$150,000,000 REVOLVING CREDIT FACILITY
AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
SUBURBAN LODGES OF AMERICA, INC.,
and
THE GUARANTORS PARTY HERETO
and
THE BANKS PARTY HERETO
and
PNC BANK, KENTUCKY, INC., as Agent
and
AMSOUTH BANK OF ALABAMA
and SUNTRUST BANK, ATLANTA, as Co-Agents
Dated as of December 15, 1997
Prepared by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
TABLE OF CONTENTS
Page
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1. CERTAIN DEFINITIONS 1
1.1 Certain Definitions........................................................................... 1
1.2 Construction.................................................................................. 20
1.2.1 Number; Inclusion................................................................... 20
1.2.2 Determination....................................................................... 20
1.2.3 Agent's Discretion and Consent...................................................... 20
1.2.4 Documents Taken as a Whole.......................................................... 21
1.2.5 Headings............................................................................ 21
1.2.6 Implied References to This Agreement................................................ 21
1.2.7 Persons............................................................................. 21
1.2.8 Modifications to Documents.......................................................... 21
1.2.9 From, To and Through................................................................ 21
1.2.10 Shall; Will......................................................................... 21
1.3 Accounting Principles......................................................................... 22
2. REVOLVING CREDIT FACILITY............................................................................ 22
2.1 Revolving Credit Commitments.................................................................. 22
2.2 Nature of Banks' Obligations With Respect to Revolving Credit Loans........................... 22
2.3 Commitment Fees............................................................................... 23
2.4 Delinquent Bank............................................................................... 23
2.5 Revolving Credit Loan Requests................................................................ 23
2.6 Making Revolving Credit Loans................................................................. 24
2.7 Revolving Credit Notes........................................................................ 24
2.8 Use of Proceeds............................................................................... 25
2.9 Letter of Credit Subfacility.................................................................. 25
2.9.1 Issuance of Letters of Credit....................................................... 25
2.9.2 Letter of Credit Fees............................................................... 25
2.9.3 Disbursements, Reimbursement........................................................ 26
2.9.4 Documentation....................................................................... 27
2.9.5 Determinations to Honor Drawing Requests............................................ 27
2.9.6 Nature of Participation and Reimbursement Obligations............................... 27
2.9.7 Indemnity........................................................................... 29
2.9.8 Liability for Acts and Omissions.................................................... 29
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2.10 Increase in Commitments....................................................................... 30
2.10.1 Existing Banks...................................................................... 30
2.10.2 New Banks........................................................................... 30
2.10.3 Limitations on Increases............................................................ 30
2.11 Reduction of Commitments...................................................................... 31
3. COLLATERAL POOL PROPERTIES.................................................................... 31
3.1 Acceptance of Collateral Pool Properties. 31
3.1.1 Acceptance Generally................................................................ 31
3.1.2 Collateral Pool Addition Fee........................................................ 32
3.2 Release of Collateral Pool Properties......................................................... 32
3.3 Borrowing Base Determinations................................................................. 33
3.3.1 Appraisals.......................................................................... 33
3.3.2 Borrowing Base Value................................................................ 33
3.4 Covenants Relating to the Collateral Pool and the Collateral Pool Properties.................. 33
3.4.1 Minimum Collateral Pool Properties.................................................. 34
3.4.2 Financial Covenants................................................................. 34
3.4.3 Extended-Stay Lodging Facilities.................................................... 34
3.4.4 Insurance........................................................................... 34
3.4.5 Guest Leases; Tenant Leases; Major Agreements....................................... 34
3.4.6 Nondisturbance Agreements........................................................... 35
3.4.7 Management Agreements............................................................... 35
3.4.8 Major Construction.................................................................. 36
3.4.9 Borrowing Base...................................................................... 36
4. INTEREST RATES................................................................................ 36
4.1 Interest Rate Options......................................................................... 36
4.1.1 Revolving Credit Interest Rate Options.............................................. 36
4.1.2 Rate Quotations..................................................................... 37
4.2 Interest Periods.............................................................................. 37
4.2.1 Ending Date and Business Day........................................................ 37
4.2.2 Amount of Borrowing Tranche......................................................... 37
4.2.3 Termination Before Expiration Date.................................................. 37
4.2.4 Renewals............................................................................ 37
4.3 Interest After Default........................................................................ 38
4.3.1 Letter of Credit Fees; Interest Rate................................................ 38
4.3.2 Other Obligations................................................................... 38
4.3.3 Acknowledgment...................................................................... 38
4.4 Euro-Rate Unascertainable..................................................................... 38
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4.4.1 Unascertainable...................................................................... 38
4.4.2 Illegality; Increased Costs; Deposits Not Available.................................. 38
4.4.3 Agent's and Bank's Rights............................................................ 39
4.5 Selection of Interest Rate Options............................................................. 40
5. PAYMENTS....................................................................................... 40
5.1 Payments....................................................................................... 40
5.2 Pro Rata Treatment of Banks.................................................................... 40
5.3 Interest Payment Dates......................................................................... 41
5.4 Voluntary Prepayments.......................................................................... 41
5.4.1 Right to Prepay...................................................................... 41
5.4.2 Replacement of a Bank................................................................ 42
5.4.3 Change of Lending Office............................................................. 42
5.5 Mandatory Prepayments.......................................................................... 43
5.5.1 Borrowing Base Exceeded.............................................................. 43
5.6 Additional Compensation in Certain Circumstances............................................... 43
5.6.1 Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc............................... 43
5.6.2 Indemnity............................................................................ 44
6. REPRESENTATIONS AND WARRANTIES......................................................................... 45
6.1 Representations and Warranties................................................................. 45
6.1.1 Organization and Qualification....................................................... 45
6.1.2 Capitalization and Ownership......................................................... 45
6.1.3 Subsidiaries......................................................................... 45
6.1.4 Power and Authority.................................................................. 46
6.1.5 Validity and Binding Effect.......................................................... 46
6.1.6 No Conflict.......................................................................... 46
6.1.7 Litigation........................................................................... 46
6.1.8 Title to Properties.................................................................. 47
6.1.9 Financial Statements................................................................. 47
6.1.10 Margin Stock......................................................................... 48
6.1.11 Full Disclosure...................................................................... 48
6.1.12 Taxes................................................................................ 48
6.1.13 Consents and Approvals............................................................... 49
6.1.14 No Event of Default; Compliance With Instruments..................................... 49
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc....................................... 49
6.1.16 Security Interests................................................................... 49
6.1.17 Mortgage Liens....................................................................... 50
6.1.18 Status of the Pledged Collateral..................................................... 50
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6.1.19 Insurance.............................................................................. 50
6.1.20 Compliance With Laws................................................................... 51
6.1.21 Material Contracts; Burdensome Restrictions............................................ 51
6.1.22 Investment Companies; Regulated Entities............................................... 51
6.1.23 Plans and Benefit Arrangements......................................................... 51
6.1.24 Employment Matters..................................................................... 52
6.1.25 Environmental Matters.................................................................. 53
6.1.26 Senior Debt Status..................................................................... 54
6.2 Updates to Schedules............................................................................. 54
7. CONDITIONS OF LENDING.................................................................................... 55
7.1 First Loans...................................................................................... 55
7.1.1 Officer's Certificate.................................................................. 55
7.1.2 Secretary's Certificate................................................................ 55
7.1.3 Delivery of Loan Documents............................................................. 56
7.1.4 Opinion of Counsel..................................................................... 56
7.1.5 Legal Details.......................................................................... 56
7.1.6 Payment of Fees........................................................................ 56
7.1.7 Consents............................................................................... 57
7.1.8 Officer's Certificate Regarding MACs................................................... 57
7.1.9 No Violation of Laws................................................................... 57
7.1.10 No Actions or Proceedings.............................................................. 57
7.1.11 Collateral Pool Properties............................................................. 57
7.1.12 Quarterly Compliance Certificate....................................................... 57
7.2 Each Additional Loan............................................................................. 58
8. COVENANTS............................................................................................... 58
8.1 Affirmative Covenants............................................................................ 58
8.1.1 Preservation of Existence, Etc......................................................... 58
8.1.2 Payment of Liabilities, Including Taxes, Etc........................................... 58
8.1.3 Maintenance of Insurance............................................................... 59
8.1.4 Maintenance of Properties and Leases................................................... 59
8.1.5 Maintenance of Patents, Trademarks, Etc................................................ 59
8.1.6 Visitation Rights...................................................................... 60
8.1.7 Keeping of Records and Books of Account................................................ 60
8.1.8 Plans and Benefit Arrangements......................................................... 60
8.1.9 Compliance With Laws................................................................... 60
8.1.10 Use of Proceeds........................................................................ 61
8.1.11 Further Assurances..................................................................... 61
8.1.12 Subordination of Intercompany Loans.................................................... 61
8.1.13 Listed Company......................................................................... 61
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8.2 Negative Covenants............................................................................... 61
8.2.1 Indebtedness........................................................................... 61
8.2.2 Liens.................................................................................. 62
8.2.3 Guaranties............................................................................. 62
8.2.4 Loans and Investments.................................................................. 62
8.2.5 Dividends and Related Distributions.................................................... 63
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.................................... 63
8.2.7 Affiliate Transactions................................................................. 63
8.2.8 Subsidiaries, Partnerships and Joint Ventures.......................................... 63
8.2.9 Continuation of or Change in Business.................................................. 64
8.2.10 Plans and Benefit Arrangements......................................................... 64
8.2.11 Fiscal Year............................................................................ 65
8.2.12 Changes in Organizational Documents.................................................... 65
8.2.13 Minimum Debt Service Coverage Ratio.................................................... 65
8.2.14 Maximum Consolidated Debt to Market Value Ratio........................................ 65
8.2.15 Maximum Certain Floating Rate Debt..................................................... 65
8.2.16 Minimum Tangible Net Worth............................................................. 66
8.2.17 Restrictions on Assets Under Development and Land...................................... 66
8.3 Reporting Requirements........................................................................... 66
8.3.1 Quarterly Financial Statements......................................................... 66
8.3.2 Annual Financial Statements............................................................ 66
8.3.3 Certificate of the Borrower............................................................ 67
8.3.4 Notice of Default...................................................................... 67
8.3.5 Notice of Litigation................................................................... 67
8.3.6 Budgets, Forecasts, Other Reports and Information...................................... 68
8.3.7 Notices Regarding Plans and Benefit Arrangements....................................... 68
9. DEFAULT................................................................................................. 70
9.1 Events of Default................................................................................. 70
9.1.1 Payments Under Loan Documents........................................................... 70
9.1.2 Breach of Warranty...................................................................... 70
9.1.3 Breach of Negative Covenants or Visitation Rights....................................... 70
9.1.4 Breach of Other Covenants............................................................... 70
9.1.5 Defaults in Other Agreements or Indebtedness............................................ 71
9.1.6 Final Judgments or Orders............................................................... 71
9.1.7 Loan Document Unenforceable............................................................. 71
9.1.8 Uninsured Losses; Proceedings Against Assets............................................ 71
9.1.9 Notice of Lien or Assessment............................................................ 72
9.1.10 Insolvency.............................................................................. 72
9.1.11 Events Relating to Plans and Benefit Arrangements....................................... 72
9.1.12 Cessation of Business................................................................... 72
9.1.13 Change of Ownership or Control.......................................................... 73
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9.1.14 Involuntary Proceedings................................................................. 73
9.1.15 Voluntary Proceedings................................................................... 73
9.2 Consequences of Event of Default.................................................................. 73
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.............................................................. 73
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.................................... 74
9.2.3 Set-off................................................................................. 74
9.2.4 Suits, Actions, Proceedings............................................................. 75
9.2.5 Application of Proceeds................................................................. 75
9.2.6 Other Rights and Remedies............................................................... 75
9.3 Notice of Sale.................................................................................... 76
10. THE AGENT............................................................................................... 76
10.1 Appointment....................................................................................... 76
10.2 Delegation of Duties.............................................................................. 76
10.3 Nature of Duties; Independent Credit Investigation................................................ 76
10.4 Actions in Discretion of Agent; Instructions From the Banks....................................... 77
10.5 Reimbursement and Indemnification of Agent by the Borrower........................................ 77
10.6 Exculpatory Provisions............................................................................ 78
10.7 Reimbursement and Indemnification of Agent by Banks............................................... 79
10.8 Reliance by Agent................................................................................. 79
10.9 Notice of Default................................................................................. 79
10.10 Notices........................................................................................... 79
10.11 Banks in Their Individual Capacities.............................................................. 80
10.12 Holders of Notes.................................................................................. 80
10.13 Equalization of Banks............................................................................. 80
10.14 Successor Agent................................................................................... 81
10.15 Agent's Fee....................................................................................... 81
10.16 Availability of Funds............................................................................. 82
10.17 Calculations...................................................................................... 82
10.18 Beneficiaries..................................................................................... 82
11. MISCELLANEOUS........................................................................................... 83
11.1 Modifications, Amendments or Waivers.............................................................. 83
11.1.1 Increase of Commitment; Extension or Expiration Date.................................... 83
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11.1.2 Extension of Payment; Reduction of Principal Interest or
Fees; Modification of Terms of Payment.................................................. 83
11.1.3 Release of Collateral or Guarantor...................................................... 83
11.1.4 Borrowing Base ......................................................................... 83
11.1.5 Miscellaneous........................................................................... 84
11.2 No Implied Waivers; Cumulative Remedies; Writing Required......................................... 84
11.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes................................. 84
11.4 Holidays.......................................................................................... 85
11.5 Funding by Branch, Subsidiary or Affiliate........................................................ 85
11.5.1 Notional Funding........................................................................ 85
11.5.2 Actual Funding.......................................................................... 86
11.6 Notices........................................................................................... 86
11.7 Severability...................................................................................... 87
11.8 Governing Law..................................................................................... 87
11.9 Prior Understanding............................................................................... 87
11.10 Duration; Survival................................................................................ 87
11.11 Successors and Assigns............................................................................ 88
11.12 Confidentiality................................................................................... 89
11.12.1 General............................................................................... 89
11.12.2 Sharing Information With Affiliates of the Banks...................................... 89
11.13 Counterparts..................................................................................... 90
11.14 Agent's or Bank's Consent........................................................................ 90
11.15 Exceptions....................................................................................... 90
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL........................................................... 90
11.17 Tax Withholding Clause........................................................................... 91
11.18 Joinder of Guarantors............................................................................ 91
11.19 LIMITATION OF LIABILITY.......................................................................... 92
11.20 Co-Agents........................................................................................ 92
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULE
SCHEDULE 1.1(A) - PRICING GRID
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS
SCHEDULE 1.1(C) - COLLATERAL POOL PROPERTIES
SCHEDULE 1.1(R) - LIST OF REAL ESTATE COLLATERAL DOCUMENTS
SCHEDULE 3.4.4 - INSURANCE REQUIREMENTS FOR COLLATERAL POOL PROPERTIES
SCHEDULE 3.4.7 - MANAGEMENT AGREEMENTS
SCHEDULE 6.1.1 - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.2 - MANAGEMENT SHAREHOLDERS; OPTIONS, WARRANTS OR OTHER
PURCHASE RIGHTS
SCHEDULE 6.1.3 - SUBSIDIARIES
SCHEDULE 6.1.8 - OWNED AND LEASED REAL PROPERTY
SCHEDULE 6.1.13 - CONSENTS AND APPROVALS
SCHEDULE 6.1.15 - PATENTS, TRADEMARKS, COPYRIGHTS,
LICENSES, ETC.
SCHEDULE 6.1.18 - PARTNERSHIP AGREEMENTS
SCHEDULE 6.1.19 - INSURANCE POLICIES
SCHEDULE 6.1.21 - MATERIAL CONTRACTS
SCHEDULE 6.1.23 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 6.1.25 - ENVIRONMENTAL DISCLOSURES
EXHIBITS
EXHIBIT 1.1(A) - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(C) - FORM OF COLLATERAL ASSIGNMENT OF FRANCHISE AGREEMENT
EXHIBIT 1.1(G) - FORM OF GUARANTY AND SURETYSHIP AGREEMENT
EXHIBIT 1.1(I) - FORM OF INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(J) - FORM OF JOINDER
EXHIBIT 1.1(N)(1) - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.1(N)(2) - FORM OF NOTIFICATION AND CONTROL AGREEMENT
EXHIBIT 1.1(P)(1) - FORM OF PLEDGE AGREEMENT
EXHIBIT 1.1(P)(2) - FORM OF PLEDGE AGREEMENT (CASH COLLATERAL)
EXHIBIT 1.1(R) - FORM OF REAL ESTATE COLLATERAL DOCUMENTS
EXHIBIT 1.1(S) - FORM OF SECURITY AGREEMENT
EXHIBIT 2.5 - FORM OF LOAN REQUEST
EXHIBIT 7.1.4(i) - REQUIREMENTS OF OPINION OF COUNSEL
EXHIBIT 8.3.3 - FORM OF COMPLIANCE CERTIFICATE
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
December 15, 1997 and is made by and among SUBURBAN LODGES OF AMERICA, INC.,
a Georgia corporation (the "Borrower"), each of the GUARANTORS (as
--------
hereinafter defined), the BANKS (as hereinafter defined), and PNC BANK,
KENTUCKY, INC., in its capacity as agent for the Banks under this Agreement
(hereinafter referred to in such capacity as the "Agent"), AMSOUTH BANK
-----
OF ALABAMA, and SUNTRUST BANK, ATLANTA, as Co-Agents.
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to amend and restate
the Credit Agreement dated September 26, 1996, as amended to date (the
"Original Credit Agreement"), to provide a revolving credit facility to
-------------------------
the Borrower in an aggregate principal amount not to exceed $150,000,000;
and
WHEREAS, the revolving credit facility shall be used for
general corporate purposes, including without limitation the acquisition,
construction and renovation of extended-stay lodging facilities and
related equity investments; and
WHEREAS, the Banks are willing to provide such credit upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to
be legally bound hereby, covenant and agree to amend and restate the
Original Credit Agreement, in its entirety, as follows:
1. CERTAIN DEFINITIONS
-------------------
1.1 Certain Definitions.
-------------------
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:
Affiliate as to any Person shall mean any other Person (i)
---------
which directly or indirectly controls, is controlled by or is under common
control with such Person, (ii) which beneficially owns or holds 5% or more
of any class of the voting or other equity interests of such Person, or
(iii) 5% or more of any class of voting interests or other equity interests
of which is beneficially owned or held, directly or indirectly, by such
Person. Control, as used in this definition, shall mean the 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, including the power to elect
a majority of the directors or trustees of a corporation or trust, as the
case may be.
Agent shall mean PNC Bank, Kentucky, Inc., and its
-----
successors and assigns.
Agent's Fee shall have the meaning assigned to that term
----------
in Section 10.15.
Agent's Letter shall mean that certain letter dated July 25,
--------------
1997 among the Agent, PNC Capital Markets, Inc. and the Borrower, as it may
be amended or supplemented from time to time.
Agreement shall mean this Amended and Restated Credit
---------
Agreement, as the same may be supplemented, amended, restated or otherwise
modified from time to time, including all schedules and exhibits.
Annual Statements shall have the meaning assigned to that term
-----------------
in Section 6.1.9(i).
Applicable Margin shall mean, as applicable:
-----------------
(A) the percentage spread to be added to the Base Rate under
the Base Rate Option based on the Collateral Pool Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
--------------
"Base Rate Spread;" and
-----------------
(B) the percentage spread to be added to the Euro Rate under
the Euro-Rate Option based on the Collateral Pool Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
--------------
"Euro-Rate Spread."
-----------------
The Applicable Margin shall be computed in accordance with the parameters
set forth on Schedule 1.1(A).
---------------
Appraisal shall mean an appraisal commissioned by and
---------
acceptable to the Agent and in compliance with the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, and the regulations
promulgated thereunder, and with the Uniform Standards of Professional
Appraisal Practice.
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As-Is Value shall mean, other than as set forth herein, the
-----------
as-is value set forth in the most recent Appraisal of a Collateral Pool
Property.
Assets Under Development shall mean all real estate which any
------------------------
Loan Party, directly or indirectly, owns or leases on which the construction
of building improvements has been commenced but which is not yet completed
and generating income.
Assignment and Assumption Agreement shall mean an Assignment
-----------------------------------
and Assumption Agreement by and among a Purchasing Bank, the Transferor Bank
and the Agent, as Agent and on behalf of the remaining Banks,
substantially in the form of Exhibit 1.1(A).
---------------
Authorized Officer shall mean those individuals, designated
------------------
by written notice to the Agent from the Borrower, authorized to execute
notices, reports and other documents on behalf of the Loan Parties required
hereunder. The Borrower may amend such list of individuals from time to
time by giving written notice of such amendment to the Agent.
Banks shall mean the financial institutions named on
-----
Schedule 1.1(B) and their respective successors and assigns as permitted
--------------
hereunder, each of which is referred to herein as a Bank.
Base Net Worth shall mean the sum of $80,000,000 plus 80% of
--------------
the proceeds received by any Loan Party from any offering or placement of any
equity securities of the Borrower after the Closing Date, net of reasonable and
customary expenses in connection with such offering or placement.
Base Rate shall mean the greater of (i) the interest rate per
---------
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective
Rate plus 1/2% per annum.
Base Rate Option shall mean the option of the Borrower to have
----------------
Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.1(i).
Benefit Arrangement shall mean at any time an "employee benefit
-------------------
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise
contributed to by any member of the ERISA Group.
Borrower shall mean Suburban Lodges of America, Inc., a
--------
corporation organized and existing under the laws of the State of Georgia.
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Borrowing Base shall be determined based on the most recent
--------------
certificate of the Borrower delivered pursuant to Section 3.1, 3.2, 7.2 or
8.3.3 and shall mean the sum of (i) the Stabilized Collateral Pool Borrowing
Base, (ii) the Pre-Stabilized Collateral Pool Borrowing Base and (iii) the
Cash Collateral Borrowing Base.
Borrowing Date shall mean, with respect to any Loan, the date
--------------
for the making thereof or the renewal or conversion thereof to the same or a
different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans
-----------------
outstanding as follows: (i) any Loans to which a Euro-Rate Option applies
which become subject to the same Interest Rate Option under the Loan Request
by the Borrower and which have the same Interest Period shall constitute one
Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies
shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday
------------
or a legal holiday on which commercial banks are authorized or required to
be closed for business in Louisville, Kentucky and if the applicable
Business Day relates to any Loan to which the Euro-Rate Option applies,
such day must also be a day on which dealings are carried on in the
London interbank market.
Cash Collateral Borrowing Base shall mean the amount of cash
------------------------------
or cash equivalents of the Borrower invested in PNC's TempCash Fund,
variable rate demand notes backed by PNC letters of credit or such other
securities acceptable from time to time to the Required Banks and as to
which the Agent on behalf of the Banks has a first priority lien pursuant
to the Pledge Agreement (Cash Collateral) and Notification and Control
Agreement.
Certain Floating Rate Debt shall mean any outstanding
-------------------------
Consolidated Debt which bears interest at a rate which is subject to
periodic adjustment (either automatically or by reference to a fluctuating
base or market rate or at the option of the lender) at any time which is not
hedged to a maximum all-in rate of 9%.
Closing Date shall mean December 15, 1997.
------------
Co-Agents shall mean AmSouth Bank of Alabama, SunTrust Bank,
---------
Atlanta and their respective successors.
Collateral shall mean the Pledged Collateral, the Real Estate
----------
Collateral, the UCC Collateral and all other property of the Borrower on which
liens and security interests have been granted to the Agent for the benefit of
the Banks to secure the Loans.
Collateral Assignment shall mean the Collateral Assignment of
---------------------
Franchise Agreements in substantially the form of Exhibit 1.1(C) executed and
-------------
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delivered by the Borrower to the Agent for the benefit of the Banks, as
the same may be supplemented or amended from time to time in accordance
herewith and therewith.
Collateral Pool shall mean, at any time, the Properties
---------------
which the Borrower has proposed as the Collateral Pool Properties and
have been included pursuant to Section 3.1 and which have not been
released pursuant to Section 3.2. The Collateral Pool Properties shall be
set forth on Schedule 1.1(C), as amended, restated, modified or otherwise
supplemented from time to time in accordance herewith.
Collateral Pool Debt Service shall mean, as of any date of
----------------------------
determination, the annual amount, assuming equal monthly payments, required
to amortize fully over a 20-year period the sum of the Revolving Facility
Usage minus the Cash Collateral Borrowing Base at an assumed interest rate of
1.75% above the "weekly average yield" on U.S. Treasury Securities adjusted
to a constant maturity of 10 years, as published in H.15(519) Federal
Reserve Statistical Release (the "Release") seven (7) Business Days prior
-------
to the date of determination; provided, however, if the Release is no
--------
longer published, a reasonably equivalent substitute therefor, as
selected by the Agent in its discretion, shall be utilized and provided,
--------
further, if the Release is not published seven (7) Business Days prior to
the date of determination, then the Release published on the most recent
prior date thereto shall be used.
Collateral Pool Debt Service Coverage Ratio shall mean the
-------------------------------------------
ratio of Net Operating Income to Collateral Pool Debt Service.
Collateral Pool Leverage Ratio shall mean the ratio of (i)
------------------------------
Revolving Facility Usage minus the Cash Collateral Borrowing Base to (ii)
the aggregate As-Is Value for each Collateral Pool Property.
Collateral Pool Property shall mean an income-producing real
------------------------
estate property which is included in the Collateral Pool, and Collateral
----------
Pool Properties shall mean more than one Collateral Pool Property.
---------------
Collateral Pool Value shall mean the aggregate of the As-Is
---------------------
Value for each Collateral Pool Property. For purposes of determining
Collateral Pool Value, the Appraisal with respect to a Collateral Pool
Property may be the Appraisal performed for the inclusion of the Property
in the Collateral Pool or an Appraisal requested by the Borrower or the
Agent and received and accepted by the Agent, whichever is most recent.
Commercial Letter of Credit shall mean any Letter of Credit
---------------------------
which is a commercial letter of credit issued in respect of the purchase of
goods or services by one or more of the Loan Parties in the ordinary course
of their business.
Commitment Fee shall have the meaning assigned to that term in
--------------
Section 2.3.
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Consolidated Debt shall mean all Indebtedness of the Borrower
-----------------
and its consolidated Subsidiaries.
Consolidated Debt Service shall mean for any period of
-------------------------
determination the sum of scheduled principal installments on Indebtedness (as
adjusted for prepayments and excluding the principal payment due under this
Agreement on the Expiration Date), plus interest incurred (both capitalized
and expensed, but excluding capitalized interest financed by an interest
reserve funded by Indebtedness), in each case of the Borrower and its
Subsidiaries for such period determined and consolidated in accordance
with GAAP, plus 100% of any interest incurred (both capitalized and
----
expensed) with respect to any obligation for which the Borrower is
liable, in whole or in part, under a Guaranty or similar obligation of an
unconsolidated Affiliate.
Consolidated EBITDA for any period of determination shall mean
-------------------
(i) the sum of net income, depreciation, amortization, other noncash charges
to net income, interest expense and income tax expense minus (ii) noncash
credits to net income and any gains (and plus any losses) from
extraordinary items and assets sales, in each case of the Borrower and
its Subsidiaries for such period determined and consolidated in
accordance with GAAP.
Consolidated Tangible Net Worth shall mean as of any date
-------------------------------
of determination total stockholders' equity less intangible assets of the
Borrower and its Subsidiaries as of such date determined and consolidated
in accordance with GAAP.
Construction Project shall have the meaning assigned to that
--------------------
term in Section 3.4.8.
Debt Service Coverage Ratio shall mean the ratio of
---------------------------
Consolidated EBITDA to Consolidated Debt Service.
Delinquent Bank shall have the meaning assigned to that term in
---------------
Section 2.4.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean
----------------------------- -
lawful money of the United States of America.
Environmental Complaint shall mean any written complaint
-----------------------
setting forth a cause of action for personal or property damage or natural
resource damage or equitable relief, order, notice of violation, citation,
request for information issued pursuant to any Environmental Laws by an
Official Body, subpoena or other written notice of any type relating to,
arising out of or issued pursuant to any of the Environmental Laws or any
Environmental Conditions, as the case may be.
Environmental Conditions shall mean any conditions of the
------------------------
environment, including the workplace, the ocean, natural resources (including
flora or fauna), soil, surface water, groundwater, any actual or potential
-6-
drinking water supply sources, substrata or the ambient air, relating to,
arising out of or caused by the use, handling, storage, treatment,
recycling, generation, transportation, release, spilling, leaking,
pumping, emptying, discharging, injecting, escaping, leaching, disposal,
dumping, threatened release or other management or mismanagement of
Regulated Substances resulting from the use of, or operations on, the
Property.
Environmental Laws shall mean all federal, state, local and
------------------
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments or consent decrees issued, or entered into,
pursuant thereto relating to pollution or protection of human health or
the environment or employee safety in the workplace.
ERISA shall mean the Employee Retirement Income Security Act
-----
of 1974, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all
-----------
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities
which, together with the Borrower, are treated as a single employer under
Section 414 of the Internal Revenue Code.
Euro-Rate shall mean, with respect to the Loans comprising any
---------
Borrowing Tranche to which the Euro-Rate Option applies for any Interest
Period, the interest rate per annum determined by the Agent by dividing (the
resulting quotient rounded upward to the nearest 1/100 of 1% per annum)
(i) the rate of interest determined by the Agent in accordance with its
usual procedures (which determination shall be conclusive absent manifest
error) to be the average of the London interbank offered rates of
interest per annum for U.S. Dollars set forth on Telerate page 3750 or
such other display on the Telerate system as may replace such page to
evidence the average of rates quoted by banks designated by the British
Bankers' Association (or appropriate successor or, if the British
Bankers' Association or its successor ceases to provide such quotes, a
comparable replacement as determined by the Agent) two (2) Business Days
prior to the first day of such Interest Period for an amount comparable
to such Borrowing Tranche and having a borrowing date and a maturity
comparable to such Interest Period by (ii) a number equal to 1.00 minus
the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by
the following formula:
Telerate page 3750 quoted by British
Euro-Rate = Banker's Association or appropriate successor
---------------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option
outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The Agent shall give prompt notice
-7-
to the Borrower of the Euro-Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.
Euro-Rate Option shall mean the option of the Borrower to
----------------
have Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.1(ii).
Euro-Rate Reserve Percentage shall mean the maximum
----------------------------
percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%)
as determined by the Agent which is in effect during any relevant period, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities") of a member
bank in such System.
Event of Default shall mean any of the Events of Default
----------------
described in Section 9.1.
Expiration Date shall mean, with respect to the Revolving
---------------
Credit Commitment, December 14, 2000.
Federal Funds Effective Rate for any day shall mean the rate
----------------------------
per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of
New York (or any successor) on such day as being the weighted average of
the rates on overnight federal funds transactions arranged by federal funds
brokers on the previous trading day, as computed and announced by such
Federal Reserve Bank (or any successor) in substantially the same manner
as such Federal Reserve Bank computes and announces the weighted average
it refers to as the "Federal Funds Effective Rate" as of the date of this
Agreement; provided, if such Federal Reserve Bank (or its successor) does
not announce such rate on any day, the "Federal Funds Effective Rate" for
such day shall be the Federal Funds Effective Rate for the last day of
which such rate was announced.
Financial Projections shall have the meaning assigned to that
---------------------
term in Section 6.1.9(ii).
Funded Debt shall mean all obligations (including letters of
-----------
credit) of the Borrower and its consolidated Subsidiaries payable more than
one (1) year from the date of the creation thereof, which under GAAP are
shown on the balance sheet as liabilities (including current portions
thereof).
GAAP shall mean generally accepted accounting principles as are
----
in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.
-8-
Governmental Acts shall have the meaning assigned to that term
-----------------
in Section 2.9.7.
Guarantor shall mean each of the parties to this Agreement
---------
which is designated as a "Guarantor" on the signature page hereof and each
other Person which joins this Agreement as a Guarantor after the date hereof
pursuant to Section 11.18.
Guaranty of any Person shall mean any obligation of such
--------
Person guaranteeing or in effect guaranteeing any liability or obligation of
any other Person in any manner, whether directly or indirectly, including any
agreement to indemnify or hold harmless any other Person, any performance
bond or other suretyship arrangement and any other form of assurance
against loss, except endorsement of negotiable or other instruments for
deposit or collection in the ordinary course of business.
Guaranty Agreement shall mean the Guaranty and Suretyship
------------------
Agreement in substantially the form of Exhibit 1.1(G) executed and delivered
-------------
by each Guarantor to the Agent for the benefit of the Banks, as the same may
be supplemented or amended from time to time in accordance herewith and
therewith.
Guest Leases shall mean agreements entered into in the
------------
ordinary course of business between a Loan Party and a third-party guest for
extended-stay lodging accommodations.
Historical Statements shall have the meaning assigned to that
---------------------
term in Section 6.1.9(i).
Indebtedness shall mean, as to any Person at any time, any and
------------
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent,
or joint or several) of such Person for or in respect of: (i) borrowed
money, (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) reimbursement obligations
under any letter of credit, currency swap agreement, interest rate swap,
cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including forward sale or purchase
agreements, capitalized leases and conditional sales agreements) having
the commercial effect of a borrowing of money entered into by such Person
to finance its operations or capital requirements (but not including
trade payables and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note or similar
evidence of indebtedness), or (v) any Guaranty of Indebtedness for
borrowed money.
Ineligible Security shall mean any security which may not be
-------------------
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
-9-
Insolvency Proceeding shall mean, with respect to any Person,
---------------------
(a) a case, action or proceeding with respect to such Person (i) before any
court or any other Official Body under any bankruptcy, insolvency,
reorganization or other similar Law now or hereafter in effect, or (ii) for
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official of any Loan Party) or
otherwise relating to the liquidation, dissolution, winding-up or relief
of such Person, or (b) any general assignment for the benefit of
creditors, composition, marshaling of assets for creditors, or other,
similar arrangement in respect of such Person's creditors generally or
any substantial portion of its creditors; undertaken under any Law.
Intercompany Subordination Agreement shall mean a Subordination
------------------------------------
Agreement among the Loan Parties in the form attached hereto as Exhibit 1.1(I),
--------------
as the same may be supplemented or amended from time to time in accordance
herewith and therewith.
Interest Payment Date shall mean each date specified for the
---------------------
payment of interest in Section 5.3.
Interest Period shall have the meaning assigned to such term in
---------------
Section 4.2.
Interest Rate Option shall mean any Euro-Rate Option or Base
--------------------
Rate Option.
Interim Statements shall have the meaning assigned to that term
------------------
in Section 6.1.9(i).
Internal Revenue Code shall mean the Internal Revenue Code of
---------------------
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
Joinder shall mean a joinder by a Person as a Guarantor, a
-------
Company and a Grantor, as the case may be, under this Agreement, the Guaranty
Agreement, the Intercompany Subordination Agreement, the Security
Agreement and the other Loan Documents in the form of Exhibit 1.1(J).
--------------
Labor Contracts shall mean all employment agreements, employment
---------------
contracts, collective bargaining agreements and other agreements among
any Loan Party or Subsidiary of a Loan Party and its employees.
Land shall mean all unimproved real estate which any Loan
----
Party, directly or indirectly, owns or leases.
-10-
Law shall mean any law (including common law), constitution,
---
statute, treaty, regulation, rule, ordinance, opinion, release, ruling,
order, injunction, writ, decree or award of any Official Body.
Letter of Credit shall have the meaning assigned to that term in
----------------
Section 2.9.1.
Letter of Credit Borrowing shall mean an extension of credit
--------------------------
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under Section 2.9.3.2.
Letter of Credit Fee shall have the meaning assigned to that
--------------------
term in Section 2.9.2.
Letter of Credit Outstandings shall mean at any time the sum of
-----------------------------
(i) the aggregate undrawn face amount of outstanding Letters of Credit, (ii)
the aggregate amount of all unpaid and outstanding Reimbursement Obligations
and (iii) the aggregate amount of all unpaid and outstanding Letter of
Credit Borrowings.
Lien shall mean any mortgage, deed of trust, pledge, lien,
----
security interest, charge or other encumbrance or security arrangement of
any nature whatsoever, whether voluntarily or involuntarily given, including
any conditional sale or title retention arrangement, and any assignment,
deposit arrangement or lease intended as, or having the effect of,
security and any filed financing statement or other notice of any of the
foregoing (whether or not a lien or other encumbrance is created or
exists at the time of the filing).
Loan Documents shall mean this Agreement, the Agent's Letter,
--------------
the Revolving Credit Notes, the Real Estate Collateral Documents, the
Guaranty Agreement, the Intercompany Subordination Agreement, the Pledge
Agreements, the Notification and Control Agreement, the Collateral
Assignment and any other instruments, certificates or documents delivered
or contemplated to be delivered hereunder or thereunder or in connection
herewith or therewith, as the same may be supplemented or amended from
time to time in accordance herewith or therewith, and Loan Document shall
mean any of the Loan Documents.
Loan Parties shall mean the Borrower and the Guarantors.
------------
Loan Request shall mean a request for Revolving Credit Loans
------------
made in accordance with Section 2.5 or a request to select, convert to or
renew a Euro-Rate Option in accordance with Section 4.2.
-11-
Loans or Revolving Credit Loans shall mean collectively, and
----- ----------------------
Loan or Revolving Credit Loan shall mean separately, all revolving credit
loans or any revolving credit loan made by the Banks or one of the Banks to
the Borrower pursuant to Section 2.1 hereof.
Major Agreements shall mean, at any time, (a) each Tenant
----------------
Lease, (b) each cross-easement, restriction or similar agreement encumbering
or affecting a Collateral Pool Property and any adjoining property, (c) each
management agreement with respect to a Collateral Pool Property, (d) each
ground lease affecting a Collateral Pool Property, and (e) any other
agreement, contract, indenture or other document or instrument material
to the operation, management and/or maintenance of a Collateral Pool
Property or to the security afforded thereby; provided that any lease for
--------
laundry facilities that is terminable by the Loan Party which is a party
thereto upon no more than thirty (30) days' notice shall not be included
as a Major Agreement.
Market Capitalization shall mean, as of any date of determin-
---------------------
ation, the product of the number of issued and outstanding shares of common
stock of the Borrower and the market price per share.
Market Value shall mean Funded Debt plus Market Capitalization.
------------
Material Adverse Change shall mean any set of circumstances or
-----------------------
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this
Agreement or any other Loan Document, (b) is or could reasonably be
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Loan
Parties taken as a whole, (c) impairs materially or could reasonably be
expected to impair materially the ability of the Loan Parties taken as a
whole to duly and punctually pay or perform their Indebtedness, or
(d) impairs materially or could reasonably be expected to impair
materially the ability of the Agent or any of the Banks, to the extent
permitted, to enforce their legal remedies pursuant to this Agreement or
any other Loan Document.
Modified Base Rate shall have the meaning assigned to that
------------------
term in Section 4.3.2.
Month, with respect to an Interest Period under the Euro-Rate
-----
Option, shall mean the interval between the days in consecutive calendar
months numerically corresponding to the first day of such Interest Period. If
any Euro-Rate Interest Period begins on a day of a calendar month for
which there is no numerically corresponding day in the month in which
such Interest Period is to end, the final month of such Interest Period
shall be deemed to end on the last Business Day of such final month.
Multiemployer Plan shall mean any employee benefit plan which is
------------------
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA
and to which the Borrower or any member of the ERISA Group is then making
or accruing an obligation to make contributions or, within the preceding
five Plan years, has made or had an obligation to make such
contributions.
-12-
Multiple Employer Plan shall mean a Plan which has two or more
----------------------
contributing sponsors (including the Borrower or any member of the ERISA
Group) at least two of whom are not under common control, as such a plan
is described in Sections 4063 and 4064 of ERISA.
Net Operating Income shall mean, as of any date of determina-
--------------------
tion, the sum of the net operating income for each Collateral Pool Property
determined in accordance with GAAP for the prior twelve (12) months (or, for
Collateral Pool Properties open less than eighteen (18) full months, the
annualized net operating income for such properties based upon the most
recent six (6) months, as adjusted to include any expenses normally
included in determining annual net operating income but not incurred in
the most recent six (6) months minus a capital reserve requirement in an
amount equal to three percent (3%) of the gross revenues for each
Collateral Pool Property and a management fee in an amount equal to three
percent (3%) of the gross revenues for each Collateral Pool Property.
Nondisturbance Agreement shall have the meaning assigned to
------------------------
that term in Section 3.4.6.
Notes or Revolving Credit Notes shall mean collectively, and
----- ----------------------
Note or Revolving Credit Note shall mean separately, all the revolving
---- ---------------------
credit notes of the Borrower in the form of Exhibit 1.1(N)(1) evidencing the
-----------------
Revolving Credit Loans, together with all amendments, extensions,
renewals, replacements, refinancings or refundings thereof in whole or in
part.
Notices shall have the meaning assigned to that term in
-------
Section 11.6.
Notification and Control Agreement shall mean the Notification
----------------------------------
and Control Agreement or Agreements (Trust, Custody or Brokerage Accounts) in
substantially the form of Exhibit (N)(2) executed and delivered from time
to time by the Borrower, the Custodian (as defined therein) and the Agent
on behalf of the Banks, as the same may be supplemented or amended from
time to time in accordance herewith and therewith.
Obligation shall mean any obligation or liability of any of the
----------
Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due, under or in connection with
this Agreement, the Revolving Credit Notes, the Letters of Credit or any
other Loan Document.
Official Body shall mean any national, federal, state, local
-------------
or other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign
or domestic.
-13-
Participation Advance shall mean, with respect to any Bank,
---------------------
such Bank's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.9.3.
Partnership Interests shall have the meaning given to such
---------------------
term in Section 6.1.3.
PBGC shall mean the Pension Benefit Guaranty Corporation
----
established pursuant to Subtitle A of Title IV of ERISA or any successor.
Permitted Investments shall mean:
---------------------
(i) direct obligations of the United States of America
or any agency or instrumentality thereof or obligations backed by the full
faith and credit of the United States of America maturing in twelve (12)
months or less from the date of acquisition;
(ii) commercial paper maturing in 180 days or less
rated not lower than ▇- ▇ by Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. on the date of acquisition; and
(iii) demand deposits, time deposits or certificates of
deposit maturing within one year in commercial banks whose obligations are
rated A-1, A or the equivalent or better by Standard & Poor's Corporation on
the date of acquisition.
Permitted Liens shall mean:
---------------
(i) Liens for taxes, assessments or similar charges
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course
of business to secure payment of workers' compensation, or to participate in
any fund in connection with workers' compensation, unemployment insurance,
old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen or
carriers, or other like Liens securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable
or in default;
(iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, not in excess of the
aggregate amount due thereunder, or to secure statutory obligations, or
surety, appeal, indemnity, performance or other similar bonds required in
the ordinary course of business;
-14-
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none
of which is violated in any material respect by existing or proposed
structures or land use;
(vi) Liens, security interests and mortgages in favor of
the Agent for the benefit of the Banks;
(vii) Liens on property of any Loan Party or Subsidiary
of any Loan Party permitted in Section 8.2.1(ii) securing Indebtedness
permitted under such section;
(viii) The following, (A) if the validity or amount
thereof is being contested in good faith by appropriate and lawful
proceedings diligently conducted, so long as levy and execution thereon have
been stayed and continue to be stayed, or (B) if a final judgment is entered
and such judgment is discharged within thirty (30) days of entry, and in
either case they do not affect the Collateral or, in the aggregate, materially
impair the ability of any Loan Party to perform its Obligations hereunder
or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the Loan
Party maintains such reserves or other appropriate provisions as
shall be required by GAAP and pays all such taxes, assessments or
charges forthwith upon the commencement of proceedings to foreclose
any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property other than the Collateral, including
any attachment of personal or real property or other legal process
prior to adjudication of a dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen, warehousemen
or carriers, or other statutory nonconsensual Liens.
Person shall mean any individual, corporation, partnership,
------
association, joint-stock company, trust, unincorporated organization, joint
venture, government or political subdivision or agency thereof, or any other
entity.
Plan shall mean at any time an employee pension benefit plan
----
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA
Group or (ii) has at any time within the preceding five years been
maintained by any entity which was at such time a member of the ERISA
Group for employees of any entity which was at such time a member of the
ERISA Group.
-16-
Pledge Agreement shall mean the Pledge Agreement in substan-
----------------
tially the form of Exhibit 1.1(P)(1) executed and delivered by the Borrower
-----------------
to the Agent for the benefit of the Banks, as the same may be supplemented
or amended from time to time in accordance herewith and therewith.
Pledge Agreement (Cash Collateral) shall mean the Pledge
----------------------------------
Agreement (Stock, Bonds and Commercial Paper) in substantially the form of
Exhibit 1.1(P)(2) executed and delivered by the Borrower in favor of the Agent
-----------------
on behalf of the Banks, as the same may be amended or supplemented from time
to time in accordance herewith and therewith.
Pledge Agreements shall mean, collectively, the Pledge Agree-
-----------------
ment and Pledge Agreement (Cash Collateral).
Pledged Collateral shall mean the property of the Borrower in
------------------
which security interests are to be granted under the Pledge Agreement.
PNC shall mean PNC Bank, Kentucky, Inc., its successors and
---
assigns.
Potential Default shall mean any event or condition which with
-----------------
notice, passage of time or a determination by the Agent or the Required
Banks, or any combination of the foregoing, would constitute an Event of
Default.
Pre-Stabilized Collateral Pool Borrowing Base shall mean the
---------------------------------------------
lesser of (i) 35% multiplied by the aggregate book value of the Pre-Stabilized
Collateral Pool Properties and (ii) 30% multiplied by the aggregate As-Is
Value of the Pre-Stabilized Collateral Pool Properties.
Pre-Stabilized Collateral Pool Properties shall mean those
-----------------------------------------
Collateral Pool Properties which have not been designated as Stabilized
Collateral Pool Properties by the Borrower and as to which a certificate of
occupancy has not been issued for more than twelve (12) months.
Principal Office shall mean the main banking office of the
----------------
Agent in Louisville, Kentucky.
Prior Security Interest shall mean a valid and enforceable
-----------------------
perfected first-priority security interest under the Uniform Commercial Code
in the UCC Collateral and the Pledged Collateral which is subject only to
Liens for taxes not yet due and payable to the extent such prospective tax
payments are given priority by statute or Purchase Money Security
Interests as permitted hereunder.
-16-
Prohibited Transaction shall mean any prohibited transaction
----------------------
as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA
for which neither an individual nor a class exemption has been issued by the
United States Department of Labor.
Property shall mean all real property, both owned and leased,
--------
of any the Borrower or Subsidiary of the Borrower.
Property Release shall have the meaning assigned to that term
----------------
in Section 3.2.
Purchase Money Security Interest shall mean Liens upon tangible
--------------------------------
personal property securing loans to the Borrower or any Subsidiary of the
Borrower or deferred payments by the Borrower or any Subsidiary of the
Borrower for the purchase of such tangible personal property.
Purchasing Bank shall mean a Bank which becomes a party to
---------------
this Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's
-------------
Commitment bears to the Commitments of all of the Banks.
Real Estate Collateral shall mean one or more Properties owned
----------------------
by a Loan Party which shall be encumbered by the Real Estate Collateral
Documents.
Real Estate Collateral Documents shall mean mortgages or
--------------------------------
deeds of trust and assignments of leases, rents, other income and contracts,
indemnity agreements and the other collateral documents listed on Schedule
--------
1.1(R) hereto, each in substantially the form set forth in Exhibit 1.1(R)
----- --------------
hereto, and such other collateral documents as the Agent may request, all
in form and substance satisfactory in all respects to the Agent with
respect to the Real Estate Collateral, executed and delivered by a Loan
Party to the Agent for the benefit of the Banks, as any of the same may
be supplemented or amended from time to time in accordance herewith and
therewith.
Regulated Substances shall mean any substance, including any
--------------------
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material,
refuse, garbage, wastes, chemicals, petroleum products, byproducts,
coproducts, impurities, dust, scrap, heavy metals, any substance defined
as a "hazardous substance," "pollutant," "pollution," "contaminant,"
"hazardous or toxic substance," "extremely hazardous substance," "toxic
chemical," "toxic waste," "hazardous waste," "industrial waste,"
"residual waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," "regulated
substance" or any related materials, substances or wastes as now or
hereafter defined pursuant to any Environmental Laws, ordinances, rules,
regulations or other directives of any Official Body, the generation,
-17-
manufacture, extraction, processing, distribution, treatment, storage,
disposal, transport, recycling, reclamation, use, reuse, spilling,
leaking, dumping, injection, pumping, leaching, emptying, discharge,
escape, release or other management or mismanagement of which is
regulated by the Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as promulgated
------------
by the Board of Governors of the Federal Reserve System, as amended from time to
time.
Reimbursement Obligation shall have the meaning assigned to
------------------------
such term in Section 2.9.3.2.
Reportable Event means a reportable event described in Section
----------------
4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Requested Increase shall have the meaning assigned to such
------------------
term in Section 2.10.1.
Required Advance shall have the meaning assigned to such term
----------------
in Section 2.2.
Required Banks shall mean
-------------
(i) if there are no Loans, Reimbursement Obligations
or Letter of Credit Borrowings outstanding, Banks whose Revolving Credit
Commitments aggregate at least 60% of the Revolving Credit Commitments of all
of the Banks, or
(ii) if there are Loans, Reimbursement Obligations, or
Letter of Credit Borrowings outstanding, any Bank or group of Banks if the
sum of the Loans, Reimbursement Obligations and Letter of Credit Borrowings
of such Banks then outstanding aggregates at least 60% of the total principal
amount of all of the Loans , Reimbursement Obligations and Letter of
Credit Borrowings then outstanding. Reimbursement Obligations and Letter
of Credit Borrowings shall be deemed, for purposes of this definition, to
be in favor of the Agent and not a participating Bank if such Bank has
not made its Participation Advance in respect thereof and shall be deemed
to be in favor of such Bank to the extent of its Participation Advance if
it has made its Participation Advance in respect thereof.
Revolving Credit Commitment or Commitment shall mean, as to
--------------------------- ----------
any Bank at any time, the amount initially set forth opposite its name on
Schedule 1.1(B) in the column labeled "Amount of Commitment for Revolving
--------------
Credit Loans" and, thereafter, on Schedule I to the most recent Assignment
and Assumption Agreement, and Revolving Credit Commitments or Commitments
---------------------------- -----------
shall mean the aggregate Revolving Credit Commitments of all of the
Banks.
-18-
Revolving Facility Usage shall mean at any time the sum of the
------------------------
Revolving Credit Loans outstanding and the Letter of Credit Outstandings.
Section 20 Subsidiary shall mean the Subsidiary of the bank
---------------------
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Security Agreement shall mean the Security Agreement in
------------------
substantially the form of Exhibit 1.1(S) executed and delivered by each of the
Loan Parties to the Agent for the benefit of the Banks, as the same may be
supplemented or amended from time to time in accordance herewith and
therewith.
Shares shall have the meaning assigned to that term in Section
------
6.1.2.
Stabilized Collateral Pool Borrowing Base shall mean Stabilized
-----------------------------------------
Collateral Pool NOI multiplied by 4.25.
Stabilized Collateral Pool NOI shall mean, as of any date of
------------------------------
determination, the sum of the net operating income for each Stabilized
Collateral Pool Property determined in accordance with GAAP for the prior
twelve (12) months (or, for properties open less than eighteen (18) full
months, the annualized net operating income for such properties based
upon the most recent six (6) months, as adjusted to include any expenses
normally included in determining annual net operating income but not
incurred in the most recent 6 months).
Stabilized Collateral Pool Properties shall mean all Collateral
-------------------------------------
Pool Properties which have been designated as Stabilized Collateral Pool
Properties by the Borrower.
Standby Letter of Credit shall mean a Letter of Credit issued
------------------------
to support obligations of one or more of the Loan Parties, contingent or
otherwise, which finance the working capital and business needs of the Loan
Parties incurred in the ordinary course of business.
Subsidiary of any Person at any time shall mean (i) any
----------
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute
the voting rights) are at such time owned directly or indirectly by such
Person or one or more of such Person's Subsidiaries, or any partnership
of which such Person is a general partner or of which 50% or more of the
partnership interests are at the time directly or indirectly owned by
such Person or one or more of such Person's Subsidiaries, or (ii) any
corporation, trust, partnership or other entity which is controlled or
capable of being controlled by such Person or one or more of such
Person's Subsidiaries.
-19-
Subsidiary Shares shall have the meaning assigned to that term
-----------------
in Section 6.1.3.
Tenant Lease shall mean any tenant lease of a Collateral Pool
------------
Property other than any Guest Lease or any lease for laundry facilities that
is terminable by the Loan Party which is a party thereto upon no more than
thirty (30) days' notice.
Transferor Bank shall mean the selling Bank pursuant to an
---------------
Assignment and Assumption Agreement.
UCC Collateral shall mean the personal property of the Loan
--------------
Parties in which security interests are granted to the Banks under the
Security Agreement and the Real Estate Collateral Documents.
Uniform Commercial Code shall have the meaning assigned to that
-----------------------
term in Section 6.1.16.
1.2 Construction.
------------
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of
the other Loan Documents:
1.2.1 Number; Inclusion.
-----------------
References to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase
"including without limitation";
1.2.2 Determination.
-------------
References to "determination" of or by the Agent or the Banks
shall be deemed to include good-faith estimates by the Agent or the Banks (in
the case of quantitative determinations) and good-faith beliefs by the Agent
or the Banks (in the case of qualitative determinations), and such
determination shall be conclusive absent manifest error;
1.2.3 Agent's Discretion and Consent.
------------------------------
Whenever the Agent or the Banks are granted the right herein
to act in its or their sole discretion or to grant or withhold consent, such
right shall be exercised in good faith;
-20-
1.2.4 Documents Taken as a Whole.
--------------------------
The words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document as a whole and not to any particular provision of
this Agreement or such other Loan Document;
1.2.5 Headings.
--------
The section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any) preceding this
Agreement or such other Loan Document are for reference purposes only and
shall not control or affect the construction of this Agreement or such other
Loan Document or the interpretation thereof in any respect;
1.2.6 Implied References to This Agreement.
------------------------------------
Article, section, subsection, clause, schedule and exhibit
references are to this Agreement or such other Loan Document, as the case may
be, unless otherwise specified;
1.2.7 Persons.
-------
Reference to any Person includes such Person's successors and
assigns, but, if applicable, only if such successors and assigns are permitted
by this Agreement or such other Loan Document, as the case may be, and
reference to a Person in a particular capacity excludes such Person in
any other capacity;
1.2.8 Modifications to Documents.
--------------------------
Reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or
thereto), document or instrument means such agreement, document or instrument
as amended, modified, replaced, substituted for, superseded or restated;
1.2.9 From, To and Through.
--------------------
Relative to the determination of any period of time, "from"
means "from and including," "to" means "to but excluding," and "through"
means "through and including"; and
1.2.10 Shall; Will.
-----------
References to "shall" and "will" are intended to have the same
meaning.
-21-
1.3 Accounting Principles.
---------------------
Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and
all financial statements to be delivered pursuant to this Agreement shall be
made and prepared in accordance with GAAP (including principles of consolida-
tion where appropriate), and all accounting or financial terms shall have
the meanings ascribed to such terms by GAAP; provided, however, that all
-------- -------
accounting terms used in Section 8.2 [Negative Covenants] (and all
defined terms used in the definition of any accounting term used in
Section 8.2 shall have the meaning given to such terms (and defined
terms) under GAAP as in effect on the date hereof applied on a basis
consistent with those used in preparing the Annual Statements referred to
in Section 6.1.9(i) [Historical Statements]. In the event of any change
after the date hereof in GAAP, and if such change would result in the
inability to determine compliance with the financial covenants set forth
in Sections 3.4 and 8.2 based upon the Borrower's regularly prepared
financial statements by reason of the preceding sentence, then the
parties hereto agree to endeavor, in good faith, to agree upon an
amendment to this Agreement that would adjust such financial covenants in
a manner that would not affect the substance thereof, but would allow
compliance therewith to be determined in accordance with the Borrower's
financial statements at that time.
2. REVOLVING CREDIT FACILITY
-------------------------
2.1 Revolving Credit Commitments.
----------------------------
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, each Bank severally
agrees to make Revolving Credit Loans to the Borrower in proportion to
such Bank's Ratable Share at any time or from time to time on or after
the date hereof to the Expiration Date, provided that after giving effect
to such Revolving Credit Loans, (i) the aggregate principal amount of
each Bank's Revolving Credit Loans outstanding hereunder shall not exceed
at any one time such Bank's Revolving Credit Commitment minus such Bank's
Ratable Share of the Letter of Credit Outstandings, and (ii) the
Revolving Facility Usage hereunder shall not exceed the Borrowing Base.
Within such limits of time and amount and subject to the other provisions
of this Agreement, the Borrower may borrow, repay and reborrow pursuant
to this Section 2.1.
2.2 Nature of Banks' Obligations With Respect to Revolving
------------------------------------------------------
Credit Loans.
------------
Each Bank shall be obligated to participate in each request
for Revolving Credit Loans pursuant to Section 2.5 in accordance with its
Ratable Share (a "Required Advance"). The aggregate of each Bank's Revolving
----------------
Credit Loans outstanding hereunder to the Borrower at any time shall never
exceed its Revolving Credit Commitment minus its Ratable Share of the
Letter of Credit Outstandings. The obligations of each Bank hereunder
are several. The failure of any Bank to perform its obligations
hereunder shall not affect the Obligations of the Borrower to any other
party, nor shall any other party be liable for the failure of such Bank
-22-
to perform its obligations hereunder. The Banks shall have no obligation
to make Revolving Credit Loans hereunder on or after the Expiration Date
or after acceleration.
2.3 Commitment Fees.
---------------
Accruing from the date hereof until the Expiration Date, the
Borrower agrees to pay to the Agent for the account of each Bank, as considera-
tion for such Bank's Revolving Credit Commitment hereunder, a nonrefundable
commitment fee (the "Commitment Fee") equal to 1/8% per annum from the
--------------
Closing Date through June 14, 1998 and 1/4% per annum after June 15, 1998
(in each case computed on the basis of a year of 360 days and actual days
elapsed) on the average daily difference between the amount of such
Bank's Revolving Credit Commitment as the same may be constituted from
time to time and the Revolving Facility Usage. Notwithstanding the
foregoing, no Commitment Fee with respect to Revolving Credit Commitments
in excess of $50,000,000 in the aggregate shall be due and payable until
the earlier to occur of (a) one (1) year from the Closing Date or (b) the
Revolving Facility Usage exceeds $50,000,000. All Commitment Fees shall
be payable in arrears on the first Business Day of each calendar quarter
after the date hereof and on the Expiration Date or upon acceleration of
the Notes.
2.4 Delinquent Bank.
---------------
No Bank that has failed to make any Required Advance or other
payment due from such Bank to the Agent in accordance with the provisions of
this Agreement within three (3) Business Days after receiving notice that
such Required Advance or other payment is due (a "Delinquent Bank") shall
---------------
be entitled to (a) its Ratable Share of any payment received by the Agent
until all Obligations owed to the nondelinquent Banks have been satisfied
in full; (b) the proceeds of any Collateral until all Obligations owed to
the nondelinquent Banks have been satisfied in full; or (c) give or deny
any approval or consent to be given by the Banks hereunder, and such
Delinquent Bank's Revolving Credit Commitment shall be deducted from the
aggregate amount of the Loan for purposes of determining whether the
Banks' or the Required Banks' approval or consent has been obtained.
Upon the cure by any Delinquent Bank of all defaults which it may have
committed under this Agreement, such Bank shall no longer be deemed a
Delinquent Bank, except that such Bank shall not be entitled, at any time
thereafter, to vote its Revolving Credit Commitment with respect to any
matter requiring the approval or consent of the Required Banks, unless
the Required Banks otherwise agree.
2.5 Revolving Credit Loan Requests.
------------------------------
Except as otherwise provided herein, the Borrower may from
time to time prior to the Expiration Date request the Banks to make Revolving
Credit Loans, or renew or convert the Interest Rate Option applicable to
existing Revolving Credit Loans pursuant to Section 4.2, by delivering to
the Agent, not later than 10:00 a.m., Louisville time, (i) three (3)
Business Days prior to the proposed Borrowing Date with respect to the
making of Revolving Credit Loans to which the Euro-Rate Option applies or
the conversion to or the renewal of the Euro-Rate Option for any
-23-
Revolving Credit Loans, and (ii) one (1) Business Day prior to either the
proposed Borrowing Date with respect to the making of a Revolving Credit
Loan to which the Base Rate Option applies or the last day of the
preceding Interest Period with respect to the conversion to the Base Rate
Option for any Revolving Credit Loan, a duly completed request therefor
substantially in the form of Exhibit 2.5 or a request by telephone
-----------
immediately confirmed in writing by letter, facsimile or telex in such
form (each, a "Loan Request"), it being understood that the Agent may
------------
rely on the authority of any individual making such a telephonic request
without the necessity of receipt of such written confirmation. Each
Revolving Credit Loan Request shall be irrevocable and shall specify
(i) the proposed Borrowing Date; (ii) the aggregate amount of the
proposed Revolving Credit Loans comprising each Borrowing Tranche, which
shall be in integral multiples of $100,000 and not less than $2,000,000
for each Borrowing Tranche to which the Euro-Rate Option applies and not
less than the lesser of $100,000 or the maximum amount available for
Borrowing Tranches to which the Base Rate Option applies; (iii) whether
the Euro-Rate Option or Base Rate Option shall apply to the proposed
Revolving Credit Loans comprising the Borrowing Tranche; and (iv) in the
case of a Borrowing Tranche to which the Euro-Rate Option applies, an
appropriate Interest Period for the proposed Revolving Credit Loans
comprising such Borrowing Tranche.
2.6 Making Revolving Credit Loans.
-----------------------------
The Agent shall, promptly after receipt by it of a Loan
Request pursuant to Section 2.5, notify the Banks of its receipt of such Loan
Request, specifying or containing: (i) the proposed Borrowing Date and the
time and method of disbursement of such Revolving Credit Loans; (ii) the
amount and type of each such Revolving Credit Loan and the applicable
Interest Period (if any); (iii) the apportionment among the Banks of the
Revolving Credit Loans as determined by the Agent in accordance with
Section 2.2 [Nature of Banks' Obligations]; and (iv) calculations in
sufficient detail to demonstrate compliance with the covenant with
respect to the Borrowing Base contained in Section 3.4.9. Each Bank
shall remit the principal amount of each Revolving Credit Loan to the
Agent such that the Agent is able to, and the Agent shall, to the extent
the Banks have made funds available to it for such purpose, fund such
Revolving Credit Loans to the Borrower in U.S. Dollars and immediately
available funds at the Principal Office prior to 2:00 p.m., Louisville
time, on the Borrowing Date, provided that if any Bank fails to remit
--------
such funds to the Agent in a timely manner, the Agent may elect in its
sole discretion to fund with its own funds the Revolving Credit Loans of
such Bank on the Borrowing Date, and such Bank shall be subject to the
repayment obligation in Section 10.16 [Availability of Funds].
2.7 Revolving Credit Notes.
----------------------
The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank,
together with interest thereon, shall be evidenced by a Revolving Credit Note
dated the Closing Date payable to the order of such Bank in a face amount
equal to the Revolving Credit Commitment of such Bank.
-24-
2.8 Use of Proceeds.
---------------
The proceeds of the Revolving Credit Loans shall be used for
general corporate purposes, including without limitation the acquisition,
construction and renovation of extended-stay lodging facilities and
related equity investments.
2.9 Letter of Credit Subfacility.
----------------------------
2.9.1 Issuance of Letters of Credit.
-----------------------------
Borrower may request the issuance of a letter of credit
(each a "Letter of Credit") on behalf of itself or another Loan Party by
----------------
delivering to the Agent a completed application and agreement for letters of
credit in such form as the Agent may specify from time to time by no later
than 10:00 a.m., Louisville time, at least five (5) Business Days, or
such shorter period as may be agreed to by the Agent, in advance of
the proposed date of issuance. Each Letter of Credit shall be either a
Standby Letter of Credit or a Commercial Letter of Credit. Subject to
the terms and conditions hereof and in reliance on the agreements of the
other Banks set forth in this Section 2.9, the Agent will issue a Letter
of Credit, provided that each Letter of Credit shall (A) have a maximum
--------
maturity of twelve (12) months from the date of issuance and (B) in no
event expire later than one (1) Business Day prior to the Expiration Date
and provided that in no event shall (i) the Letter of Credit Outstandings
--------
exceed, at any one time, $10,000,000 or (ii) the Revolving Facility Usage
exceed, at any one time, the lesser of (a) the Revolving Credit
Commitments or (b) the Borrowing Base.
2.9.2 Letter of Credit Fees.
---------------------
The Borrower shall pay (i) to the Agent for the ratable
account of the Banks a fee (the "Letter of Credit Fee") equal to the
Applicable Margin for Loans accruing interest under the Euro-Rate Option
per annum (computed on the basis of a year of 360 days and actual days
elapsed), and (ii) to the Agent for its own account a fronting fee equal
to 1/8% per annum (computed on the basis of a year of 360 days and actual
days elapsed), which fees shall be computed on the daily average Letter of
Credit Outstandings and shall be payable quarterly in arrears commencing
with the first Business Day of each calendar quarter following issuance
of each Letter of Credit and on the Expiration Date. The Borrower shall
also pay to the Agent for the Agent's sole account the Agent's then in
effect customary fees and administrative expenses payable with respect to
the Letters of Credit as the Agent may generally charge or incur from
time to time in connection with the issuance, maintenance, modification
(if any), assignment or transfer (if any), negotiation and administration
of Letters of Credit.
-25-
2.9.3 Disbursements, Reimbursement.
----------------------------
2.9.3.1 Immediately upon the issuance of each
Letter of Credit, each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Agent a participation in such
Letter of Credit and each drawing thereunder in an amount equal to such Bank's
Ratable Share of the maximum amount available to be drawn under such Letter
of Credit and the amount of such drawing, respectively.
2.9.3.2 In the event of any request for a drawing
under a Letter of Credit by the beneficiary or transferee thereof, the Agent
will promptly notify the Borrower. Provided that it shall have received such
notice, the Borrower shall reimburse (such obligation to reimburse the Agent
shall sometimes be referred to as a "Reimbursement Obligation") the Agent prior
to 12:00 noon, Louisville time on each date that an amount is paid by the
Agent under any Letter of Credit (each such date, an "Drawing Date") in
an amount equal to the amount so paid by the Agent. In the event the
Borrower fails to reimburse the Agent for the full amount of any drawing
under any Letter of Credit by 12:00 noon, Louisville time, on the Drawing
Date, the Agent will promptly notify each Bank thereof, and the Borrower
shall be deemed to have requested that Revolving Credit Loans be made by
the Banks under the Base Rate Option to be disbursed on the Drawing Date
under such Letter of Credit, subject to the amount of the unutilized
portion of the Revolving Credit Commitment and subject to the conditions
set forth in Section 7.2 [Each Additional Loan] other than any notice
requirements. Any notice given by the Agent pursuant to this
Section 2.9.3.2 may be oral if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
2.9.3.3 Each Bank shall upon any notice pursuant
to Section 2.9.3.2 make available to the Agent an amount in immediately
available funds equal to its Ratable Share of the amount of the drawing,
whereupon the participating Banks shall (subject to Section 2.9.3.4) each be
deemed to have made a Revolving Credit Loan under the Base Rate Option to the
Borrower in that amount. If any Bank so notified fails to make available
to the Agent for the account of the Agent the amount of such Bank's
Ratable Share of such amount by no later than 2:00 p.m., Louisville time
on the Drawing Date, then interest shall accrue on such Bank's obligation
to make such payment, from the Drawing Date to the date on which such
Bank makes such payment (i) at a rate per annum equal to the Federal
Funds Effective Rate during the first three (3) days following the
Drawing Date and (ii) at a rate per annum equal to the rate applicable to
Loans under the Base Rate Option on and after the fourth day following
the Drawing Date. The Agent will promptly give notice of the occurrence
of the Drawing Date, but failure of the Agent to give any such notice on
the Drawing Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligation
under this Section 2.9.3.3.
-26-
2.9.3.4 With respect to any unreimbursed drawing
that is not converted into Revolving Credit Loans under the Base Rate Option
to the Borrower in whole or in part as contemplated by Section 2.9.3.2,
because of the Borrower's failure to satisfy the conditions set forth in
Section 7.2 [Each Additional Loan] other than any notice requirements or for
any other reason, the Borrower shall be deemed to have incurred from the
Agent a Letter of Credit Borrowing in the amount of such drawing. Such
Letter of Credit Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the rate per annum applicable
to the Revolving Credit Loans under the Base Rate Option. Each Bank's
payment to the Agent pursuant to Section 2.9.3.3 shall be deemed to be a
payment in respect of its participation in such Letter of Credit
Borrowing and shall constitute a Participation Advance from such Bank in
satisfaction of its participation obligation under this Section 2.9.3.
2.9.4 Documentation.
-------------
Each Loan Party agrees to be bound by the terms of the
Agent's application and agreement for Letters of Credit and the Agent's written
regulations and customary practices relating to Letters of Credit, though
such interpretation may be different from such Loan Party's own. In the
event of a conflict between such application or agreement and this
Agreement, this Agreement shall govern. It is understood and agreed
that, except in the case of gross negligence or willful misconduct, the
Agent shall not be liable for any error, negligence and/or mistakes,
whether of omission or commission, in following any Loan Party's
instructions or those contained in the Letters of Credit or any
modifications, amendments or supplements thereto.
2.9.5 Determinations to Honor Drawing Requests.
----------------------------------------
In determining whether to honor any request for a drawing
under any Letter of Credit by the beneficiary thereof, the Agent shall be
responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been delivered
and that they comply on their face with the requirements of such Letter
of Credit.
2.9.6 Nature of Participation and Reimbursement
Obligations.
-----------------------------------------
Each Bank's obligation in accordance with this Agreement
to make the Revolving Credit Loans or Participation Advances, as contemplated
by Section 2.9.3, as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrower to reimburse the Agent upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this
Section 2.9 under all circumstances, including the following
circumstances:
(i) any set-off, counterclaim, recoupment, defense
or other right which such bank may have against the Agent, the Borrower or
any other Person for any reason whatsoever;
-27-
(ii) the failure of any Loan Party or any other
Person to comply with the conditions set forth in Sections 2.1 [Revolving
Credit Commitments], 2.5 [Revolving Credit Loan Requests], 2.6 [Making
Revolving Credit Loans] or 7.2 [Each Additional Loan] or as otherwise set
forth in this Agreement for the making of a Revolving Credit Loan, it being
acknowledged that such conditions are not required for the making of a
Revolving Credit Loan under Section 2.9.3;
(iii) any lack of validity or enforceability of any
Letter of Credit;
(iv) the existence of any claim, set-off, defense
or other right which any Loan Party or any Bank may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Persons for
whom any such transferee may be acting), the Agent or any Bank or any other
Person or, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between any Loan Party or Subsidiaries of a Loan Party and the
beneficiary for which any Letter of Credit was procured);
(v) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(vi) payment by the Agent under any Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;
(viii) any breach of this Agreement or any other Loan
Document by any party thereto;
(ix) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing;
(x) the fact that an Event of Default or a Potential
Default shall have occurred and be continuing;
(xi) the Expiration Date shall have passed or this
Agreement or the Revolving Credit Commitments hereunder shall have been
terminated; or
-28-
(xii) the occurrence or continuance of an Insolvency
Proceeding with respect to any Loan Party.
2.9.7 Indemnity.
---------
In addition to amounts payable as provided in Section
10.5 [Reimbursement of Agent by Borrower, Etc.], the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable fees, expenses and disbursements of
counsel and allocated costs of internal counsel) which the Agent may
incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit, other than as a result of (A) the gross
negligence or willful misconduct of the Agent as determined by a final
judgment of a court of competent jurisdiction or, (B) subject to the
following clause (ii), the wrongful dishonor by the Agent of a proper
demand for payment made under any Letter of Credit or (ii) the failure of
the Agent to honor a drawing under any such Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all such
acts or omissions herein called "Governmental Acts").
2.9.8 Liability for Acts and Omissions.
--------------------------------
As between any Loan Party and the Agent, such Loan Party
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Agent shall not
be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for an issuance of any such Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged (even if the
Agent shall have been notified thereof); (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or
assign any such Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) failure of the beneficiary of any such
Letter of Credit or any other party to which such Letter of Credit may be
transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of any Loan Party
against any beneficiary of such Letter of Credit or any such transferee,
or any dispute between or among any Loan Party and any beneficiary of any
Letter of Credit or any such transferee; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order
to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the
Agent, including any Governmental Acts, and none of the above shall
affect or impair, or prevent the vesting of, any of the Agent's rights or
powers hereunder. Nothing in the preceding sentence shall relieve the
Agent from liability for the Agent's gross negligence or willful
misconduct in connection with actions or omissions described in
clauses (i) through (viii) of such sentence.
-29-
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Agent
under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in
good faith, shall not put the Agent under any resulting liability to the
Borrower.
2.10 Increase in Commitments.
-----------------------
2.10.1 Existing Banks.
--------------
Subject to the limitations contained in Section 2.10.3,
the Borrower, after the Closing Date, may make one (1) request for an increase
in the Revolving Credit Commitments of the Banks by sending a notice thereof
to all of the Banks and the Agent. Such notice shall specify the total
amount of increase requested by the Borrower (the "Requested Increase")
------------------
which amount shall be at least $25,000,000 and shall not exceed the
amount permitted in Section 2.10.3 below.
2.10.2 New Banks.
---------
Subject to the limitations contained in Section 2.10.3,
the Agent upon receipt of a Requested Increase may request that a new bank or
banks join this Agreement and provide a Revolving Credit Commitment hereunder.
Unless the Borrower objects within ten (10) Business Days of notice from
the Agent of a proposed new bank or banks, such bank or banks selected by
the Agent shall join this Agreement pursuant to the procedures contained
in Section 11.11.
2.10.3 Limitations on Increases.
------------------------
Borrower may not request an increase in the Revolving
Credit Commitments and the Revolving Credit Commitments shall not be increased
pursuant to Section 2.10.1 or 2.10.2 if (i) there exists an Event of Default
or Potential Default on the date of such request or on the effective date of
such increase; or (ii) after giving effect to the proposed increase in
Revolving Credit Commitments, the Revolving Credit Commitments shall
exceed $150,000,000. In no event shall any Bank have any obligation to
increase its Revolving Credit Commitment as a result of any request by
the Borrower for an increase pursuant to Section 2.10.1
-30-
2.11 Reduction of Commitments.
------------------------
The Borrower shall have the right, upon not less than five
(5) Business Days' prior written notice to the Agent, to permanently reduce,
at any one time, in a principal amount of not less than $10,000,000 (so long
as after giving effect to such reduction, the Revolving Credit Commitments
are not less than $25,000,000 in the aggregate) or, at any time,
terminate the Revolving Credit Commitments without penalty or premium,
except as hereinafter set forth, provided that any such reduction or
termination shall be accompanied by (a) the payment in full of any
Commitment Fee then accrued on the amount of such reduction or
termination and (b) prepayment of the Revolving Credit Notes, together
with the full amount of interest accrued on the principal sum to be
prepaid (and all amounts referred to in Section 5.6 hereof), to the
extent that the aggregate amount thereof then outstanding exceeds the
Revolving Credit Commitments as so reduced or terminated. From the
effective date of any such reduction or termination, the obligations of
Borrower to pay the Commitment Fee pursuant to Section 2.3 shall
correspondingly be reduced or cease.
3. COLLATERAL POOL PROPERTIES
--------------------------
3.1 Acceptance of Collateral Pool Properties.
----------------------------------------
3.1.1 Acceptance Generally.
--------------------
Subject to compliance with the terms and conditions of
Section 7.1, the Banks have accepted the properties listed on Schedule 1.1(C)
---------------
as of the Closing Date as Collateral Pool Properties. If the Borrower desires
that the Banks accept an additional property as a Collateral Property, the
Borrower shall so notify the Agent, and the Agent shall promptly notify
each other Bank. No such additional property will be evaluated by the
Banks as a potential Collateral Pool Property unless the Borrower
delivers to the Agent in form and substance acceptable to the Agent the
items set forth on Schedule 1.1(R). If, after receipt and review of the
---------------
items set forth on Schedule 1.1(R) (including without limitation a
---------------
Compliance Certificate giving effect to the inclusion of the proposed
property into the Collateral Pool), the Agent is prepared to proceed with
acceptance of such property as a Collateral Pool Property, the Agent will
so notify the Borrower, and the Agent will obtain an Appraisal of such
property in order to determine the As-Is Value thereof. After approving
such As-Is Value, the Agent will submit the foregoing documents and
information and the As-Is Value to the Banks, for their consideration in
deciding whether to accept or reject the property as a Collateral Pool
Property. The acceptance by Banks which constitute the Required Banks
will be required for a property to be accepted as a Collateral Pool
Property. The decision of a Bank to accept a property as a Collateral
Pool Property shall be made in each Bank's sole discretion. The Banks
agree to make a decision with respect to such property within fifteen
(15) Business Days after the receipt of such documents and information
and the As-Is Value, provided that the failure of any Bank to respond
--------
within such time period shall be deemed to constitute such Bank's
acceptance of such property as a Collateral Pool Property. If the Banks
agree to accept such property as a Collateral Pool Property, upon
-31-
execution and delivery of documents and completion of all other closing
requirements imposed by the Agent (including without limitation provision
of the documents or supplements thereto described on Schedule 1.1(R) and
---------------
such other items or documents as may be appropriate under the
circumstances, including updates and modifications of any documents
previously delivered), such property shall become a Collateral Pool
Property.
3.1.2 Collateral Pool Addition Fee.
----------------------------
If more than twenty (20) properties are added to the
Collateral Pool in any calendar year during the term hereof, the Borrower
shall pay to each Bank a fee in the amount of $1,000 for each property in
excess of twenty (20), provided that the aggregate amount of such fees paid
--------
to the Banks for each such property shall not exceed $9,000.
3.2 Release of Collateral Pool Properties.
--------------------------------------
In connection with the sale to or refinancing by a third
party of a Collateral Pool Property, from time to time the Borrower may
request, upon not less than thirty (30) days' prior written notice to the
Agent (and the Agent shall promptly send a copy thereof to each other Bank),
that a Collateral Pool Property be released from the Liens created by the
Real Estate Collateral Documents applicable thereto, which release
("Property Release") shall be delivered by the Agent if all of the
----------------
following conditions are satisfied as of the date of such Property
Release:
(a) no Event of Default or Potential Default has
occurred and is then continuing or will occur after giving effect to such
Property Release and the reduction in the Collateral Pool Value by reason of
the release of such Collateral Pool Property;
(b) the Borrower shall have delivered to the Agent a
Compliance Certificate reflecting the Borrowing Base and covenant compliance
after giving effect to such Property Release;
(c) the Agent shall have determined that the
outstanding principal balance of the Loans will not exceed the Borrowing Base
after giving effect to such Property Release and any prepayment to be made
and/or the acceptance of any property as additional or replacement Collateral
Pool Property to be given concurrently with such Property Release; and
(d) the title insurance policy or policies issued in favor
of the Agent shall, at the request of the Agent, be endorsed to reflect such
release of Collateral, and the Borrower shall pay all costs and expenses
reasonably incurred by or for the account of the Agent in connection with
such Property Release.
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3.3 Borrowing Base Determinations.
-----------------------------
3.3.1 Appraisals.
----------
The As-Is Value of a Collateral Pool Property or
Properties shall be determined or redetermined, as applicable, under each of
the following circumstances:
(i) upon initial acceptance of a property as a
Collateral Pool Property, the Agent will determine the As-Is Value thereof;
(ii) from time to time a Collateral Pool Property
may be reappraised, at the Borrower's request, upon notice by the Borrower to
Agent to reappraise a Collateral Pool Property, in which event Agent shall
cause an Appraisal thereof to be made; and
(iii) at any time and from time to time upon five
(5) Business Days' prior written notice to the Borrower, the Agent may (and
shall at the direction of the Required Banks) redetermine the As-Is Value of a
Collateral Pool Property or Properties in any of the following
circumstances:
(A) if a material adverse change occurs with
respect to a Collateral Pool Property, including, without limitation, a
material deterioration in the Net Operating Income of a Collateral Pool
Property, a major casualty or condemnation or a material change in the market
conditions affecting such Collateral Pool Property; or
(B) if necessary in order to comply with any
Law applicable to any Bank.
Any As-Is Value so determined or redetermined shall be submitted by the
Agent to the Borrower and to the Lenders. The Borrower shall pay the
costs of any Appraisals.
3.3.2 Borrowing Base Value.
--------------------
In the event the As-Is Value of any Collateral
Pool Property is increased, such increase shall not become effective until the
Borrower delivers to the Agent an endorsement, if necessary, to the Agent's
title insurance policy increasing the amount thereof as related to such
Collateral Pool Property by the adjustment to the Collateral Pool Value.
3.4 Covenants Relating to the Collateral Pool and the
-------------------------------------------------
Collateral Pool Properties.
--------------------------
The Borrower covenants and agrees that until payment in full of
the Loans and interest thereon, satisfaction of all of the Borrower's other
Obligations under the Loan Documents, expiration or termination of all
Letters of Credit and termination of the Revolving Credit Commitments,
the Borrower shall comply with the following covenants:
-33-
3.4.1 Minimum Collateral Pool Properties.
----------------------------------
The Collateral Pool shall consist of at least three (3)
Collateral Pool Properties.
3.4.2 Financial Covenants.
-------------------
3.4.2.1 Collateral Pool Debt Service Coverage Ratio.
-------------------------------------------
The Collateral Pool Debt Service Coverage Ratio as of
the end of each fiscal quarter of the Borrower for the fiscal quarter then
ending shall not be less than 2.25 to 1.00.
3.4.2.2 Collateral Pool Leverage Ratio.
------------------------------
The Collateral Pool Leverage Ratio shall not exceed
55%.
3.4.3 Extended-Stay Lodging Facilities.
--------------------------------
Each Collateral Pool Property shall be an extended-stay
lodging facility (as determined by the Agent) located in the continental
United States owned by the Borrower or another Loan Party which is a wholly
owned Subsidiary of the Borrower and, without the prior written approval of
the Required Banks, shall not contain more than 175 rooms.
3.4.4 Insurance.
---------
The Borrower shall maintain or cause to be maintained
insurance covering the Collateral Pool Properties in such amounts and covering
such risks as is set forth in Schedule 3.4.4 or otherwise required from time
to time pursuant to the Real Estate Collateral Documents.
3.4.5 Guest Leases; Tenant Leases; Major Agreements.
---------------------------------------------
All Guest Leases with respect to the Collateral Pool
Properties shall be on market terms and in substantial conformity with the
Borrower's standard form of Guest Lease, which form (including revisions
thereto) shall be submitted by the Borrower to the Agent for approval in
writing, which approval shall not be unreasonably withheld. Unless otherwise
consented to by the Agent in writing, all Tenant Leases with respect to
the Collateral Pool Properties shall (i) be to third parties under market
terms, (ii) provide for uses of such Collateral Pool Property that are
consistent with first-class management thereof, and (iii) contain
provisions regarding insurance, waiver of claims, damage and destruction,
condemnation, notice to mortgagee and subordination and attornment and
other material matters in substantial conformity with the standard
form(s) of space lease utilized by the Borrower for each Collateral Pool
Property, all of which standard forms (including revisions thereto) shall
be submitted by the Borrower to the Agent for approval in writing, which
approval shall not be unreasonably withheld. Upon request by the Agent,
-34-
the Borrower shall provide to the Agent a copy of each Tenant Lease,
including all amendments, estoppel certificates and related
documentation. In addition, promptly following the execution of any
Major Agreement (or the termination or material modification thereof),
Borrower shall provide a copy thereof to the Agent, and the Agent shall
promptly provide a copy thereof to each other Bank. Upon the execution
of any Major Agreement (or the termination or material modification
thereof) not approved in writing by the Agent prior to such execution,
the Agent may (and shall at the direction of Required Banks) redetermine
the As-Is Value for the subject Collateral Pool Property; such
reappraisal right shall be in addition to the rights to reappraise set
forth in Section 3.3.1(ii).
3.4.6 Nondisturbance Agreements.
-------------------------
Borrower will obtain or cause to be obtained, prior to
the Closing Date, from all tenants under current Tenant Leases an estoppel,
subordination, nondisturbance and/or attornment agreement in a form approved
by the Agent (each a "Nondisturbance Agreement"). If any Nondisturbance
Agreement asserts a material claim or set-off right by the tenant, which
is materially inconsistent with the rent roll for such Collateral Pool
Property, or is delivered in a form materially different from the
Nondisturbance Agreement, then, in any such circumstance, the Agent shall
have the right to establish an appropriate reserve until the Agent
determines that the circumstance leading to such reserve as aforesaid has
been favorably resolved. The Borrower shall obtain, or cause to be
obtained, from each tenant under a Tenant Lease entered into after the
Closing Date, a Nondisturbance Agreement in a form approved by the Agent
as a part of the approval of such Tenant Lease.
3.4.7 Management Agreements.
---------------------
The Borrower or an Affiliate of the Borrower have entered
into the management agreements identified on Schedule 3.4.7 with respect to
--------------
the Collateral Pool Properties. The Borrower shall not enter into any other
management agreement, or hereafter amend in any material manner or
terminate, a management agreement with respect to any Collateral Pool
Property, except upon thirty (30) days' prior written notice to and
approval by the Agent, which approval shall not be unreasonably withheld.
The Borrower shall timely provide to the Agent a copy of any proposed
management agreement, and the Agent shall promptly provide a copy thereof
to each other Bank. Without limiting in any way the Agent's approval
rights with respect thereto, each proposed management agreement shall
include an absolute right of Borrower or its Affiliate to terminate such
agreement upon thirty (30) days' notice to the property manager and shall
provide for management fees, reimbursements or other payments to the
property manager at levels not in excess of applicable market levels.
-35-
3.4.8 Major Construction.
------------------
If the Borrower or any of its Affiliates intends to
engage in any construction, remodeling or demolition project or series of
related projects with respect to a Collateral Pool Property (each, a
"Construction Project"), the aggregate cost of which will exceed ten
--------------------
percent (10%) of the As-Is Value of such property, Borrower shall first
notify the Agent, and such Construction Project shall be subject to the
Required Banks' approval, which approval shall not be unreasonably
withheld.
3.4.9 Borrowing Base.
--------------
The Borrower shall not at any time permit the Revolving
Facility Usage to exceed the Borrowing Base.
4. INTEREST RATES
4.1 Interest Rate Options.
---------------------
The Borrower shall pay interest in respect of the
outstanding unpaid principal amount of the Loans as selected by it from the
Base Rate Option and Euro-Rate Option set forth below applicable to the
Loans, it being understood that, subject to the provisions of this
Agreement, the Borrower may select different Interest Rate Options and
different Interest Periods to apply simultaneously to the Loans comprising
different Borrowing Tranches and may convert to or renew one or more
Interest Rate Options with respect to all or any portion of the Loans
comprising any Borrowing Tranche, provided that there shall not be at any
one time outstanding more than four (4) Borrowing Tranches in the
aggregate among all the Loans accruing interest at a Euro-Rate Option.
If at any time the designated rate applicable to any Loan made by any
Bank exceeds such Bank's highest lawful rate, the rate of interest on
such Bank's Loan shall be limited to such Bank's highest lawful rate.
4.1.1 Revolving Credit Interest Rate Options.
--------------------------------------
The Borrower shall have the right to select from
the following Interest Rate Options applicable to the Revolving Credit Loans:
(i) Base Rate Option: A fluctuating rate per
----------------
annum (computed on the basis of a year of 360 days and actual days elapsed)
equal to the Base Rate plus the Applicable Margin, such interest rate to
change automatically from time to time effective as of the effective date of
each change in the Base Rate; or
(ii) Euro-Rate Option: A rate per annum
----------------
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin. Additionally, the Borrower shall
----
-36-
have the option of having Revolving Credit Loans in an aggregate amount at any
one time outstanding up to the lesser of (i) the Cash Collateral Borrowing
Base or (ii) $15,000,000 which shall bear interest at a rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal
to the Euro-Rate plus 50 basis points.
4.1.2 Rate Quotations.
---------------
The Borrower may call the Agent on or before the
date on which a Loan Request is to be delivered to receive an indication of
the rates then in effect, but it is acknowledged that such projection shall
not be binding on the Agent or the Banks nor affect the rate of interest
which thereafter is actually in effect when the election is made.
4.2 Interest Periods.
----------------
At any time when the Borrower shall select, convert to or
renew a Euro-Rate Option, the Borrower shall notify the Agent thereof at
least three (3) Business Days prior to the effective date of such Euro-Rate
Option by delivering a Loan Request. The notice shall specify an interest
period (the "Interest Period") during which such Interest Rate Option shall
apply, such Interest Period to be one (1), two (2), three (3), six (6)
or, if available to all the Banks, twelve (12) Months in the event of a
Euro-Rate Option, provided, that:
4.2.1 Ending Date and Business Day.
----------------------------
Any Interest Period which would otherwise end on a date
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
4.2.2 Amount of Borrowing Tranche.
---------------------------
Each Borrowing Tranche to which a Euro-Rate applies shall
be in integral multiples of $100,000 and not less than $2,000,000;
4.2.3 Termination Before Expiration Date.
----------------------------------
The Borrower shall not select, convert to or renew
an Interest Period that would end after the Expiration Date;
4.2.4 Renewals.
--------
In the case of the renewal of a Euro-Rate Option at the
end of an Interest Period, the first day of the new Interest Period shall
e the last day of the preceding Interest Period, without duplication in
payment of interest for such day; and
-37-
4.3 Interest After Default.
----------------------
To the extent permitted by Law, upon the occurrence of an Event
of Default and until such time such Event of Default shall have been cured
or waived:
4.3.1 Letter of Credit Fees; Interest Rate.
------------------------------------
The Letter of Credit Fees and the rate of interest for
each Loan otherwise applicable pursuant to Section 2.9 or Section 4.1,
respectively, shall be increased 200 basis points per annum;
4.3.2 Other Obligations.
-----------------
Each other Obligation hereunder if not paid when due
shall bear interest at a rate per annum equal to the sum of the rate of
interest applicable under the Revolving Credit Base Rate Option plus an
additional 2% per annum (the "Modified Base Rate") from the time such
Obligation becomes due and payable and until it is paid in full; and
4.3.3 Acknowledgment.
--------------
The Borrower acknowledges that such increased rates
reflect, among other things, the fact that such Loans or other amounts have
become a substantially greater risk given their default status and that the
Banks are entitled to additional compensation for such risk, and all such
interest shall be payable by Borrower upon demand by Agent.
4.4 Euro-Rate Unascertainable.
-------------------------
4.4.1 Unascertainable.
---------------
If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) a contingency has occurred which materially
and adversely affects the secondary market for negotiable certificates of
deposit maintained by dealers of recognized standing relating to the London
interbank eurodollar market relating to the Euro-Rate, the Agent shall
have the rights specified in Section 4.4.3.
4.4.2 Illegality; Increased Costs; Deposits Not Available.
---------------------------------------------------
If at any time any Bank shall have determined that:
-38-
(i) the making, maintenance or funding of any Loan
to which a Euro-Rate Option applies has been made impracticable or unlawful by
compliance by such Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of
any such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately and
fairly reflect the cost to such Bank of the establishment or maintenance of
any such Loan, or
(iii) after making all reasonable efforts,
deposits of the relevant amount in Dollars for the relevant Interest Period
for a Loan to which a Euro-Rate Option applies are not available to such Bank
in the London interbank market,
then the Agent shall have the rights specified in Section 4.4.3.
4.4.3 Agent's and Bank's Rights.
-------------------------
In the case of any event specified in subsection 4.4.1
above, the Agent shall promptly so notify the Banks and the Borrower thereof,
and in the case of an event specified in subsection 4.4.2 above, such Bank
shall promptly so notify the Agent and endorse a certificate to such notice as
to the specific circumstances of such notice, and the Agent shall
promptly send copies of such notice and certificate to the other Banks
and the Borrower. Upon such date as shall be specified in such notice
(which shall not be earlier than the date such notice is given) the
obligation of (A) the Banks, in the case of such notice given by the
Agent, or (B) such Bank, in the case of such notice given by such Bank,
to allow the Borrower to select, convert to or renew a Euro-Rate Option
shall be suspended until the Agent shall have later notified the
Borrower, or such Bank shall have later notified the Agent, of the
Agent's or such Bank's, as the case may be, determination that the
circumstances giving rise to such previous determination no longer exist.
If at any time the Agent makes a determination under subsection 4.4.1
[Unascertainable] of this Section 4.4 and the Borrower has previously
notified the Agent of its selection of, conversion to or renewal of a
Euro-Rate Option and such Interest Rate Option has not yet gone into
effect, such notification shall be deemed to provide for selection of,
conversion to or renewal of the Base Rate Option otherwise available with
respect to such Loans. If any Bank notifies the Agent of a determination
under subsection 4.4.2 [Illegality, Increased Costs, Etc.] of this
Section 4.4, the Borrower shall, subject to the Borrower's
indemnification Obligations under Section 5.6.2 [Indemnity], as to any
Loan of the Bank to which a Euro-Rate Option applies, on the date
specified in such notice either convert such Loan to the Base Rate Option
otherwise available with respect to such Loan or prepay such Loan in
accordance with Section 5.4 [Voluntary Prepayments]. Absent due notice
from the Borrower of conversion or prepayment, such Loan shall
automatically be converted to the Base Rate Option otherwise available
with respect to such Loan upon such specified date.
-39-
4.5 Selection of Interest Rate Options.
----------------------------------
If the Borrower fails to select a new Interest Period to apply
to any Borrowing Tranche of Euro-Rate Loans at the expiration of an existing
Interest Period applicable to such Borrowing Tranche in accordance with
the provisions of Section 4.2, the Borrower shall be deemed to have
converted such Borrowing Tranche to the Base Rate Option commencing upon
the last day of the existing Interest Period, provided that the Agent
shall use reasonable efforts to notify the Borrower if the Borrower fails
to select such a new Interest Period prior to the expiration of an
existing one, but the Agent's failure to provide such notice shall not
result in any liability to the Agent or prevent the conversion to the
Base Rate Option if the Borrower fails to select such a new Interest
Period in accordance with the foregoing sentence.
5. PAYMENTS
5.1 Payments.
--------
All payments and prepayments to be made in respect of
principal, interest, Commitment Fees, Letter of Credit Fees, Agent's Fee
or other fees or amounts due from the Borrower hereunder shall be payable
prior to 11:00 a.m., Louisville time, on the date when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower, and without set-off, counterclaim or other
deduction of any nature, and an action therefor shall immediately accrue.
Such payments shall be made to the Agent at the Principal Office for the
ratable accounts of the Banks with respect to the Loans in U.S. Dollars
and in immediately available funds, and the Agent shall promptly
distribute such amounts to the Banks in immediately available funds,
provided that in the event payments are received by 11:00 a.m.,
Louisville time, by the Agent with respect to the Loans and such payments
are not distributed to the Banks on the same day received by the Agent,
the Agent shall pay the Banks the Federal Funds Effective Rate with
respect to the amount of such payments for each day held by the Agent and
not distributed to the Banks. The Agent's and each Bank's statement of
account, ledger or other relevant record shall, in the absence of
manifest error, be conclusive as the statement of the amount of principal
of and interest on the Loans and other amounts owing under this Agreement
and shall be deemed an "account stated."
5.2 Pro Rata Treatment of Banks.
---------------------------
Each borrowing and any reduction of Commitments shall be
allocated to each Bank according to its Ratable Share, and each selection of,
conversion to or renewal of any Interest Rate Option and each payment or
prepayment by the Borrower with respect to principal, interest,
Commitment Fees, Letter of Credit Fees, or other fees (except for the
Agent's Fee) or amounts due from the Borrower hereunder to the Banks with
respect to the Loans, shall (except as provided in Section 4.4 [Euro-Rate
Unascertainable], 5.4.2 [Voluntary Prepayments] or 5.6 [Additional
Compensation in Certain Circumstances]) be made in proportion to the
applicable Loans outstanding from each Bank and, if no such Loans are
then outstanding, in proportion to the Ratable Share of each Bank.
-40-
5.3 Interest Payment Dates.
----------------------
Interest on Loans to which the Base Rate Option applies shall
be due and payable in arrears on the first Business Day of each month after
the date hereof and on the Expiration Date or upon acceleration of the Notes.
Interest on Loans to which the Euro-Rate Option applies shall be due and
payable on the last day of each Interest Period for those Loans and, if
any such Interest Period is longer than one (1) month, also on the last
day of every month during such period. Interest on mandatory prepayments
of principal under Section 5.5 [Mandatory Prepayments] shall be due on
the date such mandatory prepayment is due. Interest on the principal
amount of each Loan or other monetary Obligation shall be due and payable
on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated maturity date, upon
acceleration or otherwise).
5.4 Voluntary Prepayments.
---------------------
5.4.1 Right to Prepay.
---------------
The Borrower shall have the right at its option from time
to time to prepay the Loans in whole or in part without premium or penalty
(except as provided in subsection 5.4.2 below or in Section 5.6):
(i) at any time with respect to any Loan to which
the Base Rate Option applies,
(ii) on the last day of the applicable Interest
Period with respect to Loans to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any
Bank pursuant to Section 4.4 [Euro-Rate Unascertainable] with respect to any
Loan to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans,
it shall provide a prepayment notice to the Agent at least one (1) Business Day
prior to the date of prepayment of Loans setting forth the following
information:
(y) the date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(z) the total principal amount of such prepayment, which shall
not be less than $100,000.
-41-
All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount except with respect to Loans to which the
Base Rate Option applies, shall be due and payable on the date specified in
such prepayment notice as the date on which the proposed prepayment is to be
made. Except as provided in Section 4.4.3 [Agent's and Banks' Rights],
if the Borrower prepays a Loan but fails to specify the applicable
Borrowing Tranche which the Borrower is prepaying, the prepayment shall
be applied first to Loans to which the Base Rate Option applies, and then
to Loans to which the Euro-Rate Option applies. Any prepayment hereunder
shall be subject to the Borrower's Obligation to indemnify the Banks
under Section 5.6.2 [Indemnity].
5.4.2 Replacement of a Bank.
---------------------
In the event any Bank (i) gives notice under Section 4.4
[Euro-Rate Unascertainable] or Section 5.6.1 [Increased Costs, Etc.], (ii)
does not fund Revolving Credit Loans because the making of such Loans would
contravene any Law applicable to such Bank, (iii) does not approve any
action as to which consent of the Required Banks is requested by the
Borrower and obtained hereunder, or (iv) becomes subject to the control
of an Official Body (other than normal and customary supervision), then
the Borrower shall have the right at its option, with the consent of the
Agent, which shall not be unreasonably withheld, to prepay the Loans of
such Bank in whole, together with all interest accrued thereon, and
terminate such Bank's Revolving Credit Commitment within ninety (90) days
after (w) receipt of such Bank's notice under Section 4.4 [Euro-Rate
Unascertainable] or 5.6.1 [Increased Costs, Etc.], (x) the date such Bank
has failed to fund Revolving Credit Loans because the making of such
Loans would contravene Law applicable to such Bank, (y) the date of
obtaining the consent which such Bank has not approved, or (z) the date
such Bank became subject to the control of an Official Body, as
applicable; provided that the Borrower shall also pay to such Bank at the
--------
time of such prepayment any amounts required under Section 5.6
[Additional Compensation in Certain Circumstances] and any accrued
interest due on such amount and any related fees; provided, however, that
--------
the Revolving Credit Commitment of such Bank shall be provided by one or
--------
more of the remaining Banks or a replacement bank acceptable to the
Agent; provided, further, the remaining Banks shall have no obligation
--------
hereunder to increase their Revolving Credit Commitments.
Notwithstanding the foregoing, the Agent may only be replaced subject to
the requirements of Section 10.14 [Successor Agent] and provided that all
--------
Letters of Credit have expired or been terminated or replaced.
5.4.3 Change of Lending Office.
------------------------
Each Bank agrees that upon the occurrence of any event giving
rise to increased costs or other special payments under Section 4.4.2
[Illegality, Etc.] or 5.6.1 [Increased Costs, Etc.] with respect to such
Bank, it will if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by
such event, provided that such designation is made on such terms that
--------
-42-
such Bank and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event
giving rise to the operation of such Section. Nothing is this
Section 5.4.3 shall affect or postpone any of the Obligations of the
Borrower or any other Loan Party or the rights of the Agent or any Bank
provided in this Agreement.
--------
5.5 Mandatory Prepayments.
---------------------
5.5.1 Borrowing Base Exceeded.
-----------------------
Whenever the Revolving Facility Usage exceeds the
Borrowing Base, the Borrower shall make, within ten (10) Business Days after
the Borrower learns of such excess and whether or not the Agent has given
notice to such effect, a mandatory prepayment of principal equal to the
excess of the Revolving Facility Usage over the Borrowing Base, together with
accrued interest on such principal amount at the default rate set forth
in Section 4.3.
5.6 Additional Compensation in Certain Circumstances.
------------------------------------------------
5.6.1 Increased Costs or Reduced Return Resulting From
------------------------------------------------
Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc.
--------------------------------------------------------------
If any Law, guideline or interpretation or any change in
any Law, guideline or interpretation or application thereof by any Official
Body charged with the interpretation or administration thereof or compliance
with any request or directive (whether or not having the force of Law) of
any central bank or other Official Body:
(i) subjects any Bank to any tax or changes the
basis of taxation with respect to this Agreement, the Notes, the Loans or
payments by the Borrower of principal, interest, Commitment Fees, or other
amounts due from the Borrower hereunder or under the Notes (except for taxes
on the overall net income of such Bank),
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against credits or
commitments to extend credit extended by, or assets (funded or contingent)
of, deposits with or for the account of, or other acquisitions of funds by,
any Bank, or
(iii) imposes, modifies or deems applicable any
capital adequacy or similar requirement (A) against assets (funded or
contingent) of, or letters of credit, other credits or commitments to extend
credit extended by, any Bank, or (B) otherwise applicable to the obligations
of any Bank under this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce
the income receivable by, or impose any expense (including loss of
margin) upon any Bank with respect to this Agreement, the Notes or the
-43-
making, maintenance or funding of any part of the Loans (or, in the case
of any capital adequacy or similar requirement, to have the effect of
reducing the rate of return on any Bank's capital, taking into
consideration such Bank's customary policies with respect to capital
adequacy) by an amount which such Bank in its sole discretion deems to be
material, such Bank shall from time to time notify the Borrower and the
Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank to be necessary
to compensate such Bank for such increase in cost, reduction of income or
additional expense, provided that a Bank shall not give the Borrower
--------
notice hereunder unless the Bank is generally imposing such increased
costs on its similarly situated customers. Such notice shall set forth
in reasonable detail the basis for such determination. Such amount shall
be due and payable by the Borrower to such Bank ten (10) Business Days
after such notice is given.
5.6.2 Indemnity.
---------
In addition to the compensation required by subsection
5.6.1 [Increased Costs, Etc.] of this Section 5.6 [Additional Compensation in
Certain Circumstances], the Borrower shall indemnify each Bank against all
liabilities, losses or expenses (including loss of margin, any loss or
expense incurred in liquidating or employing deposits from third parties
and any loss or expense incurred in connection with funds acquired by a
Bank to fund or maintain Loans subject to the Euro-Rate Option) which
such Bank sustains or incurs as a consequence of any
(i) payment, prepayment, conversion or renewal of
any Loan to which the Euro-Rate Option applies on a day other than the last
day of the corresponding Interest Period (whether or not such payment or
prepayment is mandatory, voluntary or automatic and whether or not such
payment or prepayment is then due),
(ii) attempt by the Borrower to revoke (expressly,
by later inconsistent notices or otherwise) in whole or part any notice
relating to Loan Requests under Section 2.5 [Revolving Credit Loan Requests]
or Section 4.2 [Interest Periods] or prepayments under Section 5.4
[Voluntary Prepayments], or
(iii) default by the Borrower in the performance
or observance of any covenant or condition contained in this Agreement or any
other Loan Document, including any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal, interest, Commitment Fee or any
other amount due hereunder.
If any Bank sustains or incurs any such loss or expense, it
shall from time to time notify the Borrower of the amount determined in good
faith by such Bank (which determination may include such assumptions,
allocations of costs and expenses and averaging or attribution methods as
such Bank shall deem reasonable) to be necessary to indemnify such Bank
for such loss or expense. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and
payable by the Borrower to such Bank ten (10) Business Days after such
notice is given.
-44-
6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties.
------------------------------
The Loan Parties, jointly and severally, represent and warrant
to the Agent and each of the Banks as follows:
6.1.1 Organization and Qualification.
------------------------------
Each Loan Party and each Subsidiary of each Loan Party is
a corporation or partnership, duly organized, validly existing and in good
standing under the Laws of its jurisdiction of organization. Each Loan Party
and each Subsidiary of each Loan Party has the lawful power to own or lease
its properties and to engage in the business it presently conducts or
proposes to conduct. On the Closing Date, each Loan Party and each
Subsidiary of each Loan Party is duly licensed or qualified and in good
standing in each jurisdiction listed on Schedule 6.1.1 and in all other
--------------
jurisdictions where the property owned or leased by it or the nature of
the business transacted by it or both makes such licensing or
qualification necessary.
6.1.2 Capitalization and Ownership.
----------------------------
The authorized capital stock of the Borrower consists of
100,000,000 shares of common stock, par value $0.01 per share, of which, as
of June 30, 1997, 12,130,502 shares (referred to herein as the "Shares")
------
were issued and outstanding, and 5,000,000 shares of preferred stock, par
value $1.00 per share, of which no shares are issued and outstanding.
All of the Shares have been validly issued and are fully paid and
nonassessable. There are no options, warrants or other rights
outstanding to purchase any such shares except as indicated on Schedule
--------
6.1.2. A list of executive officers and directors of the Borrower who
-----
own Shares and their respective Share ownership is also set forth on
Schedule 6.1.2.
--------------
6.1.3 Subsidiaries.
------------
Schedule 6.1.3 states the name of each of the Borrower's
--------------
Subsidiaries, its jurisdiction of incorporation, its authorized capital stock,
the issued and outstanding shares (referred to herein as the "Subsidiary
----------
Shares") and the owners thereof if it is a corporation and its
------
outstanding partnership interests (the "Partnership Interests") if it is
---------------------
a partnership. The Borrower and each Subsidiary of the Borrower has good
and marketable title to all of the Subsidiary Shares and Partnership
Interests it purports to own, free and clear in each case of any Lien.
All Subsidiary Shares and Partnership Interests have been validly issued,
and all Subsidiary Shares are fully paid and nonassessable. All capital
contributions and other consideration required to be made or paid in
-45-
connection with the issuance of the Partnership Interests have been made
or paid, as the case may be. There are no options, warrants or other
rights outstanding to purchase any such Subsidiary Shares or Partnership
Interests except as indicated on Schedule 6.1.3.
--------------
6.1.4 Power and Authority.
--------------------
Each Loan Party has full power to enter into, execute,
deliver and carry out this Agreement and the other Loan Documents to which it
is a party, to incur the Indebtedness contemplated by the Loan Documents and
to perform its Obligations under the Loan Documents to which it is a party,
and all such actions have been duly authorized by all necessary
proceedings on its part.
6.1.5 Validity and Binding Effect.
---------------------------
This Agreement has been duly and validly executed and
delivered by each Loan Party, and each other Loan Document which any Loan
Party is required to execute and deliver on or after the date hereof will
have been duly executed and delivered by such Loan Party on the required date
of delivery of such Loan Document. This Agreement and each other Loan
Document constitutes, or will constitute, legal, valid and binding
obligations of each Loan Party which is or will be a party thereto on and
after its date of delivery thereof, enforceable against such Loan Party
in accordance with its terms, except to the extent that enforceability of
any of such Loan Document may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the
enforceability of creditors' rights generally or limiting the right of
specific performance.
6.1.6 No Conflict.
-----------
Neither the execution and delivery of this Agreement or
the other Loan Documents by any Loan Party nor the consummation of the
transactions herein or therein contemplated or compliance with the terms and
provisions hereof or thereof by them will conflict with, constitute a
default under or result in any breach of (i) the terms and conditions of
the certificate of incorporation, bylaws or other organizational
documents of any Loan Party or (ii) any Law or of any material agreement
or instrument or order, writ, judgment, injunction or decree to which any
Loan Party is a party or by which it is bound or to which it is subject,
or result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter acquired) of
any Loan Party (other than Liens granted under the Loan Documents).
6.1.7 Litigation.
----------
There are no actions, suits, proceedings or investiga-
tions pending or, to the knowledge of any Loan Party, threatened against such
Loan Party or any Subsidiary of such Loan Party at law or equity before any
Official Body which individually or in the aggregate may result in any
Material Adverse Change. None of the Loan Parties or any Subsidiaries of
any Loan Party is in violation of any order, writ, injunction or any decree
of any Official Body which may result in any Material Adverse Change.
-46-
6.1.8 Title to Properties.
-------------------
The real property owned or leased by each Loan Party and
each Subsidiary of each Loan Party is described on Schedule 6.1.8. Each Loan
Party and each Subsidiary of each Loan Party has good and marketable title to
or valid leasehold interest in all properties, assets and other rights which
it purports to own or lease or which are reflected as owned or leased on
its books and records, free and clear of all Liens and encumbrances
except Permitted Liens, and subject to the terms and conditions of the
applicable leases. All leases of property are in full force and effect
without the necessity for any consent which has not previously been
obtained upon consummation of the transactions contemplated hereby.
6.1.9 Financial Statements.
--------------------
(i) Historical Statements. The Borrower has
---------------------
delivered to the Agent copies of its audited consolidated year-end financial
statements for the fiscal year ended December 31, 1996 (the "Annual
------
Statements"). In addition, the Borrower has delivered to the Agent copies of
----------
its unaudited consolidated interim financial statements for the fiscal year to
date and as of the end of the fiscal quarter ended June 30, 1997 (the "Interim
-------
Statements") (the Annual and Interim Statements being collectively
----------
referred to as the "Historical Statements"). The Historical Statements
---------------------
were compiled from the books and records maintained by the Borrower's
management, are correct and complete and fairly represent the
consolidated financial condition of the Borrower and its Subsidiaries as
of their dates and the results of operations for the fiscal periods then
ended and have been prepared in accordance with GAAP consistently
applied, subject (in the case of the Interim Statements) to normal year-
end audit adjustments.
(ii) Financial Projections. The Borrower has
---------------------
delivered to the Agent financial projections of the Borrower and its
Subsidiaries for the period 1997-2000 derived from various assumptions of the
Borrower's management (the "Financial Projections"). The Financial
---------------------
Projections represent a reasonable range of possible results in light of the
history of the business, present and foreseeable conditions and the intentions
of the Borrower's management. The Financial Projections accurately reflect the
liabilities of the Borrower and its Subsidiaries upon consummation of the
transactions contemplated hereby as of the Closing Date.
(iii) Accuracy of Financial Statements. Neither
--------------------------------
the Borrower nor any Subsidiary of the Borrower has any liabilities,
contingent or otherwise, or forward or long-term commitments that are not
disclosed in the Historical Statements or in the notes thereto, and except
as disclosed therein there are no unrealized or anticipated losses from any
commitments of the Borrower or any Subsidiary of the Borrower which may
cause a Material Adverse Change. Since December 31, 1996, no Material
Adverse Change has occurred.
-47-
6.1.10 Margin Stock.
------------
None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock
(within the meaning of Regulation U). No part of the proceeds of any
Loan has been or will be used, immediately, incidentally or ultimately,
to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any margin stock or to refund
Indebtedness originally incurred for such purpose, or for any purpose
which entails a violation of or which is inconsistent with the provisions
of the regulations of the Board of Governors of the Federal Reserve
System. None of the Loan Parties or any Subsidiary of any Loan Party
holds or intends to hold margin stock in such amounts that more than 25%
of the reasonable value of the assets of any Loan Party or Subsidiary of
any Loan Party are or will be represented by margin stock.
6.1.11 Full Disclosure.
---------------
Neither this Agreement nor any other Loan Document, nor
any certificate, statement, agreement or other documents furnished to the Agent
or any Bank in connection herewith or therewith, contains any untrue statement
of a material fact or omits to state a material fact necessary in order
to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading. There is no
fact known to any Loan Party which materially adversely affects the
business, property, assets, financial condition, results of operations or
prospects of any Loan Party or Subsidiary of any Loan Party which has not
been set forth in this Agreement or in the certificates, statements,
agreements or other documents furnished in writing to the Agent and the
Banks prior to or at the date hereof in connection with the transactions
contemplated hereby.
6.1.12 Taxes.
-----
All federal, state, local and other tax returns required
to have been filed with respect to each Loan Party and each Subsidiary of
each Loan Party have been filed, and payment or adequate provision has been
made for the payment of all taxes, fees, assessments and other governmental
charges which have or may become due pursuant to said returns or to
assessments received, except to the extent that such taxes, fees,
assessments and other charges are being contested in good faith by
appropriate proceedings diligently conducted and for which such reserves
or other appropriate provisions, if any, as shall be required by GAAP
shall have been made. There are no agreements or waivers extending the
statutory period of limitations applicable to any federal income tax
return of any Loan Party or Subsidiary of any Loan Party for any period.
-48-
6.1.13 Consents and Approvals.
----------------------
Except for the filing of financing statements and the
applicable Real Estate Collateral Documents in the state and county filing
offices, no consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is
required by any Law or any agreement in connection with the execution,
delivery and carrying out of this Agreement and the other Loan Documents
by any Loan Party, except as listed on Schedule 6.1.13, all of which
---------------
shall have been obtained or made on or prior to the Closing Date except
as otherwise indicated on Schedule 6.1.13.
---------------
6.1.14 No Event of Default; Compliance With Instruments.
------------------------------------------------
No event has occurred and is continuing and no condition
exists or will exist after giving effect to the borrowings to be made on the
Closing Date under the Loan Documents which constitutes an Event of Default or
Potential Default. None of the Loan Parties or any Subsidiaries of any
Loan Party is in violation of (i) any term of its certificate of
incorporation, bylaws or other organizational documents or (ii) any
material agreement or instrument to which it is a party or by which it or
any of its properties may be subject or bound where such violation would
constitute a Material Adverse Change.
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
-----------------------------------------------
Each Loan Party and each Subsidiary of each Loan Party
owns or possesses all the material patents, trademarks, service marks,
trade names, copyrights, licenses, registrations, franchises, permits and
rights necessary to own and operate its properties and to carry on its
business as presently conducted and planned to be conducted by such Loan Party
or Subsidiary, without known, possible, alleged or actual conflict with the
rights of others. All material patents, trademarks, service marks, trade
names, copyrights, licenses, registrations, franchises and permits of
each Loan Party and each Subsidiary of each Loan Party are listed and
described on Schedule 6.1.15.
---------------
6.1.16 Security Interests.
------------------
The Liens and security interests granted to the Agent for
the benefit of the Banks pursuant to the Pledge Agreement, the Real Estate
Collateral Documents and the Security Agreement in the Collateral (other than
the Collateral Pool Properties) constitute and will continue to constitute
Prior Security Interests under the Uniform Commercial Code as in effect
in each applicable jurisdiction (the "Uniform Commercial Code") or other
-----------------------
applicable Law entitled to all the rights, benefits and priorities
provided by the Uniform Commercial Code or such Law. Upon the filing of
financing statements relating to said security interests in each office
and in each jurisdiction where required in order to perfect the security
interests described above, taking possession of any stock certificates or
other certificates evidencing the Pledged Collateral, and recordation of
the Security Agreement in the United States Patent and Trademark Office
and the United States Copyright Office, as applicable, all such action as
-49-
is necessary or advisable to establish such rights of the Agent will have
been taken, and there will be upon execution and delivery of the Pledge
Agreement and the Real Estate Collateral Documents, such filings and such
taking of possession, no necessity for any further action in order to
preserve, protect and continue such rights, except the filing of
continuation statements with respect to such financing statements within
six (6) months prior to each five (5) year anniversary of the filing of
such financing statements. All filing fees and other expenses in
connection with each such action have been or will be paid by the
Borrower.
6.1.17 Mortgage Liens.
--------------
The Liens granted to the Agent for the benefit of the
Banks pursuant to the Real Estate Collateral Documents constitute a valid
first priority Lien under applicable Law. All such action as will be
necessary or advisable to establish such Lien of the Agent and its priority
as described in the preceding sentence will be taken at or prior to the time
required for such purpose, and there will be as of the date of execution
and delivery of the Real Estate Collateral Documents no necessity for any
further action in order to protect, preserve and continue such Lien and
such priority.
6.1.18 Status of the Pledged Collateral.
--------------------------------
All the shares of capital stock or Partnership Interests
included in the Pledged Collateral to be pledged pursuant to the Pledge
Agreement are or will be upon issuance validly issued and nonassessable and
owned beneficially and of record by the pledgor free and clear of any Lien
or restriction on transfer, except as otherwise provided by the Pledge
Agreement and except as the right of the Banks to dispose of the Shares
or Partnership Interests may be limited by the Securities Act of 1933, as
amended, and the regulations promulgated by the Securities and Exchange
Commission thereunder and by applicable state securities laws. There are
no shareholder, partnership or other agreements or understandings with
respect to the Shares of capital stock or Partnership Interests included
in the Pledged Collateral except for the partnership agreements described
on Schedule 6.1.18. The Loan Parties have delivered true and correct
---------------
copies of such partnership agreements to the Agent.
6.1.19 Insurance.
---------
Schedule 6.1.19 lists all insurance policies and other
---------------
bonds to which any Loan Party or Subsidiary of any Loan Party is a party on
the Closing Date, all of which are valid and in full force and effect. No
notice has been given or claim made and no grounds exist to cancel or avoid
any of such policies or bonds or to reduce the coverage provided thereby.
Such policies and bonds provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and
risks of each Loan Party and each Subsidiary of each Loan Party in
accordance with prudent business practice in the industry of the Loan
Parties and their Subsidiaries.
-50-
6.1.20 Compliance With Laws.
--------------------
The Loan Parties and their Subsidiaries are in compliance in
all material respects with all applicable Laws (in other than Environmental
Laws which are specifically addressed in subsection 6.1.25 [Environmental
Matters]) in all jurisdictions in which any Loan Party or Subsidiary of any
Loan Party is presently or will be doing business except where the failure to
do so would not constitute a Material Adverse Change.
6.1.21 Material Contracts; Burdensome Restrictions.
-------------------------------------------
As of the Closing Date, Schedule 6.1.21 lists all material
---------------
contracts relating to the business operations of each Loan Party and each
Subsidiary of any Loan Party, including all employee benefit plans and
Labor Contracts. All such material contracts are valid, binding and
enforceable upon such Loan Party or Subsidiary and each of the other
parties thereto in accordance with their respective terms, and there is
no default thereunder, to the Loan Parties' knowledge, with respect to
parties other than such Loan Party or Subsidiary. None of the Loan
Parties or their Subsidiaries is bound by any contractual obligation, or
subject to any restriction in any organization document, or any
requirement of Law which could result in a Material Adverse Change.
6.1.22 Investment Companies; Regulated Entities.
----------------------------------------
None of the Loan Parties or any Subsidiaries of any Loan
Party is an "investment company" registered or required to be registered
under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company Act
of 1940 and shall not become such an "investment company" or under such
"control." None of the Loan Parties or any Subsidiaries of any Loan
Party is subject to any other federal or state statute or regulation
limiting its ability to incur Indebtedness for borrowed money.
6.1.23 Plans and Benefit Arrangements.
------------------------------
Except as set forth on Schedule 6.1.23:
---------------
(i) The Borrower and each member of the ERISA
Group are in compliance in all material respects with any applicable
provisions of ERISA with respect to all Benefit Arrangements, Plans and
Multiemployer Plans. There has been no Prohibited Transaction with respect
to any Benefit Arrangement or any Plan or, to the best knowledge of the
Borrower, with respect to any Multiemployer Plan or Multiple Employer Plan,
which could result in any material liability of the Borrower or any other
member of the ERISA Group. The Borrower and all members of the ERISA Group
have made when due any and all payments required to be made under any
agreement relating to a Multiemployer Plan or a Multiple Employer Plan or
any Law pertaining thereto. With respect to each Plan and Multiemployer
Plan, the Borrower and each member of the ERISA Group (i) have fulfilled
in all material respects their obligations under the minimum funding
-51-
standards of ERISA, (ii) have not incurred any liability to the PBGC, and
(iii) have not had asserted against them any penalty for failure to
fulfill the minimum funding requirements of ERISA.
(ii) To the best of the Borrower's knowledge,
each Multiemployer Plan and Multiple Employer Plan is able to pay benefits
thereunder when due.
(iii) Neither the Borrower nor any other member of
the ERISA Group has instituted or intends to institute proceedings to
terminate any Plan.
(iv) No event requiring notice to the PBGC under
Section 302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur
with respect to any Plan, and no amendment with respect to which security is
required under Section 307 of ERISA has been made or is reasonably expected to
be made to any Plan.
(v) The aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in, and as of the date of, the most
recent actuarial report for such Plan, does not exceed the aggregate fair
market value of the assets of such Plan.
(vi) Neither the Borrower nor any other member of
the ERISA Group has incurred or reasonably expects to incur any material
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Borrower nor any other member of the ERISA Group
has been notified by any Multiemployer Plan or Multiple Employer Plan that
such Multiemployer Plan or Multiple Employer Plan has been terminated within
the meaning of Title IV of ERISA and, to the best knowledge of the Borrower,
no Multiemployer Plan or Multiple Employer Plan is reasonably expected to be
reorganized or terminated, within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement
is insured, the Borrower and all members of the ERISA Group have paid when
due all premiums required to be paid for all periods through the Closing
Date. To the extent that any Benefit Arrangement is funded other than with
insurance, the Borrower and all members of the ERISA Group have made when
due all contributions required to be paid for all periods through the
Closing Date.
(viii) All Plans, Benefit Arrangements and Multi-
employer Plans have been administered in accordance with their terms and
applicable Law.
6.1.24 Employment Matters.
------------------
Each of the Loan Parties is in compliance with the Labor
Contracts and all applicable federal, state and local labor and employment Laws
including those related to equal employment opportunity and affirmative
action, labor relations, minimum wage, overtime, child labor, medical
insurance continuation, worker adjustment and relocation notices,
immigration controls and worker and unemployment compensation, where the
failure to comply would constitute a Material Adverse Change. There are
no outstanding grievances, arbitration awards or appeals therefrom
-52-
arising out of the Labor Contracts or current or threatened strikes,
picketing, handbilling or other work stoppages or slowdowns at facilities
of any of the Loan Parties which in any case would constitute a Material
Adverse Change. The Borrower has delivered to the Agent true and correct
copies of each of the Labor Contracts.
6.1.25 Environmental Matters.
---------------------
Except as disclosed on Schedule 6.1.25:
---------------
(i) None of the Loan Parties or any Subsidiaries of
any Loan Party has received any Environmental Complaint from any Official Body
or private Person alleging that such Loan Party or Subsidiary or any prior or
subsequent owner of the Property is a potentially responsible party under
the Comprehensive Environmental Response, Cleanup and Liability Act, 42
U.S.C. Section 9601, et seq., and none of the Loan Parties has any reason to
------
believe that such an Environmental Complaint might be received. There
are no pending or, to any Loan Party's knowledge, threatened
Environmental Complaints relating to any Loan Party or Subsidiary of any
Loan Party or, to any Loan Party's knowledge, any prior or subsequent
owner of the Property pertaining to, or arising out of, any Environmental
Conditions.
(ii) Except for conditions, violations or failures
which individually and in the aggregate are not reasonably likely to result in
a Material Adverse Change, there are no circumstances at, on or under the
Property that constitute a breach of or noncompliance with any of the
Environmental Laws, and there are no present or, to any Loan Party's
knowledge, past Environmental Conditions at, on or under the Property or,
to any Loan Party's knowledge, at, on or under adjacent property, that
prevent compliance with the Environmental Laws at the Property.
(iii) Neither the Property nor any structures,
improvements, equipment, fixtures, activities or facilities thereon or
thereunder contain or use Regulated Substances except in material compliance
with Environmental Laws. There are no processes, facilities, operations,
equipment or any other activities at, on or under the Property, or, to any
Loan Party's knowledge, at, on or under adjacent property, that currently
result in the release or threatened release of Regulated Substances onto the
Property, except to the extent that such releases or threatened releases
are not a material breach of or otherwise not a material violation of the
Environmental Laws or are not likely to result in a Material Adverse
Change.
(iv) There are no aboveground storage tanks,
underground storage tanks or underground piping associated with such tanks,
used for the management of Regulated Substances at, on or under the Property
that (a) do not have, to the extent required by Environmental Laws, a full
operational secondary containment system in place, and (b) are not otherwise
in material compliance with all Environmental Laws. There are no abandoned
underground storage tanks or underground piping associated with such
tanks, previously used for the management of Regulated Substances at, on
or under the Property that have not either been closed in place in
accordance with Environmental Laws or removed in material compliance with
all applicable Environmental Laws and no contamination associated with
the use of such tanks exists on the Property that is not in material
compliance with Environmental Laws.
-53-
(v) Each Loan Party and each Subsidiary of any Loan
Party has all material permits, licenses, authorizations, plans and approvals
necessary under the Environmental Laws for the conduct of the business of such
Loan Party and Subsidiary as presently conducted. Each Loan Party and each
Subsidiary of any Loan Party has submitted all material notices, reports
and other filings required by the Environmental Laws to be submitted to
an Official Body which pertain to past and current operations on the
Property.
(vi) Except for violations which individually and
in the aggregate are not likely to result in a Material Adverse Change, all
past and present on-site generation, storage, processing, treatment, recycling,
reclamation, disposal or other use or management of Regulated Substances
at, on or under the Property and all off-site transportation, storage,
processing, treatment, recycling, reclamation, disposal or other use or
management of Regulated Substances has been done in accordance with the
Environmental Laws.
6.1.26 Senior Debt Status.
------------------
The Obligations of each Loan Party under this Agreement,
the Notes, the Guaranty Agreement and each of the other Loan Documents to
which it is a party do rank and will rank at least pari passu in priority
of payment with all other Indebtedness of such Loan Party except Indebtedness
of such Loan Party to the extent secured by Permitted Liens. There is no
Lien upon or with respect to any of the properties or income of any Loan
Party or Subsidiary of any Loan Party which secures indebtedness or other
obligations of any Person except for Permitted Liens.
6.2 Updates to Schedules.
--------------------
Should any of the information or disclosures provided on any
of the Schedules attached hereto become outdated or incorrect in any material
respect, the Loan Party shall promptly provide the Agent in writing with
such revisions or updates to such Schedule as may be necessary or
appropriate to update or correct same; provided, however, that the
--------
Borrower shall not be required to update any Schedule that specifically
relates to the Closing Date and no Schedule shall be deemed to have been
amended, modified or superseded by any such correction or update, nor
shall any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule be deemed to have been
cured thereby, unless and until the Required Banks, in their sole and
absolute discretion, shall have accepted in writing such revisions or
updates to such Schedule.
-54-
7. CONDITIONS OF LENDING
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by each of the
Loan Parties of its Obligations to be performed hereunder at or prior to
the making of any such Loans or issuance of such Letters of Credit and to
the satisfaction of the following further conditions:
7.1 First Loans.
-----------
On the Closing Date:
7.1.1 Officer's Certificate.
---------------------
The representations and warranties of each of the Loan
Parties contained in Article 6 shall be true and accurate on and as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which representa-
tions and warranties shall be true and correct on and as of the specific
dates or times referred to therein), and each of the Loan Parties shall
have performed and complied with all covenants and conditions hereof, no Event
of Default or Potential Default under this Agreement shall have occurred
and be continuing or shall exist; and there shall be delivered to the
Agent for the benefit of each Bank a certificate of each of the Loan
Parties, dated the Closing Date and signed by the Chief Executive
Officer, President or Chief Financial Officer of each of the Loan
Parties, to each such effect.
7.1.2 Secretary's Certificate.
-----------------------
There shall be delivered to the Agent for the benefit of
each Bank a certificate dated the Closing Date and signed by the Secretary or\
an Assistant Secretary of each of the Loan Parties, certifying as appropriate
as to:
(i) all action taken by each Loan Party in
connection with this Agreement and the other Loan Documents;
(ii) the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents and the true
signatures of such officer or officers and specifying the Authorized Officers
permitted to act on behalf of each Loan Party for purposes of this Agreement
and the true signatures of such officers, on which the Agent and each Bank may
conclusively rely; and
-55-
(iii) copies of its organizational documents,
including its certificate of incorporation and bylaws as in effect on the
Closing Date certified by the appropriate state official where such documents
are filed in a state office together with certificates from the appropriate
state officials as to the continued existence and good standing of each Loan
Party in each state where organized or qualified to do business.
7.1.3 Delivery of Loan Documents.
--------------------------
The Notes, Guaranty Agreement, Real Estate Collateral
Documents for all Collateral Pool Properties, Pledge Agreements, Intercompany
Subordination Agreement, Security Agreement, Notification and Control
Agreement and Collateral Assignment shall have been duly executed and
delivered to the Agent for the benefit of the Banks, together with all
appropriate financing statements and appropriate stock powers and certificates
evidencing the Shares and the Partnership Interests (if any).
7.1.4 Opinion of Counsel.
------------------
There shall be delivered to the Agent for the benefit of
each Bank:
(i) a written opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel
for the Loan Parties, dated the Closing Date and in form and substance
satisfactory to the Agent and its counsel as to the matters set forth in
Exhibit 7.1.4(i) and as to such other matters incident to the transactions
----------------
contemplated herein as the Agent may reasonably request; and
(ii) a written opinion of local counsel for the Borrower in
form and substance satisfactory to the Agent and its counsel as to such maters
relating to the Collateral Pool Properties to be included in the
Collateral Pool on the Closing Date as the Agent may reasonably request.
7.1.5 Legal Details.
-------------
All legal details and proceedings in connection with the
transactions contemplated by the Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Agent and counsel for the Agent,
and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection
with such transactions, in form and substance satisfactory to the Agent
and said counsel, as the Agent or said counsel may reasonably request.
7.1.6 Payment of Fees.
---------------
The Borrower shall pay or cause to be paid to the Agent
for itself and for the account of the Banks to the extent not previously paid
all commitment and other fees accrued through the Closing Date, as set forth
herein and in the Agent's Letter, and the costs and expenses for which
the Agent and the Banks are entitled to be reimbursed.
-56-
7.1.7 Consents.
--------
All material consents required to effectuate the transac-
tions contemplated hereby as set forth on Schedule 6.1.13 shall have been
obtained.
7.1.8 Officer's Certificate Regarding MACs.
------------------------------------
Since December 31, 1996, no Material Adverse Change in any
Loan Party or Subsidiary of any Loan Party shall have occurred; and prior to
the Closing Date, there shall be no material change in the management of any
Loan Party or Subsidiary of any Loan Party; and there shall be delivered
to the Agent for the benefit of each Bank a certificate dated the Closing
Date and signed by the Chief Executive Officer, President or Chief
Financial Officer of each Loan Party to each such effect.
7.1.9 No Violation of Laws.
--------------------
The making of the Loans shall not contravene any Law
applicable to any Loan Party or any of the Banks.
7.1.10 No Actions or Proceedings.
-------------------------
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any
court, governmental agency or legislative body to enjoin, restrain or prohibit,
or to obtain damages in respect of this Agreement or the consummation of
the transactions contemplated hereby or which, in the Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.
7.1.11 Collateral Pool Properties.
--------------------------
With respect to the Collateral Pool Properties which are
part of the Collateral Pool on the Closing Date, the Borrower shall have
delivered all documents and information required hereunder for inclusion of
such Collateral Pool Property into the Collateral Pool and the Banks shall
have approved the inclusion therein.
7.1.12 Quarterly Compliance Certificate.
--------------------------------
The Borrower shall have delivered to the Agent for the
benefit of the Banks a duly completed certificate described in Section 8.3.3,
dated the Closing Date, certified by the Chief Executive Officer, President or
Chief Financial Officer, which shall be acceptable to the Agent and the
Banks.
-57-
7.2 Each Additional Loan.
--------------------
At the time of making any Loans or issuing any Letters of
Credit other than Loans made or Letters of Credit issued on the Closing Date
hereunder and after giving effect to the proposed borrowings: the representa-
tions and warranties of the Loan Parties contained in Article 6 shall be true
on and as of the date of such additional Loan or Letter of Credit with
the same effect as though such representations and warranties had been
made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates
or times referred to therein) and the Loan Parties shall have performed
and complied with all covenants and conditions hereof; no Event of
Default or Potential Default shall have occurred and be continuing or
shall exist; the making of the Loans or issuance of such Letter of Credit
shall not contravene any Law applicable to any Loan Party or Subsidiary
of any Loan Party or any of the Banks; and the Borrower shall have
delivered to the Agent a duly executed and completed Loan Request or
application for a Letter of Credit, as the case may be, and a Compliance
Certificate showing the Borrowing Base after giving effect to the
requested Loan or Letter of Credit.
8. COVENANTS
---------
8.1 Affirmative Covenants.
---------------------
The Loan Parties, jointly and severally, covenant and agree
that until payment in full of the Loans and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan
Parties' other Obligations under the Loan Documents and termination of
the Revolving Credit Commitments, the Borrower shall comply at all times
with the following affirmative covenants:
8.1.1 Preservation of Existence, Etc.
-------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain its corporate existence and its license or qualifica-
tion and good standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or
qualification necessary.
8.1.2 Payment of Liabilities, Including Taxes, Etc.
---------------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become
due and payable, including all taxes, assessments and governmental charges upon
it or any of its properties, assets, income or profits, prior to the date
on which penalties attach thereto, except to the extent that such
liabilities, including taxes, assessments or charges, are being contested
in good faith and by appropriate and lawful proceedings diligently
conducted and for which such reserve or other appropriate provisions, if
any, as shall be required by GAAP shall have been made, but only to the
extent that failure to discharge any such liabilities would not result in
-58-
any additional liability which would adversely affect to a material
extent the financial condition of any Loan Party or Subsidiary of any
Loan Party which would affect the Collateral, provided that the Loan
Parties and their Subsidiaries will pay all such liabilities forthwith
upon the commencement of proceedings to foreclose any Lien which may have
attached as security therefor.
8.1.3 Maintenance of Insurance.
------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by
fire and such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, workers' compensation,
public liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties
and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary, all as
reasonably acceptable to the Agent and, with respect to the Collateral
Pool Properties, the requirements of Schedule 3.4.4 and the Real Estate
--------------
Collateral Documents. At the request of the Agent, the Loan Parties
shall deliver (x) on the Closing Date and annually thereafter an original
certificate of insurance signed by the Loan Parties' independent
insurance broker describing and certifying as to the existence of the
insurance on the Collateral required to be maintained by this Agreement
and the other Loan Documents, together with a copy of the endorsement
described in the next sentence and as required by Schedule 3.4.4 and the
--------------
Real Estate Collateral Documents attached to such certificate and (y)
from time to time a summary schedule indicating all insurance then in
force with respect to each of the Loan Parties. Such policies of
insurance shall contain special endorsements, in form and substance
reasonably acceptable to the Agent, which shall specify the Agent as an
additional insured, mortgagee and lender loss payee as its interests may
appear.
8.1.4 Maintenance of Properties and Leases.
------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition
(ordinary wear and tear excepted) in accordance with the general practice
of other businesses of similar character and size, all of those properties
useful or necessary to its business, and from time to time, such Loan Party
will make or cause to be made all appropriate repairs, renewals or
replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
----------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
trade names, copyrights, licenses, franchises, permits and other authorizations
necessary for the ownership and operation of its properties and business
if the failure so to maintain the same would constitute a Material
Adverse Change.
-59-
8.1.6 Visitation Rights.
-----------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and inspect any
of its properties and to examine and make excerpts from its books and records
and discuss its business affairs, finances and accounts with its officers,
all in such detail and at such times and as often as any of the Banks may
reasonably request, provided that each Bank shall provide the Borrower
and the Agent with reasonable notice prior to any visit or inspection.
In the event any Bank desires to conduct an audit of any Loan Party, such
Bank shall make a reasonable effort to conduct such audit
contemporaneously with any audit to be performed by the Agent.
8.1.7 Keeping of Records and Books of Account.
---------------------------------------
The Borrower shall, and shall cause each Subsidiary of the
Borrower to, maintain and keep proper books of record and account which enable
the Borrower and its Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official
Body having jurisdiction over the Borrower or any Subsidiary of the
Borrower, and in which full, true and correct entries shall be made in
all material respects of all its dealings and business and financial
affairs.
8.1.8 Plans and Benefit Arrangements.
------------------------------
The Borrower shall, and shall cause each member of the
ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result
in a Material Adverse Change. Without limiting the generality of the
foregoing, the Borrower shall cause all of its Plans and all Plans
maintained by any member of the ERISA Group to be funded in accordance
with the minimum funding requirements of ERISA and shall make, and cause
each member of the ERISA Group to make, in a timely manner, all
contributions due to Plans, Benefit Arrangements and Multiemployer Plans.
8.1.9 Compliance With Laws.
--------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all Environmental
Laws, in all respects, provided that it shall not be deemed to be a violation
--------
of this Section 8.1.9 if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or
injunctive relief which in the aggregate would constitute a Material
Adverse Change.
-60-
8.1.10 Use of Proceeds.
---------------
The Borrower will use the proceeds of the Loans only for
lawful purposes in accordance with Sections 2.8 and such uses shall not
contravene any applicable Law or any other provision hereof.
8.1.11 Further Assurances.
------------------
Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security
Interest in the Collateral as a continuing first priority perfected Lien,
subject only to Permitted Liens, and shall do such other acts and things as
the Agent in its sole discretion may deem necessary or advisable from time to
time in order to preserve, perfect and protect the Liens granted under
the Loan Documents and to exercise and enforce its rights and remedies
thereunder with respect to the Collateral.
8.1.12 Subordination of Intercompany Loans.
-----------------------------------
Each Loan Party shall cause any intercompany Indebtedness,
loans or advances owed by any Loan Party to any other Loan Party to be
subordinated pursuant to the terms of the Intercompany Subordination
Agreement.
8.1.13 Listed Company.
--------------
The common stock of the Borrower shall at all times be
listed for trading and be traded on the Nasdaq Stock Market, the New York
Stock Exchange or the American Stock Exchange.
8.2 Negative Covenants.
------------------
The Loan Parties, jointly and severally, covenant and agree
that until payment in full of the Loans and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan
Parties' other Obligations hereunder and termination of the Revolving
Credit Commitments, the Loan Parties shall comply with the following
negative covenants:
8.2.1 Indebtedness.
------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, at any time create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
-61-
(ii) Indebtedness of a Loan Party which is secured
by assets not included in the Collateral Pool and for which the holder of such
Indebtedness has no recourse against any assets of a Loan Party other than the
specific asset being purchased or financed;
(iii) Indebtedness of a Loan Party which is a
general recourse obligation of such Loan Party (other than Indebtedness under
the Loan Documents) provided that the sum of any Indebtedness outstanding under
this clause (iii) shall not exceed at any time the lesser of (a)
$15,000,000 or (b) $20,000,000 minus any Loans outstanding under the
-----
Pre-Stabilized Collateral Pool Borrowing Base; and
(iv) Indebtedness which is subordinated in
accordance with the provisions of Section 8.1.12.
8.2.2 Liens.
-----
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, at any time create, incur, assume or suffer to
exist any Lien on any of its property or assets, tangible or intangible,
now owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.
8.2.3 Guaranties.
----------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, at any time, directly or indirectly, become or
be liable in respect of any Guaranty, or assume, guarantee, become surety for,
endorse or otherwise agree, become or remain directly or contingently
liable upon or with respect to any obligation or liability of any other
Person, except for Guaranties of Indebtedness of the Loan Parties
permitted hereunder.
8.2.4 Loans and Investments.
---------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, at any time make or suffer to remain outstanding
any loan or advance to, or purchase, acquire or own any stock, bonds, notes
or securities of, or any partnership interest (whether general or
limited) in, or any other investment or interest in, or make any capital
contribution to, any other Person, or agree, become or remain liable to
do any of the foregoing, except:
(i) trade credit extended on usual and customary
terms in the ordinary course of business;
(ii) advances to employees to meet expenses
incurred by such employees in the ordinary course of business;
-62-
(iii) Permitted Investments; and
(iv) loans, advances and investments in other Loan
Parties.
8.2.5 Dividends and Related Distributions.
-----------------------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, make or pay, or agree to become or remain liable
to make or pay, any dividend or other distribution of any nature (whether in
cash, property, securities or otherwise) on account of or in respect of
its shares of capital stock or partnership interests on account of the
purchase, redemption, retirement or acquisition of its shares of capital
stock (or warrants, options or rights therefor) or partnership interests,
except dividends or other distributions payable to another Loan Party.
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
---------------------------------------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or
become a party to any merger or consolidation, or acquire by purchase, lease
or otherwise all or substantially all of the assets or capital stock of any
other Person, provided that any Loan Party other than the Borrower may
--------
consolidate or merge into another Loan Party.
8.2.7 Affiliate Transactions.
----------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, enter into or carry out any transaction
(including purchasing property or services from or selling property or
services to any Affiliate of any Loan Party or other Person) unless such
transaction is not otherwise prohibited by this Agreement, is entered into
in the ordinary course of business upon fair and reasonable arm's length
terms and conditions which are fully disclosed to the Agent and is in
accordance with all applicable Law.
8.2.8 Subsidiaries, Partnerships and Joint Ventures.
---------------------------------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, own or create directly or indirectly any
Subsidiaries other than (i) any Subsidiary which has joined this Agreement as
Guarantor on the Closing Date; and (ii) any Subsidiary formed after the
Closing Date which joins this Agreement as a Guarantor pursuant to
Section 11.18, provided that the Required Banks shall have consented to
--------
such formation and joinder (such consent not to be unreasonably withheld)
and that such Subsidiary and the Loan Parties, as applicable, shall grant
and cause to be perfected first-priority Liens to the Agent in the stock
of or other ownership interests in such Subsidiary. Each of the Loan
Parties shall not become or agree to become a general or limited partner
in any general or limited partnership, a member or manager of, or hold a
limited liability company interest in, a limited liability company or a
joint venturer in any joint venture, except that the Loan Parties may be
general or limited partners in other Loan Parties.
-63-
8.2.9 Continuation of or Change in Business.
-------------------------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than their respective
businesses, substantially as conducted and operated by such Loan Party or
Subsidiary during the present fiscal year, or reasonable extensions
thereof, including the furnishing of development and management services
to third parties, and such Loan Party or Subsidiary shall not permit any
material change in such business.
8.2.10 Plans and Benefit Arrangements.
------------------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to:
(i) fail to satisfy the minimum funding requirements
of ERISA and the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the
Internal Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any
Plan, Benefit Arrangement or Multiemployer Plan which, alone or in conjunction
with any other circumstances or set of circumstances resulting in liability
under ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of
all benefit liabilities (whether or not vested) under each Plan, determined on
a plan termination basis, as disclosed in the most recent actuarial report
completed with respect to such Plan, to exceed, as of any actuarial
valuation date, the fair market value of the assets of such Plan;
(v) fail to make when due any contribution to any
Multiemployer Plan that the Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or
any Law pertaining thereto;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA
to withdraw) from any Multiple Employer Plan, where any such withdrawal is
likely to result in a material liability of the Borrower or any member of the
ERISA Group;
-64-
(vii) terminate, or institute proceedings to
terminate, any Plan, where such termination is likely to result in a material
liability to the Borrower or any member of the ERISA Group;
(viii) make any amendment to any Plan with respect
to which security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
8.2.11 Fiscal Year.
-----------
The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, change its fiscal year from the twelve (12)
month period beginning January 1 and ending December 31.
8.2.12 Changes in Organizational Documents.
-----------------------------------
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to capital
stock), bylaws or other organizational documents without providing at least
thirty (30) calendar days' prior written notice to the Agent and the
Banks and, in the event such change would be adverse to the Banks as
determined by the Agent in its reasonable discretion, obtaining the prior
written consent of the Required Banks.
8.2.13 Minimum Debt Service Coverage Ratio.
-----------------------------------
The Loan Parties shall not permit the Debt Service
Coverage Ratio, calculated as of the end of each fiscal quarter for the
fiscal quarter then ended, to be less than 2.5 to 1.0.
8.2.14 Maximum Consolidated Debt to Market Value Ratio.
-----------------------------------------------
The Loan Parties shall not at any time permit the ratio
of Consolidated Debt to Market Value to exceed 50%.
8.2.15 Maximum Certain Floating Rate Debt.
----------------------------------
The Loan Parties shall not at any time permit Certain
Floating Rate Debt to exceed 30% of Market Value.
-65-
8.2.16 Minimum Tangible Net Worth.
--------------------------
The Loan Parties shall not at any time permit
Consolidated Tangible Net Worth to be less than the Base Net Worth.
8.2.17 Restrictions on Assets Under Development and Land.
-------------------------------------------------
The Loan Parties shall not at any time permit the aggregate
book value, determined in accordance with GAAP, of (i) Assets under
Development and (ii) Land to exceed 35% of Market Value.
8.3 Reporting Requirements.
----------------------
The Loan Parties, jointly and severally, covenant and agree
that until payment in full of the Loans and interest thereon, expiration
or termination of all Letters of Credit, satisfaction of all of the Loan
Parties' other Obligations hereunder and under the other Loan Documents
and termination of the Revolving Credit Commitments, the Loan Parties
will furnish or cause to be furnished to the Agent and each of the Banks:
8.3.1 Quarterly Financial Statements.
------------------------------
As soon as available and in any event within forty-five
(45) calendar days after the end of each of the first three (3) fiscal
quarters in each fiscal year, financial statements of the Borrower, consisting
of a balance sheet as of the end of such fiscal quarter and related statements
of income, stockholders' equity and cash flows for the fiscal quarter
then ended and the fiscal year through that date, together with an
operating statement and an occupancy report for each Collateral Pool
Property, all in reasonable detail and certified (subject to normal year-
end audit adjustments) by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower as having been prepared in accordance
with GAAP, consistently applied, and setting forth in comparative form
the respective financial statements for the corresponding date and period
in the previous fiscal year.
8.3.2 Annual Financial Statements.
---------------------------
As soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Borrower, financial statements
of the Borrower consisting of a balance sheet as of the end of such fiscal
year, and related statements of income, stockholders' equity and cash flows
for the fiscal year then ended, all in reasonable detail and setting forth
in comparative form the financial statements as of the end of and for
the preceding fiscal year, and certified by independent certified public
accountants of nationally recognized standing reasonably satisfactory to
the Agent. The certificate or report of accountants shall be free of
qualifications (other than any consistency qualification that may result
from a change in the method used to prepare the financial statements as
to which such accountants concur) and shall not indicate the occurrence
or existence of any event, condition or contingency which would
-66-
materially impair the prospect of payment or performance of any covenant,
agreement or duty of the Borrower under any of the Loan Documents,
together with a letter of such accountants substantially to the effect
that, based upon their ordinary and customary examination of the affairs
of the Borrower, performed in connection with the preparation of such
consolidated financial statements, and in accordance with generally
accepted auditing standards, they are not aware of the existence of any
condition or event which constitutes an Event of Default or Potential
Default or, if they are aware of such condition or event, stating the
nature thereof and confirming the Borrower's calculations with respect to
the certificate to be delivered pursuant to Section 8.3.3 with respect to
such financial statements.
8.3.3 Certificate of the Borrower.
---------------------------
Concurrently with the financial statements of the Borrower
furnished to the Agent and to the Banks pursuant to Sections 8.3.1 [Quarterly
Financial Statements] and 8.3.2 [Annual Financial Statements], a
certificate of the Borrower signed by the Chief Executive Officer,
President or Chief Financial Officer of the Borrower, in the form of
Exhibit 8.3.3, to the effect that, except as described pursuant to
-------------
Section 8.3.4, (i) the representations and warranties of the Loan Parties
contained in Article 6 are true on and as of the date of such certificate
with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties
which expressly relate solely to an earlier date or time), and the
Borrower has performed and complied with all covenants and conditions
hereof, (ii) no Event of Default or Potential Default exists and is
continuing on the date of such certificate, and (iii) containing
calculations in sufficient detail to demonstrate compliance as of the
date of the financial statements with all financial covenants contained
in Section 8.2 and the covenant with respect to the Borrowing Base
contained in Sections 3.4.2 and 3.4.9, together with any supporting
information which the Agent may from time to time request.
8.3.4 Notice of Default.
-----------------
Promptly after any officer of any Loan Party has learned
of the occurrence of an Event of Default or Potential Default, a certificate
signed by the Chief Executive Officer, President or Chief Financial
Officer of such Loan Party setting forth the details of such Event of
Default or Potential Default and the action which such Loan Party
proposes to take with respect thereto.
8.3.5 Notice of Litigation.
--------------------
Promptly after the commencement thereof, notice of all
actions, suits, proceedings or investigations before or by any Official Body
or any other Person against any Loan Party or Subsidiary of any Loan Party
which relate to the Collateral, involve a claim or series of claims in excess
of $100,000 or which if adversely determined would constitute a Material
Adverse Change with respect to any Loan Party or Subsidiary of any Loan
Party.
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8.3.6 Budgets, Forecasts, Other Reports and Information.
-------------------------------------------------
Promptly upon their becoming available to the Borrower:
(i) the annual budget and any forecasts or
projections of the Borrower, to be supplied not later than thirty (30) days
prior to commencement of the fiscal year to which any of the foregoing may be
applicable,
(ii) any reports including management letters
submitted to the Borrower by independent accountants in connection with any
annual, interim or special audit,
(iii) any reports, notices or proxy statements
generally distributed by the Borrower to its stockholders on a date no later
than the date supplied to the stockholders,
(iv) regular or periodic reports, including Forms
10-K, 10-Q and 8-K, registration statements and prospectuses, filed by the
Borrower with the Securities and Exchange Commission not later than ten (10)
days after the date filed,
(v) a copy of any order in any proceeding to which
the Borrower or any of its Subsidiaries is a party issued by any Official Body,
(vi) a copy of any press releases no later than the
date issued, and
(vii) such other reports and information as the Agent
or the Banks may from time to time reasonably request, including without
limitation information and reports to enable the Agent and the Banks to
evaluate the financial condition and cash flow of each of the Loan Parties.
The Borrower shall also notify the Banks promptly of the enactment or
adoption of any Law which may result in a Material Adverse Change with
respect to the Borrower.
8.3.7 Notices Regarding Plans and Benefit Arrangements.
------------------------------------------------
8.3.7.1 Certain Events.
--------------
Promptly upon becoming aware of the occurrence
thereof, notice (including the nature of the event and, when known, any action
taken or threatened by the Internal Revenue Service or the PBGC with respect
thereto) of:
(i) any Reportable Event with respect to the
Borrower or any member of the ERISA Group (regardless of whether the
obligation to report said Reportable Event to the PBGC has been waived),
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(ii) any Prohibited Transaction which could
subject the Borrower or any member of the ERISA Group to a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975
of the Internal Revenue Code in connection with any Plan, Benefit Arrangement
or any trust created thereunder,
(iii) any assertion of material withdrawal
liability with respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a
Multiemployer Plan by the Borrower or any member of the ERISA Group under
Title IV of ERISA (or assertion thereof), where such withdrawal is likely
to result in material withdrawal liability,
(v) any cessation of operations (by the
Borrower or any member of the ERISA Group) at a facility in the circumstances
described in Section 4063(e) of ERISA,
(vi) withdrawal by the Borrower or any member
of the ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any member
of the ERISA Group to make a payment to a Plan required to avoid imposition of
a lien under Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA, or
(ix) any change in the actuarial assumptions
or funding methods used for any Plan, where the effect of such change is to
materially increase or materially reduce the unfunded benefit liability or
obligation to make periodic contributions.
8.3.7.2 Notices of Involuntary Termination and Annual
Reports.
---------------------------------------------
Promptly after receipt thereof, copies of (a) all notices
received by the Borrower or any member of the ERISA Group of the PBGC's
intent to terminate any Plan administered or maintained by the Borrower or any
member of the ERISA Group, or to have a trustee appointed to administer
any such Plan; and (b) at the request of the Agent or any Bank each
annual report (IRS Form 5500 series) and all accompanying schedules, the
most recent actuarial reports, the most recent financial information
concerning the financial status of each Plan administered or maintained
by the Borrower or any member of the ERISA Group, and schedules showing
the amounts contributed to each such Plan by or on behalf of the Borrower
or any member of the ERISA Group in which any of their personnel
participate or from which such personnel may derive a benefit, and each
Schedule B (Actuarial Information) to the annual report filed by the
Borrower or any member of the ERISA Group with the Internal Revenue
Service with respect to each such Plan.
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8.3.7.3 Notice of Voluntary Termination.
-------------------------------
Promptly upon the filing thereof, copies of any Form
5310, or any successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.
9. DEFAULT
-------
9.1 Events of Default.
-----------------
An Event of Default shall mean the occurrence or existence of
any one or more of the following events or conditions (whatever the reason
therefor and whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents.
-----------------------------
The Borrower shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity) or shall fail to pay any interest on any Loan or any other
amount owing hereunder or under the other Loan Documents after such
principal, interest or other amount becomes due in accordance with the
terms hereof or thereof;
9.1.2 Breach of Warranty.
------------------
Any representation or warranty made at any time by any
of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false
or misleading in any material respect as of the time it was made or
furnished;
9.1.3 Breach of Negative Covenants or Visitation Rights.
-------------------------------------------------
Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 8.1.6 or Section 8.2;
9.1.4 Breach of Other Covenants.
-------------------------
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any
other Loan Document and such default shall continue unremedied for a period of
ten (10) Business Days after any officer of any Loan Party becomes aware of
the occurrence thereof (such grace period to be applicable only in the
event such default can be remedied by corrective action of the Loan
Parties as determined by the Agent in its sole discretion);
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9.1.5 Defaults in Other Agreements or Indebtedness.
--------------------------------------------
A default or event of default shall occur at any time
under the terms of any other agreement involving borrowed money or the
extension of credit or any other Indebtedness under which any Loan Party or
Subsidiary of any Loan Party may be obligated as a borrower or guarantor
in excess of $250,000 in the aggregate, and such breach, default or event
of default consists of the failure to pay (beyond any period of grace
permitted with respect thereto, whether waived or not) any indebtedness
when due (whether at stated maturity, by acceleration or otherwise) or if such
breach or default permits or causes the acceleration of any indebtedness
(whether or not such right shall have been waived) or the termination of
any commitment to lend;
9.1.6 Final Judgments or Orders.
-------------------------
Any final judgments or orders for the payment of money in
excess of $250,000 in the aggregate shall be entered against any Loan Party by
a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded or stayed pending appeal within a period of
thirty (30) days from the date of entry;
9.1.7 Loan Document Unenforceable.
---------------------------
Any of the Loan Documents shall cease to be legal, valid
and binding agreements enforceable against the party executing the same or
such party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be
terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested
or cease to give or provide the respective Liens, security interests,
rights, titles, interests, remedies, powers or privileges intended to be
created thereby;
9.1.8 Uninsured Losses; Proceedings Against Assets.
--------------------------------------------
There shall occur any material uninsured damage to or
loss, theft or destruction of any of the Collateral in excess of $250,000
or the Collateral or any other of the Loan Parties' assets with a value in
excess of $250,000 in the aggregate are attached, seized, levied upon or
subjected to a writ or distress warrant; or such come within the
possession of any receiver, trustee, custodian or assignee for the
benefit of creditors and the same is not cured within thirty (30) days
thereafter;
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9.1.9 Notice of Lien or Assessment.
----------------------------
A notice of Lien or assessment in excess of $250,000 which
is not a Permitted Lien is filed of record with respect to all or any part of
any of the Loan Parties' assets by the United States, or any department,
agency or instrumentality thereof, or by any state, county, municipal or
other governmental agency, including the Pension Benefit Guaranty
Corporation, or if any taxes or debts owing at any time or times
hereafter to any one of these becomes payable and the same is not paid
within thirty (30) days after the same becomes payable;
9.1.10 Insolvency.
----------
Any Loan Party ceases to be solvent or admits in writing
its inability to pay its debts as they mature;
9.1.11 Events Relating to Plans and Benefit Arrangements.
-------------------------------------------------
Any of the following occurs: (i) any Reportable Event,
which the Agent determines in good faith constitutes grounds for the
termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate
any Plan, or a termination notice shall have been filed with respect to
any Plan; (iii) a trustee shall be appointed to administer or liquidate
any Plan; (iv) the PBGC shall give notice of its intent to institute
proceedings to terminate any Plan or Plans or to appoint a trustee to
administer or liquidate any Plan; and, in the case of the occurrence of
(i), (ii), (iii) or (iv) above, the Agent determines in good faith that
the amount of the Borrower's liability is likely to exceed 10% of its
Consolidated Tangible Net Worth; (v) the Borrower or any member of the
ERISA Group shall fail to make any contributions when due to a Plan or a
Multiemployer Plan; (vi) the Borrower or any member of the ERISA Group
shall make any amendment to a Plan with respect to which security is
required under Section 307 of ERISA; (vii) the Borrower or any member of
the ERISA Group shall withdraw completely or partially from a
Multiemployer Plan; (viii) the Borrower or any member of the ERISA Group
shall withdraw (or shall be deemed under Section 4062(e) of ERISA to
withdraw) from a Multiple Employer Plan; or (ix) any applicable Law is
adopted, changed or interpreted by any Official Body with respect to or
otherwise affecting one or more Plans, Multiemployer Plans or Benefit
Arrangements and, with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Agent determines in good faith that any
such occurrence would be reasonably likely to materially and adversely
affect the total enterprise represented by the Borrower and the other
members of the ERISA Group;
9.1.12 Cessation of Business.
---------------------
Any Loan Party ceases to conduct its business as
contemplated or such Loan Party is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business and such injunction, restraint or other preventive order is not
dismissed within thirty (30) days after the entry thereof;
-72-
9.1.13 Change of Ownership or Control.
------------------------------
(i) Within a period of twelve (12) consecutive calendar
months, individuals who were directors of the Borrower on the first day of such
period shall cease to constitute a majority of the board of directors of
the Borrower; (ii) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall own less than 12%; or
(iii) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall cease (a) to devote substantially all of
his business time to managing the day-to-day operations of the Borrower
and its Subsidiaries or (b) to be a senior executive officer of the
Borrower of the then outstanding capital stock of the Borrower;
9.1.14 Involuntary Proceedings.
-----------------------
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect
of any Loan Party in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar Law now or hereafter in effect,
or for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or similar official) of any Loan Party
for any substantial part of its property, or for the winding-up or liquidation
of its affairs, and such proceeding shall remain undismissed or unstayed and
in effect for a period of sixty (60) consecutive days or such court shall
enter a decree or order granting any of the relief sought in such
proceeding; or
9.1.15 Voluntary Proceedings.
---------------------
Any Loan Party shall commence a voluntary case under any
applicable bankruptcy, insolvency, reorganization or other similar Law now or
hereafter in effect, shall consent to the entry of an order for relief in
an involuntary case under any such Law, or shall consent to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or other similar official)
of itself or for any substantial part of its property or shall make a
general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due, or shall take any action in
furtherance of any of the foregoing.
9.2 Consequences of Event of Default.
--------------------------------
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
or Reorganization Proceedings.
------------------------------------------------------
If an Event of Default specified under subsections
9.1.1 through 9.1.13 of Section 9.1 shall occur and be continuing, the Banks
and the Agent shall be under no further obligation to make Loans or issue
Letters of Credit, as the case may be, and the Agent may, and upon the
request of the Required Banks, shall (i) by written notice to the Borrower,
declare the unpaid principal amount of the Notes then outstanding and all
interest accrued thereon, any unpaid fees and all other Indebtedness of
the Borrower to the Banks hereunder and thereunder to be forthwith due
-73-
and payable, and the same shall thereupon become and be immediately due
and payable to the Agent for the benefit of each Bank without
presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived, and (ii) require the Borrower to, and
the Borrower shall thereupon, deposit in a noninterest-bearing account
with the Agent, as cash collateral for its Obligations under the Loan
Documents, an amount equal to the maximum amount currently or at any time
thereafter available to be drawn on all outstanding Letters of Credit,
and the Borrower hereby pledges to the Agent and the Banks, and grants to
the Agent and the Banks a security interest in, all such cash as security
for such Obligations. Upon the curing of all existing Events of Default
to the satisfaction of the Required Banks, the Agent shall return such
cash collateral to the Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
----------------------------------------------------
If an Event of Default specified under subsections 9.1.14
[Involuntary Proceedings] or 9.1.15 [Voluntary Proceedings] of Section 9.1
shall occur, the Banks shall be under no further obligations to make Loans
hereunder and the unpaid principal amount of the Notes then outstanding
and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder shall
be immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived; and
9.2.3 Set-off.
-------
If an Event of Default shall occur and be continuing, any
Bank to whom any Obligation is owed by any Loan Party hereunder or under any
other Loan Document or any participant of such Bank which has agreed in writing
to be bound by the provisions of Section 10.13 [Equalization of Banks]
and any branch, Subsidiary or Affiliate of such Bank or participant
anywhere in the world shall have the right, in addition to all other
rights and remedies available to it, without notice to such Loan Party,
to set-off against and apply to the then unpaid balance of all the Loans
and all other Obligations of the Borrower and the other Loan Parties
hereunder or under any other Loan Document any debt owing to, and any
other funds held in any manner for the account of, the Borrower or such
other Loan Party by such Bank or participant or by such branch,
Subsidiary or Affiliate, including all funds in all deposit accounts
(whether time or demand, general or special, provisionally credited or
finally credited, or otherwise) now or hereafter maintained by the
Borrower or such other Loan Party for its own account (but not including
funds held in custodian or trust accounts) with such Bank or participant
or such branch, Subsidiary or Affiliate. Such right shall exist whether
or not any Bank or the Agent shall have made any demand under this
Agreement or any other Loan Document, whether or not such debt owing to
or funds held for the account of the Borrower or such other Loan Party is
or are matured or unmatured and regardless of the existence or adequacy
of any Collateral, Guaranty or any other security, right or remedy
available to any Bank or the Agent; and
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9.2.4 Suits, Actions, Proceedings.
---------------------------
If an Event of Default shall occur and be continuing, and
whether or not the Agent shall have accelerated the maturity of Loans to
the Borrower pursuant to any of the foregoing provisions of this Section 9.2,
the Agent or any Bank, if owed any amount with respect to the Notes, may
proceed to protect and enforce its rights by suit in equity, action at
Law and/or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement or
the Notes, including as permitted by applicable Law the obtaining of the
ex parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Agent or such Bank; and
9.2.5 Application of Proceeds.
-----------------------
From and after the date on which the Agent has taken any
action pursuant to this Section 9.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the Agent
from any sale or other disposition of the Collateral, or any part thereof,
or the exercise of any other remedy by the Agent, shall be applied as
follows:
(i) first, to reimburse the Agent and the Banks for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys'
and paralegals' fees and legal expenses, actually incurred by the Agent or
the Banks in connection with realizing on the Collateral or collection of
any Obligations of any of the Loan Parties under any of the Loan
Documents, including advances made by the Banks or any one of them or the
Agent for the reasonable maintenance, preservation, protection or
enforcement of, or realization upon, the Collateral, including advances
for taxes, insurance, repairs and the like and reasonable expenses
incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;
(ii) second, to the repayment of all Indebtedness
then due and unpaid of the Loan Parties to the Banks incurred under this
Agreement or any of the Loan Documents, whether of principal, interest, fees,
expenses or otherwise, in such manner as the Agent may determine in its
discretion; and
(iii) the balance, if any, as required by Law; and
9.2.6 Other Rights and Remedies.
-------------------------
In addition to all of the rights and remedies contained in
this Agreement or in any of the other Loan Documents (including the Mortgage),
the Agent shall have all of the rights and remedies of a secured party under
the Uniform Commercial Code or other applicable Law, all of which rights and
remedies shall be cumulative and nonexclusive, to the extent permitted by
Law. The Agent may, and upon the request of the Required Banks shall,
exercise all post-default rights granted to the Agent and the Banks under
the Loan Documents or applicable Law.
-75-
9.3 Notice of Sale.
--------------
Any notice required to be given by the Agent of a sale,
lease or other disposition of the Collateral or any other intended action by
the Agent, if given ten (10) days prior to such proposed action, shall
constitute commercially reasonable and fair notice thereof to the Borrower.
10. THE AGENT
---------
10.1 Appointment.
-----------
Each Bank hereby irrevocably designates, appoints and
authorizes PNC to act as Agent for such Bank under this Agreement to execute
and deliver or accept on behalf of each of the Banks the other Loan
Documents. Each Bank hereby irrevocably authorizes, and each holder of any
Note by the acceptance of a Note shall be deemed irrevocably to authorize,
the Agent to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and any other instruments and
agreements referred to herein, and to exercise such powers and to perform
such duties hereunder as are specifically delegated to or required of the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. PNC Bank agrees to act as the Agent on behalf of the
Banks to the extent provided in this Agreement.
10.2 Delegation of Duties.
--------------------
The Agent may perform any of its duties hereunder by or through
agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Agent) and, subject to Sections 10.5 and 10.6,
shall be entitled to engage and pay for the advice or services of any
attorneys, accountants or other experts concerning all matters pertaining to
its duties hereunder and to rely upon any advice so obtained.
10.3 Nature of Duties; Independent Credit Investigation.
--------------------------------------------------
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Agreement or otherwise exist. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by
reason of this Agreement a fiduciary or trust relationship in respect of
any Bank; and nothing in this Agreement, express or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations
in respect of this Agreement except as expressly set forth herein.
Without limiting the generality of the foregoing, the use of the term
"agent" in this Agreement with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising
under agency doctrine of any applicable Law. Instead, such term is used
more as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting
parties. Each Bank expressly acknowledges (i) that the Agent has not
made any representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of any of the Loan
Parties, shall be deemed to constitute any representation or warranty by
the Agent to any Bank; (ii) that it has made and will continue to make,
without reliance upon the Agent, its own independent investigation of the
-76-
financial condition and affairs and its own appraisal of the
creditworthiness of each of the Loan Parties in connection with this
Agreement and the making and continuance of the Loans hereunder; and
(iii) except as expressly provided herein, that the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information with respect
thereto, whether coming into its possession before the making of any Loan
or at any time or times thereafter.
10.4 Actions in Discretion of Agent; Instructions From the Banks.
-----------------------------------------------------------
The Agent agrees, upon the written request of the Required
Banks, to take or refrain from taking any action of the type specified as
being within the Agent's rights, powers or discretion herein, provided that
the Agent shall not be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement or any other
Loan Document or applicable Law. In the absence of a request by the
Required Banks, the Agent shall have authority, in its sole discretion,
to take or not to take any such action, unless this Agreement
specifically requires the consent of the Required Banks or all of the
Banks. Any action taken or failure to act pursuant to such instructions
or discretion shall be binding on the Banks, subject to Section 10.6
[Exculpatory Provisions]. Subject to the provisions of Section 10.6, no
Bank shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Banks, or in the absence
of such instructions, in the absolute discretion of the Agent.
10.5 Reimbursement and Indemnification of Agent by the Borrower.
----------------------------------------------------------
The Borrower unconditionally agrees to pay or reimburse the
Agent and save the Agent harmless against (a) liability for the payment of
all reasonable out-of-pocket costs, expenses and disbursements, including
fees and expenses of counsel, appraisers and environmental consultants,
actually incurred by the Agent (i) in connection with the development,
negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the
other Loan Documents, (ii) relating to any requested amendments, waivers
or consents pursuant to the provisions hereof, (iii) in connection with
the enforcement of this Agreement or any other Loan Document or
collection of amounts due hereunder or thereunder or the proof and
allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise,
and (iv) in any workout, restructuring or in connection with the
protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings,
and (b) all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or
arising out of this Agreement or any other Loan Documents or any action
-77-
taken or omitted by the Agent hereunder or thereunder, provided that the
--------
Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements if the same results from the Agent's
gross negligence or willful misconduct, or if the Borrower was not given
notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that the Borrower shall remain
liable to the extent such failure to give notice does not result in a
loss to the Borrower), or if the same results from a compromise or
settlement agreement entered into without the consent of the Borrower,
which shall not be unreasonably withheld. In addition, the Borrower
agrees to reimburse and pay all reasonable out-of-pocket expenses of the
Agent's regular employees and agents engaged periodically to perform
audits of the Loan Parties' books, records and business properties.
10.6 Exculpatory Provisions.
----------------------
Neither the Agent nor any of its directors, officers,
employees, agents, attorneys or Affiliates shall (a) be liable to any Bank for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith, including pursuant to any Loan Document, unless caused by
its or their own gross negligence or willful misconduct, (b) be responsible
in any manner to any of the Banks for the effectiveness, enforceability,
genuineness, validity or the due execution of this Agreement or any other
Loan Documents or for any recital, representation, warranty, document,
certificate, report or statement herein or made or furnished under or in
connection with this Agreement or any other Loan Documents, or (c) be
under any obligation to any of the Banks to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Loan Parties, or the
financial condition of the Loan Parties, or the existence or possible
existence of any Event of Default or Potential Default. Neither the
Agent nor any Bank nor any of their respective directors, officers,
employees, agents, attorneys or Affiliates shall be liable to any of the
Loan Parties for consequential damages resulting from any breach of
contract, tort or other wrong in connection with the negotiation,
documentation, administration or collection of the Loans or any of the
Loan Documents.
-78-
10.7 Reimbursement and Indemnification of Agent by Banks.
---------------------------------------------------
Each Bank agrees to reimburse and indemnify the Agent (to the
extent not reimbursed by the Borrower and without limiting the Obligation of
the Borrower to do so) in proportion to its Ratable Share from and against
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the
Agent, in its capacity as such, in any way relating to or arising out of
this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
(a) if the same results from the Agent's gross negligence or willful
misconduct, or (b) if such Bank was not given notice of the subject claim
and the opportunity to participate in the defense thereof, at its expense
(except that such Bank shall remain liable to the extent such failure to
give notice does not result in a loss to the Bank), or (c) if the same
results from a compromise and settlement agreement entered into without
the consent of such Bank, which shall not be unreasonably withheld. In
addition, each Bank agrees promptly upon demand to reimburse the Agent
(to the extent not reimbursed by the Borrower and without limiting the
Obligation of the Borrower to do so) in proportion to its Ratable Share
for all amounts due and payable by the Borrower to the Agent in
connection with the Agent's periodic audit of the Loan Parties' books,
records and business properties.
10.8 Reliance by Agent.
-----------------
The Agent shall be entitled to rely upon any writing,
telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon the advice and opinions of counsel and other professional advisers
selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be
indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.9 Notice of Default.
-----------------
The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Potential Default or Event of Default unless the Agent
has received written notice from a Bank or the Borrower referring to this
Agreement, describing such Potential Default or Event of Default and
stating that such notice is a "notice of default."
10.10 Notices.
-------
The Agent shall promptly send to each Bank a copy of all
notices received from the Borrower pursuant to the provisions of this
Agreement or the other Loan Documents promptly upon receipt thereof. The
Agent shall promptly notify the Borrower and the other Banks of each change
in the Base Rate and the effective date thereof.
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10.11 Banks in Their Individual Capacities.
------------------------------------
With respect to its Revolving Credit Commitments and the
Revolving Credit Loans made by it, the Agent shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it
were not the Agent, and the term "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. PNC Bank and
its Affiliates and each of the Banks and their respective Affiliates may,
without liability to account, except as prohibited herein, make Loans to,
accept deposits from, discount drafts for, act as trustee under
indentures of, and generally engage in any kind of banking or trust
business with, the Loan Parties and their Affiliates, in the case of the
Agent, as though it were not acting as Agent hereunder and in the case of
each Bank, as though such Bank were not a Bank hereunder. The Banks
acknowledge that, pursuant to such activities, the Agent or its
Affiliates may (i) receive information regarding the Loan Parties
(including information that may be subject to confidentiality obligations
in favor of the Loan Parties) and acknowledge that the Agent shall be
under no obligation to provide such information to them, and (ii) accept
fees and other consideration from the Loan Parties for services in
connection with this Agreement and otherwise without having to account
for the same to the Banks.
10.12 Holders of Notes.
----------------
The Agent may deem and treat any payee of any Note as the
owner thereof for all purposes hereof unless and until written notice of
the assignment or transfer thereof shall have been filed with the Agent.
Any request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee
of such Note or of any Note or Notes issued in exchange therefor.
10.13 Equalization of Banks.
---------------------
The Banks and the holders of any participations in any Notes
agree among themselves that, with respect to all amounts received by any Bank
or any such holder for application on any Obligation hereunder or under any
Note or under any such participation, whether received by voluntary payment,
by realization upon security, by the exercise of the right of set-off or
banker's lien, by counterclaim or by any other non-pro rata source,
equitable adjustment will be made in the manner stated in the following
sentence so that, in effect, all such excess amounts will be shared
ratably among the Banks and such holders in proportion to their interests
in payments under the Notes, except as otherwise provided in Sections
4.4.3 [Agent's and Banks' Rights], 5.4.2 [Replacement of a Bank] or 5.6.1
[Increased Costs, Etc.]. The Banks or any such holder receiving any such
amount shall purchase for cash from each of the other Banks an interest
in such Bank's Loans in such amount as shall result in a ratable
participation by the Banks and each such holder in the aggregate unpaid
amount under the Notes, provided that if all or any portion of such
excess amount is thereafter recovered from the Bank or the holder making
such purchase, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, together with interest or other
amounts, if any, required by law (including court order) to be paid by
the Bank or the holder making such purchase.
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10.14 Successor Agent.
---------------
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is required by Section 5.4.2 [Replacement of a Bank], in
either case of (i) or (ii) by giving not less than thirty (30) days'
prior written notice to the Borrower. If the Agent shall resign under
this Agreement, then either (a) the Required Banks shall appoint from
among the Banks a successor agent for the Banks, subject to the consent
of the Borrower, such consent not to be unreasonably withheld, or (b) if
a successor agent shall not be so appointed and approved within the
thirty (30) day period following the Agent's notice to the Banks of its
resignation, then the Agent shall appoint, with the consent of the
Borrower, such consent not to be unreasonably withheld, a successor agent
who shall serve as Agent until such time as the Required Banks appoint
and the Borrower consents to the appointment of a successor agent. The
Agent may be removed for cause if the Banks determine that the Agent has
acted with gross negligence or willful misconduct in exercising its
duties hereunder. If the Agent is removed for cause under this
Agreement, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks, subject to the consent of the Borrower,
such consent not to be unreasonably withheld. Upon its appointment
pursuant to the foregoing, such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean
such successor agent, effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated without
any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement. After the resignation of any Agent
hereunder, the provisions of this Article 10 shall inure to the benefit
of such former Agent, and such former Agent shall not by reason of such
resignation be deemed to be released from liability for any actions taken
or not taken by it while it was an Agent under this Agreement.
10.15 Agent's Fee.
-----------
The Borrower shall pay to the Agent a nonrefundable fee per
annum (the "Agent's Fee") as set forth in the Agent's Letter, payable in
equal quarterly installments in arrears on the first Business Day of each
calendar quarter after the date hereof and on the date on which all Loans
shall be paid in full, all Letters of Credit shall have expired or have
been terminated, the Revolving Credit Commitments shall have been
terminated, and the Borrower shall have paid all of its other monetary
Obligations hereunder. The Agent's Fee shall continue to accrue through
such date.
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10.16 Availability of Funds.
---------------------
The Agent may assume that each Bank has made or will make the
proceeds of a Loan available to the Agent unless the Agent shall have been
notified by such Bank on or before the later of (i) the close of Business on
the Business Day preceding the Borrowing Date with respect to such Loan or
(ii) two (2) hours before the time on which the Agent actually funds the
proceeds of such Loan to the Borrower (whether using its own funds
pursuant to this Section 10.16 or using proceeds deposited with the Agent
by the Banks and whether such funding occurs before or after the time on
which Banks are required to deposit the proceeds of such Loan with the
Agent). The Agent may, in reliance upon such assumption (but shall not
be required to), make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such amount on
demand from such Bank (or, if such Bank fails to pay such amount
forthwith upon such demand from the Borrower) together with interest
thereon, in respect of each day during the period commencing on the date
such amount was made available to the Borrower and ending on the date the
Agent recovers such amount, at a rate per annum equal to (i) the Federal
Funds Effective Rate during the first three (3) days after such interest
shall begin to accrue and (ii) the applicable interest rate in respect of
such Loan after the end of such three-day period.
10.17 Calculations.
------------
In the absence of gross negligence or willful misconduct, the
Agent shall not be liable for any error in computing the amount payable to
any Bank whether in respect of the Loans, fees or any other amounts due to
the Banks under this Agreement. In the event an error in computing any
amount payable to any Bank is made, the Agent, the Borrower and each
affected Bank shall, forthwith upon discovery of such error, make such
adjustments as shall be required to correct such error, and any
compensation therefor will be calculated at the Federal Funds Effective
Rate.
10.18 Beneficiaries.
-------------
Except as expressly provided herein, the provisions of this
Article 10 are solely for the benefit of the Agent and the Banks, and the Loan
Parties shall not have any rights to rely on or enforce any of the
provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any of the Loan Parties.
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11. MISCELLANEOUS
-------------
11.1 Modifications, Amendments or Waivers.
------------------------------------
With the written consent of the Required Banks, the Agent,
acting on behalf of all the Banks, and the Borrower, on behalf of the Loan
Parties, may from time to time enter into written agreements amending or
changing any provision of this Agreement or any other Loan Document or
the rights of the Banks or the Loan Parties hereunder or thereunder, or may
grant written waivers or consents to a departure from the due performance of
the Obligations of the Loan Parties hereunder or thereunder. Any such
agreement, waiver or consent made with such written consent shall be
effective to bind all the Banks and the Loan Parties; provided that
without the written consent of all the Banks, no such agreement, waiver
or consent may be made which will:
11.1.1 Increase of Commitment; Extension or Expiration Date.
----------------------------------------------------
Increase the amount of the Revolving Credit Commitment of
any Bank hereunder or extend the Expiration Date;
11.1.2 Extension of Payment; Reduction of Principal
Interest or Fees; Modification of Terms of Payment.
---------------------------------------------------
Whether or not any Loans are outstanding, extend the time
for payment of principal or interest of any Loan, the Commitment Fee or any
other fee payable to any Bank, or reduce the principal amount of or the rate
of interest borne by any Loan or reduce the Commitment Fee or any other fee
payable to any Bank, or otherwise affect the terms of payment of the
principal of or interest of any Loan, the Commitment Fee or any other fee
payable to any Bank, including without limitation forgiving any payment
of any principal or interest of any Loan or any other fee payable to any
Bank hereunder;
11.1.3 Release of Collateral or Guarantor.
----------------------------------
Except as permitted by Section 3.2, release any
Collateral, release any Guarantor from its Obligations under the Guaranty
Agreement (or limit any Guarantor's Obligations thereunder) or release any
other security for any of the Loan Parties' Obligations; or
11.1.4 Borrowing Base
--------------
Amend the definitions of Borrowing Base, Pre-Stabilized
Collateral Pool Borrowing Base, Stabilized Collateral Pool Borrowing Base,
Cash Collateral Borrowing Base, Collateral Pool Leverage Ratio or any defined
terms used in the foregoing definitions.
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11.1.5 Miscellaneous
-------------
Amend Sections 5.2 [Pro Rata Treatment of Banks], 10.6
[Exculpatory Provisions] or 10.13 [Equalization of Banks] this Section 11.1,
the first sentence of Section 11.11 [Successors and Assigns] or Schedule 1.1(A)
---------------
[Pricing Grid], alter any provision regarding the pro rata treatment of
the Banks, change the definition of Required Banks, or change any
requirement providing for the Banks or the Required Banks to authorize
the taking of any action hereunder.
No agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or as
the issuer of Letters of Credit shall be effective without the written consent
of the Agent.
11.2 No Implied Waivers; Cumulative Remedies; Writing Required.
---------------------------------------------------------
No course of dealing and no delay or failure of the Agent or
any Bank in exercising any right, power, remedy or privilege under this
Agreement or any other Loan Document shall affect any other or future
exercise thereof or operate as a waiver thereof, nor shall any single or
partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power, remedy or privilege preclude any further
exercise thereof or of any other right, power, remedy or privilege. The
rights and remedies of the Agent and the Banks under this Agreement and any
other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of any Bank of any breach or
default under this Agreement or any such waiver of any provision or condition
of this Agreement must be in writing and shall be effective only to the
extent specifically set forth in such writing.
11.3 Reimbursement and Indemnification of Banks by the
Borrower; Taxes.
-------------------------------------------------
The Borrower agrees unconditionally upon demand to pay or
reimburse to each Bank (other than the Agent, as to which the Borrower's
Obligations are set forth in Section 10.5 [Reimbursement of Agent by
Borrower, Etc.]) and to save such Bank harmless against (i) liability for the
payment of all reasonable out-of-pocket costs, expenses and disbursements
(including fees and expenses of counsel for each Bank except with respect to
(a) and (b) below), incurred by such Bank (a) in connection with the
administration and interpretation of this Agreement, and other
instruments and documents to be delivered hereunder, (b) relating to any
amendments, waivers or consents pursuant to the provisions hereof, (c) in
connection with the enforcement of this Agreement or any other Loan
Document, or collection of amounts due hereunder or thereunder or the
proof and allowability of any claim arising under this Agreement or any
other Loan Document, whether in bankruptcy or receivership proceedings or
otherwise, and (d) in any workout, restructuring or in connection with
the protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings, or
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such
Bank, in its capacity as such, in any way relating to or arising out of
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this Agreement or any other Loan Documents or any action taken or omitted
by such Bank hereunder or thereunder, provided that the Borrower shall
--------
not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (A) if the same results from such Bank's gross negligence
or willful misconduct, or (B) if the Borrower was not given notice of the
subject claim and the opportunity to participate in the defense thereof,
at its expense (except that the Borrower shall remain liable to the
extent such failure to give notice does not result in a loss to the
Borrower), or (C) if the same results from a compromise or settlement
agreement entered into without the consent of the Borrower, which shall
not be unreasonably withheld. The Banks will attempt to minimize the
fees and expenses of legal counsel for the Banks which are subject to
reimbursement by the Borrower hereunder by considering the usage of one
law firm to represent the Banks and the Agent if appropriate under the
circumstances. The Borrower agrees unconditionally to pay all stamp,
document, transfer, recording or filing taxes or fees and similar
impositions now or hereafter determined by the Agent or any Bank to be
payable in connection with this Agreement or any other Loan Document, and
the Borrower agrees unconditionally to save the Agent and the Banks
harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to
pay or delay in paying any such taxes, fees or impositions.
11.4 Holidays.
--------
Whenever payment of a Loan to be made or taken hereunder shall
be due on a day which is not a Business Day such payment shall be due on the
next Business Day and such extension of time shall be included in computing
interest and fees, except that the Loans shall be due on the Business Day
preceding the Expiration Date if the Expiration Date is not a Business
Day. Whenever any payment or action to be made or taken hereunder shall
be stated to be due on a day which is not a Business Day, such payment or
action shall be made or taken on the next following Business Day (except
as provided in Section 4.2.1 with respect to Interest Periods under the
Euro-Rate Option), and such extension of time shall be included in
computing interest or fees, if any, in connection with such payment or
action.
11.5 Funding by Branch, Subsidiary or Affiliate.
-----------------------------------------
11.5.1 Notional Funding.
----------------
Each Bank shall have the right from time to time, without
notice to the Borrower, to deem any branch, Subsidiary or Affiliate (which for
the purposes of this Section 11.5 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct or
indirect common control with any corporation or association which
directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Loan to which the Euro-Rate Option applies at
any time, provided that immediately following (on the assumption that a
--------
payment were then due from the Borrower to such other office), and as a
result of such change, the Borrower would not be under any greater
financial obligation pursuant to Section 5.6 than it would have been in
the absence of such change. Notional funding offices may be selected by
each Bank without regard to the Bank's actual methods of making,
maintaining or funding the Loans or any sources of funding actually used
by or available to such Bank.
-85-
11.5.2 Actual Funding.
--------------
Each Bank shall have the right from time to time to make
or maintain any Loan by arranging for a branch, Subsidiary or Affiliate of
such Bank to make or maintain such Loan subject to the last sentence of
this Section 11.5.2. If any Bank causes a branch, Subsidiary or Affiliate
to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly
requires otherwise, be applicable to such part of the Loans to the same
extent as if such Loans were made or maintained by such Bank, but in no
event shall any Bank's use of such a branch, Subsidiary or Affiliate to
make or maintain any part of the Loans hereunder cause such Bank or such
branch, Subsidiary or Affiliate to incur any cost or expenses payable by
the Borrower hereunder or require the Borrower to pay any other
compensation to any Bank (including any expenses incurred or payable
pursuant to Section 5.6) which would otherwise not be incurred.
11.6 Notices.
-------
All notices, requests, demands, directions and other
communications (as used in this Section 11.6, collectively referred to as
"notices") given to or made upon any party hereto under the provisions of
this Agreement shall be by telephone or in writing (including telex or
facsimile communication) unless otherwise expressly permitted hereunder
and shall be delivered or sent by telex or facsimile to the respective
parties at the addresses and numbers set forth under their respective names
on the signature pages hereof or in accordance with any subsequent unrevoked
written direction from any party to the others. All notices shall,
except as otherwise expressly herein provided, be effective (a) in the
--------
case of telex or facsimile, when received, (b) in the case of hand-
delivered notice, when hand-delivered, (c) in the case of telephone, when
telephoned, provided, however, that in order to be effective, telephonic
--------
notices must be confirmed in writing no later than the next day by
letter, facsimile or telex, (d) if given by mail, four (4) days after
such communication is deposited in the mail with first-class postage
prepaid, return receipt requested, and (e) if given by any other means
(including by air courier), when delivered; provided, that notices to the
Agent shall not be effective until received. Any Bank giving any notice
to any Loan Party shall simultaneously send a copy thereof to the Agent,
and the Agent shall promptly notify the other Banks of the receipt by it
of any such notice.
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11.7 Severability.
------------
The provisions of this Agreement are intended to be severable.
If any provision of this Agreement shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.
11.8 Governing Law.
-------------
Each Letter of Credit and Section 2.9 [Letter of Credit
Subfacility] shall be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be revised or amended from time to time,
and to the extent not inconsistent therewith, the internal Laws of the
Commonwealth of Kentucky without regard to its conflict of laws
principles and the balance of this Agreement shall be deemed to be a
contract under the Laws of the Commonwealth of Kentucky and for all
purposes shall be governed by and construed and enforced in accordance
with the internal Laws of the Commonwealth of Kentucky without regard to
its conflict of laws principles.
11.9 Prior Understanding.
-------------------
This Agreement supersedes all prior understandings and
agreements, whether written or oral, between the parties hereto and thereto
relating to the transactions provided for herein and therein, including any
prior confidentiality agreements and commitments.
11.10 Duration; Survival.
------------------
All representations and warranties of the Loan Parties
contained herein or made in connection herewith shall survive the making
of Loans and issuance of Letters of Credit and shall not be waived by the
execution and delivery of this Agreement, any investigation by the Agent
or the Banks, the making of Loans, issuance of Letters of Credit, or payment
in full of the Loans. All covenants and agreements of the Loan Parties
contained in Sections 8.1 [Affirmative Covenants], 8.2 [Negative
Covenants] and 8.3 [Reporting Requirements] herein shall continue in full
force and effect from and after the date hereof so long as the Borrower
may borrow or request Letters of Credit hereunder and until termination
of the Revolving Credit Commitments and payment in full of the Loans and
expiration or termination of all Letters of Credit. All covenants and
agreements of the Borrower contained herein relating to the payment of
principal, interest, premiums, additional compensation or expenses and
indemnification, including those set forth in the Notes, Article 5 and
Sections 10.5 [Reimbursement and Indemnification of Agent by the
Borrower], 10.7 [ Reimbursement and Indemnification of Agent by Banks]
and 11.3 [Reimbursement and Indemnification of Banks by the Borrower;
Taxes], shall survive payment in full of the Loans, expiration or
termination of the Letters of Credit and termination of the Revolving
Credit Commitments.
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11.11 Successors and Assigns.
----------------------
(i) This Agreement shall be binding upon and shall
inure to the benefit of the Banks, the Agent, the Loan Parties and their
respective successors and assigns, except that none of the Loan Parties may
assign or transfer any of its rights and Obligations hereunder or any interest
herein. Each Bank may, at its own cost, make assignments of or sell partici-
pations in all or any part of its Revolving Credit Commitment and the Loans
made by it to one or more banks or other entities, subject to the consent of
the Borrower and the Agent with respect to any assignee, such consent not to
be unreasonably withheld, provided that (1) no consent of the Borrower
--------
shall be required in the case of an assignment by a Bank to an Affiliate
of such Bank, and (2) any assignment by a Bank to a Person other than an
Affiliate of such Bank may not be made in amounts less than the lesser of
$5,000,000 or the amount of the assigning Bank's Revolving Credit
Commitment. In the case of an assignment, upon receipt by the Agent of
the Assignment and Assumption Agreement, the assignee shall have, to the
extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it had been a
signatory Bank hereunder, the Revolving Credit Commitments shall be
adjusted accordingly, and upon surrender of any Note subject to such
assignment, the Borrower shall execute and deliver a new Note to the
assignee in an amount equal to the amount of the Revolving Credit
Commitment assumed by it and a new Revolving Credit Note to the assigning
Bank in an amount equal to the Revolving Credit Commitment retained by it
hereunder. Any Bank which assigns any or all of its Revolving Credit
Commitment or Loans to a Person other than an Affiliate of such Bank
shall pay to the Agent a service fee in the amount of $3,500 for each
assignment. In the case of a participation, the participant shall only
have the rights specified in Section 9.2.3 [Set-off] (the participant's
rights against such Bank in respect of such participation to be those set
forth in the agreement executed by such Bank in favor of the participant
relating thereto and not to include any voting rights except with respect
to changes of the type referenced in Sections 11.1.1 [Increase of
Commitment, Etc.], 11.1.2 [Extension of Payment, Etc.], or 11.1.3
[Release of Collateral or Guarantor], all of such Bank's obligations
under this Agreement or any other Loan Document shall remain unchanged,
and all amounts payable by any Loan Party hereunder or thereunder shall
be determined as if such Bank had not sold such participation.
(ii) Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state
thereof shall deliver to the Borrower and the Agent the form of certificate
described in Section 11.17 [Tax Withholding Clause] relating to federal
income tax withholding. Each Bank may furnish any publicly available
information concerning any Loan Party or its Subsidiaries and any other
information concerning any Loan Party or its Subsidiaries in the possession
of such Bank from time to time to assignees and participants (including
prospective assignees or participants), provided that such assignees and
--------
participants agree to be bound by the provisions of Section 11.12
[Confidentiality].
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(iii) Notwithstanding any other provision in this
Agreement, any Bank may at any time pledge or grant a security interest in all
or any portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or
consent of the Borrower or the Agent. No such pledge or grant of a
security interest shall release the transferor Bank of its obligations
hereunder or under any other Loan Document.
11.12 Confidentiality.
---------------
11.12.1 General.
-------
The Agent and the Banks each agree to keep confidential
all information obtained from any Loan Party or its Subsidiaries which is
nonpublic and confidential or proprietary in nature (including any
information the Borrower specifically designates as confidential), except
as provided below, and to use such information only in connection with their
respective capacities under this Agreement and for the purposes
contemplated hereby. The Agent and the Banks shall be permitted to
disclose such information (i) to outside legal counsel, accountants and
other professional advisors who need to know such information in
connection with the administration and enforcement of this Agreement,
subject to agreement of such Persons to maintain the confidentiality,
(ii) to assignees and participants as contemplated by Section 11.11,
(iii) to the extent requested by any bank regulatory authority or, with
notice to the Borrower, as otherwise required by applicable Law or by any
subpoena or similar legal process, or in connection with any
investigation or proceeding arising out of the transactions contemplated
by this Agreement, (iv) if it becomes publicly available other than as a
result of a breach of this Agreement or becomes available from a source
not subject to confidentiality restrictions, or (v) if the Borrower shall
have consented to such disclosure.
11.12.2 Sharing Information With Affiliates of the Banks.
------------------------------------------------
Each Loan Party acknowledges that from time to time
financial advisory, investment banking and other services may be offered or
provided to the Borrower or one or more of its Affiliates (in connection with
this Agreement or otherwise) by any Bank or by one or more Subsidiaries or
Affiliates of such Bank and each of the Loan Parties hereby authorizes
each Bank to share any information delivered to such Bank by such Loan
Party and its Subsidiaries pursuant to this Agreement, or in connection
with the decision of such Bank to enter into this Agreement, to any such
Subsidiary or Affiliate of such Bank, it being understood that any such
Subsidiary or Affiliate of any Bank receiving such information shall be
bound by the provisions of Section 11.12.1 as if it were a Bank
hereunder. Such authorization shall survive the repayment of the Loans
and other Obligations and the termination of the Revolving Credit
Commitments.
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11.13 Counterparts.
------------
This Agreement may be executed by different parties hereto on
any number of separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.
11.14 Agent's or Bank's Consent.
-------------------------
Whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a
condition to any action, inaction, condition or event, the Agent and each
Bank shall be authorized to give or withhold such consent in its sole and
absolute discretion and to condition its consent upon the giving of additional
collateral, the payment of money or any other matter.
11.15 Exceptions.
----------
The representations, warranties and covenants contained herein
shall be independent of each other, and no exception to any representation,
warranty or covenant shall be deemed to be an exception to any other
representation, warranty or covenant contained herein unless expressly
provided, nor shall any such exceptions be deemed to permit any action or
omission that would be in contravention of applicable Law.
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
--------------------------------------
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE CIRCUIT COURT OF JEFFERSON COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED
TO SUCH LOAN PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT
THEREOF. EACH LOAN PARTY WAIVES ANY OBJECTION TO JURISDICTION AND VENUE
OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO
ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE. EACH LOAN
PARTY, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULL
EXTENT PERMITTED BY LAW.
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11.17 Tax Withholding Clause.
----------------------
Each Bank or assignee or participant of a bank that is not
incorporated under the Laws of the United States of America or a state
thereof agrees that it will deliver to each of the Borrower and the Agent two
(2) duly completed copies of the following: (i) Internal Revenue Service
Form W-9, 4224 or 1001, or other applicable form prescribed by the Internal
Revenue Service, certifying that such Bank, assignee or participant is
entitled to receive payments under this Agreement and the other Loan
Documents without deduction or withholding of any United States federal
income taxes, or is subject to such tax at a reduced rate under an
applicable tax treaty, or (ii) Internal Revenue Service Form W-8 or other
applicable form or a certificate of the Bank, assignee or participant
indicating that no such exemption or reduced rate is allowable with
respect to such payments. Each Bank, assignee or participant required to
deliver to the Borrower and the Agent a form or certificate pursuant to
the preceding sentence shall deliver such form or certificate as follows:
(A) each Bank which is a party hereto on the Closing Date shall deliver
such form or certificate at least five (5) Business Days prior to the
first date on which any interest or fees are payable by the Borrower
hereunder for the account of each Bank; (B) each assignee or participant
shall deliver such form or certificate at least five (5) Business Days
before the effective date of such assignment or participation (unless the
Agent in its sole discretion shall permit such assignee or participant to
deliver such form or certificate less than five (5) Business Days before
such date, in which case it shall be due on the date specified by the
Agent). Each Bank, assignee or participant which so delivers a Form W-8,
W-9, 4224 or 1001 further undertakes to deliver to each of the Borrower
and the Agent two (2) additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent
form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the
Agent, either certifying that such Bank, assignee or participant is
entitled to receive payments under this Agreement and the other Loan
Documents without deduction or withholding of any United States federal
income taxes or is subject to such tax at a reduced rate under an
applicable tax treaty or stating that no such exemption or reduced rate
is allowable. The Agent shall be entitled to withhold United States
federal income taxes at the full withholding rate unless the Bank,
assignee or participant establishes an exemption or that it is subject to
a reduced rate as established pursuant to the above provisions.
11.18 Joinder of Guarantors.
---------------------
Any Subsidiary of the Borrower which is required to join
this Agreement as a Guarantor pursuant to Section 8.2.8 shall execute and
deliver to the Agent (i) a Joinder in substantially the form attached hereto
as Exhibit 1.1(J) pursuant to which it shall join as a Guarantor each of
-------------
the documents to which the Guarantors are parties, (ii) documents in the
forms described in Section 7.1 [First Loans] modified as appropriate to
relate to such Subsidiary; and (iii) documents necessary to grant and
perfect Prior Security Interests to the Agent for the benefit of the
Banks in all Collateral held by such Subsidiary. The Loan Parties shall
deliver such Joinder and related documents to the Agent within five (5)
Business Days after the date of the filing of such Subsidiary's articles
of incorporation if the Subsidiary is a corporation, the date of the
filing of its certificate of limited partnership if it is a limited
partnership or the date of its organization if it is an entity other than
a limited partnership or corporation.
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11.19 LIMITATION OF LIABILITY.
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TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE
BY THE BORROWER OR ANY OTHER LOAN PARTY OR ANY OTHER PERSON AGAINST THE
AGENT AND THE BANKS, OR ANY OF THEM, OR ANY AFFILIATE, DIRECTOR, OFFICER,
EMPLOYEE, ATTORNEY OR AGENT OF THE AGENT OR THE BANKS FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
ARISING FROM OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN
CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR
ANY OTHER THEORY OF LIABILITY); AND EACH OF THE BORROWER AND THE OTHER
LOAN PARTIES HEREBY WAIVE, RELEASE AND AGREE NOT TO ▇▇▇ UPON ANY CLAIM
FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.
11.20 Co-Agents.
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The Co-Agents shall have no rights, obligations or duties
under this Agreement other than in their respective capacities as Banks
hereunder.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE 1 OF 4 TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and
year first above written.
SUBURBAN LODGES OF AMERICA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
GUARANTORS:
SUBURBAN HOLDINGS, L.P.
By: Suburban Management, Inc.,
its sole general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
SLA DEVELOPMENT, INC.
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SUBURBAN MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
[SIGNATURE PAGE 2 OF 4 TO CREDIT AGREEMENT]
SUBURBAN FRANCHISE SYSTEMS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
SUBURBAN CONSTRUCTION, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SLA PROPERTIES, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Address for Notices to Borrower and Each
Guarantor:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURE PAGE 3 OF 4 TO CREDIT AGREEMENT]
PNC BANK, KENTUCKY, INC., as Agent and as a
Bank
By: /s/ Don R. H [unreadable]
Title: Assistant Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Commercial Real Estate Lending
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
AMSOUTH BANK OF ALABAMA, as a
Co-Agent and as a Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: VP
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURE PAGE 4 OF 4 TO CREDIT AGREEMENT]
SUNTRUST BANK, ATLANTA, as a Co-Agent and
as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. Hawens
Title: First Vice President
Address for Notices:
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 1.1(A)
PRICING GRID
VARIABLE PRICING BASED ON LEVERAGE RATIO
Collateral Pool Base Rate Spread Euro-Rate
Level Leverage Ratio Spread
----------------------------------------------------------------------------------------------------------
I Less than 35% 0 150
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II Greater than or equal to 35% but less than 40% 25 175
----------------------------------------------------------------------------------------------------------
III Greater than or equal to 40% but less than 45% 50 200
----------------------------------------------------------------------------------------------------------
IV Greater than or equal to 45% 75 225
----------------------------------------------------------------------------------------------------------
For purposes of determining the Applicable Margin:
(a) The Applicable Margin shall be set at Level IV until
such time as a Compliance Certificate which evidences that a
different level is applicable is delivered.
(b) The Applicable Margin shall be recomputed (i) as of the end
of each fiscal quarter ending after December 31, 1997, (ii) as of
the addition of a new Collateral Pool Property pursuant to
Section 3.1, (iii) as of the release of a Collateral Pool
Property pursuant to Section 3.2 and (iv) as of a request for a
Loan or Letter of Credit pursuant to Section 7.2, in each case
based on the Collateral Pool Leverage Ratio as of the date of
recomputing. Any increase in the Applicable Margin computed as
of a quarter end shall be effective on the date on which the
Compliance Certificate evidencing such computation is due to be
delivered under Section 8.3.3; any such decrease shall be
effective on the date on which such Compliance Certificate is
actually delivered. Any change in the Applicable Margin computed
as a result of the addition or release of a Collateral Pool
Property or the request for a Loan or Letter of Credit shall be
effective on the date of such addition, release, Loan or issuance
of Letter of Credit.