign Investments and Investments in Ventures..................55
SECTION 6.07. Major Ground Lease Limitations..................................................56
SECTION 6.08. Limitation on Dividends and Distributions.......................................56
SECTION 6.09. Limitation on Floating Rate Debt................................................56
SECTION 6.10. Dissolution.....................................................................56
SECTION 6.11. Consolidations, Mergers and Sales of Assets.....................................56
SECTION 6.12. Use of Proceeds.................................................................56
SECTION 6.13. Change in Fiscal Year or Fiscal Quarters........................................56
SECTION 6.14. Environmental Matters...........................................................56
SECTION 6.15. Operations......................................................................57
SECTION 6.16. No Modifications to Organizational Documents....................................57
ARTICLE VII
FINANCIAL COVENANTS............................................................................57
SECTION 7.01. Maximum Leverage Ratio..........................................................57
SECTION 7.02. Maximum Unsecured Debt..........................................................57
SECTION 7.03. Maximum Secured Debt............................................................57
SECTION 7.04. Minimum Interest Coverage.......................................................57
SECTION 7.05. Minimum Fixed Charge Coverage...................................................58
SECTION 7.06. Minimum Consolidated Tangible Net Worth.........................................58
ARTICLE VIII
DEFAULTS; REMEDIES.............................................................................58
SECTION 8.01. Events of Default...............................................................58
SECTION 8.02. Notice of Default...............................................................61
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ARTICLE IX
THE AGENT......................................................................................61
SECTION 9.01. Appointment, Powers and Immunities..............................................61
SECTION 9.02. Reliance by the Agent...........................................................62
SECTION 9.03. Defaults........................................................................62
SECTION 9.04. Rights of Agent as a Bank; Rights of Agent to Lend..............................62
SECTION 9.05. Indemnification.................................................................62
SECTION 9.06. Consequential Damages...........................................................63
SECTION 9.07. Payee of Note Treated as Owner..................................................63
SECTION 9.08. Non-Reliance on Agent and Other Banks...........................................63
SECTION 9.09. Failure to Act..................................................................64
SECTION 9.10. Resignation or Removal of the Agent.............................................64
SECTION 9.11. Intercreditor Agreement.........................................................64
ARTICLE X
CHANGE IN CIRCUMSTANCES; COMPENSATION..........................................................64
SECTION 10.01. Basis for Determining Interest Rate Inadequate or Unfair.......................64
SECTION 10.02. Illegality.....................................................................65
SECTION 10.03. Increased Cost and Reduced Return..............................................65
SECTION 10.04. Base Rate Loans Substituted for Affected Euro-Dollar Loans.....................67
SECTION 10.05. Compensation...................................................................67
ARTICLE XI
MISCELLANEOUS..................................................................................68
SECTION 11.01. Notices........................................................................68
SECTION 11.02. No Waivers.....................................................................68
SECTION 11.03. Expenses; Documentary Taxes; Indemnification...................................69
SECTION 11.04. Setoffs; Sharing of Set-Offs...................................................69
SECTION 11.05. Amendments and Waivers.........................................................70
SECTION 11.06. Margin Stock Collateral........................................................71
SECTION 11.07. Successors and Assigns.........................................................71
SECTION 11.08. Confidentiality................................................................73
SECTION 11.09. Swap Obligations...............................................................73
SECTION 11.10. Representation by Banks........................................................73
SECTION 11.11. Obligations Several............................................................74
SECTION 11.12. Survival of Certain Obligations................................................74
SECTION 11.13. North Carolina Law.............................................................74
SECTION 11.14. Severability...................................................................74
SECTION 11.15. Interest.......................................................................74
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SECTION 11.16. Interpretation.................................................................74
SECTION 11.17. Defaulting Bank................................................................74
SECTION 11.18. Consent to Jurisdiction........................................................75
SECTION 11.19. Counterparts...................................................................75
EXHIBIT A-1 Form of Bank Notes
EXHIBIT A-2 Form of Term Notes
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Closing Certificate
EXHIBIT E Form of Assistant Secretary's Certificate
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Assignment and Acceptance
EXHIBIT H Form of Notice of Borrowing
EXHIBIT I Form of Borrowing Base Values Certificate
EXHIBIT J Conduit Debt Hotels
EXHIBIT K Initial Hotels
EXHIBIT L Form of Permitted Operating Lease
EXHIBIT M Allocated Loan ▇▇▇▇▇▇
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SYNDICATED CREDIT AGREEMENT
THIS SYNDICATED CREDIT AGREEMENT dated as of January 15, 1999, among
WINSTON HOTELS, INC., a North Carolina corporation (the "Company"), ▇▇▇▇ LIMITED
PARTNERSHIP, a North Carolina limited partnership (the "Partnership"), the BANKS
listed on the signature pages hereof, and WACHOVIA BANK, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section 1.01
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
"Accessibility Laws" means all laws and regulations governing
accessibility of public facilities to the handicapped, specifically including,
but not limited to the physical accessibility requirements of Title III of the
Americans with Disabilities Act of 1990, and the implementing regulations
promulgated thereunder by the Department of Justice and the Americans with
Disabilities Act Accessibility Guidelines (ADAAG) associated therewith.
"Accumulated Depreciation" means the cumulative sum of all Depreciation
Expense recognized on the financial statements of the Borrower and Subsidiaries
in accordance with GAAP.
"Additional Hotels" means all Hotels now owned or hereafter owned by
the Borrower and any Subsidiary, with the exclusion of (i) the Initial Hotels;
(ii) the Conduit Debt Hotels owned by the Special Purpose Entity; and (iii) any
hotel acquired by a partnership or joint venture in which the Borrower or any
Subsidiary is a partner or joint venturer.
"Adjusted London Interbank Offered Rate" means a rate per annum equal
to the quotient obtained (rounded upward or downward, if necessary, to the
closest 1/10,000th of 1%, with 5,000/10,000th being rounded upward) by dividing
(i) the applicable London Interbank Offered Rate for such Interest Period by
(ii) 1.00 minus the Euro-Dollar Reserve Percentage.
"Adjusted EBITDA" means EBITDA for such period, less (a) Required Room
Reserves, and adjusted to exclude (b) all extraordinary items and (c) all gains
or losses from the sale of assets.
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"Affiliate" of any Person means (i) any other Person which directly, or
indirectly through one or more intermediaries, controls such Person, (ii) any
other Person which directly, or indirectly through one or more intermediaries,
is controlled by or is under common control with such Person, or (iii) any other
Person of which such Person owns, directly or indirectly, 20% or more of the
common stock or equivalent equity interests. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means Wachovia Bank, N.A., a national banking association
organized under the laws of the United States of America, in its capacity as
agent for the Banks hereunder, and its successors and permitted assigns in such
capacity.
"Agent's Letter Agreement" means that certain letter agreement, dated
as of October 2, 1998, between the Borrower and the Agent relating to the
structure of the Loans, and certain fees from time to time payable by the
Borrower to the Agent, together with all amendments and modifications thereto.
"Agreement" means this Syndicated Credit Agreement, together with all
amendments and supplements hereto.
"Allocated Loan Amount" means the portion of the Loans allocated to
each Borrowing Base Hotel for title insurance purposes and for other purposes,
as set out in Exhibit M attached hereto and incorporated herein by reference.
"Applicable Margin" means for any Euro-Dollar Loan the following
interest spread corresponding to the Performance Pricing Level set forth below
for which Borrower qualifies, such spread being expressed as a percentage, that
shall be added to the Adjusted London Interbank Offered Rate for an Interest
Period:
Performance The Ratio of Consolidated
Pricing Total Indebtedness to
Level Total Value shall be Applicable Margin
----------- ------------------------- -----------------
I Less than 45% 1.45%
II Equal to or Greater than 45%
but Less than 50% 1.60%
III Equal to or Greater than 50%
but Equal to or Less than 55% 1.70%
IV Greater than 55% Euro-Dollar Rates not available.
The Default Rate shall govern.
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"Approved Franchisor" means any franchisor approved by all of the Banks
from time to time. The following franchisors have been preapproved by the Banks
as "Pre-Approved Franchisors": Hampton Inn; Hampton Inn & Suites; Embassy
Suites; Homewood Suites; Staybridge Suites; Holiday Inn; Holiday Inn Select;
Holiday Inn Express; Marriott Courtyard; Residence Inn; Fairfield Inn; Hilton
Garden Inn; Comfort Inn; Comfort Suites; and Quality Suites.
"Assignee" has the meaning set forth in Section 11.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance executed
in accordance with Section 11.07(c) in the form attached hereto as Exhibit G.
"Assignments of Rents" means any assignments of rents, leases and
profits now or hereafter executed by the Borrower for the benefit of the Agent,
specifically including (but not limited to) any assignments of rents
incorporated within any Deed of Trust and given with respect to the Initial
Hotels, and any and all amendments and modifications thereof.
"Authority" has the meaning set forth in Section 10.02.
"Bank" means each bank listed on the signature pages hereof as having a
Commitment, and its successors and assigns. "Banks" means more than one Bank.
Where approval of any matter is required to be obtained from the "Banks,"
approval must be obtained from all of the Banks.
"Bank Notes" means the promissory notes of the Borrower payable to the
Banks, substantially in the form of Exhibit A-1 attached hereto, evidencing the
obligation of the Borrower to repay the Loans, together with all amendments,
consolidations, modifications, replacements, renewals and supplements thereto.
"Bank Note" means any one of such Bank Notes.
"Base Rate" means for any Base Rate Loan for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half
of one percent above the Federal Funds Rate for such day. For purposes of
determining the Base Rate for any day, changes in the Prime Rate and the Federal
Funds Rate shall be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear interest at a
rate based upon the Base Rate.
"Borrower" means one or more of the Partnership and the Company, and
their successors and permitted assigns.
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"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower at the same time by the Banks pursuant to Article II or, in the case of
a Swing Line Borrowing, by the Swing Line Bank only. A Borrowing is a "Base Rate
Borrowing" if such Loans are Base Rate Loans or a "Euro-Dollar Borrowing" if
such Loans are Euro-Dollar Loans.
"Borrowing Base Value" means the sum of the following:
(a) For all Non-Stabilized Borrowing Base Hotels, the
undepreciated book value (as determined in accordance with
GAAP) for all such Hotels; and
(b) For all Stabilized Borrowing Base Hotels, the Capitalized
Value for all such Hotels.
"Borrowing Base Value Certificate" has the meaning set forth in Section
2.01(b)(1).
"Borrowing Base Hotel" is a Hotel as described and meeting the criteria
specified in Section 3.01(c) hereof.
"Borrowing Base Hotel Release Entitlement Event" has the meaning given
in Section 3.02.
"Capital Stock" means any nonredeemable capital stock of the Borrower
or any Subsidiary (to the extent issued to a Person other than the Borrower),
whether common or preferred.
"Capitalized Lease Obligation" means that portion of any obligation of
a Person, as a lessee under a lease, which at the time would be required to be
capitalized on the balance sheet of such Person in accordance with GAAP.
"Capitalized Value" means (A) the aggregate Property Operating Income
for Stabilized Borrowing Base Hotels during the most recent Four Fiscal Quarters
for which financial results have then been reported less the Required Room
Reserves (hereinafter defined) applicable thereto for such four Fiscal Quarters,
divided by (b) 11.5%.
"Cash Equivalents" means cash on hand, deposits in financial
institutions, and the market value of readily marketable securities, provided
that any such amounts that are restricted in any way shall be excluded.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. ss. 9601 et seq. and its implementing regulations
and amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
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"Change of Law" shall have the meaning set forth in Section 10.02.
"Closing Certificate" has the meaning set forth in Section 3.03(e).
"Closing Date" means February 1, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Collateral Assignments of Franchise Agreements" means all collateral
assignments of franchise agreements, if any, now or hereafter executed by a
Lessee, and any and all amendments and modifications thereof.
"Collateral Assignments of Management Agreements" means all collateral
assignments of all or any portion of a Lessee's rights in and under any one or
more Management Agreements, and any and all amendments and modifications
thereof.
"Collateral Documents" means all Deeds of Trust, all Assignments of
Rents, all Security Agreements, all Collateral Assignments of Franchise
Agreements, all Collateral Assignments of Management Agreements, all UCC-1
Financing Statements and any other loan documentation executed by the Borrower
or any Subsidiary establishing the Agent's collateral rights in one or more
Properties.
"Commitment" means, with respect to each Bank, (i) the amount set forth
opposite the name of such Bank on the signature pages hereof, or (ii) as to any
Bank which enters into an Assignment and Acceptance (whether as transferor Bank
or as Assignee thereunder), the amount of such Bank's Commitment after giving
effect to such Assignment and Acceptance, in each case as such amount may be
reduced from time to time pursuant to Sections 2.08 and 2.09.
"Company" means Winston Hotels, Inc., and its successors and permitted
assigns.
"Completion Requirements" means (i) delivery of a Certificate of
Substantial Completion signed by the general contractor, the owner, and the
project architect indicating that such Hotel is substantially complete, (ii)
issuance by appropriate governmental authorities of a permanent, unqualified
certificate of occupancy, (iii) issuance of an endorsement to the title policy
for such Hotel deleting any general lien exception and all specific liens as
exceptions from the title policy, and (iv) receipt by the Agent of documentation
satisfactory to the Agent as to matters of zoning.
"Compliance Certificate" has the meaning set forth in Section 5.01(c).
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"Conduit Debt" means that certain non-recourse loan from the Conduit
Lender to the Special Purpose Entity in the original principal amount of
$71,000,000, evidenced by a promissory note executed by the Special Purpose
Entity, dated November 3, 1998, and payable to the Conduit Lender.
"Conduit Lender" means CMF Capital Company LLC, its successors and
assigns.
"Conduit Debt Hotels" means all those Hotels owned by the Special
Purpose Entity and serving as collateral security for the Conduit Debt. The
Hotels initially pledged as collateral for the Conduit Debt are listed in
Exhibit J.
"Consolidated Liabilities" means the sum of (i) all liabilities that,
in accordance with GAAP, should be classified as liabilities on a consolidated
balance sheet of Borrower and its Consolidated Subsidiaries, and (ii) to the
extent not included in clause (i) of this definition, the Borrower's redemption
obligations with respect to all Redeemable Preferred Stock.
"Consolidated Secured Debt" means the aggregate principal amount of all
Debt of the Borrower or any Consolidated Subsidiary, outstanding as of such
date, which is secured by a Lien on any asset or Capital Stock of the Borrower
or any Consolidated Subsidiary, including without limitation loans secured by
mortgages, stock, or partnership interests.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date (specifically including the Special Purpose Entity).
"Consolidated Tangible Net Worth" means, at any time, Stockholders'
Equity, less the sum of the value, as set forth or reflected on the most recent
consolidated balance sheet of the Borrower, prepared in accordance with GAAP, of
(A) Any surplus resulting from any write-up of assets
subsequent to June 30, 1998;
(B) All assets which would be treated as intangible assets for
balance sheet presentation purposes under GAAP, including without
limitation goodwill (whether representing the excess of cost over book
value of assets acquired, or otherwise), trademarks, tradenames,
copyrights, patents and technologies, and unamortized debt discount and
expense;
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(C) To the extent not included in (B) of this definition, any,
amount at which shares of capital stock of the Borrower appear as an
asset on the consolidated balance sheet of the Borrower;
(D) Loans or advances to stockholders, directors, officers or
employees; and
(E) To the extent not included in (B) of this definition,
deferred expenses.
"Consolidated Total Indebtedness" means at any date all of the Debt of
the Borrower and its Consolidated Subsidiaries (excluding however, without
duplication, Intercompany Debt), determined on a consolidated basis as of such
date.
"Contested/Not Completed Hotels" means the following four Hotels:
Homewood Suites, Alpharetta, Georgia (Hotel #24); Homewood Suites, Raleigh,
North Carolina (Hotel #6); Homewood Suites, Durham, North Carolina (Hotel #8);
and Marriott Courtyard, Winston-Salem, North Carolina (Hotel #14).
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication, (i) all
obligations (whether recourse or non-recourse) of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such Person
as lessee under capital leases, (v) all obligations of such Person to reimburse
any bank or other Person in respect of amounts payable under a banker's
acceptance, (vi) all Redeemable Preferred Stock of such Person (in the event
such Person is a corporation), (vii) all obligations (absolute or contingent) of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (viii) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, and (ix) all Debt of others Guaranteed by such Person.
"Debt Service" means all interest due and payable by the Borrower or
its Subsidiaries on its Debt, all dividends due and payable on Redeemable
Preferred Stock, all sinking fund payments or similar payments required to be
paid in connection with Redeemable Preferred Stock, and all regularly scheduled
principal payments required to be paid on any Debt other than the final
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payment due on such Debt if such final payment is substantially greater than the
periodic payments required in connection with such Debt. For purposes of
calculating Debt Service, one shall exclude (without duplication) Intercompany
distributions or dividends and Debt Service payable in connection with
Intercompany Debt.
"Deeds of Trust" means all deeds of trust, deeds to secure debt,
mortgages or similar instruments now or hereafter executed by the Borrower to or
for the benefit of the Agent in its capacity as agent to secure the indebtedness
evidenced by the Notes, specifically including (but not limited to) those deeds
of trust, mortgages, and deeds to secure debt given with respect to the Initial
Hotels, and any and all amendments and modifications thereof.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived in writing, become an Event of Default.
"Defaulting Bank" means, at any time, any Bank that (a) has failed to
make a Loan or failed to purchase a participation interest in a Swing-Line Loan
as so required pursuant to the terms of this Agreement, or (b) has failed to pay
to the Agent or to any other Bank an amount owed by such Bank pursuant to the
terms of this Agreement (but only for so long as such amount has not been paid).
"Default Rate" means, with respect to any Loan, a rate per annum equal
to 150% of the Prime Rate.
"Deferred Revenue" means accrued revenue of the Borrower or any
Subsidiary under hotel operating leases which was recognized as Income under
GAAP prior to the implementation of EITF 98-9 but is no longer recognized as
such pursuant to EITF 98-9 issued by Financial Accounting Standards Board's
Emerging Issues Task Force.
"Depreciation Expense" means for any period the sum of all depreciation
expenses of the Borrower and its Subsidiaries for such period, as determined in
accordance with GAAP.
"Dividends" means for any period the sum of all dividends paid or
declared by the Company during such period and applicable thereto in respect of
any Capital Stock and Preferred Stock (other than dividends paid or payable in
the form of additional Capital Stock or Preferred Stock) and, with respect to
interests in the Partnership held by partners other than the Company, all
distributions paid or declared during such period and applicable thereto in
respect to partnership interests (other than distributions paid or payable in
the form of additional partnership interests).
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia are authorized or
required by law to close.
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"EBITDA" means, with respect to the accounts of Borrower and
Subsidiaries, consolidated income in accordance with GAAP (before Minority
Interests) of the Borrower and its Subsidiaries, before extraordinary items plus
Deferred Revenue plus Interest Expense, Depreciation Expense, amortization
expense and provisions for income tax.
"Effective Date" with respect to the Borrowing Base Value has the
meaning given such term in Section 2.01(c)(iv).
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower or any Subsidiary required by any Environmental
Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
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"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Reports" means those environmental reports which were
rendered with respect to the Initial Hotels and copies of which were delivered
to the Banks in connection with the Loans and any environmental reports
hereafter delivered to the Banks with respect to Additional Hotels. These
reports include, but are not limited to, reports concerning asbestos located in
and about one or more of the Properties.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or the Properties, including but not limited to any such requirement under
CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan which bears or is to bear interest at a
rate based upon the London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered Rate
shall be adjusted automatically on and as of the effective date of any change in
the Euro-Dollar Reserve Percentage.
"Event of Default" has the meaning set forth in Section 8.01.
"Extension of Term" means any one year extension of the term hereof
from the Termination Date or any Extended Termination Date, as provided in
Section 2.05(c).
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"Extended Termination Date" means the date on which the Banks'
Commitments terminate following one or more Extensions of Term.
"Facility Limit" shall mean $140,000,000 or such lesser sum as shall be
available upon reduction in the Facility Limit, as provided in Section 2.05(c)
and Section 2.13 herein.
"FF&E" means furniture, fixtures and equipment now or hereafter located
on one or more of the Properties of the Borrower and Subsidiaries and required
for the operation of such Properties as hotels.
"FF&E Deficiency" means the amount, if any, as of each Measurement
Date, by which the cumulative amount of Required Room Reserves accrued
commencing January 1, 1999, and continuing during the term of the Loan, exceeds
the accrued cumulative expenditures by the Borrower for the replacement and
enhancement of FF&E located within the Borrowing Base Hotels.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Domestic Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to Wachovia on such day on such
transactions as determined by the Agent.
"Fiscal Quarter" means any fiscal quarter of the Borrower. As of the
Closing Date the Fiscal Quarters end on March 31, June 30, September 30, and
December 31.
"Fiscal Year" means any fiscal year of the Borrower. As of the Closing
Date, the Fiscal Year ends on December 31.
"Fixed Charges" means the sum of (a) Debt Service for such period plus
(b) Ground Lease Expenses for such period.
"Floating Rate Debt" means any Debt which bears interest at an interest
rate that is subject to change more frequently than once per calendar year.
"Franchisor" means any franchisor of a Hotel, specifically including
any Pre-Approved Franchisor.
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"Franchise Agreement" means the written agreement between a Lessee and
the Franchisor pursuant to which such Lessee is granted a franchise to operate a
Hotel, and any and all amendments and modifications thereof.
"Funds from Operations" means for any period net income (loss) of the
Borrower and Subsidiaries, determined on a consolidated basis in accordance with
GAAP plus Deferred Revenue, before Preferred Dividends and before deducting the
portion of such net income (loss) allocable to Minority Interests, gains (or
losses) from debt restructuring and sales of income producing Property,
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated partnerships and
joint ventures will be calculated to reflect "Funds from Operations" consistent
with the basis as presented by Borrower. It is acknowledged that the computation
of "Funds from Operations" may be adjusted from time to time to be consistent
with the conventions adopted by the National Association of Real Estate
Investment Trusts.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss.6901 et seq. and its implementing regulations and amendments,
or in any applicable state or local law or regulation, (b) any "hazardous
substance", "pollutant" or "contaminant", as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
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"Hotels" means a hotel (specifically including land, building,
improvements, FF&E and all related personal property used or useful in
connection with such hotel operations) owned by the Partnership, the Company, or
the Special Purpose Entity. "Hotels" collectively refers to the Initial Hotels,
all Additional Hotels, and all Conduit Debt Hotels.
"Hotel Cost" means for any Non-Stabilized Hotel the total investment at
cost of the land, buildings, improvements and the FF&E located therein according
to GAAP before Accumulated Depreciation.
"Initial Hotels" mean those Hotels owned by the Partnership and pledged
to secure the Loans, as generally described in Exhibit K attached hereto and
incorporated herein by reference.
"Intercompany Debt" means Debt owing by the Company or the Partnership
or any Subsidiary, on the one hand, to the Company or the Partnership or any
Subsidiary, on the other hand.
"Interest Expense" means during any period interest or similar fees and
charges accrued by the Borrower and its Consolidated Subsidiaries in accordance
with GAAP on all Debt constituting Consolidated Total Indebtedness other than
Intercompany Debt (including the portion of any Capitalized Lease Obligation
treated under GAAP as an interest component), but specifically excluding
therefrom interest that is capitalized in accordance with GAAP.
"Interest Period" means:
(1) with respect to each Euro-Dollar Borrowing other than a Swing Line
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period (subject to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall, subject to clause (c) below, end on the last Euro-Dollar
Business Day of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
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(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending one day thereafter; provided that any Interest
Period which would otherwise end on a day which is not a Domestic Business Day
shall be extended to the next succeeding Domestic Business Day.
(3) with respect to each Swing Line Borrowing, the period commencing on the date
of such Borrowing and (i), in the case of a Swing Line Borrowing that is a
Euro-Dollar Borrowing, ending 7 days thereafter, or (ii) in the case of a Base
Rate Borrowing, ending one day thereafter, provided that:
(a) in the case of a Swing Line Borrowing that is a Base Rate
Borrowing, any Interest Period (subject to clause (c) below) which
would otherwise end on a day which is not a Domestic Business Day shall
be extended to the next succeeding Domestic Business Day;
(b) in the case of a Swing Line Borrowing that is a
Euro-Dollar Loan, any Interest Period (subject to clause (c) below)
which would otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the next succeeding Euro-Dollar Business Day;
and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise (in either case, whether direct or indirect).
"Lease" or "Leases" means any and all lease agreements now or hereafter
executed between the Borrower or a Subsidiary and any Lessee and any and all
amendments and modifications thereof, pursuant to which such Lessee operates one
or more of the Hotels.
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to the Borrower and the
Agent.
"Lessee" means any party operating a Hotel pursuant to a Lease.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, servitude or encumbrance of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by
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consensual agreement or by operation of statute or other law, or by any
agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, ground
lease, capital lease or other title retention agreement relating to such asset.
"Loan" means any loan made by any Bank to the Borrower pursuant to the
provisions hereof, and "Loans" means any of all such loans, as the context shall
require.
"Loan Documents" means this Agreement, the Notes, all Deeds of Trust,
all Assignments of Rents, all Security Agreements, all Collateral Assignments of
Franchise Agreements, all Collateral Assignments of Management Agreements, any
other document evidencing, relating to or securing the Loans, and any other
document or instrument delivered from time to time in connection with this
Agreement, the Notes or the Loans, as such documents and instruments may be
amended or supplemented from time to time.
"London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rate appears on the display
designated as Page "3750" of the Telerate Service in the case of the One-Month
LIBOR Option, the Two-Month LIBOR Option, the Three-Month LIBOR Option or the
Six-Month LIBOR Option and "Page 3875" of the Telerate Service in the case of
the Seven-Day LIBOR Option or, in the case of any LIBOR Option, such other page
as may replace such page of that service or such other service or services as
may be designated by the British Bankers' Association for the purpose of
displaying the London Interbank Offered Rates for United States dollar deposits
(the "Telerate Service") determined as of 11:00 a.m. London time, as that rate
is set two (2) Euro-Dollar Business Days prior to the first day of the Interest
Period, provided that (i) if more than one such offered rate appears on the
applicable Telerate Service, the "London Interbank Offered Rate" will be the
arithmetic average (rounded upward or downward, if necessary, to the closest
1/10,000th of 1%, with 5,000/10,000th being rounded upward) of such offered
rates; and (ii) if no such offered rates appear on such page, or if there is no
such service designated by the British Bankers' Association, the "London
Interbank Offered Rate" for such Interest Period will be the arithmetic average
(rounded upward or downward, if necessary, to the closest 1/10,000th of 1%, with
5,000/10,000th being rounded upward) of rates quoted by not less than 2 major
banks in New York City, selected by the Agent, at approximately 10:00 a.m., New
York City time, 2 Euro-Dollar Business Days prior to the first day of such
Interest Period, for deposits in Dollars offered to leading European banks for a
period comparable to such Interest Period in an amount comparable to the
principal amount of such Euro-Dollar Loan.
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"Major Ground Lease" means a ground lease demising to the Borrower or
any Subsidiary all of the land on which a Hotel is situated or any portion of
such land which the Agent, in its reasonable judgment, deems necessary for the
operation of the Hotel, or which, without the benefit of such ground lease,
would materially impair the marketability of the Hotel in the reasonable
judgment of the Agent.
"Manager" means any manager of a Hotel.
"Management Agreement" means the written agreement between a Lessee and
a Manager pursuant to which a Manager undertakes the management of a Hotel, and
any and all amendments and modifications thereof.
"Margin Stock" means "margin stock" as defined in Regulation G, T, U or
X of the Board of Governors of the Federal Reserve System, as in effect from
time to time, together with all official rulings and interpretations issued
thereunder.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business or properties of the Borrower and its
Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of the
Agent or the Banks under the Loan Documents, or the ability of the Borrower to
perform its obligations under the Loan Documents to which it is a party, as
applicable, or (c) the legality, validity or enforceability of any Loan
Document.
"Maximum Advance" has the meaning set forth in Section 2.01(b).
"Measurement Date" shall mean December 31, 1998, and each March 31,
June 30, September 30 and December 31 thereafter.
"Minority Interests" shall mean the partnership interests in the
Partnership held by limited partners other than the Company.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"Non-Stabilized Borrowing Base Hotel" means a Borrowing Base Hotel that
does not constitute a Stabilized Borrowing Base Hotel.
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"Non-Stabilized Hotel" means a Hotel that does not constitute a
Stabilized Hotel.
"Notes" means collectively the Term Notes and the Bank Notes. "Note"
means any one of such Notes.
"Notice of Borrowing" has the meaning set forth in Section 2.02(a).
"Officer's Certificate" has the meaning set forth in Section 3.03(f).
"Participant" has the meaning set forth in Section 11.07(b).
"Partnership" means ▇▇▇▇ Limited Partnership, a North Carolina limited
partnership, its successors and permitted assigns.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" means January 1, 1999, and the
first day of each calendar quarter (April 1, July 1, October 1, and January 1)
thereafter.
"Permitted Operating Lease" means any Lease with respect to a Hotel
owned by Borrower or a Subsidiary, such Lease being between such Borrower or
Subsidiary, as lessor, and either of Capstar Winston Company, L.L.C., Capstar
Management Company, L.P., Capstar Hotel Company or another entity directly or
indirectly owned wholly by MeriStar Hospitality Corporation (herein a "Capstar
Entity"), as lessee, or such other entity approved by the Required Banks and
provided further that the obligations of any Capstar Entity are guaranteed by
MeriStar Hospitality Corporation and further provided that each such Lease shall
conform to any one or more of the following requirements:
(a) Such Lease is a lease with respect an Initial Hotel;
(b) Such Lease is with respect to a Conduit Debt Hotel;
(c) If such Lease is a lease with respect to any Additional Hotel
that is or becomes a Borrowing Base Hotel, such Lease shall be
in substantially the same form as evidenced by the Form of
Permitted Operating Lease shown in Exhibit L, provided,
however, that the terms affecting the payments thereunder
shall be acceptable to all of the Banks;
(d) If such Lease is with respect to any Hotel that is not a
Borrowing Base Hotel or a Conduit Debt Hotel, such lease shall
be in substantially the form shown in Exhibit L;
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(e) If such Lease described in paragraph (d) above is not with a
Capstar Entity, such lease shall be in substantially the form
shown in Exhibit L or shall be approved by the Required Banks.
The Banks have approved the existing lease with Secaucus Holding Corp.
with respect to Hotel #19 located in Secaucus, New Jersey, and have also
approved the existing lease with Bristol Hotel Tenant Company for Hotel #27
located in Las Vegas, Nevada. Such approval for these particular hotels does not
constitute approval of the forms of lease applicable to these Hotels for other
hotel properties.
"Person" means an individual, a corporation, a partnership (including
without limitation, a joint venture), a limited liability company, an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prior Indebtedness" means indebtedness evidenced by that certain
revolving demand promissory note executed by the Borrower and payable to
Wachovia, dated as of October 30, 1998, and in the principal amount of
$45,000,000 and indebtedness evidenced by that certain credit agreement dated
October 29, 1996, in the principal amount of $125,000,000 among the Borrower,
Wachovia, as agent, and the banks listed therein.
"Prime Rate" refers to that interest rate so denominated and set by the
Agent from time to time as an interest rate basis for borrowings. The Prime Rate
is but one of several interest rate bases used by the Agent. The Agent lends at
interest rates above and below the Prime Rate.
"Property" or "Properties" means any and all real property owned,
leased or otherwise used or occupied by the Borrower or any Subsidiary, wherever
located.
"Property Operating Income" means with respect to any Hotel, for any
period, Borrower's rental revenue derived under a Lease and accrued according to
GAAP plus Deferred Revenue for such Hotel for such period, (i) less all expenses
incurred by the Borrower and not reimbursed by tenants that are directly related
to such Hotel, including real estate taxes, common area maintenance charges,
casualty insurance, liability insurance, and ground lease payments (where
applicable), (ii) less actual general and administrative expenses for the
Borrower and its Subsidiaries allocated for all Hotels owned by the Borrower and
its Subsidiaries, and (iii) plus, to the extent
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included in (i) above, Depreciation Expense, and amortization expense and
Interest Expense with respect to such Hotel for such period. If such period is
less than a year, such expenses shall be adjusted by straight lining various
expenses which are payable less frequently than monthly during every such period
(e.g. real estate taxes, ground lease payments and insurance premiums). General
and administrative expenses for the Borrower and its Subsidiaries shall be
allocated by dividing all such actual expenses by the number of Hotels then
owned by the Borrower and its Subsidiaries, and an equal amount of such general
and administrative expenses shall be allocated to each such Hotel.
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"Related Parties" shall mean, collectively, (a) the Company, (b) the
Partnership, (c) all Subsidiaries of the Borrower, (d) all non-consolidated
ventures in which the Borrower and/or any Consolidated Subsidiaries own at least
20% of the equity interests and over which the Borrower and/or any Consolidated
Subsidiaries have control, and (e) all non-consolidated ventures in which the
Borrower and/or any Consolidated Subsidiaries own at least 50% of the equity
interests.
"Rents" means, for any period, the revenue accrued according to GAAP
pursuant to the "annual base rent" and the Deferred Revenue to be received
according to the "annual percentage rent formula" schedule of the Lease for any
Hotel.
"Required Banks" means at any time Banks (exclusive of Defaulting
Banks) having at least 66 2/3% of the aggregate amount of the Commitments
(exclusive of Commitments of Defaulting Banks) or, if the Commitments are no
longer in effect, Banks (exclusive of Defaulting Banks) holding at least 66 2/3%
of the aggregate outstanding principal amount of the Notes (exclusive of Notes
payable to Defaulting Banks).
"Required Room Reserves" means, for any period, a sum equal to the
greater of (a) 5% of gross room revenues of the Hotels or (b) the amount
required to be "set aside" for replacement of FF&E for Hotels under the Leases
for such Hotels.
"Security Agreements" mean all security agreements now or hereafter
executed by the Borrower, specifically including but not limited to those
security agreements given incorporated within the Deed of Trust which have been
given with respect to the Initial Hotels, and any and all amendments and
modifications thereof.
"Senior Revolving Debt" means the principal amount outstanding under
the Loans.
"Special Purpose Entity" means Winston SPE, LLC, a Virginia limited
liability company, a wholly owned subsidiary of the Borrower.
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"Stabilized Borrowing Base Hotel" means, as of each Measurement Date, a
Borrowing Base Hotel that has been owned by the Borrower and continuously
operated by the Borrower or its Lessee for six or more full Fiscal Quarters.
"Stabilized Hotel" means, as of each Measurement Date, a Hotel that has
been owned by the Borrower and continuously operated by the Borrower or its
Lessee for six or more full Fiscal Quarters.
"Stockholders' Equity" means, at any time, the shareholders' equity of
the Borrower and its Consolidated Subsidiaries, as set forth or reflected on the
most recent consolidated balance sheet of the Borrower prepared in accordance
with GAAP, but excluding any Redeemable Preferred Stock of the Borrower or any
of its Consolidated Subsidiaries. Shareholders' equity generally would include,
but not be limited to (i) the par or stated value of all outstanding Capital
Stock, (ii) capital surplus, (iii) retained earnings, and (iv) various
deductions such as (A) purchases of treasury stock, (B) valuation allowances,
(C) receivables due from an employee stock ownership plan, (D) employee stock
ownership plan debt guarantees, and (E) translation adjustments for foreign
currency transactions.
"Subordination Agreements" mean collectively those agreements pursuant
to which a Lease is subordinated to the lien of a Deed of Trust given with
respect to such Hotel.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Substitute Hotels" has the meaning given such term in Section
3.02(a)(i).
"Supermajority of Banks" means at any time Banks (exclusive of
Defaulting Banks) having at least 80% of the aggregate amount of the Commitments
(exclusive of the Commitments of Defaulting Banks) or, if the Commitments are no
longer in effect, Banks (exclusive of Defaulting Banks) holding at least 80% of
the aggregate outstanding principal amount of the Notes (exclusive of Notes
payable to Defaulting Banks).
"Swing Line Bank" shall mean Wachovia, in its capacity as one of the
Banks providing a Commitment hereunder.
"Swing Line Borrowing" is a borrowing pursuant to the Swing Line
established under Section 2.03(a).
"Swing Line Loan" means a loan constituting a borrowing under the Swing
Line established under Section 2.03(a).
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"Syndicated Borrowing" means a Borrowing with respect to a Loan or
Loans (as the case may be) other than Swing Line Loans made pursuant to this
Credit Agreement.
"Taxes" has the meaning set forth in Section 2.11(c).
"Term Notes" mean the promissory notes of the Borrower payable to the
Agent for the benefit of the Banks, substantially in the form of Exhibit A-2
attached hereto, evidencing the obligation of the Borrower to repay a designated
portion of the Loans, together with all amendments, consolidations,
modifications, replacements, renewals and supplements thereto. "Term Note" means
any one of such Term Notes.
"Termination Date" means the later of January 14, 2002, or any Extended
Termination Date if any Extension of Term is granted pursuant to Section
2.05(c).
"Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Borrower's business and on a temporary basis.
"Total Cost" means as of each Measurement Date, the sum of (a) the book
value according to GAAP of all Hotels then owned by the Borrower and its
Subsidiaries (including the Capitalized Value of any Major Ground Lease of such
Properties) plus (b) all Accumulated Depreciation on such Hotels reflected on
the Borrower's financial statements.
"Total Value" means as of each Measurement Date, the sum of (a) all
Cash Equivalents then held by the Borrower and its Consolidated Subsidiaries
plus (b) for Stabilized Hotels, their aggregate Capitalized Value, plus (c) for
Non-Stabilized Hotels, their aggregate Hotel Cost, plus (d) the aggregate amount
of investments in and advances of the Borrower and its Consolidated Subsidiaries
in and to joint ventures or partnerships as reflected on the balance sheet of
the Borrower and its Consolidated Subsidiaries, according to GAAP.
"Transferee" has the meaning set forth in Section 11.07(d).
"Unused Commitment" means at any date, with respect to any Bank, an
amount equal to its Commitment less the aggregate outstanding principal amount
of its Loans.
"Unutilized Commitment Fee Payment Date" means each January 10, April
10, July 10, and October 10.
"Unutilized Commitment Fees" shall have the meaning set forth in
Section 2.07(b).
"Wachovia" means Wachovia Bank, N.A., a national banking association,
and its successors.
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"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower delivered to the Banks, unless with respect
to any such change concurred in by the Borrower's independent public accountants
or required by GAAP, in determining compliance with any of the provisions of
this Agreement or any of the other Loan Documents: (i) the Borrower shall have
objected to determining such compliance on such basis at the time of delivery of
such financial statements, or (ii) the Required Banks shall so object in writing
within 30 days after the delivery of such financial statements, in either of
which events such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to which such
objection shall not have been made (which, if objection is made in respect of
the first financial statements delivered under Section 5.01 hereof, shall mean
the financial statements referred to in Section 4.04).
Notwithstanding the foregoing, all accounting determinations
(specifically including the Financial Covenants in Article VIII) and all
financial statements required to be delivered with respect to the "Borrower and
its Consolidated Subsidiaries" or with respect to the "Company and its
Consolidated Subsidiaries" shall include the operations of the Company, the
Partnership, the Special Purpose Entity and any Consolidated Subsidiary of any
of the foregoing.
SECTION 1.03. Use of Defined Terms. All terms defined in this Agreement
shall have the same meanings when used in any of the other Loan Documents,
unless otherwise defined therein or unless the context shall otherwise require.
SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 1.05. References. Unless otherwise indicated, references in
this Agreement to "Articles," "Exhibits," "Schedules," and "Sections" are
references to articles, exhibits, schedules and sections hereof.
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SECTION 1.06. "Borrower" References; Joint and Several Obligations;
Notice. Where this Agreement imposes obligations upon the "Borrower," such
reference shall mean that both the Partnership and the Company shall be jointly
and severally obligated for the payment and performance of the obligations.
Where any notice is required hereunder to be given to or by the "Borrower," any
notice given by the Company (and any signature of a Company representative on
behalf of the Company) shall be deemed to have been given on the Company's own
behalf and as general partner of the Partnership, even though not specifically
delineated in such notice.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.01. Commitments to Make Loans; Maximum Advance; Borrowing
Base Value.
(a) Generally. Upon the satisfaction of each of the conditions of
Article III, the Banks shall extend a line of credit to the Borrower under which
the Banks will, ratably in accordance with their respective Commitments, subject
to the conditions of Article III and all other terms and conditions of this
Agreement, from time to time at the Borrower's request, make Loans to the
Borrower in amounts not to exceed either the Facility Limit or the Maximum
Advance, which may be borrowed, repaid (subject to the provisions of Section
2.09) and reborrowed (subject to the limitations set out herein, specifically
including, but not limited to, Section 2.14 hereof), from time to time, in
minimum principal amounts as set forth herein, in one or more borrowings prior
to the Termination Date.
Each Syndicated Borrowing shall be in an aggregate principal amount of
$1,000,000 or any larger multiple of $100,000 (except that any such Borrowing
may be in the aggregate amount of the Unused Commitments) and shall be made from
the several Banks ratably in proportion to their respective Commitments. Each
Swing Line Borrowing, however, shall be in an aggregate principal amount of
$100,000 or any larger multiple of $100,000, except that any such Swing Line
Borrowing may be in the aggregate amount of the unused portion of the Swing
Line.
(b) Maximum Advance. The maximum amount of credit available to be drawn
upon from time to time under this Agreement, determined as of each Measurement
Date and being effective as set out in Section 2.01(c), but in no event to
exceed the Facility Limit (the "Maximum Advance"), is the product of (a) 58%
from the date hereof through June 30, 2000, and 55% thereafter, and (b) the sum
of (i) Total Cost of each Non-Stabilized Borrowing Base Hotel, and (ii) the
Capitalized Value of each Stabilized Borrowing Base Hotel less (iii) the FF&E
Deficiency. On July 1, 2000, Borrower shall provide a Borrowing Base Certificate
recalculating the Maximum Advance available hereunder based on the product of
55% of the sums described in (b) above, as shown on the then-effective Borrowing
Base Value Certificate, and, if the Maximum Advance is thus reduced, such
reduction shall become effective on such date.
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Notwithstanding the foregoing, the Maximum Advance otherwise available
hereunder shall be reduced by the sum of: (x) an amount equal to 1.25 times the
amount of all liens now or hereafter filed with respect to the Contested/Not
Completed Hotels (the "Contested/Not Completed Hotel Liens"), and (y) the
aggregate amount of any remaining sums unpaid under construction contracts for
the Contested/Not Completed Hotels but only to the extent (if any) that such
remaining sums are included in the computation of the book value for such
Contested/Not Completed Hotel [excluding sums captured in (x) above]. In
determining the amount of the deduction for Contested/Not Completed Hotel Liens,
the Agent shall exclude such portion of a Contested/Not Completed Hotel Lien
that is reflected in an existing Contested/Not Completed Hotel Lien already
included in the deduction, so as to eliminate the duplication of a deduction
with respect to multiple lien claimants (e.g., claims by subcontractors as well
as contractors for the same sum owed). Such reduction in the Maximum Advance
shall be removed as and when the Agent determines that such Contested/Not
Completed Hotel Liens have been cancelled or bonded off and the title company
has deleted any exception for such specific Contested/Not Completed Hotel Liens
in the case of (x) and any generic lien exception in the case of (y) in its
title policy issued for the benefit of the Agent. Other covenants and agreements
with respect to Contested/Not Completed Hotels are provided in Section 3.01(d)
hereof. The foregoing deduction for Contested/Not Completed Hotel Liens is made
pursuant to a requirement of the Banks, and the Borrower's consenting to such
deduction does not constitute an admission of liability for any sums claimed by
any contractors.
(c) Borrowing Base Value. The Borrowing Base Value shall be calculated
from time to time in accordance with the following procedure:
(i) Borrowing Base Value Certificate. Simultaneously with
the submission of the financial statements required
in Section 5.01 of this Agreement, the Borrower shall
provide to the Agent and to each Bank a
certification, signed by the chief financial officer
of the Borrower, providing its calculation of the
Borrowing Base Value, such certification to be in a
form set out in Exhibit I and otherwise in form
satisfactory to the Agent and the Required Banks (the
"Borrowing Base Value Certificate"). The Borrower in
the Borrowing Base Value Certificate shall certify as
to which Borrowing Base Hotels constitute
Non-Stabilized Borrowing Base Hotels and which
Borrowing Base Hotels constitute Stabilized Borrowing
Base Hotels and shall certify as to the amount of the
FF&E Deficiency for all such Borrowing Base Hotels in
the aggregate.
(ii) Property-Level Information. The Borrower shall
provide to the Agent and to each Bank, together with
the quarterly financial statements required by
Section 5.01 of this Agreement, a financial statement
with respect to the operations of the Borrowing Base
Hotels during the preceding four Fiscal Quarters
ending as of the Measurement Date. Such financial
statements shall
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be delivered no later than 55 days after each
Measurement Date. Such financial statements shall be
in form and detail satisfactory to the Required Banks
with respect to each Borrowing Base Hotel
individually and with respect to all Borrowing Base
Hotels in the aggregate for each Lessee.
(iii) Review; Agent's Determination. The Agent shall be
entitled to review such information and to request
such additional information as it or any of the Banks
deems necessary to verify and assess such
calculations. Within twenty-five (25) days of receipt
of the certified Borrowing Base Value Certificate,
the Agent shall notify the Borrower (x) whether it
has not accepted the Borrower's Borrowing Base Value
Certificate determinations, and (y) if not, the
Agent's computation of the Borrowing Base Value. The
Agent's determination of the Borrowing Base Value
shall be conclusive, absent manifest error.
(iv) Effective Date. Except in the case of a release of or
revocation of status of a Borrowing Base Hotel or
Borrowing Base Hotels, such Borrowing Base Value and
the Maximum Advance determined thereby shall be
effective as of the first day of the next Fiscal
Quarter commencing after such determination (the
"Effective Date"). [For example, for the Fiscal
Quarter ending March 31, the Borrower would supply
financial statements and the Borrowing Base Value
Certificate on or before May 25; the Agent would
review and respond to the Borrowing Base Value
Certificate (and establish the Borrowing Base) on or
before June 20, with such computations to be
effective on July 1, the first day of the next Fiscal
Quarter.]
(v) Releases; Additions. Prior to the time that a
Borrowing Base Hotel is released or added, the
Borrower shall supply to the Agent and each of the
Banks a pro forma Borrowing Base Value Certificate
giving effect to the release or addition of any
Borrowing Base Hotel. In the case of a reduction in
the Maximum Advance, such reduction shall be
effective immediately subject to review and
adjustment by the Agent as described in (iii) above.
In the case of an increase in the Maximum Advance,
such an increase shall be effective only following
review and approval of the Borrowing Base Value
Certificate by the Agent as set out above.
(d) Required Paydown Due to a Reduction in the Maximum Advance. If,
upon a reduction in the Maximum Advance as a result of a reduction in the
Borrowing Base Value, the outstanding principal balance of the Loans exceeds the
permitted Maximum Advance available as of the first day of the next Fiscal
Quarter, then on or before such date the Borrower shall pay down the principal
balance to that amount available under the new Maximum Advance. In addition, the
Borrower at any time (but subject to the limitations for approval set out in
Section 3.01(c) entitled Borrowing Base Hotels) may request the Banks to approve
one or more additional hotels as
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Borrowing Base Hotels. If, after reviewing the information to which they are
entitled to review in connection with their determination of Borrowing Base
Hotels, all of the Banks consent to such addition or additions, the Borrower
shall provide a replacement Borrowing Base Value Certificate that includes such
additional Borrowing Base Hotels. The recomputed Maximum Advance shall be
effective as of the date on which the Agent establishes the recomputed Maximum
Advance.
(e) Title Insurance Amounts Subject to Increases Upon Increases in
Maximum Advance. As of the Closing Date, the Borrower has obtained title
insurance policies aggregating $140,000,000.00. The Borrower shall obtain
additional title coverage such that, at all times, the amount of title coverage,
if requested by the Required Banks, shall be at least $5 million greater than
the Maximum Advance (the "Title Coverage Spread"). Amounts of title insurance
coverage provided for Additional Hotels that become Borrowing Base Hotels shall
be included for purposes of determining whether this requirement has been
satisfied. The Required Banks may require a greater Title Coverage Spread if a
"Tie In Endorsement" cannot be issued in any jurisdiction other than Texas and
Florida.
SECTION 2.02. Method of Borrowing.
(a) The Borrower shall give the Agent notice in the form attached
hereto as Exhibit H (a "Notice of Borrowing") prior to 11:00 A.M. (Atlanta,
Georgia time) on the date of each Base Rate Borrowing, and at least three
Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be
Base Rate Loans, or Euro-Dollar Loans, and whether any portion of such
Loans comprising such Borrowing are to be Swing Line Loans,
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period, and
(v) such other information as is required to be provided in
the Notice of Borrowing.
(b) Upon receipt of a Notice of Borrowing for a Syndicated Borrowing,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such Syndicated Borrowing and such Notice of Borrowing
shall not thereafter be revocable by the Borrower.
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(c) Not later than 11:00 A.M. (Atlanta, Georgia time) on the date of
each Syndicated Borrowing, each Bank shall (except as provided in subsection (d)
of this Section) make available its ratable share of such Syndicated Borrowing,
in Federal or other funds immediately available in Atlanta, Georgia, to the
Agent at its address referred to in or specified pursuant to Section 11.01.
Unless the Agent determines that any applicable condition specified in Article
III has not been satisfied, the Agent will make the funds that the Agent has so
received from the Banks available to the Borrower.
Unless the Agent receives notice from a Bank, at the Agent's address
referred to in Section 11.01, no later than 4:00 P.M. (local time at such
address) on the Domestic Business Day before the date of a Syndicated Borrowing
stating that such Bank will not make a Loan in connection with such Syndicated
Borrowing, the Agent shall be entitled to assume that such Bank will make a Loan
in connection with such Syndicated Borrowing and, in reliance on such
assumption, the Agent may (but shall not be obligated to) make available such
Bank's ratable share of such Syndicated Borrowing to the Borrower which provided
the Notice of Borrowing for the account of such Bank. If the Agent makes such
Bank's ratable share available to the Borrower which provided the Notice of
Borrowing and such Bank does not in fact make its ratable share of such
Syndicated Borrowing available on such date, the Agent shall be entitled to
recover such Bank's ratable share from such Bank or the Borrower (and for such
purpose shall be entitled to charge such amount to any account of the Borrower
maintained with the Agent), together with interest thereon for each day during
the period from the date of such Syndicated Borrowing until such sum shall be
paid in full at a rate per annum equal to the rate at which the Agent determines
that it obtained (or could have obtained) overnight Federal funds to cover such
amount for each such day during such period, provided that (i) any such payment
by the Borrower of such Bank's ratable share and interest thereon shall be
without prejudice to any rights that the Borrower may have against such Bank,
and (ii) until such Bank has paid its ratable share of such Loan, together with
interest pursuant to the foregoing, it shall have no interest in or rights with
respect to such Loan for any purpose hereunder.
(d) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the Agent as
provided in subsection (c) of this Section, or remitted by the Borrower to the
Agent as provided in Section 2.11, as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived in writing.
(f) In the event that a Notice of Borrowing fails to specify whether
the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans, such Loans shall be made as Base Rate Loans.
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If the Borrower is otherwise entitled under this Agreement to repay any
Loans maturing at the end of an Interest Period applicable thereto with the
proceeds of a new Syndicated Borrowing, and the Borrower does not repay such
Loans using its own moneys and fails to give a Notice of Borrowing in connection
with such new Syndicated Borrowing, a new Borrowing shall be deemed to be made
on the date such Loans mature in an amount equal to the principal amount of the
Loans so maturing, and the Loans comprising such Syndicated Borrowing shall be
Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein, (i)
there shall not be more than ten different Euro-Dollar Borrowings (each request
for a Borrowing being treated as a single Borrowing, even though more than one
Bank may provide funds for such Borrowing) outstanding at the same time and (ii)
the proceeds of any Base Rate Borrowing shall be applied first to repay the
unpaid principal amount of all Base Rate Loans (if any) outstanding immediately
before such Base Rate Borrowing.
SECTION 2.03. Restrictions on Use of Loan Proceeds Generally.
(a) Swing Line. The Commitment of Wachovia, as a Bank, includes a Swing
Line available to the Borrower. Swing Line Loans may be used for any of the
purposes for which the Loans may be utilized.
(i) The Borrower may prior to the Termination Date, borrow
Swing Line Loans from the Swing Line Bank and may repay and reborrow
such Swing Line Loans, in an aggregate principal amount at any one time
outstanding not exceeding $15,000,000, provided that:
(y) the aggregate principal amount of all Loans
(including Swing Line Loans) at any one time outstanding shall
not exceed the lesser of (i) the aggregate amount of the
Commitments of all of the Banks at such time; or (ii) the
Maximum Advance; and
(z) the aggregate principal amount of all Swing Line
Loans, together with all other outstanding Loans made by the
Swing Line Bank, at any one time outstanding shall not exceed
the Commitment of the Swing Line Bank.
(ii) When the Borrower wishes to request a Swing Line Loan, it
shall give the Agent notice of such a borrowing (a "Swing Line Loan
Request") on the Notice of Borrowing hereunder described, so as to be
received by 11:00 A.M. on the day of the Borrowing.
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(iii) The Swing Line Bank shall make the amount of such Swing
Line Loan available to the Borrower on such date by depositing the
proceeds of such Swing Line Loan in immediately available funds in an
account of such Borrower maintained with the Swing Line Bank.
(iv) Swing Line Loans shall be considered a utilization of the
Commitment of the Swing Line Bank under this Agreement for purposes of
calculating the Unutilized Commitment Fee.
(v) At any time, upon the request of the Swing Line Bank, each
Bank other than the Swing Line Bank shall, on the third Domestic
Business Day after such request is made, purchase a participating
interest in Swing Line Loans in an amount equal to its ratable share
(based upon its respective Commitment) of such Swing Line Loans. On
such third Domestic Business Day, each Bank will immediately transfer
to the Swing Line Bank, in immediately available funds, the amount of
its participation. Whenever, at any time after the Swing Line Bank has
received from any such Bank its participating interest in a Swing Line
Loan, the Agent receives any payment on account thereof, the Agent will
distribute to such Bank its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Bank's participating interest was
outstanding and funded); provided, however, that in the event that such
payment received by the Agent is required to be returned, such Bank
will return to the Agent any portion thereof previously distributed by
the Agent to it. Each Bank's obligation to purchase such participating
interests shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation: (v) any set-off,
counterclaim, recoupment, defense, or other right which such Bank or
any other Person may have against the Swing Line Bank requesting such
purchase or any other Person for any reason whatsoever; (w) the
occurrence or continuance of a Default or an Event of Default or the
termination of the Commitments; (x) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Person; (y) any
breach of this Agreement by the Borrower or any other Bank; or (z) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
(b) Use Restrictions for Loans Generally. Proceeds of the Loans may be
used only for the following purposes: (i) development or acquisition by the
Borrower or Subsidiaries (specifically including investments by the Borrower and
its Subsidiaries in joint ventures or partnerships, subject to the limitations
in Section 6.06) of premium "limited service" hotels, premium "extended stay"
hotels, premium "all-suite" hotels, and premium "full service" hotels; (ii)
development, expansion and renovation of any of the Properties then owned by the
Borrower; and (iii) other general corporate and working capital needs of the
Borrower and its Subsidiaries, specifically including day-to-day operations,
payment of debt, payment of dividends and distributions, and repayment of the
Swing Line.
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SECTION 2.04. Notes.
(a) The Loans of each Bank shall be evidenced by a single Note payable
to the order of such Bank for the account of its Lending Office in an amount
equal to the original principal amount of such Bank's Commitment. A portion of
the Loans shall also be evidenced by Term Notes payable to the Agent for the pro
rata benefit of the Banks.
(b) Upon receipt of each Bank's Note pursuant to Section 3.03, the
Agent shall deliver such Note to such Bank. Each Bank shall record, and prior to
any transfer of its Notes shall endorse on the schedule forming a part thereof
appropriate notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Loan made by it, the date and amount of each
payment of principal made by the Borrower with respect thereto and whether, in
the case of such Bank's Note, such Loan is a Base Rate Loan or Euro Dollar Loan,
and such schedule shall constitute rebuttable presumptive evidence of the
principal amount owing and unpaid on such Bank's Note; provided that the failure
of any Bank to make, or any error in making, any such recordation or endorsement
shall not affect the obligation of the Borrower hereunder or under its Note or
the ability of any Bank to assign its Note. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
SECTION 2.05. Termination Date, Repayment of Loans, Extension of Term.
(a) As provided in Section 2.01(a) of this Agreement, but subject to
the limitations of Section 2.14 hereof, the Borrower is entitled to borrow,
repay and reborrow Loans at any time before the Termination Date.
(b) Each Loan included in any Borrowing other than a Loan evidenced by
a Term Note shall mature and the principal amount thereof shall be due and
payable on the first to occur of (1) the Termination Date, or (2), except where
principal is repaid through a rollover borrowing as described in Section 2.02(d)
of this Agreement, the last day of the Interest Period applicable to such
Borrowing. As provided in Section 2.02(d) in this Agreement, a new Borrowing
sufficient to repay the principal of such Loans shall be deemed to have been
made where the Borrower does not repay such otherwise maturing Loans.
Notwithstanding anything herein to the contrary, each Loan evidenced by a Term
Note shall mature and the principal amount thereof shall be due and payable on
the Termination Date (and not the last day of the Interest Period for such
Loan). As provided in Section 8.01, the Banks may accelerate the maturity date
of each Loan prior to the Termination Date upon the occurrence of an Event of
Default.
(c) The Borrower may request a maximum of two one-year annual
Extensions of the Term no sooner than 90 days and no later than 30 days prior to
(x) January 14, 2002, in the case of the first extension, in which case the
Termination Date shall extend to January 14, 2003, or (y) January 14, 2003 (in
the case of the second extension), in which case the Termination Date shall
extend to January 14, 2004. The Borrower may request the second extension only
if one or more
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of the Banks have previously granted a prior Extension of the Term. Each Bank
may, in its sole discretion and without any obligation, determine whether to
grant such an extension and shall be entitled to receive whatever information
such Bank deems necessary for the consideration of such request. Each Bank, in
its sole discretion, may condition its decision to grant an extension upon a
modification of the terms of this Agreement or the Notes, an adjustment in the
interest rate payable under the Notes, or the payment of a fee, including the
Extension Fee described in Section 2.07(c) in the amount stated herein or such
higher amount required by such Bank, or any other condition precedent specified
by such Bank. The fact that the Borrower may request one year annual extensions
of the Term as described herein is not an option of the Borrower to renew or
extend the Term, but merely evidences the fact that the Borrower may request an
Extension of the Term, and none of the Banks is under any obligation whatsoever
to grant such a request. Any such decision to extend the Termination Date for
all of the Commitments shall require unanimous approval by the Banks, but any
Bank may elect to extend the Termination Date of its own Commitment without an
Extension of the Term by one or more other Banks. A Bank which has not elected
to grant such an extension (a "Non-Extending Bank") shall offer to assign, at
par, its Note and its interests hereunder to those remaining Banks which have
elected to grant such extensions. No Bank, however, shall be obligated to
purchase all or any portion of the interests of a Non-Extending Bank. If the
Banks electing to extend the Term do not purchase the Note of any Non-Extending
Bank, the interests of a Non-Extending Bank may be assigned by such
Non-Extending Bank to a bank or other financial institution pursuant to the
assignment provisions of Section 11.07(c) of this Agreement. If one or more of
the Banks do not grant such an extension and the interests of such Non-Extending
Banks are not assigned to other Banks or to banks or other financial
institutions as described herein, (i) the Facility Limit shall be automatically
reduced on the date such Banks' Commitments expire by the amount of such
Non-Extending Banks' Commitments and (ii) the extension shall be applicable only
with respect to those Banks which have elected to grant such an extension. In
particular (without limiting the foregoing), any extension is subject to the
Banks' prior review and execution of such documents as required by the Agent and
Banks. In order for the Banks to complete their financial review and as a
condition for any Extension of Term, Borrower must have delivered to the Banks
the financial information required in Section 5.01 to be supplied on a quarterly
and/or annual basis and such additional information requested by the Banks.
SECTION 2.06. Interest Rates.
(a) Interest Rate Options Generally. Subject to the provisions hereof,
the Borrower may elect one or more of the following Interest Rate Options:
(i) One-Month LIBOR Option.
(ii) Two-Month LIBOR Option.
(iii) Three-Month LIBOR Option.
(iv) Six-Month LIBOR Option.
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(v) Base Rate Option.
(vi) Seven-Day LIBOR Option [available for Swing Line
Borrowings only].
Of the foregoing, the Borrower may select (i) through (v) for
Syndicated Borrowings, and the Borrower may select either (v) or (vi) for Swing
Line Borrowings. All Swing Line Borrowings outstanding at any one time must be
in the same interest rate option.
(b) Base Rate Loan Interest Rate. Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it is repaid, at a rate per annum equal to the Base Rate
for each day. Such interest shall be payable on the last day of each calendar
month. Any overdue principal of and, to the extent permitted by applicable law,
overdue interest on any Base Rate Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the Default Rate.
(c) Euro-Dollar Loan Interest Rate. Each Euro-Dollar Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin plus the applicable Adjusted London Interbank Offered Rate for such
Interest Period. Interest on each Euro-Dollar Loan shall be payable for each
Interest Period on the last day thereof, but in no event greater than three
months. Any overdue principal of and, to the extent permitted by applicable law,
overdue interest on any Euro-Dollar Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the Default Rate.
(d) Agent's Determination of Applicable Margin. The Applicable Margin
shall be determined by the Agent as of each Performance Pricing Determination
Date and shall remain effective until the next Performance Pricing Determination
Date. On the date that the Borrower provides to the Agent and each Bank the
Borrowing Base Value Certificate and the financial statements required by
Section 5.01 of this Agreement, the Borrower shall also provide to the Agent and
to each Bank as a part of the Compliance Certificate a certification, signed by
the chief financial officer of the Borrower, providing its calculation of the
ratio of Consolidated Total Indebtedness to Total Value (the "Leverage Ratio"),
upon which the Performance Pricing Level is determined. Within twenty-five days
of receipt, the Agent shall notify the Borrower (x) whether it has not accepted
the Borrower's computation of the Leverage Ratio and (y) if not, the Agent's
computation of the Leverage Ratio. The Agent's determination of the Leverage
Ratio and the Applicable Margin shall be conclusive, absent manifest error.
(e) Agent Calculation of Rates and Notice of Rates. The Agent, using
the formulas set out herein for the various options hereunder, shall calculate
(for selection by the Borrower pursuant to Section 2.02 hereof) each interest
rate applicable to the Loans hereunder. The Agent shall give prompt notice to
the Borrower and the Banks by telecopy of each rate of interest so calculated,
and the Agent's calculation thereof shall be conclusive in the absence of
manifest error.
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(f) Default Rate. Any overdue principal of and, to the extent permitted
by law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default Rate.
After the occurrence and during the continuance of a Default, the principal
amount of the Loans (and, to the extent permitted by applicable law, all accrued
interest thereon) may, at the election of the Required Banks, bear interest at
the Default Rate.
SECTION 2.07. Fees.
(a) Up-Front Commitment Fee. The Borrower shall pay to the Agent, for
the pro rata benefit of the Banks, at Closing a non-refundable, fully earned
commitment fee of $350,000.00 (the "Up Front Fee").
(b) Unutilized Commitment Fee for Unused Commitment. The Borrower shall
pay to the Agent for the ratable account of each Bank a commitment fee
calculated at the rate of one-fifth of one percent (.20%) per annum on the daily
average amount of such Bank's Unused Commitment during each Fiscal Quarter
(collectively, the "Unutilized Commitment Fees"). Such Unutilized Commitment
Fees shall accrue from and including the Closing Date to but excluding the
Termination Date and shall be payable quarterly on each Unutilized Commitment
Fee Payment Date and on the Termination Date; provided, that should the
Commitments be terminated at any time prior to the Termination Date for any
reason, the entire accrued and unpaid Unutilized Commitment Fee shall be paid on
the date of such termination. The Unutilized Commitment Fee for each Bank shall
be computed by (a) multiplying the percentage determined as set forth above by
the average daily Unused Commitment for such Bank in effect on the due date
thereof, (b) dividing the product so obtained by 360, and (c) multiplying the
quotient so obtained, in the case of the Unutilized Commitment Fee due and
payable on the effective date of this Agreement, by the actual number of days in
the period commencing on such effective date and ending on March 31, 1999, and
in the case of each subsequent Unutilized Commitment Fee, the actual number of
days in the calendar quarter for which the Unutilized Commitment Fee is due. The
Unutilized Commitment Fees shall be based upon the Facility Limit available
(without deduction for the Swing Line), even though the Maximum Advance may be a
lesser sum. In the case of any period not constituting a full Fiscal Quarter
(specifically including both the initial and final Fiscal Quarters within which
the Commitment is available), the amount of the Unutilized Commitment Fees shall
be prorated and shall be payable only for the period in which the Commitment is
available.
(c) Extension Fees. Upon the request by the Borrower that the
Commitments be further extended in accordance with the terms and conditions
contained in Section 2.01(c), within 10 days of the written approval of such
request by one or more Banks, the Borrower shall pay to the Agent, for the pro
rata benefit of the Banks approving such Extension request, a non-refundable
Extension Fee of 1/8th of one percent (.125%) of the Facility Limit available
during the Extension of Term for each one-year Extension, irrespective of any
limitations concerning the Maximum Advance then
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applicable. This Extension Fee shall be due and payable with each annual
extension requested by the Borrower and approved by one or more Banks. Nothing
herein shall obligate any Bank to agree to such an extension, and each Bank may
condition its granting of an Extension of Term as described in Section 2.05(c).
(d) Agent's Fees Due Under Letter Agreement. The Borrower shall pay to
the Agent, for the account and sole benefit of the Agent, such fees and other
amounts at such times as set forth in the Agent's Letter Agreement.
(e) Additional Fees; Reimbursement of Expenses.
(i) The Agent shall be entitled to the reimbursement of its
expenses that it shall incur and to the payment of fees that it shall
determine to be reasonable in connection with (x) the administration of
the Borrowing Base Hotel documentation (including, without limitation,
the cost of appraisals, inspections, flood certifications,
environmental reports and other such costs with respect to the
Borrowing Base Hotels), (y) any additions to or deletions from the
Borrowing Base Hotels, and (z) the administration of any documentation
as to the Borrowing Base Hotels that was not delivered on or before the
Closing Date.
(ii) The Borrower shall also pay to the Agent, for the account
of the Banks, a fee equal to the greater of $20,000 or such higher
amount assessed by the Agent with respect to the administration or any
amendment of this Agreement, or with respect to obtaining any waiver or
consent. The first 25% of such fee shall be paid to the Agent, with the
balance distributed to the Banks pro rata based upon their Commitments.
SECTION 2.08. Mandatory Termination of Commitments. The Commitments
shall terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.
SECTION 2.09. Optional and Mandatory Prepayments.
(a) The Borrower may repay any Base Rate Borrowing in whole or in part
at any time, or from time to time, by paying the principal amount to be repaid
together with accrued interest thereon to the date of repayment. Each such
repayment shall be applied to repay ratably the Base Rate Loans of the several
Banks included in such Base Rate Borrowing.
(b) Except as provided in Section 10.02 and except for prepayment
arising out of a reduction in the Maximum Advance, the Borrower may not prepay
all or any portion of the principal amount of any Euro-Dollar Loan prior to the
maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
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(d) At no time shall the principal balance of all Loans outstanding
exceed the Maximum Advance, as calculated from time to time as provided herein.
In the event the outstanding principal balance exceeds such amount, the Borrower
shall immediately repay such excess to the Agent.
SECTION 2.10. Mandatory Prepayments. On each date on which the
Commitments are terminated pursuant to Section 2.08, or on each date a
prepayment is required in order to achieve compliance with the Maximum Advance
permitted hereunder, the Borrower shall repay or prepay such principal amount of
the outstanding Loans, if any together with interest accrued thereon and any
amounts due under Section 10.05(a).
SECTION 2.11. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and interest
on, the Loans and of Unutilized Commitment Fees and other fees due hereunder,
not later than 11:00 A.M. (Atlanta, Georgia time) on the date when due, in
Federal or other funds immediately available in Atlanta, Georgia, to the Agent
at its address referred to in Section 11.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the Base Rate
Loans or of fees shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.
(c) All payments of principal, interest and fees and all other amounts
to be made by the Borrower pursuant to this Agreement with respect to any Loan
or fee relating thereto shall be paid without deduction for, and free from, any
tax, imposts, levies, duties, deductions, or withholdings of any nature now or
at anytime hereafter imposed by any governmental authority or by any taxing
authority thereof or therein excluding in the case of each Bank, taxes imposed
on or measured by its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction of such Bank's applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, imposts, levies, duties, deductions or withholdings of any nature being
"Taxes"). In the event that the Borrower is required by applicable law to make
any such withholding or deduction of Taxes with respect to any Loan or fee or
other amount, the Borrower shall pay such deduction or withholding to the
applicable taxing authority, shall promptly furnish to any Bank in respect of
which such deduction or withholding is made all receipts and other documents
evidencing such payment and shall pay to such
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Bank additional amounts as may be necessary in order that the amount received by
such Bank after the required withholding or other payment shall equal the amount
such Bank would have received had no such withholding or other payment been
made. If no withholding or deduction of Taxes are payable in respect of any Loan
or fee relating thereto, the Borrower shall furnish any Bank, at such Bank's
request, a certificate from each applicable taxing authority or an opinion of
counsel acceptable to such Bank, in either case stating that such payments are
exempt from or not subject to withholding or deduction of Taxes. If the Borrower
fails to provide such original or certified copy of a receipt evidencing payment
of Taxes or certificate(s) or opinion of counsel of exemption, the Borrower
hereby agrees to compensate such Bank for, and indemnify them with respect to,
the tax consequences of the Borrower's failure to provide evidence of tax
payments or tax exemption.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.11, it will pay to the Borrower the amount
of such refund promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.11 shall be applicable with respect to any Participant, Assignee
or other Transferee, and any calculations required by such provisions (i) shall
be made based upon the circumstances of such Participant, Assignee or other
Transferee, and (ii) constitute a continuing agreement and shall survive the
termination of this Agreement and the payment in full or cancellation of the
Notes.
SECTION 2.12. Computation of Interest and Fees. Interest on the Base
Rate Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on Euro-Dollar Loans shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Unutilized Commitment Fees and any other fees payable
hereunder shall be computed on the basis of a year of 360 days an d paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.13. Facility Limit Reduction or Termination by Borrower. The
Borrower shall have the option, from time to time, to reduce the Facility Limit
by $5,000,000 or any greater integral multiple of $1,000,000, by (a) giving
written notice of its election to exercise such option to the Agent no later
than five (5) Domestic Business Days before the date the reduction is to be
effective, and (b) giving such notice of, and making such, prepayment, if any,
as is required by the provisions of Section 2.10 on account of such reduction of
the Facility Limit. In no event shall the Borrower, as a result of any such
election, be entitled to a refund of any fees paid to the Agent or any Bank
hereunder or be entitled thereafter, without the written consent of the Agent
and all Banks, to a restoration of the amount, or any part thereof, by which the
Facility Limit shall have been reduced. Upon receipt of any such written notice,
the Agent shall deliver a copy of the same to each Bank.
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SECTION 2.14. Term Loans Secured by Hotels in Specific States.
(a) Generally. Certain states in which some of the Borrowing Base
Hotels are located impose a mortgage tax upon each borrowing and reborrowing. In
light of the foregoing, the Borrower has elected to borrow (and the Banks have
agreed to permit the Borrower to do so upon the terms and conditions herein set
out) a portion of the Loans as term loans under Term Notes. The original
principal amount of the term loans evidenced by any outstanding Term Notes (not
merely the then-outstanding principal balance of such Term Notes) shall reduce
the amount otherwise available on a revolving basis to the Borrower under
Section 2.01(a). hereof. Any Term Notes shall be payable to the Agent, as agent
for the Banks, and the Agent shall be responsible for paying to each Bank the
pro rata portion of payments made by the Borrower under the Term Notes. The
indebtedness evidenced by the Term Notes shall constitute a portion of the
overall indebtedness evidenced by the Bank Notes and represents funds made
available by the Banks to the Borrower, rather than additional funds advanced by
the Agent to the Borrower.
(b) Collateral for Term Notes. The Term Note reflecting the Allocated
Loan Amount for Hotels in a particular state for which a Term Note is executed
(a "Term Note State") shall be secured by the hotels within such Term Note
State, as well as all other Borrowing Base Hotels. The Deeds of Trust and other
Collateral Documents for each Term Note State, however, secure only the Term
Note for that Term Note State and shall not secure other indebtedness evidenced
by the Notes or the Credit Agreement.
(c) New York Term Note; Florida Term Note; Future Term Notes. As of the
Closing Date, the Borrower has requested that the Allocated Loan Amounts for
Borrowing Base Hotels in Florida and New York be evidenced by two separate Term
Notes: (i) a Term Promissory Note, executed by the Borrower and payable to the
Agent, for the benefit of the Banks, in the amount of $7,700,000 (such note
being referred to as the "New York Term Promissory Note"), with respect to Hotel
#28, Albany, New York (the "New York Hotel"), and (ii) a Term Promissory Note,
executed by the Borrower and payable to the Agent, for the benefit of the Banks,
in the amount of $12,970,000 (such note being referred to as the "Florida Term
Promissory Note"), with respect to Hotel #▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇; Hotel #17, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇; and Hotel #18,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (collectively, the "Florida Hotels"). If
future Borrowing Base Hotels would be subject to recurring mortgage taxes, the
Borrower may request that the Banks permit additional Term Notes. The Banks,
however, in their sole and absolute discretion shall be entitled to not permit
such additional Term Notes.
(d) Principal Reduction of Term Notes; No Reborrowings Except in
Specified Circumstances. To the extent that the principal amount of the Loans
evidenced by the Bank Notes shall be reduced through repayment of principal,
such reductions shall be applied (x) first to all indebtedness evidenced by the
Notes other than the indebtedness evidenced by the Term Notes and, (y) second,
after all other such indebtedness has been repaid, then to indebtedness
evidenced by the Term Notes in such order as the Banks may elect. Any principal
repaid on any Term Note may not
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be reborrowed unless the full amount of such Term Note has been repaid in full,
and all the Borrowing Base Hotels in the Term Note State securing such Term Note
have been released and excluded from the Borrowing Base Value, in which event
the Borrower may borrow, repay and reborrow such sums subject to the terms and
conditions of this Credit Agreement.
ARTICLE III
SECURITY AND COLLATERAL FOR THE LOANS;
CONDITIONS TO BORROWINGS
SECTION 3.01. Typology of Hotels.
(a) Initial Hotels. As of the Closing Date, the Borrower has granted to
the Agent, for the ratable benefit of the Banks, a first lien on the twenty-nine
Initial Hotels.
(b) Additional Hotels. The Borrower owns hotels not securing repayment
of the Loans. In addition, subsequent to the date hereof, the Borrower may
acquire additional hotel properties. Such hotels now owned by the Borrower (but
not constituting Initial Hotels) and such other hotels hereafter acquired are
included within the definition of "Additional Hotels."
The Borrower shall be entitled to utilize Loan proceeds at the time of
acquisition of an Additional Hotel, without contemporaneously granting a first
lien to the Agent on such Additional Hotel and without providing to the Agent or
the Banks any information with respect to such Additional Hotel except as
otherwise required hereby. If the Borrower elects to submit such Additional
Hotel for consideration as a Borrowing Base Hotel, however, the Borrower shall
provide to the Agent the information and documentation (e.g., cost breakdown,
operating statements, budgets, survey, title insurance commitment, environmental
report, appraisals, etc.), in form and scope meeting the requirements for
Borrowing Base Hotels and as may be requested by the Banks at the time of such
request by the Borrower.
If all of Banks agree that such Additional Hotel is to be accepted as a
Borrowing Base Hotel, the Borrower shall execute and cause to be recorded
Collateral Documents (as the Agent deems necessary) with respect to such
Additional Hotel, and shall thereafter promptly provide such related
documentation (for example, the title policy) that can be obtained only after
recordation of a Deed of Trust.
(c) Borrowing Base Hotels. The Banks' right to review and approve
certain matters set out herein differentiate between those hotels that are
"Borrowing Base Hotels" and other hotels. "Borrowing Base Hotels," as defined in
this Agreement, are (i) all Initial Hotels, and (ii) such Additional Hotels, if
any, that all of the Banks, in their sole discretion, have accepted as a
Borrowing Base Hotel. In order for a Hotel to be eligible for approval and
qualification and in order to remain eligible for continued approval and
qualification as a Borrowing Base Hotel, the Hotel (i) must be open and fully
operational and must be owned in its entirety by the Borrower (rather than a
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Subsidiary of the Borrower), (ii) must be subject to a first-priority Lien in
favor of the Agent, (iii) must be free and clear of all Liens and other
encumbrances of any nature whatsoever, except for the first-priority Lien in
favor of the Agent and except for encumbrances acceptable to all of the Banks;
(iv) must be in substantial compliance with all applicable law and regulations
including zoning, Accessibility Laws, and building codes, (v) must have access
to public roadways and all required utilities, (vi) must not be subject to any
environmental contamination that, in the reasonable opinion of Agent, materially
adversely affects the leasing, operation, marketability or value of such Hotel,
(vii) must be subject to a Permitted Operating Lease, under which neither the
Borrower (as lessor) nor the Lessee shall be in default after the expiration of
any applicable cure period set out in such Permitted Operating Lease; (viii)
must be subject to a franchise agreement with an Approved Franchisor, (ix) at
least 90% of all rooms in such Hotel must be in service other than rooms
temporarily unavailable due to renovation, and (x) with the exception of Hotel
#19 located in Secaucus, New Jersey, must not be subject to a Major Ground
Lease. [Items (i) through (ix) are herein referred to as the "Qualifying
Criteria."] The Banks shall have sole and absolute discretion in determining
whether to accept the offered hotel as a "Borrowing Base Hotel" and, in their
sole discretion, may reject a Hotel meeting the foregoing criteria. In that
regard, the Banks can take into consideration any additional factors the Banks
deem pertinent, in their sole and absolute discretion. Prior to determining
whether to accept a hotel as a Borrowing Base Hotel, the Banks (i) shall be
provided all underwriting documentation for each such hotel received in
connection with an Initial Hotel (appraisal, environmental reports, title
policy, "as-built" survey, etc.), (ii) shall have the right to review and
approve the lessee, the Rent schedule, and Lease associated with such hotel, and
(iii) shall have a right of review/approval over all other matters for which the
Banks may deem pertinent, in their sole discretion. The Borrower is not
obligated to offer any Additional Hotel to the Banks for consideration as a
Borrowing Base Hotel. If the Borrower has requested that the Banks accept an
Additional Hotel as a Borrowing Base Hotel and has submitted all documentation
required hereby for such consideration, the Agent shall within 30 days of its
receipt of such request and required supporting information inform the Borrower
whether all of the Banks have accepted such hotel as a Borrowing Base Hotel.
Failure of the Agent to inform the Borrower in writing that a Hotel has been
accepted as a Borrowing Base Hotel shall constitute a rejection by the Banks of
such Hotel as a Borrowing Base Hotel.
(i) The Required Banks shall have the right, in their reasonable
discretion, to revoke their prior approval of any property as a Borrowing Base
Hotel which the Required Banks determine no longer meets the Qualifying Criteria
described in 3.01(c) above. The Agent shall provide the Borrower with written
notice of any such revocation.
(ii) The Borrower shall have the right, within thirty (30) days after
notice of the Banks' revocation of approval of Borrowing Base Hotel, to
designate substitute property or additional property for the Banks'
consideration for approval as Borrowing Base Hotel.
COVENANTS PROVIDED FOR HEREIN WITH RESPECT TO THE INITIAL HOTELS SHALL
BE AUTOMATICALLY APPLICABLE TO ANY ADDITIONAL HOTEL THAT BECOMES A BORROWING
BASE HOTEL.
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(d) Contested/Not Completed Hotels. Four of the Initial Hotels being
developed by the Borrower (those constituting the Contested/Not Completed
Hotels) either (i) have liens relative thereto filed against such Hotel by one
or more contractors, the amounts of which are being contested by the Borrower,
or (ii) are recently completed and are Hotels for which the contractors have not
been fully paid pending completion of punchlist matters and other work. The
Banks have elected to treat such Contested/Not Completed Hotels as Borrowing
Base Hotels even though title coverage is not available as to matters of liens
generally (in certain cases) and as to specific liens (in other cases), provided
the Borrower agrees as follows:
(i) Except with respect to Hotel #▇▇ (▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇), in each loan title policy issued with respect to
any Contested/Not Completed Hotel, any exception for liens generally
and as to each specific lien and civil action constituting an exception
to title shall be deleted on or before December 31, 1999. Except with
respect to Hotel #24, any liens remaining of record on such date shall
be bonded off by the Borrower pursuant to indemnity bonds discharging
such liens and allowing the title company to provide such title
coverage. Simultaneously with the submission of each Compliance
Certificate each Fiscal Quarter, the Borrower shall provide to each
Bank a status report as to liens and pending claims by contractors with
respect to Hotel #24. Such report shall provide detailed information as
to the status of any pending claims and liens, including litigation or
arbitration proceedings with respect to such claims and liens, as well
as the Borrower's projected timetable for the resolution of such claims
and liens. The Borrower agrees to use reasonable, diligent efforts to
resolve the claims of contractors upon terms acceptable to the
Borrower. Provided the Banks are satisfied with the scope and detail of
such reports, on December 31, 1999, the Banks shall extend the period
for resolution of such claims and liens with respect to Hotel #24 to
December 31, 2000. If the Banks are not so satisfied by the information
tendered by the Borrower, or if the claims and liens are not resolved
on or before December 31, 2000, the Banks may elect to exclude such
hotel from the Borrowing Base Value computation. Failure to satisfy the
Completion Requirements as to Hotel #24, however, shall not be an Event
of Default hereunder.
(ii) Any Completion Requirements as to such Contested/Not
Completed Hotels (other than with respect to liens as described in (i)
or with respect to the Certificate of Substantial Completion for Hotel
#24) shall be satisfied on or before March 31, 1999.
(iii) Any Contested/Not Completed Hotel shall be treated as a
Non-Stabilized Borrowing Base Hotel and shall not qualify as a
Stabilized Borrowing Base Hotel until the Completion Requirements for
such Hotel are satisfied.
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SECTION 3.02. Collateral Release Provisions. If the Borrower seeks to
obtain the release of a Borrowing Base Hotel, the Borrower shall provide to the
Agent and the Banks a replacement Borrowing Base Value Certificate reflecting
the deletion of such hotel from the calculations of the Borrowing Base Value, as
previously described in Section 2.01(b). The Agent shall not release such hotel
until the Agent (i) has reviewed and approved such Borrowing Base Value
Certificate and (ii) has determined that the principal balance outstanding under
the Loans shall not exceed the Maximum Advance after giving effect to the
release. The Borrower may obtain a release of any Borrowing Base Hotel or
Borrowing Base Hotels, provided (x) a Borrowing Base Hotel Release Entitlement
Event has occurred, (y) provided there is no existing Default hereunder and the
release of such Hotel would not cause a Default or an Event of Default to occur;
and also (z) provided that one of the following conditions, as selected by the
Borrower, in its sole discretion, is satisfied:
(i) Substitute Hotel. If the Borrower selects this option, the
Borrower shall deliver to the Banks another hotel or hotels
acceptable to all of the Banks to serve as a "Borrowing Base
Hotel" (a "Substitute Hotel"), in which case the pro forma
Borrowing Base Value Certificate shall reflect the inclusion
of such hotel in the calculations of the Maximum Advance, and
the Borrower shall provide the documentation necessary for the
Banks to consider such hotel as a Borrowing Base Hotel.
(ii) Alternative Collateral. If the Borrower selects this option,
the Banks shall receive alternative collateral for release of
a Borrowing Base Hotel, such alternative collateral to be
satisfactory to all of the Banks in their sole and absolute
discretion.
(iii) Reduction of Maximum Advance. If the Borrower selects this
option, the Borrower shall be entitled to a release of any
Borrowing Base Hotel upon a reduction in the Maximum Advance
as reflected in the revised Borrowing Base Value Certificate
submitted by the Borrower calculating the Borrowing Base Value
and the Maximum Advance. Should the Loans then outstanding
exceed the Maximum Advance as evidenced by the approved
replacement Borrowing Base Value Certificate, the Borrower
shall immediately repay the outstanding principal balance by
such excess
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on or before the release of such Hotel. The reduction in the
Maximum Advance shall be effective upon the release of such
Hotel. The Agent shall not be obligated to release such a
Hotel until any repayment required hereunder has occurred.
"Borrowing Base Hotel Release Entitlement Event" as to any Borrower
Base Hotel means any one or more of the following events: (i) such Borrowing
Base Hotel is being sold by the Borrower in a commercially reasonable
transaction to a third party that is unrelated to the Borrower, any Subsidiary,
or any of the principal shareholders of the Company (or partners in the case of
the Partnership) or its Subsidiaries; (ii) such Borrowing Base Hotel is being
contributed to or transferred to a partnership or a joint venture in which the
Partnership or the Company is a partner or a joint venturer in a commercially
reasonable transaction with a third party that is unrelated to the Borrower, any
Subsidiary, or any of the principal shareholders of the Company (or partners in
the case of a Partnership) or its Subsidiaries; or (iii) such Borrowing Base
Hotel is being refinanced through a loan to be secured by a deed of trust
encumbering such Borrowing Base Hotel in a commercially reasonable transaction
with a third party institutional lender that is unrelated to the Borrower, any
Subsidiary, or any of the principal shareholders of the Company (or partners in
the case of a Partnership) or its Subsidiaries.
If a Borrowing Base Hotel located in a Term Note State is released
pursuant to the foregoing provisions, the Allocated Loan Amount for such
Borrowing Base Hotel shall be deemed to have been deducted from the principal
amount of the Term Note secured by such Borrowing Base Hotel, and the Borrower
shall be entitled to thereafter borrow, repay, and reborrow such Allocated Loan
Amount from the Banks, subject to the satisfaction of the other terms and
conditions of this Credit Agreement.
SECTION 3.03. Conditions of Closing and to First Borrowing. The
obligation of each Bank to make a Loan on the occasion of the closing of this
credit facility and the first Borrowing hereunder is subject to the satisfaction
of the conditions set forth in Section 3.04 and the following additional
conditions:
(a) receipt by the Agent from each of the parties hereto of
either (i) a duly executed counterpart of this Agreement signed by such
party or (ii) a facsimile transmission of the executed signature page
accompanied by a statement that such party has duly executed a
counterpart of this Agreement and sent such counterpart to the Agent;
(b) receipt by the Agent of a duly executed Note for the
account of each Bank complying with the provisions of Section 2.04;
(c) receipt by the Agent of (i) an opinion (together with any
opinions of local counsel relied on therein) of ▇▇▇▇▇ and Bunch,
counsel for the Borrower, dated as of the Closing Date, substantially
in the form of Exhibit C hereto and covering such additional matters
relating to the transactions contemplated hereby as the Agent or any
Bank may reasonably request and (ii) opinions as to enforceability and
related matters of the Deeds of Trust and
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other documents with respect to the Agent's security interest in and
lien upon the Borrowing Base Hotels;
(d) receipt by the Agent of an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC, special counsel for the Agent, dated as of the
Closing Date, substantially in the form of Exhibit D hereto and
covering such additional matters relating to the transactions
contemplated hereby as the Agent may reasonably request;
(e) receipt by the Agent of a certificate (the "Closing
Certificate"), dated the date of the first Borrowing, substantially in
the form of Exhibit D hereto, signed by the principal financial officer
of the Borrower, to the effect that (i) no Default has occurred and is
continuing on the date of the first Borrowing and (ii) the
representations and warranties of the Borrower contained in Article IV
are true on and as of the date of the first Borrowing hereunder, and
including (x) Certificate of Borrowing Base Values in the form attached
hereto as Exhibit I, (y) a calculation of the Leverage Ratio as of the
Closing Date, and (z) a Certificate of Compliance as of the Fiscal
Quarter ended prior to the date hereof;
(f) receipt by the Agent of all documents which the Agent or
any Bank may reasonably request relating to the existence of the
Borrower, the corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant hereto, all in
form and substance satisfactory to the Agent, including without
limitation a certificate of incumbency of the Borrower (the "Officer's
Certificate"), signed by the Secretary or an Assistant Secretary of the
Company, substantially in the form of Exhibit E hereto, certifying as
to the names, true signatures and incumbency of the officer or officers
of the Company authorized to execute and deliver the Loan Documents on
behalf of the Company and the Partnership, and certified copies of the
following items: (i) the Company's Articles of Incorporation, (ii) the
Company's Bylaws, (iii) a certificate of the Secretary of State of the
State of North Carolina as to the good standing of the Company as a
North Carolina corporation, (iv) a Certificate of Limited Partnership
for the Partnership issued by the Secretary of State for North
Carolina, and (v) the action taken by the Board of Directors of the
Company authorizing on behalf of the Company and on behalf of the
Partnership the Borrower's execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to which the Company
and the Partnership are a party;
(g) receipt by the Agent of a Notice of Borrowing;
(h) receipt and recordation of the Deeds of Trust and receipt
and recordation or filing (as the Agent deems appropriate) of other
Collateral Documents required by the Agent with respect to each of the
Initial Hotels;
(i) receipt of certified copies of the executed Leases, any
Management Agreements, Franchise Agreements, and other documentation
required hereunder for the Initial Hotels. The form and substance of
such Leases (including the base rents and percentage rents due
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thereunder) and other documents affecting the operation of the hotels
described herein are subject to the Banks' acceptance;
(j) receipt by the Agent of the Up Front Fee required by
Section 2.07(a) hereunder; and
(k) receipt of such other documents, instruments, opinions,
and agreements as the Agent or the Banks may require in their
discretion, specifically including (but not limited to) all those items
required hereunder.
The initial Borrowing shall be sufficient to pay the principal
amount of all Prior Indebtedness in full, and Borrower and the Agent
shall have made arrangements satisfactory to the Agent (a) for the
proceeds of such Loan to be applied, to the extent required, to pay
such principal amount of the Prior Indebtedness, and (b) for Borrower
to pay immediately all accrued and unpaid interest and unused
commitment fees owing on account of the Prior Indebtedness.
SECTION 3.04. Conditions to All Borrowings. The obligation of each Bank
to make a Loan on the occasion of each Borrowing is subject to the satisfaction
of the following conditions:
(a) receipt by the Agent of Notice of Borrowing as required by
Section 2.02 unless the Borrowing is a "rollover borrowing" described
in Section 2.02(f);
(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and
as of the date of such Borrowing; and
(d) the fact that, immediately after such Borrowing (i) the
aggregate outstanding principal amount of the Loans of each Bank will
not exceed the amount of its Commitment and (ii) the aggregate
outstanding principal amount of the Loans will not exceed the Maximum
Advance or the Facility Limit for all of the Banks as of such date.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in clauses (b), (c) and (d) of this Section; provided that such
Borrowing shall not be deemed to be such a representation and warranty to the
effect set forth in Section 4.04(b) as to any event, act or condition having a
Material Adverse Effect which has theretofore been disclosed in writing by the
Borrower to the Banks if the aggregate outstanding principal amount of the Loans
immediately after such Borrowing will not exceed the aggregate outstanding
principal amount thereof immediately before such Borrowing.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
The Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, is duly qualified to transact business in every jurisdiction where,
by the nature of its business, such qualification is necessary, and has all
partnership powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 4.02. Corporate, Partnership and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Notes and the other Loan Documents (i) are within the Company's
corporate powers and the Partnership's partnership powers, (ii) have been duly
authorized by all necessary corporate and partnership action, (iii) require no
action by or in respect of, or filing with, any governmental body, agency or
official, (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of the Company or the partnership agreement for the Partnership or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Borrower or any of its Subsidiaries, and (v) do not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries other than the Liens securing the Loans.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes and the other Loan Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower as of December 31,
1997, and the related consolidated statements of income, shareholders' equity
and cash flows for the Fiscal Year then ended, audited by PriceWaterhouse
Coopers LLP, copies of which have been delivered to each
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of the Banks, and the unaudited consolidated financial statements of the
Borrower for the interim period ended September 30, 1998, copies of which have
been delivered to each of the Banks, fairly present, in conformity with GAAP,
the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated.
(b) Since September 30, 1998, there has been no event, act, condition
or occurrence having a Material Adverse Effect other than has been disclosed in
writing to each Bank prior to the Closing Date, such notices set out in Schedule
4.04 attached hereto.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Borrower threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have a Material Adverse Effect
or which in any manner draws into question the validity or enforceability of, or
could impair the ability of the Borrower to perform its obligations under, this
Agreement, the Notes or any of the other Loan Documents. There is no litigation
pending against the Borrower or any of its Subsidiaries or with respect to any
Borrowing Base Hotel (specifically including, but not limited to, liens filed)
or Lease with respect thereto, except as described in Schedule 4.05 attached
hereto.
SECTION 4.06. Compliance with ERISA.
(a) The Borrower and each member of the Controlled Group have fulfilled
their obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and have not incurred any
liability to the PBGC or a Plan under Title IV of ERISA.
(b) Neither the Borrower nor any member of the Controlled Group is or
ever has been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Taxes. There have been filed on behalf of the Borrower
and its Subsidiaries all Federal, state and local income, excise, property and
other tax returns which are required to be filed by them and all taxes due
pursuant to such returns or pursuant to any assessment received by or on behalf
of the Borrower or any Subsidiary have been paid. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Borrower, adequate.
SECTION 4.08. Subsidiaries. Each of the Borrower's Subsidiaries is a
corporation or partnership duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, is duly qualified to
transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary, and has all powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The
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Borrower has no Subsidiaries except those Subsidiaries listed on Schedule 4.08
attached hereto, which accurately sets forth each such Subsidiary's complete
name and jurisdiction of incorporation.
SECTION 4.09. Not an Investment Company. Neither the Borrower nor any
of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither the Borrower
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", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has title to its properties sufficient for the conduct of its
business, and none of its hotels is subject to any Lien except as permitted in
this Agreement and as described in Schedule 4.11 attached hereto and
incorporated herein by reference. Except for certain telephone equipment and
vehicles used in the operation of the Secaucus New Jersey Holiday Inn (Hotel
#19), each of the Borrower and its Subsidiaries has title to all personal
property required for the operation of its Hotels, free and clear of any
security interests of third parties other than the Agent and (in the case of
property owned by the Special Purpose Entity) the Conduit Lender.
SECTION 4.12. No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound which could have or cause a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All information heretofore furnished by
the Borrower to the Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by the Borrower to the Agent or any Bank will be, true,
accurate and complete in every material respect or based on reasonable estimates
on the date as of which such information is stated or certified. The Borrower
has disclosed to the Banks in writing any and all facts which could have or
cause a Material Adverse Effect.
SECTION 4.14. Environmental Matters.
(a) Except as disclosed in the Environmental Reports, neither the
Borrower nor any Subsidiary is subject to any Environmental Liability which
could have or cause a Material Adverse Effect and neither the Borrower nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. None of the Properties has been
identified on any current or proposed (i) National Priorities List under 40
C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list arising from a state statute
similar to CERCLA.
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(b) Except as disclosed in the Environmental Reports, no Hazardous
Materials have been or are being used, produced, manufactured, processed,
treated, recycled, generated, stored, disposed of, managed or otherwise handled
at, or shipped or transported to or from the Properties or are otherwise present
at, on, in or under the Properties, or, to the best of the knowledge of the
Borrower, at or from any adjacent site or facility, except for Hazardous
Materials, such as cleaning solvents, pesticides and other materials used,
produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, and managed or otherwise handled in minimal amounts in the ordinary
course of business in compliance with all applicable Environmental Requirements.
(c) The Borrower, and each of its Subsidiaries and Affiliates, has
procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in connection
with the operation of the Properties and the Borrower's, and each of its
Subsidiary's and Affiliate's, respective businesses.
SECTION 4.15. Compliance with Laws. The Borrower and each Subsidiary is
in compliance with all applicable laws, including, without limitation, all
Environmental Laws, except where any failure to comply with any such laws would
not, alone or in the aggregate, have a Material Adverse Effect.
SECTION 4.16. Capital Stock. All Capital Stock, debentures, bonds,
notes and all other securities of the Borrower and its Subsidiaries presently
issued and outstanding are validly and properly issued in accordance with all
applicable laws, including, but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws. The issued shares of Capital
Stock of the Borrower's Wholly Owned Subsidiaries are owned by the Borrower free
and clear of any Lien or adverse claim. At least a majority of the issued shares
of Capital Stock of each of the Borrower's other Subsidiaries (other than Wholly
Owned Subsidiaries) is owned by the Borrower free and clear of any Lien or
adverse claim.
SECTION 4.17. Margin Stock. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or be used for any purpose which violates, or which is inconsistent with,
the provisions of Regulation X.
SECTION 4.18. Insolvency. After giving effect to the execution and
delivery of the Loan Documents and the making of the Loans under this Agreement,
the Borrower will not be "insolvent," as defined in ss. 101 of Title 11 of the
United States Code or Section 2 of the Uniform Fraudulent Transfer Act, or any
other applicable state law pertaining to fraudulent transfers, as each may be
amended from time to time, or be unable to pay its debts generally as such debts
become due, or have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated.
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SECTION 4.19. Americans with Disabilities Act. The Borrower, to the
best of its knowledge, (but without any claim of expert knowledge as to
Accessibility Laws and without engaging consultants having such knowledge), is
in compliance with the Accessibility Laws, except as disclosed to the Banks in
writing. The Borrower agrees to notify the Agent of any grievance, complaint or
governmental investigation into whether the Borrower is in compliance with the
Accessibility Laws. The Borrower agrees to indemnify and hold the Banks harmless
from any loss, cost or expense in fact incurred by the Banks as a result of such
a violation of the Accessibility Laws.
SECTION 4.20. Compliance with Certain Lease Provisions. The Borrower
has spent or set aside all sums required to be spent or set aside under the
Leases and has paid to the Lessee all sums required to be paid to the Lessee as
room reserves under the Leases.
SECTION 4.21. Condemnation Awards. Subject to the terms and conditions
of each Lease, the Borrower agrees to pay to the Agent for the pro rata benefit
of the Banks sums equal to 125% of the Allocated Loan Amount for any Borrowing
Base Hotel subject to a taking or condemnation or deed in lieu of condemnation.
The terms and conditions of paragraph 6 of each Nondisturbance, Subordination
and `Attornment Agreement between the Partnership, a lessee, and the Agent with
respect to a Borrowing Base Hotel are incorporated herein by reference as if
fully set forth herein.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Company will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the
Company as of the end of such Fiscal Year and the related statements of
income, shareholders' equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the
previous Fiscal Year, all audited by PriceWaterhouse Coopers LLP or
other independent public accountants of nationally recognized standing,
and whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified in any manner, except as acceptable to the
Required Banks. In addition, the Company shall concurrently provide
such annual information as to the Special Purpose Entity separate and
apart from other entities consolidated in the financial statements
provided.
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(b) as soon as available and in any event within 55 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Company as of the end of such Fiscal
Quarter and the related statement of income for such Fiscal Quarter and
for the portion of the Fiscal Year ended at the end of such Fiscal
Quarter setting forth in each case in comparative form the figures for
the corresponding Fiscal Quarter and the corresponding portion of the
previous Fiscal Year. In addition, the Company shall concurrently
provide such quarterly information as to the Special Purpose Entity
separate and apart from other entities consolidated in the financial
statements provided.
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of
the chief financial officer or the chief accounting officer of the
Company (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Article VII and such other requirements of the
Agreement as may be requested by the Agent or the Banks on the date of
such financial statements and (ii) stating whether any Default exists
on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto. In addition,
simultaneously with the delivery of the Compliance Certificate, such
officer shall deliver a Borrowing Base Value Certificate substantially
in the form of Exhibit I.
In addition, simultaneously with the financial statements
referred to in Section 5.01 (a) and (b) above, the Company shall
provide (i) a report listing and describing all newly acquired
properties of the Borrower and its Subsidiaries, including their cash
flow, cost and Debt (if any) secured by such properties, and the record
owner for such properties, (ii) a report listing all capital
expenditures of the Borrower and its Subsidiaries, and (iii) a summary
of property information for all properties of the Borrower and its
Subsidiaries and such other information as may be requested by the
Agent to evaluate any certificates delivered hereunder.
(d) simultaneously with the delivery of each set of annual
financial statements referred to in Section 5.01 (a) above, a statement
of the firm of independent public accountants which reported on such
statements to the effect that nothing has come to its attention to
cause it to believe that any Default existed on the date of such
financial statements.
(e) As to any Borrowing Base Hotel, the Company shall promptly
provide to the Agent and the Banks such information as to the Lessee
and any guarantor of the Leases with respect to Borrowing Base Hotels
(collectively, the "Borrowing Base Lessee Parties"), as is provided by
the Borrowing Base Lessee Parties under the Permitted Operating Leases
for such Borrowing Base Hotel.
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(f) within 5 Domestic Business Days after receipt by the
Company or any Subsidiary, a copy of any correspondence from the
independent certified public accountants preparing the certificate
referenced in Section 5.01(a) or (d) constituting a criticism of, or a
notice of deficiency in, the internal accounting practices or
procedures of the Company or its Subsidiaries.
(g) within 5 Domestic Business Days after the Company becomes
aware of the occurrence of any Default, a certificate of the chief
financial officer or the chief accounting officer of the Company
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto.
(h) promptly upon the mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports and
proxy statements so mailed.
(i) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Company shall have filed with
the Securities and Exchange Commission.
(j) if and when the Borrower or any member of the Controlled
Group (i) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect
to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required
to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or
(iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan, a copy
of such notice.
(k) promptly after the Borrower knows of the commencement
thereof, notice of any litigation, dispute or proceeding or the filing
of a Lien, involving a claim against the Borrower and/or any Subsidiary
for $250,000 or more. In addition, the Borrower shall provide periodic
update reports as to any such matters previously reported by the
Borrower.
(l) from time to time such additional information regarding
the financial position, business plans, budget forecasts or business of
the Borrower and its Subsidiaries as the Agent, at the request of any
Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. The Borrower
will (i) keep, and will cause each Subsidiary to keep, proper books of record
and account in which full, true and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to its business and
activities; and (ii) permit, and will cause each Subsidiary to permit,
representatives of any Bank at such Bank's expense prior to the occurrence of an
Event of Default
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and at the Borrower's expense after the occurrence of an Event of Default to
visit and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants. The Borrower agrees to cooperate
and assist in such visits and inspections, in each case at such reasonable times
and as often as may reasonably be desired.
SECTION 5.03. Required Room Reserves. The Borrower shall establish, and
shall make available to each Lessee on each of its leased Hotels or shall set
aside for each such leased Hotel Required Room Reserves to be expended by the
Lessee or the Borrower for the restoration and refurbishment of the Hotel for
which the Required Room Reserve was established pursuant to the terms of the
Lease with respect to each such Hotel.
SECTION 5.04. Maintenance of Property. The Borrower shall, and shall
cause each Subsidiary to, maintain each of its Properties and assets in good
condition, repair and working order, ordinary wear and tear excepted and
specifically shall (and cause each Subsidiary to) ensure that each Property is
renovated periodically in the manner appropriate for the industry and maintain
each of its Properties in a fully competitive position. Except for telephone
equipment and vehicles leased in connection with the Secaucus New Jersey Holiday
Inn (Hotel #19), the Borrower shall, and shall cause each Subsidiary to, own all
personal property required for operation of its Hotels free and clear of the
security interests of third parties other than the Agent and, in the case of the
Conduit Debt Hotels, the Conduit Lender.
SECTION 5.05. Maintenance of Existence. The Borrower shall, and shall
cause each Subsidiary to, maintain its existence as a corporation (in the case
of the Company) and as a partnership (in the case of the Partnership) and carry
on its business in substantially the same manner and in substantially the same
fields as such business is now carried on and maintained. The Company shall
maintain its status as a Real Estate Investment Trust and shall be in compliance
with all applicable laws with respect to Real Estate Investment Trusts as well
as other applicable laws. The Borrower shall not make any material modifications
to its partnership agreement (in the case of the Partnership) or to its articles
of incorporation or by-laws (in the case of the Company) without the prior
written consent of the Required Banks. The issuance of limited partnership
interests in the Partnership shall not constitute a "material modification" to
the Partnership's partnership agreement.
SECTION 5.06. Sole General Partner. The Company shall at all times be
the sole general partner of the Partnership.
SECTION 5.07. Compliance with Laws; Payment of Taxes. The Borrower
will, and will cause each of its Subsidiaries and each member of the Controlled
Group to, comply with applicable laws (including but not limited to the
Accessibility Laws and ERISA), regulations and similar requirements of
governmental authorities (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued. The Borrower will, and will cause
each of its Subsidiaries to, pay promptly when
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due all taxes, assessments, governmental charges, claims for labor, supplies,
rent and other obligations which, if unpaid, might become a lien against the
property of the Borrower or any Subsidiary, except liabilities being contested
in good faith by appropriate proceedings diligently pursued and against which,
if requested by the Agent, the Borrower shall have set up reserves in accordance
with GAAP.
SECTION 5.08. Insurance. The Borrower will maintain, and will cause
each of its Subsidiaries and Lessees to maintain (either in the name of the
Borrower or in such Subsidiary's own name), with financially sound and reputable
insurance companies, insurance on all its Property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business.
In addition, the Borrower shall satisfy all requirements for insurance set out
in each Deed of Trust with respect to each Borrowing Base Hotel.
SECTION 5.09. Environmental Notices. The Borrower shall furnish to the
Banks and the Agent prompt written notice of all Environmental Liabilities,
pending, threatened or anticipated Environmental Proceedings, Environmental
Notices, Environmental Judgments and Orders, and Environmental Releases at, on,
in, under or in any way affecting the Properties or any adjacent property, and
all facts, events, or conditions that could lead to any of the foregoing. The
provisions of this Section, and Section 6.14 and 5.10, are applicable to all
Properties owned by the Borrower and any Subsidiary, and are not restricted to
Borrowing Base Hotels. Additional requirements with respect to environmental
matters are set out in each Deed of Trust encumbering a Borrowing Base Hotel.
SECTION 5.10. Environmental Reports; Environmental Release.
(a) The Borrower shall prepare or cause to be prepared, prior
to the acquisition of each Hotel by the Borrower or any Subsidiary, an
environmental report by an environmental firm approved by the Agent.
Each environmental report must be in scope and detail comparable to
that required by the Agent for each Initial Hotel. The foregoing
covenant applies to all Hotels acquired by the Borrower and each
Subsidiary, and is not limited to Borrowing Base Hotels.
(b) The Borrower agrees that upon the occurrence of an
Environmental Release at or on any of the Properties it will act
immediately to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether or
not ordered or otherwise directed to do so by any Environmental
Authority.
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SECTION 5.11. Upstream of Cash Flow from Special Purpose Entity. The
Borrower shall cause the Special Purpose Entity to remit to the Partnership at
least once each calendar month, to the extent available and to the extent
permitted by the loan documents executed by the Special Purpose Entity cash
receipts from the leases of its hotels received during the month after deducting
therefrom the following: principal and interest payments made on the Conduit
Debt, all expenses incurred by the SPE for the operation of its Hotels including
the payment of property taxes and insurance premiums, sums required to maintain
reserves required under the Conduit Debt loan documents and any other reserves,
including working capital reserves (such other reserves, exclusive of the
reserves required to be established under the Conduit Debt loan documents, not
to exceed $500,000 in the aggregate).
SECTION 5.12. Special Purpose Entity to Remain a Subsidiary
Consolidated with the Borrower. The Borrower shall cause the Special Purpose
Entity to remain a Subsidiary whose operations are Consolidated with the
Borrower under GAAP.
SECTION 5.13. Intercompany Transactions. Any and all transactions,
agreements or undertakings of any nature whatsoever between Borrower or any
Related Party, on the one hand, and any Affiliate of such Person, on the other
hand, shall be arms-length and upon terms and conditions at least as favorable
to Borrower or such Related Party, as the case may be, as could reasonably be
obtained in a similar transaction with a party that is not an Affiliate of such
Person.
SECTION 5.14. Notice of Exercise of Remedies Under Deeds of Trust.
Borrower shall give prompt written notice to the Agent and the Banks of the
giving of a notice of any event of default under any deed of trust or loan
agreement to which the Borrower or any Subsidiary is a party by the holder
thereof, or upon the holder of any such indebtedness or deed of trust taking any
action to enforce its rights and remedies thereunder, including, without
limitation, any self-help or judicial remedies with respect to collateral or any
legal action to collect any indebtedness.
SECTION 5.15. Notice of Default of any Lease. The Borrower shall
provide to the Agent and to the Banks (i) any notice of any default received by
the Borrower from a Lessee claiming that the lessor is in default under a Lease,
and (ii) any notice of any default sent by the Borrower to a Lessee claiming
that the Lessee is in default under a Lease.
SECTION 5.16. Guaranty by Subsidiaries. The Borrower shall cause any
Subsidiary of the Borrower other than the Special Purpose Entity to execute a
guaranty agreement (in form and substance approved by the Agent) guaranteeing
the repayment of all principal, interest, fees and other sums due under this
Agreement and the Notes.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
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SECTION 6.01. Base Rent and Percentage Rent of Hotel Leases. The
Borrower shall not reduce the Base Rents or Percentage Rents as to any of the
Leases with respect to the Borrowing Base Hotels without the prior written
consent of a Supermajority of Banks.
SECTION 6.02. Prohibition of Secured Debt on Borrowing Base Hotels. The
Borrower may not incur Debt secured by a Lien on the Borrowing Base Hotels other
than the Liens in favor of the Banks.
SECTION 6.03. Contingent Liabilities. The Borrower and any Subsidiaries
or corporate or partnership entities constituting Related Parties of the
Borrower may not guaranty the obligations of any party, become obligated for the
obligations of any other party as a result of becoming a partner or a joint
venturer or incur contingent liabilities or contingent debt other than (i)
contingent liability with respect to performance obligations, as distinct from
Debt, arising under franchise agreements for its Hotels, (ii) potential
contingent liabilities incurred by the Borrower pursuant to the Joinder
Agreement to be executed in connection with the Conduit Debt, (iii)
indemnification obligations of the Borrower to the title company insuring the
properties securing the Conduit Debt, and (iv) indemnification obligations of
the Borrower under this Credit Agreement and other documents now or hereafter
executed in connection with the Loans.
SECTION 6.04. Limitation on Hotels under Development. The sum of (i)
the aggregate cost (including construction in progress and estimated remaining
costs to complete) of all hotels under construction which are owned by the
Borrower and its Subsidiaries and (ii) the aggregate obligations of the Borrower
and its Subsidiaries to purchase hotels under construction (including
construction in progress and estimated remaining costs to complete) shall not
exceed 25% of Total Value. Notwithstanding the foregoing, at all times the
funding available under the Loans pursuant to the terms hereof and such other
sources available to the Borrower must be sufficient to pay for the Hotels under
development or under contract for purchase.
SECTION 6.05. No Material Modifications to Permitted Operating Leases;
Percentage of Rooms Leased Under Permitted Operating Leases.
(a) The Borrower shall not make significant or material modifications
or amendments to any Permitted Operating Lease.
(b) The percentage of the total rooms in all hotels of the Borrower and
its Subsidiaries that are leased under Permitted Operating Leases shall not be
less than 85% of all rooms in hotels of the Borrower and its Subsidiaries.
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SECTION 6.06. Limitations on Foreign Investments and Investments in
Ventures. Investments in, advances to, and loans to any joint venture or entity
other than a Wholly Owned Subsidiary, plus the investment in hotels located
outside of the continental United States, shall not exceed 10% of Total Value.
SECTION 6.07. Major Ground Lease Limitations. No more than 10% of Total
Value shall consist of hotels subject to a Major Ground Lease.
SECTION 6.08. Limitation on Dividends and Distributions. The Borrower
shall not permit the aggregate amount of dividends and distributions paid for
any of the most recent four Fiscal Quarters to exceed 90% of the Funds From
Operations for such Fiscal Quarters, provided that Borrower may, so long as a
Default does not exist, pay the minimum amount of dividends required to maintain
its status as a real estate investment trust under the Code.
SECTION 6.09. Limitation on Floating Rate Debt. The Borrower shall not
permit the principal amount of Floating Rate Debt of the Borrower and any
Subsidiary that is not subject to an interest rate cap, a swap or other interest
rate protection that shall have the economic effect of insulating the Borrower
from increases in interest rates to exceed 50% of the Consolidated Total
Indebtedness.
SECTION 6.10. Dissolution. Neither the Borrower nor any of its
Subsidiaries shall undertake or commence a plan of dissolution or suffer or
permit dissolution or liquidation either in whole or in part or redeem or retire
any shares of its own stock or that of any Subsidiary, except through corporate
reorganization to the extent permitted by Section 5.05.
SECTION 6.11. Consolidations, Mergers and Sales of Assets. The Borrower
will not, nor will it permit any Subsidiary to, consolidate or merge with or
into, or sell, lease or otherwise transfer all or any substantial part of its
assets to, any other Person, unless (i) the Company or Partnership is the
surviving entity under any such transaction, (ii) such transaction does not
create a Default or Event of Default hereunder, and (iii) to the extent that
such transaction is a merger that is otherwise prohibited hereby, the
Supermajority of Banks shall consent to such transaction.
SECTION 6.12. Use of Proceeds. No portion of the proceeds of the Loans
will be used by the Borrower or any Subsidiary (i) in connection with, either
directly or indirectly, any tender offer for, or other acquisition of, stock of
any corporation with a view towards obtaining control of such other corporation,
(ii) directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock, or (iii) for any purpose
in violation of any applicable law or regulation.
SECTION 6.13. Change in Fiscal Year or Fiscal Quarters. The Borrower
will not change its Fiscal Year or Fiscal Quarters without the consent of the
Required Banks.
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SECTION 6.14. Environmental Matters. The Borrower and its Subsidiaries
will not, and will not permit any Third Party to, use, produce, manufacture,
process, treat, recycle, generate, store, dispose of, manage at, or otherwise
handle or ship or transport to or from the Properties any Hazardous Materials
except for Hazardous Materials such as cleaning solvents, pesticides and other
similar materials used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed, managed or otherwise handled in minimal amounts in
the ordinary course of business in compliance with all applicable Environmental
Requirements.
With respect to any Hotels that Environmental Reports disclose as
having asbestos or asbestos-containing material within the Property, the
Borrower agrees to establish an operations and maintenance plan satisfactory to
the Required Banks (the "O&M Plans") so as to minimize the risks associated with
such asbestos. The Banks may require periodic inspection of such Hotels in order
to assess such condition and to assess compliance with such O&M Plans and may
require modifications to the O&M Plans as necessary to minimize or eliminate
such risks.
SECTION 6.15. Operations. The Borrower and its Subsidiaries shall not
undertake any business other than the acquisition, development, ownership,
management and operation of hotels (specifically excluding from its business
undertaking the acquisition, development, ownership, management and operation of
"economy" hotels and "budget" hotels).
SECTION 6.16. No Modifications to Organizational Documents. The
Partnership shall not materially modify its Partnership Agreement. The Company
shall not materially modify its Articles of Incorporation or its Bylaws.
ARTICLE VII
FINANCIAL COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid, the Borrower and
its Subsidiaries shall satisfy the following financial covenants, each of which
is to be calculated on a Consolidated basis:
SECTION 7.01. Maximum Leverage Ratio. The Consolidated Total
Indebtedness of the Company and its Consolidated Subsidiaries shall not exceed
55% of Total Value as of each Measurement Date.
SECTION 7.02. Maximum Unsecured Debt. The aggregate amount of
Consolidated Total Indebtedness of the Company and its Consolidated Subsidiaries
(exclusive of Consolidated Secured Debt and trade accounts payable and accruals
arising in the ordinary course of business) shall not exceed $500,000 at any
time.
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SECTION 7.03. Maximum Secured Debt. Consolidated Secured Debt of the
Company and its Consolidated Subsidiaries, excluding Senior Revolving Debt,
shall not exceed twenty-five percent (25%) of the Total Value as of each
Measurement Date.
SECTION 7.04. Minimum Interest Coverage. As of each Measurement Date,
the ratio of Adjusted EBITDA to Interest Expense for the preceding four Fiscal
Quarters shall not be less than 2.50 to 1.
SECTION 7.05. Minimum Fixed Charge Coverage. As of each Measurement
Date, for the four preceding Fiscal Quarters, the ratio of (a) the sum of (i)
Adjusted EBITDA plus (ii) all Ground Lease Expenses to (b) Fixed Charges shall
not be less than 2.00 to 1.
SECTION 7.06. Minimum Consolidated Tangible Net Worth. The Company and
its Consolidated Subsidiaries shall maintain at all times a minimum Consolidated
Tangible Net Worth of at least $170,000,000. In addition, such amount shall be
increased by eighty-five percent of the net proceeds of any offerings of the
Company's capital stock or partnership units as valued in accordance with such
offering.
ARTICLE VIII
DEFAULTS; REMEDIES
SECTION 8.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Loan or shall fail to pay any interest on any Loan within five
Domestic Business Days after such interest shall become due, or shall
fail to pay any fee or other amount payable hereunder within five
Domestic Business Days after such fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any
affirmative covenant contained in Article V, any negative covenant in
Article VI, or any financial covenant in Article VII; or
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in this Agreement
(other than those covered by clause (a) or (b) above) or under any of
the other Loan Documents for thirty days after the earlier of (i) the
first day on which the Borrower has knowledge of such failure or (ii)
written notice thereof has been given to the Borrower by the Agent; or
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(d) any representation, warranty, certification or statement
made or deemed made by the Borrower in Article IV of this Agreement or
in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) the Borrower or any Subsidiary (specifically including the
Special Purpose Entity) shall fail to make any payment in respect of
Debt outstanding (other than the Notes but specifically including the
Conduit Debt) when due or within any applicable grace period set out in
the loan documents evidencing or securing such Debt; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding of the Borrower or any
Subsidiary (i) that individually is in excess of $5,000,000, or (ii)
that in the aggregate is in excess of $10,000,000 (specifically
including the Conduit Debt) (such Debt being hereinafter referred to as
the "Cross-Default Debt") or the mandatory prepayment or purchase of
such Cross-Default Debt (specifically including the Conduit Debt) by
the Borrower (or its designee) or such Subsidiary (or its designee)
prior to the scheduled maturity thereof, or which enables (or, with the
giving of notice or lapse of time or both, would enable) the holders of
such Cross-Default Debt or any Person acting on such holders' behalf to
accelerate the maturity thereof or require the mandatory prepayment or
purchase thereof prior to the scheduled maturity thereof, without
regard to whether such holders or other Person shall have exercised or
waived their right to do so; or
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally, or shall admit in
writing its inability, to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing, or
suspends business, or generally fails to pay its debts as such debts
become due, or becomes insolvent, however evidenced; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, provided, however, such involuntary case or proceeding
shall not constitute an Event of Default unless such involuntary case
or proceeding remains undismissed or unstayed for a period of 60 days
or
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an order for relief shall be entered against the Borrower or any
Subsidiary under the federal bankruptcy laws as now or hereafter in
effect; or
(i) the Borrower or any member of the Controlled Group shall
fail to pay when due any material amount which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower, any member of the Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or
a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
the Borrower or any other member of the Controlled Group shall enter
into, contribute or be obligated to contribute to, terminate or incur
any withdrawal liability with respect to, a Multiemployer Plan; or
(j) one or more judgments or orders for the payment of money
in an amount in excess of $100,000 shall be rendered against the
Borrower or any Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower or
any Subsidiary under Section 6323 of the Code or a lien of the PBGC
shall be filed against the Borrower or any Subsidiary under Section
4068 of ERISA and in either case such lien shall remain undischarged
for a period of 25 days after the date of filing; or
(l) the Company shall cease to be the sole general partner of
the Partnership or any amendment to the partnership agreement of the
Partnership shall be executed whereby the consent of limited partners
is required for any action to be taken by the Partnership except as
provided in the existing partnership agreement of the Partnership.
(m) the occurrence of any event, condition or act having a
Material Adverse Effect.
(n) a termination of Franchise Agreements involving seven
percent (7%) or more of the aggregate number of rooms in hotels of the
Borrower and its Subsidiaries, excluding, however, from such seven
percent threshold the following: (i) two Holiday Corporation franchises
(for Hotels #20 (Tinton Falls, New Jersey) and #17 (Clearwater,
Florida) as identified in Exhibit K) with less than 12 month remaining
on their terms and (ii) termination of Franchise Agreements voluntarily
by the lessee of the Borrower or its Subsidiary (as the case may be)
where a substitute franchise agreement by a Pre-Approved Franchisor or
by a Franchisor approved by all of the Banks is in effect.
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then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Borrower terminate the Commitments (specifically
including, but not limited to, the Swing Line) and they shall thereupon
terminate, (ii) if requested by the Required Banks, by notice to the Borrower,
declare the Notes (together with accrued interest thereon) and all other amounts
payable hereunder and under the other Loan Documents to be, and the Notes
(together with all accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents shall thereupon become, immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower; provided that if any Event
of Default specified in clause (g) or (h) above occurs with respect to the
Borrower, without any notice to the Borrower or any other act by the Agent or
the Banks, the Commitments (specifically including, but not limited to, the
Swing Line) shall thereupon automatically terminate and the Notes (together with
accrued interest thereon) and all other amounts payable hereunder and under the
other Loan Documents shall automatically become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower, and (iii) exercise any rights, powers and
remedies under any of the Loan Documents. Notwithstanding the foregoing, the
Agent shall have available to it all rights and remedies provided under the Loan
Documents and in addition thereto, all other remedies at law or equity, and
shall exercise any one or all of them at the request of the Required Banks.
SECTION 8.02. Notice of Default. The Agent shall give notice to the
Borrower of any Default under Section 8.01(c) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE IX
THE AGENT
SECTION 9.01. Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Bank; (b) shall not be responsible to the Banks
for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any Bank under, this Agreement or
any other Loan Document, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Banks, and then only on terms and conditions
satisfactory to the Agent, and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other Loan Document or any
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other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct. The Agent may employ agent and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agent or
attorneys-in-fact selected by it with reasonable care. The provisions of this
Article IX are solely for the benefit of the Agent and the Banks, and the
Borrower shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Agent shall act solely as agent of the
Banks and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower. The duties
of the Agent shall be ministerial and administrative in nature, and the Agent
shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Bank.
SECTION 9.02. Reliance by the Agent. The Agent shall be entitled to
rely upon any certification, notice or other communication (including any
thereof by telephone, telefax, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 9.03. Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans) unless the Agent has
received notice from a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". The Agent shall
give each Bank prompt notice of each non-payment of principal of or interest on
the Loans, whether or not it has received any notice of the occurrence of such
non-payment. The Agent shall (subject to Section 11.05) take such action with
respect to such Default or Event of Default as shall be directed by the Required
Banks, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
SECTION 9.04. Rights of Agent as a Bank; Rights of Agent to Lend. With
respect to the Loans made by it, Wachovia in its capacity as a Bank hereunder
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though Wachovia were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include
Wachovia in its individual capacity. The Agent may (without having to account
therefor to any Bank) accept deposits from, lend money to, issue letters of
credit on behalf of, engage in interest rate swap or derivative transactions
with, and generally engage in any kind of banking, trust or other business with
the Borrower (and any of its Affiliates) as if it were not acting as the Agent,
and the Agent may accept fees and other consideration from the Borrower (in
addition to any agency fees
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and arrangement fees heretofore agreed to between the Borrower and Agent) for
services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Banks.
SECTION 9.05. Indemnification. Each Bank severally agrees to indemnify
the Agent, to the extent the Agent shall not have been reimbursed by the
Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however, that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 9.06. Consequential Damages. THE AGENT SHALL NOT BE RESPONSIBLE
OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.07. Payee of Note Treated as Owner. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Agent and the provisions of Section 11.07(c) have been satisfied.
Any requests, 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 or assignee of that
Note or of any Note or Notes issued in exchange therefor or replacement thereof.
SECTION 9.08. Non-Reliance on Agent and Other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself (or any Bank) informed
as to the performance or observance by the Borrower of this
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Agreement or any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Borrower or any other Person. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by the Agent
hereunder or under the other Loan Documents, the Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
other Person (or any of their Affiliates) which may come into the possession of
the Agent.
SECTION 9.09. Failure to Act. Except for action expressly required of
the Agent hereunder or under the other Loan Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction by the Banks of
their indemnification obligations under Section 9.05 against any and all
liability and expense which may be incurred by the Agent by reason of taking,
continuing to take, or failing to take any such action.
SECTION 9.10. Resignation or Removal of the Agent. Subject to the
appointment and acceptance of a successor Agent as provided in this Section
9.10, the Agent may resign at any time by giving notice thereof to the Banks and
the Borrower and the Agent may be removed at any time with or without cause by
the Required Banks. Upon any such resignation or removal, the Required Banks
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Banks and shall have accepted such
appointment within 30 days after the retiring Agent's notice of resignation or
the Required Banks' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent. Any successor Agent shall be
a bank which has a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article IX shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent
hereunder.
SECTION 9.11. Intercreditor Agreement. The Banks have entered into an
Intercreditor Agreement dated of even date herewith governing rights and
responsibilities of the Agent to the Banks and certain obligations of the Agent.
The Borrower acknowledges and agrees that it is not a third-party beneficiary of
any provisions of the Intercreditor Agreement and is not entitled to rely
thereon or enforce any provisions thereof. The Borrower also acknowledges that
the Intercreditor Agreement may be amended by the Banks without prior notice to
or approval by the Borrower. The Intercreditor Agreement and any such amendment,
however, shall not waive or amend any provision of this Agreement to the
contrary. The Agent shall provide the Borrower with a photocopy of the
Intercreditor Agreement and any amendment thereto within 10 days after execution
by all parties to such document.
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ARTICLE X
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 10.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for
such Interest Period, or
(b) the Required Banks advise the Agent that the London
Interbank Offered Rate, as determined by the Agent will not adequately
and fairly reflect the cost to such Banks of funding the Euro-Dollar
Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Agent at
least 1 Domestic Business Day before the date of any Borrowing of Euro-Dollar
Loans for which a Notice of Borrowing has previously been given that it elects
not to borrow on such date, such Borrowing shall instead be made as a Base Rate
Loan.
SECTION 10.02. Illegality. If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change in any existing or future
law, rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof (any such authority, bank or
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Agent, the Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each Euro-Dollar Loan of
such Bank, together with accrued interest thereon and any amount due such Bank
pursuant to Section 10.05(a). Concurrently with prepaying each such Euro-Dollar
Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
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SECTION 10.03. Increased Cost and Reduced Return.
(a) If after the date hereof, a Change of Law or compliance by any Bank
(or its Lending Office) with any request or directive (whether or not having the
force of law) of any Authority:
(i) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to its Euro-Dollar Loans, its Notes
or its obligation to make Euro-Dollar Loans, or shall change the basis
of taxation of payments to any Bank (or its Lending Office) of the
principal of or interest on its Euro-Dollar Loans or any other amounts
due under this Agreement in respect of its Euro-Dollar Loans or its
obligation to make Euro-Dollar Loans (except for changes in the rate of
tax on the overall net income of such Bank or its Lending Office
imposed by the jurisdiction in which such Bank's principal executive
office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Lending Office); or
(iii) shall impose on any Bank (or its Lending Office) or on
the London interbank market any other condition affecting its
Euro-Dollar Loans, its Notes or its obligation to make Euro-Dollar
Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any existing or future law, rule or regulation, or any change
in the interpretation or administration thereof, or compliance by any Bank (or
its Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any Authority, has or would have the
effect of reducing the rate of return on such Bank's capital as a consequence of
its obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15 days after demand by
such Bank, the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
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(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section 10.03 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any calculations
required by such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
SECTION 10.04. Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans
has been suspended pursuant to Section 10.02 or (ii) any Bank has demanded
compensation under Section 10.03, and the Borrower shall, by at least 5
Euro-Dollar Business Days' prior notice to such Bank through the Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans, shall be made instead as Base Rate Loans, as the
Borrower may elect in the notice to such Bank through the Agent
referred to herein above (in all cases interest and principal on such
Loans shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Base Rate Loans and its
Base Rate Loans instead.
In the event that the Borrower shall elect that the provisions of this Section
shall apply to any Bank, the Borrower shall remain liable for, and shall pay to
such Bank as provided herein, all amounts due such Bank under Section 10.03 in
respect of the period preceding the date of conversion of such Bank's Loans
resulting from the Borrower's election.
SECTION 10.05. Compensation. Upon the request of any Bank, delivered to
the Borrower and the Agent, the Borrower shall pay to such Bank such amount or
amounts as shall compensate such Bank for any loss, cost or expense incurred by
such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.09,
Section 2.10, Section 10.02 or otherwise) of a Euro-Dollar Loan on a
date other than the last day of an Interest Period for such Euro-Dollar
Loan;
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(b) any failure by the Borrower to prepay a Euro-Dollar Loan
on the date for such prepayment specified in the relevant notice of
prepayment hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan
on the date for the Borrowing of which such Euro-Dollar Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to
Section 2.02.
Such compensation shall include, without limitation, an amount equal to the
excess, if any, of (x) the amount of interest which would have accrued on the
amount so paid or prepaid or not prepaid or borrowed for the period from the
date of such payment, prepayment or failure to prepay or borrow to the last day
of the then current Interest Period for such Euro-Dollar Loan (or, in the case
of a failure to prepay or borrow, the Interest Period for such Euro-Dollar Loan
which would have commenced on the date of such failure to prepay or borrow) at
the applicable rate of interest for such Euro-Dollar Loan provided for herein
over (y) the amount of interest (as reasonably determined by such Bank) such
Bank would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party at its address or telecopy
number set forth on the signature pages hereof or such other address or telecopy
number as such party may hereafter specify for the purpose by notice to each
other party. Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the telecopy
number specified in this Section and the telecopy machine used by the sender
provides a written confirmation that such telecopy has been so transmitted or
receipt of such telecopy transmission is otherwise confirmed, provided any
notice (other than a Notice of Borrowing) is also given by an alternative method
set out herein, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid,
(iii) if given by reputable commercial courier for next day delivery, one day
following the date such communication is deposited with such reputable courier,
and (iv) if given by any other means, when delivered at the address specified in
this Section; provided that notices to the Agent under Article II or Article X
shall not be effective until received.
SECTION 11.02. No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
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SECTION 11.03. Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent,
including fees and disbursements of special counsel for the Banks and the Agent,
in connection with the preparation of this Agreement and the other Loan
Documents, any waiver or consent hereunder or thereunder or any amendment hereof
or thereof or any Default or alleged Default or alleged hereunder or thereunder
and (ii) if a Default occurs, all out-of-pocket expenses incurred by the Agent
or any Bank, including fees and disbursements of counsel, in connection with
such Default and collection and other enforcement proceedings resulting
therefrom, including out-of-pocket expenses incurred in enforcing this Agreement
and the other Loan Documents.
(b) The Borrower shall indemnify the Agent and each Bank against any
transfer taxes, documentary taxes, assessments or charges made by any Authority
by reason of the execution and delivery of this Agreement or the other Loan
Documents.
(c) The Borrower shall indemnify the Agent, the Banks and each
Affiliate thereof and their respective directors, officers, employees and agent
from, and hold each of them harmless against, any and all losses, liabilities,
claims or damages to which any of them may become subject, insofar as such
losses, liabilities, claims or damages arise out of or result from any actual or
proposed use by the Borrower of the proceeds of any extension of credit by any
Bank hereunder or breach by the Borrower of this Agreement or any other Loan
Document or from investigation, litigation (including, without limitation, any
actions taken by the Agent or any of the Banks to enforce this Agreement or any
of the other Loan Documents) or other proceeding (including, without limitation,
any threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Agent and each Bank, and each Affiliate thereof and
their respective directors, officers, employees and agent, upon demand for any
expenses (including, without limitation, legal fees) incurred in connection with
any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
SECTION 11.04. Setoffs; Sharing of Set-Offs.
(a) The Borrower hereby grants to each Bank, as security for the full
and punctual payment and performance of the obligations of the Borrower under
this Agreement, a continuing lien on and security interest in all deposits and
other sums credited by or due from such Bank to the Borrower or subject to
withdrawal by the Borrower; and regardless of the adequacy of any collateral or
other means of obtaining repayment of such obligations, each Bank may at any
time upon or after the occurrence of any Event of Default, and without notice to
the Borrower, set off the whole or any portion or portions of any or all such
deposits and other sums against such obligations, whether or not any other
Person or Persons could also withdraw money therefrom.
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(b) Each Bank agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Note held
by it which is greater than the proportion received by any other Bank in respect
of the aggregate amount of all principal and interest owing with respect to the
Note held by such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Note held by the other Banks,
and/or such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to a Note shall be shared by the
Banks pro rata; provided that (i) nothing in this Section shall impair the right
of any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under a Note, and (ii) if all or any
portion of such payment received by the purchasing Bank is thereafter recovered
from such purchasing Bank, such purchase from each other Bank shall be rescinded
and such other Bank shall repay to the purchasing Bank the purchase price of
such participation to the extent of such recovery together with an amount equal
to such other Bank's ratable share (according to the proportion of (x) the
amount of such other Bank's required repayment to (y) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
SECTION 11.05. Amendments and Waivers.
(a) Any provision of this Agreement, the Notes or any other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent); provided that
no such amendment or waiver shall, unless signed by the Borrower and by each of
the Banks, (i) change the Commitment of any Bank or subject any Bank to any
additional obligation, (ii) change the principal of or rate of interest on any
Loan or any fees payable to the Banks hereunder, (iii) change the date fixed for
any payment of principal of or interest on any Loan or any fees hereunder
specifically including any Extension of Term, subject to the provisions of
Section 2.01(c), (iv) change the amount of principal, interest or fees due on
any date fixed for the payment thereof, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
percentage of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Agreement,
(vi) change the manner of application of any payments made under this Agreement,
the Notes, or any other Loan Document, (vii) release or substitute all or any
substantial part of the collateral (if any) held as security for the Loans
except where this Agreement or other Loan Documents explicitly entitle the
Borrower to such a release, or (viii) release any guaranty given to support
payment of the Loans.
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(b) The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by the Borrower and shall
be afforded an opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Agreement shall be delivered
by the Borrower to each Bank forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Banks. The
Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Banks.
SECTION 11.06. Margin Stock Collateral. Each of the Banks represents to
the Agent and each of the other Banks that it in good faith is not, directly or
indirectly (by negative pledge or otherwise), relying upon any Margin Stock as
collateral in the extension or maintenance of the credit provided for in this
Agreement.
SECTION 11.07. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided that the Borrower may not assign or otherwise transfer any of its
rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
Loan or Loans, (ii) the change of the amount of any principal, interest or fees
due on any date fixed for the payment thereof with respect to the related Loan
or Loans, (iii) the change of the principal of the related Loan or Loans, (iv)
any change in the rate at which either interest is payable thereon or (if the
Participant is entitled to any part thereof) commitment fee is payable hereunder
from the rate at which the Participant is entitled to receive interest or
commitment fee (as the case may be) in respect of such participation, (v) the
release or substitution of all or any substantial part of the collateral (if
any) held as security for the Loans, or (vi) the release of any guaranty given
to support payment of the Loans. Each Bank selling a participating interest in
any
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Loan, Note, Commitment or other interest under this Agreement shall, within 10
Domestic Business Days of such sale, provide the Borrower and the Agent with
written notification stating that such sale has occurred and identifying the
Participant and the interest purchased by such Participant. The Borrower agrees
that each Participant shall be entitled to the benefits of Article X with
respect to its participation in Loans outstanding from time to time.
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance in the form attached hereto as Exhibit
G, executed by such Assignee, such transferor Bank and the Agent (and, in the
case of an Assignee that is not then a Bank or an Affiliate of a Bank, by the
Borrower); provided that (i) no interest may be sold by a Bank pursuant to this
paragraph (c) unless the Assignee shall agree to assume ratably equivalent
portions of the transferor Bank's Commitment, (ii) the amount of the Commitment
of the assigning Bank subject to such assignment (determined as of the effective
date of the assignment) shall be equal to $5,000,000 (or any larger multiple of
$1,000,000), (iii) no interest may be sold by a Bank pursuant to this paragraph
(c) to any Assignee that is not then a Bank or an Affiliate of a Bank without
the consent of the Borrower, which consent is within the sole and absolute
discretion of the Borrower, provided, however, that upon the occurrence and
continuation of an Event of Default, the consent of the Borrower shall not be
required as to such an assignment, and (iv) a Bank may not have more than two
Assignees that are not then Banks at any one time. Upon (A) execution of the
Assignment and Acceptance by such transferor Bank, such Assignee, the Agent and
(if applicable) the Borrower, (B) delivery of an executed copy of the Assignment
and Acceptance to the Borrower and the Agent, (C) payment by such Assignee to
such transferor Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, and (D) payment of a processing and
recordation fee of $2,000 to the Agent, such Assignee shall for all purposes be
a Bank party to this Agreement and shall have all the rights and obligations of
a Bank under this Agreement (including, without limitation, the rights of a Bank
under Section 2.03) to the same extent as if it were an original party hereto
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by the Borrower, the
Banks or the Agent shall be required. Upon the consummation of any transfer to
an Assignee pursuant to this paragraph (c), the transferor Bank, the Agent and
the Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to each of such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 11.08, the Borrower authorizes
each Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all financial and other
information in such Bank's possession concerning the Borrower which has been
delivered to such Bank by the Borrower pursuant to this Agreement or which has
been delivered to such Bank by the Borrower in connection with such Bank's
credit evaluation prior to entering into this Agreement.
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(e) No Transferee shall be entitled to receive any greater payment
under Section 10.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 10.02
or 10.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 11.07 to the contrary notwithstanding, any
Bank may assign and pledge all or any portion of the Loans and/or obligations
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Loans and/or
obligations made by the Borrower to the assigning and/or pledging Bank in
accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Loans and/or obligations to
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
SECTION 11.08. Confidentiality. Each Bank agrees to exercise its best
efforts to keep any information delivered or made available by the Borrower to
it which is clearly indicated to be confidential information, confidential from
anyone other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided, however, that nothing herein shall prevent
any Bank from disclosing such information (i) to any other Bank, (ii) upon the
order of any court or administrative agency, (iii) upon the request or demand of
any regulatory agency or authority having jurisdiction over such Bank, (iv)
which has been publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to which the Agent, any Bank or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel
and independent auditors and (viii) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section 11.08.
SECTION 11.09. Swap Obligations. Any Bank being a party to this Credit
Agreement may engage in derivative transactions or interest rate swap
transactions with respect to the Notes (the "Swap Obligations") with the
Borrower or any Subsidiary. Any such Swap Obligations shall be secured by the
Collateral; provided, however, in the absence of any agreement by the Banks to
the contrary, such Swap Obligations may be satisfied from the Collateral only
after all other obligations secured thereby have been satisfied.
SECTION 11.10. Representation by Banks. Each Bank hereby represents
that it is a commercial lender or financial institution which makes loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided, however,
that, subject to Section 11.07, the disposition of the Note held by that Bank
shall at all times be within its exclusive control.
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SECTION 11.11. Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document. It
shall not be necessary for any other Bank to be joined as an additional party in
any proceeding for such purpose.
SECTION 11.12. Survival of Certain Obligations. Sections 10.03(a),
10.03(b), 10.05 and 11.03, and the obligations of the Borrower thereunder, shall
survive, and shall continue to be enforceable notwithstanding, the termination
of this Agreement and the Commitments and the payment in full of the principal
of and interest on all Loans.
SECTION 11.13. North Carolina Law. This Agreement and each Note shall
be construed in accordance with and governed by the law of the State of North
Carolina.
SECTION 11.14. Severability. In case any one or more of the provisions
contained in this Agreement, the Notes or any of the other Loan Documents should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 11.15. Interest. In no event shall the amount of interest due
or payable hereunder or under the Notes exceed the maximum rate of interest
allowed by applicable law, and in the event any such payment is inadvertently
made to any Bank by the Borrower or inadvertently received by any Bank, then
such excess sum shall be credited as a payment of principal, unless the Borrower
shall notify such Bank in writing that it elects to have such excess sum
returned forthwith. It is the express intent hereof that the Borrower not pay
and the Banks not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
SECTION 11.16. Interpretation. No provision of this Agreement or any of
the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 11.17. Defaulting Bank. Each Bank understands and agrees that
if such Bank is a Defaulting Bank, then notwithstanding any provisions of this
Agreement to the contrary, it shall not be entitled to vote on any matter
requiring the consent of the Banks or to object to any matter requiring the
consent of the Banks; provided, however, that all other benefits and obligations
under the Loan Documents shall apply to such Defaulting Bank.
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SECTION 11.18. Consent to Jurisdiction. The Borrower (a) submits to
personal jurisdiction in the State of North Carolina, the courts thereof and the
United States District Courts sitting therein, for the enforcement of this
Agreement, the Notes and the other Loan Documents, (b) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of North Carolina for the purpose of litigation to enforce this
Agreement, the Notes or the other Loan Documents, and (c) agrees that service of
process may be made upon it in the manner prescribed in Section 11.01 for the
giving of notice to the Borrower. Nothing herein contained, however, shall
prevent the Agent from bringing any action or exercising any rights against any
security and against the Borrower personally, and against any assets of the
Borrower, within any other state or jurisdiction.
SECTION 11.19. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
75
82
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, under seal, by their respective authorized officers as of the day
and year first above written.
WINSTON HOTELS, INC., a North Carolina
corporation
[Corporate Seal] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Senior Vice President
Attest:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Assistant Secretary
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., a North Carolina
corporation, its general partner
[Corporate Seal] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Senior Vice President
Attest:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Assistant Secretary
Address:
--------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
76
83
WACHOVIA BANK, N.A., as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Title: Senior Vice President
[CORPORATE SEAL]
For Routine Loan Transactions
-----------------------------
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndicate Services
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
For All Other Matters
---------------------
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Senior
Vice President
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
77
84
$60,000,000.00 WACHOVIA BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
Title: Senior Vice President
[CORPORATE SEAL]
Lending Office
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Senior
Vice President
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
$40,000,000.00 BRANCH BANKING AND TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Senior Vice President
[CORPORATE SEAL]
Lending Office
--------------
Branch Banking and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
78
85
$25,000,000.00 SOUTHTRUST BANK, N.A.
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇
------------------------
Title: Vice President
[CORPORATE SEAL]
Lending Office
--------------
SouthTrust Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇▇ ▇▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
$15,000,000.00 CENTURA BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------
Title: Bank Officer
[CORPORATE SEAL]
Lending Office
--------------
Centura Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Corporate Banking Officer
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
------------
TOTAL COMMITMENTS:
$140,000,000.00
79
86
SCHEDULE 4.04
EVENTS HAVING A MATERIAL ADVERSE EFFECT
None.
87
SCHEDULE 4.05
LITIGATION AND LIENS
The properties are subject to no liens other than those disclosed
in the title insurance policies insuring the interests of the Agent, and other
than those described in Schedule 4.11 hereof.
There is no litigation pending other than litigation with respect
to Hotels 6 and 24, arising in connection with liens affecting such properties.
88
SCHEDULE 4.08
EXISTING SUBSIDIARIES
Name of Subsidiary Jurisdiction of Formation
------------------ -------------------------
Winston Manager Corporation ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ SPE, LLC Virginia
89
SCHEDULE 4.11
LIENS AND UNPAID CONSTRUCTION COSTS ON CONTESTED/NOT COMPLETED HOTELS
To be provided upon request.
90
EXHIBIT A-1
FORM OF BANK NOTE
NOTE
$__________ [SPECIFY AMOUNT] Raleigh, North Carolina
as of January 15, 1999
For value received, the undersigned, WINSTON HOTELS, INC., a North
Carolina corporation (the "Company"), and ▇▇▇▇ LIMITED PARTNERSHIP, a North
Carolina limited partnership (the "Partnership") (the Company and the
Partnership shall hereinafter be referred to, jointly and severally, as the
"Borrower"), jointly and severally promise to pay to the order of
____________________________ [SPECIFY NAME OF BANK], A ___________________
[SPECIFY WHETHER A STATE BANK OR NATIONAL BANKING ASSOCIATION] (the "Bank"), for
the account of its Lending Office, the principal sum of
_________________________________ DOLLARS ($__________ ) [SPECIFY AMOUNT], or
such lesser amount as shall equal the unpaid principal amount of each Loan made
by the Bank to the Borrower pursuant to the Credit Agreement referred to below,
on the dates and in the amounts provided in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of this Note on the
dates and at the rate or rates provided for in the Credit Agreement. Interest on
any overdue principal and, to the extent permitted by law, overdue interest on
the principal amount hereof shall bear interest at the Default Rate, as provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank, N.A., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as may be specified from
time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof, the
interest rates from time to time applicable thereto and all repayments of the
principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make, or any error of the Bank in making, any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Bank Notes referred to in the Syndicated Credit
Agreement dated as of January 15, 1999, among the Borrower, the banks listed on
the signature pages thereof and their successors and assigns, Wachovia Bank,
N.A., as Agent (as the same may be amended or modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment and the repayment hereof and the acceleration of the maturity
hereof.
Time is of the essence of this Note. In the event all or any part of
any installment due under the terms of this Note is delinquent for more than
fifteen (15) days (excluding the final payment of principal and interest due on
the Maturity Date), there shall be due to the Bank, in addition to the
delinquent installment or part thereof and in order to compensate the Bank for
extra costs and expenses caused by such late payment, a sum equal to four
percent (4%) of the amount so delinquent.
91
THIS NOTE MAY NOT BE CHANGED ORALLY AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
The Borrower agrees, in the event that this Note or any portion hereof
is collected by law or through an attorney at law, to pay all reasonable costs
of collection, including, without limitation, reasonable attorneys' fees.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed under seal, by its duly authorized officers as of the day and year
first above written.
BORROWER:
WINSTON HOTELS, INC., a North Carolina corporation
By: _____________________________
Senior Vice President
ATTEST:
------------------------------
Assistant Secretary
[CORPORATE SEAL]
92
▇▇▇▇ LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., its sole general partner
By: _____________________________
Senior Vice President
ATTEST:
------------------------------
Assistant Secretary
[CORPORATE SEAL]
93
Note
LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------------------------------
Type Interest Rate Amount Amount Amount of
of of Principal Principal Maturity Notation
Date Loan(1) Loan Borrowed Repaid Date Made By
---- ---- ------- -------- --------- -------- --------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
---------------
(1) i.e., a Base Rate or Euro-Dollar Loan.
94
EXHIBIT A-2
FORM OF TERM NOTE
TERM PROMISSORY NOTE
$__________ [SPECIFY AMOUNT] Raleigh, North Carolina
as of January 15, 1999
For value received, the undersigned, WINSTON HOTELS, INC., a North
Carolina corporation (the "Company"), and ▇▇▇▇ LIMITED PARTNERSHIP, a North
Carolina limited partnership (the "Partnership") (the Company and the
Partnership shall hereinafter be referred to, jointly and severally, as the
"Borrower"), jointly and severally promise to pay to the order of WACHOVIA BANK,
N.A., as Agent for the Banks being parties to the Credit Agreement (hereinafter
defined) (the "Agent"), for the account and pro rata benefit of the Banks being
parties to the Credit Agreement, the principal sum of
_________________________________ DOLLARS ($__________ ) [SPECIFY AMOUNT], on
the dates provided in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of this Note on the dates and at the
rate or rates provided for in the Credit Agreement. Interest on any overdue
principal and, to the extent permitted by law, overdue interest on the principal
amount hereof shall bear interest at the Default Rate, as provided for in the
Credit Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of Wachovia Bank, N.A., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as may be specified from time to time
pursuant to the Credit Agreement.
This note is one of the Term Notes referred to in the Syndicated Credit
Agreement dated as of January 15, 1999, among the Borrower, the banks listed on
the signature pages thereof and their successors and assigns, Wachovia Bank,
N.A., as Agent (as the same may be amended or modified from time to time, the
"Credit Agreement"). This Term Note evidences indebtedness also evidenced by
those certain Bank Notes described in the Credit Agreement. Terms defined in the
Credit Agreement are used herein with the same meanings. Reference is made to
the Credit Agreement for provisions for the prepayment and the repayment hereof
and the acceleration of the maturity hereof.
Time is of the essence of this Note. In the event all or any part of
any installment due under the terms of this Note is delinquent for more than
fifteen (15) days (excluding the final payment of principal and interest due on
the Maturity Date), there shall be due to the Agent, for the pro rata benefit of
the Banks, in addition to the delinquent installment or part thereof and in
order to compensate the Agent for extra costs and expenses caused by such late
payment, a sum equal to four percent (4%) of the amount so delinquent.
THIS NOTE MAY NOT BE CHANGED ORALLY AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
95
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
The Borrower agrees, in the event that this Note or any portion hereof
is collected by law or through an attorney at law, to pay all reasonable costs
of collection, including, without limitation, reasonable attorneys' fees.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed under seal, by its duly authorized officers as of the day and year
first above written.
BORROWER:
WINSTON HOTELS, INC., a North Carolina corporation
By: _____________________________
Senior Vice President
ATTEST:
------------------------------
Assistant Secretary
[CORPORATE SEAL]
96
▇▇▇▇ LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., its sole general partner
By: _____________________________
Senior Vice President
ATTEST:
------------------------------
Assistant Secretary
[CORPORATE SEAL]
97
EXHIBIT B
[▇▇▇▇▇ & BUNCH Letterhead]
February 1, 1999
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, N.A.
as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies/Gentlemen:
We have acted as counsel for Winston Hotels, Inc., a North Carolina
corporation ("the Company") and ▇▇▇▇ Limited Partnership, a North Carolina
limited partnership ("the Partnership") (the Company and the Partnership being
collectively referred to as the "Borrower") in connection with the Syndicated
Credit Agreement ("the Credit Agreement") dated as of January 15, 1999 among the
Borrower, the banks listed on the signature page thereof and Wachovia Bank,
N.A., as Agent. Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion. We have assumed for purposes of our opinions set forth
below that the execution and delivery of the Credit Agreement by each Bank and
by the Agent have been duly authorized by each Bank and by the Agent. As to
questions of fact relating to the Borrower material to such opinions, we have
relied upon representations of appropriate officers of the Borrower.
Upon the basis of the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of North Carolina and has all corporate powers
required to carry on
98
February 1, 1999
its business as now conducted.
The Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of North Carolina and has all
partnership powers required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement, the Notes and the Loan Documents to which the Partnership or
the Company is a party, which Loan Documents, inclusive of the Credit Agreement
and the Notes, are specifically listed on the attached Schedule A which is
incorporated herein by this reference (i) are within the Company's corporate
powers and the Partnership's partnership powers, (ii) have been duly authorized
by all necessary corporate and partnership action, as the case may be, (iii) to
the best of our knowledge, require no action by or in respect of or filing with,
any governmental body, agency or official, (iv) to the best of our knowledge, do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Company
or partnership agreement of the Partnership or of any agreement, judgment,
injunction, order, decree or other instrument which to our knowledge is binding
upon the Borrower and (v) to the best of our knowledge, except as provided in
the Credit Agreement, do not result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries.
3. The Credit Agreement, the Notes and the Loan Documents (to the
extent governed by North Carolina law) constitute valid and binding agreements
of the Borrower, enforceable against the Borrower in accordance with their
terms, except as such enforceability may be limited by: (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity.
4. To the best of our knowledge, there is no action, suit or proceeding
pending, or threatened, against or affecting the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could materially adversely affect the business, consolidated financial position
or consolidated results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or which in any manner questions the
validity or enforceability of the Credit Agreement or any Note.
5. The Borrower is not an "investment company" within the meaning of
The Investment Company Act of 1940, as amended.
99
February 1, 1999
6. The Borrower is not a "holding company" or a "subsidiary company" of
a "holding company", or an "affiliate" or a "holding company" or of a "holding
company" or of a "subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
The opinions expressed in this opinion are subject to the following
qualifications:
(a) Any opinions herein as to the enforceability of the Credit
Agreement, the Notes and the Loan Documents are further subject to the
qualification that the enforceability of certain of the remedial, waiver and
other provisions of such instruments are further limited by applicable
constitutional, legislative, judicial and administrative provisions, statutes,
regulations, decisions, rulings and other laws in addition to those described in
paragraph 3 above; however, such additional laws do not, in our opinion,
substantially interfere with the practical realization of the benefits expressed
in the Credit Agreement, the Notes and the Loan Documents except for the
economic consequences of any procedural delay which may result from such laws.
(b) A creditor is permitted under North Carolina law in the enforcement
or collection of a debt instrument providing for "reasonable attorneys fees" in
the collection or enforcement thereof to collect, after written notice to the
debtor, attorney's fees up to but not exceeding 15% of the amount of the debt
outstanding.
(c) Certain remedies, waivers and other provisions of the Credit
Agreement, the Notes and the Loan Documents may not be enforceable, but such
unenforceability will not render such instruments invalid as a whole or preclude
the judicial enforcement of the obligation of the Borrower to repay the
principal, together with interest thereon, as provided in the Notes. Provisions
that may be unenforceable due to public policy concerns may include, but are not
limited to, issues relative to the waiver of procedural, substantive or
constitutional rights or other legal or equitable rights, including, without
limitation, the right of statutory or equitable redemption; the confession or
consent to any judgment; the consent by Borrower to the jurisdiction of any
court or to service or process in any particular manner; disclaimers or
limitations of liabilities; discharges of defenses; the exercise of self-help or
other remedies without judicial process; and the waiver of accounts for rent or
sale proceeds.
(d) We express no opinion as to the enforceability of any provisions of
the Credit Agreement and the Loan Documents which impose liquidated damages,
penalties, forfeitures or an increase in interest rate upon default; or that
appoint the Agent or others as the agent or attorney-in-fact for Borrower.
100
February 1, 1999
(e) We express no opinion with respect to the effect of the failure of
the Agent or Banks to enforce its rights under any of the Loan Documents in good
faith and in a commercially reasonable manner.
(f) The opinions herein are limited to the specific document and matter
expressly addressed herein and no inference is to be drawn or implied herefrom
relative to any of the Loan Documents or the contents thereof, unless expressly
addressed and opined to herein.
(g) With respect to matters of title to lands comprising part of the
property securing the Notes, we are advised that you are relying upon policies
of title insurance, and with respect to the location of such land, we are
advised that you are relying upon surveys previously submitted to you. We are
not expressing herein any opinion with respect to the title or location of such
lands.
(h) Any opinion herein as to the enforceability of the North Carolina
Deed of Trust is subject to the provisions of N.C. Gen. Stat. 40A-68, which
provides that lienholder may share in the amount of condemnation compensation
awarded for a partial taking only to the extent determined necessary to prevent
an impairment of the lienholder's security.
(i) Some provisions of the Loan Documents may purport to relieve the
Agent and Banks of some responsibilities in the operation of the property
located in North Carolina after the lenders have exercised their right to enter
and take possession of the property after default. A mortgagee in possession is
chargeable in an accounting for rents received. Additionally, although no cases
have been discovered on this point, some commentators believe that a mortgagee
in possession is chargeable for rents which, in the exercise of reasonable
diligence, the real property in question could produce. Therefore, we express no
opinion as to the enforceability of any provision purporting to relieve the
Agent and Banks from the exercise of reasonable diligence in operating the
property located in North Carolina as a mortgagee in possession or as assignee
of rental agreements.
(j) We express no opinion as to the effectiveness of any provisions of
the Loan Documents that provide for the assignment or transfer of any permits,
licenses or similar rights of the Borrower.
(k) We express no opinion as to the right to obtain a receiver, which
determination is subject to equitable principles.
101
February 1, 1999
(l) Whenever any opinion herein with respect to the existence or
absence of facts is qualified by the phrase "to the best of our knowledge", such
phrase indicates only that during the course of our representation of the
Borrower, no information has come to our attention which would give us actual
knowledge of the existence or absence of such facts. Except to the extent
expressly stated herein, we have not undertaken any independent investigation to
determine the existence or absence of any such facts, and no inference as to our
knowledge of the existence of such facts should be drawn from the fact of our
representation of the Borrower.
(m) We have no obligation to update our opinions for events occurring
after the date of this letter.
We are licensed to practice only in the State of North Carolina and do
not purport to express an opinion on any laws other than the laws of the United
States and the State of North Carolina, and this opinion is rendered only with
respect to such laws. We are advised that with respect to certain of the Loan
Documents and their provisions which are governed by the laws of the States of
South Carolina, Georgia, Virginia, Texas, Michigan, New Jersey, Florida, Nevada,
New York or Arizona, you have obtained and are relying on the opinions of
counsel licensed in such states. We have made no independent investigation of
the laws of such jurisdictions.
We express no opinion as to the laws of any jurisdiction wherein any
Bank may be located which limits rates of interest which may be charged or
collected by such Bank other than in paragraph 3 with respect to the State of
North Carolina.
Sincerely,
▇▇▇▇▇ & BUNCH
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
WWB/jbd
Opinion.333
102
EXHIBIT C
OPINION OF
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC, SPECIAL COUNSEL
FOR THE AGENT
[Date as provided in Section 3.04 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Ladies/Gentlemen:
We have participated in the preparation of the Syndicated Credit
Agreement (the "Credit Agreement") dated as of January 15, 1999, among Winston
Hotels, Inc., a North Carolina corporation (the "Company"), and ▇▇▇▇ Limited
Partnership, a North Carolina limited partnership (the "Partnership"), the banks
listed on the signature pages thereof (the "Banks") and Wachovia Bank, N.A., as
Agent (the "Agent"), and have acted as special counsel for the Agent for the
purpose of rendering this opinion pursuant to Section 3.04(d) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions, which Interpretive
Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, and assuming the due authorization,
execution and delivery of the Credit Agreement and each of the Notes by or on
behalf of the Borrower, we are of the opinion that the Credit Agreement
constitutes a valid and binding agreement of the Borrower and each Note
constitutes valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms except as: (i) the enforceability
thereof may be affected by bankruptcy, insolvency, reorganization, fraudulent
conveyance, voidable preference, moratorium or similar laws applicable to
creditors' rights or the collection of debtors' obligations generally; (ii)
rights of acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; and (iii) the enforceability
of certain of the remedial, waiver and other provisions of the Credit Agreement
and the Notes may be further limited by the laws of the State of North Carolina;
provided, however, such
1
103
additional laws do not, in our opinion, substantially interfere with the
practical realization of the benefits expressed in the Credit Agreement and the
Notes, except for the economic consequences of any procedural delay which may
result from such laws.
In giving the foregoing opinion, we express no opinion as to the effect
(if any) of any law of any jurisdiction except the State of North Carolina. We
express no opinion as to the effect of the compliance or noncompliance of the
Agent or any of the Banks with any state or federal laws or regulations
applicable to the Agent or any of the Banks by reason of the legal or regulatory
status or the nature of the business of the Agent or any of the Banks.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you and any Assignee,
Participant or other Transferee under the Credit Agreement without our prior
written consent.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC
By:____________________________
Member
2
104
EXHIBIT D
CLOSING CERTIFICATE
OF
▇▇▇▇ LIMITED PARTNERSHIP AND
WINSTON HOTELS, INC.
Reference is made to the Syndicated Credit Agreement (the "Credit
Agreement") dated as of January 15, 1999, among ▇▇▇▇ Limited Partnership, a
North Carolina limited partnership (the "Partnership"), Winston Hotels, Inc., a
North Carolina corporation (the "Company") (the Company and the Partnership
being collectively referred to as the "Borrower"), Wachovia Bank, N.A., as Agent
and as a Bank, and the other Banks listed on the signature pages thereof.
Capitalized terms used herein have the meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 3.03(e) of the Credit Agreement, _____________, the
duly authorized _________ Vice President of the Company, on its own behalf and
as the general partner of the Partnership, hereby certifies to the Agent and the
Banks that: (i) no Default has occurred and is continuing on the date hereof;
(ii) the representations and warranties of the Borrower contained in Article IV
of the Credit Agreement are true on and as of the date hereof; and (iii) that
the Exhibits attached hereto are true and correct and fully represent the
condition of the Borrower and the matters described therein.
Certified as of the ___ day of January, 1999.
▇▇▇▇ LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., a North Carolina
corporation, its general partner
By: _________________________________
Senior Vice President
WINSTON HOTELS, INC., a North Carolina
corporation
By: ______________________________________
Senior Vice President
105
Exhibits to Closing Certificate
D-1. Borrowing Base Values Certificate as of Closing Date
D-2. Certificate of Compliance; Calculation of Pricing Level; Determination of
Leverage Ratio as of December 31, 1998.
106
EXHIBIT E
WINSTON HOTELS, INC.
ASSISTANT SECRETARY'S CERTIFICATE
The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Assistant Secretary of Winston
Hotels, Inc., a North Carolina corporation (the "Company"), on behalf of the
Company and on behalf of ▇▇▇▇ Limited Partnership, a North Carolina limited
partnership in which the Company is the general partner (the "Partnership"),
(the Company and the Partnership being collectively referred to as the
"Borrower") hereby certifies that she has been duly elected, qualified and is
acting in such capacity as Assistant Secretary of the Company and that, as such,
she is familiar with the facts herein certified and is duly authorized to
certify the same, and hereby further certifies, in connection with the
Syndicated Credit Agreement dated as of January 15, 1999, among the Borrower,
Wachovia Bank, N.A., as Agent, as Agent, and the Banks listed on the signature
pages thereof that:
1. Attached hereto as Exhibit E-1 is a complete and correct copy of the
Articles of Incorporation of the Company as in full force and effect on the date
hereof as certified by the Secretary of State of the State of North Carolina,
the Company's state of incorporation.
2. Attached hereto as Exhibit E-2 is a complete and correct copy of the
Bylaws of the Company as in full force and effect on the date hereof.
3. Attached hereto as Exhibit E-3 is a complete and correct copy of the
limited partnership agreement of the Partnership as in full force and effect on
the date hereof.
4. Attached hereto as Exhibit E-4 is a complete and correct copy of the
resolutions duly adopted by the Board of Directors of the Company on January __,
1999, approving, and authorizing, on behalf of the Company and the Partnership,
the execution and delivery of the Credit Agreement, the Notes (as such term is
defined in the Credit Agreement) and the other Loan Documents (as such term is
defined in the Credit Agreement) to which the Borrower is a party. Such
resolutions have not been repealed or amended and are in full force and effect,
and no other resolutions or consents have been adopted by the Board of Directors
of the Company in connection therewith.
5. ______________, who as Senior Vice President of the Company signed
the Credit Agreement, the Notes and the other Loan Documents to which the
Borrower is a party, was duly elected, qualified and acting as such at the time
he signed the Credit Agreement, the Notes and other Loan Documents to which the
Borrower is a party, and his signature appearing on the Credit Agreement, the
Notes and the other Loan Documents to which the Borrower is a party is his
genuine signature.
107
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the
____ day of January, 1999.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Secretary,
Winston Hotels, Inc.
108
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
To be provided upon request.
109
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated ________________ __, 199_
Reference is made to the Syndicated Credit Agreement dated as of
January 15, 1999 (together with all amendments and modifications thereto, the
"Credit Agreement") among Winston Hotels, Inc., a North Carolina corporation
(the "Company") and ▇▇▇▇ Limited Partnership, a North Carolina limited
partnership (the "Partnership") (the Company and the Partnership being
collectively referred to as the "Borrower"), the Banks (as defined in the Credit
Agreement), Wachovia Bank, N.A., as Agent (the "Agent"). Terms defined in the
Credit Agreement are used herein with the same meaning.
_____________________________________________________ (the "Assignor")
and _____________________________________________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse to
the Assignor, and the Assignee hereby purchases and assumes from the Assignor, a
______% interest in and to all of the Assignor's rights and obligations under
the Credit Agreement as of the Effective Date (as defined below) (including,
without limitation, a ______% interest (which on the Effective Date hereof is
$_______________) in the Assignor's Commitment and a ______% interest (which on
the Effective Date hereof is $_______________) in the Loans owing to the
Assignor a ______% interest in the Note held by the Assignor (which on the
Effective Date hereof is $__________________).
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, any other instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder, that such interest is free and clear of any
adverse claim and that as of the date hereof its Commitment (without giving
effect to assignments thereof which have not yet become effective) is
$_________________ and the aggregate outstanding principal amount of Loans owing
to it (without giving effect to assignments thereof which have not yet become
effective) is $_________________; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iii) attaches the
Note[s] referred to in paragraph 1 above and requests that the Agent exchange
such Note[s] as follows: [a new Note dated _______________, ____ in the
principal amount of _________________ payable to the order of the Assignee in
the principal amount of $_______________ payable to the order of the Assignor
and a Note dated ______________, ____ in the principal amount of $______________
payable to the order of the Assignee].
110
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.04(a) thereof (or any more recent financial statements of the Borrower
delivered pursuant to Section 5.01 thereof) and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) confirms that it is a bank or financial
institution; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; (vi) specifies as its
Lending Office (and address for notices) the office set forth beneath its name
on the signature pages hereof, (vii) represents and warrants that the execution,
delivery and performance of this Assignment and Acceptance are within its
corporate powers and have been duly authorized by all necessary corporate
action[, and (viii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's status for purposes
of determining exemption from United States withholding taxes with respect to
all payments to be made to the Assignee under the Credit Agreement and the Notes
or such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty].(2)
4. The Effective Date for this Assignment and Acceptance shall be
_______________ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for execution and
acceptance by the Agent [and to the Borrower for execution by the Borrower](3).
5. Upon such execution and acceptance by the Agent [and execution by
the Borrower](2), from and after the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent rights and obligations have
been transferred to it by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee by this Assignment
and Acceptance, relinquish its rights (other than under Section 10.03 and
Section 11.03 of the Credit Agreement) and be released from its obligations
under the Credit Agreement.
6. Upon such execution and acceptance by the Agent [and execution by
the Borrower], from and after the Effective Date, the Agent shall make all
payments in respect of the interest assigned hereby to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to such acceptance by the Agent directly between themselves.
---------------
(2) If the Assignee is organized under the laws of a jurisdiction outside
the United States.
(3) If the Assignee is not a Bank or an Affiliate of a Bank prior to the
Effective Date.
2
111
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of North Carolina.
[NAME OF ASSIGNOR]
By:____________________________________
Title:
[NAME OF ASSIGNEE]
By:____________________________________
Title:
Lending Office:
__________________________________
__________________________________
Telecopy number:__________________
Telephone number:_________________
WACHOVIA BANK, N.A., as Agent
By:____________________________________
Title:
BORROWER:*
WINSTON HOTELS, INC., a North Carolina
corporation
By: _____________________________
Senior Vice President
---------------
* If the Assignee is not a Bank or an Affiliate of a Bank prior to the
Effective Date.
3
112
▇▇▇▇ LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., its sole general
partner
By: _____________________________
Senior Vice President
4
113
EXHIBIT H
NOTICE OF BORROWING
WINSTON HOTELS, INC.
______________ __, 1999
FAX (▇▇▇) ▇▇▇-▇▇▇▇ (Original Request) FAX (▇▇▇) ▇▇▇-▇▇▇▇ (Copy)
------------------------------------- -------------------------
Mr. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇
Wachovia Bank, N.A. Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
Mail Code GA-382, 27th Floor Mail Code GA-1810, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Syndicated Credit Agreement Dated as of January 15, 1999, in the Amount
of $140,000,000 (The "Credit Agreement") by and Among Winston Hotels,
Inc. and ▇▇▇▇ Limited Partnership (The "Borrower"), Wachovia Bank, N.A.
(The "Agent" or "Swing Bank" ) and the Banks Who are Signatories
Thereto (The "Banks").
Ladies and Gentlemen:
This is Our Request to the Agent to Make the Advances or to Effect the
Repayments Under the Credit Agreement as Described in the Following Schedule and
to Select Interest Rates With Respect to This Activity.
SYNDICATED LOAN ACTIVITY
1. Syndicated Loan Balance From Prior Day $
----------------
2. Today's Syndicated Loan Advance + $
----------------
3. Today's Syndicated Loan Repayment - $
----------------
4. Syndicated Loan Balance After Today's Activity (1+2-3) = $
----------------
SWING LOAN ACTIVITY
5. Swing Loan Balance From Prior Day $
----------------
6. Today's Swing Loan Advance + $
----------------
7. Today's Swing Loan Repayment - $
----------------
8. Swing Loan Balance After Today's Activity (5+6-7) = $
----------------
SUMMARY OF AGGREGATE LOAN ACTIVITY
9. Aggregate Loan Balance Before Today's Activity (1+5) $
----------------
10. Today's Aggregate Loan Advance (2+6) + $
----------------
11. Today's Aggregate Loan Repayment (3+7) - $
----------------
12. Aggregate Loan Balance After Today's Activity (4+8) = $
----------------
PLEASE CREDIT IN THE CASE OF ADVANCES OR DEBIT IN THE CASE OF REPAYMENTS THE
ACCOUNT OF _____________________ AT WACHOVIA BANK, N.A., RALEIGH, NC ACCOUNT #
______________.
114
SYNDICATED LOAN
INTEREST RATE ELECTION FOR LOAN ADVANCES
Borrower hereby elects the following interest rate(s) with respect to the
Syndicated Loan advance requested hereby:
-------------------------------------------------------------------------------------------------------------
INTEREST RATE SELECTED AMOUNT OF INTEREST INTEREST RATE INTEREST RATE
FOR ADVANCE LOAN ADVANCE RATE COMMENCES EXPIRES
-------------------------------------------------------------------------------------------------------------
BASE RATE $
-------------------------------------------------------------------------------------------------------------
FOR EURO-DOLLAR LOANS:
-------------------------------------------------------------------------------------------------------------
ONE-MONTH LIBOR $ %
-------------------------------------------------------------------------------------------------------------
TWO-MONTH LIBOR $ %
-------------------------------------------------------------------------------------------------------------
THREE-MONTH LIBOR $ %
-------------------------------------------------------------------------------------------------------------
SIX-MONTH LIBOR $ %
-------------------------------------------------------------------------------------------------------------
$ %
-------------------------------------------------------------------------------------------------------------
$ %
-------------------------------------------------------------------------------------------------------------
APPLICATION OF LOAN REPAYMENTS
BORROWER HEREBY INSTRUCTS AGENT TO APPLY THE ABOVE REQUESTED SYNDICATED LOAN
REPAYMENT TO THE PORTIONS OF THE SYNDICATED LOAN DESCRIBED BELOW:
---------------------------------------------------------------------------------------
INTEREST RATE SELECTED AMOUNT OF INTEREST INTEREST RATE
FOR REPAYMENT LOAN REPAYMENT RATE EXPIRES
---------------------------------------------------------------------------------------
BASE RATE $
---------------------------------------------------------------------------------------
EURO-DOLLAR LOAN $ %
---------------------------------------------------------------------------------------
EURO-DOLLAR LOAN $ %
---------------------------------------------------------------------------------------
EURO-DOLLAR LOAN $ %
---------------------------------------------------------------------------------------
115
SWING LOAN
INTEREST RATE ELECTION
BORROWER HEREBY ELECTS THE FOLLOWING INTEREST RATE WITH RESPECT TO THE SWING
LOAN EFFECTIVE THIS DAY.
-----------------------------------------------------------
INTEREST RATE MARKED BY "X"
ELECTION
-----------------------------------------------------------
7-DAY LIBOR RATE
-----------------------------------------------------------
BASE RATE
-----------------------------------------------------------
(NOTICE TO BE GIVEN ONLY UPON CHANGE OF THE INTEREST RATE ELECTION FOR THE SWING
LOAN. SWING LOAN SHALL CARRY THE BASE RATE UNLESS 7 DAY LIBOR RATE IS SELECTED
BY BORROWER.)
CERTIFICATIONS
WE HEREBY CERTIFY THAT THE LOAN ADVANCE REQUESTED BY THIS NOTICE OF BORROWING
SHALL NOT CAUSE THE LOAN TO EXCEED THE MAXIMUM ADVANCE OR THE FACILITY LIMIT
UNDER THE CREDIT AGREEMENT AS SET FORTH IN THE FOLLOWING SCHEDULE.
1. MAXIMUM ADVANCE CURRENTLY PERMITTED UNDER THE CREDIT AGREEMENT $
---------------
2. LESS AGGREGATE LOAN BALANCE AFTER TODAY'S ACTIVITY - $
---------------
3. AVAILABLE CREDIT OR (LOAN BALANCE EXCEEDING MAXIMUM ADVANCE) = $
---------------
WE FURTHER CERTIFY THAT BORROWER IS IN COMPLIANCE WITH THE CREDIT AGREEMENT AND
THE LOAN DOCUMENTS AND THAT NO DEFAULT, OR EVENT WHICH, WITH NOTICE OR PASSAGE
OF TIME OR BOTH, WOULD CONSTITUTE A DEFAULT UNDER THE CREDIT AGREEMENT OR THE
LOAN DOCUMENTS HAS OCCURRED OR WILL BE IN EXISTENCE AFTER GIVING EFFECT TO ANY
ADVANCE OR OTHER EXTENSION OF CREDIT UNDER THE CREDIT AGREEMENT CONTEMPLATED
HEREBY.
SINCERELY,
WINSTON HOTELS, INC. (AS BORROWER AND ON
BEHALF OF ▇▇▇▇ LIMITED PARTNERSHIP AS ITS
SOLE GENERAL PARTNER)
BY:________________________________________
SENIOR VICE PRESIDENT
116
EXHIBIT I
BORROWING BASE VALUE CERTIFICATE
To be provided upon request.
117
EXHIBIT J
TO CREDIT AGREEMENT
CONDUIT DEBT HOTELS
1. Comfort Suites, Orlando, Florida
2. Comfort Inn, Charleston, South Carolina
3. Courtyard by Marriott, Ann Arbor, Michigan
4. Courtyard by Marriott, Wilmington, North Carolina
5. Hampton Inn, Elmsford, New York
6. Hampton Inn, Raleigh, North Carolina
7. Hampton Inn, Perimeter, Georgia
8. Hampton Inn, West Springfield, Massachusetts
9. Hampton Inn, Charlotte, North Carolina
10. ▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (Gwinnett)
11. Homewood Suites, Cary, North Carolina
12. Homewood Suites, Clearlake, Texas
13. Quality Suites, North Charleston, South Carolina
14. Residence Inn, Phoenix, Arizona
118
EXHIBIT K TO CREDIT AGREEMENT
INITIAL HOTELS
HOTEL CHART
▇▇▇▇ LIMITED PARTNERSHIP/WINSTON HOTELS, INC. (1999 SYNDICATED LOAN)
WXH
PROPERTY ROOMS/
CODE ADDRESS METRO CITY- COMMUNITY COUNTY STATE SUITES FRANCHISE OWNER MANAGER
-------- ------- --------------------- ------ ----- ------ --------- ----- -------
1. CA ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇/▇
2. RG ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ 155 HILTON GARDEN INN PARTNERSHIP N/A
3. SP ▇▇▇▇ ▇▇ ▇▇▇-▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 126 HAMPTON INN PARTNERSHIP N/A
4. JV ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇/▇
5. BN ▇▇▇. ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ WATAUGA NC 95 HAMPTON INN PARTNERSHIP N/A
6. CT ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ WAKE NC 137 HOMEWOOD SUITES PARTNERSHIP N/A
7. HI ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 118 HAMPTON INN PARTNERSHIP N/A
8. DH ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 96 HOMEWOOD SUITES PARTNERSHIP N/A
9. SL ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇/▇
10. BR ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ GA 127 HAMPTON INN PARTNERSHIP N/A
11. HH ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 125 HAMPTON INN PARTNERSHIP IMIC
12. CH ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ 66 HAMPTON INN PARTNERSHIP IMIC
13. CC ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ 123 COMFORT INN PARTNERSHIP IMIC
14. WC ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 120 MARRIOTT PARTNERSHIP N/A
15. DC ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 138 COMFORT INN PARTNERSHIP IMIC
16. LM ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇/▇
17. CE ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 127 HOLIDAY INN EXP. PARTNERSHIP N/A
18. CL ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 120 COMFORT INN PARTNERSHIP N/A
19. SC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 160 HOLIDAY INN PARTNERSHIP N/A
20. TH ▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 171 HOLIDAY INN PARTNERSHIP N/A
21. DS ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 244 HOLIDAY INN SELECT PARTNERSHIP N/A
22. HM ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 202 MARRIOTT PARTNERSHIP N/A
23. DV ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 119 HAMPTON INN PARTNERSHIP N/A
24. AH ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇/▇
25. WG ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 164 HILTON GARDEN INN PARTNERSHIP N/A
26. AF ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ 110 MARRIOTT/FAIRFIELD PARTNERSHIP N/A
27. LV ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 118 HAMPTON INN PARTNERSHIP N/A
28. AL 800 ALBANY SHAKER RD. ALBANY ALBANY NY 155 HILTON GARDEN INN PARTNERSHIP N/A
29. HP ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇/▇
WXH
PROPERTY
CODE LESSEE
-------- ------
1. CA CAPSTAR WINSTON
2. RG CAPSTAR WINSTON
3. SP CAPSTAR WINSTON
4. JV CAPSTAR WINSTON
5. BN CAPSTAR WINSTON
6. CT CAPSTAR WINSTON
7. HI CAPSTAR WINSTON
8. DH CAPSTAR WINSTON
9. SL CAPSTAR WINSTON
10. BR CAPSTAR WINSTON
11. HH CAPSTAR WINSTON
12. CH CAPSTAR WINSTON
13. CC CAPSTAR WINSTON
14. WC CAPSTAR WINSTON
15. DC CAPSTAR WINSTON
16. LM CAPSTAR WINSTON
17. CE CAPSTAR WINSTON
18. CL CAPSTAR WINSTON
19. SC SECAUCUS HOLDING
CORP.
20. TH CAPSTAR WINSTON
21. DS CAPSTAR WINSTON
22. HM CAPSTAR WINSTON
23. DV CAPSTAR WINSTON
24. AH CAPSTAR WINSTON
25. WG CAPSTAR WINSTON
26. AF CAPSTAR WINSTON
27. LV BRISTOL HOTELS
28. AL CAPSTAR WINSTON
29. HP CAPSTAR WINSTON
119
EXHIBIT L
TO CREDIT AGREEMENT
FORM OF PERMITTED OPERATING LEASE
Exhibit to the Company's Registration Statement on Form S-11 as filed with the
Securities and Exchange Commission (Registration No. 33-91230) effective May 11,
1995 and incorporated herein by reference.
120
EXHIBIT M TO CREDIT AGREEMENT
ALLOCATED LOAN AMOUNTS FOR INITIAL HOTELS
HOTEL CHART
▇▇▇▇ LIMITED PARTNERSHIP/WINSTON HOTELS, INC. (1999 SYNDICATED LOAN)
WXH
PROPERTY ROOMS/
CODE ADDRESS METRO CITY- COMMUNITY COUNTY STATE SUITES ALLOCATED LOAN AMOUNTS
-------- ------- --------------------- ------ ----- ------- ----------------------
1. CA ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇ 130 $ 4,970,000.00
2. RG ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ 155 $ 7,250,000.00
3. SP ▇▇▇▇ ▇▇ ▇▇▇-▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 126 $ 3,030,000.00
4. JV ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 120 $ 3,430,000.00
5. BN ▇▇▇. ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ WATAUGA NC 95 $ 2,970,000.00
6. CT ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ WAKE NC 137 $ 7,710,000.00
7. HI ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 118 $ 3,910,000.00
8. DH ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 96 $ 4,040,000.00
9. SL ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 124 $ 3,070,000.00
10. BR ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 127 $ 3,720,000.00
11. HH ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 125 $ 3,300,000.00
12. CH ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ 66 $ 2,340,000.00
13. CC ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ 123 $ 3,590,000.00
14. WC ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 120 $ 3,620,000.00
15. DC ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 138 $ 5,810,000.00
16. LM ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 112 $ 6,250,000.00
17. CE ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 127 $ 3,920,000.00
18. CL ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 120 $ 2,800,000.00
19. SC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ $10,350,000.00
20. TH ▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 171 $ 4,710,000.00
21. DS ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 244 $ 9,210,000.00
22. HM ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 202 $ 5,870,000.00
23. DV ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 119 $ 1,690,000.00
24. AH ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 112 $ 5,520,000.00
25. WG ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 164 $ 8,150,000.00
26. AF ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ 110 $ 2,570,000.00
27. LV ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 118 $ 5,420,000.00
28. AL ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 155 $ 7,700,000.00
29. HP ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 126 $ 6,950,000.00