Exhibit 10.1
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SENIOR SECURED
REVOLVING LINE OF CREDIT AGREEMENT
between
INTERSTATE HOTELS CORPORATION, AS BORROWER
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
D/B/A ▇▇▇▇▇▇ CAPITAL, A DIVISION
OF ▇▇▇▇▇▇ BROTHERS HOLDINGS INC.,
INDIVIDUALLY AS A CO-LENDER, AS
AGENT FOR ONE OR MORE CO-LENDERS AND AS ARRANGER
and
CREDIT LYONNAIS NEW YORK BRANCH, as Co-Lender,
as Co-Arranger and as Documentation Agent
and
PNC BANK, NATIONAL ASSOCIATION, as Co-Lender
and
▇▇▇▇▇▇ COMMERCIAL PAPER, INC., AS SYNDICATION AGENT
Dated as of July 31, 2001
$40,000,000.00
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS
Section 1.01 Definitions.......................................................................1
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY
Section 2.01 Advances.........................................................................26
Section 2.02 Notice of Borrowing..............................................................27
Section 2.03 Disbursement of Funds............................................................27
Section 2.04 The Note.........................................................................27
Section 2.05 Interest.........................................................................28
Section 2.06 Interest Periods.................................................................29
Section 2.07 Minimum Amount of Eurodollar Portions............................................30
Section 2.08 Conversion or Continuation.......................................................30
Section 2.09 Voluntary Reduction of Facility Amount; Termination of Facility Amount...........31
Section 2.10 Principal Payments...............................................................31
Section 2.11 Voluntary Prepayments............................................................31
Section 2.12 Mandatory Prepayments............................................................32
Section 2.13 Application of Payments and Prepayments..........................................32
Section 2.14 Method and Place of Payment......................................................32
Section 2.15 Fees.............................................................................32
Section 2.16 Interest Rate Unascertainable, Increased Costs, Illegality.......................33
Section 2.17 Funding Losses...................................................................35
Section 2.18 Increased Capital................................................................36
Section 2.19 Taxes............................................................................36
Section 2.20 Use of Proceeds and Limitations on Advances......................................38
Section 2.21 Intentionally Deleted............................................................38
Section 2.22 Intentionally Deleted............................................................38
Section 2.23 Intentionally Deleted............................................................38
Section 2.24 Decision Making by Agent.........................................................38
Section 2.25 Intentionally Deleted............................................................38
Section 2.26 Pro Rata Interests...............................................................38
Section 2.27 Extension of Maturity Date.......................................................38
Section 2.28 Intentionally Deleted............................................................39
SECTION 3. CONDITIONS PRECEDENT
Section 3.01 Conditions Precedent to the Initial Advance......................................39
Section 3.02 Conditions Precedent to All Advances of the Loan.................................45
Section 3.03 Acceptance of Borrowings.........................................................46
Section 3.04 Sufficient Counterparts..........................................................46
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TABLE OF CONTENTS
(continued)
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SECTION 4. REPRESENTATIONS AND WARRANTIES
Section 4.01 Organizational Status............................................................46
Section 4.02 Power and Authority..............................................................47
Section 4.03 No Violation.....................................................................47
Section 4.04 Litigation.......................................................................47
Section 4.05 Financial Statements: Financial Condition; etc..................................47
Section 4.06 Solvency.........................................................................48
Section 4.07 Material Adverse Change..........................................................48
Section 4.08 Use of Proceeds; Margin Regulations..............................................48
Section 4.09 Governmental Approvals...........................................................48
Section 4.10 Intentionally Deleted............................................................48
Section 4.11 Tax Returns and Payments.........................................................48
Section 4.12 ERISA............................................................................48
Section 4.13 Closing Date Transactions........................................................49
Section 4.14 Representations and Warranties in Loan Documents.................................49
Section 4.15 True and Complete Disclosure.....................................................50
Section 4.16 Ownership of Assets; Existing Security Instruments...............................50
Section 4.17 No Default.......................................................................50
Section 4.18 Licenses, etc....................................................................50
Section 4.19 Compliance With Law..............................................................50
Section 4.20 Brokers..........................................................................51
Section 4.21 Judgments........................................................................51
Section 4.22 Management Agreements............................................................51
Section 4.23 Leasing Arrangements.............................................................51
Section 4.24 Intentionally Deleted............................................................51
Section 4.25 Operations.......................................................................52
Section 4.26 Stock............................................................................52
Section 4.27 Ground Leases....................................................................52
Section 4.28 Environmental Condition..........................................................52
Section 4.29 Franchise Agreements.............................................................53
Section 4.30 Owned Hospitality Properties.....................................................53
Section 4.31 Existing Indebtedness and Hedge Agreements.......................................53
Section 4.32 Permitted Property Agreements Conversion.........................................53
Section 4.33 Survival.........................................................................53
SECTION 5. AFFIRMATIVE COVENANTS
Section 5.01 Financial Reports................................................................54
Section 5.02 Books, Records and Inspections...................................................56
Section 5.03 Maintenance of Insurance.........................................................57
Section 5.04 Taxes............................................................................57
Section 5.05 Corporate Franchises; Conduct of Business........................................57
Section 5.06 Compliance with Law..............................................................58
Section 5.07 Performance of Obligations.......................................................58
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(continued)
PAGE
Section 5.08 Stock............................................................................58
Section 5.09 Intentionally Deleted............................................................58
Section 5.10 Maintenance of Properties........................................................58
Section 5.11 Compliance with ERISA............................................................59
Section 5.12 Settlement/Judgment Notice.......................................................60
Section 5.13 Acceleration Notice..............................................................60
Section 5.14 Lien Searches; Title Searches....................................................60
Section 5.15 Intentionally Deleted............................................................60
Section 5.16 Intentionally Deleted............................................................60
Section 5.17 Intentionally Deleted............................................................60
Section 5.18 Intentionally Deleted............................................................60
Section 5.19 Intentionally Deleted............................................................60
Section 5.20 Intentionally Deleted............................................................60
Section 5.21 Manager..........................................................................60
Section 5.22 Further Assurances...............................................................61
Section 5.23 Intentionally Deleted............................................................61
Section 5.24 Additional Covenants.............................................................61
Section 5.25 Intentionally Deleted............................................................61
Section 5.26 Intentionally Deleted............................................................61
Section 5.27 Preparation of Environmental Reports.............................................61
Section 5.28 Intentionally Deleted............................................................62
Section 5.29 Intentionally Deleted............................................................62
Section 5.30 Intentionally Deleted............................................................62
Section 5.31 Compliance with Terms of Leaseholds..............................................62
Section 5.32 Intentionally Deleted............................................................62
Section 5.33 Interest Coverage Ratio..........................................................62
Section 5.34 Intentionally Deleted............................................................62
Section 5.35 Fixed Charge Ratio...............................................................62
Section 5.36 Intentionally Omitted............................................................62
Section 5.37 DSC Ratio........................................................................62
Section 5.38 Leverage Ratio...................................................................62
Section 5.39 Intentionally Deleted............................................................63
Section 5.40 Maintenance of Tangible Net Worth................................................63
Section 5.41 Maintenance of Management Agreement Income.......................................63
Section 5.42 Collateral.......................................................................63
Section 5.43 New Subsidiaries.................................................................63
Section 5.44 Hedge Agreements.................................................................64
SECTION 6. NEGATIVE COVENANTS
Section 6.01 Intentionally Deleted............................................................64
Section 6.02 Intentionally Deleted............................................................64
Section 6.03 Liens............................................................................64
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TABLE OF CONTENTS
(continued)
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Section 6.04 Fundamental Changes; Asset Dispositions..........................................65
Section 6.05 Transactions with Affiliates.....................................................65
Section 6.06 Plans............................................................................66
Section 6.07 Restricted Payments..............................................................66
Section 6.08 Sale or Discount of Receivables..................................................66
Section 6.09 Restriction on Prepayment of Indebtedness........................................66
Section 6.10 Agreements Restricting Distributions From Subsidiaries...........................67
Section 6.11 Maximum Indebtedness.............................................................67
Section 6.12 Material Documents...............................................................67
Section 6.13 No Further Negative Pledges......................................................68
Section 6.14 Restrictions on Investments......................................................68
SECTION 7. EVENTS OF DEFAULT
Section 7.01 Events of Default................................................................70
Section 7.02 Rights and Remedies..............................................................73
SECTION 8. INTENTIONALLY DELETED
SECTION 9. MISCELLANEOUS
Section 9.01 Payment of Agent's, Syndication Agent's and Co-Lender's Expenses,
Indemnity, etc...................................................................74
Section 9.02 Notices..........................................................................75
Section 9.03 Successors and Assigns...........................................................76
Section 9.04 Amendments and Waivers...........................................................77
Section 9.05 No Waiver; Remedies Cumulative...................................................77
Section 9.06 Governing Law; Submission to Jurisdiction........................................77
Section 9.07 Confidentiality Disclosure of Information........................................78
Section 9.08 Recourse.........................................................................78
Section 9.09 Sale of Loan, Co-Lenders, Participations and Servicing...........................78
Section 9.10 Borrower's Assignment............................................................81
Section 9.11 Counterparts.....................................................................81
Section 9.12 Effectiveness....................................................................82
Section 9.13 Headings Descriptive.............................................................82
Section 9.14 Marshaling; Recapture............................................................82
Section 9.15 Severability.....................................................................82
Section 9.16 Survival.........................................................................82
Section 9.17 Domicile of Loan Portions........................................................82
Section 9.18 Limitation of Liability..........................................................82
Section 9.19 Calculations; Computations.......................................................82
Section 9.20 WAIVER OF TRIAL BY JURY..........................................................83
Section 9.21 No Joint Venture.................................................................83
Section 9.22 Estoppel Certificates............................................................83
Section 9.23 No Other Agreements..............................................................83
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(continued)
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Section 9.24 Controlling Document.............................................................83
Section 9.25 No Benefit to Third Parties......................................................84
Section 9.26 Hedge Agreements.................................................................84
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EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B Note
Exhibit C Notice of Conversion or Continuation
Exhibit D Notice of Voluntary Reduction of Facility Amount
Exhibit E Voluntary Prepayment Notice
Exhibit F Security Agreement
Exhibit G Intentionally Deleted
Exhibit H Guaranty
Exhibit I Intentionally Deleted
Exhibit J Compliance Certificate
Exhibit K Intentionally Deleted
Exhibit L Ground Lessor Estoppel
Exhibit M Adjustment Report
Exhibit N Intentionally Deleted
Exhibit O Intentionally Deleted
Exhibit P Owned Hospitality Security Documents
Exhibit Q Affiliate Subordination Agreement
SCHEDULES
Schedule 1 List of Environmental Conditions
Schedule 2 List of Existing Owned Hospitality Property Investments
Schedule 3 Loan Parties, Subsidiaries of Borrower and Unconsolidated
Entities of Borrower
Schedule 4 Intentionally Omitted
Schedule 5 Litigation
Schedule 6 Employee Benefit Plans
Schedule 7 Liens
Schedule 8 Indebtedness and Hedge Agreements
Schedule 9 Borrower Business Operations
Schedule 10 Ground Leases
Schedule 11 Pro Rata Interests
Schedule 12 Intentionally Omitted
Schedule 13 Existing Participating Leases
Schedule 14 Guarantors
Schedule 15 Existing Management Agreements
Schedule 16 List of Insurance Policies
Schedule 17 Franchise Agreements
Schedule 18 Management Base Fees
Schedule 19 Management Incentive Fees
Schedule 20 Equity Inns Management Agreement Termination Dates
Schedule 21 List of Unaffiliated Managers
Schedule 22 List of Interstate Existing Employee Loans
Schedule 23 List of Existing Ownership Interests Collateral
THIS SENIOR SECURED REVOLVING LINE OF CREDIT AGREEMENT, dated as of
July 31, 2001, is made among INTERSTATE HOTELS CORPORATION, a Maryland
corporation ("Borrower"), ▇▇▇▇▇▇ BROTHERS HOLDINGS INC., D/B/A ▇▇▇▇▇▇ CAPITAL, A
DIVISION OF ▇▇▇▇▇▇ BROTHERS HOLDINGS INC., a Delaware corporation, individually
as a Co-Lender ("▇▇▇▇▇▇" or "Lender"), as Agent for one or more Co-Lenders
("Agent") and as Arranger (the "Arranger"), the Co-Lenders listed on the
signature pages attached hereto, ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as Syndication
Agent ("Syndication Agent" or "▇▇▇▇▇▇ Commercial") ( ▇▇▇▇▇▇, as Lender, a
"Co-Lender" and together with the other Co-Lenders, collectively, the
"Co-Lenders").
SECTION 1. DEFINITIONS.
Section 1.01 Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural number the singular.
"Acceptable Lien" means a Lien which (a) exists in favor of the Agent
for its benefit and the ratable benefit of the Co-Lenders, (b) secures the
Obligations and (c) is perfected and enforceable against all Persons in
preference to any rights of any Person in the property encumbered thereby and
superior to all other Liens except for Permitted Liens; provided that the Lien
on any Ownership Interests in an Unconsolidated Entity may be subordinate to the
Liens securing any Indebtedness of such Unconsolidated Entity. For purposes
hereof, the Lien in favor of the Agent on any Ownership Interests in CGLH-IHC
Fund I, L.P., a Delaware limited partnership, as subject to and limited by the
terms of the Consent by CGLH Partners III LP, a Delaware limited partnership,
and CGLH Partners IV L.P., a Delaware limited partnership, dated July 31, 2001
(the "CGLH Consent"), shall be deemed an Acceptable Lien.
"Accession Agreement" means an Accession Agreement in the form attached
respectively to the Guaranty, Environmental Indemnity and Security Agreement as
Annex 1 thereto, which agreement causes the Person executing and delivering the
same to the Agent to become a party to the Guaranty, Environmental Indemnity and
Security Agreement.
"Accounts Receivable" shall mean all income and revenues of Borrower
and any Loan Party received and Borrower's and each Loan Party's right to
receive all income and revenues arising from the Permitted Property Agreements
or from the operation of the Owned Hospitality Properties and all payments for
goods or property sold or leased or for services rendered by Borrower or any
Loan Party, whether or not yet earned by performance, and not evidenced by an
instrument or chattel paper, including, without limiting the generality of the
foregoing, (i) all accounts, contract rights, book debts, and notes arising from
the Permitted Property Agreements or from the operation of the Owned Hospitality
Properties or arising from the sale, lease or exchange of goods or other
property and/or the performance of services, (ii) Borrower's and any Loan
Party's rights to payment from any consumer credit/charge card organization or
entity (such as, or similar to, the organizations or entities which sponsor and
administer the American Express Card, the Visa Card, the Bankamericard, the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Card, or the MasterCard), (iii) Borrower's and any Loan Party's
rights in, to and under all purchase orders for goods, services or other
property, (iv) Borrower's and any Loan Party's rights to any goods, services or
other property represented by any of the foregoing, (v) monies
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due to or to become due to Borrower or any Loan Party under all contracts for
the sale, lease or exchange of goods or other property and/or the performance of
services including the right to payment of any interest or finance charges in
respect thereto (whether or not yet earned by performance on the part of
Borrower or any Loan Party) and (vi) all collateral security and guaranties of
any kind given by any person or entity with respect to any of the foregoing.
Accounts Receivable shall include those now existing or hereafter created,
substitutions therefor, proceeds (whether cash or non-cash, movable or
immovable, tangible or intangible) received upon the sale, exchange, transfer,
collection or other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom.
"Adjusted EBITDA" means, for the Borrower or any Subsidiary of the
Borrower, as applicable, for any Rolling Period, the EBITDA of the Borrower or
any Subsidiary of the Borrower, as applicable, for such Rolling Period plus the
EBITDA of such Person's Unconsolidated Entities allocated to such Person after
the deduction of any debt service expense allocable to such Person's percentage
interest in such Unconsolidated Entity; provided that for any Owned Hospitality
Property the aggregate FF&E Reserves for such Rolling Period in respect of such
Owned Hospitality Property shall be subtracted from such Owned Hospitality
Property's EBITDA in determining such Owned Hospitality Property's Adjusted
EBITDA; provided further that if the Borrower or any of its Subsidiaries during
such Rolling Period either (a) sells, disposes of or terminates any Permitted
Property Agreements or (b) sells or disposes of any Investments with an
Investment Amount in excess of $1,000,000, the EBITDA arising from such
Permitted Property Agreement or Investment, as applicable, for the applicable
Rolling Period shall be excluded from the calculation of Adjusted EBITDA;
provided further if the Borrower or any of its Subsidiaries during such Rolling
Period either (a) purchases or acquires any Permitted Property Agreements or (b)
purchases or acquires any Investments with an Investment Amount in excess of
$1,000,000, the EBITDA arising from such Permitted Property Agreement or
Investment, as applicable, for the applicable Rolling Period on a pro forma
basis shall be included in the calculation of Adjusted EBITDA; and provided
further, that the EBITDA arising from the Wyndham Transaction for the applicable
Rolling Period shall be calculated on a pro-forma basis.
"Adjustment Event" means the making, acquisition or disposition by
Borrower or its Subsidiary of an Investment with an Investment Amount in excess
of $2,000,000 or the incurrence by Borrower or its Subsidiary of additional
Indebtedness (excluding any Obligations) in excess of $2,000,000.
"Adjustment Report" means a certificate of the Borrower in
substantially the form of the attached Exhibit M.
"Advance" shall mean each advance and readvance of the principal
balance of the Loan.
"Affiliate" shall mean, with reference to a specified Person, any
Person that directly or indirectly through one or more intermediaries Controls
or is Controlled by or is under common Control with the specified Person and any
Subsidiaries (including Subsidiaries) of such specified Person.
2
"Affiliate Subordination Agreement" shall mean the Affiliate
Subordination Agreement by Borrower and certain Guarantors in favor of Agent
which subordinates Permitted Intercompany Debt to the Obligations in the form of
the attached Exhibit Q.
"Agent" shall have the meaning provided in the opening paragraph of
this Agreement and in Section 9.09(e).
"Agreement" shall mean this Senior Secured Revolving Line of Credit
Agreement as the same may from time to time hereafter be modified, supplemented
or amended.
"Annual Operating Budget" shall have the meaning provided in Section
5.01.
"Applicable Laws" shall mean all existing and future federal, state and
local laws, statutes, orders, ordinances, rules, and regulations or orders,
writs, injunctions or decrees of any court affecting Borrower, any Loan Party or
any Hospitality Property owned, leased or managed by Borrower or its Subsidiary,
or the use thereof including, but not limited to, all zoning, fire safety and
building codes, the Americans with Disabilities Act, and all Environmental Laws
(as defined in the Environmental Indemnity).
"Appraisal" shall mean an appraisal prepared in accordance with the
requirements of FIRREA, prepared by an independent third party appraiser holding
an MAI designation, who is state licensed or state certified if required under
the laws of the state where the applicable Owned Hospitality Property is
located, who meets the requirements of FIRREA and who has at least ten (10)
years real estate experience appraising properties of a similar nature and type
as the applicable Owned Hospitality Property and who is otherwise satisfactory
to the Agent.
"Approved Management Agreement" means a Management Agreement by and
between a Person, as owner, and Borrower or Borrower's Subsidiary, as manager,
in a form which does not include materially adverse provisions which are not
customary for management agreements of Hospitality Properties or such other form
as is approved by the Agent in writing (which approval shall not be unreasonably
withheld).
"Approved Participating Lease" means a lease (except for a Ground
Lease) by and between a Person, as lessor, and Borrower or Borrower's
Subsidiary, as lessee, in a form which does not include materially adverse
provisions which are not customary for participating leases of Hospitality
Properties or such other form as is approved by the Agent in writing (which
approval shall not be unreasonably withheld).
"Asset Disposition" means any conveyance, exchange, transfer, or
assignment of any Investment or Property by the Borrower or a Guarantor to a
Person other than the Borrower or a Guarantor.
"Assets" of any Person means all assets of such Person that would, in
accordance with GAAP, be classified as assets of a company conducting a business
the same as or similar to that of such Person, including without limitation, the
Permitted Property Agreements and all Owned Hospitality Properties.
"Assignment and Assumption" shall have the meaning provided in Section
9.09.
3
"Assignment of Leases" means an assignment of leases, rents and
security deposits executed by the Borrower or any Guarantor to secure the
Obligations, each in form reasonably approved by the Agent with such
modifications as may be necessary and appropriate in the opinion of Counsel to
the Agent to comply with the state law of the filing jurisdiction and as may be
reasonably satisfactory to the Agent, as the same may be amended or terminated
in accordance with its terms.
"Authorized Officer" means the chief executive officer, chief financial
officer, chief operating officer or any senior vice president of the Borrower.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors' rights.
"Base Rate" shall mean, for any day, a rate of interest per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate (as defined below) in effect on such day, and (b) the Federal
Funds Rate (as defined below) in effect on such day plus 1/2 of 1%.
The determination of the Base Rate by Lender shall be conclusive absent
manifest error.
"Base Rate Margin" means two and three-quarters percent per annum
(2.75%).
"Base Rate Portion" shall mean the portion of the Loan made and/or
being maintained at a rate of interest based upon the Base Rate.
"Best" shall mean A.M. Best Company, Inc.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement and any successor Borrower expressly permitted hereunder.
"Borrowing" shall mean a borrowing of one Type of Advance from Agent
and the Co-Lenders on a given date (or resulting from conversions or
continuations on a given date), having in the case of Eurodollar Portions the
same Interest Period.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which Agent, or any Co-Lender or
banking institutions are authorized or required by law or other government
actions to close, and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Portions,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks for U.S. dollar deposits in the relevant
interbank Eurodollar market.
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"Capital Expenditures" shall mean, for any period, all expenditures
during such period for equipment, fixed assets, real property or improvements,
or for replacements or substitutions therefor or additions thereto, that have a
useful life of more than one year.
"Capitalization Event" means any sale or issuance by the Borrower or
any of its Subsidiaries of equity securities.
"Capitalized Lease" as to any Person shall mean (i) any lease of
property, real or personal, the obligations under which are capitalized on the
consolidated balance sheet of such Person and its Subsidiaries, and (ii) any
other such lease to the extent that the then present value of the minimum rental
commitment thereunder should, in accordance with GAAP, be capitalized on a
balance sheet of the lessee.
"Capitalized Lease Obligations" as to any Person shall mean all
obligations of such Person and its Subsidiaries under or in respect of
Capitalized Leases, in each case taken at the amount thereof accounted for as
liabilities in accordance with GAAP.
"Cash Equivalents" shall mean any of the following, to the extent owned
by a Person free and clear of all Liens: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) Federally insured
certificates of deposit of or time deposits with any commercial bank that is a
Co-Lender or a member of the Federal Reserve System, issues (or the Borrower of
which issues) commercial paper rated as described in clause (c) below, is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1 billion, (c) commercial paper issued
by any corporation organized under the laws of any State of the United States
and rated at least "Prime-l" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Services or (d) investments in money market funds where substantially
all of the assets of such funds are comprised of the types of securities in (a)
- (c) above.
"Change in Law" shall have the meaning provided in Section 2.19(c).
"Change in Control" means for any Person a change in ownership or
control of such Person effected through either of the following transactions:
(a) any Person or related group of Persons (other than such
Person or an Affiliate of such Person) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of securities possessing
fifty percent (50%) or more of the total combined voting power of such
Person's outstanding securities; or
(b) there is a change in the composition of such Person's
Board of Directors over a period of thirty-six (36) consecutive months
(or less) such that a majority of Board members (rounded up to the
nearest whole number) ceases, by reason of one or more proxy contests
for the election of Board members, to be comprised of individuals who
either (i) have been Board members continuously since the beginning of
such period or (ii) have been elected or nominated for election as
Board members during such period by
5
at least a majority of the Board members described in clause (i) who
were still in office at the time such election or nomination was
approved by the Board.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute, together with all rules and regulations
from time to time promulgated thereunder.
"Collateral" means the Borrower's and Borrower's Subsidiaries'
interests in the following, whether owned on or acquired after the Closing Date:
(a) the Ownership Interests of all existing Subsidiaries and Unconsolidated
Entities of the Borrower set forth on Schedule 23 (the "Existing Ownership
Interests Collateral") and any future Material Subsidiary or Material
Unconsolidated Entity (the Ownership Interests required to be Collateral
pursuant to this definition being referred to herein as the "Ownership Interests
Collateral"), (b) the rights to receive payments for its account (including the
right to receive termination payments) under all Permitted Property Agreements,
(c) all Owned Hospitality Properties (other than the Pittsburgh Airport
Residence Inn, Pittsburgh, Pennsylvania), and (d) any other collateral described
in the Security Agreement or other Security Documents; provided that the pledge
of such Collateral is not prohibited by the terms of (i) Permitted Property
Agreements, joint venture agreements, organizational documents and other
contractual arrangements to which Borrower or a Subsidiary is a party and which
are in effect on the Closing Date, in each case as approved by the Agent (the
execution of this Agreement by the Agent to be conclusive evidence of such
approval by the Agent) (notwithstanding anything to the contrary contained in
this clause (i), with respect to all Collateral which is acquired by Borrower
and/or its Subsidiaries after the Closing Date, as more particularly described
in Section 5.42 hereof, Borrower and its Subsidiaries shall cause Agent to have
an Acceptable Lien in the Collateral notwithstanding the terms, covenants and
provisions of the Permitted Property Agreements, joint venture agreements,
organizational documents and other contractual documents in effect as of the
Closing Date); (ii) with respect to any Ownership Interests in or Asset of a
Permitted Other Subsidiary, the loan documentation for any Permitted Other
Indebtedness incurred by such Permitted Other Subsidiary; and (iii) with respect
to any Ownership Interests in an Unconsolidated Entity, the loan documentation
for Indebtedness incurred by such Unconsolidated Entity or joint venture
agreements or other contractual arrangements for such Unconsolidated Entity;
provided, further, that the pledges of any Ownership Interests of the Borrower
and/or any of its Subsidiaries in CGLH-IHC Fund I, L.P., a Delaware limited
partnership, are subject to the terms of the CGLH Consent.
"Co-Lender" shall have the meaning set forth in the opening paragraph
of this Agreement, and any successors or assigns of Lender or any Co-Lender
pursuant to Section 9.09.
"Commitment" shall mean each Co-Lender's obligations under the Loan
Documents to make Advances.
"Compliance Certificate" means a certificate of the Borrower in
substantially the form of the attached Exhibit J.
6
"Consolidated Interest Expense" means with respect to any Person for
any period, interest accrued or payable by such Person and its Subsidiaries
during such period in respect of Total Debt determined on a consolidated basis
in accordance with GAAP, taking into account any Hedge Agreement.
"Contingent Obligation" as to any Person shall mean any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases
(including Capitalized Leases) dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth, solvency or other financial
condition of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof: provided, however, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or obligations of such
Person which would not be required to be disclosed under GAAP as liabilities or
footnoted on such Person's financial statement. The amount of any accrued or
accruable Contingent Obligation shall be determined in accordance with GAAP.
"Contract Rate" shall mean the rate or rates of interest (which rate
shall include the applicable margin added thereto pursuant to the terms of this
Agreement) per annum provided for in this Agreement which are applicable to the
Loan from time to time so long as no Event of Default has occurred and is
continuing. If more than one rate of interest is applicable to the Loan, then,
unless the context indicates that the Contract Rate is to be determined for each
Loan Portion, the Contract Rate shall be the average of such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%) with such average to be
weighted according to the relative size of the Loan Portions to which such
different rates are applicable. The determination of the Contract Rate by Agent
shall be conclusive absent manifest error.
"Control" shall mean in (a) in the case of a corporation, ownership,
directly or through ownership of other entities, of at least ten percent (10%)
of all the voting stock (exclusive of stock which is voting only as required by
applicable law or in the event of nonpayment of dividends and pays dividends
only on a nonparticipating basis at a fixed or floating rate), and (b) in the
case of any other entity, ownership, directly or through ownership of other
entities, of at least ten percent (10%) of all of the beneficial equity
interests therein (calculated by a method that excludes from equity interests,
ownership interests that are nonvoting (except as required by applicable law or
in the event of nonpayment of dividends or distributions) and pay dividends or
distributions only on a non-participating basis at a fixed or floating rate) or,
in any case, (c) the power directly or indirectly, to direct or control, or
cause the direction of, the management policies of another Person, whether
through the ownership of voting securities, general partnership interests,
common directors, trustees, officers by contract or otherwise. The terms
"controlled" and "controlling" shall have meanings correlative to the foregoing
definition of "Control."
7
"Current Co-Lender" shall mean each of the Co-Lenders which is not a
Defaulting Co-Lender.
"Debt Service" means with respect to any Person for any period, the sum
(without duplication) of (a) Consolidated Interest Expense of such Person for
such period plus (b) scheduled principal amortization of Total Debt and any
unscheduled principal amortization payments actually made or required to be made
during such period pursuant to a settlement of debt (giving effect to any
principal payments actually made or required to be made other than scheduled
balloon payments due on the applicable maturity date that are not then due or
past due) of such Person for such period (whether or not such payments are
made).
"Default" shall mean any event, act or condition which shall have
occurred and which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default.
"Default Rate" shall mean for each Loan Portion the lesser of (a) the
Maximum Legal Rate or (b) the greater of (i) the rate per annum determined by
adding 5% to (A) the Contract Rate applicable to each Loan Portion immediately
prior to a Default until the expiration of the applicable Interest Periods, and
(B) the sum of the Eurodollar Rate Margin and the Eurodollar Rate for an
Interest Period of one month, as the same shall adjust each month, thereafter,
or (ii) the rate per annum determined by adding 4% to the Base Rate as from time
to time is in effect.
"Defaulting Co-Lender" shall have the meaning ascribed to it in Section
9.09(d).
"Distribution" shall mean any dividends (other than dividend payable
solely in common stock), distributions, return of capital to any stockholders,
general or limited partners or members, other payments, distributions or
delivery of property or cash to stockholders, general or limited partners or
members, or any redemption, retirement, purchase or other acquisition, directly
or indirectly, of any shares of any class of capital stock now or hereafter
outstanding (or any options or warrants issued with respect to capital stock)
general or limited partnership interest, or the setting aside of any funds for
the foregoing.
"Dollars" and the symbol "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" shall mean the office set forth in Section
9.02 for Agent and the Co-Lenders, or such other office as may be designated
from time to time by written notice to Borrower.
"Draw Period" shall mean the period commencing on the date hereof and
expiring on the date which is 15 days prior to the Maturity Date as same may be
extended as provided for herein.
"DSC Ratio" means, as of the end of any Rolling Period, a ratio of (a)
the Borrower's and its Subsidiaries' consolidated Adjusted EBITDA to (b)
Borrower's and its Subsidiaries' Debt Service, for such Rolling Period.
8
"EBITDA" means for any Person or Hospitality Property, as applicable,
for any period for which such amount is being determined, an amount equal to (a)
the Net Income for such Person or Hospitality Property, as applicable, for such
period plus (b) to the extent deducted in determining Net Income, Consolidated
Interest Expense, income taxes, depreciation, amortization, and other non-cash
items for such period, as determined on a consolidated basis in accordance with
GAAP plus (c) to the extent deducted in determining Net Income, deductions for
minority interests.
"Employee Benefit Plan" shall mean an employee benefit plan within the
meaning of Section 3(3) of ERISA.
"Engineering Reports" shall have the meaning provided in Section
3.01(p).
"Environment" or "Environmental" shall have the meanings set forth in
42 U.S.C. `9601(8), as amended.
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of employees) which seeks to impose liability under any
Environmental Law.
"Environmental Indemnity" shall mean that certain environmental
indemnity agreement dated the date hereof given by Borrower and the Guarantors
to the Agent, individually as a Co-Lender, as Agent for one or more Co-Lenders
and as Arranger.
"Environmental Laws" shall have the meaning provided in the
Environmental Indemnity.
"Environmental Permit" means any permit, license, order, approval or
other authorization under Environmental Law.
"Environmental Reports" shall mean written environmental site
assessments, prepared by independent qualified environmental professionals
acceptable to Agent, on each of the Owned Hospitality Properties in form and
substance reasonably satisfactory to Agent containing the following: (1) a Phase
I environmental site assessment analyzing the presence of environmental
contaminants, polychlorinated biphenyls or storage tanks and other Hazardous
Substances at each of the Owned Hospitality Properties, the risk of
contamination from off-site Hazardous Substances and compliance with
Environmental Laws, such assessments shall be conducted in accordance with ASTM
Standard E 1527-93, or any successor thereto published by ASTM, with respect to
each of the Owned Hospitality Properties, (ii) an asbestos survey of each of the
Owned Hospitality Properties, which shall include random sampling of materials
and air quality testing, (iii) if any of the Owned Hospitality Properties is
used for residential housing, an assessment of the presence of lead-based paint,
lead in water and radon in the improvements (other than units that are not owned
or leased by Borrower, any other Loan Party or any Affiliate thereof), and (iv)
such further site assessments Agent may require or request due to the results
obtained in (i), (ii) or (iii) hereof or in its reasonable discretion.
9
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and any successor statute, together with all rules
and regulations promulgated thereunder. Section references to ERISA are to
ERISA, as in effect at the date of this Agreement and any provisions of ERISA
substituted therefor.
"ERISA Controlled Group" means any corporation or entity or trade or
business or person that is a member of any group described in Section 414(b),
(c), (m) or (o) of the Code of which Borrower or any other Loan Party is a
member.
"Estoppel Certificate" shall have the meaning provided in Section
3.01(e).
"Eurocurrency Reserve Requirements" shall mean, with respect to each
day during an Interest Period for Eurodollar Portions, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Federal Reserve Board or other governmental authority or agency having
jurisdiction with respect thereto for determining the maximum reserves
(including, without limitation, basic, supplemental, marginal and emergency
reserves) for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate" shall mean, for any Interest Period, the rate
per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a
period equal to such Interest Period which appears on the Telerate Page 3750 as
of 11:00 a.m. (London, England time) two (2) Business Days prior to the first
day of such Interest Period. The determination of the Eurodollar Base Rate by
Agent shall be conclusive absent manifest error.
"Eurodollar Lending Office" shall mean the office of Agent (or any
Co-Lender) designated as such by Agent from time to time by written notice to
Borrower.
"Eurodollar Portions" shall mean each portion of the Loan made and/or
being maintained at a rate of interest calculated by reference to the Eurodollar
Rate.
"Eurodollar Rate" shall mean with respect to each day during an
Interest Period for Eurodollar Portions, a rate per annum equal to the
Eurodollar Base Rate, or, if any Co-Lender is subject to Eurocurrency Reserve
Requirements, whether or not such reserves are actually incurred or maintained,
the average of the Eurodollar Base Rate and the Adjusted Eurodollar Base Rate
(defined below), with such average to be weighted according to the percentage of
the Eurodollar Portion subject to such Co-Lender's interest in the Loan and the
balance of such Eurodollar Portion. The Adjusted Eurodollar Base Rate shall mean
a rate per annum, determined for each day during an Interest Period in
accordance with the following formula (rounded upwards to the nearest whole
multiple of 1/16th of one percent):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
10
"Eurodollar Rate Margin" means the applicable percentage per annum set
forth in the column "Eurodollar Rate Margin" determined by reference to the
column "Leverage Ratio of Borrower" then in effect as set forth below:
-----------------------------------------------------------
Leverage Ratio of Borrower Eurodollar Rate Margin
-----------------------------------------------------------
Greater than
4.0x but less than 5.50x 4.50%
-----------------------------------------------------------
Less than 4.0x 3.75%
-----------------------------------------------------------
The Eurodollar Rate Margin for the Eurodollar Rate Portions shall be
determined by reference to the Leverage Ratio of Borrower and any change in the
Eurodollar Rate Margin shall be effective on the first day of the related
Interest Period immediately following the date such Leverage Ratio is announced
or determined.
"Event of Default" shall have the meaning provided in Section 7.
"Existing Employee Loans" means each of the unsecured employee loans by
Borrower to Borrower's employees listed on Schedule 22 evidenced by notes, in
the maximum aggregate principal amount equal to the lesser of (i) $3,600,000,
and (ii) $3,600,000 less any principal payment made by any employee to Borrower
pursuant to the notes evidencing such Existing Employee Loans.
"Existing Owned Hospitality Property Investments" means the Owned
Hospitality Property Investments set forth on Schedule 2.
"Existing Management Agreements" means the management agreements listed
on Schedule 15.
"Existing Participating Leases" means the participating leases set
forth on Schedule 13.
"FF&E Reserve" means, for any Owned Hospitality Property for any
period, a reserve equal to the greater of (i) four percent (4%) of gross
revenues or (ii) such other actual amount as may be required by the applicable
franchise agreement, for such period, excluding, however, from such calculation
for such Hospitality Property the gross revenues generated by the office, retail
and garage portions of such Hospitality Property.
"Facility Amount" shall initially mean U.S. $40,000,000, as such amount
may be permanently or temporarily reduced pursuant to Sections 2.09, 2.12, 2.27
or otherwise pursuant to the terms and conditions of this Agreement.
"Facility Fee" shall have the meaning provided in the Fee Letter.
"Federal Funds Rate" shall mean, on any particular date, a rate per
annum equal to the overnight rate of interest at which Agent can borrow Federal
Funds from the Federal Reserve on such day, with any change in said rate to be
effective as of the date of such change; if Agent cannot borrow Federal Funds
from the Federal Reserve, Federal Funds Rate shall mean, on any particular date,
a rate per annum equal to the rate of interest published in The Wall Street
11
Journal as the "Federal Funds" rate as in effect on such day, with any change in
the Federal Funds Rate to be effective as of the date of the relevant change in
said Federal Funds rate; provided, however, that if more than one Federal Funds
rate is published in The Wall Street Journal for a day, the average of the
Federal Funds shall be used; provided further, however, that the Federal Funds
rate (or the average of the Federal Funds rates) will be rounded to the nearest
1/16th of 1% or, if there is no nearest 1/16th of 1%, to the next higher 1/16th
of 1%.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System as constituted from time to time, or any successor
thereto in function.
"Fees" shall mean all amounts payable pursuant to Sections 2.09, 2.15,
2.17 and 9.01.
"Fee Letter" shall mean that certain letter agreement between Borrower
and ▇▇▇▇▇▇ dated the date hereof.
"Financing Statement" shall mean any Uniform Commercial Code -
Financing Statement - Form UCC-1 to be executed and delivered by the Borrower or
any of its Subsidiaries in connection with perfecting the security interest
assigned by any Security Document, and any extension, renewal, or amendment
thereof.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended from time to time.
"Fixed Charges" means, for any Person for the period for which such
amount is being determined, the amount (without duplication) of all scheduled
principal payments and mandatory prepayments (excluding optional prepayments and
scheduled principal payments in respect of any such Indebtedness which is
payable in a single installment at final maturity), Consolidated Interest
Expense, and all Capital Lease scheduled payments of such Person and such
Person's Subsidiaries, on a consolidated basis, and all preferred stock
dividends and preferred partnership distributions paid during such period by
such Person and such Person's Subsidiaries on a consolidated basis.
"Fixed Charge Coverage Ratio" means, as of the end of any Rolling
Period, a ratio of (a) the Borrower's and its Subsidiaries' consolidated
Adjusted EBITDA for such Rolling Period to (b) the Borrower's and its
Subsidiaries Fixed Charges for such Rolling Period.
"Funding Costs" shall have the meaning provided in Section 2.17.
"Furnished Information" shall have the meaning provided in Section
4.15.
"GAAP" shall mean United States generally accepted accounting
principles on the date hereof and as in effect from time to time during the term
of this Agreement, and consistent with those utilized in the preparation of the
financial statements referred to in Section 4.05.
"Governmental Authority" means any foreign governmental authority, the
United States of America, any state of the United States of America and any
subdivision of any of the
12
foregoing, any agency, department, commission, board, authority or
instrumentality, bureau or court having jurisdiction over any Co-Lender, the
Borrower, any Subsidiaries or Unconsolidated Entities of the Borrower or any of
their respective Hospitality Properties.
"Governmental Proceedings" means any action or proceedings by or before
any Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Applicable Law.
"Ground Lease" means a lease by and between a Person, as lessor, and
Borrower or Borrower's Subsidiary, as lessee, where the term of such lease is in
excess of twenty (20) years.
"Guarantor" shall mean the Loan Parties identified on Schedule 14
together with any existing Subsidiary or any future Material Subsidiary of
Borrower acquired by Borrower subject to Section 5.43 of this Agreement (other
than the Permitted Other Subsidiaries).
"Guaranty" shall mean that certain Guaranty and Contribution Agreement
dated the date hereof made by the Guarantors to Agent, individually as a
Co-Lender, as Agent for one or more Co-Lenders, and as Arranger, as the same may
be supplemented or amended from time to time, and substantially in the form of
Exhibit H attached hereto.
"Hazardous Substance" means the substances identified as such pursuant
to CERCLA and those regulated under any other Environmental Law, including
without limitation pollutants, contaminants, petroleum, petroleum products,
radio nuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to
any Environmental Law.
"Hedge Agreement" shall mean an interest rate swap, cap or other
interest rate management agreement, provided that the entity providing such
interest rate management agreement maintains a credit rating equal or exceeding
"A" as rated by Standard & Poor's Ratings Services or Aa2 by ▇▇▇▇▇'▇ Investors
Service Inc. or such other reputable rating agency reasonably satisfactory to
Agent and the Majority Co-Lenders.
"Hospitality Management Business" shall mean the management, operation
or leasing as lessee of any Hospitality Property, including timeshare sales and
brokerage.
"Hospitality Property" shall mean a full service or limited service
hotel or resort, a condominium or timeshare resort, an extended stay property,
or a convention center, and other facilities incidental to, or in support of
such property, including without limitation, restaurants and other food-service
facilities, golf facilities or other entertainment facilities or club,
convention or meeting facilities and Intellectual Property related thereto;
provided that such property shall not include any casino or other gaming
property (even if only a part of a Hospitality Property) or senior living
property.
"Increased Capital Costs" shall have the meaning provided in Section
2.18.
13
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, other than account or trade payables incurred in
the ordinary course of business that are not evidenced by a note and that are
less than 59 days past due, (ii) all indebtedness of such Person evidenced by a
note, bond, debenture or similar instrument, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all un-reimbursed amounts drawn thereunder, (iv) all indebtedness
of any other Person secured by any Lien on any property owned by such Person,
whether or not such indebtedness has been assumed (notwithstanding the foregoing
contained in clause (iv), in the event that such Person is contesting the
validity of such Lien in good faith and with due diligence by appropriate
proceedings, such contested Lien shall not be included in the calculation of
"Indebtedness" provided (A) such Person's property shall not be in any danger of
being sold, forfeited or lost by reason of such contest, (B) such contest shall
not subject such Person to the risk of criminal or civil liability (except for
liability to pay the Lien which is the subject of this contest plus interest and
penalties thereon), (C) such contested Lien is subordinate to the lien created
by the Security Documents, (D) such Person shall promptly pay the obligation
secured by such Lien upon a final determination of such Person's liability, and
(E) such Person shall have delivered to Agent a bond or other security equal to
125% of the contested amount or an indemnity reasonably acceptable to Agent),
(v) all Contingent Obligations of such Person, (vi) all Unfunded Benefit
Liabilities of such Person, (vii) all payment obligations of such Person under
any interest rate protection agreement (including, without limitation, any
interest rate swaps, caps, floors, collars and similar agreements) and currency
swaps and similar agreements, (viii) all indebtedness and liabilities secured by
any Lien or mortgage on any property of such Person, whether or not the same
would be classified as a liability on a balance sheet, (ix) the liability of
such Person in respect of banker's acceptances and the estimated liability under
any participating mortgage, convertible mortgage or similar arrangement, (x) the
aggregate amount of rentals or other consideration payable by such Person in
accordance with GAAP over the remaining unexpired term of all Capitalized
Leases, (xi) all judgments or decrees by a court or courts or competent
jurisdiction entered against such Person, (xii) all indebtedness, payment
obligations, contingent obligations, etc. of any partnership in which such
Person holds a general partnership interest for which recourse may be had
against such Person, provided only the portion of such recourse indebtedness
equal to such Person's percentage ownership interest in such partnership shall
be included in this definition, (xiii) all convertible debt and subordinated
debt, (xiv) all preferred stock issued by such Person that, in either case, are
redeemable for cash, a cash equivalent, a note receivable or similar instrument
or are convertible to Indebtedness as defined herein (other than Indebtedness
described in clauses (iii), (vi), (x), (xi) or (xiv) of this definition), (xv)
to the extent treated as a liability under GAAP, obligations under interest rate
swap agreements, interest rate cap agreements, interest rate collar agreements
or other similar agreements or arrangements designed to protect against
fluctuations in interest rates, and (xvi) all obligations, liabilities, reserves
and any other items which are listed as a liability on a balance sheet of such
Person determined on a consolidated basis in accordance with GAAP, but excluding
all general contingency reserves and reserves for deferred income taxes and
investment credit.
"Indemnitee" shall have the meaning provided in Section 9.01(c).
"Intellectual Property" shall have the meaning given such term in the
Security Agreement.
14
"Interest Coverage Ratio" means, as of the end of any Rolling Period, a
ratio of (a) the Borrower's and its Subsidiaries' consolidated Adjusted EBITDA
to (b) Borrower's and its Subsidiaries' Consolidated Interest Expense, for such
Rolling Period.
"Investment" means, with respect to any Person, (a) any loan or advance
to any other Person, (b) the ownership, purchase or other acquisition of any
Ownership Interests or Ownership Interest Equivalents in any other Person, (c)
any joint venture or partnership with, or any capital contribution to, or other
investment in, any other Person, (d) any Capital Expenditure and (e) any
payment, whether capitalized or not, to acquire a Permitted Property Agreement
or lease.
"Investment Amount" means (a) for any Owned Hospitality Property the
sum of (i) the aggregate purchase price paid by the Borrower or its Subsidiary
for such Owned Hospitality Property, and (ii) the actual cost of any Capital
Expenditures for such Owned Hospitality Property made by the Borrower or its
Subsidiaries after the acquisition of such Owned Hospitality Property, and (b)
for any other Investment the aggregate purchase price paid by the Borrower or
its Subsidiary for such other Investment. The Investment Amount shall include
any Ownership Interests or Ownership Interest Equivalents used to purchase such
Investment at their fair market value at the time of purchase; provided that any
such Ownership Interests or Ownership Interest Equivalents which are convertible
into the Borrower's common stock shall be valued at the price at which they
could be exchanged into the Borrower's common stock assuming such exchange
occurred on the date of acquiring such Investment.
"Intercreditor Agreement" shall have the meaning provided in Section
9.04.
"Interest Period" shall have the meaning provided in Section 2.06.
"Leases" shall mean all written leases and rental agreements,
registration cards and agreements and other agreements, whether or not in
writing, affecting the use, enjoyment or occupancy of any Owned Hospitality
Property heretofore or hereafter entered into, together with any Existing
Participating Leases and any Approved Participating Leases.
"Leverage Ratio" means the ratio on any date of (a) the consolidated
Total Debt of the Borrower and its Subsidiaries on such date to (b) the
consolidated Adjusted EBITDA of the Borrower and its Subsidiaries for the
Rolling Period immediately preceding such date.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same effect as
any of the foregoing, inchoate liens arising under ERISA to secure the
contingent liabilities of Borrower, or any Loan Party, and the filing of any
financing statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction, domestic or foreign.
"Loan" shall mean, in the aggregate, the Advances made to Borrower
under this Agreement and the Note pursuant to the terms hereof, the aggregate
outstanding principal amount of which shall not exceed at any time the Facility
Amount.
15
"Loan Documents" shall mean this Agreement, the Note, the Guaranty, the
Environmental Indemnity, the Security Agreement, the Security Documents, the
Intercreditor Agreement, the Fee Letter and any other documents or instruments
evidencing, securing or guaranteeing the Loan.
"Loan Party" shall mean, individually and collectively, as the context
requires, Borrower, Guarantors, Subsidiaries of Borrower and Affiliates of
Borrower (other than any Unconsolidated Entities) that are parties to any Loan
Documents, and all of the parties set forth on Schedule 3.
"Loan Portion" shall mean the Base Rate Portion and each Eurodollar
Portion of the Loan.
"Majority Co-Lenders" shall have the meaning provided in the
Intercreditor Agreement, provided that prior to Syndication, it shall mean the
Lender. With respect to the provisions of this Agreement requiring the consent,
approval, disapproval or determination of the Majority Co-Lenders, each Current
Co-Lender's Pro Rata Interest shall be used as the means of calculating the
Majority Co-Lenders and the term "Majority Co-Lenders" shall mean those Current
Co-Lenders whose Pro Rata Interests, at any time, in the aggregate, is equal to
or greater than the percentage prescribed in Intercreditor Agreement based
solely on the aggregate owned by all Current Co-Lenders; the Pro Rata Interests
in the Loan of Defaulting Co-Lenders shall not be taken into account in the
calculation of the Majority Co-Lenders.
"Margin Stock" shall have the meaning provided such term in Regulation
U of the Federal Reserve Board.
"Material Adverse Effect" shall mean any condition which causes or
continues the occurrence of an Event of Default or has a material adverse effect
upon (i) the business, operations, properties, assets, prospects, corporate
structure or condition (financial or otherwise) of Borrower or any of the Loan
Parties, taken as a whole, (ii) the ability of Borrower or the Loan Parties to
perform, or of Agent, or any Co-Lender to enforce, any of the Obligations or
(iii) the value of the Owned Hospitality Properties, the Permitted Property
Agreements or Other Assets taken as a whole.
"Material Subsidiary" means any Subsidiary of the Borrower having
assets or annual revenues in excess of $1,000,000.
"Material Unconsolidated Entity" means any Unconsolidated Entity of the
Borrower having assets or annual revenue in excess of $1,000,000.
"Maturity Date" shall mean August 1, 2003 or such earlier date on which
the principal balance of the Loan and all other sums due in connection with the
Loan shall be due as a result of the acceleration of the Loan, subject to
extension as provided in Section 2.27 hereof.
"Maximum Legal Rate" shall mean the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the Security
16
Instruments or other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
"Minimum Tangible Net Worth" shall mean, with respect to the Borrower,
at any time, the sum of $30,000,000 plus (a) an mount equal to 75% of the
aggregate net proceeds or value received by Borrower or its Subsidiaries after
the date of this Agreement in connection with any Capitalization Events taken as
a whole, including without limitation, in connection with the acquisition of any
Investment or Asset plus (b) an amount equal to 75% of the aggregate Net Income
of the Borrower and its Subsidiaries after September 30, 2000 on a consolidated
basis.
"Minority Interest" shall mean the interest of equity holders who, in
the aggregate, own less than half the equity interests in a Person (other than
an individual).
"Moody's" shall mean ▇▇▇▇▇'▇ Investor Service, Inc.
"Mortgages" means, collectively, the deeds of trust and mortgages
executed by the Borrower or any Guarantor on any Owned Hospitality Property to
secure the Obligations, each in form reasonably acceptable to the Agent with
such modifications as may be necessary and appropriate in the opinion of counsel
to the Agent to comply with the state law of the filing jurisdiction and as may
be reasonably satisfactory to the Agent, as the same may be amended or
terminated in accordance with their terms, and "Mortgage" means any of such
instruments.
"Multiemployer Plan" shall mean a Plan which is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
"Net Income" means, for any Person or Hospitality Property, as
applicable, for any period for which such amount is being determined, the net
income of such Person (on a consolidated basis) or Hospitality Property, as
applicable, after taxes, as determined on a consolidated basis in accordance
with GAAP, excluding, however, extraordinary items, including but not limited to
(i) any net gain or loss during such period arising from the sale, exchange, or
other disposition of capital assets (such term to include all fixed assets and
all securities) other than in the ordinary course of business and (ii) any
write-up or write-down of assets.
"Net Worth" means, for any Person, net worth as calculated in
accordance with GAAP.
"Non-use Fee" shall have the meaning provided in Section 2.15(b).
"Non-use Fee Due Date" shall mean the date which is five (5) business
days after the date Agent has furnished Borrower with an invoice showing the
amount of the Non-use Fee and a detailed calculation of the same, as calculated
quarterly by Agent.
"Note" shall have the meaning provided in Section 2.04.
"Notice of Borrowing" shall have the meaning provided in Section 2.02.
17
"Notice of Conversion or Continuation" shall have the meaning provided
in Section 2.08.
"Obligations" shall mean all payment, performance and other
obligations, liabilities and indebtedness of every nature of (i) Borrower and
any Guarantor from time to time owing to Agent or any Co-Lender under or in
connection with this Agreement or any other Loan Document, or (ii) Borrower and
the other Loan Parties under or in connection with the Guaranty or any other
Loan Documents.
"Other Assets" shall mean all Assets of a Person that are not Permitted
Property Agreements or Owned Hospitality Properties.
"Owned Hospitality Property" means a Hospitality Property owned by the
Borrower or one of the Borrower's Subsidiaries or leased by the Borrower or one
of the Borrower's Subsidiaries pursuant to a Ground Lease.
"Owned Hospitality Property Investments" shall mean Investments in
Owned Hospitality Properties (including the fixtures, furniture and equipment
necessary to operate such Hospitality Property) or in Persons for which
Hospitality Properties are substantially all of such Person's Property.
"Owned Hospitality Property Security Documents" for any Owned
Hospitality Property, means collectively (a) a Mortgage, (b) an Assignment of
Leases, and (c) such other security agreements, pledge agreements, assignments,
mortgages, financing statements, stock powers, and other collateral
documentation as the Agent may reasonably request, substantially in the form
attached hereto as Exhibit P.
"Ownership Interests" means shares of stock, other securities,
partnership interests, member interests, beneficial interests or other interests
in any Person, whether voting or non-voting, and participations or other
equivalents (regardless of how designated) of or in a Person.
"Ownership Interests Collateral" has the meaning given such term in the
definition of "Collateral."
"Ownership Interest Equivalents" means all securities (other than
Ownership Interests) convertible into or exchangeable for Ownership Interests
and all warrants, options or other rights to purchase or subscribe for any
Ownership Interests, whether or not presently convertible, exchangeable or
exercisable.
"Participant" shall have the meaning provided in Section 9.09(i).
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"Permitted Asset Disposition" means an Asset Disposition which (a)
occurs at a time in which no Default has occurred and is continuing, and (b)
would not cause a Default to occur upon the consummation of such Asset
Disposition.
18
"Permitted Hazardous Substances" means (a) Hazardous Substances,
petroleum and petroleum products which are (i) used in the ordinary course of
business and in typical quantities for a Hospitality Property and (ii)
generated, used and disposed of in accordance with all Applicable Laws and good
industry practice and (b) non-friable asbestos to the extent (i) that no
Applicable Laws require removal of such asbestos from the Hospitality Property
and (ii) such asbestos is encapsulated in accordance with all Applicable Laws
and such reasonable operations and maintenance program as may be required by the
Agent.
"Permitted Intercompany Debt" shall have the meaning set forth in the
definition of "Permitted Other Indebtedness."
"Permitted New Employee Loans" means the unsecured employee loans by
Borrower to Borrower's employees, provided that (i) such new employee loans are
advanced solely to cover such employee's relocation costs, (ii) such new
employee loans are evidenced by a note and (iii) at no time shall the
outstanding principal sum of the Permitted New Employee Loans exceed
$500,000.00.
"Permitted New Investments" means the following Investments made after
the Closing Date:
(a) to acquire Permitted Property Agreements;
(b) in Persons for which Permitted Property Agreements are
substantially all of such Person's Assets; provided that the aggregate
Investment Amount relating to this subparagraph (b) should not exceed
$30,000,000;
(c) in Owned Hospitality Property Investments; provided that
(i) the aggregate Investment Amount in Owned Hospitality Property
Investments, excluding the Investment Amount in Existing Owned
Hospitality Property Investments and the Investment Amount in
Unconsolidated Entities, shall not at any time exceed $10,000,000 and
(ii) at least five (5) Business Days prior to acquiring an Owned
Hospitality Property, the Borrower shall have delivered to the Agent
the Property Information for such Owned Hospitality Property; and
(d) which are Permitted Stock Repurchases provided the
proceeds of the Loan are not used to acquire same.
All Permitted New Investments shall be (1) Investments in (A) Assets located in
the United States and/or (b) Persons formed and organized in the United States
and whose principal place of business is located within the United States and
(2) Investments in which Agent on behalf the Co-Lenders shall be granted an
Acceptable Lien.
"Permitted Non-Recourse Unconsolidated Entity Indebtedness" means
Indebtedness of an Unconsolidated Entity which (i) is incurred by an
Unconsolidated Entity to acquire a Hospitality Property or Hospitality
Management Business or refinance such acquisition Indebtedness, and (ii) is
non-recourse to the Borrower and its Subsidiaries except for the Ownership
Interests in such Unconsolidated Entity.
19
"Permitted Other Indebtedness" means:
(a) Subordinate Indebtedness (including the Subordinate
Convertible Note provided CGLH Partners II LP or an Affiliate thereof
continues to be the Subordinate Convertible Noteholder);
(b) Indebtedness which (i) is incurred by a Permitted Other
Subsidiary to acquire a Permitted New Investment or refinance
Indebtedness incurred to acquire a Permitted New Investment where the
Indebtedness incurred in connection with such acquisition does not
exceed 70% of the Investment Amount for such Permitted New Investment,
(ii) is non-recourse to the Borrower and its Subsidiaries except for
the Assets of or the Ownership Interests in such Permitted Other
Subsidiary and customary recourse "carve-outs", and (iii) in the
aggregate does not exceed $20,000,000;
(c) Minority Interests reflected on the Borrower's financial
statements as Indebtedness;
(d) Trade payables in the ordinary course of business which
are payable in accordance with customary trade terms;
(e) Permitted Non-Recourse Unconsolidated Entity Indebtedness;
(f) Indebtedness in respect of the Wyndham Notes and the
guaranties thereof;
(g) Indebtedness outstanding on the date hereof and listed on
Schedule 8 attached hereto and any renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal
amount thereof); provided further that (1) with respect to the
Indebtedness referred to in (A)(3) on Schedule 8 (the "Existing
Intercompany Debt") (A) the Indebtedness evidenced by the note by
Pittsburgh Hotel Holdings, L.L.C. listed on Schedule 8 as A(3)(f) shall
not exceed the principal sum of $5,700,000 throughout the term of the
Loan, (B) the notes evidencing the Existing Intercompany Debt are
pledged to Agent and such original notes are delivered to Agent in
connection with such pledge, (C) the holder of the Existing
Intercompany Debt executes and delivers to Agent the Affiliate
Subordination Agreement with respect to such Existing Intercompany Debt
(excluding the Indebtedness evidenced by the note in A(3)(f) on
Schedule 8) and (4) such Existing Intercompany Debt is unsecured, and
(2) the principal amount of the Indebtedness evidenced by the note
listed as A(4) on Schedule 8 shall not exceed the outstanding principal
amount as of the Closing Date and listed on Schedule 8; and
(h) Indebtedness of the Borrower to any Guarantor and of any
Guarantor to the Borrower or any other Guarantor ("Permitted
Intercompany Debt") provided (1) the holder of the future Permitted
Intercompany Debt and the obligor thereunder execute the Affiliate
Subordination Agreement, (2) the holder of the future Permitted
Intercompany Debt pledges to Agent the note(s) evidencing the future
Permitted Intercompany Debt and delivers the original note(s) to Agent
in connection with such pledge and (3) such Permitted Intercompany Debt
is unsecured.
20
"Permitted Other Subsidiary" means a Subsidiary of the Borrower which
(a) is a single-purpose Person, (b) has never been a Guarantor, nor owned any
Collateral, and (c) only owns Permitted New Investments acquired in whole or in
part with the proceeds of Indebtedness excluding the proceeds of Advances and
other Assets ancillary to such Permitted New Investments.
"Permitted Property Agreements" means (a) Existing Management
Agreements and Existing Participating Leases and (b) Approved Management
Agreements or Approved Participating Leases related to Hospitality Properties
entered into after the Closing Date; provided that the aggregate Adjusted EBITDA
in any applicable Rolling Period arising from management fee revenues for
managed hotels or leased hotels which are not full-service hotels shall not
exceed 25% of the Borrower's Adjusted EBITDA for such Rolling Period.
"Permitted Property Agreements Conversion" means the conversion of
certain Existing Participating Leases and Approved Participating Leases between
the Borrower and the Borrower's Subsidiaries, as applicable, as tenant, and
Equity Inns Partnership, L.P. ("Equity Inns") and certain Equity Inns'
subsidiaries, as applicable, as landlord, from participating leases to
management agreements that occurred as of January 1, 2001 pursuant to that
certain Master Lease Termination Agreement described on Schedules 18 and 19
hereof which management agreements (a) provide for a base management fee as set
forth on Schedule 18, an incentive fee and an additional incentive fee as set
forth on Schedule 19 and an accounting fee equal to $1,000 per hotel, per
accounting period, (b) provide for termination dates set forth on Schedule 20
with respect to each of the Hospitality Properties listed on Schedule 20 and (c)
contain customary provisions pursuant to which each Hospitality Property owner
agrees not to disturb Borrower or Borrower's Subsidiaries', as the case may be,
right to manage each such Hospitality Property except in connection with a
default by Borrower or Borrower's Subsidiary, as the case may be, under the
applicable Permitted Property Agreement, a sale or transfer of the Hospitality
Property, or the failure of the applicable Hospitality Property to meet certain
performance levels.
"Permitted Liens" shall have the meaning provided in Section 6.03.
"Permitted Stock Repurchase" means the repurchase of the common stock
of the Borrower provided the aggregate amount of such stock repurchases shall
not exceed $2,000,000.
"Person" shall mean and include any individual, partnership, joint
venture, firm, corporation, limited liability company, association, company,
trust or other enterprise or any government or political subdivision or agency,
department or instrumentality thereof.
"Plan" means any employee benefit plan covered by Title IV of ERISA or
which is subject to Section 412 of the Code or Section 302 of ERISA, (i) that is
maintained by the Borrower, any other Loan Party or any member of either of
their ERISA Controlled Groups or (ii) for which Borrower, any other Loan Party
or any member of either of their ERISA Controlled Groups has or may have any
obligation or liability, whether direct or indirect.
"Policies" shall have the meaning provided in Section 5.03(c).
"Prime Rate" shall mean the prime lending rate as set forth on the
British Banking Association Telerate page 5 (or such other comparable pages as
may, in the opinion of the Agent,
21
replace such page for the purpose of displaying such rate), as in effect from
time to time. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually available. The Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate or the Federal Funds Rate,
respectively.
"Property Information" for any Owned Hospitality Property means the
following information and documentation for such Owned Hospitality Property:
(a) an Engineering Report;
(b) an Environmental Report;
(c) a commitment for a Title Policy, together with a legible
copy of all documents referred to in such commitment;
(d) a current Appraisal satisfactory to the Agent;
(e) a copy of the agreements pursuant to which the Owned
Hospitality Property is being acquired;
(f) a ALTA/ACSM survey reasonably satisfactory to the Agent;
and
(g) all financial statements reasonably required by the Agent.
"Pro-Rata Interest" shall mean the proportionate share of each
Co-Lender in the Loan, this Agreement, the other Loan Documents and the
obligations to make Advances pursuant to the terms of this Agreement.
Notwithstanding the foregoing, with respect to any approvals, consents or
determinations that are to be made by the Majority Co-Lenders, Pro Rata Interest
shall mean, with respect to each Current Co-Lender, a percentage equal to the
amount of the Loan owned by such Current Co-Lender divided by the aggregate
amount of the Loan owned by all of the Current Co-Lenders, multiplied by 100.
"Quarter" shall mean each calendar quarter.
"Recourse Indebtedness" of any Person means all Indebtedness of such
Person and its Subsidiaries for which recourse for payment may be made against
such Person for the obligations secured thereunder.
"Register" shall have the meaning provided in Section 9.09.
"Regulation D" shall mean Regulation D of the Federal Reserve Board as
from time to time in effect and any successor to all or any portion thereof.
"Repayment Event" means the occurrence of either a Capitalization Event
or an Asset Disposition after the Closing Date except for Asset Dispositions for
which the aggregate Net Cash Proceeds do not exceed $1,000,000 in any calendar
year.
22
"Reportable Event" has the meaning set forth in Section 4043(c)(3),
(5), (6) or (13) of ERISA (other than a Reportable Event as to which the
provision of 30 days' notice to the PBGC is waived under applicable
regulations).
"Responsible Officer" means the Chairman of the Board, President or the
Chief Financial Officer of any Person.
"Restoration" shall have the meaning provided in Section 5.03(h).
"Restricted Payment" means (a) any direct or indirect payment,
prepayment, redemption, purchase, or deposit of funds or Property for the
payment (including any sinking fund or defeasance), prepayment, redemption or
purchase of any Indebtedness not permitted by this Agreement or any Subordinate
Indebtedness, and (b) the making by any Person of any dividends or other
distributions (in cash, property, or otherwise) on or payment for the purchase,
redemption or other acquisition of, any Ownership Interests of such Person.
"Rolling Period" means, as of any date, the twelve (12) month period
immediately preceding such date (which such Rolling Period shall end on the last
day of a calendar month) provided that, for purposes of calculating the
financial ratios set forth in Article V hereof, the applicable Rolling Period
shall end on the last day of the applicable Quarter.
"S&P" shall mean Standard & Poor's Rating Services.
"Security Agreement" means the Security Agreement in favor of the Agent
from the Borrower and the other Guarantors, granting a Lien in all existing and
future Collateral of the Borrower and its Subsidiaries in substantially the form
of the attached Exhibit F.
"Security Documents" means the Security Agreement, all Owned
Hospitality Properties Security Documents, all Financing Statements and each
other document, instrument or agreement executed in connection therewith or
otherwise executed in order to secure all or a portion of the Obligations; and
any "Security Document" means any one of the foregoing.
"Solvent" as to any Person shall mean that (i) the sum of the assets of
such Person, at a fair valuation based upon appraisals or comparable valuation,
will exceed its liabilities, including contingent liabilities, (ii) such Person
will have sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (iii) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of this definition, "debt" means any liability on a
claim, and "claim" means (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (y)
a right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such contingent liabilities, such
liabilities shall be computed in accordance with GAAP at the amount which, in
light of all the facts and circumstances existing at the time, represents the
amount which can reasonably be expected to become an actual or matured
liability.
23
"Subordinate Indebtedness" means Indebtedness of the Borrower and its
Subsidiaries which (a) shall not mature, become payable or require the payment
of any principal amount thereof (or any amount in lieu thereof) or be
mandatorily redeemable, pursuant to a sinking fund or otherwise redeemable at
the option of the holder thereof, in any case in whole or in part, before the
date that is 91 days after the Maturity Date (except the common stock conversion
right in favor of CGLH Partners II LP or an Affiliate thereof shall be permitted
as provided for in the Subordinate Convertible Note) and (b) shall be junior and
subordinate to the Obligations and subject to an intercreditor agreement or
subordination provisions which are in accordance with the then prevailing
customary market terms and conditions (including but not limited to that certain
Indebtedness in the original principal amount of $25,000,000 evidenced by that
certain 8.75% Convertible Subordinated Note Due October 20, 2007, dated October
20, 2000 by Interstate Hotels Corporation (the "Subordinate Convertible Note"),
which Subordinate Convertible Note is currently held "by CGLH Partners II LP, a
Delaware limited partnership (the "Subordinate Convertible Noteholder")).
"Subsidiary" means, with respect to any Person, at any date, any other
Person in whom such Person holds an Investment and whose financial results would
be consolidated under GAAP with the financial results of such Person if such
statements were prepared as of such date.
"Syndication" shall have the meaning provided in Section 9.04(c).
"Syndication Agent" shall have the meaning provided in the opening
paragraph of this Agreement.
"Tangible Net Worth" shall mean, with respect to any Person (a) Net
Worth, plus (b) Minority Interests, minus (c) the net book value of all assets,
after deducting any reserves applicable thereto, which would be treated as
intangible under GAAP, including without limitation, good will, trademarks,
trade names, service marks, brand names, copyrights, patents and unamortized
debt discount and expenses and the excess of the equity in any Subsidiary over
the cost of the investment in such Subsidiary, calculated on a consolidated
basis.
"Taxes" shall have the meaning provided in Section 2.19.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for U.S. Dollar deposits).
"Termination Date" shall mean the date on which the Draw Period
expires.
"Termination Event" shall mean (i) a Reportable Event, or (ii) the
initiation of any action by Borrower, any member of Borrower's or any other Loan
Party's ERISA Controlled Group or any other person to terminate a Plan or the
treatment of an amendment to an ERISA Plan as a termination under ERISA, in
either case, which would result in liability to Borrower, any Loan Party or any
of their ERISA Controlled Group, (iii) the institution of proceedings by the
PBGC under Section 4042 of ERISA to terminate an ERISA Plan or to appoint a
trustee to administer any ERISA Plan, (iv) any partial or total withdrawal from
a Multiemployer Plan
24
which in either case would result in liability to Borrower, any Loan Party or
any of their ERISA Controlled Groups or (v) the taking of any action would
require security to the Plan under Section 401(a)(29) of the Code.
"Title Policy" means a Mortgagee Policy of Title Insurance which (a) is
in the form of American Land Title Association Standard Loan Policy - 1970
(without modification, revision or amendment) (or such other form as approved by
the Agent) with endorsements reasonably requested by the Agent, including
without limitation, a revolving credit endorsement, (b) is issued by an
underwriter reasonably acceptable to the Agent, (c) insures that the grantor of
the Lien insured by such policy owns the Owned Hospitality Property subject to
such Lien in fee simple or pursuant to a leasehold estate and that the Mortgage
covering such Owned Hospitality Property is a valid lien on such Owned
Hospitality Property in favor of the Agent for the benefit of the Co-Lenders
(subject only to Permitted Liens), (d) does not contain any exceptions for
tights of parties in possession, or unpaid delinquent installments of taxes,
special assessments or subsequent assessments due to changes in ownership or
usage, or any other exceptions to coverage other than Permitted Liens.
"Title Searches" shall have the meaning provided in Section 5.14.
"Total Debt" means with respect to any Person at any time, the sum
(without duplication) of the following: (a) all Indebtedness of such Person as
determined on a consolidated basis in accordance with GAAP, plus (b) such
Person's and such Person's Subsidiaries' Unconsolidated Entity Percentage of
Indebtedness of such Person's and such Person's Subsidiaries' Unconsolidated
Entities, plus (c) to the extent not already included in the calculation of
either of the preceding clauses (a) or (b), the aggregate amount of letters of
credit for which such Person or any of its Subsidiaries would have a direct or
contingent obligation to reimburse the issuers of such letters of credit upon a
drawing under such letters of credit, minus (d) to the extent included in the
calculation of either of the preceding clauses (a), (b), or (c), the amount of
any ordinary trade payables, accruals and minority interests.
"Transaction Costs" shall mean all costs and expenses paid or payable
by Borrower or any other Loan Party relating to the Transactions including,
without limitation, the costs and expenses of Agent and each Co-Lender in
conducting its due diligence with respect to the Transactions, financing fees,
commitment fees, advisory fees, appraisal fees, legal fees, accounting fees,
title insurance premiums, recording charges and taxes, whether directly or as
reimbursement to Agent or such Co-Lender.
"Transactions" shall mean each of the transactions contemplated by the
Loan Documents.
"Transferee" shall have the meaning provided in Section 9.07.
"Type" shall mean the type of any portion of the Loan determined with
respect to the interest option applicable thereto, i.e., the Base Rate Portion
or a Eurodollar Portion.
"UCC Searches" shall have the meaning provided in Section 3.01(g).
25
"Unconsolidated Entity" means, with respect to any Person, at any date,
any other Person in whom such Person holds an Investment and whose financial
results would not be consolidated under GAAP with the financial results of such
Person if such statements were prepared as of such date.
"Unconsolidated Entity Percentage" means, for any Person, with respect
to a Person's Unconsolidated Entity, the percentage of such Unconsolidated
Entity's Indebtedness for which recourse may be made against such Person.
"Unfunded Benefit Liabilities" means with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA, exceeds
(ii) the fair market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan (on the basis
of assumptions prescribed by the PBGC for the purpose of Section 4044 of ERISA).
"Unsecured Debt" shall mean, with respect to a Person, the outstanding
principal balance of all Indebtedness which is not secured by any collateral or
Assets of such Person and is evidenced by a promissory note or other instrument
or written agreement.
"Uniform System of Accounts" means the Uniform System of Accounts for
Hotels as approved by the American Hotel and Motel Association (as in effect
from time to time) applied on a consistent basis.
"Wyndham Notes" means that certain promissory note by Interstate
Hotels, LLC to PAH-Interstate Holdings, Inc. ("PAH") in the principal amount of
$750,000 and that certain promissory note by Interstate Hotels, LLC to PAH in
the principal amount of $3,681,818, each of which will be issued by Interstate
Hotels, L.L.C. not before July 1, 2001 in accordance with the Conversion and
Redemption Agreement, dated as of August 31, 2000, among Interstate Hotels,
L.L.C., PAH, Wyndham International, Inc., Patriot American Hospitality, Inc.,
Northridge Holdings, Inc. and the Borrower (the "Wyndham Conversion and
Redemption Agreement").
"Wyndham Transaction" means the partial redemption by Borrower of PAH's
interest (the "Wyndham Interest") in Interstate Hotels, L.L.C., which occurred
on or about October, 2000, as more particularly described in the Wyndham
Conversion and Redemption Agreement, pursuant to which Interstate Hotels, L.L.C.
caused certain management contracts to be transferred to PAH in partial
redemption of the Wyndham Interest.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY.
Section 2.01 Advances.
(a) Subject to and upon the terms and conditions herein set forth,
Lender and each Co-Lender agrees, at any time and from time to time on and after
the Closing Date and prior to the Termination Date, to make its pro rata share
of Advances to Borrower, which Advances shall not exceed in aggregate principal
amount at any time outstanding, the Facility Amount at such time.
26
(b) Advances may be voluntarily prepaid pursuant to Section 2.11, and,
subject to the other provisions of this Agreement, including, without
limitation, Sections 2.09, 2.10 and 2.12, any amounts so prepaid may be
re-borrowed prior to the Termination Date. All outstanding Advances shall mature
on the Maturity Date, without further action on the part of Agent or any
Co-Lender.
(c) Each Advance of the Loan shall be in the aggregate minimum amount
of Three Millions Dollars (U.S. $3,000,000.00) or any integral multiple of One
Hundred Thousand Dollars (U.S. $100,000.00) in excess thereof. No Advance shall
be made after the Termination Date.
(d) The obligation of Lender and each Co-Lender to make their pro rata
share of each Advance of the Loan is several and not joint. Neither Agent,
Lender nor any Co-Lender shall be liable for the failure of any other Co-Lender
to fund its pro rata share of any Advance hereunder.
(e) Borrower may request no more than two (2) Advances per month,
except in the case where an Advance is requested for a Permitted New Investment,
the foregoing restriction shall not apply.
Section 2.02 Notice of Borrowing. Whenever Borrower desires an Advance
hereunder, it shall give Agent at Agent's Office prior to 10:00 A.M., New York
City time, at least three (3) Business Days' prior telex, facsimile, or
telephonic notice (promptly confirmed in writing) of each Advance to be made
hereunder. Each such notice (a "Notice of Borrowing") (i) shall be irrevocable,
(ii) shall be executed by a Responsible Officer of Borrower, (iii) shall specify
(w) the aggregate principal amount of the requested Advance, (x) the date of
Borrowing (which shall be a Business Day), (y) the initial Interest Period to be
applicable thereto and (z) the Type of Advance (or, if at the time of such
request, Eurodollar Loan Portions are not available pursuant to Section 2.16,
that such Advance shall be a Base Rate Portion), (iv) shall certify that, taking
into account the amount of the requested Advance, no Default or Event of Default
has occurred and is continuing, all provisions of the Loan Documents will be
complied with after giving effect to such Advance, (v) shall contain a
description of the intended use of the Advance and (vi) shall be in the form
annexed hereto as Exhibit "A".
Agent shall, upon determining the Eurodollar Rate for any Interest
Period, promptly notify Borrower thereof.
Section 2.03 Disbursement of Funds. No later than 2:00 P.M., New York
City time on the date specified in each Notice of Borrowing, provided all
conditions precedent to the making of such Advance have been complied with, and
further provided that Agent has received, in immediately available federal
funds, each Co-Lender's pro rata share of such Advance from each Co-Lender,
Agent will make available to Borrower by disbursing to or at the direction of
Borrower, or by depositing in Borrower's account at Agent's Office, the amount
of the requested Advance.
Section 2.04 The Note. (a) Borrower's obligation to pay the
principal of, and interest on, the Loan shall be evidenced by the promissory
note (as amended, modified,
27
supplemented, extended or consolidated, the "Note") duly executed and delivered
by Borrower substantially in the form of Exhibit "B" hereto in a principal
amount equal to the Facility Amount, with blanks appropriately completed in
conformity herewith. The Note shall (i) be payable to the order of Agent, and
the Co-Lenders, (ii) be dated the Closing Date, and (iii) mature on the Maturity
Date. If required by a Co-Lender that is not a Co-Lender as of the date hereof,
Borrower hereby agree to execute a supplemental Note in the principal amount of
such Co-Lender's pro rata share of the Facility Amount substantially in the form
of Exhibit "B" hereto, with blanks appropriately completed, and such
supplemental Note shall (i) be payable to order of Agent, on account of such
Co-Lender, (ii) be dated as of the Closing Date, and (iii) mature on the
Maturity Date. Such supplemental Note shall provide that it evidences a portion
of the existing indebtedness hereunder and not any new or additional
indebtedness of Borrower.
(b) Agent is hereby authorized, at its option, (i) to endorse on the
schedule attached to each Note (or on a continuation of such schedule attached
to each such Note and made a part thereof) an appropriate notation evidencing
the date and amount of each Advance evidenced thereby and the pro rata share
thereof of each Co-Lender, and the date and amount of each principal and
interest payment in respect thereof, and/or (ii) to record such Advances and
such payments in its books and records. Such schedule or such books and records,
as the case may be, shall be conclusive and binding on Borrower absent manifest
error, provided that the failure to make any notation shall not affect the
obligations of Borrower, any Guarantor or the rights of Lender or any Co-Lender
hereunder or under the Guaranty.
Section 2.05 Interest.
(a) Borrower shall pay interest in respect of the unpaid principal
amount of the Base Rate Portion from the date of the making of the Base Rate
Portion until the Base Rate Portion shall be paid in full, or converted to a
Eurodollar Portion, at a rate per annum which shall be equal to the sum of the
Base Rate Margin plus the Base Rate in effect from time to time, such rate to
change as and when the Base Rate changes.
(b) Intentionally Deleted.
(c) Borrower shall pay interest in respect of the unpaid principal
amount of each Eurodollar Portion from the date of the making of such Eurodollar
Portion until such Eurodollar Portion shall be paid in full, continued as a
Eurodollar Portion or converted to a Base Rate Portion, at a rate per annum
which shall be equal to the sum of the Eurodollar Rate Margin plus the relevant
Eurodollar Rate.
(d) In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal amount of the Loan
and, to the extent permitted by law, overdue interest in respect of the Loan,
shall bear interest at the Default Rate, calculated from the date such payment
was due without regard to any grace or cure periods contained herein.
(e) Interest on the Loan shall accrue from and including the date of
each Borrowing thereof to but excluding the date of any repayment thereof
(provided that any Advance borrowed and repaid on the same day shall accrue one
day's interest) and Borrower
28
shall pay such interest (A) monthly in arrears on the first day of each month or
with respect to each Eurodollar Portion where the Interest Period is six (6)
months, quarterly in arrears on the first day of each Quarter, (B) on the date
of any prepayment or conversion, (C) on the Maturity Date (whether by
acceleration or otherwise) and (D) after the Maturity Date, on demand.
(f) Interest on the outstanding principal balance of Eurodollar
Portions and Base Rate Portions shall be calculated on the basis of a three
hundred sixty (360) day year based on the actual number of days elapsed.
(g) This Agreement and the Note are subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject Lender or any
Co-Lender to either civil or criminal liability as a result of being in excess
of the Maximum Legal Rate. If by the terms of this Agreement or the Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of the Maximum Legal Rate,
the interest rate or the Default Rate, as the case may be, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in
excess of the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Agent for the use, forbearance, or detention
of the sums due under the Loan, shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full stated
term of the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum Legal Rate of interest from time
to time in effect and applicable to the Loan for so long as the Loan is
outstanding.
Section 2.06 Interest Periods.
(a) Borrower shall, in each Notice of Borrowing or Notice of Conversion
or Continuation in respect of the making of, conversion into or continuation of
a Eurodollar Portion, select the interest period (each an "Interest Period")
applicable to such Eurodollar Portion, which Interest Period shall, at the
option of Borrower, be either a one month, two-month, three-month or six-month
period, provided that:
(i) the Interest Period for any Eurodollar Portion shall
commence on the date of the making of such Advance (including the date
of any conversion from the Base Rate Portion) and each Interest Period
occurring thereafter in respect of such Portion shall commence on the
date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided however, if such Interest Period
would otherwise expire on the Maturity Date, and the Maturity Date is
not a Business Day, such Interest Period shall expire on the
immediately preceding Business Day;
(iii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month; and
29
(iv) no Interest Period in respect of any Eurodollar Portion
shall extend beyond the Maturity Date.
(b) [INTENTIONALLY DELETED]
(c) If upon the expiration of any Interest Period, Borrower has failed
to elect or confirm a new Interest Period or Eurodollar Base Rate to be
applicable to any Eurodollar Portion in accordance with Section 2.08, Borrower
shall be deemed to have elected to convert such Eurodollar Portion into a Base
Rate Portion effective as of the expiration date of such current Interest
Period.
Section 2.07 Minimum Amount of Eurodollar Portions. All advances,
borrowings, conversions, continuations, payments, prepayments and selection of
Interest Periods hereunder shall be made or selected so that, after giving
effect thereto, each Eurodollar Portion shall (i) have a principal amount equal
to or greater than Three Million Dollars (U.S. $3,000,000.00) and (ii) be in an
integral multiple of $100,000.00 in excess of such minimum amount. There shall
be no more than four (4) Eurodollar Portions outstanding at any one time.
Section 2.08 Conversion or Continuation. (a) (a) Subject to the other
provisions hereof, Borrower shall have the option (i) to convert at any time all
or any part of the outstanding Base Rate Portion to Eurodollar Portions, or (ii)
to continue all or any part of the outstanding Eurodollar Portions as Eurodollar
Portions for an additional Interest Period, on the expiration of the Interest
Period applicable thereto (or prior to such expiration date, provided Borrower
pays Funding Costs in connection therewith pursuant to Section 2.17); provided
that no Loan Portion may be continued as, or converted into, a Eurodollar
Portion when any Default with respect to the payment of money or any Event of
Default has occurred and is continuing or (iii) to convert at any time all or
any portion of the outstanding Eurodollar Portions to a Base Rate Portion. In
the event Eurodollar Portions are not available pursuant to Section 2.16,
Borrower shall be deemed to have elected to convert such Eurodollar Portions
into a Base Rate Portion, and if such conversion occurs prior to the expiration
date of the applicable Interest Period, Borrower shall also pay all Funding
Costs and other costs, expenses and losses in connection therewith pursuant to
Sections 2.16 and 2.17.
(b) In order to elect to convert or continue a Loan Portion under this
Section 2.08, Borrower shall deliver an irrevocable notice thereof in the form
annexed hereto as Exhibit "C" (a "Notice of Conversion or Continuation") to
Agent no later than 11:00 A.M., New York City time, (which notice may be by
facsimile transmission provided that an original is delivered prior to the close
of business on the immediately succeeding Business Day) three (3) Business Days
prior to the proposed conversion or continuation date in the case of a
conversion to, or a continuation of, a Eurodollar Portion. A Notice of
Conversion or Continuation shall specify (v) the requested conversion or
continuation date (which shall be a Business Day), (w) the amount and Type of
the Loan Portion to be converted or continued, (x) whether a conversion or
continuation is requested, (y) in the case of a conversion to, or a continuation
of, a Eurodollar Portion, the requested Interest Period and (z) the Contract
Rate applicable to the Loan Portion to be converted or continued as previously
quoted by Agent.
30
Section 2.09 Voluntary Reduction of Facility Amount; Termination of
Facility Amount.
(a) Upon at least three (3) Business Days' prior irrevocable written
notice annexed hereto as Exhibit "D" (or telephonic notice promptly confirmed in
writing) to Agent, Borrower shall have the right, without premium or penalty to
permanently reduce the Facility Amount, provided that (a) Borrower may not
reduce the Facility Amount below the aggregate principal amount outstanding
under the Loan at the time of such requested reduction, (unless Borrower
simultaneously prepays the Loan to the extent necessary so that the aggregate
principal amount outstanding does not exceed such reduced Facility Amount,
together with any applicable Funding Costs and accrued interest as a result of
such prepayment), (b) any such partial reduction shall be in the minimum
aggregate amount of Five Million Dollars (U.S. $5,000,000.00) or any integral
multiple of One Million Dollars (U.S. $1,000,000.00) in excess thereof, and (c)
Borrower may not reduce the Facility Amount to an amount less than Twenty Five
Million Dollars (U.S. $25,000,000.00) unless the Loan is terminated and prepaid
in full pursuant to Section 2.09(b). Any reduction of the Facility Amount shall
be permanent and be applied pro rata to Lender's and each Co-Lender's respective
percentage interest in the Loan.
(b) Upon at least three (3) Business Days prior irrevocable written
notice to Agent, Borrower shall have the right to terminate the Loan, this
Agreement and reduce the Facility Amount to zero, provided that Borrower, on the
date specified in such notice, pays to Agent, on behalf of the Co-Lenders, the
entire outstanding principal balance of the Loan, together with all interest
accrued and unpaid thereon, all Funding Costs and all other sums due under the
Note, this Agreement and the other Loan Documents; upon such termination, Lender
and the Co-Lenders shall have no further obligation to make any Advances.
Section 2.10 Principal Payments. Borrower shall pay the then
outstanding principal balance of the Loan together with all accrued and unpaid
interest thereon and all other sums then due and payable under this Agreement
and the other Loan Documents on the Maturity Date.
Section 2.11 Voluntary Prepayments. Borrower shall have the right to
prepay the Loan, in whole or in part, from time to time on the following terms
and conditions: (a) Borrower shall give Agent written notice (or telephonic
notice promptly confirmed in writing), in the form attached hereto as Exhibit E,
which notice shall be irrevocable, of its intent to prepay all or a portion of
the Loan, at least three (3) Business Days prior to a prepayment of Eurodollar
Portions and all or some of the Base Rate Portion, which notice shall specify
the amount of such prepayment and what Loan Portions are to be prepaid and, in
the case of Eurodollar Portions, the specific Borrowing(s) pursuant to which
made, (b) each prepayment shall be in an aggregate principal amount of One
Million Dollars (U.S. $1,000,000.00) or any integral multiple of One Hundred
Thousand U.S. Dollars (U.S. $100,000.00) in excess thereof, and (c) prepayments
of Eurodollar Portions made pursuant to this Section on a date other than the
last day of the Interest Period applicable thereto shall be accompanied by
payment of any Funding Costs which Lender and the Co-Lenders shall incur as a
result of such early payment. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein.
31
Section 2.12 Mandatory Prepayments. (a) (a) On each day on which the
Facility Amount is reduced pursuant to the terms of this Agreement, Borrower
shall prepay the Loan to the extent, if any, that the outstanding principal
amount of the Loan exceeds such reduced Facility Amount, together with any
applicable Funding Costs and accrued interest as a result of such payment. (b)
If at any time the Advances exceed the Facility Amount, Borrower shall make a
prepayment of the Advances in the amount of such excess, and if all Advances
have been repaid, then Borrower shall deposit with Agent an amount equal to the
amount of such excess less the amount of Advances then repaid. (c) Upon a
Repayment Event in accordance with Section 6.04, Borrower shall prepay Advances
on the Business Day the net cash proceeds from such Repayment Event are received
by Borrower in an amount equal to the lesser of (i) the amount of outstanding
Advances on such Business Day and (ii) 100% of such net cash proceeds.
Section 2.13 Application of Payments and Prepayments. Unless
specifically provided otherwise, all payments and prepayments of the Loan,
whether voluntary or otherwise, shall be applied first, to unpaid Fees, any
reasonable out-of-pocket costs and expenses of Agent and any Co-Lender arising
as a result of such prepayment and any Funding Costs, second, to pay any accrued
and unpaid interest then payable with respect to the Loan, and third, to pay the
outstanding principal amount of the Loan. Payments applied to the outstanding
principal amount of the Loan shall be first applied to the Base Rate Portion of
the Loan, and then to pay the Eurodollar Portions of the Loan being repaid in
the order of such Loan Portion's maturity.
Section 2.14 Method and Place of Payment. (a) (a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Note shall be made to Agent not later than 12:00 noon, New York City
time, on the date when due and shall be made in lawful money of the United
States of America in immediately available funds at Agent's Office, and any
funds received by Agent after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day. Each payment
(including all prepayments on account of principal and interest on the Loan), to
the extent received, shall constitute payment by Borrower to each Co-Lender in
the amount of such Co-Lender's pro rata share of such payment.
(b) Except as expressly provided to the contrary in Section 2.06
hereof, whenever any payment to be made hereunder or under the Note or other
Loan Documents shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
(c) All payments made by Borrower hereunder, under the Note and the
other Loan Documents, shall be made irrespective of, and without any deduction
for, any setoff or counterclaims.
Section 2.15 Fees.
(a) On the Closing Date, Borrower shall pay to Agent the Facility Fee.
(b) Borrower shall pay to Agent a fee (the "Non-use Fee"), computed at
the per annum rate (based on a year of 360 days, for the actual number of days
elapsed) of (i) one-
32
half of one percent (0.50%) when the unfunded portion of the Facility Amount
is greater than $20,000,000 or (ii) three eighths of one percent (0.375%) when
the unfunded portion of the Facility Amount is equal to or less than
$20,000,000, multiplied by the average daily unfunded portion of the Facility
Amount from and including the Closing Date through and including the Termination
Date, payable, in arrears, on the Non-use Fee Due Date through the Termination
Date. Agent shall notify Borrower within three (3) Business Days of the last day
of the calendar quarter of the amount of the Non-Use fee then due. Each payment
of the Non-Use Fee, to the extent received by Agent, shall constitute payment by
Borrower to each Co-Lender in the amount of such Co-Lender's Pro Rata Interest
of the Non-Use Fee.
(b) Intentionally Deleted.
(c) Intentionally Deleted.
(d) Intentionally Deleted.
(e) Intentionally Deleted.
(f) Intentionally Deleted.
Section 1.02 Interest Rate Unascertainable, Increased Costs,
Illegality.
(a) In the event that Agent has determined or, with respect to any
Co-Lender, has been notified that (which determination or notice shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that by reason of any changes arising after the date
of this Agreement affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of the Eurodollar
Rate; or
(ii) at any time, that the relevant Eurodollar Rate applicable
to any of its Eurodollar Portions shall not represent the effective
pricing to Lender or the Co-Lenders for funding or maintaining its
Eurodollar Portions, or Lender and the Co-Lenders shall incur increased
costs or reduction in the amounts received or receivable hereunder in
respect of any Eurodollar Portion, in any such case because of (x) any
change since the date of this Agreement in any applicable law or
governmental rule, regulation, guideline, order, request or directive
or any interpretation thereof and including the introduction of any new
law or governmental rule, regulation, guideline, order, request or
directive (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D of the Federal Reserve Board to the extent
included in the computation of the Eurodollar Rate), whether or not
having the force of law and whether or not failure to comply therewith
would be unlawful, and/or (y) other circumstances affecting Lender, any
Co-Lender or the interbank Eurodollar market or the position of Lender
or any Co-Lender in such market; or
33
(iii) at any time, that the making or continuance by it of any
Eurodollar Portion has become unlawful in order for Lender or any
Co-Lender, in good faith, to comply with any law or governmental rule,
regulation, guideline, order, request or directive (whether or not
having the force of law and whether or not failure to comply therewith
would be unlawful), or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or has become impracticable as a result of a
contingency occurring after the date of this Agreement which materially
and adversely affects the interbank Eurodollar market;
then, and in any such event, Agent shall, promptly after making such
determination or receiving notice thereof from any Co-Lender, give notice by
telephone promptly confirmed in writing to Borrower. Thereafter (x) in the case
of clause (i) above, Borrower's right to request advances, conversions or
continuations of Eurodollar Portions shall be suspended, and any Notice of
Borrowing, or Notice of Conversion or Continuation given by Borrower with
respect to any Borrowing of Eurodollar Portions which has not yet been made
shall be deemed canceled and rescinded by Borrower, (y) in the case of clause
(ii) above, Borrower shall pay to Agent, upon such Agent's written demand
therefor to Borrower, such additional amounts (in the form of an increased rate
of interest, or a different method of calculating interest, or otherwise, as
Agent and the affected Co-Lenders shall determine) as shall be required to
compensate Lender and any Co-Lender for such increased costs or reduction in
amounts received or receivable hereunder (it being understood and agreed by the
parties hereto that in the event that Agent shall fail to notify Borrower
promptly after such determination, then Borrower shall not be liable to pay to
Agent any additional amounts relating to the period prior to Agent's notifying
Borrower, and (z) in the case of clause (iii) above, Borrower shall take one of
the actions specified in clause (b) below as promptly as possible and, in any
event, within the time period required by law. The written demand provided for
in clause (y) shall demonstrate in reasonable detail the circumstances giving
rise to such demand and the calculation of the amounts demanded; provided that
Borrower shall not be obligated to pay an amount in excess of the amount
directly attributable to the Loan hereunder (it being understood and agreed that
Agent shall not be required to deliver any documentation substantiating such
amounts).
(b) In the case of any Eurodollar Portion or requested Eurodollar
Portion affected by the circumstances described in clause (a)(ii) above,
Borrower may, and in the case of any Eurodollar Portion affected by the
circumstances described in clause (a)(iii) above, Borrower shall, either (i) if
any such Eurodollar Portion has not yet been made but is then the subject of a
Notice of Borrowing or a Notice of Conversion or Continuation, be deemed to have
canceled and rescinded such notice, or (ii) if any such Eurodollar Portion is
then outstanding, require Agent to convert each such Eurodollar Portion into a
Base Rate Portion at the end of the applicable Interest Period or such earlier
time as may be required by law, in each case by giving Agent notice (by
telephone promptly confirmed in writing) thereof within two (2) Business Days
after Borrower was notified by Agent pursuant to clause (a) above.
(c) In the event that Agent determines at any time following the giving
of notice based on the conditions described in clause (a)(i) above that such
conditions no longer exist, Agent shall promptly give notice thereof to
Borrower, whereupon Borrower's right to request Eurodollar Portions from Agent
and Lender's and any Co-Lender's obligation to make
34
Eurodollar Portions shall be automatically restored and until such time as
Borrower has delivered a Notice of Conversion or Continuation, the entire Loan
shall be deemed to be a Eurodollar Portion with an Interest Period of one month
at a Contract Rate determined as of the date that Eurodollar Portions are again
available to Borrower.
(d) In the event that Agent determines at any time following its giving
of a notice based on the conditions described in clause (a)(iii) above that such
conditions no longer exist, Agent shall promptly give notice thereof to
Borrower, whereupon Borrower's right to request Eurodollar Portions from Agent
and Lender's and any Co-Lender's obligation to make Eurodollar Portions shall be
automatically restored and until such time as Borrower has delivered a Notice of
Conversion or Continuation, the entire Loan shall be deemed to be a Eurodollar
Portion with an Interest Period of one month at a Contract Rate determined as of
the date that Eurodollar Portions are again available to Borrower.
(e) The amount of any increased costs or reductions in amounts referred
to in Section 2.16(a)(ii) with respect to Lender and each Co-Lender shall be
based on the assumption that Lender and any Co-Lender funded all of its
Eurodollar Portions in the interbank Eurodollar market, although the parties
hereto agree that Lender or Co-Lender may fund all or any portion of a
Eurodollar Portion, in any manner it independently determines. For purposes of
any demand for payment made by Agent under Sections 2.16(a)(ii) or 2.18, in
attributing Lender's or any Co-Lender's general costs relating to eurocurrency
operations or its commitments or customers, or in averaging any costs over a
period of time, Agent and the affected Co-Lender may use any reasonable
attribution and/or averaging method which it deems appropriate, reasonable and
practical. The agreements in this Section 2.16 shall survive the termination of
this Agreement and the payment of the Note and all other Obligations.
Section 2.17 Funding Losses. Borrower shall compensate Lender and the
Co-Lenders for all reasonable losses, expenses and liabilities, to the extent
actually incurred (including, without limitation, any loss, expense or liability
incurred by Lender or any Co-Lender in connection with the liquidation or
reemployment of deposits or funds required by it to make or carry its Eurodollar
Portions), excluding loss of anticipated profits ("Funding Costs"), that Lender
or any Co-Lender sustains: (a) if for any reason (other than a default by Agent
or any Co-Lender) a Borrowing of, or conversion from or into, or a continuation
of, Eurodollar Portions does not occur on a date specified therefor in a Notice
of Borrowing or Notice of Conversion or Continuation (whether or not rescinded,
canceled or withdrawn or deemed rescinded, canceled or withdrawn, pursuant to
Section 2.16(a) or 2.16(b) or otherwise), (b) if any prepayment (whether
voluntary or mandatory), repayment (including, without limitation, payment after
acceleration) or conversion of any of its Eurodollar Portions occurs on a date
which is not the last day of the Interest Period applicable thereto, (c) if any
prepayment of any of its Eurodollar Portions is not made on any date specified
in a notice of prepayment given by Borrower, or (d) as a consequence of any
default by Borrower in repaying its Eurodollar Portions or any other amounts
owing hereunder in respect of its Eurodollar Portions when required by the terms
of this Agreement. Borrower shall pay such Funding Costs on the date specified
for conversion or continuation of any Eurodollar Portion, the date of prepayment
or repayment of any Eurodollar Portion under clause (b) or (c) above, or within
five (5) Business Days of written demand therefor by Agent with respect to
clause (d) above. Calculation of all amounts payable to Agent under this Section
2.17 shall be made on the assumption that Lender and each Co-Lender has
35
funded its relevant Eurodollar Portion through (i) the purchase of a Eurodollar
deposit bearing interest at the Eurodollar Rate in an amount equal to the amount
of such Eurodollar Portion with a maturity equivalent to the Interest Period
applicable to such Eurodollar Portion, and (ii) the transfer of such Eurodollar
deposit from an offshore office of Lender or any Co-Lender to a domestic office
of Lender and the Co-Lenders in the United States of America, provided that
Lender and the Co-Lenders may fund their Eurodollar Portions in any manner that
they in their sole discretion choose and the foregoing assumption shall only be
made in order to calculate amounts payable under this Section 2.17. Agent shall
provide Borrower with a statement detailing the basis for requesting such
amounts and the calculation thereof, and such statement shall, absent manifest
error, be final and conclusive and binding upon Borrower and all Loan Parties).
The agreements in this Section 2.17 shall survive the termination of this
Agreement and the payment of the Note and all other Obligations.
Section 2.18 Increased Capital. With respect to each Eurodollar
Portion, if Agent shall have determined (or received notice from any Co-Lender
of its determination that) in good faith, that compliance with any applicable
law, rule, regulation, guideline, request or directive (whether or not having
the force of law) which shall be imposed, issued or amended from and after the
date of this Agreement by any governmental authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital or assets of Lender or any Co-Lender as a consequence of its commitments
or obligations hereunder, then from time to time, upon Agent's delivering a
written demand therefor to Borrower, setting forth its reasonable calculations,
Borrower shall pay to Agent on demand such additional amount or amounts
("Increased Capital Costs") as will compensate Lender and any Co-Lender for such
reduction. Such calculations may use any reasonable averaging and attribution
methods selected by Agent and the affected Co-Lenders. The agreements in this
Section 2.18 shall survive the termination of this Agreement and the payment of
the Note and all other Obligations.
Section 2.19 Taxes. (a) (a) All payments made by Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any governmental
authority excluding, in the case of Agent or any Co-Lender, net income and
franchise taxes imposed on Agent or any Co-Lender by the jurisdiction under the
laws of which Agent or any Co-Lender is organized or any political subdivision
or taxing authority thereof or therein, or by any jurisdiction in which Agent's
or Co-Lender's Domestic Lending Office or Eurodollar Lending Office, as the case
may be, is located or any political subdivision or taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes").
(b) Notwithstanding anything to the contrary herein, if at any time or
from time to time Taxes are required to be deducted or withheld from the
payments required to be made to Lender or any Co-Lender hereunder solely by
reason of a Change in Law after the date hereof (other than as a result of any
transfer or assignment of any of the obligations of Borrower hereunder), all
payment required to be made by Borrower hereunder (including any additional
amounts that may be payable pursuant to this clause (b) shall be increased to
the extent required so that the net amount received by Lender or any Co-Lender
after the deduction or withholding of Taxes imposed solely by reason of a Change
in Law after the date hereof will be not less than
36
the full amount that would otherwise have been receivable had no such deduction
or withholding been imposed by reason of such Change in Law. In the event that
this clause (b) shall be operative, Borrower shall promptly provide to Agent
evidence of payment of such Taxes to the appropriate taxing authority and shall
promptly forward to Agent any official tax receipts or other documentation with
respect to the payment of the Taxes as may be issued by the taxing authority. If
Borrower fails to pay any Taxes when due to the appropriate taxing authority or
fails to remit to Agent the required receipts or other required documentary
evidence, Borrower shall indemnify Agent and any Co-Lender for any incremental
taxes, interest or penalties that may become payable by Lender or Co-Lender as a
result of any such failure. The agreements in this Section 2.19 shall survive
the termination of this Agreement and the payment of the Note and all other
Obligations.
(c) For purposes of this Section 2.19 the term "Change in Law" shall
mean the following events: (i) the enactment of any legislation by the United
States, including the enactment, amendment or modification of a treaty; (ii) the
lapse, by its terms, of any law of the United States or any treaty to which the
United States is a party; or (iii) the promulgation of any temporary or final
regulation under the Code.
(d) Each Co-Lender that is not incorporated under the laws of the
United States of America or a state thereof agrees that, prior to the first date
on which any payment is due to it hereunder, it will deliver to Borrower and
Agent (i) two duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case may be, certifying
in each case that such Co-Lender is entitled to receive payments under this
Agreement and the Note payable to it, without deduction or withholding of any
United States federal income taxes, and (ii) an Internal Revenue Service Form
W-8 or W-9 or successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax. Each Co-Lender required to
deliver to Borrower and Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant
to the preceding sentence further undertakes to deliver to Borrower and Agent
two further copies of the said letter and Form 1001 or 4224 and Form W-8 or W-9,
or successor applicable forms, or other manner of certification, as the case may
be, on or before the date that any such letter or form expires (which, in the
case of the Form 4224, is the last day of each U.S. taxable year of the non-U.S.
Co-Lender) or becomes obsolete or after the occurrence of any event requiring a
change in the most recent letter and form previously delivered by it to Borrower
and Agent, and such other extensions or renewals thereof as may reasonably be
requested by Borrower or Agent, certifying in the case of a Form 1001 or 4224
that such Co-Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless in
any such case an event (including, without limitation, any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Co-Lender from duly completing and delivering any such letter or
form with respect to it and such Co-Lender advises Borrower and Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax. If a Co-Lender fails to
provide a duly completed Form 1001 or 4224 or other applicable form and, under
applicable law, in order to avoid liability for Taxes, Borrower is required to
withhold on payments made to such Co-Lender that has failed to provide the
applicable form, Borrower shall be entitled to withhold the appropriate amount
of Taxes. In such
37
event, Borrower shall promptly provide to such Co-Lender or Agent evidence of
payment of such Taxes to the appropriate taxing authority and shall promptly
forward to such Co-Lender or Agent any official tax receipts or other
documentation with respect to the payment of the Taxes as may be issued by the
taxing authority.
Section 2.20 Use of Proceeds and Limitations on Advances.
(a) Borrower shall use the proceeds of the Loan solely to provide
short-term financing for (i) working capital in an amount not exceed $10,000,000
and (ii) the acquisition of Permitted New Investments (excluding Permitted Stock
Repurchases).
(b) The aggregate amount of any single Advance made hereunder shall not
exceed with respect to an acquisition by Borrower or any Loan Party of an Asset,
an amount equal to the acquisition cost of such Asset (including acquisition
cost of planned FF&E), as verified by Borrower to the satisfaction of Agent,
less the amount of any mortgage indebtedness secured by such Asset that will
remain outstanding following such acquisition.
Section 2.21 Intentionally Deleted.
Section 2.22 Intentionally Deleted.
Section 2.23 Intentionally Deleted.
Section 2.24 Decision Making by Agent. Borrower acknowledges and agrees
that all approvals, consents, requests, calculations, determinations, decisions,
waivers, amendments and modifications that Agent is entitled to make under this
Agreement are subject to the approval or consent of some or all of the
Co-Lenders pursuant to the terms and conditions of the Intercreditor Agreement,
whether or not such approval or consent is expressly stated herein or otherwise.
Section 2.25 Intentionally Deleted.
Section 2.26 Pro Rata Interests. The Pro Rata Interest of each
Co-Lender is set forth on Schedule 11. The liabilities of each of the Co-Lenders
are several and not joint, and each Co-Lender's obligations to Borrower under
this Agreement shall be reduced by the amount of any Assignment and Assumption.
No Co-Lender shall be responsible for the obligations of any other Co-Lender.
Each Co-Lender shall be liable to Borrower only for their respective
proportionate shares of the Loan. If for any reason any of the Co-Lenders shall
fail or refuse to abide by their obligations under this Agreement, the other
Co-Lenders shall not be relieved of their obligations, if any, hereunder,
including their obligations to make their pro rata share of any Advance on the
date set forth for such Advance in the Notice of Borrowing; notwithstanding the
foregoing, the Co-Lenders shall have the right, but not the obligation, at their
sole option, to make the defaulting Co-Lender's pro rata share of such Advance
pursuant to the terms of the Intercreditor Agreement.
Section 2.27 Extension of Maturity Date. Provided no Event of Default
has occurred and is continuing at the time of exercise or the commencement of
the Extension Period, Borrower shall have one (1) option to extend the Maturity
Date with respect to the Facility for an
38
additional period of one (1) year (an "Extension Period"), such extended term to
begin respectively upon the Maturity Date. If Borrower shall elect to exercise
the aforesaid option, it shall do so by giving written notice to the Agent on or
prior to the date that is ninety (90) days prior to the Maturity Date (the
"Notice"). Upon receipt by the Agent of such Notice, the Maturity Date shall be
extended, but only upon the following terms and conditions:
(i) On the first day of the Extension Period, Borrower shall
pay to the Agent on behalf of the Co-Lenders an extension fee equal to
0.25% of the aggregate amount of the Co-Lender's Commitments hereunder
as of the original Maturity Date;
(ii) No Event of Default shall have occurred and be
continuing;
(iii) If the Borrower is obligated to pay any Advances, the
Borrower shall have repaid such Advances;
(iv) The representations and warranties contained in Article 4
hereof remain true and correct as of the original Maturity Date or as
of the first day of the Extension Period; and
(v) Subject to Section 2.12 hereof, if the aggregate amount of
the Co-Lenders' Commitments have not already been so reduced, then on
the following dates the aggregate amount of the Co-Lenders' Commitments
shall be reduced to the following respective amounts with each
Co-Lender's Commitment being reduced in accordance with such
Co-Lender's Pro-Rata Interest of the aggregate Commitment reduction:
Date Aggregate Co-Lenders' Commitments
--------------------------------------- ---------------------------------
original Maturity Date (August 1, 2003) $35,000,000
November 1, 2003 $34,500,000
February 1, 2004 $34,000,000
May 1, 2004 $33,500,000
Section 2.28 Intentionally Deleted.
SECTION 3. CONDITIONS PRECEDENT.
Section 3.01 Conditions Precedent to the Initial Advance. The
obligation of Lender and each Co-Lender to make the initial Advance of the Loan
(or its pro rata share thereof) on the Closing Date is subject to the
satisfaction by Borrower on the Closing Date of the following conditions
precedent:
(a) Loan Documents.
(i) Line of Credit Agreement. Borrower shall have executed and
delivered this Agreement to the Agent.
(ii) The Note. Borrower shall have executed and delivered to
the Agent, individually as a Co-Lender and as Agent for one or more
Co-Lenders, the Note in the amount, maturity and as otherwise provided
herein.
39
(iii) The Security Documents. The Security Documents,
including, without limitation, the Owned Hospitality Property Security
Documents relating to the Owned Hospitalities Properties, to the extent
applicable, shall have been executed by the Borrower and the other
Guarantors granting to the Agent for the benefit of the Co-Lenders an
Acceptable Lien in the Collateral, together with stock certificates,
stock powers executed in blank, UCC-1 financing statements and any
other documents, agreements or instruments necessary or desirable to
create an Acceptable Lien in the Collateral (as of the Closing Date,
there are no Owned Hospitality Property Security Documents).
(iv) Intentionally Deleted.
(v) Environmental Indemnity. Borrower and the Guarantors shall
have executed and delivered to the Agent, individually as a Co-Lender
and as Agent for one or more Co-Lenders, the Environmental Indemnity.
(vi) Intentionally Deleted.
(vii) Guaranty. The Guarantors shall have executed and
delivered the Guaranty to the Syndication Agent.
(viii) Intentionally Deleted.
(ix) Intentionally Deleted.
(x) Ground Leases. If the Borrower or any other Loan Party
owns a leasehold estate in an Owned Hospitality Property, (A) a
certified copy of the Ground Lease for such Owned Hospitality Property,
together with all amendments and modifications thereto and a recorded
memorandum thereof, which Ground Lease shall be satisfactory in all
respects to Agent and all of the Co-Lenders in their sole discretion
and (B) a Ground Lease Estoppel substantially in the form of Exhibit L,
to be executed by the fee owner and ground lessor of such Owned
Hospitality Property, which estoppel shall be satisfactory to Agent and
all of the Co-Lenders in their sole discretion.
(xi) Intentionally Deleted.
(xii) Intentionally Deleted.
(xiii) Intentionally Deleted.
(b) Opinions of Counsel. The Agent shall have received legal opinions,
dated the Closing Date, from counsel to Borrower and the Guarantors, in form and
substance satisfactory to the Agent and all of the Co-Lenders and its counsel,
that, among other things: (i) this Agreement and the Loan Documents have been
duly authorized, executed and delivered by Borrower and the Guarantors and are
valid and enforceable in accordance with their terms, subject to bankruptcy and
equitable principles; (ii) that Borrower and the Guarantors are qualified to do
business and in good standing under the laws of the jurisdiction in which it is
organized, in which it is transacting business and where the Hospitality
Properties owned, leased
40
or managed by Borrower or its Guarantors are located; and (iii) the Loan does
not violate any usury laws. Notwithstanding the foregoing, Borrower shall not be
required to deliver to Agent the legal opinions referred to in (i) and (ii)
above with respect to CRS/Burlington Corporation, a Guarantor.
(c) Organizational Documents. The Agent shall have received (i) with
respect to Borrower and each of the Guarantors which is a corporation, the
certificate of incorporation of Borrower and such Loan Party, as amended,
modified or supplemented to the Closing Date, certified to be true, correct and
complete by the appropriate Secretary of State as of a date not more than thirty
(30) days prior to the Closing Date, together with a good standing certificate
from such Secretary of State and a good standing certificate from the
Secretaries of State (or the equivalent thereof) of each other State in which
each Hospitality Property owned, leased or managed by Borrower or any Guarantor
is located and in which each of them is required to be qualified to transact
business, each to be dated a date not more than thirty (30) days prior to the
Closing Date (or each subject to a "bringdown" certificate, acceptable to Agent,
dated a date not more than thirty (30) days prior to the Closing Date), (ii)
with respect to Borrower and each of the Guarantors which is a limited
partnership, the agreement of limited partnership of such Person, as amended,
modified or supplemented to the Closing Date, certified to be true, correct and
complete by a general partner of such Person, together with a copy of the
certificate of limited partnership of such entity, as amended, modified or
supplemented to the Closing Date, certified to be true, correct and complete by
the appropriate Secretary of State as of a date not more than thirty (30) days
prior to the Closing Date, together with a good standing certificate from such
Secretary of State and a good standing certificate from the Secretary of State
(or the equivalent thereof) of each other State in which each such Person is
required to be qualified to transact business, each to be dated not more than
thirty (30) days prior to the Closing Date (or each subject to a "bringdown"
certificate, acceptable to Agent, dated a date not more than thirty (30) days
prior to the Closing Date), (iii) with respect to Borrower and each of the
Guarantors which is a general partnership, the agreement of general partnership
of Borrower and such Loan Party, as amended, modified or supplemented to the
Closing Date, certified to be true, complete and correct by a general partner of
Borrower and such Loan Party, together with a copy of Borrower's and of such
Loan Party's doing business certificate (or the equivalent thereof), as amended,
modified or supplemented to the Closing Date, certified to be true, correct and
complete by the appropriate Secretary of State (or County Clerk's or Recorder's
Office, as the case may be) as of a date not more than thirty (30) days prior to
the Closing Date, in each case reasonably satisfactory to the Agent and all of
the Co-Lenders and (iv) with respect to Borrower and each of the Guarantors
which is a limited liability company, the operating agreement of such Person, as
amended, modified or supplemented to the Closing Date, certified to be true,
correct and complete by a managing member of such Person, together with a copy
of the articles of formation or organization of such entity, as amended,
modified or supplemented to the Closing Date certified to be true, correct and
complete by the appropriate Secretary of State as of a date not more than thirty
(30) days prior to the Closing Date, together with a good standing certificate
from such Secretary of State and a good standing certificate from the Secretary
of State (or the equivalent thereof) of each other State in which each such
Person is required to be qualified to transact business, each to be dated not
more than thirty (30) days prior to the Closing (or each subject to a
"bringdown" certificate, acceptable to Agent, dated a date not more than thirty
(30) days prior to the Closing Date).
41
(d) Certified Resolutions, etc. The Agent shall have received a
certificate of the secretary or assistant secretary of Borrower and each of the
Loan Parties which is a corporation and dated the Closing Date, certifying (i)
the names and true signatures of the incumbent officers of such Person
authorized to sign the applicable Loan Documents, (ii) the by-laws of such
Person as in effect on the Closing Date, (iii) the resolutions of such Person's
board of directors approving and authorizing the execution, delivery and
performance of all Loan Documents executed by such Person, and (iv) that there
have been no changes in the certificate of incorporation of such Person since
the date of the most recent certification thereof by the appropriate Secretary
of State.
(e) Intentionally Deleted.
(f) Insurance. The Agent shall have received certificates of insurance
demonstrating insurance coverage in respect of each of the Hospitality
Properties owned, leased and managed by Borrower and its Subsidiaries for which
such insurance coverage is provided by the Borrower's insurance program in
compliance with the terms, provisions and conditions of Section 5.03.
(g) Lien Search Reports. The Agent shall have received satisfactory
(i.e., showing no Liens other than Permitted Liens) UCC searches, together with
tax lien, judgment and litigation searches conducted in the appropriate
jurisdictions by a search firm acceptable to the Agent and all of the Co-Lenders
with respect to the Owned Hospitality Properties, Borrower and each of the
Guarantors (collectively, the "UCC Searches").
(h) Intentionally Deleted.
(i) Intentionally Deleted.
(j) Title Insurance Policies; Surveys. To the extent that the Borrower
or any of its Subsidiaries is providing a mortgage/deed of trust/deed to secure
debt in respect of any Owned Hospitality Property in accordance with this
Agreement, the Agent shall have received Title Policies issued by a title
insurance company satisfactory to the Agent and all of the Co-Lenders, in form
and substance satisfactory to the Agent and all of the Co-Lenders, insuring the
Borrower's or the appropriate Guarantor's good and marketable fee simple or
leasehold title to any Owned Hospitality Property, together with a title "bring
down" or lien search showing no liens or encumbrances other than Permitted Liens
on any Owned Hospitality Properties and (ii) a recent survey with respect to any
of the Owned Hospitality Properties certified to Agent, its successors and
assigns, dated within 60 days prior to the Closing Date prepared by a land
surveyor licensed in each of the states where any Owned Hospitality Properties
are located pursuant to the then current ALTA/ACSM standards for title surveys
and otherwise reasonably satisfactory to the Agent.
(k) Financial Statements. The Agent shall have received the (i)
consolidated audited financial statements of Borrower and their Subsidiaries for
the most recently ended fiscal year of Borrower and their Subsidiaries and the
unaudited consolidated financial statements of Borrower and their Subsidiaries
for each fiscal quarter of Borrower and their Subsidiaries ending since the end
of such entity's most recent fiscal year, (ii) for each Hospitality Property
leased or
42
managed by Borrower or its Subsidiary, the annual worksheet for the calculation
of management base and incentive fees for Borrower's most recent fiscal year and
to the extent available, the operating and capital budget approved by Borrower
or the appropriate Loan Party for the current fiscal year, and (iii) for each
Hospitality Property owned by Borrower or its Subsidiaries, annual operating
statements and occupancy statements for Borrower's most recent fiscal year
together with the current year to date operating statements and occupancy
statements and the operating and capital budget approval by Borrower or the
appropriate Loan Party. Such financial statements and worksheets shall be
reasonably acceptable to the Agent and all of the Co-Lenders in their sole
discretion, and each such statement and worksheet shall be certified by a
Responsible Officer of Borrower that, as of the Closing Date, there has been no
material adverse change in the financial condition of any Owned Hospitality
Property or Borrower or the respective Loan Parties since the date thereof.
(l) Environmental Matters. The Agent shall have received Environmental
Reports with respect to each of the Owned Hospitality Properties each of which
shall be in form and substance reasonably satisfactory to the Agent and all of
the Co-Lenders.
(m) Fees and Operating Expenses. The Agent shall have received, for its
and the Co-Lenders' account as applicable, all Transaction Costs, the Facility
Fee, the Fees and other fees and expenses due and payable hereunder on or before
the Closing Date, including, without limitation, the costs of all engineering,
environmental and real property appraisal reports required to be delivered
hereunder, and the fees and expenses accrued through the Closing Date, of
counsel retained by the Agent and the Co-Lenders.
(n) Consents, Licenses, Approvals, etc. The Agent shall have received
certified copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by Borrower and the
other Loan Parties, and the validity and enforceability, of the Loan Documents,
or in connection with any of the Transactions, and such consents, licenses and
approvals shall be in full force and effect.
(o) Appraisals. To the extent that the Borrower or any of its
Subsidiaries is providing a mortgage/deed of trust/deed to secure debt in
respect of any Owned Hospitality Property in accordance with the terms of this
Agreement, the Agent shall have received Appraisals acceptable to the Agent and
all of the Co-Lenders with respect to any of the Owned Hospitality Properties
dated within six (6) months prior to delivery.
(p) Engineering Reports. To the extent that the Borrower or any of its
Subsidiaries is providing a mortgage/deed of trust/deed to secured debt in
respect of any Owned Hospitality Property in accordance with the terms of this
Agreement, the Agent shall have received engineering reports dated within six
(6) months prior to the Closing Date and in form and substance satisfactory to
Agent and all of the Co-Lenders with respect to any of the Owned Hospitality
Properties; such engineering reports shall be prepared in accordance with the
Agent's then current guidelines for property inspection reports by licensed
engineers acceptable to Agent and all of the Co-Lenders, and such report should
state, among other things, that each Owned Hospitality Property is in good
condition and repair, free from damage and waste (reasonable wear and tear
excepted) and is in material compliance with the Americans with Disabilities Act
(the "Engineering Reports").
43
(q) Zoning Compliance. To the extent that the Borrower or any of its
Subsidiaries is providing a mortgage/deed of trust/deed to secure debt in
respect of any Owned Hospitality Property in accordance with the terms of this
Agreement, the Agent shall have received evidence reasonably satisfactory to the
Agent and all of the Co-Lenders to the effect that each of the Owned Hospitality
Properties and the use thereof are in substantial compliance with the applicable
zoning, subdivision, and all other applicable federal, state or local laws and
ordinances affecting each of the Owned Hospitality Properties, and that all
building and operating licenses and permits necessary for the use and occupancy
of each of the Owned Hospitality Properties as first class hotels including, but
not limited to, current certificates of occupancy, if available, have been
obtained and are in full force and effect.
(r) Leases. To the extent that the Borrower or any of its Subsidiaries
is providing a mortgage in respect of any Owned Hospitality Property in
accordance with the terms of this Agreement, the Agent shall have received
certified copies of all Leases with respect to each of the Owned Hospitality
Properties which shall be reasonably satisfactory to the Agent and all of the
Co-Lenders.
(s) Intentionally Deleted
(t) Intentionally Deleted.
(u) Representations and Warranties. The Agent shall have received a
certification by Borrower certifying that all of the representations and
warranties contained in this Agreement, the Security Instruments and the other
Loan Documents are true and correct with respect to each of the Hospitality
Properties, owned, leased or managed by Borrower or its Subsidiaries, Borrower
and each Loan Party, and that there is no Default or Event of Default hereunder.
(v) Certification as to Covenants. The Agent shall have received a
certificate of a Responsible Officer of Borrower together with other evidence
satisfactory to the Agent and all of the Co-Lenders, which shall include the
financial covenant calculations, that as of the Closing Date, the covenants set
forth in Sections 5.33 to 5.41 hereof are satisfied and that, as of the Closing
Date and after giving effect to the Transaction to be consummated thereon, there
is no Default or Event of Default hereunder.
(w) Certification as to Applicable Laws. The Agent shall have received
such evidence as the Agent and all of the Co-Lenders shall deem reasonably
necessary to establish (including, without limitation, a certificate of
Borrower) that each Owned Hospitality Property is in material compliance with
all Applicable Laws as of the Closing Date.
(x) Existing Participating Leases. The Agent shall have received
certified copies of all Existing Participating Leases which shall be reasonably
satisfactory to the Agent and all of the Co-Lenders.
(y) Existing Management Agreements. The Agent shall have received
certified copies of all Existing Management Agreements which shall be reasonably
satisfactory to Agent and all of the Co-Lenders.
44
(z) Additional Matters. The Agent shall have received such other
certificates, opinions, documents and instruments relating to the Transactions
as may have been reasonably requested by the Agent and any of the Co-Lenders,
and all corporate and other proceedings and all other documents (including,
without limitation, all documents referred to herein and not appearing as
exhibits hereto) and all legal matters in connection with the Transactions shall
be satisfactory in form and substance to the Agent and all of the Co-Lenders.
Section 3.02 Conditions Precedent to All Advances of the Loan. The
obligation of Lender and each Co-Lender to make any Advance under the Loan
(including the initial Advance made on or after the Closing Date) (or its pro
rata share thereof) is subject to the satisfaction on the date such Advance is
made of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties
contained herein and in the other Loan Documents (other than representations and
warranties which expressly speak only as of a different date) shall be true and
correct in all material respects on such date both before and after giving
effect to the making of such Advance.
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date either before or after giving
effect to the making of such Advance and Borrower shall be in compliance with
the covenants set forth in Sections 5.33 to 5.41.
(c) No Injunction. No law or regulation shall have been adopted, no
order, judgment or decree of any governmental authority shall have been issued,
and no litigation shall be pending or threatened, which in the good faith
judgment of Agent would enjoin, prohibit or restrain, or impose or result in the
imposition of any material adverse condition upon, the making of the Advances or
Borrower's or any Guarantor's obligation to pay (or Agent or any Co-Lender's
rights to receive payment) of the Loan and the other Obligations or the
consummation of the Transactions.
(d) No Material Adverse Change. No event, act or condition shall have
occurred after the Closing Date which, in the judgment of Agent and the Majority
Co-Lenders has had or could have a Material Adverse Effect.
(e) Notice of Borrowing. Agent shall have received a fully executed
Notice of Borrowing or Notice of Conversion or Continuation, as the case may be,
in respect of the Advance to be made on such date.
(f) No Litigation. Except for matters identified on Schedule 5 (as the
same may be amended or supplemented), no actions, suits or proceedings shall be
pending or threatened with respect to the Transactions or the Loan Documents,
Borrower or any of the other Loan Parties, or with respect to the Hospitality
Properties owned, leased or managed by Borrower or its Subsidiaries, that could,
individually or in the aggregate, result in a Material Adverse Effect and
matters identified on Schedule 5, individually or in the aggregate, do not
result in a Material Adverse Effect.
(g) Title Insurance Searches. Agent or any Co-Lender may elect, in its
reasonable discretion, to perform or have performed Title Searches with respect
to some or all of
45
the Owned Hospitality Properties on an annual basis at Borrower's sole cost and
expense. The results of all such Title Searches shall be satisfactory to Agent
in its sole discretion.
(h) UCC Searches. Agent shall have received satisfactory (i.e., showing
no Liens other than Permitted Liens) UCC searches, together with tax lien,
judgment and litigation searches conducted in the appropriate jurisdictions and
as requested by Agent performed by a search firm acceptable to Agent with
respect to the Owned Hospitality Properties, Borrower and each of the
Guarantors.
(i) Insurance. The certificates of insurance delivered to Agent in
accordance with Section 3.01 (i) hereof shall name Agent as additional insured
and loss payee with respect to Owned Hospitality Properties (other than the
Pittsburgh Airport Residence Inn, Pittsburgh, Pennsylvania).
(j) Additional Matters. Agent shall have received such other
certificates, opinions, documents and instruments relating to the Transactions
as may have been reasonably requested by any of the Co-Lenders and all corporate
and other proceedings and all other documents (including, without limitation,
all documents referred to herein and not appearing as exhibits hereto) and all
legal matters in connection with the Transactions shall be satisfactory in form
and substance to Agent and the Majority Co-Lenders.
Section 3.03 Acceptance of Borrowings. The acceptance by Borrower of
the proceeds of each Advance shall constitute a representation and warranty by
Borrower to Agent and the Co-Lenders that all of the conditions required to be
satisfied under this Section 3 in connection with the making of such Advance and
all of the terms and provisions of this Agreement have been satisfied.
Section 3.04 Sufficient Counterparts. All certificates, agreements,
legal opinions and other documents and papers referred to in this Section 3,
unless otherwise specified, shall be delivered to Agent and shall be
satisfactory in form and substance to Agent and all of the Co-Lenders in their
sole discretion (unless the form thereof is prescribed herein) and Borrower
shall deliver sufficient counterparts of all such materials for distribution to
Agent and each Co-Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In order to induce Agent, Lender and the Co-Lender to enter into this
Agreement and to make the Loan, Borrower and the other Loan Parties make the
following representations and warranties, which shall survive the execution and
delivery of this Agreement and the Note and the making of the Loan and each
Advance:
Section 4.01 Organizational Status. Each of Borrower and the other Loan
Parties (a) is a duly organized and validly existing corporation or partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its incorporation or formation, (b) has all
requisite power and authority, to own its property and Assets (including the
Hospitality Properties owned, leased or managed by Borrower or its Subsidiaries)
and to transact the business in which it is engaged or presently proposes to
engage (including this Transaction) and (c) has duly qualified and is authorized
to do business and is in good standing as a foreign corporation or foreign
partnership, as the case may be, in every
46
jurisdiction in which it owns, leases or manages real property (including the
Hospitality Properties owned, leased or managed by Borrower or its Subsidiaries)
or in which the nature of its business requires it to be so qualified.
Section 4.02 Power and Authority. Each of Borrower and the other Loan
Parties has the power and authority to execute, deliver and carry out the terms
and provisions of each of the Loan Documents to which it is a party and has
taken all necessary action, to authorize the execution, delivery and performance
by it of such Loan Documents. Each of Borrower and the other Loan Parties has
duly executed and delivered each such Loan Document, and each such Loan Document
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms, except as enforcement may be limited by applicable insolvency,
bankruptcy or other laws affecting creditors' rights generally, and by general
principles of equity whether enforcement is sought in a proceeding in equity or
at law.
Section 4.03 No Violation. Neither the execution, delivery or
performance by Borrower or any other Loan Party of the Loan Documents to which
it is a party, nor the compliance by such Person with the terms and provisions
thereof nor the consummation of the Transactions, (a) will contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, or (b) will
conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the Assets (including the Hospitality Properties owned, leased or managed
by Borrower or its Subsidiaries) of Borrower or any of the other Loan Parties
(or of any partnership of which such Person is a partner) pursuant to the terms
of any indenture, mortgage, deed of trust, agreement or other instrument to
which Borrower or any of the other Loan Parties (or of any partnership of which
such Person is a partner) is a party or by which it or any of its Assets
(including the Hospitality Properties owned, leased or managed by Borrower or
its Subsidiaries) is bound or to which it may be subject, or (c) will, with
respect to Borrower or any Loan Party which is a partnership, violate any
provisions of the partnership agreement of such Person (or the partnership
agreement of any partnership of which such Person is a partner), or (d) will,
with respect to the Borrower or any of the Loan Parties which is a corporation,
violate any provision of the Certificate of Incorporation or By-Laws of such
Person.
Section 4.04 Litigation. Except as set forth on Schedule 5, there are
no actions, suits or proceedings, judicial, administrative or otherwise, pending
or, to Borrower's actual knowledge, threatened with respect to any of the
Transactions or Loan Documents, Borrower any of the other Loan Parties, or with
respect to any Assets (including the Hospitality Properties owned, leased or
managed by Borrower or its Subsidiaries or Unconsolidated Entities) that could,
individually or in the aggregate, result in a Material Adverse Effect. All
matters set forth on Schedule 5 do not, individually or in the aggregate, result
in a Material Adverse Effect.
Section 4.05 Financial Statements; Financial Condition; etc. The
financial statements, worksheets, and operating statements, as applicable,
delivered pursuant to Section 3.01(k) were prepared in accordance with GAAP
consistently applied and fairly present the financial condition and the results
of operations of Borrower and its Subsidiaries and their Assets (including
Hospitality Properties owned, leased or managed by Borrower or its Subsidiaries,
as applicable) covered thereby on the dates and for the periods covered thereby,
except as disclosed
47
in the notes thereto and, with respect to interim financial statements,
worksheets and operating statements subject to normally recurring year-end
adjustments. Neither the Borrower nor any of its Subsidiaries has any material
liability (contingent or otherwise) not reflected in such financial statements
worksheets, or operating statements or in the notes thereto. There has been no
adverse change in any condition, fact, circumstance or event that would make any
such information inaccurate, incomplete or otherwise misleading or would affect
Borrower's ability to perform its obligations under this Agreement.
Section 4.06 Solvency. On the Closing Date and after and giving effect
to the Transactions, Borrower and the Loan Parties will be Solvent.
Section 4.07 Material Adverse Change. Since the date of the most recent
audited financial statements delivered pursuant to Section 3.01(j), there has
occurred no event, act or condition, and to Borrower's actual knowledge, there
is no prospective event or condition which has had, or could have, a Material
Adverse Effect.
Section 4.08 Use of Proceeds; Margin Regulations. All proceeds of each
Advance will be used by Borrower only in accordance with the provisions of
Section 2.20. No part of the proceeds of any Advance will be used by Borrower to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Advance
nor the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulations T, U or X of the Federal Reserve Board.
Section 4.09 Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required (or if required, has been obtained) to
authorize, or is required in connection with (i) the execution, delivery and
performance of any Loan Document or the consummation of any of the Transactions
or (ii) the legality, validity, binding effect or enforceability of any Loan
Document.
Section 4.10 Intentionally Deleted.
Section 4.11 Tax Returns and Payments. Borrower and the other Loan
Parties have filed all tax returns required to be filed by them for which the
filing date has passed and not been extended and has paid all taxes and
assessments payable by such Persons which have become due, other than (a) those
not yet delinquent or (b) those that are reserved against in accordance with
GAAP which are being diligently contested in good faith by appropriate
proceedings.
Section 4.12 ERISA. Neither Borrower nor any of the other Loan Parties
has any Employee Benefit Plans other than those listed on Schedule 6. No
accumulated funding deficiency (as defined in Section 412 of the Code or Section
302 of ERISA) or Reportable Event has occurred with respect to any Plan. As of
the Closing Date, the Unfunded Benefit Liabilities do not in the aggregate
exceed $500,000. Borrower, the other Loan Parties and each member of their
respective ERISA Controlled Groups have complied in all material respects with
the requirements of ERISA and the Code and plan documents for each Employee
Benefit Plan and Plans and are not in default (as defined in Section 4219(c)(5)
of ERISA) with respect to
48
payments to a Multiemployer Plan. Neither Borrower nor any of the other Loan
Parties, nor any member of their respective ERISA Controlled Groups is subject
to any present or potential withdrawal liability or annual withdrawal liability
payments, which, individually or in the aggregate, could materially adversely
affect any of such Persons. To the best knowledge of Borrower, the other Loan
Parties and their respective ERISA Controlled Groups, no Multiemployer Plan is
or is likely to be disqualified for tax purposes or in reorganization (within
the meaning of Section 4241 of ERISA or Section 418 of the Code) or is insolvent
(as defined in Section 4245 of ERISA). No material liability to the PBGC (other
than required premium payments), the Internal Revenue Service, any Plan or any
trust established under Title IV of ERISA has been, or is expected by Borrower,
the other Loan Parties, or any member of their respective ERISA Controlled
Groups to be, incurred by Borrower, the other Loan Parties, or any member of
their respective ERISA Controlled Groups. Except as otherwise disclosed on
Schedule 6 hereto, none of Borrower, the other Loan Parties, nor, any member of
their respective ERISA Controlled Groups has any contingent liability with
respect to any post-retirement benefit under any "welfare plan" (as defined in
Section 3(1) of ERISA), other than liability for continuation coverage under
Part 6 of Section B of Title I of ERISA. No lien under Section 412(n) of the
Code or 302(j) of ERISA or requirement to provide security under Section
401(a)(29) of the Code or Section 307 of ERISA has been or is reasonably
expected by Borrower, the other Loan Parties, or any member of their respective
ERISA Controlled Groups to be imposed on the assets of Borrower, the other Loan
Parties, or any member of their respective ERISA Controlled Groups. Neither
Borrower nor any other Loan Party is a party to any collective bargaining
agreement. Except as set forth in Schedule 6, neither Borrower nor any Loan
Party nor any of their ERISA Controlled Groups has engaged in any transaction
prohibited by Section 408 of ERISA or Section 4975 of the Code. As of the
Closing Date and throughout the term of the Loan, neither Borrower nor any other
Loan Party is or will be an "employee benefit plan" as defined in Section 3(32)
of ERISA, which is subject to Title I of ERISA, and none of the assets of
Borrower or any other Loan Party will constitute "plan assets" of one or more
such plans for purposes of Title I of ERISA. As of the Closing Date and
throughout the term of the Loan, neither Borrower nor any other Loan Party is or
will be a "governmental plan" within the meaning of Section 3(3) of ERISA and
neither Borrower nor any other Loan Party will be subject to state statutes
applicable to Borrower or such Loan Party regulating investments and fiduciary
obligations, of Borrower or any Loan Party with respect to governmental plans.
Section 4.13 Closing Date Transactions. On the Closing Date and
immediately prior to the making of the initial Advance hereunder, the
Transactions (other than the making of the Loan) intended to be consummated on
the Closing Date will have been consummated in accordance with the terms of the
relevant Loan Documents and in accordance with all Applicable Laws. All consents
and approvals of, and filings and registrations with, and all other actions by,
any Person required in order to make or consummate such Transactions have been
obtained, given, filed or taken and are or will be in full force and effect.
Section 4.14 Representations and Warranties in Loan Documents. All
representations and warranties made by Borrower or any other Loan Party in the
Loan Documents are true and correct in all material respects.
49
Section 4.15 True and Complete Disclosure. All factual information
(taken as a whole) furnished by or on behalf of Borrower or any other Loan Party
in writing to Agent and/or the Syndication Agent on or prior to the Closing
Date, for purposes of or in connection with this Agreement or any of the
Transactions (the "Furnished Information") is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Borrower
or any other Loan Party in writing to Agent and/or the Syndication Agent will
be, true, accurate and complete in all material respects and will not omit any
material fact necessary to make such information (taken as a whole) not
misleading on the date as of which such information is dated or furnished. As of
the Closing Date, there are no facts, events or conditions directly and
specifically affecting Borrower or any other Loan Party known to Borrower or any
other Loan Party and not disclosed to Agent and the Syndication Agent, in the
Furnished Information, in the Schedules attached hereto or in the other Loan
Documents, which, individually or in the aggregate, have or could be expected to
have a Material Adverse Effect.
Section 4.16 Ownership of Assets; Existing Security Instruments.
Borrower and its Subsidiaries have good title to all their Assets (including
without limitation, good and marketable fee simple or leasehold title in all of
the Owned Hospitality Properties), subject to no Lien of any kind except for
Permitted Liens. As of the date of this Agreement, there are no options or other
rights to acquire any of the Assets of Borrower or its Subsidiaries (included
without limitation, the Owned Hospitality Properties and Permitted Property
Agreements) that run in favor of any Person (other than Interstate Hotels, LLC's
right to redeem from affiliates of Wyndham International, Inc. their aggregate
50% interest in Interstate Hotels, LLC pursuant to that certain Conversion and
Redemption Agreement dated August 31, 2000) and there are no mortgages, deeds of
trust, indentures, debt instruments or other agreements creating a Lien against
any Asset of Borrower or its Subsidiaries (including without limitation, the
Owned Hospitality Properties and the Permitted Property Agreements) other than
Permitted Liens.
Section 4.17 No Default. No Default or Event of Default exists under or
with respect to any Loan Document. Neither Borrower, any Loan Party or any of
their respective Subsidiaries is in default in any material respect beyond any
applicable grace period under or with respect to any other material agreement,
instrument or undertaking to which it is a party or by which it or any of its
properties or assets is bound in any respect, the existence of which default
could result in a Material Adverse Effect.
Section 4.18 Licenses, etc. Borrower or the applicable Loan Party has
obtained or has caused the owner of the applicable Hospitality Property to
obtain and holds in full force and effect, all material franchises, trademarks,
tradenames, copyrights, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the operation of the Hospitality
Properties owned, leased or managed by Borrower or its Subsidiaries and their
respective businesses as presently conducted.
Section 4.19 Compliance With Law. Borrower and each Loan Party is in
compliance with all Applicable Laws and other laws, rules, regulations, orders,
judgments, writs and decrees, noncompliance with which could result in a
Material Adverse Effect.
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Section 4.20 Brokers. Borrower, each Loan Party, Agent and each
Co-Lender hereby represent and warrant that no brokers or finders were used in
connection with procuring the financing contemplated hereby and Borrower hereby
agree to indemnify and save Agent and each Co-Lender harmless from and against
any and all liabilities, losses, costs and expenses (including attorneys' fees
or court costs) suffered or incurred by Agent or any Co-Lender as a result of
any claim or assertion by any party claiming by, through or under Borrower or
any Loan Party, that it is entitled to compensation in connection with the
financing contemplated hereby and Agent and each Co-Lender hereby agrees to
indemnify and save Borrower harmless from and against any and all liabilities,
losses, costs and expenses (including attorneys' fees or court costs) suffered
or incurred by Borrower as a result of any claim or assertion by any party
claiming by, through or under Agent or any Co-Lender that it is entitled to
compensation in connection with the financing contemplated hereby.
Section 4.21 Judgments. There are no judgments, decrees, or orders of
any kind against Borrower or any Loan Party unpaid of record which would
materially and adversely affect the ability of Borrower or any Loan Party to
comply with its obligations under the Loan or this Agreement in a timely manner.
There are no federal tax claims or liens assessed or filed against Borrower or
any Loan Party or any related entity, or any principal thereof, and there are no
material judgments against Borrower or any Loan Party unsatisfied of record or
docketed in any court of the States in which the Hospitality Properties owned,
leased or managed by Borrower or its Subsidiaries are located or in any other
court located in the United States and no petition in bankruptcy or similar
insolvency proceeding has ever been filed by or against Borrower or any Loan
Party, and neither Borrower nor any Loan Party has ever made any assignment for
the benefit of creditors or taken advantage of any insolvency act or any act for
the benefit of debtors.
Section 4.22 Management Agreements. The only management agreements for
which either the Borrower or a Guarantor is a manager are the Existing
Management Agreements. The Existing Management Agreements are in full force and
effect; no monetary defaults by the Borrower or any Guarantor, or to the actual
knowledge of the Borrower by any other party thereto, exist thereunder; and no
other defaults by the Borrower or any Guarantor, or to the actual knowledge of
the Borrower by any other party thereto, exist thereunder which could reasonably
be expected to cause a Material Adverse Effect (or with respect to the giving of
this representation after the date of this Agreement, as otherwise disclosed to
the Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section 4.23 Leasing Arrangements. The only material Leases for which
either the Borrower or a Guarantor is a lessee are the Existing Participating
Leases. The Existing Participating Leases are in full force and effect; no
monetary defaults by the Borrower or any Guarantor, or to the actual knowledge
of the Borrower by any other party thereto, exist thereunder; and no other
defaults by the Borrower or any Guarantor, or to the actual knowledge of the
Borrower by any other party thereto, exist thereunder which could reasonably be
expected to cause a Material Adverse Change (or with respect to the giving of
this representation after the date of this Agreement, as otherwise disclosed to
the Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section 4.24 Intentionally Deleted.
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Section 4.25 Operations. The Borrower conducts its business only in its
own name, except as described on Schedule 9.
Section 4.26 Stock. The Borrower lists all of its outstanding shares of
stock on the NASDAQ.
Section 4.27 Ground Leases. With respect to those Owned Hospitality
Properties in which Borrower or any other Loan Party holds a leasehold estate
under a Ground Lease, with respect to each such Ground Lease (i) Borrower or the
respective Loan Party is the owner of a valid and subsisting interest as tenant
under the Ground Lease; (ii) the Ground Lease is in full force and effect,
unmodified and not supplemented by any writing or otherwise; (iii) all rent,
additional rent and other charges reserved therein have been paid to the extent
they are payable to the date hereof; (iv) the remaining term of the Ground Lease
is at least ten (10) years after the Maturity Date; (v) Borrower or the
respective Loan Party enjoys the quiet and peaceful possession of the estate
demised thereby, subject to any sublease; (vi) the Borrower or the respective
Loan Party is not in default under any of the terms thereof and there are no
circumstances which, with the passage of time or the giving of notice or both,
would constitute an event of default thereunder; (vii) the lessor under the
Ground Lease is not in default under any of the terms or provisions thereof on
the part of the lessor to be observed or performed; (viii) the lessor under the
Ground Lease has satisfied all of its repair or construction obligations, if
any, to date pursuant to the terms of the Ground Lease; and (ix) Schedule 10
lists all the Ground Leases to which any of the Owned Hospitality Properties are
subject and all amendments and modifications thereto; and (x) the lessor
indicated on Schedule 10 for each Ground Lease is the current lessor under the
related Ground Lease.
Section 4.28 Environmental Condition.
(a) Except as disclosed in Schedule 1 (or with respect to the giving of
this representation after the date of this Agreement, as otherwise disclosed to
the Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given), to the actual knowledge of any Authorized
Officer (i) have obtained or have caused the owner of the Hospitality Property
to obtain all Environmental Permits material for the operation of their
respective Hospitality Properties owned, leased or managed and the conduct of
their respective businesses; (ii) have been and are in material compliance with
all terms and conditions of such Environmental Permits and with all other
requirements of applicable Environmental Laws; (iii) have not received notice of
any violation or alleged violation of any Environmental Law or Environmental
Permit; and (iv) are not subject to any actual or contingent Environmental
Claim.
(b) Except as disclosed in Schedule 1, to the actual knowledge of any
Authorized Officer, no Hospitality Property which is presently or previously
owned, leased or managed by the Borrower or any of its respective present or
former Subsidiaries, wherever located, (i) has been placed on or proposed to be
placed on the National Priorities List, the Comprehensive Environmental Response
Compensation Liability Information System list, or their state or local analogs,
or have been otherwise investigated, designated, listed, or identified as a
potential site for removal, remediation, cleanup, closure, restoration,
reclamation, or other response activity under any Environmental Laws which could
reasonably be expected to cause a Material Adverse Effect; (ii) is subject to a
Lien, arising under or in connection with any
52
Environmental Laws, that attaches to any revenues or to any Hospitality Property
owned, leased or managed by the Borrower, or any of its Subsidiaries, wherever
located; (iii) has been the site of any Release, use or storage of Hazardous
Substances or Hazardous Wastes from present or past operations except for
Permitted Hazardous Substances, which Permitted Hazardous Substances have not
caused at the site or at any third-party site any condition that has resulted in
or could reasonably be expected to result in the need for Response or (iv) none
of the Improvements are constructed on land designated by any Governmental
Authority having land use jurisdiction as wetlands.
Section 4.29 Franchise Agreements. The only franchise agreements or
license agreements to which the Borrower or a Loan Party are a party are those
certain agreements listed on Schedule 17 hereto. Any such franchise and license
agreements are in full force and effect and no material defaults by the Borrower
or any Loan Party exist thereunder (or with respect to the giving of this
representation after the date of this Agreement, as otherwise disclosed to the
Agent in writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section 4.30 Owned Hospitality Properties. Neither the Borrower nor of
any of its Subsidiaries owns any Owned Hospitality Property other than those
listed in Schedule 2; provided that such Persons do own Ownership Interests in
Unconsolidated Entities which own Owned Hospitality Property.
Section 4.31 Existing Indebtedness and Hedge Agreements. Except for the
Obligations, the only Indebtedness or Hedge Agreements of the Borrower or any of
its Subsidiaries existing as of the Closing Date are set forth on Schedule 8
attached hereto. No "default" or "event of default", however defined, has
occurred and is continuing under any such Indebtedness or Hedge Agreement (or
with respect to the giving of this representation after the date of this
Agreement, as otherwise disclosed to the Agent in writing after the date of this
Agreement and prior to the date such representation is deemed given).
Section 4.32 Permitted Property Agreements Conversion. The Borrower has
complied with the terms, covenants and conditions of the Master Lease
Termination Agreement described on Schedules 18 and 19 hereof, such that the
Permitted Property Agreements Conversion occurred as of January 1, 2001. The
Existing Management Agreements which replaced the applicable participating
leases contain the terms described in (a)-(c) contained in the definition of
"Permitted Property Agreements Conversion."
Section 4.33 Survival. The foregoing representations and warranties
shall survive the execution and delivery of this Agreement and shall continue in
full force and effect until the indebtedness evidenced by the Note has been
fully paid and satisfied and Lender and the Co-Lenders have no further
commitment to advance funds hereunder. The request for any Advance under this
Agreement by Borrower or on its behalf shall constitute a certification that the
aforesaid representations and warranties are true and correct as of the date of
such request, except to the extent any such representation or warranty shall
relate solely to an earlier date.
53
SECTION 5. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that on and after the Closing Date and
until the Obligations are paid in full:
Section 5.01 Financial Reports.
(a) Borrower will furnish to Agent: (i) annual audited consolidated
financial statements of the Borrower and its Subsidiaries prepared in accordance
with GAAP within 95 days of the end of the Borrower's fiscal year prepared by
nationally recognized independent public accountants (which accountant's opinion
shall be unqualified) including the related consolidated statements of income,
cash flow and retained earnings and setting forth in comparative form the
figures for the corresponding prior year period, satisfactory to Agent; (ii)
within 50 days after the close of each quarterly accounting period in each
fiscal year, the management prepared consolidated balance sheet of each of the
Borrower and its Subsidiaries, as of the end of such quarterly period and the
related consolidated statements of income, cash flow and retained earnings for
such quarterly period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly period, each prepared in accordance with GAAP;
(iii) quarterly and annual worksheets prepared by Borrower in connection with
the calculation of management base and incentive fees for each of the
Hospitality Properties leased or managed by Borrower or by its Subsidiaries
within 50 days of the end of each calendar quarter (which such worksheets shall
indicate the management base and incentive fees that relate to Permitted
Property Agreements that are part of the Collateral hereunder); (iv) quarterly
and annual operating statements (prepared on a basis consistent with that used
in the preparation of the GAAP consolidated financial statements of Borrower)
for each of the Hospitality Properties owned by Borrower or by Borrower
Subsidiaries, including a comparison with the most recent Annual Operating
Budget, within 50 days of the end of each calendar quarter; (v) copies of all of
the Borrower's and Loan Parties' quarterly and annual filings with the
Securities and Exchange Commission and all shareholder reports and letters to
the Borrower's and all Loan Parties' shareholders or partners, as the case may
be and all other publicly released information promptly but in no event later
than thirty (30) days after their filing or mailing; and (vi) to the extent
available and to the extent not subject to any confidentiality obligation with
respect thereto, an annual operating and capital budget for each of the
Hospitality Properties owned, leased or managed by Borrower or by Borrower
Subsidiaries (the "Annual Operating Budget"), including cash flow projections
for the upcoming year, presented on a monthly basis consistent with the
quarterly and annual operating statements referred to in clause (iii) above at
least 15 days prior to the start of each calendar year. Borrower will furnish
such additional reports or data, but no more often than on a quarterly basis and
to the extent not subject to any confidentiality obligation with respect
thereto, as Agent may reasonably request including, without limitation, monthly
operating statements, to extent that there are retail tenants located at a
Hospitality Property, a certified rent roll, leasing and management reports for
each of the Hospitality Properties owned, leased or managed by Borrower or by
Borrower Subsidiaries and an accounting for security deposits. Borrower shall
maintain a system of accounting capable of furnishing all such information and
data, and shall maintain its books and records respecting financial and
accounting matters in a proper manner and on a basis consistent with that used
in the preparation of the GAAP consolidated financial statements of Borrower.
54
(b) Officer's Certificates. At the time of the delivery of the
financial statements under clause (a) above, Borrower shall provide (i) a
certificate of a Responsible Officer of Borrower (A) that such financial
statements, balance sheets and operating statement have been prepared in
accordance with GAAP (unless such financial statements, balance sheets or
operating statements are not required to be prepared in accordance with GAAP
pursuant to this Agreement) and fairly present the consolidated financial
condition and the results of operations of Borrower, its Subsidiaries and the
Owned Hospitality Properties on the dates and for the periods indicated,
subject, in the case of interim financial statements, to normally recurring year
end adjustments, (B) to the best knowledge of Borrower that no Default or Event
of Default has occurred on the date of such certificate or, if any Default or
Event of Default has occurred and is continuing on such date, specifying the
nature and extent thereof and the action Borrower proposes to take in respect
thereof, (C) that the worksheets for management fees fairly present the base and
incentive management fees due Borrower and its Subsidiaries with respect to
Hospitality Properties leased or managed by Borrower or its Subsidiaries, as
applicable, on the dates and for periods indicated; (D) that since the date of
the prior financial statements, balance sheets, operating statements and
worksheets delivered pursuant to such clause (a) no change has occurred in the
financial position of Borrower or their respective Subsidiaries, which change
could result in a Material Adverse Effect, and (E) setting forth in detail the
financial performance of the applicable Person related to financial covenants
contained in the documentation for Permitted Other Indebtedness, (ii) a report
prepared and certified by Borrower relating to each Hospitality Property owned,
leased or managed by Borrower or Borrower's Subsidiaries setting forth the
EBITDA for the previous four (4) calendar Quarters, calculated on both a
quarterly and aggregate four (4) Quarter basis (notwithstanding the foregoing,
with respect to Hospitality Properties which relate to Existing Management
Agreements or Approved Management Agreements, Borrower shall only be required to
deliver such reports to the extent the applicable property owner is required to
deliver such reports to Borrower or its Subsidiary, as applicable, pursuant to
the applicable Permitted Property Agreement and such reports are not subject to
any confidentiality agreement, and (iii) a Compliance Certificate executed by a
Responsible Officer of the Borrower.
(c) Notice of Default or Litigation. Promptly after Borrower or any
other Loan Party obtains actual knowledge thereof, Borrower shall give Agent
notice of (i) the occurrence of a Default or any Event of Default, (ii) the
occurrence of (x) any default that is not cured, or any event of default, under
any partnership agreement of Borrower, any Loan Party, any mortgage, deed of
trust, indenture or other debt or security instrument, covering any of the
Assets of Borrower or (y) any event of default under any other material
agreement to which Borrower or any other Loan Party is a party, which, if not
cured could result in a Material Adverse Effect, (iii) any litigation or
governmental proceeding pending or threatened (in writing) against Borrower or
any other Loan Party which could result in a Material Adverse Effect and (iv)
any other event, act or condition which could result in a Material Adverse
Effect. Each notice delivered pursuant to this Section 5.01(c) shall be
accompanied by a certificate of the Borrower setting forth the details of the
occurrence referred to therein and describing the actions Borrower proposes to
take with respect thereto.
(d) Reports Affecting the Leverage Ratio. On or prior to the 15th day
following any Adjustment Event, an Adjustment Report with respect to such
Adjustment Event.
55
(e) Press Releases. Promptly and in any event within 5 days after the
sending or releasing thereof, copies of all press releases or other releases of
information to the public by the Borrower, or any of its Subsidiaries or
releases of information to the Borrower's shareholders.
(f) Tenants. With respect to the Owned Hospitality Properties where
there are retail tenants at the Premises, Borrower shall notify Agent within 15
days of any change in occupancy, lease commencement, extension, expiration,
termination or default with respect to tenants under any lease for more than
1,000 square feet.
(g) Tax Returns. Promptly after they are filed with the Internal
Revenue Service, copies of all annual federal income tax returns and amendments
thereto of the Borrower and the Loan Parties.
(h) Condemnation and Casualty. Borrower shall immediately notify Agent
of any fire or other casualty or any pending or threatened condemnation or
eminent domain proceeding with respect to all or any portion of each of the
Owned Hospitality Property.
(i) Securities Law Filings. Promptly and in any event within 30 days
after the sending or filing thereof, copies of all proxy material, reports and
other information which the Borrower, or any of its Subsidiaries sends to or
files with the United States Securities and Exchange Commission or sends to all
of the shareholders of the Borrower.
(j) Other Information. From time to time, Borrower shall provide such
other information and financial documents relating to Borrower as Agent may
reasonably request.
(k) Lender's Determination of Compliance with Financial Covenants.
Borrower agrees that Agent shall upon receipt of the statements and certificates
referred to in (a) and 0a) above determine as of the last day of such
immediately preceding Quarter if Borrower and its Subsidiaries are in compliance
with the financial covenants set forth in Sections 5.33 through and including
5.41 hereof.
Section 5.02 Books, Records and Inspections. Borrower shall, and shall
cause each applicable Loan Party to, at Borrower's or such Loan Party's
principal place of business or at each Hospitality Property owned, leased or
managed by Borrower or its Subsidiaries, keep proper books of record and account
in which full, true and correct entries shall be made. Borrower shall and shall
cause each applicable Loan Party to, permit officers and designated
representatives of Agent to visit and inspect any of the Hospitality Properties
owned, leased or managed by Borrower or its Subsidiaries, and to examine and
copy the books of record and account of Borrower and any Loan Party and the
Hospitality Properties owned, leased or managed by Borrower or its Subsidiaries,
(including, without limitation, leases, statements, bills and invoices), discuss
the affairs, finances and accounts of Borrower and any Loan Party, and be
advised as to the same by, its and their officers and independent accountants,
all upon reasonable notice and at such reasonable times as Agent may desire
(provided, however, to the extent that a Hospitality Property is leased or
managed by Borrower or its Subsidiaries, the foregoing right in favor of Agent
shall be exercised only to confirm the calculation of management fees and/or
lease payments under Permitted Property Agreements). Any Co-Lender may accompany
the
56
Agent on such visit or inspection. Provided that no Event of Default has
occurred and is continuing, such inspections shall be made no more frequently
than four (4) times in any consecutive twelve (12) month period.
Section 5.03 Maintenance of Insurance. Borrower shall maintain or cause
to be maintained insurance (a) for each Hospitality Property that is owned,
leased or managed by Borrower or its Subsidiaries as required by the applicable
Permitted Property Agreement, (b) for each Owned Hospitality Property as is
required by the applicable Security Documents and (c) evidenced by and in
accordance with the policies on Schedule 16 hereof.
Section 5.04 Taxes. Borrower and the other Loan Parties shall pay or
cause to be paid, when due (i.e., before any penalty or fine could be levied or
charged), all taxes, charges and assessments and all other lawful claims
required to be paid by Borrower, the other Loan Parties, except as contested in
good faith and by appropriate proceedings diligently conducted, if adequate
reserves have been established with respect thereto in accordance with GAAP.
Upon request from Agent, Borrower shall provide evidence to Agent of payment of
such taxes, charges, assessments and other lawful claims.
Section 5.05 Corporate Franchises; Conduct of Business. (a) (a)
Borrower and each Loan Party shall do or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and good standing in
the State of its organization and in each state in which a Hospitality Property
owned, leased or managed by Borrower or its Subsidiaries is located, and its
respective franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals, except where the failure to so preserve any of the
foregoing (other than existence and good standing) could not, individually or in
the aggregate, result in a Material Adverse Effect.
(b) Borrower shall carry on and conduct its business in substantially
the same manner and substantially the same field of enterprise as it is
presently conducted.
(c) The Borrower shall cause the Permitted Other Subsidiaries which
have Indebtedness to, (i) maintain financial statements, accounting records and
other corporate records and other documents separate from all non-Permitted
Other Subsidiaries, (ii) maintain their own bank accounts in their own name,
separate from all non-Permitted Other Subsidiaries, (iii) pay their own expenses
and other liabilities from their own assets and incur (or endeavor to incur)
obligations to other Persons based solely upon their own assets and
creditworthiness and not upon the creditworthiness of each other or any other
Person, and (iv) file their own tax returns or, if part of a consolidated group,
join in the consolidated tax return of such group as a separate member thereof.
(d) The Borrower shall, and shall cause the Permitted Other
Subsidiaries which have Indebtedness to, take all actions necessary to keep such
Permitted Other Subsidiaries separate from the Borrower and the Borrower's other
Subsidiaries, including, without limitation, (i) the taking of action under the
direction of the Board of Directors, members or partners, as applicable, of such
Permitted Other Subsidiaries and, if so required by the Certificate of
Incorporation or the Bylaws, operating agreement or partnership agreement, as
applicable, of such Permitted Other Subsidiaries by any Applicable Law, the
approval or consent of the
57
stockholders, members or partners, as applicable, of such Permitted Other
Subsidiaries, (ii) the preparation of corporate, partnership or limited
liability company minutes for or other appropriate evidence of each significant
transaction engaged in by such Permitted Other Subsidiaries, (iii) the
observance of separate approval procedures for the adoption of resolutions by
the Board of Directors or consents by the partners, as applicable, of such
Permitted Other Subsidiaries, on the one hand, and of the Borrower and the
Borrower's other Subsidiaries on the other hand, and (iv) preventing the cash,
cash equivalents, credit card receipts or other revenues of the Hospitality
Properties owned by such Permitted Other Subsidiaries or any other assets of
such Permitted Other Subsidiaries from being commingled with the cash, cash
equivalents, credit card receipts or other revenues collected by the Borrower or
the Borrower's other Subsidiaries.
(e) The Borrower shall take all steps reasonably necessary to avoid (i)
misleading any other Person as to the identity of the entity with which such
Person is transacting business or (ii) implying that the Borrower is, directly
or indirectly, absolutely or contingently, responsible for the Indebtedness or
other obligations of the Permitted Other Subsidiaries or any other Person.
Section 5.06 Compliance with Law. Borrower and the other Loan Parties
shall comply with all Applicable Laws, rules, statutes, regulations, decrees and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of their business and the
ownership of their Assets (including the Hospitality Properties owned, leased or
managed by Borrower or its Subsidiaries), except for such laws, rules, statutes,
regulations, decrees, orders and restrictions, (a) which Borrower or such other
Loan Party are contesting in good faith and in compliance with and pursuant to
appropriate proceedings diligently prosecuted (provided that such contest does
not and cannot (i) expose any of Agent, the Co-Lenders, Borrower, the other Loan
Parties to any criminal liability or penalty, (ii) give rise to a Lien against
any of the Assets or any Hospitality Property owned, leased or managed by
Borrower or its Subsidiaries, or (iii) otherwise materially adversely affect any
of the Assets or the value thereof), or (b) the failure to observe which, taken
individually or in the aggregate, could not result in a Material Adverse Effect.
Borrower and the applicable Loan Parties shall not use or permit the use of all
or any portion of any Hospitality Property owned, leased or managed by Borrower
or its Subsidiaries for any illegal activity.
Section 5.07 Performance of Obligations. Borrower and each Loan Party
shall perform all of their obligations under the terms of each mortgage,
indenture, security agreement, debt instrument, lease, undertaking and contract
by which it or any of its Owned Hospitality Properties is bound or to which it
is a party.
Section 5.08 Stock. Borrower shall cause its issued and outstanding
shares of stock to be listed for trading on the NASDAQ.
Section 5.09 Intentionally Deleted.
Section 5.10 Maintenance of Properties. Borrower and the other Loan
Parties shall ensure that the Owned Hospitality Properties are kept in their
current condition and repair, normal wear and tear and casualty damage in the
process of being repaired or restored excepted.
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Section 5.11 Compliance with ERISA. (a) (a) Borrower and the other Loan
Parties shall maintain each Employee Benefit Plan and Plan in compliance with
all material applicable requirements of ERISA and the Code and with all material
applicable regulations promulgated thereunder. Borrower and the other Loan
Parties shall provide to Agent, within ten (10) days of sending or receipt by
Borrower or the other Loan Parties, copies of all filings or correspondence
(other than filings made in the ordinary course of business) with the Internal
Revenue Service, PBGC, Department of Labor or union, regarding any Plan, or
regarding or disclosing any liability or potential liability or violation of law
under any Employee Benefit Plan.
(b) Borrower and the other Loan Parties shall also provide to Agent,
within ten (10) days of filing or receipt by Borrower or the other Loan Parties,
(i) any notice from the Department of Labor or Internal Revenue Service of
assessment or investigation regarding a prohibited transaction under Section
4975 of the Code or Section 406 of ERISA, (ii) any notice from a Multiemployer
Plan of withdrawal with respect to a Multiemployer Plan, (iii) any notice from
the Internal Revenue Service of imposition of excise tax with respect to an
Employee Benefit Plan, (iv) any Form 5500 filed by any Borrower or Loan Party
with respect to an Employee Benefit Plan which includes a qualified accountant's
opinion, or (v) any notice regarding a proposed termination from the PBGC.
(c) Neither Borrower nor any other Loan Party shall engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Agent or the Co-Lenders of any of its rights under
this Agreement or the other Loan Documents) to be a non-exempt (under a
statutory or administrative class exemption) prohibited transaction under ERISA
or result in a violation of a state statute regulating governmental plans that
would subject Agent or any Co-Lender to liability for a violation of ERISA or
such a state statute.
(d) Borrower further covenants and agrees to deliver to Agent such
certifications or other evidence from time to time throughout the term of the
Loan, as reasonably requested by Agent or the Co-Lenders in their sole
discretion, that (i) neither Borrower or any other Loan Party is an "employee
benefit plan" as defined in Section 3(32) of ERISA, which is subject to Title I
of ERISA, or a "governmental plan" within the meaning of Section 3(3) of ERISA;
(ii) neither Borrower or any other Loan Party is subject to state statutes
applicable to Borrower or any Loan Party regulating investments and fiduciary
obligations of Borrower or any Loan Party with respect to governmental plans;
and (iii) with respect to each Loan Party and Borrower, at least one of the
following circumstances is true:
(i) Equity interests in Borrower or such Loan Party are
publicly offered securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(ii) Less than 25 percent of each outstanding class of equity
interests in Borrower or such Loan Party are held by "benefit plan
investors" within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Borrower or such Loan Party qualifies as an "operating
company" or a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(c) or (e) or an investment company registered
under The Investment Company Act of 1940.
59
Section 5.12 Settlement/Judgment Notice. Borrower agrees that it shall,
within ten (10) days after a settlement of any obligation in excess of
$1,000,000.00 provide written notice to Agent of such settlement together with a
certification signed by Borrower certifying based upon the most recent quarterly
consolidated financial statements of Borrower and its Subsidiaries, such
settlement will not cause Borrower to violate the financial covenants set forth
in Sections 5.33 to 5.41 hereof. Borrower further agrees that it shall, within
ten (10) days after entry of a final judgment in excess of $1,000,000.00 or
final judgments in excess of $1,000,000.00 in the aggregate during the
immediately preceding twelve (12) month period, provide written notice to Agent
of such judgment together with a certification signed by Borrower certifying
based upon the most recent quarterly consolidated financial statements of
Borrower and its Subsidiaries, that such judgment will not cause Borrower to
violate the financial covenants set forth in Section 5.33 through and including
Section 5.41 hereof.
Section 5.13 Acceleration Notice. Borrower agrees that it shall, within
ten (10) days after receipt of written notice that any Indebtedness of Borrower
or any Loan Party has been accelerated, provide written notice to Agent of such
acceleration.
Section 5.14 Lien Searches; Title Searches. In addition to searches and
endorsements required in connection with an Advance, Borrower shall, upon
Agent's request therefor given from time to time, but not more frequently than
annually, unless an Event of Default shall have occurred and be continuing or
such Title Search indicates a Lien other than a Permitted Lien or another state
of facts not reasonably satisfactory to Agent and the Majority Co-Lenders, pay
for (a) reports of UCC, tax lien, judgment and litigation searches with respect
to Borrower, each of the Guarantors, and (b) searches of title to each of the
Owned Hospitality Properties (each, a "Title Search"). Such Title Searches and
lien searches required under this Agreement shall be conducted by search firms
designated by Agent in each of the locations designated by Agent.
Section 5.15 Intentionally Deleted.
Section 5.16 Intentionally Deleted.
Section 5.17 Intentionally Deleted.
Section 5.18 Intentionally Deleted.
Section 5.19 Intentionally Deleted.
Section 5.20 Intentionally Deleted.
Section 5.21 Manager. Except as set forth on Schedule 21, the
Hospitality Properties owned, leased or managed by Borrower or its Subsidiaries
shall at all times be managed by the Borrower or an Affiliate of Borrower
pursuant to the Existing Management Agreements or Approved Management
Agreements. With respect to the Owned Hospitality Properties, only, if (i) any
manager shall become insolvent or (ii) an Event of Default shall occur and be
continuing, then the Majority Co-Lenders, at their option, may require Borrower
to engage a bona-fide, independent third party management agent approved by the
Majority Co-Lenders, in their sole discretion (the "New Manager") to manage the
applicable Hospitality
60
Properties. The New Manager shall be engaged by Borrower pursuant to a written
management agreement that complies with the terms hereof and is otherwise
satisfactory to the Majority Co-Lenders in all respects and the New Manager
shall execute and deliver to Agent such other documentation as required by
Lender.
Section 5.22 Further Assurances. Borrower will, at Borrower's sole cost
and expense, at any time and from time to time upon request of Agent take or
cause to be taken any action and execute, acknowledge, deliver or record any
further Loan Documents, other documents, opinions, negative pledge agreements or
other instruments which Agent or any Co-Lender in its reasonable discretion
deems necessary or appropriate to carry out the purposes of this Agreement and
the other Loan Documents including to consummate the transfer or sale of the
Loan or any portion thereof.
Section 5.23 Intentionally Deleted.
Section 5.24 Additional Covenants. (a) (a) Borrower shall give prompt
notice to Agent of the receipt by Borrower or any Loan Party of (i) any notice
related to a violation of any Applicable Laws and (ii) the commencement of any
proceedings or investigations which relate to compliance with Applicable Laws.
(b) Borrower will take appropriate measures to prevent and will not
engage in or knowingly permit any illegal activities at any Hospitality
Properties owned, leased or managed by Borrower or its Subsidiaries.
Section 5.25 Intentionally Deleted.
Section 5.26 Intentionally Deleted.
Section 5.27 Preparation of Environmental Reports. At the reasonable
request of Agent, or any Co-Lender, from time to time, Borrower shall provide to
Agent, within 30 days after such request, at the expense of Borrower, an
Environmental Report for all Hospitality Properties owned, leased or managed by
Borrower or its Subsidiaries that have been acquired after the date hereof, or
with respect to the Hospitality Properties owned, leased or managed by Borrower
or its Subsidiaries owned, leased or managed as of the date hereof, or any
Hospitality Property owned, leased or managed by Borrower or its Subsidiaries
for which Agent has a reasonable basis for requiring such an Environmental
Report (including, without limitation, the fact that an environmental report was
not delivered at or prior to the Closing Date or there is a basis to believe
that there may be Hazardous Substances or Hazardous Waste or a threat of a
Release with respect to such Hospitality Property owned, leased or managed by
Borrower or its Subsidiaries) as described in such request (the foregoing
requirement shall apply to Hospitality Properties leased or managed by Borrower
or its Subsidiaries only to the extent that an Environmental Report is in the
possession of Borrower and/or its Subsidiaries and not subject to any
confidentiality obligation or such Environmental Report is available and not
subject to any confidentiality obligation pursuant to the applicable Permitted
Property Agreement). Without limiting the generality of the foregoing, if Agent
or the Majority Co-Lenders determine at any time that a material risk exists
that any such Environmental Report will not be provided within the time referred
to above, Agent may retain an environmental consulting firm to prepare such
61
Environmental Report at the expense of Borrower, and Borrower hereby grants and
agrees to cause any Loan Party which owns any Hospitality Property owned, leased
or managed by Borrower or its Subsidiaries described in such request to grant at
the time of such request, to Agent, such firm and any agents of representatives
thereof an irrevocable non-exclusive license, subject to the rights of tenants,
to enter onto their respective Hospitality Properties owned, leased or managed
by Borrower or its Subsidiaries to undertake such an assessment.
Section 5.28 Intentionally Deleted.
Section 5.29 Intentionally Deleted.
Section 5.30 Intentionally Deleted.
Section 5.31 Compliance with Terms of Leaseholds. Borrower and the
applicable Loan Party shall make all payments (in which Borrower or such Loan
Party is a tenant or lessee) and otherwise perform all obligations in respect of
Leases of real property, keep such leases in full force and effect and not allow
such Leases to lapse or be terminated or any rights to renew such Leases to be
forfeited or canceled, notify the Agent of any default by any party with respect
to such Leases and cooperate with the Agent in all respects to cure any such
default and cause each Loan Party to do so.
Section 5.32 Intentionally Deleted.
Section 5.33 Interest Coverage Ratio. The Borrower shall maintain at
the end of each Rolling Period, as determined by Agent at the end of each
corresponding Quarter in accordance with Subsection 5.01(k) hereof, commencing
(a) on the date hereof through and including July 31, 2002, an Interest Coverage
Ratio of not less than 2.25 to 1.00 and (b) thereafter, an Interest Coverage
Ratio of not less than 2.75 to 1.00.
Section 5.34 Intentionally Deleted.
Section 5.35 Fixed Charge Ratio. The Borrower shall maintain at the end
of each Rolling Period as determined by Agent at the end of each corresponding
Quarter in accordance with Subsection 5.01(k) hereof, commencing (a) on the date
hereof through and including July 31, 2002, a Fixed Charge Ratio of not less
than 2.00 to 1.00, and (b) thereafter, a Fixed Charge Ratio of not less than
2.50 to 1.00.
Section 5.36 Intentionally Omitted.
Section 5.37 DSC Ratio. The Borrower shall maintain at the end of each
Rolling Period, as determined by Agent at the end of each corresponding Quarter
in accordance with Subsection 5.01(k) hereof, commencing (a) on the date hereof
through and including July 31, 2002 a DSC Ratio of not less than 2.25 to 1.00,
and (b) thereafter, a DSC Ratio of not less than 2.75 to 1.00.
Section 5.38 Leverage Ratio. The Borrower shall maintain at the end of
each Rolling Period, as determined by Agent at the end of each corresponding
Quarter in accordance with Subsection 5.01(k) hereof, commencing (a) on the date
hereof through and including July
62
31, 2002, a Leverage Ratio of not more than 5.50 to 1.00, and (b) thereafter, a
Leverage Ratio of not more than 3.50 to 1.00.
Section 5.39 Intentionally Deleted.
Section 5.40 Maintenance of Tangible Net Worth. The Tangible Net Worth
of the Borrower shall not at any time be less than the Minimum Tangible Net
Worth determined by Agent at the end of each corresponding Quarter in accordance
with Subsection 5.01(k) hereof.
Section 5.41 Maintenance of Management Agreement Income. Gross revenue
for each Rolling Period, as determined by Agent at the end of each Quarter in
accordance with Subsection 5.01(k) hereof, derived from Existing Management
Agreements and Approved Management Agreements shall at all times be equal to or
greater than $30,000,000.
Section 5.42 Collateral. Subject to the time periods set forth in
Section 5.43 and Section 6.14(h) for executing Security Documents in connection
with the acquisition of Permitted New Investments and with respect to the Lien
on the Collateral consisting of any Ownership Interests of the Borrower and/or
any of its Subsidiaries in CGLH-IHC Fund I, L.P., a Delaware limited
partnership, subject to the terms of the CGLH Consent, the Borrower and its
Subsidiaries (a) will cause at all times the Agent to have an Acceptable Lien in
the Collateral, (b) will cause at all times all material provisions of the
Security Documents to be valid and binding on the Persons executing such
Security Documents and (c) shall execute or re-execute such Security Documents
and take such other actions as the Agent shall reasonably request in order for
the Agent to maintain or create an Acceptable Lien in the Collateral, including
without limitation, any Collateral acquired by the Borrower, or any of the other
Guarantors after the Closing Date. The obligation set forth in this Subsection
5.42 shall apply with respect to Collateral which is acquired after the Closing
Date by Borrower and its Subsidiaries, notwithstanding the terms, covenants and
provisions of Permitted Property Agreements, joint venture agreements,
organizational documents and other contractual agreements to which Borrower and
its Subsidiaries are a party and which are in effect as of the Closing Date.
Notwithstanding the foregoing, upon request of the Borrower to the Agent, the
Agent will release the Asset which is the subject of a Permitted Asset
Disposition from the Liens of the Security Documents.
Section 5.43 New Subsidiaries. Within ten (10) Business Days after
either (a) the date that any Subsidiary of the Borrower that was not a Material
Subsidiary becomes a Material Subsidiary, or (b) the purchase by the Borrower or
any of its Subsidiaries of the Ownership Interests of any Person, which purchase
results in such Person becoming a Material Subsidiary, the Borrower shall, in
each case, cause (i) such Material Subsidiary to execute and deliver to the
Agent either (A) a Guaranty, an Environmental Indemnity and a Security Agreement
or (B) an Accession Agreement, (ii) any of the Borrower and any Guarantor who is
a direct owner of the Ownership Interests of such Material Subsidiary to execute
and deliver to the Agent a Security Agreement, if necessary, and such other
documents as are necessary to create an Acceptable Lien in the Ownership
Interests in the Material Subsidiary owned by such Person (and such other
Security Documents as the Agent may reasonably request) and (iii) the Persons
who are party to the documents delivered pursuant to the provisions of this
Section 5.43 to provide such evidence of authority to enter into such documents
as the Agent may reasonably request. The obligation
63
set forth in this Subsection 5.43 shall apply with respect to all entities that
become Material Subsidiaries after the Closing Date, notwithstanding the terms,
covenants and provisions of Permitted Property Agreements, joint venture
agreements, organizational documents and other contractual agreements to which
Borrower and its Subsidiaries are a party and which are in effect as of the
Closing Date.
Section 5.44 Hedge Agreements. From the date 60 days following the
Closing Date (the "Hedge Trigger Date") until the Maturity Date, the Borrower
shall obtain and thereafter maintain Hedge Agreements reasonably satisfactory to
the Agent, sufficient to ensure that 50% of the outstanding Advances measured as
of each day during such period, shall be covered by such Hedge Agreements. On or
before the Hedge Trigger Date, Borrower shall pledge and assign any and all
payments and proceeds to be paid to the Borrower under the Hedge Agreements to
the Agent for the benefit of the Co-Lenders, and shall execute such other
documents and take further actions required by Agent to evidence and perfect
such assignment.
SECTION 6. NEGATIVE COVENANTS.
Borrower covenants and agrees that on and after the Closing Date until
the Obligations are paid in full:
Section 6.01 Intentionally Deleted.
Section 6.02 Intentionally Deleted.
Section 6.03 Liens. Borrower and the other Loan Parties shall not,
create, incur, assume or suffer to exist, directly or indirectly, any Lien on
any of its Assets, other than the following (collectively, the "Permitted
Liens"):
(a) Liens existing on the Closing Date and set forth on
Schedule 7 or listed in the Title Policies as of the Closing Date;
(b) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves are being maintained in accordance
with GAAP;
(c) Statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by Law (other than any Lien imposed
by ERISA) created in the ordinary course of business for amounts not
yet due or (i) which are being contested in good faith by appropriate
proceedings diligently conducted, and with respect to which adequate
bonds have been posted if required to do so by Applicable Law or the
terms of the Mortgage;
(d) Easements, rights-of-way, covenants, restrictions, zoning
and similar restrictions and other similar charges or encumbrances not
interfering with the ordinary conduct of the business of Borrower and
which do not detract materially from the value of any of the Owned
Hospitality Properties to which they attach or impair materially the
use thereof by Borrower or Borrower Subsidiaries;
(e) Liens securing the Obligations;
64
(f) Liens on leased personal property to secure solely the
lease obligations associated with such property;
(g) Liens on the Assets of or Ownership Interests in a
Permitted Other Subsidiary securing Indebtedness set forth in paragraph
(b) of the definition of Permitted Other Indebtedness" incurred by such
Permitted Other Subsidiary to the extent such Indebtedness is permitted
pursuant to the provisions of Section 6.11;
(h) Liens on the Ownership Interests in an Unconsolidated
Entity securing Permitted Non-Recourse Unconsolidated Entity
Indebtedness incurred by such Unconsolidated Entity; and
(i) Liens granted to the owner of a Hospitality Property
subject to a Permitted Property Agreement on the accounts receivable,
inventory, cash or other property owned by the Borrower or the
Borrower's Subsidiary in connection with such Hospitality Property.
Section 6.04 Fundamental Changes; Asset Dispositions. Neither Borrower,
nor any of its Subsidiaries (other than the Permitted Other Subsidiaries) will,
(a) merge or consolidate with or into any other Person, unless (i) a Guarantor
is merged into the Borrower and the Borrower is the surviving Person or a
Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other
than the Obligations) is merged into any Subsidiary (other than a Permitted
Other Subsidiary which has Indebtedness other than the Obligations), and (ii)
immediately after giving effect to any such proposed transaction no Default
would exist; (b) sell, transfer, or otherwise dispose of all or any of such
Person's Assets except for a Permitted Asset Disposition, or dispositions or
replacements of personal property in the ordinary course of business; (c) enter
into, as lessor, a lease (other than a lease which qualifies as a Permitted
Asset Disposition) of all or substantially all of any Owned Hospitality
Properties with any Person without the consent of the Agent; (d) sell or
otherwise dispose of any Ownership Interests of any Subsidiary (except for a
Permitted Other Subsidiary or a sale which qualifies as a Permitted Asset
Disposition); (e) except for Capitalization Events for which consideration is
principally cash or cash equivalents and for which the net cash proceeds are
applied in accordance with the provisions of Section 2.12, alter the corporate,
capital or legal structure of any such Person (except for a Permitted Other
Subsidiary); (f) enter into any forward sales of Borrower's common stock or
Ownership Interests in the Borrower; (g) liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution) provided that nothing herein shall
prohibit the Borrower from dissolving any Subsidiary which has no assets on the
date of dissolution, (h) enter into any leases of Assets or management
agreements for any Assets except for Permitted Property Agreements, or (i) alter
the character of their respective businesses from that conducted as of the date
of this Agreement or otherwise engage in any material business activity outside
of the Hospitality Management Business.
Section 6.05 Transactions with Affiliates. Borrower and the other Loan
Parties shall not enter into any material transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of Borrower, other than on terms and conditions substantially as
favorable as would be obtainable at the time in a comparable arm's-length
transaction with a Person other than an Affiliate of Borrower.
65
Section 6.06 Plans. Borrower and the other Loan Parties shall not, nor
shall they permit any member of their respective ERISA Controlled Groups to, (i)
take any action which would (A) increase the aggregate present value of the
Unfunded Benefit Liabilities under all Plans or withdrawal liability under a
Multiemployer Plan for which Borrower or any Loan Party or any member of their
respective ERISA Controlled Groups (determined without reference to Section
414(m) or (o) of the Code, if liabilities of entities in Borrower's or the Loan
Parties' ERISA Controlled Group solely by reason of Section 414(m) or (o) of the
Code could not result in liability to Borrower or any Loan Party) could be
liable to an amount in excess of $500,000 or (B) result in liability or
Contingent Obligation for any post-retirement benefit under any "welfare plan"
(as defined in Section 3(1) of ERISA), or any withdrawal liability or exit fee
or charge with respect to any "welfare plan" (as defined in Section 3(1) of
ERISA), other than liability for continuation coverage under Part 6 of
Subsection B of Title I of ERISA, or state laws which require similar
continuation coverage for which the employee pays approximately the full cost of
coverage, or (ii) engage in any transaction prohibited by Section 408 of ERISA
or Section 4975 of the Code.
Section 6.07 Restricted Payments. Neither the Borrower nor any of its
Subsidiaries, will make any Restricted Payment, except that:
(a) Provided that no Default has occurred or is continuing,
(i) Interstate Hotels, LLC shall be entitled to make cash distributions
to PAH-Interstate Holdings, Inc., provided that PAH-Interstate
Holdings, Inc. shall not hold more than a 1.6627% common membership
interest in Interstate Hotels, LLC at any time, (ii) the Borrower shall
be entitled to make Permitted Stock Repurchases, (iii) Borrower shall
be entitled to pay dividends and distributions to the holders of its
Series B Convertible Preferred Stock, in accordance with the terms of
the Articles Supplementary to the Charter of Interstate Hotels
Corporation filed with the State Department of Assessments and Taxation
of the State of Maryland on October 16, 2000, or otherwise in
accordance with the terms of such series of stock, and (iv) Borrower
shall be permitted to effect a conversion of Preferred Stock in the
Borrower to Common Stock (as long as such conversion does not cause (A)
a Change in Control of Borrower as otherwise set forth herein, or (B) a
default pursuant to Section 7.01(j)(ii) hereof);
(b) a Subsidiary of the Borrower may make a Restricted Payment
to the Borrower or to any other Subsidiary which is a Guarantor; and
(c) the Borrower may make scheduled payments to the
Subordinate Convertible Noteholder (or effect any required common stock
conversion in favor of CGLH Partners II LP or an Affiliate thereof)
pursuant to the terms of the Subordinate Convertible Note.
Section 6.08 Sale or Discount of Receivables. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, sell
with recourse, or discount or otherwise sell for less than the face value
thereof, any of its notes or accounts receivable.
Section 6.09 Restriction on Prepayment of Indebtedness. Borrower shall
not prepay the principal amount, in whole or in part, of any Unsecured Debt
other than the Obligations after the occurrence of any Event of Default.
66
Section 6.10 Agreements Restricting Distributions From Subsidiaries.
The Borrower will not, nor will it permit any of its Subsidiaries (other than
Permitted Other Subsidiaries) to, enter into any agreement (other than a Loan
Document) which limits distributions to or any advance by any of the Borrower's
Subsidiaries to the Borrower.
Section 6.11 Maximum Indebtedness. The Borrower and its Subsidiaries
will not incur or permit to exist any Indebtedness other than the Obligations
and the following:
(a) Permitted Other Indebtedness in an amount that does not
cause a breach at any time of the covenants contained in Article V;
(b) Capital Leases for Personal Property;
(c) Hedge Agreements; provided that (i) such agreements shall
be unsecured (except as provided for in Section 9.26 hereof and the
Security Agreement), (ii) the dollar amount of indebtedness subject to
such agreements and the indebtedness subject to Hedge Agreements in the
aggregate shall not exceed the sum of the amount of the Co-Lender's
Commitments and the amount of the other Indebtedness of the Borrower or
its Affiliates which bears interest at a variable rate, and (iii) the
agreements shall be at such interest rates and otherwise in form and
substance reasonably acceptable to the Agent; and
(d) Any of the following Indebtedness incurred by the
Borrower:
(i) guaranties in connection with Permitted Other
Indebtedness secured by an Owned Hospitality Property or
interest in a Person owning a Hospitality Property of (A) if
the Hospitality Property is subject to a ground lease, the
payment of rent and performance of obligations under such
ground lease, (B) real estate taxes relating to such
Hospitality Property, and (C) capital reserves required under
such Indebtedness;
(ii) customary indemnities for acts of malfeasance,
misappropriation and misconduct and an environmental indemnity
for the lender under Indebtedness permitted under this
Agreement;
(iii) guaranties of franchise and license agreements
in connection with Hospitality Properties; and
(iv) guaranties of obligations of the Borrower's
Subsidiaries or Unconsolidated Entities under or with respect
to Permitted Property Agreements.
Extensions, renewals and refinancing of any of the Indebtedness
specified in paragraphs (a)-(d) above so long as the principal amount of such
Indebtedness is not thereby increased.
Section 6.12 Material Documents. Neither Borrower nor any other Loan
Party shall make any amendments or modifications to (a) their partnership
agreements, corporate charters, by-laws, certificates of incorporation, articles
of organization or other organizational documents or (b) enter into any
termination or modification or amendment of Permitted Property Agreements
(provided that such Persons shall be entitled to cause the Permitted Property
67
Agreements Conversion to occur), without the prior approval of the Agent and the
Majority Co-Lenders (notwithstanding the foregoing contained in this Subsection
6.12(b), Borrower or the applicable Loan Party may terminate, modify or amend
the Permitted Property Agreements provided that immediately subsequent to such
termination, modification or amendment, as applicable, the Borrower shall be in
compliance with the financial covenants set forth in Section 5.33 through and
including Section 5.41 hereof). Any termination, modification or amendment
prohibited under this Section 6.12 without the Agent's and the Majority
Co-Lender's written consent shall, to the extent permitted by applicable law, be
void and of no force and effect.
Section 6.13 No Further Negative Pledges. Neither the Borrower nor its
Subsidiaries shall enter into or suffer to exist any agreement (other than this
Agreement and the Loan Documents and as set forth in the Permitted Property
Agreements) (a) prohibiting the creation or assumption of any Lien upon the
Assets of the Borrower or any of its Subsidiaries (except for Assets of and
Ownership Interests in the Permitted Other Subsidiaries), whether now owned or
hereafter acquired, or (b) requiring an obligation to be secured if some other
obligation is or becomes secured.
Section 6.14 Restrictions on Investments. In addition to the provisions
of Section 2.20, neither Borrower or any Loan Party shall make or permit to
exist or remain outstanding any Investment other than Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower or any Loan Party;
(b) marketable direct obligations of any of the following:
Federal Home Loan Mortgage Corporation, Student Loan Marketing
Association, Federal Home Loan banks, Federal National Mortgage
Association, Government National Mortgage association, Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal Financing
Banks, Export-Import Bank of the United States, Federal Land Bank, or
any other agency or instrumentality of the United States of America;
(c) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $100,000,000.00; provided, however, that the
aggregate amount at any time so invested with any single bank having
total assets of less than $1,000,000,000.00 will not exceed
$200,000.00;
(d) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any State which at the times of purchase are rated
by ▇▇▇▇▇'▇ or by S&P at not less than "P 2" if then rated by ▇▇▇▇▇'▇,
and not less than "A 2", if then rated by S&P;
(e) mortgage-backed securities guaranteed by the Government
National Mortgage Association, the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation and other
mortgage-backed bonds which at the time of purchase are rated by
▇▇▇▇▇'▇ or by S&P at not less than "Aa" if then rated by ▇▇▇▇▇'▇ and
not less than "AA" if then rated by S&P;
68
(f) repurchase agreements having a term not greater than 90
days and fully secured by securities described in the foregoing
subsection (a), (b) or (e) with banks described in the foregoing
subsection (c) or with financial institutions or other corporations
having total assets in excess of $500,000,000.00;
(g) shares of so-called "money market funds" registered with
the SEC under the Investment Company Act of 1940 which maintain a level
per-share value, invest principally in investments described in the
foregoing subsections (a) through (f) and have total assets in excess
of $50,000,000.00;
(h) Permitted New Investments; provided that (i) within five
(5) Business Days of the acquisition by the Borrower or any of the
Borrower's Subsidiaries of any Collateral for which the Agent on behalf
of the Co-Lenders does not already have an Acceptable Lien, the
Borrower and the other Guarantors will execute such Security Documents
as are necessary or desirable for the Agent on behalf of the Co-Lenders
to have an Acceptable Lien in such Collateral and (ii) within twenty
(20) Business Days of the acquisition of an Owned Hospitality Property
by the Borrower or any of the Borrower's Subsidiaries, the Borrower
shall deliver to the Agent a Title Policy for such Owned Hospitality
Property;
(i) trade and customer accounts receivable which are for goods
furnished or services rendered in the ordinary course of business and
are payable in accordance with customary trade terms, and receivables
purchased in connection with the acquisition of an Owned Hospitality
Property;
(j) Existing Employee Loans and Permitted New Employee Loans;
(k) other assets owned in the ordinary course of (i) owning
the Borrower's and the Borrower's Subsidiaries' existing Investments
and Assets and any Permitted New Investments and (ii) operating a
Hospitality Management Business;
(l) Investments held by IHC Holdings, Inc., Borrower,
Interstate Hotels, L.L.C., Interstate/Dallas GP, L.L.C. and
Interstate/Dallas Partnership, L.P. existing on the date hereof and
listed as Nos. (A)(3) and (B) on Schedule 8 attached hereto (where the
principal amount of such Investments referred to in (B) on Schedule 8
shall not exceed the outstanding principal amount as of the Closing
Date and listed on Schedule 8); and
(m) Investments in any direct or indirect Subsidiary of the
Borrower or any Loan Party which Investment consists of Ownership
Interests in such Subsidiary or Loan Party as of the Closing Date.
Notwithstanding the foregoing, neither the Borrower nor its Subsidiaries shall
make an Investment or acquire any other Assets which would (a) cause a Default,
or (b) cause or result in the Borrower failing to comply with any of the
financial covenants contained herein. In addition, neither the Borrower nor its
Subsidiaries shall enter into any agreements to purchase Investments or other
Assets, unless with respect to such purchase such Person at all times has
available sources of funds equal to pay in full the cost of the purchase of such
Investments or other Assets (to the extent that the payment of such cost of
purchase constitutes a recourse obligation of the Borrower or its Subsidiary),
which available sources of funds may include Advances to the
69
extent that the Borrower may borrow the same for the purposes required or other
Indebtedness permitted by the terms of this Agreement.
SECTION 7. EVENTS OF DEFAULT
Section 7.01 Events of Default. Each of the following events, acts,
occurrences or conditions shall constitute an Event of Default under this
Agreement, regardless of whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to or
as a result of compliance by any Person with any judgment, decree, order, rule
or regulation of any court or administrative or governmental body:
(a) Failure to Make Payments. Borrower shall (i) default in
the payment when due of any principal of the Loan, or (ii) default in
the payment within five (5) days after the due date of (x) any interest
on the Loan or (y) any Fees, Transaction Costs or any other amounts
owing hereunder; provided, however, (A) that any interest payable with
respect to any delinquent payment shall be calculated at the Default
Rate from the date such payment was actually due as if there were no
grace period, and (B) in the event that a default in (ii) above occurs
twice in one (1) calendar year, thereafter the five (5) day grace
period shall no longer apply.
(b) Breach of Representation or Warranty. Any representation
or warranty made by Borrower or any other Loan Party herein or in any
other Loan Document or in any certificate or statement delivered
pursuant hereto or thereto shall prove to be false or misleading in any
material respect on the date as of which made or deemed made: provided,
however, that if such breach is capable of being cured, then Borrower
shall have a period of thirty (30) days after delivery of notice from
Agent to cure any such breach, provided if such default cannot be
reasonably cured within such thirty (30) day period and Borrower shall
have commenced to cure such default within such thirty (30) day period
and thereafter diligently and expeditiously proceeds to cure same, such
thirty (30) day period shall be extended for so long as it shall
require Borrower in the exercise of due diligence to cure such default,
it being agreed that no such extension shall exceed ninety (90) days.
(c) Breach of Covenants.
(i) Borrower or any other Loan Party shall fail to
perform or observe any agreement, covenant or obligation
arising under Sections 5.03, 5.12, 5.13, 5.33, 5.35, 5.37,
5.38, 5.40, 5.41, 5.42, 5.43, 5.44, 5.45, 6.03, 6.04, 6.05,
6.06, 6.07, 6.08, 6.09, 6.10, 6.11, 6.12, 6.13, and 6.14.
(ii) Borrower or any of the Loan Parties shall fail
to perform or observe any agreement, covenant or obligation
arising under this Agreement (except those described in
subsections (a), (b) and (c)(i) above), and such failure shall
continue uncured for thirty (30) days after delivery of notice
thereof, or such longer period of time as is reasonably
necessary to cure such Default, provided that Borrower has
commenced and is diligently prosecuting the cure of such
Default and cures it within ninety (90) days.
(iii) Borrower or any other Loan Party shall fail to
perform or observe any agreement, covenant or obligation
arising under any provision of the Loan
70
Documents other than this Agreement, or the Fee Letter which
failure shall continue after the end of any applicable grace
period provided therein.
(d) Default Under Other Agreements. Borrower or any other Loan
Party shall default beyond any applicable grace period in the payment,
performance or observance of any obligation or condition with respect
to any Indebtedness in excess of $500,000 or any other event shall
occur or condition exist, if the effect of such default, event or
condition is to accelerate the maturity of any such Indebtedness or to
permit (without regard to any required notice or lapse of time) the
holder or holders thereof, or any trustee or agent for such holders, to
accelerate the maturity of any such Indebtedness, or any such
Indebtedness shall become or be declared to be due and payable prior to
its stated maturity and the forgoing conditions are not cured within
thirty (30) days after the condition occurs.
(e) Bankruptcy, etc. (i) Borrower or any other Loan Party
shall commence a voluntary case concerning itself under the Bankruptcy
Code; or (ii) an involuntary case is commenced against Borrower or any
other Loan Party and the petition is not controverted within thirty
(30) days, or is not dismissed within sixty (60) days, after
commencement of the case or (iii) a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of Borrower, any other Loan Party or
Borrower or any other Loan Party commences any other proceedings under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower,
any other Loan Party or there is commenced against Borrower or any
other Loan Party any such proceeding which remains undismissed for a
period of sixty (60) days; or (iv) any order of relief or other order
approving any such case or proceeding is entered; or (v) Borrower or
any other Loan Party is adjudicated insolvent or bankrupt; or (vi)
Borrower or any other Loan Party suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of sixty (60) days; or
(vii) Borrower or any other Loan Party makes a general assignment for
the benefit of creditors; or (viii) Borrower, any other Loan Party
shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; or (ix) Borrower
or any other Loan Party shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debt; or (x)
Borrower or any other Loan Party shall by any act or failure to act
consent to, approve of or acquiesce in any of the foregoing; or (xi)
any corporate or partnership action is taken by Borrower or any other
Loan Party for the purpose of effecting any of the foregoing.
(f) ERISA. (i) Any Termination Event shall occur, or (ii) any
Plan shall incur an accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived, or fail to make a required installment payment on or before the
due date under Section 412 of the Code or Section 302 of ERISA, or
(iii) Borrower or any of the Loan Parties or a member of their
respective ERISA Controlled Groups shall have engaged in a transaction
which is prohibited under Section 4975 of the Code or Section 406 of
ERISA and an exemption shall not be applicable or have been obtained
under Section 408 of ERISA or Section 4975 of the Code, or (iv)
Borrower or any of the other Loan Parties or any member of their
respective ERISA Controlled Groups shall fail to pay when due an amount
which it shall have become liable to pay to the PBGC, any Plan, any
Multiemployer Plan or a trust established under Section 4049 of ERISA,
or (v) Borrower shall have received a notice from the PBGC of its
71
intention to terminate a Plan or to appoint a trustee to administer
such Plan or Multiemployer Plan, which notice shall not have been
withdrawn within fourteen (14) days after the date thereof, or (vi) a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that an ERISA Plan must be terminated or
have a trustee appointed to administer any ERISA Plan, or (vii)
Borrower or any of the other Loan Parties or a member of their
respective ERISA Controlled Groups suffers a partial or complete
withdrawal from a Multiemployer Plan or is in default (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan, or (viii) a proceeding shall be instituted against
any of Borrower or any of the other Loan Parties or any member of their
respective ERISA Controlled Groups to enforce Section 515 of ERISA, or
(ix) any other event or condition shall occur or exist with respect to
any Employee Benefit Plan, Plan or Multiemployer Plan which could
subject Borrower or any of the other Loan Parties or any member of
their respective ERISA Controlled Groups to any tax, penalty or other
liability or the imposition of any lien or security interest on
Borrower or any of the other Loan Parties or any member of their
respective ERISA Controlled Groups, or (x) with respect to any
Multiemployer Plan, the institution of a proceeding to enforce Section
515 of ERISA, to terminate such Plan, the receipt of a notice of
reorganization or insolvency under Sections 4241 or 4245 of ERISA, or
(xi) the assets of Borrower or any other Loan Party become or are
deemed to be assets of an Employee Benefit Plan. No Event of Default
under this Section 7.01(f) shall be deemed to be, or have been, waived
or corrected because of any disclosure by Borrower or any Loan Party.
(g) Judgments. One or more judgments or decrees (i) in an
aggregate amount of $1,000,000 or more are entered against Borrower or
any other Loan Parties in any consecutive twelve (12) month period or
(ii) which, with respect to Borrower and the other Loan Parties, could
result in a Material Adverse Effect, shall be entered by a court or
courts of competent jurisdiction against any of such Persons (other
than any judgment as to which, and only to the extent, a reputable
insurance company has acknowledged coverage of such claim in writing)
and (x) any such judgments or decrees shall not be stayed (by appeal or
otherwise), discharged, paid, bonded or vacated within thirty (30) days
or (y) enforcement proceedings shall be commenced by any creditor on
any such judgments or decrees.
(h) SEC. The Borrower fails to remain in good standing with
the NASDAQ and with the Securities and Exchange Commission.
(i) Material Adverse Effect. If any Material Adverse Effect
shall occur.
(j) Change in Ownership. (i) A Change in Control occurs for
the Borrower or (ii) ▇▇▇▇▇▇ or an Affiliate thereof fails to hold the
500,000 shares of Series B Convertible Preferred Stock issued to an
Affiliate of ▇▇▇▇▇▇ pursuant to the Securities Purchase Agreement dated
August 31, 2000.
(k) Permitted Property Agreements. Any of the following occur:
(i) any Permitted Property Agreement(s) shall for any reason cease to
be valid and binding and/or terminate (other than those terminations of
Permitted Property Agreements contemplated by the Master Lease
Termination Agreement described on Schedules 18 and 19 hereof), and
that such event could reasonably be expected to cause a Material
Adverse Effect; or (ii) a default by the
72
Borrower or any of its Subsidiaries shall occur under any Permitted
Property Agreement(s) that could reasonably be expected to cause a
Material Adverse Effect.
(l) Guaranty. Any provision of any Guaranty shall for any
reason cease to be valid and binding on any Guarantor or any Guarantor
shall so state in writing.
(m) Environmental Indemnity. Any Environmental Indemnity shall
for any reason cease to be valid and binding on any Person party
thereto or any such Person shall so state in writing.
(n) Repayment Event. Upon the receipt by the Borrower of any
net cash proceeds from a Repayment Event, the Borrower fails to apply
such net cash proceeds in accordance with this Agreement.
(o) First Priority Lien. The Loan Documents after delivery
thereof shall for any reason (other than pursuant to the terms thereof)
cease to create a valid and perfected first priority lien on the
Collateral (subject to the Permitted Liens) purported to be covered,
hereby or thereby.
(p) Transfer of Subordinate Convertible Note. CGLH Partners II
LP shall transfer, sell or assign the Subordinate Convertible Note to a
Person other than an Affiliate.
Section 7.02 Rights and Remedies.
(a) Upon the occurrence of any Event of Default described in Section
7.01 (e), the Facility Amount shall automatically and immediately terminate and
the unpaid principal amount of and any and all accrued interest on the Loan and
any and all accrued Fees and other Obligations shall automatically become
immediately due and payable, with all additional interest thereon calculated at
the Default Rate from the occurrence of the Default until the Loan is paid in
full and without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by Borrower and the
other Loan Parties, and the obligation of Lender and all Co-Lenders to make any
Advances hereunder shall thereupon terminate; and upon the occurrence and during
the continuance of any other Event of Default, Agent, upon approval by the
Majority Co-Lenders, may, by written notice to Borrower, (i) declare that the
Facility Amount is terminated, whereupon the Facility Amount and the obligation
of Lender and all Co-Lenders to make any Advances (or their pro rata share
thereof) hereunder shall immediately terminate, and (ii) declare the unpaid
principal amount of and any and all accrued and unpaid interest on the Loan and
any and all accrued Fees and other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest thereon
calculated at the Default Rate from the occurrence of the Default until the Loan
is paid in full and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by
Borrower and the other Loan Parties.
(b) Agent and any Co-Lender may offset any indebtedness, obligations or
liabilities owed to Borrower against any indebtedness, obligations or
liabilities of Borrower to it.
73
(c) Agent and any Co-Lender may avail itself of any remedies available
to it under the Loan Documents or at law or equity.
SECTION 8. INTENTIONALLY DELETED.
SECTION 9. MISCELLANEOUS.
Section 9.01 Payment of Agent's, Syndication Agent's and Co-Lender's
Expenses, Indemnity, etc. Borrower shall:
(a) whether or not the Transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of
Agent, the Syndication Agent, Lender and all Co-Lenders in connection
with Agent's, the Syndication Agent's, and such Co-Lender's due
diligence review of the Hospitality Properties (including due diligence
expenses, syndication expenses, consultation expenses, travel expenses
and reasonable fees, charges and disbursement of counsel), the
negotiation, preparation, execution and delivery of the Loan Documents
and the documents and instruments referred to therein, all Appraisals
of the Hospitality Properties made by Agent or the Syndication Agent,
in connection with the administration of the Loan and any amendment,
waiver or consent relating to any of the Loan Documents and of Agent,
the Syndication Agent, and Co-Lenders in connection with the
preservation of rights under, any amendment, waiver or consent relating
to, and enforcement of, the Loan Documents and the documents and
instruments referred to therein or in connection with any restructuring
or rescheduling of the Obligations (including, without limitation, the
reasonable fees and disbursements of counsel for Agent, the Syndication
Agent, and the Co-Lenders);
(b) pay, and hold Agent, the Syndication Agent, and each
Co-Lender harmless from and against, any and all present and future
stamp, excise and other similar taxes with respect to the foregoing
matters and hold Agent, the Syndication Agent, and each Co-Lender
harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent
attributable to Agent, the Syndication Agent or such Co-Lender) to pay
such taxes; and
(c) indemnify Agent (in its capacity as Lender and as Agent),
the Syndication Agent (in its capacity as Syndication Agent and as a
Co-Lender) and each Co-Lender, its officers, directors, employees,
representatives and agents and any persons or entities owned or
Controlled by, owning or Controlling, or under common Control or
Affiliated with Agent, the Syndication Agent, or each Co-Lender (each
an "Indemnitee") from, and hold each of them harmless against, any and
all losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any
kind or nature whatsoever (including, without limitation, the
reasonable fees and disbursements of counsel for such Indemnitee in
connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may at any time (including,
without limitation, at any time following the payment of the
Obligations) be imposed on, asserted against or incurred by any
Indemnitee as a result of, or arising in any manner out of, or in any
way related to or by reason of, (i) any of the Transactions or the
execution, delivery or performance of any Loan Document, (ii) the
breach of any of Borrower's or other Loan Party's representations and
warranties or of any of Borrower's or other Loan
74
Party's Obligations, (iii) a default under Sections 4.12 or 5.11,
including, without limitation, attorneys' fees and costs incurred in
the investigation, defense, and settlement of losses incurred in
correcting any prohibited transaction or in the sale of a prohibited
loan, and in obtaining any individual prohibited transaction exemption
under ERISA that may be required, and (iv) the exercise by Agent, the
Syndication Agent and the Co-Lenders of their rights and remedies
(including, without limitation, foreclosure) under any Loan Documents
(but excluding, as to any Indemnitee, any such losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments,
suits, costs or disbursements incurred solely by reason of the gross
negligence or willful misconduct of such Indemnitee as finally
determined by a court of competent jurisdiction) (collectively,
"Indemnified Liabilities"). Borrower further agrees that, without
Agent's, the Syndication Agent's or the Co-Lenders' prior written
consent, they will not enter into any settlement of a lawsuit, claim or
other proceeding arising or relating to any Indemnified Liability
unless such settlement includes an explicit and unconditional release
from the party bringing such lawsuit, claim or other proceeding of each
Indemnitee. Borrower's obligations under this Section shall survive the
termination of this Agreement and the payment of the Obligations.
Section 9.02 Notices. Except as otherwise expressly provided herein,
all notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile, telex, or cable
communication), and shall be deemed to have been duly given or made when
delivered by hand, or five (5) days after being deposited in the United States
mail, certified or registered, postage prepaid, or, in the case of telex notice,
when sent, answerback received, or, in the case of facsimile notice, when sent,
answerback received, or, in the case of a nationally recognized overnight
courier service, one (1) Business Day after delivery to such courier service,
addressed, in the case of Borrower, Agent and the Syndication Agent, at the
addresses specified below, or to such other addresses as may be designated by
any party in a written notice to the other parties hereto, provided that notices
and communications to Agent shall not be effective until received by Agent.
If to Agent, as follows:
including, without limitation, all notices given in
accordance with Sections 2.02, 2.08(b), 2.09(a) and
2.11 of this Agreement to:
▇▇▇▇▇▇ Brothers Holdings Inc.
d/b/a ▇▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇ Brothers Holdings Inc.
Three World Financial ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
and
75
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇
If to Syndication Agent, as follows:
▇▇▇▇▇▇ Commercial Paper, Inc.
Three World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇
with copies thereof to:
▇▇▇▇▇▇▇▇ Philips Inc.
Suite 2300 Marquis Two Tower
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
If to Borrower, as follows:
Interstate Hotels Corporation
▇▇▇▇▇▇ Plaza 10
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman and Chief Executive Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies thereof to:
Interstate Hotels Corporation ▇▇▇▇▇▇ Plaza 10
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.03 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Borrower, Agent, the Syndication Agent, the
Co-Lenders, all future holders of the Note and their respective successors and
assigns.
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Section 9.04 Amendments and Waivers. (a) (a) Neither this Agreement,
the Note, any other Loan Document to which Borrower or any other Loan Party is a
party nor any terms hereof or thereof may be amended, supplemented, modified or
waived other than in a writing executed by Borrower, or the applicable Loan
Party and Agent. If all or a portion of the Loan and the Facility Amount is sold
to a Co-Lender pursuant to Section 9.09, the Borrower acknowledges and agrees
that any amendment, modification approval, waiver or request to be granted
regarding the terms of this Agreement shall be given in accordance with the
terms, provisions and conditions of the intercreditor agreement to be entered
into between Lender, as Agent, and each Co-Lender (the "Intercreditor
Agreement"), provided that such terms, provisions and conditions shall have been
disclosed to Borrower; Lender agrees that the terms of such Intercreditor
Agreement shall not be inconsistent with this Agreement, the other Loan
Documents or the Assignment and Assumption. The parties hereto acknowledge and
agree that after the occurrence of a Syndication, any amendment, modification,
approval, waiver or request to be granted regarding the terms of this Agreement
shall be given in accordance with the terms, provisions and conditions of the
Intercreditor Agreement. The authority of Agent to act as Agent hereunder arises
pursuant to and is governed by the Intercreditor Agreement and this Agreement.
(b) In the case of any waiver, Borrower, Agent and all Co-Lenders shall
be restored to their former position and rights hereunder and under the
outstanding Note and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Section 9.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of Agent or any Co-Lender in exercising any right, power or privilege
hereunder or under any other Loan Document and no course of dealing between
Borrower or any other Loan Party and Agent or any Co-Lender shall operate as a
waiver thereof nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which Agent or any
Co-Lender would otherwise have. No notice to or demand on Borrower or any other
Loan Party in any case shall entitle Borrower or any other Loan Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of Agent or any Co-Lender, to any other or
further action in any circumstances without notice or demand.
Section 9.06 Governing Law; Submission to Jurisdiction. (a) (a) This
Agreement shall be deemed to be a contract entered into pursuant to the laws of
the State of New York and shall in all respects be governed, construed, applied
and enforced in accordance with the laws of the State of New York, provided
however, that with respect to the creation, perfection, priority and enforcement
of the lien of the Security Documents, and the determination of deficiency
judgments, the laws of the State where the applicable Hospitality Property is
located shall apply.
(b) Any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, Borrower
77
hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. Borrower irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to Borrower at their addresses set forth in Section 9.02.
Borrower hereby irrevocably waives any objection which they may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement or any other Loan Document
brought in the courts referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of Agent or any Co-Lender, to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction.
Section 9.07 Confidentiality Disclosure of Information. Each party
hereto shall treat the transactions contemplated hereby and all financial and
other information furnished to it about Borrower, the other Loan Parties and the
Hospitality Properties owned, leased, or managed by Borrower or Borrower
Subsidiaries as confidential; provided, however, that such confidential
information may be disclosed (a) as required by law (including without
limitation to bank regulators) or pursuant to generally accepted accounting
procedures, (b) to officers, directors, employees, agents, partners, investors,
attorneys, accountants, engineers and other consultants of the parties hereto
who need to know such information, provided such Persons are instructed to treat
such information confidentially, (c) by Agent or the Syndication Agent to any
Participant, Co-Lender, servicer, or assignee ("Transferee"), which disclosure
to Transferees and prospective Transferees may include any and all information
which has been delivered to Agent or the Syndication Agent by Borrower or any
other Loan Party pursuant to this Agreement or the other Loan Documents or which
has been delivered to Agent or the Syndication Agent in connection with Agent's
or the Syndication Agent's or the Co-Lenders' credit evaluation of Borrower
prior to entering into this Agreement; provided such Transferee agrees to keep
such information confidential, or (d) upon the written consent of the party
whose otherwise confidential information would be disclosed.
Borrower acknowledges and agrees that Agent and the Syndication Agent
may provide to the Co-Lenders, and that Agent, the Syndication Agent and each of
the Co-Lenders may provide to any Participant, originals or copies of this
Agreement, all Loan Documents and all other documents, instruments,
certificates, opinions, insurance policies, letters of credit, reports,
requisitions and other materials and information of every nature or description,
and may communicate all oral information, at any time submitted by or on behalf
of Borrower or any other Loan Party or received by Agent or the Syndication
Agent in connection with the Loan or Borrower or any other loan Party.
Section 9.08 Recourse. The Loan and the Obligations shall be full
recourse to Borrower.
Section 9.09 Sale of Loan, Co-Lenders, Participations and Servicing.
(a) Lender and any Co-Lender may, at their option, sell with novation
all or any part of their right, title and interest in, and to, and under the
Loan, including, without
78
limitation, all or a portion of their obligation to make Advances, and its
interest in the outstanding principal balance of the Loan, to one or more
additional Co-Lenders; notwithstanding the foregoing, provided that no Event of
Default has occurred and is continuing, any such sale with novation to any
Co-Lender that is not an Affiliate of Lender or any Co-Lender shall be subject
to Borrower's prior written approval, which approval shall not be unreasonably
withheld or delayed; provided, further, however, that Borrower shall be deemed
to have approved any entity purchasing the Loan or part thereof or interest
therein that has a long-term credit rating on its senior debt equal or exceeding
BBB as rated by Standard & Poor's Ratings Services or equal or exceeding Baa-2
as rated by ▇▇▇▇▇'▇ Investors Service, Inc. Each additional Co-Lender shall
enter into an assignment and assumption agreement (the "Assignment and
Assumption") assigning a portion of Lender's or Co-Lender's rights and
obligations under the Loan, and pursuant to which the additional Co-Lender
accepts such assignment and assumes the assigned obligations. From and after the
effective date specified in the Assignment and Assumption (i) each Co-Lender
shall be a party hereto and to each Loan Document to the extent of the
applicable percentage or percentages set forth in the Assignment and Assumption
and, except as specified otherwise herein, shall succeed to the rights and
obligations of Lender and the Co-Lenders hereunder and thereunder in respect of
the Loan (including, without limitation, its pro rata share of Lender's and each
Co-Lenders' obligations to make Advances hereunder), and (ii) Lender, as lender
and each Co-Lender, as applicable, shall, to the extent such rights and
obligations have been assigned and assumed by it pursuant to such Assignment and
Assumption, relinquish its rights and be released from its obligations hereunder
and under the Loan Documents.
(b) The liabilities of Lender and each of the Co-Lenders shall be
several and not joint, and Lender's and each Co-Lenders' obligations to Borrower
under this Agreement shall be reduced by the amount of each such Assignment and
Assumption. Neither Lender nor any Co-Lender shall be responsible for the
obligations of any other Co-Lender. Lender and each Co-Lender shall be liable to
Borrower only for their respective proportionate shares of the Loan. If for any
reason any of the Co-Lenders shall fail or refuse to abide by their obligations
under this Agreement, Lender and the other Co-Lenders shall not be relieved of
their obligations, if any, hereunder, including their obligations to make their
pro rata share of any Advance on the date set forth for such Advance in the
Notice of Borrowing; notwithstanding the foregoing, Lender and the Co-Lenders
shall have the right, but not the obligation, at their sole option, to make the
defaulting Co-Lender's pro rata share of such Advance pursuant to the terms of
the Intercreditor Agreement.
(c) Borrower agrees that it shall, in connection with any sale of all
or any portion of the Loan, whether in whole or to an additional Co-Lender or
Participant (the "Syndication"), within ten (10) business days after requested
by Agent or the Syndication Agent, furnish Agent or the Syndication Agent with
the certificates required under Section 9.22(a) and (b) and such other
information as reasonably requested by any additional Co-Lender or Participant
in performing its due diligence in connection with its purchase of an interest
in the Loan and the Facility Amount.
(d) If for any reason the Lender or any of the Co-Lenders shall fall or
refuse to abide by its obligations under the Loan Agreement, this Agreement or
the other Loan Documents (each a "Defaulting Co-Lender"), then, in addition to
the rights and remedies that
79
may be available to the Agent and the other Co-Lenders at law and in equity,
such Defaulting Co-Lender's right to participate in the administration of the
Loan and the Loan Documents, including without limitation, any rights to consent
to or direct any action or inaction of the Agent or to be taken into account in
the calculation of Majority Co-Lenders, shall be suspended during the pendency
of such failure or refusal.
(e) Lender (or an Affiliate of Lender) shall act as administrative
agent for itself and the Co-Lenders (together with any successor administrative
agent, the "Agent") pursuant to this Section 9.09(e). Borrower acknowledges that
Lender, as Agent shall have the sole and exclusive authority to execute and
perform this Agreement and each Loan Document on behalf of itself, as Lender and
as agent for itself and the Co-Lenders subject to the terms of the Intercreditor
Agreement. Except as otherwise provided herein, Borrower shall have no
obligation to recognize or deal directly with any Co-Lender, and no Co-Lender
shall have any right to deal directly with Borrower with respect to the rights,
benefits and obligations of Borrower under this Agreement, the Loan Documents or
any one or more documents or instruments in respect thereof. Borrower may rely
conclusively on the actions of Lender as Agent to bind Lender and the
Co-Lenders, notwithstanding that the particular action in question may, pursuant
to this Agreement or any Intercreditor Agreement among Agent and the Co-Lenders,
be subject to the consent or direction of the Co-Lenders. Lender may resign as
Agent of the Co-Lenders, in its sole discretion, without the consent of
Borrower. Upon any such resignation, a successor Agent shall be determined
pursuant to the terms of the Intercreditor Agreement. The term Agent shall mean
any successor Agent.
Notwithstanding any provision to the contrary in this Agreement,
neither the Agent nor the Syndication Agent shall have any duties or
responsibilities except those expressly set forth herein and in the
Intercreditor Agreement and no covenants, functions, responsibilities, duties,
obligations or liabilities of Agent or the Syndication Agent shall be implied by
or inferred from this Agreement, the Intercreditor Agreement, or any other Loan
Document, or otherwise exist against Agent or the Syndication Agent.
(f) Except to the extent its obligations hereunder and its interest in
the Loan have been assigned pursuant to one or more Assignments and Assumptions,
▇▇▇▇▇▇ as Agent, shall have the same rights and powers under this Agreement as
any other Co-Lender and may exercise the same as though it were not the Agent,
respectively. The term "Co-Lender" or "Co-Lenders" shall, unless otherwise
expressly indicated, include ▇▇▇▇▇▇ in its individual capacity. ▇▇▇▇▇▇ and the
other Co-Lenders and their respective affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, Borrower, any Loan Party or any Affiliate of Borrower or any
Loan Party and any Person or entity who may do business with or own securities
of Borrower or any Loan Party or any Affiliate of Borrower or any Loan Party or
any Affiliate thereof, all as if they were not serving in such capacities
hereunder and without any duty to account therefor to each other.
(g) Intentionally Deleted.
(h) Lender, as Agent, shall maintain at its domestic lending office or
at such other location as Lender, as Agent, shall designate in writing to each
Co-Lender and Borrower a copy of each Assignment and Assumption delivered to and
accepted by it and a register for the
80
recordation of the names and addresses of the Co-Lenders, the amount of each
Co-Lender's proportionate share of the Facility Amount and the Loan and the name
and address of each Co-Lender's agent for service of process (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrower, Lender, as Agent, and the Co-Lenders may
treat each person or entity whose name is recorded in the Register as a
Co-Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection and copying by Borrower or any Co-Lender during normal
business hours upon reasonable prior notice to the Agent. A Co-Lender may change
its address and its agent for service of process upon written notice to Lender,
as Agent, which notice shall only be effective upon actual receipt by Lender, as
Agent, which receipt will be acknowledged by Lender, as Agent, upon request.
(i) Notwithstanding anything herein to the contrary, any financial
institution or other entity may be sold a participation interest in the Loan by
Lender or any Co-Lender without Borrower's consent (such financial institution
or entity, a "Participant") (x) if such sale is without novation and (y) if the
other conditions set forth in this paragraph are met. No Participant shall be
considered a Co-Lender hereunder or under the Note or the Loan Documents. No
Participant shall have any rights under this Agreement, the Note or any of the
Loan Documents and the Participant's rights in respect of such participation
shall be solely against Lender or Co-Lender, as the case may be, as set forth in
the participation agreement executed by and between Lender or Co-Lender, as the
case may be, and such Participant. The terms of any participation agreement
between Lender or Co-Lender, as the case may be, and its Participant shall not
grant the Participant any consent rights except for consent to (i) changes in
the interest rate and term of the Loan, (ii) increase in the principal amount of
the Loan (except for protective advances), (iii) release of collateral, (iv)
release of any party liable for repayment of the Loan, (v) forbearance, (vi)
consents to Liens other than Permitted Liens, (vii) the acceleration of the Loan
or the taking of any enforcement action with respect to the Loan. No
participation shall relieve Lender or Co-Lender, as the case may be, from its
obligations hereunder or under the Note or the Loan Documents and Lender or
Co-Lender, as the case may be, shall remain solely responsible for the
performance of its obligations hereunder.
(j) Notwithstanding any other provision set forth in this Agreement,
the Lender or any Co-Lender may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
amounts owing to it in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System), provided
that no such security interest or the exercise by the secured party of any of
its rights thereunder shall release Lender or Co-Lender from its funding
obligations hereunder.
Section 9.10 Borrower's Assignment. Borrower may not assign its rights
or obligations hereunder without the prior written consent of Agent and all of
the Co-Lenders.
Section 9.11 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
81
Section 9.12 Effectiveness. This Agreement shall become effective on
the date on which all of the parties hereto shall have signed a counterpart
hereof and shall have delivered the same to the Syndication Agent.
Section 9.13 Headings Descriptive. The heading of the several Sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
Section 9.14 Marshaling; Recapture. Agent shall be under no obligation
to marshal any assets in favor of Borrower, any other Loan Party or any other
party or against or in payment of any or all of the Obligations. To the extent
Agent receives any payment by or on behalf of Borrower or any other Loan Party,
which payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to Borrower or
such other Loan Party or its estate, trustee, receiver, custodian or any other
party under any bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such payment or repayment, the obligation or part
thereof which has been paid, reduced or satisfied by the amount so repaid shall
be reinstated by the amount so repaid and shall be included within the
liabilities of Borrower or such other Loan Party to Agent and the Co-Lenders as
of the date such initial payment, reduction or satisfaction occurred.
Section 9.15 Severability. In case any provision in or obligation under
this Agreement or the Note or the other Loan Documents shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 9.16 Survival. Except as expressly provided to the contrary
herein, all indemnities set forth herein including, without limitation, in
Sections 2.16, 2.17, 2.18, 2.19 and 9.01 shall survive the execution and
delivery of this Agreement, the Note and the Loan Documents and the making and
repayment of the Loan hereunder.
Section 9.17 Domicile of Loan Portions. Lender and the Co-Lenders may
transfer and carry any Loan Portion at, to or for the account of any domestic or
foreign branch office, subsidiary or affiliate, subject to Section 2.19.
Section 9.18 Limitation of Liability. No claim may be made by Borrower,
any other Loan Party or any other Person against Agent, the Syndication Agent,
or any Co-Lenders or the Affiliates, directors, officers, employees, attorneys
or agent of any of such Persons for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement or any other Transactions, or any act, omission or event
occurring in connection therewith; and Borrower hereby waives, releases and
agrees 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.
Section 9.19 Calculations; Computations. Except as otherwise expressly
provided herein, the financial statements to be furnished to Agent or the
Syndication Agent
82
pursuant hereto shall be made and prepared in accordance with GAAP consistently
applied throughout the periods involved and consistent with GAAP as used in the
preparation of the financial statements referred to in Section 4.05.
Section 9.20 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER, AGENT AND ALL CO-LENDERS EACH HEREBY IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
Section 9.21 No Joint Venture. Notwithstanding anything to the contrary
herein contained, neither Agent, the Syndication Agent nor any Co-Lender by
entering into this Agreement or by taking any action pursuant hereto, will be
deemed a partner or joint venturer with Borrower or any Loan Party and Borrower
agrees to hold Agent, the Syndication Agent and each Co-Lender harmless from any
damages and expenses resulting from such a construction of the relationship of
the parties hereto or any assertion thereof.
Section 9.22 Estoppel Certificates. (a) (a) Borrower and Agent, each
hereby agree at any time and from time to time upon not less than ten (10) days
prior written notice by Borrower or Agent, to execute, acknowledge and deliver
to the party specified in such notice, a statement, in writing, certifying
whether this Agreement is unmodified and in full force and effect (or if there
have been modifications, whether the same, as modified, is in full force and
effect and stating the modifications hereto), and stating whether or not, to the
best knowledge of such certifying party, any Default or Event of Default has
occurred and is then continuing, and, if so, specifying each such Default or
Event of Default; provided, however, that it shall be a condition precedent to
Lender's obligation, as Agent, to deliver the statement pursuant to this
Section, that Agent shall receive, together with Borrower's request for such
statement, a certificate of a general partner or senior executive officer of
Borrower stating that no Default or Event of Default exists as of the date of
such certificate (or specifying such Default or Event of Default).
(b) Within five (5) Business Days of Agent's request, Borrower shall
execute and deliver a certificate of the general partner of Borrower or senior
executive officer of Borrower confirming the then aggregate outstanding
principal balance of the Loan, the outstanding principal balance of each
Eurodollar Portion and the Base Rate Portion, the Contract Rate for each Loan
Portion, the dates to which all interest has been paid, and the Interest Period
for each Eurodollar Portion. Such statement shall be binding and conclusive on
Borrower absent manifest error.
Section 9.23 No Other Agreements. The Loan Documents constitute the
entire understanding of the parties with respect to the transactions
contemplated hereby, and all prior understandings with respect thereto, whether
written or oral, shall be of no force and effect.
Section 9.24 Controlling Document. In the event of a conflict between
the provisions of this Agreement and the other Loan Documents, the provisions of
this Agreement shall control and govern the conflicting provisions of the other
Loan Documents.
83
Section 9.25 No Benefit to Third Parties. This Agreement is for the
sole and exclusive benefit of Borrower and Agent, the Syndication Agent and the
Co-Lenders and all conditions of the obligation of Lender and the Co-Lenders to
make Advances hereunder are imposed solely and exclusively for the benefit of
Lender and the Co-Lenders and their assigns and no other person shall have
standing to require satisfaction of such conditions in accordance with their
terms or be entitled to assume that Lender and the Co-Lenders will refuse to
make Advances in the absence of strict compliance with any and all thereof and
no other person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Agent and the Co-Lenders at any time if they in their sole discretion deem it
advisable to do so. Without limiting the generality of the foregoing, neither
Agent nor the Co-Lenders shall have any duty or obligation to anyone to
ascertain that funds advanced hereunder are used as required by the terms hereof
or to pay the cost of constructing the improvements on any of the Hospitality
Properties or to acquire materials and supplies to be used in connection
therewith or to pay costs of owning, operating and maintaining same.
Section 9.26 Hedge Agreements. As more fully set forth in the Guaranty
and the Security Agreement, if any Co-Lender enters into a Hedge Agreement with
the Borrower, the obligations of the Borrower to such Co-Lender under such Hedge
Agreement shall (a) be pari passu with the Obligations and (b) be secured by the
Collateral pursuant to the Security Agreement.
[NO FURTHER TEXT ON THIS PAGE]
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[SIGNATURE PAGE OF CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INTERSTATE HOTELS CORPORATION,
a Maryland corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
85
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INTERSTATE HOTELS CORPORATION,
a Maryland corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
D/B/A ▇▇▇▇▇▇ CAPITAL, A DIVISION OF
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.,
a Delaware corporation, individually
as a Co-Lender, as Agent and as
Co-Arranger
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signature
▇▇▇▇▇▇ COMMERCIAL PAPER, INC., a
_______________, as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signature
CREDIT LYONNAIS NEW YORK BRANCH,
a New York State licensed branch of
a French Banking corporation, as
Co-Lender, as Co-Arranger and
Documentation Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
a national banking
association, as Co-Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
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