1
EXHIBIT 10.31
U.S. $250,000,000
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
Dated as of October 18, 1996
Among
FELCOR SUITE HOTELS, INC.
and FELCOR SUITES LIMITED PARTNERSHIP
as Borrower
and
THE LENDERS PARTY HERETO
and
THE CHASE MANHATTAN BANK
as Administrative Agent
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
as Documentation Agent
________________________________________________________________________________
THE CHASE MANHATTAN BANK
and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
as Co-Arrangers
2
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
1.3. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
1.4. Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1. The Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2 Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3 Making the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.4. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.5. Reduction and Termination of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.6. Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.7. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.8. Conversion/Continuation Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.9. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.10. Interest Rate Determination and Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.11. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.12. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.13. Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.14. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.15. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.16. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.17. Swing Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE III
I
3
CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.1. Conditions Precedent to Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.2. Additional Conditions Precedent to Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.3. Conditions Precedent to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.1. Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.2. Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.4. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.5. Financial Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.6. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.7. Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.8. Ownership of Borrower and DJONT; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.9. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.10. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.11. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.12. No Burdensome Restrictions; No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.13. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.14. Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.15. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.16. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.17. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.18. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.19. Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
4.20. Contractual Obligations Concerning Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.21. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.22. Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.23. Status as REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4.24. Operator: Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4.25. Operating Leases, Licenses and Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.26. FF&E Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE V
FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
II
4
5.1. Gross Interest Expense Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.2. Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.3. Maintenance of Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.4 Limitations on Total Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.5 Limitations on Total Secured Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE VI
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.1. Compliance with Laws, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.2. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.3. Payment of Taxes, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.4. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.5. Preservation of Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.6. Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.7. Keeping of Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.8. Maintenance of Properties, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.9. Performance and Compliance with Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.10. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.11. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.12. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
6.13. Leases and Operating Leases; Management Agreements and Licenses. . . . . . . . . . . . . . . . . . . 79
6.14. Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.15. Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.16. Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.17. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.19. REIT Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.20. Maintenance of FF&E Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.21. Hotel Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.22. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.23. Borrowing Base Determination/Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE VII
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.1. Restrictions on Creation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
III
5
7.2. Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.3. Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.4. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.5. Mergers, Stock Issuances, Asset Sales, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.6 Restrictions on Construction/Budget Hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.7. Change in Nature of Business or in Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . 87
7.8. Modification of Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.9. Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.10. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.11. Adverse or Speculative Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.12. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.13. Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.14. Management Continuity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.15. ERISA Plan Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE VIII
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE IX
THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.1. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.2. Administrative Agent's Reliance, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.3. Chase and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
9.4. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
9.5. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
9.6. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.1. Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.2. Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.3. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.4. Costs; Expenses; Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
IV
6
10.5. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.6. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
10.7. Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
10.8. Governing Law; Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.9. Submission to Jurisdiction; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.10. Section Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.11. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.12. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.13. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.14. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.15. Joint and Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
V
7
SCHEDULES
Schedule I - Commitments
Schedule II - Applicable Lending Offices and
Addresses for Notices
Schedule 4.8 - Subsidiaries and Unconsolidated Entities
Schedule 4.10 - Existing Indebtedness
Schedule 4.13 - Existing Investments
Schedule 4.19 - Environmental Protection
Schedule 4.22(a) - Owned Real Estate
Schedule 4.22(b) - Leased Real Estate
Schedule 6.23 - Initial Eligible Hotels
VI
8
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or Continuation
Exhibit D - Form(s) of Opinion(s) of Counsel for the
Loan Parties
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Borrowing Base Certificate
Exhibit G - Form of Compliance Certificate
Exhibit H - Form of Operating Lease
Exhibit I - Form of Subsidiary Guaranty
VII
9
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
October 18, 1996, among FELCOR SUITE HOTELS, INC., a Maryland corporation
("FelCor") and FELCOR SUITES LIMITED PARTNERSHIP, a Delaware limited
partnership ("FelCor LP" and collectively with FelCor, the "Borrower"), the
financial institutions listed on the signature pages hereof (each individually
a "Lender" and collectively the "Lenders") and THE CHASE MANHATTAN BANK
("Chase"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent") and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("▇▇▇▇▇
Fargo") as documentation agent.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Revolving Credit Agreement
dated as of September 30, 1996, among the Borrower, the financial institutions
listed on the signature page thereof (the "Original Lenders"), the
Administrative Agent and ▇▇▇▇▇ Fargo as documentation agent (the "Original
Revolving Credit Agreement"), the Original Lenders agreed to make to the
Borrower revolving credit advances of up to $250,000,000 in aggregate principal
amount outstanding at any one time, for the purposes and upon the terms and
subject to the conditions set forth therein;
WHEREAS, as of the date hereof Fifty-Two Million Dollars
($52,000,000) have been advanced to the Borrower, and are outstanding as Base
Rate Loans (as hereinafter defined), pursuant to the terms of the Original
Revolving Credit Agreement;
WHEREAS, immediately prior to the execution and delivery
hereof, the Original Lenders assigned portions of their respective Commitments
and Loans (as hereinafter defined) to the other Lenders; and
1
10
WHEREAS, the parties hereto have agreed to amend certain terms
and provisions of the Original Revolving Credit Agreement and to restate the
same as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree that
the aforementioned recitals are true and correct and hereby incorporated herein
and that the Original Revolving Credit Agreement is hereby amended
2
11
and restated in its entirety so that all of the terms and conditions contained
in this Agreement shall supersede and control the terms and conditions of the
Original Revolving Credit Agreement.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Adjusted EBITDA" means, for any Person for any period, EBITDA
of such Person for such period less the aggregate FF&E Reserves for such period
in respect of each Hotel owned or leased by such Person or its Subsidiaries.
"Adjusted Funds From Operations" means, for any Person, for
any period, Net Income (Loss) of such Person for such period plus (a) the sum
of the following amounts of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense and other non-cash charges of such Person
and its Subsidiaries with respect to their real estate assets for such period,
(iii) losses from Asset Sales of such Person and its Subsidiaries, losses
resulting from restructuring of Indebtedness of such Person and its
Subsidiaries and other extraordinary losses, and (iv) minority interests
attributable to FelCor LP's partnership units; less (b) the sum of the
following amounts of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) gains from Asset
Sales of such Person and its Subsidiaries, gains resulting from restructuring
of Indebtedness of such Person and its Subsidiaries and other
3
12
extraordinary gains, and (ii) the applicable share of Net Income (Loss) of such
Person's Unconsolidated Entities; plus (c) such Person's Pro Rata Share of
Adjusted Funds From Operations of such Person's Unconsolidated Entities.
"Adjusted NOI" means, with respect to any Hotel owned or
leased by the Borrower or any of its Subsidiaries or Eligible Joint Ventures,
for any period, the Net Operating Income for such Hotel for such period less
the FF&E Reserve for such Hotel for such period.
"Affiliate" means, to any Person, any Subsidiary of such
Person and any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person and includes each
executive officer, director, trustee, limited liability company manager or
general partner of such Person, and each Person who is the beneficial owner of
10% or more of any class of voting Stock of such Person. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Aggregate Value" means, with respect to the Eligible Hotels,
at any date, the aggregate value thereof to be calculated as follows:
(a) For Eligible Hotels owned or leased for four
(4) Fiscal Quarters or more, Adjusted NOI on a consolidated basis from such
Eligible Hotels for the preceding four (4) Fiscal Quarters divided by ten
percent (10%); and
(b) For Eligible Hotels owned or leased for less
than four (4) Fiscal Quarters, the Borrower's Investment in such Eligible
Hotels.
4
13
provided that in no event shall more than (i) 20% of the Aggregate Value be
attributable to Joint Venture Hotels, or (ii) 15% of the Aggregate Value be
attributable to Eligible Hotels leased pursuant to Qualified Leases.
"Agreement" means the Original Revolving Credit Agreement,
together with all Exhibits and Schedules thereto, as amended and restated by
this Amended and Restated Revolving Credit Agreement, together with all
Exhibits and Schedules hereto and as the same may be further amended,
supplemented or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each
Lender, its Domestic Lending Office in the case of a Base Rate Loan and its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means, with respect to each Loan at any
date, the applicable percentage per annum set forth below based upon the Status
then in effect, it being understood that the Applicable Margin for (i) Base
Rate Loans shall be the percentage set forth under the column "Base Rate
Loans", (ii) Eurodollar Rate Loans shall be the percentage set forth under the
column "Eurodollar Rate Loans", and (iii) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee":
Base Rate Eurodollar Commitment
Loans Rate Loans Fee
--------- ---------- ----------
Level I Status 0% 1.25% 0.25%
Level II Status 0% 1.375% 0.275%
Level III Status 0% 1.5% 0.3%
5
14
Base Rate Eurodollar Commitment
Loans Rate Loans Fee
--------- ---------- ----------
Level IV Status 0.125% 1.625% 0.325%
Level V Status 0.25% 1.75% 0.35%
Level VI Status 0.375% 1.875% 0.375%
Level VII Status 0.5% 2.0% 0.5%
"Asset Sale" means any sale, conveyance, transfer, assignment,
lease or other disposition (including, without limitation, by merger or
consolidation, and by condemnation, eminent domain, loss, damage, or
destruction, and whether by operation of law or otherwise) by the Borrower or
any of its Subsidiaries to any Person (other than to Borrower or any of its
Subsidiaries) of any Stock of any of its Subsidiaries, any Stock Equivalents of
any of its Subsidiaries or any Hotel, but excluding Operating Leases.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit E.
"Available Credit" means, at any time, an amount equal to (a)
the lower of (i) the then effective Commitments of the Lenders and (ii) the
Borrowing Base at such time less the sum of any Indebtedness of the Borrower or
any of its Subsidiaries plus their respective Pro Rata Shares of Indebtedness
of their Eligible Joint Ventures (excluding (A) Indebtedness evidenced by the
Notes, (B) Indebtedness secured by first priority mortgages on Hotels provided
that with respect to each such secured Indebtedness the ratio of
6
15
such Indebtedness to the Borrower's Investment in such Hotel, is less than 65%,
and (C) Non-Recourse Indebtedness), minus (b) the aggregate of the outstanding
principal amount of the Loans at such time.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall
be equal at all times to the higher of:
(a) the rate of interest announced publicly by Chase at its
principal office, from time to time, as Chase's base rate; and
(b) the sum (adjusted to the nearest 1/8 of one percent or, if
there is no nearest 1/8 of one percent, to the next higher 1/8 of one percent)
of (i) 1/2 of one percent per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any outstanding principal amount of the
Loans of any Lender that bears interest with reference to the Base Rate, other
than Swing Advances.
"Borrower's Investment" means, with respect to any Hotel, the
Borrower's or any of its Subsidiaries' investment in such Hotel (including all
investments constituting, evidencing or secured by an interest in property,
whether tangible or intangible and whether real, personal or mixed, that is
used or intended for use in, or in any manner connected with or relating to,
the ownership or leasing of such Hotel, specifically including, without
limitation, investments in Subsidiaries and Unconsolidated Entities owning or
leasing Hotels), at cost, on a consolidated basis, provided that in determining
the cost of such investments, there shall be included (i) the amount of all
cash paid and the value (as determined by the Board of Directors of FelCor for
purposes of such investment) of any other property transferred therefor by the
Borrower or its Subsidiary, (ii) the
7
16
amount of all indebtedness and other obligations assumed or incurred by the
Borrower or its Subsidiary or to which the Borrower or its Subsidiary takes
subject, and (iii) the value (as determined by the Board of Directors of FelCor
for the purposes of such investment) of all equity securities of which the
issuer is an entity that is, or upon such investment will be, included within
the Borrower or its Subsidiary and which are issued (otherwise than for cash)
to, or retained by, any person other than the Borrower or its Subsidiary in
connection with such investment. For purposes of this definition only
"indebtedness" of the Borrower or its Subsidiary shall mean the consolidated
liabilities of the Borrower and its Subsidiaries for borrowed money (including
all notes payable and drafts accepted representing extensions of credit) and
all obligations evidenced by bonds, debentures, notes or other similar
instruments on which interest charges are customarily paid, including
obligations under Capitalized Leases.
"Borrowing" means a borrowing consisting of Loans made on the
same day by the Lenders ratably according to their respective Commitments.
"Borrowing Base" means, at any time, the sum of 40% of the
Aggregate Value of Eligible Hotels.
"Borrowing Base Certificate" means a certificate of the
Borrower substantially in the form of Exhibit F.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and California and, if the
applicable Business Day relates to a Eurodollar Rate Loan, a day on which
dealings are also carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period,
the aggregate of all expenditures by such Person and its Subsidiaries, except
interest capitalized during
8
17
construction, during such period for property, plant or equipment, including,
without limitation, renewals, improvements, replacements and capitalized
repairs, that would be reflected as additions to property, plant or equipment
on a consolidated balance sheet of such Person and its Subsidiaries prepared in
conformity with GAAP. For the purpose of this definition, the purchase price
of equipment which is acquired simultaneously with the trade-in of existing
equipment owned by such Person or any of its Subsidiaries or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment being traded in at such time or the amount of such proceeds, as
the case may be.
"Capitalized Lease" means, as to any Person, any lease of
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
"Commitment" means, as to each Lender, the commitment of such
Lender to make Loans to the Borrower pursuant to Section 2.1 in the aggregate
principal amount outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule I under the caption "Commitment", as such amount may
be reduced or modified pursuant to this Agree-
9
18
ment, and "Commitments" means the aggregate Commitments of all Lenders.
"Commitment Fee" has the meaning specified in Section 2.4(a).
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness or Contractual Obligation of another Person, if the
purpose or intent of such Person in incurring the Contingent Obligation is to
provide assurance to the obligee of such Indebtedness or Contractual Obligation
that such Indebtedness or Contractual Obligation will be paid or discharged, or
that any agreement relating thereto will be complied with, or that any holder
of such Indebtedness or Contractual Obligation will be protected (in whole or
in part) against loss in respect thereof. Contingent Obligations of a Person
include, without limitation, (a) the direct or indirect guarantee, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of an
obligation of another Person (including, in the case of any Guarantor, its
obligations under its Subsidiary Guaranty), and (b) any liability of such
Person for an obligation of another Person through any agreement (contingent or
otherwise) (i) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such obligation or to assure
the
10
19
holder of such obligation against loss, or (v) to supply funds to or in any
other manner invest in such other Person (including, without limitation, to pay
for property or services irrespective of whether such property is received or
such services are rendered), if in the case of any agreement described under
subclause (i), (ii), (iii), (iv) or (v) of this sentence the primary purpose or
intent thereof is as described in the preceding sentence. Anything herein to
the contrary notwithstanding, no agreement entered into by the Borrower or any
of its Subsidiaries or Unconsolidated Entities with respect to its acquisition
of any direct or indirect interest in any Hotel shall, prior to the
satisfaction in full of all conditions precedent to the obligations of such
Person pursuant to the agreement, be deemed or construed to constitute a
"Contingent Obligation" or "Indebtedness" of such Person hereunder, provided
that pursuant to any such agreement, the Borrower or its Subsidiary or
Unconsolidated Entity is not liable or responsible for, and does not assume
any, development or construction risks. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement (including, without limitation, any management or
franchise agreement), undertaking, contract, lease, indenture, mortgage, deed
of trust or other instrument (excluding a Loan Document) to which such Person
is a party or by which it or any of its property is bound or to which any of
its properties is subject.
"Debt Service" means, for any Person for any period, (a) Gross
Interest Expense for such period plus (b) the aggregate amount of scheduled
principal payments on the Total Indebtedness of such Person (excluding optional
prepayments and scheduled principal payments in respect of any
11
20
such Total Indebtedness which is payable in a single installment at final
maturity) required to be made during such period.
"Default" means any event which with the passing of time or
the giving of notice or both would become an Event of Default.
"DJONT" means DJONT Operations, L.L.C., a Delaware limited
liability company.
"DOL" means the United States Department of Labor, or any
successor thereto.
"Dollars" and the sign "$" each mean the lawful money of the
United States of America.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule II or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for any Person for any period, the Net Income
(Loss) of such Person for such period taken as a single accounting period, plus
(a) the sum of the following amounts of such Person and its Subsidiaries for
such period determined on a consolidated basis in conformity with GAAP to the
extent included in the determination of such Net Income (Loss): (i)
depreciation expense, (ii) amortization expense and other non-cash charges,
(iii) interest expense, (iv) income tax expense, (v) extraordinary losses (and
other losses on Asset Sales not otherwise included in extraordinary losses
determined on a consolidated basis in conformity with GAAP), and (vi) minority
interests attributable to FelCor LP's partnership units, less (b) the sum of
the following amounts of such Person and its Subsidiaries determined
12
21
on a consolidated basis in conformity with GAAP to the extent included in the
determination of such Net Income (Loss): (i) extraordinary gains (and in the
case of the Borrower, other gains on Asset Sales not otherwise included in
extraordinary gains determined on a consolidated basis in conformity with
GAAP), (ii) the applicable share of Net Income (Loss) of such Person's
Unconsolidated Entities; plus (c) such Person's Pro Rata Share of EBITDA of
such Person's Unconsolidated Entities.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $5,000,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the OECD, or a political
subdivision of any such country, and having total assets in excess of
$5,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is
also a member of the OECD or the Cayman Islands; (iii) the central bank of any
country which is a member of the OECD; corporation organized under the laws of
the United States, or any State thereof, and having total assets in excess of
$3,000,000,000; (iv) an insurance company organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$5,000,000,000; (v) any Lender; (vi) any Affiliate of any Lender; and (vii) any
Person other than an Affiliate of a Loan Party, in each case acceptable (a) to
the Administrative Agent, and (b) provided no Default or Event of Default
exists, to the Borrower, which acceptance will not be unreasonably withheld,
conditioned or delayed.
"Eligible Hotels" means, collectively, (a) such of the Hotels
owned or leased by the Borrower or any of its direct or indirect wholly-owned
Subsidiaries, and (b) such of the Joint Venture Hotels, as shall meet at any
time and from time to time, each of the following minimum criteria:
13
22
(a) such Hotel is Unencumbered;
(b) such Hotel is free of all material structural and
title defects and other material adverse matters;
(c) such Hotel is (i) in compliance, in all material
respects, with all applicable Environmental Laws, and
(ii) not subject to any material Environmental
Liabilities and Costs, in each case as initially
verified by a written report of an environmental
consultant reasonably acceptable to the
Administrative Agent;
(d) such Hotel is fully-operating with less than 20% of
"keys" out of service due to casualty or condemnation
loss or as a consequence of a material structural
repair, alteration or addition;
(e) such Hotel is (i) leased to the Operating Lessee
pursuant to an Operating Lease, (ii) managed by a
Manager pursuant to a Management Agreement, and (iii)
operated pursuant to and has the benefit of, a
License; and no material defaults exist under such
Operating Lease, Management Agreement or License;
(f) such Hotel is (i) owned in fee simple or (ii) leased
pursuant to a Qualified Lease in favor of, the
Borrower or its direct or indirect wholly owned
Subsidiary or an Eligible Joint Venture
"Eligible Hotel Documents" means, with respect to any Eligible
Hotel, the documents described in Section 6.23(b).
14
23
"Eligible Joint Venture" means any joint venture, corporation,
partnership or other business entity (a) in which the Borrower (i) owns
directly or indirectly a JV% of at least 50% and (ii) is the managing general
partner or equivalent thereof for such entity, and (b) which owns a single
Hotel.
"Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, Environmental Lien, demand, abatement or other
Order or direction (conditional or otherwise) by any Governmental Authority or
any other Person for personal injury (including sickness, disease or death),
tangible or intangible property damage, damage to the environment, nuisance,
pollution, contamination or other adverse effects on the environment, or for
fines, penalties or restriction, resulting from or based upon (i) the
existence, or the continuation of the existence, of a Release (including,
without limitation, sudden or non-sudden accidental or non-accidental Releases)
of, or exposure to, any Hazardous Material or other nuisance (to the extent the
same relates to any Hazardous Materials), or other Release in, into or onto the
environment (including, without limitation, the air, soil, surface water or
groundwater) at, in, by, from or related to any property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures or any
activities or operations thereof; (ii) the environmental aspects of the
transportation, storage, treatment or disposal of Hazardous Materials in
connection with any property owned or leased by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures or their operations or facilities; or
(iii) the violation, or alleged violation, of any Environmental Laws, Orders or
Environmental Permits of or from any Governmental Authority relating to
environmental matters connected with any property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures.
15
24
"Environmental Laws" means any applicable federal, state,
local or foreign law (including common law), statute, code, ordinance, rule,
regulation or other requirement having the force or effect of law relating to
the environment, natural resources, or public or employee health and safety and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.,
the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136
et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section
6901 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act,
33 U.S.C. Section 1251 et seq., the Occupational Safety and Health Act,
29 U.S.C. Section 651 et seq. (to the extent the same relates to any Hazardous
Materials), and the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.,
as such laws have been amended or supplemented, and the regulations promulgated
pursuant thereto, and all analogous state and local statutes.
"Environmental Liabilities and Costs" means, as to any Person,
all liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including, without limitation, all reasonable fees, disbursements and
expenses of counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any other Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
including, without limitation, any thereof arising under any Environmental Law,
Environmental Permit, order or agreement with any Governmental Authority or
other Person, and which relate to any environmental, health or safety
condition, or a Release or threatened Release, and result from the past,
present or
16
25
future operations of, or ownership of property by, such Person or any of its
Subsidiaries or Eligible Joint Ventures.
"Environmental Lien" means any Lien in favor of any
Governmental Authority arising under any Environmental Law.
"Environmental Permit" means any Permit required under any
applicable Environmental Laws or Order and all supporting documents associated
therewith.
"ERISA" means the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with any
Loan Party within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
"ERISA Event" means (i) an event described in Sections
4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a Pension
Plan; (ii) the withdrawal of any Loan Party or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (iii)
the complete or partial withdrawal of any Loan Party or any ERISA Affiliate
from any Multiemployer Plan or the insolvency of any Multiemployer Plan; (iv)
the filing of a notice of intent to terminate a Pension Plan or the treatment
of a plan amendment as a termination under Section 4041 of ERISA; (v) the
institution of proceedings by the PBGC to terminate or appoint a trustee to
administer a Pension Plan or Multiemployer Plan; (vi) the failure to make any
required contribution to a Pension Plan; (vii) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
17
26
any Pension Plan or Multiemployer Plan; (viii) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA; (ix) a prohibited transaction (as described in
Code Section 4975 or ERISA Section 406) shall occur with respect to any Plan;
or (x) any Loan Party or ERISA Affiliate shall request a minimum funding waiver
from the IRS with respect to any Pension Plan.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" below
its name on Schedule II (or, if no such office is specified, its Domestic
Lending Office) or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period, an interest
rate per annum equal to the rate per annum obtained by multiplying (a) a rate
per annum equal to the rate for U.S. dollar deposits with maturities comparable
to such Interest Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of such Interest
Period, provided, however, that if such rate does not appear on Telerate Page
3750, the "Eurodollar Rate" applicable to a particular Interest Period shall
mean a rate per annum equal to the rate at which U.S. dollar deposits in an
amount approximately equal to the Principal Balance (or the portion thereof
which will bear interest at a rate determined by reference to the Eurodollar
Rate during the Interest Period to which such Eurodollar Rate is applicable in
accordance with the provisions hereof), and with maturities comparable to the
last day of the Interest Period with respect to which such Eurodollar Rate is
applicable, are offered in immediately available funds in the London Interbank
Market to the London office of Chase by leading banks in the Eurodollar market
at 11:00 a.m., London time, two (2) Business Days prior to the com-
18
27
mencement of the Interest Period to which such Eurodollar Rate is applicable,
by (b) a fraction (expressed as a decimal) the numerator of which shall be the
number one and the denominator of which shall be the number one minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount
of the Loans of any Lender that, for an Interest Period, bears interest at a
rate determined with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Interest Period
means the aggregate reserve percentages (expressed as a decimal) from time to
time established by the Board of Governors of the Federal Reserve System of the
United States and any other banking authority to which any of the Lenders are
now or hereafter subject, including, but not limited to any reserve on
Eurocurrency Liabilities as defined in Regulation D of the Board of Governors
of the Federal Reserve System of the United States at the ratios provided in
such Regulation from time to time, it being agreed that any portion of the
Principal Balance bearing interest at a rate determined by reference to the
Eurodollar Rate shall be deemed to constitute Eurocurrency Liabilities, as
defined by such Regulation, and it being further agreed that such Eurocurrency
Liabilities shall be deemed to be subject to such reserve requirements without
benefit of or credit for prorations, exceptions or offsets that may be
available to any of the Lenders from time to time under such Regulation and
irrespective of whether such Lender actually maintains all or any portion of
such reserve.
"Event of Default" has the meaning specified in Section 8.1.
"$100MM Facility" means that certain revolving credit facility
in the aggregate principal sum of $100,000,000 made by Boatmen's National Bank
of Oklahoma, as
19
28
Agent for certain banks, as lenders, in favor of the Borrower, as borrowers.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"FF&E Reserve" means, for any Person (or with respect to any
Hotel) for any period, a reserve equal to four percent (4%) of Suite Revenues
from any Hotel owned by such Person (or from such Hotel), for such Period,
plus, (a) for any Person, such Person's Pro Rata Share of any FF&E Reserve for
any Hotel owned by such Person's Unconsolidated Entities or, (b) with respect
to any Joint Venture Hotel, the FF&E Reserve for such Joint Venture Hotel
multiplied by the applicable JV%.
"Final Maturity Date" means October 1, 1999.
"Fiscal Quarter" means each of the three month periods ending
on March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December
31.
"Free Cash Flow" means, for any Person for any period, the
Adjusted Funds From Operations for such period less (a) the aggregate FF&E
Reserves for such Person and its
20
29
Subsidiaries for such period, and (b) the aggregate amount of scheduled
principal payments on the Total Indebtedness of such Person (excluding optional
prepayments and scheduled principal payments in respect of any such
Indebtedness which is payable in a single installment at final maturity)
required to be made during such period.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by
such other entity as may be in general use by significant segments of the
accounting profession, which are applicable to the circumstances as of the date
of determination except that, for purposes of Articles V and VII, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the audited financial
statements referred to in Section 4.5.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity duly exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Gross Interest Expense" means, for any Person for any period,
the sum of (a) the total interest expense in respect of all Indebtedness
(excluding all Contingent Obligations) of such Person and its Subsidiaries for
such period determined on a consolidated basis in conformity with GAAP, plus
capitalized interest of such Person and its Subsidiaries, plus (b) such
Person's Pro Rata Share of Gross Interest Expense of such Person's
Unconsolidated Entities.
21
30
"Guarantor" means each direct and indirect wholly owned
Subsidiary of the Borrower, comprising, as of the date hereof, (i) FelCor/CSS
Hotels, L.L.C., a Delaware limited liability company, (ii) FelCor/LAX Hotels,
L.L.C., a Delaware limited liability company, (iii) FelCor/CSS Holdings, L.P.,
a Delaware limited partnership, (iv) FelCor/St. ▇▇▇▇ Holdings, L.P., a
Delaware limited partnership, and (v) FelCor/LAX Holdings, L.P., a Delaware
limited partnership.
"Hazardous Material" means any substance, material or waste
which is regulated by any Governmental Authority of the United States as a
"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous waste," "restricted hazardous waste," "contaminant," "toxic waste,"
"toxic substance" or words of similar meaning or import under any provision of
Environmental Law, which includes, but is not limited to, petroleum, petroleum
products, asbestos, urea formaldehyde and polychlorinated biphenyls.
"Hotel" means any Real Estate or Lease comprising an operating
facility offering hotel or other lodging services.
"Improvements" has the meaning specified in Section 4.22(c).
"Indebtedness" of any Person means, without duplication, the
principal amount of (i) all indebtedness of such Person for borrowed money
(including, without limitation, reimbursement and all other obligations with
respect to surety bonds, letters of credit and bankers' acceptances, whether or
not matured) or for the deferred purchase price of property or services, (ii)
all obligations of such Person evidenced by notes, bonds, debentures or similar
instruments (including, in the case of the Borrower, the Loans outstanding),
(iii) all indebtedness of such
22
31
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (iv) all
Capitalized Lease Obligations of such Person, (v) all Contingent Obligations of
such Person, (vi) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value (other than for other equity securities)
any Stock or Stock Equivalents of such Person, valued, in the case of
mandatorily redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (vii) all
Indebtedness referred to in clause (i), (ii), (iii), (iv), (v) or (vi) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including, without limitation, accounts and general intangibles) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, and (viii) all liabilities of such Person under
Title IV of ERISA.
"Indemnitees" has the meaning specified in Section 10.4.
"Interest Period" means, (a) in the case of any Eurodollar
Rate Loan, (i) initially, the period commencing on the date such Eurodollar
Rate Loan is made or on the date of conversion of a Base Rate Loan to such
Eurodollar Rate Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its Notice of Borrowing or Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.3 or 2.8,
and (ii) thereafter, if such Loan is continued, in whole or in part, as a
Eurodollar Rate Loan pursuant to Section 2.8, a period commencing on the last
day of the immediately preceding Interest Period therefor and ending one, two,
23
32
three or six months thereafter, as selected by the Borrower in its Notice of
Conversion or Continuation given to the Administrative Agent pursuant to
Section 2.8; provided, however, that:
(A) if any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless the
result of such extension would be to extend such Interest
Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding
Business Day;
(B) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(C) the Borrower may not select any Interest Period
which ends after the Final Maturity Date;
(D) until the earlier to occur of (i) such date upon
which the Commitment of the Administrative Agent hereunder has
been reduced to or below $30,000,000, or (ii) such date as is
90 days after the Closing Date, the Borrower may only select a
one month Interest Period in its Notice of Borrowing or Notice
of Conversion or Continuation.
(E) the Borrower may not select any Interest Period
in respect of Loans having an aggregate principal amount of
less than $5,000,000; and
24
33
(F) there shall be outstanding at any one time no
more than five (5) Interest Periods in the aggregate.
"Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.
"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 Stock, Stock Equivalents, other equity interest,
obligations or other securities of, (i) any other Person, (ii) or all or
substantially all of the assets of any other Person, or (iii) all or
substantially all of the assets constituting the business of a division, branch
or other unit operation of any other Person, or (c) any joint venture or
partnership with, or any capital contribution to, or other investment in, any
other Person or any real property.
"IRS" means the Internal Revenue Service, or any successor
thereto.
"Joint Venture Hotel" means any Hotel owned by an Eligible
Joint Venture
"JV%" means, with respect to any Eligible Joint Venture, the
percentage ownership interest of Borrower in such Eligible Joint Venture.
"Leases" means, with respect to the Borrower or any of its
Subsidiaries or Eligible Joint Ventures, all of those leasehold estates in real
property owned by the Borrower or such Subsidiary or Eligible Joint Venture, as
lessee, as such may be amended, supplemented or otherwise
25
34
modified from time to time to the extent permitted by this Agreement.
"Legal Proceedings" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private) or governmental
proceedings.
"License" means an agreement in favor of either the Borrower
or the Operating Lessee as licensee, permitting the use of hotel system
trademarks, trade names and any related rights in connection with the ownership
or operation of any Hotel.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), security interest or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including, without limitation,
any conditional sale or other title retention agreement, the interest of a
lessor under a Capitalized Lease Obligation, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing,
under the Uniform Commercial Code or comparable law of any jurisdiction, of any
financing statement naming the owner of the asset to which such Lien relates as
debtor.
"Loan" or "Loans" means the revolving credit loan or loans
made or to be made by a Lender to the Borrower pursuant to Article II.
"Loan Documents" means, collectively, this Agreement, the
Notes, the Subsidiary Guaranties and each certificate, agreement or document
executed by a Loan Party and delivered to the Administrative Agent or any
Lender in connection with or pursuant to any of the foregoing.
26
35
"Loan Party" means each of the Borrower and each Guarantor.
"Majority Lenders" means, at any time, Lenders holding at
least 51% of the then aggregate unpaid principal amount of Loans (excluding
Loans held by Non-Funding Lenders) or, if no such Loans are then outstanding,
Lenders having at least 51% of the Commitments of all Lenders (excluding
Non-Funding Lenders).
"Management Agreement" means an agreement relating to the
operation and/or management of any Hotel between the Operating Lessee and the
Manager.
"Manager" means Promus, DT Management, Inc., American General
Hospitality, Inc., Coastal Hotel Group, Inc., or such other manager as shall be
reasonably approved by the Borrower and engaged by the Operating Lessee, as
manager under the Management Agreement.
"Material Adverse Change" means a material adverse change in
any of (i) the condition (financial or otherwise), business, performance,
prospects, operations or properties of (A) any Borrower, (B) the Borrower and
its Subsidiaries taken as one enterprise or (C) DJONT (ii) the legality,
validity or enforceability of any Loan Document, or any material Operating
Lease or the Operating Leases taken as a whole, (iii) the ability of the
Borrower or its Significant Subsidiaries to repay the Obligations or to perform
its obligations under any Loan Document, (iv) the ability of DJONT to perform
its obligations under any material Operating Lease or the Operating Leases
taken as a whole, or (v) the rights and remedies of the Lenders or the
Administrative Agent under the Loan Documents.
"Material Adverse Effect" means an effect that results in or
causes, or has a reasonable likelihood of resulting in or causing, a Material
Adverse Change.
27
36
"Minimum Tangible Net Worth" means, with respect to the
Borrower, at any time, the sum of $500,000,000 plus (a) 75% of the sum of (i)
cumulative positive Net Income of the Borrower for each Fiscal Quarter after
June 30, 1996 through the date of determination less (ii) cumulative dividends
paid by the Borrower or its Subsidiaries after June 30, 1996 during all such
Fiscal Quarters; plus (b) 50% of the aggregate net proceeds received by the
Borrower or any of its Subsidiaries after June 30, 1996 in connection with any
offering of Stock or Stock Equivalents of the Borrower and its Subsidiaries
taken as a whole.
"Moody's" means ▇▇▇▇▇'▇ Investor Service Inc.
"Multiemployer Plan" means, as of any applicable date, a
multiemployer plan, as defined in Section 4001(a)(3) of ERISA, and to which any
Loan Party, any of its Subsidiaries or any ERISA Affiliate is making, is
obligated to make, or within the six-year period ending at such date, has made
or been obligated to make, contributions on behalf of participants who are or
were employed by any of them.
"Net Income (Loss)" means, for any Person for any period, the
aggregate of net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP.
"Net Operating Income" means, with respect to any Hotel, for
any period, the sum of the following (without duplication) (a) all gross
income, revenues, receipts and all other consideration received by the lessor
under the Operating Lease for such Hotel, including, without limitation, base
rent, percentage and similar rentals, late charges and interest payments, but
excluding extraordinary income and, until earned, security deposits, prepaid
rents and other refundable receipts, minus (b) all expenses incurred by the
owner of such Hotel during such period pursuant to its obligations as lessor
under the Operating
28
37
Lease for such Hotel, including, without limitation, real estate taxes,
personal property taxes, maintenance and repair costs of a non-capital nature
for the structural portions of such Hotel and premiums payable for insurance
required to be carried by the lessor on or with respect to such Hotels pursuant
to the Operating Lease therefor, but excluding extraordinary expenses; provided
that, with respect to any Joint Venture Hotel, "Net Operating Income" shall
mean the Net Operating Income from such Hotel multiplied by the applicable JV%.
"Non-Funding Lender" has the meaning specified in Section
2.14(f).
"Non-Recourse Indebtedness" of any Person means all
Indebtedness of such Person with respect to which recourse for payment is
limited to specific assets encumbered by a Lien securing such Indebtedness;
provided, however, that personal recourse of a holder of Indebtedness against
any obligor with respect thereto for fraud, misrepresentation, misapplication
of cash, waste and other circumstances customarily excluded from non-recourse
provisions in non-recourse financing of real estate shall not, by itself,
prevent any Indebtedness from being characterized as Non-Recourse Indebtedness,
provided further that if a personal recourse claim is made in connection
therewith, such claim shall not constitute Non-Recourse Indebtedness for the
purposes of this Agreement).
"Non-Suite Hotel" means a Hotel that is not a Suite Hotel.
"Note" means a promissory note of the Borrower payable to the
order of any Lender in a stated principal amount equal to the amount of such
Lender's Commitment as originally in effect, in substantially the form of
Exhibit A, evidencing the aggregate Indebtedness of the Borrower to
29
38
such Lender resulting from the Loans made by such Lender, and "Notes" means,
collectively, the Notes.
"Notice of Borrowing" has the meaning specified in Section
2.3(a).
"Obligations" means the Loans and all other advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to the
Administrative Agent, any Lender, any Affiliate of any of them or any
Indemnitee, of every type and description, present or future, arising under
this Agreement or under any other Loan Document, whether direct or indirect
(including, without limitation, those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term "Obligations" includes, without limitation, all interest,
charges, expenses, fees, attorneys' fees and disbursements and any other sum
then payable by the Borrower under this Agreement or any other Loan Document.
"OECD" means the Organization for Economic Cooperation and
Development.
"Operating Lease" means a lease or sublease relating to any
Hotel, between the Borrower or any of its Subsidiaries or Eligible Joint
Ventures, as lessor, and the Operating Lessee, as lessee, substantially in the
form of the lease annexed as Exhibit H hereto or such other form as shall be
approved by the Lender.
"Operating Lessee" means DJONT or its wholly owned subsidiary,
as lessee under an Operating Lease.
"Operator" means the Operating Lessee and/or the Manager or
both (as the case may be) responsible for the operation and management of any
Hotel.
30
39
"Order" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award.
"Other Taxes" has the meaning specified in Section 2.15(b).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means a plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA or Code Section 412 and which any Loan
Party, any of its Subsidiaries or any ERISA Affiliate maintains, contributes to
or has an obligation to contribute to on behalf of participants who are or were
employed by any of them.
"Permit" means any permit, approval, authorization, license,
variance, registration, permission or consent required from a Governmental
Authority under an applicable Requirement of Law.
"Permitted Liens" means, collectively, (a) Liens arising by
operation of law in favor of materialmen, mechanics, warehousemen, carriers,
lessors or other similar Persons incurred by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures in the ordinary course of business
which secure its obligations to such Person; provided, however, that (i) the
Borrower or such Subsidiary or Eligible Joint Venture is not in default with
respect to such payment obligation to such Person, or (ii) the Borrower or such
Subsidiary or Eligible Joint Venture is in good faith and by appropriate
proceedings diligently contesting such obligation and adequate provision is
made for the payment thereof; (b) Liens (excluding Environmental Liens)
securing taxes, assessments or governmental charges or levies; provided,
however, that neither the Borrower nor any of its Subsidiaries or Eligible
Joint Ventures is in default in respect of any payment obligation with respect
thereto
31
40
unless the Borrower or such Subsidiary or Eligible Joint Venture is in good
faith and by appropriate proceedings diligently contesting such obligation and
adequate provision is made for the payment thereof; and (c) Zoning
restrictions, subleases, licenses or concessions for restaurants, bars, gift
shops, antennas, communications equipment and similar agreements entered into
in the ordinary course of such Person's business in connection with the
ownership and operation of a hotel; and easements, licenses, reservations,
restrictions on the use of real property or minor irregularities incident
thereto which do not in the aggregate materially detract from the value or use
of the property or assets of the Borrower or any of its Subsidiaries or
Eligible Joint Venture or impair, in any material manner, the use of such
property for the purposes for which such property is held by the Borrower or
any such Subsidiary or Eligible Joint Venture.
"Person" means an individual, partnership, corporation
(including, without limitation, a business trust), limited liability company,
joint stock company, trust, unincorporated association, joint venture or other
entity, or a Governmental Authority.
"Plan" means an employee benefit plan, as defined in Section
3(3) of ERISA, which any Loan Party or any of its Subsidiaries maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"Principal Balance" means, collectively, the outstanding
principal balances of the Notes from time to time.
"Projections" means those financial projections covering the
fiscal years ending in 1996 through 2000, inclusive, delivered to the Lenders
by the Borrower.
32
41
"Promus" means Promus Hotels, Inc., a Delaware corporation or
any Subsidiary thereof that is a Manager.
"Pro Rata Share" means, for any Person, with respect to such
Person's Unconsolidated Entities (including, without limitation, any Eligible
Joint Ventures), the percentage ownership interest of such Person in such
Unconsolidated Entity, provided that, in the event that such Person is the
general partner of such Unconsolidated Entity, such Person's Pro Rata Share
with respect to such Unconsolidated Entity shall be the percentage of the
general partner interests owned by such Person in such Unconsolidated Entity
with respect to any Indebtedness for which recourse may be made against any
general partner of such Unconsolidated Entity.
"Qualified Lease" means any Lease (a) which is a direct ground
lease granted by the fee owner of real property, (b) which may be transferred
and/or assigned without the consent of the lessor (or as to which the Lease
expressly provides that (i) such Lease may be transferred and/or assigned with
the consent of the lessor and (ii) such consent shall not be unreasonably
withheld or delayed), (c) which has a remaining term (including any renewal
terms exercisable at the sole option of the lessee) of at least 40 years, (d)
under which no material default has occurred and is continuing, (e) with
respect to which a security interest may be granted without the consent of the
lessor, and (f) which contains lender protection provisions reasonably
acceptable to the Administrative Agent including, without limitation,
provisions to the effect that (i) the lessor shall notify any holder of a
security interest in such Lease of the occurrence of any default by the lessee
under such Lease and shall afford such holder the right to cure such default,
and (ii) in the event that such Lease is terminated, such holder shall have the
option to enter into a new lease having terms substantially identical to those
contained in the terminated Lease. Upon the submission to
33
42
the Administrative Agent of a written request for approval of the lender
protection provisions and other terms of a proposed Qualified Lease, the
Administrative Agent shall respond by accepting or rejecting such proposal
within ten Business Days following receipt of such request.
"Ratable Portion" or "ratably" means, except as otherwise
specifically provided herein, with respect to any Lender, the quotient obtained
by dividing the Commitment of such Lender by the Commitments of all Lenders and
that payments of principal of the Loans and interest thereon shall be made pro
rata in accordance with the respective unpaid principal amounts of the Loans
held by the Lenders.
"Real Estate" means all of those plots, pieces or parcels of
land now owned or hereafter acquired by the Borrower or any of its Subsidiaries
or Eligible Joint Ventures (the "Land"), including, without limitation, those
listed on Schedule 4.22(a), together with the right, title and interest of the
Borrower or such Subsidiary or Eligible Joint Venture, if any, in and to the
streets, the land lying in the bed of any streets, roads or avenues, opened or
proposed, in front of, adjoining or abutting the Land to the center line
thereof, the air space and development rights pertaining to the Land and the
right to use such air space and development rights, all rights of way,
privileges, liberties, tenements, hereditaments and appurtenances belonging or
in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including, without limitation, all alley, vault,
drainage, mineral, water, oil and gas rights, together with all of the
buildings and other improvements now or hereafter erected on the Land, and any
fixtures appurtenant thereto.
"Register" has the meaning specified in Section 10.7.
34
43
"Release" means any release, spill, emission, leaking,
pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge,
dispersal, leaching or migration on or into the indoor or outdoor environment
or into or out of any property.
"Remedial Action" means all actions, including without
limitation any Capital Expenditures, required or necessary to (i) clean up,
remove, treat or in any other way address any Hazardous Material or other
substance in the indoor or outdoor environment, (ii) prevent the Release or
threat of Release, or minimize the further Release, of any Hazardous Material
or other substance so it does not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment, (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and care,
or (iv) bring facilities on any property owned or leased by the Borrower or any
of its Subsidiaries into compliance with all Environmental Laws and
Environmental Permits.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and all federal, state and local laws, rules and regulations,
including, without limitation, federal, state or local securities, antitrust
and licensing laws, all food, health and safety laws, and all applicable trade
laws and requirements, including, without limitation, all disclosure
requirements of Environmental Laws, ERISA and all orders, judgments, decrees or
other determinations of any Governmental Authority or arbitrator, applicable to
or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
35
44
"Responsible Officer" means, with respect to any Person, any
of the principal executive officers or general partners of such Person.
"Restricted Payments" has the meaning specified in Section
7.4.
"S&P" means Standard & Poor's Ratings Group and its
successors.
"Significant Subsidiary" means, at any date of determination,
(i) any Subsidiary of the Borrower which, or (ii) any group of Subsidiaries of
the Borrower which when aggregated, at such date, directly or indirectly own(s)
or lease(s) one or more Hotels having an aggregate value (calculated on the
basis of the Borrower's Investment therein) in excess of $75,000,000.
"Solvent" means, with respect to any Person, that the value of
the assets of such Person (at fair value) is, on the date of determination,
greater than the total amount of liabilities (including, without limitation,
contingent and unliquidated liabilities) of such Person as of such date and
that, as of such date, such Person is able to pay all liabilities of such
Person as such liabilities mature and does not have unreasonably small capital.
In computing the amount of contingent or unliquidated liabilities at any time,
such liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Status" means the existence of Level I Status, Level II
Status, Level III Status, Level IV Status, Level V Status, Level VI Status or
Level VII Status, as the case may be.
36
45
As used in this definition:
"Level I Status" exists at any date if, at such date,
either Borrower has a long-term senior unsecured actual or
implied debt rating of A- or better by S&P and A3 or better by
Moody's;
"Level II Status" exists at any date if, at such
date, either Borrower has a long-term senior unsecured actual
or implied debt rating of BBB+ by S&P and Baa1 by Moody's;
"Level III Status" exists at any date if, at such
date, either Borrower has a long-term senior unsecured actual
or implied debt rating of BBB by S&P and Baa2 by Moody's;
"Level IV Status" exists at any date if, at such
date, either Borrower has a long-term senior unsecured actual
or implied debt rating of BBB- or by S&P and Baa3 by Moody's;
"Level V Status" exists at any date if, at such date,
either Borrower has a long-term senior unsecured actual or
implied debt rating of BB+ by S&P and Ba1 by Moody's;
"Level VI Status" exists at any date if, at such
date, either Borrower has a long-term senior unsecured actual
or implied debt rating of BB by S&P and Ba2 by Moody's; and
"Level VII Status" exists at any date if, at such
date, either Borrower has a long-term senior unsecured actual
or implied debt rating of BB- or lower by S&P and Ba3 or lower
by Moody's.
37
46
provided that (i) if S&P and/or Moody's shall cease to issue ratings of debt
securities of real estate investment trusts generally, then the Administrative
Agent and the Borrower shall negotiate in good faith to agree upon a substitute
rating agency or agencies (and to correlate the system of ratings of each
substitute rating agency with that of the rating agency for which it is
substituting) and (a) until such substitute rating agency or agencies are agreed
upon, Status shall be determined on the basis of the rating assigned by the
other rating agency (or, if both S&P and Moody's shall have so ceased to issue
such ratings, on the basis of the Status in effect immediately prior thereto)
and (b) after such substitute rating agency or agencies are agreed upon, Status
shall be determined on the basis of the rating assigned by the other rating
agency and such substitute rating agency or the two substitute rating agencies,
as the case may be; (ii) if the long term senior unsecured actual or implied
debt ratings of either Borrower by S&P and Moody's are not equivalent, the
higher rating will apply for the purposes of determining Status; and (iii) if
the long term senior unsecured actual or implied debt ratings of either Borrower
by S&P and Moody's are two or more Levels apart, the rating one Level below the
higher rating will apply for the purposes of determining Status.
"Stock" means shares of capital stock, beneficial or
partnership interests, participations or other equivalents (regardless of how
designated) of or in a corporation or equivalent entity, whether voting or
non-voting, and includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities (other than Stock)
convertible into or exchangeable for Stock and all warrants, options or other
rights to purchase or subscribe for any stock, whether or not presently
convertible, exchangeable or exercisable.
38
47
"Subsidiary" means, with respect to any Person (other than
FelCor LP with respect to FelCor), at any date, any corporation, partnership or
other business entity the accounts of which would be consolidated with those of
such Person in its consolidated financial statements in accordance with GAAP,
if such statements were prepared as of such date.
"Subsidiary Guaranty" means a guaranty, in substantially the
form of Exhibit I, executed by each Guarantor, as such guaranty may be amended,
supplemented or otherwise modified from time to time.
"Suite Hotel" means a Hotel offering substantially all suite
accommodations.
"Suite Revenues" has the meaning ascribed to such term in the
form of Operating Lease attached as Exhibit H hereto.
"Super Majority Lenders" means, at any time, Lenders holding
at least 66-2/3% of the then aggregate unpaid principal amount of Loans
(excluding Loans held by Non-Funding Lenders) or, if no such Loans are then
outstanding, Lenders having at least 66-2/3% of the Commitments of all Lenders
(excluding Non-Funding Lenders).
"Swing Advance" has the meaning set forth in Section 2.17.
"Swing Advance Bank" means Chase.
"Tangible Net Worth" means, with respect to the Borrower at
any date, (a) the sum of (i) the total shareholders' equity of FelCor, and (ii)
the value of all partnership interests in FelCor LP owned by Persons other than
FelCor; minus (b) the sum of all intangible assets of
39
48
FelCor, each as shown on the consolidated balance sheet of FelCor as of such
date.
"Tax Affiliate" means, as to any Person, (i) any Subsidiary of
such Person, and (ii) any Affiliate of such Person with which such Person files
or is eligible to file consolidated, combined or unitary tax returns.
"Tax Return" has the meaning specified in Section 4.3.
"Taxes" has the meaning specified in Section 2.15(a).
"Telerate Page 3750" means the display designated as "Page
3750" on the Associated Press-Dow ▇▇▇▇▇ Telerate Service (or such other page as
may replace Page 3750 on the Associated Press-Dow ▇▇▇▇▇ Telerate 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). Any
Eurodollar Rate determined on the basis of the rate displayed on Telerate Page
3750 in accordance with the provisions hereof shall be subject to corrections,
if any, made in such rate and displayed by the Associated Press-Dow ▇▇▇▇▇
Telerate Service within one hour of the time when such rate is first displayed
by such Service.
"Termination Date" means the earliest of (i) October 15, 1996
unless the Closing Date occurs prior thereto, (ii) the Final Maturity Date, and
(iii) the date of termination in whole of the Commitments pursuant to Section
2.5 or 8.2.
"Total Assets" of any Person means, at any date, the total
assets of such Person and its Subsidiaries at such
40
49
date determined on a consolidated basis in conformity with GAAP.
"Total Indebtedness" of any Person means the sum of the
following (without duplication): (a) all Indebtedness of such Person and its
Subsidiaries determined on a consolidated basis in conformity with GAAP, plus
(b) such Person's Pro Rata Share of Indebtedness (excluding Non-Recourse
Indebtedness) of such Person's Unconsolidated Entities.
"Total Secured Indebtedness" of any Person means any Total
Indebtedness of such Person for which the obligations thereunder are secured by
a pledge of or other encumbrance on any assets of such Person or its
Subsidiaries or Unconsolidated Entities.
"Unconsolidated Entity" means, with respect to any Person, at
any date, any other Person in whom such Person holds an Investment, which
Investment is accounted for in the financial statements of such Person on an
equity basis of accounting and whose financial results would not be consolidated
under GAAP with the financial results of such Person on the consolidated
financial statements of such Person, if such statements were prepared as of such
date.
"Unencumbered" means, with respect to any Hotel, at any date
of determination, the circumstance that such Hotel on such date:
(a) is not subject to any Liens (including restrictions on
transferability or assignability) of any kind (including any such Lien or
restriction imposed by (i) any agreement governing Indebtedness, and (ii) the
organizational documents of the Borrower or any of its Subsidiaries or Eligible
Joint Ventures, but excluding Permitted Liens and, in the case of any Qualified
Lease (to the extent permitted by the definition thereof),
41
50
restrictions on transferability or assignability in respect of such Lease);
(b) is not subject to any agreement (including (i) any agreement
governing Indebtedness, and (ii) if applicable, the organizational documents of
the Borrower or any of its Subsidiaries or Eligible Joint Ventures) which
prohibits or limits the ability of the Borrower or any of its Subsidiaries or
Eligible Joint Ventures to create, incur, assume or suffer to exist any Lien
upon such Hotel, other than Permitted Liens (excluding any agreement or
organizational document which limits generally the amount of Indebtedness which
may be incurred by the Borrower or its Subsidiaries or Eligible Joint
Ventures); and
(c) is not subject to any agreement (including any agreement
governing Indebtedness) which entitles any Person to the benefit of any Lien
(other than Permitted Liens) on such Hotel, or would entitle any Person to the
benefit of any such Lien upon the occurrence of any contingency (including,
without limitation, pursuant to an "equal and ratable" clause).
For the purposes of this Agreement, any Joint Venture Hotel or Hotel owned by a
Subsidiary or Eligible Joint Venture of the Borrower shall not be deemed to be
Unencumbered unless both (i) such Hotel and (ii) all Stock owned directly or
indirectly by Borrower in such Eligible Joint Venture or Subsidiary, is
Unencumbered.
1.2. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".
42
51
1.3. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
1.4. Certain Terms. (a) The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, and not to any particular Article, Section, subsection or clause in this
Agreement. References herein to an Exhibit, Schedule, Article, Section,
subsection or clause refer to the appropriate Exhibit or Schedule to, or
Article, Section, subsection or clause in this Agreement.
(b) The terms "Lender" and "Administrative Agent" include
their respective successors and the term "Lender" includes each assignee of
such Lender who becomes a party hereto pursuant to Section 10.7.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1. The Loans. On the terms and subject to the conditions
contained in this Agreement, each Lender severally agrees to make loans (each a
"Loan") to the Borrower from time to time on any Business Day during the period
from the date hereof until the Termination Date in an aggregate amount not to
exceed at any time outstanding such Lender's Commitment; provided, however,
that at no time shall any Lender be obligated to make a Loan in excess of such
Lender's Ratable Portion of the Available Credit. Within the limits of each
Lender's Commitment, amounts prepaid pursuant to Section 2.7(b) may be
reborrowed under this Section 2.1. The Loans of each Lender shall be evidenced
by the Note to the order of such Lender.
43
52
2.2 Intentionally Omitted.
2.3 Making the Loans. (a) Each Borrowing shall be made
on notice, given by the Borrower to the Administrative Agent not later than (i)
11:00 A.M. (New York City time) on the third (3rd) Business Day prior to the
date of the proposed Borrowing in the case of Eurodollar Rate Loans, and (ii)
11:00 A.M. (New York City time) on the Business Day prior to the date of the
proposed Borrowing in the case of Base Rate Loans. Each such notice (a "Notice
of Borrowing") shall be in substantially the form of Exhibit B, specifying
therein (i) the date of such proposed Borrowing, (ii) the aggregate amount of
such proposed Borrowing, (iii) the amount thereof, if any, requested to be
Eurodollar Rate Loans, and (iv) the initial Interest Period or Periods for any
such Eurodollar Rate Loans. The Loans shall be made as Base Rate Loans unless
(subject to Section 2.12) the Notice of Borrowing specifies that all or a pro
rata portion thereof shall be Eurodollar Rate Loans; provided, however, that
the aggregate of the Eurodollar Rate Loans for each Interest Period must be in
an amount of not less than $5,000,000 or an integral multiple of $500,000 in
excess thereof.
(b) The Administrative Agent shall give to each Lender
prompt notice of the Administrative Agent's receipt of a Notice of Borrowing
and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the applicable interest rate under Section 2.9, and each Lender's
Ratable Portion of the proposed Borrowing. Each Lender shall, before 12:00
Noon (New York City time) on the date of the proposed Borrowing, make available
for the account of its Applicable Lending Office to the Administrative Agent at
its address referred to in Section 10.2, in immediately available funds, such
Lender's Ratable Portion of such proposed Borrowing. By 12:00 Noon (New York
City time) in the case of Eurodollar Rate Loans and Base Rate Loans, on the
date specified by the Borrower in the
44
53
Notice of Borrowing, subject to fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds available
to the Borrower at the Administrative Agent's aforesaid address; provided that
in the event that the Administrative Agent shall have received notice from a
Lender prior to the date of any proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing, the Administrative Agent shall be under no obligation to fund
such Lender's Ratable Portion of such Borrowing.
(c) Each Base Rate Loan shall be in an aggregate amount
of not less than $1,000,000 or an integral multiple of $100,000 in excess
thereof.
(d) Intentionally omitted.
(e) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any proposed Borrowing which the
related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Loans, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such proposed
Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (including, without limitation, loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund any
Eurodollar Rate Loan to be made by such Lender as part of such proposed
Borrowing when such Eurodollar Rate Loan, as a result of such failure, is not
made on such date.
(f) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any proposed Borrowing that such
Lender will not make available
45
54
to the Administrative Agent such Lender's Ratable Portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such Ratable
Portion available to the Administrative Agent on the date of such Borrowing in
accordance with this Section 2.3 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender
and the Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Loan as part of such Borrowing
for purposes of this Agreement. If the Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Lender of any obligation it may have to the Borrower hereunder.
(g) The failure of any Lender to make the Loan to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any Borrowing.
2.4. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, a commitment fee (the
"Commitment Fee") equal to the Applicable Margin times the average daily unused
portion of
46
55
such Lender's Commitment, from the date hereof until the Termination Date,
payable in arrears with respect to each full calendar quarter on (i) the last
day of each calendar quarter during the term of such Lender's Commitment,
commencing December 31, 1996, (ii) on the date of any reduction of the
Commitments pursuant to Section 2.5 and (iii) on the Termination Date. For
purposes of this Section 2.4, Swing Advances shall be included as part of the
unused portion of the Commitments.
(b) The Borrower has agreed to pay to Chase additional fees,
the amount and dates of payment of which are embodied in a separate agreement
between the Borrower and Chase.
2.5. Reduction and Termination of the Commitments. The
Borrower may, upon at least three Business Days' prior notice to the
Administrative Agent, terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders; provided, however, that
each partial reduction shall be in the aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
2.6. Repayment. The Borrower shall repay the entire unpaid
principal amount of the Loans on the Termination Date.
2.7. Prepayments. (a) The Borrower shall have no right to
prepay the principal amount of any Loan other than as provided in this Section
2.7.
(b) The Borrower may, upon at least two (2) Business Days'
prior notice to the Administrative Agent, stating the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Loans in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal
47
56
amount prepaid; provided, however, that any prepayment of any Eurodollar Rate
Loan made other than on the last day of an Interest Period for such Loan shall
be subject to payment by the Borrower to the Administrative Agent of any costs,
fees or expenses incurred by any Lender in connection with such prepayment
including without limitation any costs to unwind any Eurodollar Rate contracts;
and, provided, further, that each partial prepayment shall be in an aggregate
principal amount not less than $3,000,000 or integral multiples of $100,000 in
excess thereof. Upon the giving of such notice of prepayment, the principal
amount of the Loans specified to be prepaid shall become due and payable on the
date specified for such prepayment.
(c) If at any time the aggregate principal amount of Loans
outstanding at such time exceeds the lower of the Borrowing Base or the
Commitments at such time (a "Borrowing Base Imbalance"), the Borrower shall
prepay the Loans then outstanding in an amount equal to such excess, together
with accrued interest as follows:
(i) in the event that the Borrowing Base Imbalance
is due to (A) any sale, conveyance, transfer, assignment or other
disposition of an Eligible Hotel, or (B) a financing secured by an
Eligible Hotel, the prepayment shall be made within one (1) Business
Day of such event occurring;
(ii) in the event that the Borrowing Base Imbalance
is due to any (A) condemnation or taking by eminent domain of an
Eligible Hotel, or (B) loss, damage or destruction by casualty to any
Eligible Hotel, the prepayment shall be made within one (1) Business
Day after receipt by the Borrower or its Subsidiary or Eligible Joint
Venture of the condemnation award or insurance proceeds relating to
such event; or
48
57
(iii) in the event that the Borrowing Base
Imbalance is due to (A) a decrease in the value of any Eligible
Hotels, or (B) any of the Eligible Hotels ceasing, for whatever
reason, to meet the requirements for Eligible Hotels set forth herein,
the prepayment shall be made within 180 days of such event.
2.8. Conversion/Continuation Option. (a) Swing Advances
shall be automatically converted to Base Rate Loans on the Business Day
following the date of borrowing thereof.
(b) The Borrower may elect (i) at any time to convert Base
Rate Loans or any portion thereof to Eurodollar Rate Loans, (ii) at any time to
convert Swing Advances or any portion thereof to Base Rate Loans or Eurodollar
Rate Loans, or (iii) at the end of any Interest Period with respect thereto, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or
to continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate of the Eurodollar Loans
for each Interest Period therefor must be in the amount of $5,000,000 or an
integral multiple of $500,000 in excess thereof. Each conversion or
continuation shall be allocated among the Loans of all Lenders in accordance
with their Ratable Portion. Each such election shall be in substantially the
form of Exhibit C hereto (a "Notice of Conversion or Continuation") and shall
be made by giving the Administrative Agent at least three (3) Business Days'
prior written notice thereof specifying (A) the amount and type of conversion
or continuation, (B) in the case of a conversion to or a continuation of
Eurodollar Rate Loans, the Interest Period therefor, and (C) in the case of a
conversion, the date of conversion (which date shall be a Business Day and, if
a conversion from Eurodollar Rate Loans, shall also be the last day of the
Interest Period therefor). The Administrative Agent shall promptly notify each
Lender of its receipt of a Notice of Conversion or Continuation and of the
contents thereof
49
58
and such Lender's Ratable Portion of the Loans to be converted. Notwithstanding
the foregoing, no conversion in whole or in part of Base Rate Loans or Swing
Advances to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any Interest Period therefor, shall
be permitted at any time at which a Default or an Event of Default shall have
occurred and be continuing. If, within the time period required under the terms
of this Section 2.8, the Administrative Agent does not receive a Notice of
Conversion or Continuation from the Borrower containing a permitted election to
continue any Eurodollar Rate Loans for an additional Interest Period or to
convert any such Loans, then, upon the expiration of the Interest Period
therefor, such Loans will be automatically converted to Base Rate Loans. Each
Notice of Conversion or Continuation shall be irrevocable.
2.9. Interest. (a) The Borrower shall pay interest on the
unpaid principal amount of each Loan from the date thereof until the principal
amount thereof shall be paid in full, at the following rates per annum:
(i) For Base Rate Loans, at a rate per annum equal
at all times to the Base Rate in effect from time to time plus the
Applicable Margin, payable monthly on the first day of each month, on
the Termination Date and on the date any Base Rate Loan is converted
or paid in full.
(ii) For Eurodollar Rate Loans, at a rate per annum
equal at all times during the applicable Interest Period for each
Eurodollar Rate Loan to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect on the first day
of such Interest Period, payable on the last day of such Interest
Period, on the Termination Date and, if such Interest Period has a
duration of more than three
50
59
months, on the last day of each calendar quarter during such Interest
Period commencing on December 31, 1996.
(b) If the principal indebtedness is declared immediately
due and payable by the Administrative Agent pursuant to the provisions of this
Agreement or any other Loan Document, or if the Loans are not paid in full on
the Termination Date, the Borrower shall thereafter, unless and until such
date, if any, as the Super Majority Lenders may elect, in their sole and
absolute discretion, to waive, in writing, all or any portion of such default
rate interest, pay interest on the principal sum then remaining unpaid from the
date of such declaration or the Termination Date, as the case may be, until the
date on which the principal sum then outstanding is paid in full (whether
before or after judgment), at a rate per annum (calculated for the actual
number of days elapsed on the basis of a 360-day year) equal to the greater, on
a daily basis, of (a) 13% or (b) 4% plus the Base Rate, provided, however, that
such interest rate shall in no event exceed the maximum interest rate which the
Borrower may by law pay.
2.10. Interest Rate Determination and Protection. (a) The
Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall be
determined by the Administrative Agent two Business Days before the first day
of such Interest Period.
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.9(a) or (b).
(c) If, with respect to Eurodollar Rate Loans, the Majority
Lenders in good faith notify the Administrative Agent that the Eurodollar Rate
for any Interest Period therefor will not adequately reflect the cost to such
Majority Lenders of making such Loans or funding or
51
60
maintaining their respective Eurodollar Rate Loans for such Interest Period,
the Administrative Agent shall forthwith so notify the Borrower and the
Lenders, whereupon
(i) each Eurodollar Loan will automatically, on the
last day of the then existing Interest Period therefor, convert into a
Base Rate Loan; and
(ii) the obligations of the Lenders to make Eurodollar
Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended until the Administrative Agent shall notify the
Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
2.11. Increased Costs. If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation (other than any change by way of imposition or increase of reserve
requirements included in determining the Eurodollar Rate Reserve Percentage) or
(ii) compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding
or maintaining any Eurodollar Rate Loans, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower and the Administrative Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error. If the
Borrower so notifies the Administrative Agent within five Business Days after
any Lender notifies the Borrower of any increased cost pursuant to the
foregoing provisions of this Section 2.11, the Borrower may either (A) prepay
in full all Eurodollar Rate Loans of such Lender then outstanding in
52
61
accordance with Section 2.7(b) and, additionally, reimburse such Lender for
such increased cost in accordance with this Section 2.11 or (B) convert all
Eurodollar Rate Loans of all Lenders then outstanding into Base Rate Loans in
accordance with Section 2.8 and, additionally, reimburse such Lender for such
increased cost in accordance with this Section 2.11.
2.12. Illegality. Notwithstanding any other provision of
this Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Administrative
Agent, (i) the obligation of such Lender to make or to continue Eurodollar Rate
Loans and to convert Base Rate Loans into Eurodollar Rate Loans shall terminate
and (ii) the Borrower shall forthwith prepay in full all Eurodollar Rate Loans
of such Lender then outstanding, together with interest accrued thereon, unless
the Borrower, within five Business Days of such notice and demand, converts all
Eurodollar Rate Loans of all Lenders then outstanding into Base Rate Loans.
2.13. Capital Adequacy. If (i) the introduction of or any
change in or in the interpretation of any law or regulation, (ii) compliance
with any law or regulation, or (iii) compliance with any guideline or request
from any central bank or other Governmental Authority (whether or not having
the force of law) affects or would affect the amount of capital required or
expected to be maintained by any Lender or any corporation controlling any
Lender and such Lender reasonably determines that such amount is based upon the
existence of such Lender's Commitments and Loans and its other commitments and
loans of this type, then, upon demand
53
62
by such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender in the light of such circumstances, to the extent that
such Lender reasonably determines such increase in capital to be allocable to
the existence of such Lender's Commitments and Loans. A certificate as to such
amounts submitted to the Borrower and the Administrative Agent by such Lender
shall be conclusive and binding for all purposes absent manifest error.
2.14. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes not later than 11:00 A.M. (New
York City time) on the day when due, in Dollars, to the Administrative Agent at
its address referred to in Section 10.2 in immediately available funds without
set-off or counterclaim. The Administrative Agent will promptly thereafter
cause to be distributed immediately available funds relating to the payment of
principal or interest or fees (other than amounts payable pursuant to Section
2.11, 2.12, 2.13, 2.15 or 2.17) to the Lenders, in accordance with their
respective Ratable Portions, for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Lender to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. To the extent the foregoing payments are received by the
Administrative Agent prior to 11:00 A.M. (New York City time) and are not
distributed to the Lenders on the same day, the Administrative Agent shall pay
to each Lender in addition to the amount distributed to such Lender, interest
thereon, for each day from the date such amount is received by the
Administrative Agent until the date such amount is distributed to such Lender,
at the Federal Funds Rate. Payment received by the Administrative Agent after
54
63
11:00 A.M. (New York City time) shall be deemed to be received on the next
Business Day.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under any
Loan held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate, the
Eurodollar Rate or the Federal Funds Rate and of fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fee, as the
case may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due
hereunder to the Lenders that the Borrower will not make such payment in full,
the Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such
55
64
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal Funds Rate.
(f) If any Lender (a "Non-Funding Lender") has (x) failed to
make a Loan required to be made by it hereunder, and the Administrative Agent
has determined that such Lender is not likely to make such Loan or (y) given
notice to the Borrower or the Administrative Agent that it will not make, or
that it has disaffirmed or repudiated any obligation to make, Loans, in each
case by reason of the provisions of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 or otherwise, (i) such Non-Funding Lender shall
lose any and all voting rights hereunder, and (ii) any payment made on account
of the principal of the Loans outstanding shall be made as follows:
(A) in the case of any such payment made on any
date when and to the extent that, in the determination of the
Administrative Agent, the Borrower would be able, under the terms and
conditions hereof, to reborrow the amount of such payment under the
Commitments and to satisfy any applicable conditions precedent set
forth in Article III to such reborrowing, such payment shall be made
on account of the outstanding Loans held by the Lenders other than the
Non-Funding Lender pro rata according to the respective outstanding
principal amounts of the Loans of such Lenders;
56
65
(B) otherwise, such payment shall be made on account
of the outstanding Loans held by the Lenders pro rata according to the
respective outstanding principal amounts of such Loans; and
(C) any payment made on account of interest on the Loans
shall be made pro rata according to the respective amounts of accrued
and unpaid interest due and payable on the Loans with respect to which
such payment is being made.
2.15. Taxes. (a) Any and all payments by the Borrower under
each Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes measured by its net income,
and franchise taxes imposed on it, by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or
any political subdivision thereof and, in the case of each Lender, taxes
measured by its net income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities (excluding, in the case of such Lender or
the Administrative Agent, taxes imposed by reason of any failure of such Lender
or the Administrative Agent, if such Lender or the Administrative Agent is
entitled at such time to a total or partial exemption from withholding that is
required to be evidenced by a United States Internal Revenue Service Form 1001
or 4224 or any successor or additional form, to deliver to the Administrative
Agent or the Borrower, from time to time as required by the Administrative
Agent or the Borrower, such Form 1001 or 4224 (as applicable) or any successor
or additional form, completed in a manner reasonably satisfactory to the
Administrative Agent or the
57
66
Borrower) being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including, without limitation, deductions applicable to additional sums
payable under this Section 2.15) such Lender or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
Borrower shall deliver to the Administrative Agent evidence of such payment to
the relevant taxation or other authority.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies of the United States or any political subdivision
thereof or any applicable foreign jurisdiction which arise from any payment
made under any Loan Document or from the execution, delivery or registration
of, or otherwise with respect to, any Loan Document (collectively, "Other
Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.15) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including, without
limitation, for penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
58
67
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the Borrower will furnish to the Administrative Agent, at its
address referred to in Section 10.2, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.15 shall survive the payment in full of
the Obligations.
(f) Prior to the Closing Date in the case of each Lender that
is a signatory hereto, and on the date of the Assignment and Acceptance pursuant
to which it becomes a Lender in the case of each other Lender and from time to
time thereafter if requested by the Borrower or the Administrative Agent, each
Lender organized under the laws of a jurisdiction outside the United States that
is entitled to an exemption from United States withholding tax, or that is
subject to such tax at a reduced rate under an applicable tax treaty, shall
provide the Administrative Agent and the Borrower with an IRS Form 4224 or Form
1001 or other applicable form, certificate or document prescribed by the IRS
certifying as to such Lender's entitlement to such exemption or reduced rate
with respect to all payments to be made to such Lender hereunder and under the
Notes. Unless the Borrower and the Administrative Agent have received forms or
other documents satisfactory to them indicating that payments hereunder or under
any Note are not subject to United States withholding tax or are subject to such
tax at a rate reduced by an applicable tax treaty, the Borrower or the
Administrative Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Lender organized under the
laws of a jurisdiction outside the United States.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.15 shall use its best
59
68
efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office if
the making of such a change would avoid the need for, or reduce the amount of,
any such additional amounts which may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
2.16. Sharing of Payments, Etc.. (a) If any Lender (other
than the Swing Advance Bank) shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set off or otherwise) on
account of Loans made by it (other than pursuant to Section 2.13 or 2.15), and
there is any Swing Advance outstanding in respect of which the Swing Advance
Bank has not received payment in full from the Lenders pursuant to Section
2.17(d) or (e), such Lender (a "Purchasing Lender") shall purchase a
participation in all such Swing Advances in an amount equal to the lesser of
such payment and the amount of such Swing Advances for which the Swing Advance
Bank has not so received payment in full. If, after giving effect to the
foregoing, any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Loans made by it (other than pursuant to Sections 2.13 or 2.15) in excess of
its Ratable Portion of payments on account of the Loans obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in their Loans as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them.
2.17. Swing Advances. (a) The Swing Advance Bank, on the
terms and subject to the conditions contained in this Agreement, shall make
advances (each a "Swing Advance") to the Borrower from time to time on any
Business Day during the period from the date hereof until the day preceding the
Termination Date in an aggregate amount not to exceed at any time outstanding
the lesser of (i)
60
69
$15,000,000, and (ii) the Available Credit; provided that the Swing Advance
Bank shall not be requested to make a Swing Advance to refinance an outstanding
Swing Advance. The Swing Advance Bank shall be entitled to rely on the most
recent Borrowing Base Certificate delivered to the Administrative Agent.
Within the limits set forth above, Swing Advances repaid may be reborrowed
under this Section 2.17.
(b) Each Swing Advance shall be made upon a Notice of
Borrowing for a Swing Advance being given by the Borrower to the Swing Advance
Bank by no later than 11:00 A.M. (New York City time) on the Business Day of
the proposed Swing Advance. Upon fulfillment of the applicable conditions set
forth in Article III, the Swing Advance Bank will make each Swing Advance
available on the same day to the Borrower at the Agent's address referred to in
Section 10.2. All Swing Advances shall bear interest at the same rate, and be
payable on the same basis, as Base Rate Loans and shall be converted to Base
Rate Loans pursuant to Section 2.8(a).
(c) Each Swing Advance shall be in an aggregate amount of
not less than $1,000,000.00 or an integral multiple of $100,000.00 in excess
thereof.
(d) The Administrative Agent shall give to each Lender
prompt notice of the Administrative Agent's receipt of a Notice of Borrowing
for a Swing Advance and each Lender's Ratable Portion thereof. Each Lender
shall before 12:00 Noon (New York City time) on the next Business Day (the
"Settlement Date") make available to the Administrative Agent, in immediately
available funds, the amount of its Ratable Portion of the principal amount of
such Swing Advance. Upon such payment by a Lender, such Lender shall be deemed
to have made a Loan to the Borrower in the amount of such payment. The
Administrative Agent shall use such funds to repay the Swing Advance to the
Swing Advance Bank.
61
70
To the extent that any Lender fails to make such payment to the Swing Advance
Bank, the Borrower shall repay such Swing Advance on demand and in any event on
the Termination Date.
(e) During the continuance of a Default under Section
8.1(e), each Lender shall acquire, without recourse or warranty, an undivided
participation in each Swing Advance otherwise required to be repaid by such
Lender pursuant to the preceding paragraph, which participation shall be in a
principal amount equal to such Lender's Ratable Portion of such Swing Advance,
by paying to the Swing Advance Bank on the date on which such Lender would
otherwise have been required to make a payment in respect of such Swing Advance
pursuant to the preceding paragraph, in immediately available funds, an amount
equal to such Lender's Ratable Portion of such Swing Advance. If such amount
is not in fact made available to the Swing Advance Bank on the date when the
Swing Advance would otherwise be required to be made pursuant to the preceding
paragraph, the Swing Advance Bank shall be entitled to recover such amount on
demand from that Lender together with interest accrued from such date at the
Federal Funds Rate. From and after the date on which any Lender purchases an
undivided participation interest in a Swing Advance pursuant to this paragraph
(e), the Swing Advance Bank shall promptly distribute to such Lender such
Lender's Ratable Portion of all payments of principal and of interest on such
Swing Advance, other than those received from a Lender pursuant to Section 2.16
or this or the preceding paragraph (d). If any payment made by or on behalf of
the Borrower and received by the Swing Advance Bank with respect to any Swing
Advance is rescinded or must otherwise be returned by the Swing Advance Bank
for any reason and the Swing Advance Bank has made a payment to the
Administrative Agent, on account thereof, each Lender shall, upon notice to the
Swing Advance Bank, forthwith pay over to the Swing Advance Bank an amount
equal to such Lender's pro rata share of the payment so rescinded or returned
based on the respective amounts paid in respect
62
71
thereof to the Lenders pursuant to the preceding paragraph (d).
ARTICLE III
CONDITIONS OF LENDING
3.1. Conditions Precedent to Initial Loans. The obligation
of each Lender to make its initial Loan is subject to satisfaction of the
conditions precedent that the Administrative Agent shall have received, on the
Closing Date, the following, each dated the Closing Date unless otherwise
indicated, in form and substance satisfactory to the Administrative Agent and
(except for the Notes) in sufficient copies for each Lender:
(a) The Notes to the order of the Lenders, respectively.
(b) A certificate of the Secretary or an Assistant Secretary
of each Loan Party (or, as applicable, of such Loan Party's partners)
certifying (i) the resolutions of its Board of Trustees or Directors, as
appropriate, approving each Loan Document to which it is a party, (ii) all
documents evidencing other necessary trust, partnership or corporate action, as
appropriate, and required governmental and third party approvals, licenses and
consents with respect to each Loan Document to which it is a party and the
transactions contemplated thereby, (iii) a copy of its and each of its
Subsidiaries' and Eligible Joint Ventures' declaration of trust, certificates
of incorporation, by-laws, partnership agreements and certificates of
partnership as appropriate, as of the Closing Date, and (iv) the names and true
signatures of each of its officers who has been authorized to execute and
deliver any Loan Document or other document required hereunder to be executed
and delivered by or on behalf of such Person.
63
72
(c) A copy of the declaration of trust or articles or
certificate of incorporation or partnership agreement or certificate of
partnership, as appropriate, of each Loan Party and of each of its Subsidiaries
and Eligible Joint Ventures which is not a Loan Party certified as of a recent
date by the Secretary of State of the state of formation of such Loan Party or
Subsidiary, together with certificates of such official attesting to the good
standing of each such Loan Party, Subsidiary and Eligible Joint Ventures.
(d) Favorable opinion(s) of counsel to the Loan Parties, in
substantially the form(s) of Exhibit D, and as to such other matters as any
Lender through the Administrative Agent may reasonably request.
(e) A certificate of the chief financial officer of the
Borrower, stating that the Borrower is Solvent after giving effect to the
initial Loans, the application of the proceeds thereof in accordance with
Section 6.10 and the payment of all estimated legal, accounting and other fees
related hereto and thereto.
(f) Evidence that the insurance required by Section 6.4 is in
full force and effect.
(g) Such additional documents, information and materials as
any Lender, through the Administrative Agent, may reasonably request.
(h) A certificate, signed by a Responsible Officer of the
Borrower, stating that the following statements are true and correct on the
Closing Date:
(i) The statements set forth in Section 3.3 are
true after giving effect to the Loans being made on the Closing Date.
64
73
(ii) All costs and accrued and unpaid fees and
expenses (including, without limitation, legal fees and expenses)
required to be paid to the Lenders on or before the Closing Date,
including, without limitation, those referred to in Sections 2.4 and
10.4, to the extent then due and payable, have been paid.
(iii) All necessary governmental and third party
approvals required to be obtained by any Loan Party in connection with
the transactions contemplated hereby have been obtained and remain in
effect, and all applicable waiting periods have expired without any
action being taken by any competent authority which restrains,
prevents, impedes, delays or imposes materially adverse conditions
upon any of the transactions contemplated hereby.
(iv) There exists no judgment, order, injunction
or other restraint prohibiting or imposing materially adverse
conditions upon any of the transactions contemplated hereby.
(v) There exists no claim, action, suit,
investigation or proceeding (including, without limitation,
shareholder or derivative litigation) pending or, to the knowledge of
the Borrower, threatened in any court or before any arbitrator or
Governmental Authority which relates to the Loan Documents or the
financing hereunder or which, if adversely determined, would have a
Material Adverse Effect.
(vi) There has been no Material Adverse Change
since June 30, 1996 in the corporate, capital or legal structure of
the Borrower or any of its Subsidiaries without the consent of the
Administrative Agent.
65
74
(vii) The Borrower's Tangible Net Worth is not less
than $500,000,000.
(i) A Borrowing Base Certificate, executed by a Responsible
Officer of the Borrower, satisfactory to the Administrative Agent, together
with copies of the Eligible Hotel Documents in respect of each of the Eligible
Hotels shown listed thereon.
(j) A Compliance Certificate, executed by the Chief Financial
Officer of the Borrower substantially in the form attached as Exhibit G hereto.
(k) The Subsidiary Guaranties, duly executed by each
Guarantor.
3.2. Additional Conditions Precedent to Initial Loans. The
obligation of each Lender to make its initial Loan is subject to the further
conditions precedent that:
(a) No Lender in its sole judgment exercised reasonably shall
have determined (i) that there has been any Material Adverse Change since June
30, 1996 or (ii) that there has occurred any adverse change which such Lender
deems material in the financial markets generally, since June 30, 1996 or (iii)
that there is any claim, action, suit, investigation, litigation or proceeding
(including, without limitation, shareholder or derivative litigation) pending
or threatened in any court or before any arbitrator or Governmental Authority
which, if adversely determined, would have a Material Adverse Effect; and
nothing shall have occurred since June 30, 1996 which, in the judgment of any
Lender, has had a Material Adverse Effect.
(b) Each Lender shall be satisfied, in its sole judgment,
exercised reasonably, with the corporate, capital, legal and management
structure of the Borrower and its Subsidiaries, and shall be satisfied, in its
sole judgment
66
75
exercised reasonably, with the nature and status of all Contractual
Obligations, securities, labor, tax, ERISA, employee benefit,
environmental, health and safety matters, in each case, involving or
affecting the Borrower or any of its Subsidiaries.
(c) The $100MM Facility shall have been converted to a
secured term loan in an aggregate principal sum not exceeding $85,000,000 with
a final maturity of September 30, 2000 and all material documentation
evidencing such conversion, in form and substance satisfactory to the
Administrative Agent, shall have been received by the Administrative Agent.
3.3. Conditions Precedent to Each Loan. The obligation of
each Lender to make any Loan (including the Loan being made by such Lender on
the Closing Date) shall be subject to the further conditions precedent that:
(a) The following statements shall be true on the date of
such Loan, before and after giving effect thereto and to the application of the
proceeds therefrom (and the acceptance by the Borrower of the proceeds of such
Loan shall constitute a representation and warranty by the Borrower that on the
date of such Loan such statements are true):
(i) The representations and warranties of the
Borrower contained in Article IV and of each Loan Party in the other
Loan Documents are correct on and as of such date as though made on
and as of such date (it being understood and agreed that any
representation or warranty which by its terms is made on a specified
date shall be required to be true and correct only as of such
specified date); and
(ii) No Default or Event of Default exists or will result
from the Loans being made on such date.
67
76
(b) The making of the Loans on such date does not violate any
Requirement of Law and is not enjoined, temporarily, preliminarily or
permanently.
(c) The Administrative Agent shall have received a Borrowing
Base Certificate, executed by a Responsible Officer of the Borrower,
satisfactory to the Administrative Agent, together with (to the extent not
previously delivered) copies of the Eligible Hotel Documents in respect of each
of the Eligible Hotels shown listed thereon.
(d) The Administrative Agent shall have received such
additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter
into this Agreement, the Borrower represents and warrants to the Lenders and
the Administrative Agent that:
4.1. Existence; Compliance with Law. Each Loan Party and
each of its Subsidiaries and Eligible Joint Ventures (i) is a real estate
investment trust or a corporation, limited liability company or limited
partnership, as specified herein, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation; (ii) is duly
qualified as a foreign corporation, limited liability company or limited
partnership and in good standing under the laws of each jurisdiction where such
qualification is necessary, except for failures which in the aggregate have no
Material Adverse Effect; (iii) has all requisite corporate, limited liability
company or partnership power and authority and the legal
68
77
right to own, pledge and mortgage its properties, to lease (as lessee) the
properties that it leases as lessee, to lease or sublease (as lessor) the
properties it owns and/or leases (as lessee) and to conduct its business as now
or currently proposed to be conducted; (iv) is in compliance with its
declaration of trust or certificate of or formation and by- laws, regulations
or partnership agreement, as appropriate; (v) is in compliance with all other
applicable Requirements of Law except for such non-compliances as in the
aggregate have no Material Adverse Effect; and (vi) has all necessary licenses,
permits, consents or approvals from or by, has made all necessary filings with,
and has given all necessary notices to, each Governmental Authority having
jurisdiction, to the extent required for such ownership, leasing and conduct,
except for licenses, permits, consents or approvals which can be obtained by
the taking of ministerial action to secure the grant or transfer thereof or
failures which in the aggregate have no Material Adverse Effect.
4.2. Power; Authorization; Enforceable Obligations. (a) The
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is a party and the consummation of the transactions related to the
financing contemplated hereby:
(i) are within such Loan Party's corporate, partnership
or trust powers, as appropriate;
(ii) have been duly authorized by all necessary
corporate, partnership or trust action, as appropriate, including,
without limitation, the consent of stockholders and general and/or
limited partners where required;
(iii) do not and will not (A) contravene any Loan Party's
or any of its Subsidiaries' or Eligible Joint Ventures' respective
declaration of trust,
69
78
certificate of incorporation or formation or by-laws, regulations,
partnership agreement or other comparable governing documents, (B)
violate any other applicable Requirement of Law (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System), or any order or decree of any Governmental
Authority or arbitrator, (C) conflict with or result in the breach of,
or constitute a default under, or result in or permit the termination
or acceleration of, any material Contractual Obligation of any Loan
Party or any of its Subsidiaries or Eligible Joint Ventures, or (D)
result in the creation or imposition of any Lien upon any of the
property of any Loan Party or any of its Subsidiaries or Eligible
Joint Ventures; and
(iv) do not require the consent of, authorization by,
approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those which
have been obtained or made and copies of which have been or will be
delivered to the Administrative Agent pursuant to Section 3.1, and
each of which on the Closing Date will be in full force and effect.
(b) This Agreement has been, and each of the other Loan
Documents will have been upon delivery thereof pursuant to Section 3.1, duly
executed and delivered by each Loan Party party thereto. This Agreement is,
and the other Loan Documents will be, when delivered hereunder, the legal,
valid and binding obligation of each Loan Party party thereto, enforceable
against it in accordance with its terms except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting the
enforcement of creditor's rights and remedies generally.
70
79
4.3. Taxes. All federal, state, local and foreign tax
returns, reports and statements (collectively, the "Tax Returns") required to be
filed by the Borrower or any of its Tax Affiliates have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax
Returns, are required to be filed, all such Tax Returns are true and correct in
all material respects, and all taxes, charges and other impositions due and
payable have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for non-payment thereof,
except where contested in good faith and by appropriate proceedings if (i)
adequate reserves therefor have been established on the books of the Borrower or
such Tax Affiliate in conformity with GAAP and (ii) all such non-payments in the
aggregate have no Material Adverse Effect. Proper and accurate amounts have
been withheld by the Borrower and each of its respective Tax Affiliates from
their respective employees for all periods in full and complete compliance with
the tax, social security and unemployment withholding provisions of applicable
federal, state, local and foreign law and such withholdings have been timely
paid to the respective Governmental Authorities. None of the Borrower or any of
its Tax Affiliates has (i) executed or filed with the IRS any agreement or other
document extending, or having the effect of extending, the period for assessment
or collection of any charges; (ii) agreed or been requested to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise; or (iii) any obligation under any written tax sharing
agreement.
4.4. Full Disclosure. No written statement prepared or
furnished by or on behalf of any Loan Party or any of its Affiliates in
connection with any of the Loan Documents or the consummation of the
transactions contemplated thereby, and no financial statement delivered
pursuant hereto or thereto, contains any untrue statement of a material fact or
omits to state a material fact necessary
71
80
to make the statements contained herein or therein not misleading.
4.5. Financial Matters. (a) The consolidated balance sheet
of the Borrower and its Subsidiaries as at December 31, 1995, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, certified by
Coopers & ▇▇▇▇▇▇▇, L.L.P. and the consolidated balance sheets of the Borrower
and its Subsidiaries as at June 30, 1996, and the related consolidated
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries for the six months then ended, certified by the chief financial
officer of the Borrower, copies of which have been furnished to each Lender,
fairly present, subject, in the case of said balance sheets as at June 30,
1996, and said statements of income, retained earnings and cash flows for the
six months then ended, to year-end audit adjustments, the consolidated
financial condition of the Borrower and its Subsidiaries as at such dates and
the consolidated results of the operations of the Borrower and its Subsidiaries
for the period ended on such dates, all in conformity with GAAP.
(b) Since June 30, 1996, there has been no Material Adverse
Change and there have been no events or developments that in the aggregate have
had a Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries had at
June 30, 1996 any material obligation, contingent liability or liability for
taxes, long-term leases or unusual forward or long-term commitment which is not
reflected in the balance sheet at such date referred to in subsection (a) above
or in the notes thereto.
(d) The Projections that have been delivered to each Lender,
were prepared on the basis of the assumptions
72
81
expressed therein, which assumptions the Borrower believed to be reasonable
based on the information available to the Borrower at the time so furnished and
on the Closing Date.
(e) The Borrower is, and on a consolidated basis the Borrower
and its Subsidiaries are, Solvent.
4.6. Litigation. There are no pending or, to the knowledge
of the Borrower, threatened actions, investigations or proceedings affecting
the Borrower, any of its Subsidiaries or Eligible Joint Ventures, or (to the
best knowledge of the Borrower) any Operating Lessee or any of their respective
properties or revenues before any court, Governmental Authority or arbitrator,
other than those that in the aggregate, if adversely determined, would have no
Material Adverse Effect. The performance of any action by (a) any Loan Party
required or contemplated by any of the Loan Documents or (b) any Operator
required or contemplated by any Operating Lease or Management Agreement is not,
to the best knowledge of the Borrower, restrained or enjoined (either
temporarily, preliminarily or permanently), and, to the best knowledge of the
Borrower, no material adverse condition has been imposed by any Governmental
Authority or arbitrator upon any of the foregoing transactions contemplated by
the aforementioned documents.
4.7. Margin Regulations. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System), and no proceeds of any Borrowing will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
4.8. Ownership of Borrower and DJONT; Subsidiaries. (a) The
authorized capital stock of FelCor consists of (i) 50,000,000 shares of common
stock, $.01 par
73
82
value per share, of which 23,495,057 shares are issued and outstanding as of
the date hereof, and (ii) 10,000,000 shares of preferred stock, $.01 par value
per share, of which 6,050,000 shares, designated as $1.95 Series A Cumulative
Convertible Preferred Stock, $25.00 per share liquidation preference, are
outstanding as of the date hereof. All of the outstanding capital stock of
FelCor has been validly issued, is fully paid and non-assessable. At least
200,000 shares of FelCor common stock, and/or units of limited partner interest
in FelCor LP that are redeemable for common stock of FelCor is owned, in the
aggregate, beneficially by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., free
and clear of all Liens.
(b) FelCor is the sole general partner of FelCor LP and, as
of the date hereof, owns beneficially and of record at least 88.2% of the
partnership interests of FelCor LP free and clear of all Liens.
(c) As of the date hereof, the membership interests of
DJONT consist of 50% voting Class A membership interests, 50% non-voting Class
B membership interests, and non-voting Class C and Class D membership
interests, each of which provides for limited distributions based solely upon
the operations of a single Hotel. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇. each own, beneficially, 25% of the voting Class A membership interests in
DJONT, free and clear of all Liens.
(d) Set forth on Schedule 4.8 hereto is a complete and
accurate list showing, as of the date hereof, all Subsidiaries and
Unconsolidated Entities of the Borrower and, as to each such Subsidiary and
Unconsolidated Entity, the jurisdiction of its formation and the percentage of
the outstanding Stock of each class owned (directly or indirectly) by the
Borrower. No Stock of any Subsidiary or Unconsolidated Entity of the Borrower
is subject to any outstanding option, warrant, right of conversion or purchase
74
83
or any similar right. All of the outstanding capital Stock of each such
Subsidiary and Unconsolidated Entity owned by the Borrower has been validly
issued, is fully paid and (except for partnership interests) non-assessable,
and all outstanding capital Stock of its Subsidiaries and Unconsolidated
Entities owned by the Borrower is free and clear of all Liens. Neither the
Borrower nor any such Subsidiary or Unconsolidated Entity is a party to, or has
knowledge of, any agreement restricting the transfer or hypothecation of any
shares of Stock of any such Subsidiary or Unconsolidated Entity, other than
those imposed by Requirements of Law, or the Loan Documents.
4.9. ERISA. (a) There are no Multiemployer Plans.
(b) Each Plan and any related trust intended to qualify under
Code Section 401 or 501 has been determined by the IRS to be so qualified and
to the best knowledge of the Borrower nothing has occurred which would cause
the loss of such qualification.
(c) None of the Borrower, any of its Subsidiaries or any
ERISA Affiliate, with respect to any Pension Plan, has failed to make any
contribution or pay any amount due as required by Section 412 of the Code or
Section 302 of ERISA or the terms of any such plan, and all required
contributions and benefits have been paid in accordance with the provisions of
each such plan.
(d) There are no pending or, to the knowledge of the
Borrower, threatened claims, actions or proceedings (other than claims for
benefits in the normal course), relating to any Plan other than those that in
the aggregate, if adversely determined, would have no Material Adverse Effect.
75
84
(e) No Pension Plan has any unfunded accrued benefit
liabilities, as determined by using reasonable actuarial assumptions utilized
by such plan's actuary for funding purposes. Within the last five years none
of the Borrower, any of its Subsidiaries or any ERISA Affiliate has caused a
Pension Plan with any such liabilities to be transferred outside of its
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA).
(f) No Plan provides for continuing health, disability,
accident or death benefits or coverage for any participant or his or her
beneficiary after such participant's termination of employment (except as may
be required by Section 4980B of the Code and at the sole expense of the
participant or the beneficiary) which would result in the aggregate under all
Plans in a liability in an amount which would have a Material Adverse Effect.
(g) None of the assets of any of the Loan Parties are subject
to Title I of ERISA because they consist of "plan assets" within the meaning of
DOL Regulation Section 2510.3-101 by reason of an equity investment in any of
the Loan Parties.
4.10. Indebtedness. Except as disclosed on Schedule 4.10, as
of the date hereof, none of the Borrower or any of its Subsidiaries or
Unconsolidated Entities has any Indebtedness.
4.11. Restricted Payments. From and after the Closing Date,
the Borrower has not declared or made any Restricted Payments (other than those
permitted pursuant to Section 7.4).
4.12. No Burdensome Restrictions; No Defaults. (a) No Loan
Party nor any of its Subsidiaries or Eligible Joint Ventures (i) is a party to
any Contractual Obligation the compliance with which would have a Material
Adverse
76
85
Effect or the performance of which by any thereof, either unconditionally or
upon the happening of an event, will result in the creation of a Lien on the
property or assets of any such Loan Party or its Subsidiaries, or (ii) is
subject to any charter or corporate restriction which has a Material Adverse
Effect.
(b) No Loan Party or Subsidiary or Eligible Joint Venture of
any Loan Party is in default under or with respect to any Contractual
Obligation owed by it and, to the knowledge of the Borrower, no other party is
in default under or with respect to any Contractual Obligation owed to any Loan
Party or to any Subsidiary or Eligible Joint Venture of a Loan Party, other
than those defaults which in the aggregate have no Material Adverse Effect.
(c) No Event of Default or Default has occurred and is
continuing.
(d) There is no Requirement of Law the compliance with which
by any Loan Party would have a Material Adverse Effect.
(e) As of the date hereof, no Subsidiary or Eligible Joint
Venture of the Borrower is subject to any Contractual Obligation (other than as
set forth in the governing documents thereof) restricting or limiting its
ability to transfer its assets to the Borrower or to declare or make any
dividend payment or other distribution on account of any shares of any class of
its Stock or its ability to purchase, redeem, or otherwise acquire for value or
make any payment in respect of any such shares or any shareholder rights.
4.13. Investments. Except as disclosed on Schedule 4.8 or
4.13, the Borrower and its Subsidiaries considered as a single enterprise, is
not engaged in any
77
86
joint venture or partnership with any other Person nor does it maintain any
Investment, as of the date hereof.
4.14. Government Regulation. Neither the Borrower nor any of
its Subsidiaries or Eligible Joint Ventures is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act
of 1940, as amended, or subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or any
other federal or state statute or regulation such that its ability to incur
Indebtedness is limited, or its ability to consummate the transactions
contemplated hereby or by any other Loan Document, or the exercise by the
Administrative Agent or any Lender of rights and remedies hereunder or
thereunder, is impaired. The making of the Loans by the Lenders, the
application of the proceeds and repayment thereof by the Borrower and the
consummation of the transactions contemplated by the Loan Documents will not
cause the Borrower or any of its Subsidiaries or Eligible Joint Ventures to
violate any provision of any of the foregoing or any rule, regulation or order
issued by the Securities and Exchange Commission thereunder.
4.15. Insurance. All policies of insurance of any kind or
nature owned by or issued to or for the benefit of any Loan Party or any of its
Subsidiaries or Eligible Joint Ventures, or issued in respect of any real
property owned or leased by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures including, without limitation, policies of life, fire, theft,
product liability, public liability, property damage, other casualty, employee
fidelity, workers' compensation and employee health and welfare insurance, are
in full force and effect and are of a nature and provide such coverage as is
sufficient and as is customarily carried by companies of the size and character
of such Person. No Loan Party or any of its Subsidiaries or
78
87
Eligible Joint Ventures has been refused insurance for which it applied or had
any policy of insurance terminated (other than at its request).
4.16. Labor Matters. (a) There are no strikes, work
stoppages, slowdowns or lockouts pending or threatened against or involving the
Borrower or its Subsidiaries or their respective Hotels, other than those which
in the aggregate have no Material Adverse Effect.
(b) There are no unfair labor practice charges, arbitrations
or grievances pending against or involving, or to the knowledge of the Borrower
threatened against or involving the Borrower or its Subsidiaries or Eligible
Joint Ventures, other than those which, in the aggregate, if resolved adversely
to the Borrower or such Subsidiary or Eligible Joint Venture, would have no
Material Adverse Effect.
(c) As of the Closing Date, neither the Borrower nor any of
its Subsidiaries or Eligible Joint Ventures are parties to, or have any
obligations under, any collective bargaining agreement.
(d) There is no organizing activity involving the Borrower or
any of its Subsidiaries or Eligible Joint Ventures pending or, to the
Borrower's knowledge, threatened by any labor union or group of employees,
other than those which in the aggregate have no Material Adverse Effect. There
are no representation proceedings pending or, to the Borrower's knowledge,
threatened with the National Labor Relations Board, and no labor organization
or group of employees of the Borrower or any of its Subsidiaries or Eligible
Joint Ventures have made a pending demand for recognition, other than those
which in the aggregate have no Material Adverse Effect.
79
88
4.17. Force Majeure. Neither the business nor the properties
of any Loan Party or any of their respective Subsidiaries or Eligible Joint
Ventures are currently suffering from the effects of any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), other than those which in the aggregate
have no Material Adverse Effect.
4.18. Use of Proceeds. The proceeds of the Loans will be
used by the Borrower solely as follows: (a) subject to the limitations set
forth herein, to fund any direct or indirect investment in existing Hotels, in
Hotels and/or interests in Hotels which are to be acquired by the Borrower or
any of its Subsidiaries, and for the payment of related transaction costs, fees
and expenses, and (b) as to the sum of up to $25,000,000 only, for general
corporate or working capital purposes.
4.19. Environmental Protection. Except as disclosed on
Schedule 4.19 (and the Borrower represents and warrants to the Lenders and the
Administrative Agent that the matters disclosed in the reports identified on
Schedule 4.19 would not reasonably be expected to have a Material Adverse
Effect):
(a) to the best knowledge of Borrower and its
Subsidiaries, all real property leased or owned by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures is free from contamination by any
Hazardous Material which could reasonably be expected to subject the Borrower
or any of its Subsidiaries to Environmental Liabilities and Costs of $1,000,000
or more;
(b) the operations of the Borrower and each of its
Subsidiaries or Eligible Joint Ventures, and the operations at any real
property leased or owned by the
80
89
Borrower or any of its Subsidiaries or Eligible Joint Ventures are in material
compliance in all respects with all applicable Environmental Laws;
(c) neither the Borrower nor any of its Subsidiaries or
Eligible Joint Ventures have liabilities with respect to Hazardous Materials
and, to the best knowledge of the Borrower and its Subsidiaries, no facts or
circumstances exist which could give rise to liabilities with respect to
Hazardous Materials which could reasonably be expected to subject the Borrower
or any of its Subsidiaries to Environmental Liabilities and Costs of $1,000,000
or more;
(d) (i) the Borrower and its Subsidiaries and Eligible Joint
Ventures and all real property owned or leased by the Borrower or its
Subsidiaries and Eligible Joint Ventures have all Environmental Permits
necessary for the operations at such real property and are in material
compliance with such Environmental Permits, (ii) there are no Legal Proceedings
pending nor, to the best knowledge of the Borrower and its Subsidiaries,
threatened to revoke, or alleging the violation of, such Environmental Permits,
and (iii) neither the Borrower nor any of its Subsidiaries or Eligible Joint
Ventures or to the best knowledge of the Borrower and its Subsidiaries the
Operators have received any notice from any source to the effect that there is
lacking any Environmental Permit required in connection with the current use or
operation of any property leased or owned by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures;
(e) neither the Borrower's nor any of its Subsidiaries'
or Eligible Joint Ventures' current facilities and operations, nor, to the best
knowledge of the Borrower and its Subsidiaries, any Operator, any predecessor
of the Borrower or any of its Subsidiaries or Eligible Joint Ventures, nor any
of the Borrower's or its Subsidiaries' or
81
90
Eligible Joint Ventures' past facilities and operations, nor to the best
knowledge of the Borrower and its Subsidiaries, any owner of premises leased or
operated by the Borrower and its Subsidiaries and Eligible Joint Ventures, are
subject to any outstanding written Order or Contract, including Environmental
Liens, with any Governmental Authority or other Person, or to any federal,
state, local, foreign or territorial investigation respecting (i) Environmental
Laws, (ii) Remedial Action, (iii) any Environmental Claim, or (iv) the Release
or threatened Release of any Hazardous Material;
(f) neither the Borrower nor any of its Subsidiaries or
Eligible Joint Ventures or, to the best knowledge of the Borrower and its
Subsidiaries, Operators are subject to any pending Legal Proceeding alleging
the violation of any Environmental Law with respect to a Hotel nor, to the best
knowledge of the Borrower and its Subsidiaries, are any such proceedings
threatened;
(g) neither the Borrower nor any of its Subsidiaries or
Eligible Joint Ventures nor, to the best knowledge of the Borrower and its
Subsidiaries, any Operators or predecessor of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures, nor to the best knowledge of the
Borrower and its Subsidiaries any owner of premises leased by the Borrower or
any of its Subsidiaries or Eligible Joint Ventures, have filed any notice under
federal, state or local, territorial or foreign law indicating past or present
treatment, storage, or disposal of or reporting a Release of Hazardous Material
into the environment;
(h) none of the operations of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures or, to the best knowledge of the
Borrower and its Subsidiaries, of any Operators or predecessor of the Borrower
or any of its Subsidiaries or Eligible Joint Ventures, or, to the best
knowledge of the Borrower and its Subsidiaries, of any owner
82
91
of premises leased by the Borrower or any of its Subsidiaries or Eligible Joint
Ventures, involve or previously involved the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Part 261.3 (in effect as of the date of this Agreement) or any state, local,
territorial or foreign equivalent; and
(i) there is not now, nor to the best knowledge of the
Borrower and its Subsidiaries, has there been in the past, on, in or under any
real property leased or owned by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures, to the best knowledge of the Borrower and its
Subsidiaries or any of their predecessors (i) any underground storage tanks or
surface tanks, dikes or impoundments (other than for surface water), (ii) any
friable asbestos-containing materials, (iii) any polychlorinated biphenyls, or
(iv) any radioactive substances other than naturally-occurring radioactive
material.
4.20. Contractual Obligations Concerning Assets. As of the
date hereof, neither the Borrower nor any of its Subsidiaries owns or holds, or
is obligated under or a party to, any option, right of first refusal, or other
contractual right to purchase or acquire, or any Contractual Obligation to
effect an Asset Sale of, any Hotel owned or leased by the Borrower or any of
its Subsidiaries, except those that in the aggregate would not have a Material
Adverse Effect whether or not exercised.
4.21. Intellectual Property. The Loan Parties and its
Subsidiaries and Eligible Joint Ventures or the Operating Lessee own or license
or otherwise have the right to use all material licenses, permits, patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, copyright applications, franchises, authorizations and other
intellectual property
83
92
rights that are necessary for the operations of their respective businesses,
without infringement upon or conflict with the rights of any other Person with
respect thereto, including, without limitation, the Licenses and all trade
names associated with any private label brands of any Loan Party or any of its
Subsidiaries or Eligible Joint Ventures. To the best knowledge of the
Borrower, no material slogan or other advertising device, product, process,
method, substance, part or component, or other material now employed, or now
contemplated to be employed, by any Loan Party or any of their respective
Subsidiaries or Eligible Joint Ventures or the Operating Lessee infringes upon
or conflicts with any rights owned by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened.
4.22. Title. (a) Each Loan Party and their respective
Subsidiaries and Eligible Joint Ventures own good and marketable fee simple
absolute title to all of the Real Estate purported to be owned by them, which
Real Estate is at the date hereof described in Schedule 4.22(a), and good and
marketable title to, or valid leasehold interests in, all other properties and
assets purported to be leased by any Loan Party or any of their respective
Subsidiaries or Eligible Joint Ventures, including, without limitation, valid
leasehold interests pursuant to the Leases and all property reflected in the
balance sheet referred to in Section 4.5(a). Each Loan Party and its
respective Subsidiaries or Eligible Joint Ventures received all deeds,
assignments, waivers, consents, non-disturbance and recognition or similar
agreements, bills of sale and other documents, and have duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect such Loan Party's and their respective Subsidiaries' or Eligible Joint
Ventures' right, title and interest in and to all such property except for such
documents or actions the failure to obtain or accomplish which would not have a
Material Adverse Effect.
84
93
(b) All material real property leased at the date hereof by
the Borrower or any of their respective Subsidiaries or Eligible Joint Ventures
is listed on Schedule 4.22(b). Each of such leases is valid and enforceable in
accordance with its terms and is in full force and effect. The Borrower has
delivered to the Administrative Agent true and complete copies of each of such
leases and all documents affecting the rights or obligations of the Borrower or
any of its Subsidiaries or Eligible Joint Ventures which is a party thereto,
including, without limitation, any non- disturbance and recognition agreements,
subordination agreements, attornment agreements and agreements regarding the
term or rental of any of the leases. None of the Borrower or any of its
respective Subsidiaries or Eligible Joint Ventures nor, to the knowledge of the
Borrower, any other party to any such lease is in default of its obligations
thereunder or has delivered or received any notice of default under any such
lease, nor has any event occurred which, with the giving of notice, the passage
of time or both, would constitute a default under any such lease, except for
defaults which in the aggregate have no Material Adverse Effect.
(c) All components of all improvements included within the
Hotels owned or leased, as lessee, by any Loan Party or Eligible Joint Venture
(collectively, "Improvements"), including, without limitation, the roofs and
structural elements thereof and the heating, ventilation, air conditioning,
plumbing, electrical, mechanical, sewer, waste water, storm water, paving and
parking equipment, systems and facilities included therein, are in good working
order and repair, subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect. All water, gas, electrical,
steam, compressed air, telecommunication, sanitary and storm sewage lines and
systems and other similar systems serving the Hotels owned or leased by any
Loan Party or any of their respective Subsidiaries or
85
94
Eligible Joint Ventures are installed and operating and are sufficient to
enable the real property owned or leased by any Loan Party and their respective
Subsidiaries or Eligible Joint Ventures to continue to be used and operated in
the manner currently being used and operated, and no Loan Party or any of its
Subsidiaries or Eligible Joint Ventures has any knowledge of any factor or
condition that reasonably could be expected to result in the termination or
material impairment of the furnishing thereof. No Improvement or portion
thereof is dependent for its access, operation or utility on any land, building
or other Improvement not included in the real property owned or leased by any
Loan Party or any of its Subsidiaries or Eligible Joint Ventures other than for
access provided pursuant to a recorded easement or other right of way
establishing the right of such access.
(d) All Permits required to have been issued or appropriate
to enable all real property owned or leased by any Loan Party or any of its
Subsidiaries or Eligible Joint Ventures to be lawfully occupied and used for
all of the purposes for which they are currently occupied and used have been
lawfully issued and are in full force and effect, other than those which in the
aggregate have no Material Adverse Effect.
(e) No Loan Party or any of its Subsidiaries or Eligible
Joint Ventures has received any notice, or has any knowledge, of any pending,
threatened or contemplated condemnation proceeding affecting any real property
owned or leased by any Loan Party or any of its Subsidiaries or Eligible Joint
Ventures or any part thereof, or any proposed termination or impairment of any
parking at any such owned or leased real property or of any sale or other
disposition of any real property owned or leased by any Loan Party or any of
its Subsidiaries or Eligible Joint Ventures or any part thereof in lieu of
condemnation, which in the
86
95
aggregate, are reasonably likely to have a Material Adverse Effect.
(f) Except for events or conditions not reasonably likely to
have, in the aggregate, a Material Adverse Effect, (i) no portion of any real
property owned or leased by any Loan Party or any of its Subsidiaries or
Eligible Joint Ventures has suffered any material damage by fire or other
casualty loss which has not heretofore been completely repaired and restored to
its condition prior to such casualty, and (ii) no portion of any real property
owned or leased by any Loan Party or any of its Subsidiaries or Eligible Joint
Ventures is located in a special flood hazard area as designated by any Federal
Governmental Authorities.
4.23. Status as REIT. The Borrower is organized in
conformity with the requirements for qualification as an equity-oriented real
estate investment trust under the Code. Borrower has met all of the
requirements for qualification as an equity-oriented real estate investment
trust under the Code for its Fiscal Year ended December 31, 1995. The Borrower
is in a position to qualify for its current Fiscal Year as a real estate
investment trust under the Code and its proposed methods of operation will
enable it to so qualify.
4.24. Operator: Compliance with Law. To the best knowledge
of the Borrower and its Subsidiaries, each Operator (i) has full power and
authority and the legal right to own, lease (or sublease), manage and operate
(as applicable) the properties it operates and to conduct the business in which
it is currently engaged with respect to any real property owned or leased by
the Borrower or any of its Subsidiaries or Eligible Joint Ventures (ii) is duly
qualified or licensed and is in good standing under the laws of each
jurisdiction where its ownership, lease (or sublease), management or operation
of any real property
87
96
owned or leased by the Borrower or any of its Subsidiaries or Eligible Joint
Ventures requires such qualification, and (iii) is in compliance with all
Requirements of Law applicable to the real property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures, or applicable
to the operation or management thereof except to the extent that the failure to
comply therewith is not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
4.25. Operating Leases, Licenses and Management Agreement.
(a) Each of the Hotels (i) is leased to an Operating Lessee under an Operating
Lease (ii) is the subject of a License, and (iii) is managed and operated for
the Operating Lessee pursuant to a Management Agreement.
(b) Each of the Operating Leases, Licenses and Management
Agreements in respect of the Hotels (i) is in full force and effect, (ii) is a
legally valid and binding obligation of each of the parties thereto, subject to
such exceptions which are not reasonably likely to have, in the aggregate, a
Material Adverse Effect, and (iii) has not been modified, amended or
supplemented in any material or adverse way. Neither the Borrower nor any of
its Subsidiaries or Eligible Joint Ventures has collected any rents becoming
due under any Operating Lease more than 30 days in advance. All rent and other
sums and charges payable by any Operating Lessee under each Operating Lease to
which it is a party are current, no notice of default or termination under any
such Operating Lease is outstanding, no termination event or condition or
uncured default on the part of the Operating Lessee exists under any Operating
Lease, and no event of default has occurred which, with the giving of notice or
the lapse of time or both, would constitute such a default or termination event
or condition or uncured default on the part of the Borrower or its Subsidiaries
or Eligible Joint Ventures or the Operators (as the case may be), subject to
such exceptions which are not reasonably likely to have, in
88
97
the aggregate, a Material Adverse Effect. As to all of the Leases, Borrower
and each of its Subsidiaries or Eligible Joint Ventures has performed all of
its repair and maintenance obligations (if any) and, to the best knowledge and
belief of Borrower, each Operating Lessee under each Operating Lease to which
it is a party has performed all of its repair and maintenance obligations,
subject to such exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect.
4.26. FF&E Reserves. An FF&E Reserve has been established in
respect of each of the Hotels and the Borrower or its Subsidiaries or Eligible
Joint Ventures have made any contributions to such FF&E Reserve as required by
the terms of the Operating Lease and/or the Management Agreement relating
thereto.
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or Commitments remain
outstanding, unless the requisite Lenders specified in Section 10.1 otherwise
consent in writing, the Borrower agrees with the Lenders and the Administrative
Agent that:
5.1. Gross Interest Expense Coverage. The Borrower shall
maintain at the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending on September 30, 1996, a ratio of (a) Adjusted EBITDA to (b) Gross
Interest Expense, in each case determined on the basis of the four (4) Fiscal
Quarters ending on the date of determination, of not less than 3:1.
5.2. Debt Service Coverage Ratio. The Borrower shall
maintain at the end of each Fiscal Quarter commencing with the Fiscal Quarter
ending on September 30, 1996, a
89
98
ratio of (a) Adjusted EBITDA to (b) Debt Service, in each case determined on
the basis of the four (4) Fiscal Quarters ending on the date of determination,
of not less than 2.5:1.0.
5.3. Maintenance of Tangible Net Worth. The Borrower shall
maintain during each Fiscal Quarter a Tangible Net Worth of not less than the
Minimum Tangible Net Worth.
5.4 Limitations on Total Indebtedness. The Borrower shall
not, during each Fiscal Quarter on a consolidated basis, permit the Total
Indebtedness (including, without limitation, the Obligations and all
Capitalized Lease Obligations) of the Borrower for borrowed money to exceed the
lesser of:
(i) the sum of (A) for Hotels owned for four (4) Fiscal
Quarters or more, Adjusted NOI on a consolidated
basis from such Hotels for the preceding four (4)
Fiscal Quarters multiplied by four (4), and (B) for
Hotels owned for less than four (4) Fiscal Quarters
(including newly acquired Hotels and Hotels to be
immediately acquired using the proceeds from any
Indebtedness), 40% of the Borrower's Investment in
such Hotels; or
(ii) 40% of the Borrower's Investment in Hotels (including
newly acquired Hotels and Hotels to be immediately
acquired using the proceeds from any Indebtedness);
provided that, in no event shall the Borrower permit the Total Indebtedness of
the Borrower to exceed the limitation on indebtedness set forth in Article IX
of the Charter of FelCor as in effect on the date hereof.
90
99
5.5 Limitations on Total Secured Indebtedness. The Borrower
shall not, during each Fiscal Quarter on a consolidated basis, permit the Total
Secured Indebtedness (including, without limitation, secured Obligations and
Capitalized Lease Obligations) of the Borrower, to exceed the lesser of:
(i) the sum of (A) for Hotels owned for four (4) Fiscal
Quarters or more, Adjusted NOI on a consolidated
basis from such Hotels for the preceding four (4)
Fiscal Quarters multiplied by 1.5, and (B) for Hotels
owned for less than four (4) Fiscal Quarters
(including newly acquired Hotels and Hotels to be
immediately acquired using the proceeds from any
Indebtedness), 15% of the Borrower's Investment in
such Hotels; or
(ii) 15% of the Borrower's Investment in Hotels (including
newly acquired Hotels and Hotels to be immediately
acquired using the proceeds from any Indebtedness).
ARTICLE VI
AFFIRMATIVE COVENANTS
As long as any of the Obligations or the Commitments remain
outstanding, unless the Majority Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Administrative Agent that:
6.1. Compliance with Laws, Etc. The Borrower shall comply,
and shall cause each of its Subsidiaries and Eligible Joint Ventures to comply,
in all material respects with all Requirements of Law, Contractual Obligations,
commitments, instruments, licenses, permits and franchises,
91
100
including, without limitation, all Permits; provided, however, that the
Borrower shall not be deemed in default of this Section 6.1 if all such
non-compliances in the aggregate have no Material Adverse Effect.
6.2. Conduct of Business. The Borrower shall (a) conduct,
and shall cause each of its Subsidiaries and Eligible Joint Ventures to
conduct, its business in the ordinary course and consistent with past practice;
(b) use, and cause each of its Subsidiaries and Eligible Joint Ventures to use,
its reasonable efforts, in the ordinary course and consistent with past
practice, to (i) preserve its business and the goodwill and business of the
customers, advertisers, suppliers and others having business relations with the
Borrower or any of its Subsidiaries or Eligible Joint Ventures, and (ii) keep
available the services and goodwill of its present employees; (c) preserve, and
cause each of its Subsidiaries and Eligible Joint Ventures to preserve, all
registered patents, trademarks, trade names, copyrights and service marks with
respect to its business; and (d) perform and observe, and cause each of its
Subsidiaries and Eligible Joint Ventures to perform and observe, all the terms,
covenants and conditions required to be performed and observed by it under its
Contractual Obligations (including, without limitation, to pay all rent and
other charges payable under any lease and all debts and other obligations as
the same become due), and do, and cause its Subsidiaries and Eligible Joint
Ventures to do, all things necessary to preserve and to keep unimpaired its
rights under such Contractual Obligations; provided, however, that, in the case
of each of clauses (a) through (d), the Borrower shall not be deemed in default
of this Section 6.2 if all such failures in the aggregate have no Material
Adverse Effect.
6.3. Payment of Taxes, Etc. The Borrower shall pay and
discharge, and shall cause each of its Subsidiaries and Eligible Joint
Ventures, as appropriate, to pay and
92
101
discharge, before the same shall become delinquent, all lawful governmental
claims, taxes, assessments, charges and levies, except where contested in good
faith, by proper proceedings, if adequate reserves therefor have been
established on the books of the Borrower or the appropriate Subsidiary or
Eligible Joint Venture in conformity with GAAP; provided, however, that the
Borrower shall not be deemed in default of this Section 6.3 if all such
non-payments in the aggregate have no Material Adverse Effect.
6.4. Maintenance of Insurance. The Borrower shall maintain,
and shall cause each of its Subsidiaries and Eligible Joint Ventures to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks (including, without
limitation, fire, extended coverage, vandalism, malicious mischief, public
liability, product liability, and business interruption) as is usually carried
by companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary or Eligible Joint
Venture. The Borrower will furnish to the Lenders from time to time such
information as may be requested as to such insurance.
6.5. Preservation of Existence, Etc. The Borrower shall
preserve and maintain, and shall cause each of its Subsidiaries and Eligible
Joint Ventures to preserve and maintain, its corporate or partnership
existence, rights (charter and statutory) and franchises, except as permitted
under Section 7.5.
6.6. Access. The Borrower shall, at any reasonable time and
from time to time, permit the Administrative Agent or any of the Lenders, or
any agents or representatives thereof, at the expense of the Lenders (but such
expense to be reimbursed by the Borrower in the event that any of the following
reveal a material Default by the Borrower), to (a) examine and make copies of
and abstracts
93
102
from the records and books of account of the Borrower and each of its
Subsidiaries and Eligible Joint Ventures, (b) visit the properties of the
Borrower and each of its Subsidiaries and Eligible Joint Ventures, (c) discuss
the affairs, finances and accounts of the Borrower and each of its Subsidiaries
and Eligible Joint Ventures with any of their respective officers or directors,
and (d) communicate directly with the Borrower's independent certified public
accountants.
6.7. Keeping of Books. The Borrower shall keep, and shall
cause each of its Subsidiaries and Eligible Joint Ventures to keep, proper
books of record and account, in which proper entries shall be made of all
financial transactions and the assets and business of the Borrower and each
such Subsidiary or Eligible Joint Venture.
6.8. Maintenance of Properties, Etc. The Borrower shall
maintain and preserve, and shall cause each of its Subsidiaries and Eligible
Joint Ventures to maintain and preserve, (i) all of its properties which are
used or useful or necessary in the conduct of its business in good working
order and condition, and (ii) all rights, permits, licenses, approvals and
privileges (including, without limitation, all Permits) which are used or
useful or necessary in the conduct of its business; provided, however, that the
Borrower shall not be deemed in default of this Section 6.8 if all such
failures in the aggregate have no Material Adverse Effect.
6.9. Performance and Compliance with Other Covenants. The
Borrower shall perform and comply with, and shall cause each of its
Subsidiaries and Eligible Joint Ventures to perform and comply with, each of
the covenants and agreements set forth in each Contractual Obligation to which
it or any of its Subsidiaries or Eligible Joint Ventures is a party; provided,
however, that the Borrower shall not be deemed in default of this Section 6.9
if all
94
103
such failures in the aggregate have no Material Adverse Effect.
6.10. Application of Proceeds. The Borrower shall use the
entire amount of the proceeds of the Loans as provided in Section 4.18.
6.11. Financial Statements. The Borrower shall furnish to
the Lenders:
(a) as soon as available and in any event within 45 days
after the end of each of the first three Fiscal Quarters of each Fiscal Year,
consolidated balance sheets of the Borrower and its Subsidiaries and DJONT as
of the end of such quarter and consolidated statements of income, retained
earnings and cash flow of the Borrower and its Subsidiaries and DJONT for the
period commencing at the end of the previous Fiscal Year and ending with the
end of such Fiscal Quarter, all prepared in conformity with GAAP and certified
by the chief financial officer of the Borrower or the chief financial officer
of DJONT, as appropriate, as fairly presenting the financial condition and
results of operations of the Borrower and its Subsidiaries and DJONT at such
date and for such period, together with (i) a certificate of said officer
stating that no Default or Event of Default has occurred and is continuing or,
if a Default or an Event of Default has occurred and is continuing, a statement
as to the nature thereof and the action which the Borrower or DJONT, as
appropriate, proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Borrower or DJONT, as appropriate, in determining compliance with all financial
covenants contained herein, and (iii) a written discussion and analysis by the
management of the Borrower or DJONT, as appropriate, of the financial
statements furnished in respect of such Fiscal Quarter;
95
104
(b) as soon as available and in any event within 90 days
after the end of each Fiscal Year, consolidated balance sheets of the Borrower
and its Subsidiaries and DJONT as of the end of such year and consolidated
statements of income, retained earnings and cash flow of the Borrower and its
Subsidiaries and DJONT for such Fiscal Year, all prepared in conformity with
GAAP and certified, in the case of such consolidated financial statements, in a
manner reasonably acceptable to the Administrative Agent without qualification
as to the scope of the audit by Coopers & ▇▇▇▇▇▇▇ or other independent public
accountants of recognized national standing together with (i) a schedule in
form satisfactory to the Administrative Agent of the computations used by the
Borrower in determining, as of the end of such Fiscal Year, the Borrower's or
DJONT's, as appropriate, compliance with all financial covenants contained
herein, and (ii) a written discussion and analysis by the management of the
Borrower or DJONT, as appropriate, of the financial statements furnished in
respect of such Fiscal Year; and
(c) promptly after the same are received by the Borrower, a
copy of each management letter provided to the Borrower by its independent
certified public accountants which refers in whole or in part to any
inadequacy, defect, problem, qualification or other lack of fully satisfactory
accounting controls utilized by the Borrower or any of its Subsidiaries.
(d) within 45 days after the end of each Fiscal Quarter, (i)
a Borrowing Base Certificate as of the end of such Fiscal Quarter, executed by
a Responsible Officer of the Borrower, together with (to the extent not
previously delivered) copies of the Eligible Hotel Documents in respect of each
of the Eligible Hotels shown listed thereon, and (ii) a Compliance Certificate
as of the end of such Fiscal Quarter, executed by the Chief Financial Officer
of the Borrower.
96
105
6.12. Reporting Requirements. The Borrower shall furnish to
the Lenders:
(a) prior to any Asset Sale generating proceeds in excess of
10% of the value of Total Assets of the Borrower, a notice (i) describing the
assets being sold, (ii) stating the estimated Asset Sales proceeds in respect
of such Asset Sale and (iii) accompanied by a Borrowing Base Certificate and a
certificate of the chief financial officer of the Borrower stating that before
and after giving effect to such Asset Sale, the Borrower shall be in compliance
with all of its covenants set forth in the Loan Documents and that no Default
or Event of Default will result from such Asset Sale.
(b) as soon as available and in any event within 90 days
after the end of each Fiscal Year (or earlier if approved earlier by the Board
of Directors of the Borrower), an annual budget of the Borrower and its
Subsidiaries for the succeeding Fiscal Year, displaying on a monthly and
quarterly basis anticipated balance sheets, forecasted Capital Expenditures,
working capital requirements, revenues, net income, cash flow, EBITDA, all on a
consolidated basis;
(c) promptly and in any event within 30 days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred, a written statement of the chief
financial officer or other appropriate officer of the Borrower describing such
ERISA Event or waiver request and the action, if any, which the Borrower, its
Subsidiaries and ERISA Affiliates propose to take with respect thereto and a
copy of any notice filed by or with the PBGC or the IRS pertaining thereto;
(d) promptly and in any event within 10 days after receipt
thereof, a copy of any adverse notice,
97
106
determination letter, ruling or opinion the Borrower, any of its Subsidiaries
or any ERISA Affiliate receives from the PBGC, DOL or IRS with respect to any
Plan, other than those which, in the aggregate, do not have any reasonable
likelihood of resulting in a Material Adverse Change;
(e) promptly after the commencement thereof, notice of all
actions, suits and proceedings before any domestic or foreign Governmental
Authority or arbitrator, affecting the Borrower or any of its Subsidiaries,
except those which in the aggregate, if adversely determined, would have no
Material Adverse Effect;
(f) promptly and in any event within two Business Days after
the Borrower becomes aware of the existence of (i) any Default or Event of
Default, (ii) any breach or non-performance of, or any default under, any
Operating Lease, Management Agreement or any Contractual Obligation which is
material to the business, prospects, operations or financial condition of the
Borrower and its Subsidiaries taken as one enterprise, or (iii) any Material
Adverse Change or any event, development or other circumstance which has any
reasonable likelihood of causing or resulting in a Material Adverse Change,
telephonic or telecopied notice in reasonable detail specifying the nature of
the Default, Event of Default, breach, non-performance, default, event,
development or circumstance, including, without limitation, the anticipated
effect thereof, which notice shall be promptly confirmed in writing within five
days;
(g) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to its security holders generally, and
copies of all reports and registration statements which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange or the National Association of Securities Dealers,
Inc.;
98
107
(h) promptly upon the request of any Lender, through the
Administrative Agent, copies of all federal tax returns and reports filed by
the Borrower or any of its Subsidiaries in respect of taxes measured by income
(excluding sales, use and like taxes);
(i) promptly and in any event within ten days of the Borrower
or any Subsidiary learning of any of the following, written notice to the
Administrative Agent of any of the following:
(i) the Release or threatened Release of any
Hazardous Material on or from any property owned or leased by the
Borrower of any of its Subsidiaries or Eligible Joint Ventures and any
written order, notice, permit, application or other written
communication or report received by the Borrower, any of its
Subsidiaries or Eligible Joint Ventures in connection with or relating
to any such Release or threatened Release, unless such Release or
threatened Release is not reasonably likely to subject the Borrower or
any of its Subsidiaries to Environmental Liabilities and Costs of
$500,000 or more;
(ii) any notice or claim to the effect that the
Borrower, any of its Subsidiaries or any Eligible Joint Ventures is or
may be liable to any Person as a result of the Release or threatened
Release of any Hazardous Material into the environment;
(iii) receipt by the Borrower, any of its
Subsidiaries or Eligible Joint Ventures or any Operator of
notification that any real or personal property of the Borrower or any
of its Subsidiaries is subject to an Environmental Lien;
(iv) any Remedial Action taken by the Borrower or
any of its Subsidiaries or Eligible Joint
99
108
Ventures or any other Person on their behalf in response to any
Hazardous Material on, under or about any real property owned or
leased by the Borrower or any of its Subsidiaries or Eligible Joint
Ventures, unless such Remedial Action is not reasonably likely to
subject the Borrower or any of its Subsidiaries or Eligible Joint
Ventures to Environmental Liabilities and Costs of $500,000 or more;
(v) receipt by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures of any notice of violation of,
or knowledge by the Borrower or any of its Subsidiaries or any
Eligible Joint Ventures that there exists a condition which may result
in a violation by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures of, any Environmental Law, unless such violation is not
reasonably likely to subject the Borrower or any of its Subsidiaries
to Environmental Liabilities and Costs of $500,000 or more;
(vi) any proposed Capital Expenditure by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures
intended or designed to implement any existing or additional Remedial
Action, unless such expenditures are not reasonably likely to exceed
$500,000;
(vii) the commencement of any judicial or
administrative proceeding or investigation alleging a violation of any
Environmental Law; or
(viii) any proposed acquisition of stock, assets or
real property, or any proposed leasing of property by the Borrower, or
any of its Subsidiaries or Eligible Joint Ventures, unless such action
is not reasonably likely to subject the Borrower and its Subsidiaries
to Environmental Liabilities and Costs to the Borrower in excess of
$500,000;
100
109
(j) promptly, such additional financial and other information
respecting the financial or other condition of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures or the Operating Lessee or the status
or condition of any real property owned or leased by the Borrower or its
Subsidiaries or Eligible Joint Ventures, or the operation thereof which the
Borrower is entitled to or can otherwise reasonably obtain, as the
Administrative Agent from time to time reasonably requests; and
(k) upon written request by any Lender through the
Administrative Agent, a report providing an update of the status of any
Environmental Claim, Remedial Action or any other issue identified in any
notice or report required pursuant to this Section 6.12.
6.13. Leases and Operating Leases; Management Agreements and
Licenses. (a) The Borrower shall provide the Administrative Agent with a copy
of each Qualified Lease and each Operating Lease relating to an Eligible Hotel.
The Borrower shall, and shall cause each of its Subsidiaries and Eligible Joint
Ventures to, (i) comply in all material respects with all of their respective
obligations under all of their respective Leases and Operating Leases now or
hereafter held respectively by them with respect to real property, including,
without limitation, the Leases set forth in Schedule 4.22(b); (ii) not modify,
amend, cancel, extend or otherwise change in any materially adverse manner any
of the terms, covenants or conditions of any such Leases or Operating Leases;
(iii) not assign any Leases or sublet any portion of the premises if such
assignment or sublet would have a Material Adverse Effect; (iv) provide the
Administrative Agent with a copy of each notice of default under any Lease or
Operating Lease received by the Borrower or any Subsidiary or Eligible Joint
Venture of the Borrower immediately upon receipt thereof and deliver to the
Administrative Agent a copy of each notice of default sent by the Borrower or
any Subsidiary or Eligible Joint Venture
101
110
of the Borrower under any Lease or Operating Lease simultaneously with its
delivery of such notice under such Lease or Operating Lease except to the
extent that such defaults, in the aggregate, would not have a Material Adverse
Effect; (v) notify the Administrative Agent, not later than 30 days prior to
the date of the expiration of the term of any Qualified Lease, of the
Borrower's or any Subsidiary or Eligible Joint Venture of the Borrower's
intention either to renew or to not renew any such Qualified Lease, and, if the
Borrower or any Subsidiary or Eligible Joint Venture of the Borrower intends to
renew such Qualified Lease, the terms and conditions of such renewal; and (vi)
maintain each Operating Lease in full force and effect and enforce the
obligations of the Operating Lessee thereunder, in a timely manner except to
the extent that the failure to do so, in the aggregate, would not have a
Material Adverse Effect.
(b) The Borrower shall take all actions and do all things
within its power or control necessary or required to cause each Operating
Lessee to (i) keep, observe, comply with and perform all of the terms,
provisions, covenants and undertakings on its part required by each Operating
Lease, each License, each sublease and Management Agreement relating to any
Hotel, and (ii) to enforce the provisions of each License and each Management
Agreement, if the failure to comply or enforce such agreements would be
reasonably likely, in the aggregate, to have a Material Adverse Effect.
6.14. Intentionally Omitted.
6.15. Employee Plans. For each Plan and any related trust
hereafter adopted or maintained by a Loan Party or any of its ERISA Affiliates
intended to qualify under Code Section 125, 401 or 501, the Borrower shall (i)
seek, and cause such of its ERISA Affiliates to seek, and receive determination
letters from the IRS to the effect
102
111
that such plan is so qualified; and (ii) cause such plan to be so qualified.
6.16. Intentionally Omitted.
6.17. Fiscal Year. The Borrower shall maintain as its Fiscal
Year the twelve month period ending on December 31 of each year.
6.18. Environmental Matters. (a) The Borrower shall comply
and shall cause each of its Subsidiaries and Eligible Joint Ventures and each
property owned or leased by such parties to comply in all material respects
with all applicable Environmental Laws currently or hereafter in effect.
(b) If Administrative Agent or Lenders at any time have a
reasonable basis to believe that there may be a material violation of any
Environmental Law by the Borrower or any of its Subsidiaries and Eligible Joint
Ventures or any Operator related to any real property owned or leased by the
Borrower or any of its Subsidiaries and Eligible Joint Ventures, or real
property adjacent to such real property, then the Borrower agrees, upon request
from the Administrative Agent, to provide the Administrative Agent, at the
Borrower's expense, with such reports, certificates, engineering studies or
other written material or data as the Administrative Agent or Lenders may
reasonably require so as to reasonably satisfy the Administrative Agent and
Lenders that the Borrower or such Subsidiary, Eligible Joint Venture or real
property owned or leased by them is in material compliance with all applicable
Environmental Laws. Furthermore, Administrative Agent shall have the right to
inspect during normal business hours any real property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures if at any time
Administrative Agent or Lenders have a reasonable basis to believe that there
may be such a material violation of Environmental Law.
103
112
(c) The Borrower shall, and shall cause each of its
Subsidiaries and Eligible Joint Ventures and each Operating Lessee to, take
such Remedial Action or other action as required by Environmental Laws, as any
Governmental Authority requires, except to the extent contested in good faith
and by proper proceedings, or as is appropriate and consistent with good
business practice.
6.19. REIT Requirements. The Borrower shall operate its
business at all times so as to satisfy all requirements necessary to qualify as
an equity-oriented real estate investment trust under Sections 856 through 860
of the Code. The Borrower will maintain adequate records so as to comply with
all record-keeping requirements relating to the qualification of the Borrower
as an equity-oriented real estate investment trust as required by the Code and
applicable regulations of the Department of the Treasury promulgated thereunder
and will properly prepare and timely file with the IRS all returns and reports
required thereby. The Borrower will request from its shareholders all
shareholder information required by the Code and applicable regulations of the
Department of Treasury promulgated thereunder.
6.20. Maintenance of FF&E Reserves. The Borrower shall cause
to be maintained the FF&E Reserves pursuant to the terms of the Operating
Leases.
6.21. Hotel Requirements. The Borrower shall cause:
(a) at least 80% of the "keys" to be maintained and operated
as Suite Hotels;
(b) at least 75% of the "suites" to be maintained and
operated under "Embassy Suites" Licenses or to be in the process of conversion
to "Embassy Suites" Hotels.
104
113
(c) at least 70% of the "suites" to be managed by Promus.
6.22. Further Assurances. At any time upon the request of
the Administrative Agent, the Borrower will, promptly and at its expense,
execute, acknowledge and deliver such further documents and do such other acts
and things as the Administrative Agent may reasonably request to evidence the
Loans made hereunder and interest thereon in accordance with the terms of this
Agreement;
6.23. Borrowing Base Determination/Requirements. (a)
Subject to compliance with the terms and conditions of Section 3.1, the
Administrative Agent has accepted the Hotels listed on Schedule 6.23 as
Eligible Hotels for the purposes of the Borrowing Base as of the Closing Date,
provided that the parties acknowledge and agree that (i) the Embassy Suites
Hotel located at Los Angeles Airport, CA is subject to a mortgage in favor of
FelCor LP but the Administrative Agent has agreed, as a one time waiver only,
to accept such Hotel as an Eligible Hotel provided that such Hotel shall cease
to be an Eligible Hotel, inter alia, in the event that FelCor LP assigns its
mortgage to any other Person, and (ii) the Administrative Agent's acceptance of
the Hotels listed on Schedule 6.23 is based on outdated title insurance
policies for such Hotels. The Borrower covenants and agrees to deliver to the
Administrative Agent within 45 days of the Closing Date, title updates with
respect to each of the Hotels listed on Schedule 6.23 and, to the extent that
such title updates reveal that any of such Hotels are not Unencumbered, such
Hotels shall cease to qualify as Eligible Hotels.
(b) If the Borrower desires that the Administrative Agent
accept an additional Hotel as an Eligible Hotel for the purposes of the
Borrowing Base, the Borrower shall so notify the Administrative Agent in
writing. The Administrative Agent's acceptance of such Hotel in the Borrowing
105
114
Base shall not be unreasonably withheld, conditioned or delayed, provided such
Hotel shall meet the requirements for Eligible Hotels specified herein and
unless and until the Borrower shall have delivered to the Administrative Agent
the following, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) A description of such Hotel, such description to
include the age, location and number of rooms or suites of
such Hotel;
(ii) Details of the Borrower's Investment in such Hotel
and, if such Hotel has been owned for more than four (4)
Fiscal Quarters or more, details of the Adjusted NOI of such
Hotel for the prior four (4) Fiscal Quarters;
(iii) A copy of the most recent ALTA Owner's Policy of
Title Insurance (or commitment to issue such a policy to the
Loan Party (or Eligible Joint Venture) owning or to own such
Hotel) relating to such Hotel showing the identity of the fee
titleholder thereto and all matters of record as of its date;
(iv) Copies of each of the Operating Lease, Management
Agreement and License relating to such Hotel;
(v) Copies of all engineering, mechanical,
structural and maintenance studies performed by third party
consultants with respect to such Hotel;
(vi) A "Phase I" environmental assessment of such Hotel
prepared by an environmental engineering firm acceptable to
the Administrative Agent, and any additional environmental
studies or
106
115
assessments available to the Borrower performed with respect
to such Hotel;
(vii) If such Hotel is owned pursuant to a Qualified
Lease, a copy of such Lease together with all and any
amendments thereto or modifications thereof;
(viii) A Borrowing Base Certificate setting forth on
a pro forma basis the Available Credit assuming that such
Hotel is accepted as an Eligible Hotel for the purposes of the
Borrowing Base; and
(ix) Such other information as the Administrative
Agent may reasonably request in order to evaluate the Hotel.
(c) The Borrower shall promptly notify the Administrative
Agent in writing in the event that at any time the Borrower or any of its
Subsidiaries receives or otherwise gains knowledge that (i) any Hotel included
in a prior Borrowing Base Certificate as an Eligible Hotel, ceases, for any
reason whatsoever, to be an Eligible Hotel, or (ii) that the Aggregate Value of
the Eligible Hotel is less than 90% of the Aggregate Value reflected in the
most recent Borrowing Base Certificate delivered pursuant hereto, or (iii) the
Loans outstanding at such time exceed the Available Credit at such time as a
result of any decrease in the Borrowing Base, and the amount of such excess.
(d) The Administrative Agent, at the expense of the Lenders,
which expense shall not exceed $10,000 without the consent of the Majority
Lenders (but such expense to be reimbursed by the Borrower in the event that a
Hotel fails to meet requirements for an Eligible Hotel in any material respect)
may make physical and other verifications of any Hotels included as Eligible
Hotels in any reasonable manner
107
116
and through any medium that the Administrative Agent considers advisable, and
the Borrower shall furnish all such assistance and information as the
Administrative Agent may require in connection therewith.
(e) Notwithstanding anything to the contrary set forth
herein, a Hotel shall cease to be an Eligible Hotel if it shall cease to comply
with the requirements therefor set forth herein.
ARTICLE VII
NEGATIVE COVENANTS
As long as any of the Obligations or Commitments remain
outstanding, without the written consent of the Administrative Agent, the
Borrower agrees with the Lenders and the Administrative Agent that:
7.1. Restrictions on Creation of Subsidiaries. The Borrower
shall not create or acquire any direct or indirect Subsidiary after the Closing
Date unless, concurrently with the creation or acquisition thereof, such
Subsidiary executes and delivers to the Administrative Agent a Subsidiary
Guaranty.
7.2. Intentionally Omitted.
7.3. Lease Obligations. (a) The Borrower shall not create
or suffer to exist, or permit any of its Subsidiaries or Eligible Joint
Ventures to create or suffer to exist, any obligations as lessee for the rental
or hire of real or personal property of any kind under other leases or
agreements to lease entered into otherwise than in the ordinary course of
business.
108
117
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures to, become or remain liable as lessee
or guarantor or other surety with respect to any lease, whether an operating
lease or a Capitalized Lease, of any property (whether real or personal or
mixed), whether now owned or hereafter acquired, which (i) the Borrower or any
of its Subsidiaries or Eligible Joint Ventures has sold or transferred or is to
sell or transfer to any other Person, or (ii) the Borrower or any of its
Subsidiaries or Eligible Joint Ventures intends to use for substantially the
same purposes as any other property which has been or is to be sold or
transferred by that entity to any other Person in connection with such lease.
7.4. Restricted Payments. The Borrower, unless otherwise
required in order to maintain FelCor's status as a real estate investment trust
in accordance with the written advice of independent counsel to the Borrower,
the Borrower shall not declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account or in respect of any of its Stock or Stock Equivalents (collectively,
"Restricted Payments"); provided, that, notwithstanding the foregoing, during
any period of four consecutive Fiscal Quarters, (i) the Borrower may make
Restricted Payments in an aggregate amount not to exceed 85% of the
consolidated Adjusted Funds From Operations of the Borrower for such period and
(ii) the aggregate amount of Restricted Payments made shall not exceed 100% of
Free Cash Flow of the Borrower for such period.
7.5. Mergers, Stock Issuances, Asset Sales, Etc. (a) The
Borrower shall not sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its assets or properties, and shall not, and shall not
permit any of its Subsidiaries or Eligible Joint Ventures to, (i) merge with
any Person, or (ii) consolidate with any Person, unless the Borrower or its
Subsidiary or Eligible Joint Venture is the surviving or resulting entity and,
following such merger
109
118
or consolidation, no Default or Event of Default shall have occurred.
(b) The Borrower shall not and shall not permit any of its
Subsidiaries or Eligible Joint Ventures to effect, enter into, consummate or
suffer to exist any Asset Sale(s) of any Hotel(s) generating proceeds
aggregating more than 25% of the value of the Hotels owned by the Borrower, its
Subsidiaries and Eligible Joint Ventures as at the Closing Date and shown
listed on Schedules 4.22(a) and (b).
(c) The Borrower shall not sell or otherwise dispose of, or
factor at maturity or collection, or permit any of its Subsidiaries or Eligible
Joint Ventures to sell or otherwise dispose of, or factor at maturity or
collection, any accounts receivables.
7.6 Restrictions on Construction/Budget Hotels. The Borrower
shall not, and shall not permit any of its Subsidiaries or Eligible Joint
Ventures to (a) engage in the construction of new hotels (provided that nothing
herein shall prohibit expansions to existing Hotels), (b) make investments in
any Non-Suite Hotels that will not be maintained as first class full service
hotels, (c) make Investments in any budget hotels, or (d) enter into any
commitments or agreements to purchase any Hotels under, or to be under,
original construction (provided that nothing herein shall limit commitments or
agreements for expansions to existing Hotels), pursuant to which (i) such
Persons' obligations, in the aggregate, exceed 15% of the Total Assets of the
Borrower as of the end of the Fiscal Quarter immediately preceding the date of
any such commitment or agreement, or (ii) any such Person is or may be liable
for, or otherwise assumes, any risks relating to the development or
construction (but not operation) of such Hotel, whether by way of providing any
guaranties of completion, payment of any construction loans, payment of
construction cost overruns, or otherwise.
110
119
7.7. Change in Nature of Business or in Capital Structure.
(a) The Borrower shall not make, and shall not permit any of its Subsidiaries
or Eligible Joint Ventures to make, any material change in the nature or
conduct of its business as carried on at the date hereof.
(b) The Borrower shall not make, and shall not permit any of
its Subsidiaries or Eligible Joint Ventures to make, any change in its capital
structure (including, without limitation, in the terms of its outstanding
Stock) or amend its declaration of trust, certificate of incorporation or
by-laws or other equivalent documents other than for changes or amendments
which in the aggregate have no Material Adverse Effect.
7.8. Modification of Material Agreements. The Borrower shall
not, and shall not permit any of its Subsidiaries or Eligible Joint Ventures
to, alter, amend, modify, rescind, terminate, supplement or waive any of their
respective rights under, or fail to comply in all material respects with, any
of its material Contractual Obligations unless approved by the Administrative
Agent, which approval shall not be unreasonably withheld, conditioned or
delayed; provided, however, that, with respect to any such failure to comply
with any Contractual Obligation, the Borrower shall not be deemed in default of
this Section 7.8 if all such failures in the aggregate would have no Material
Adverse Effect; and provided, further, that in the event of any breach or event
of default by a Person other than the Borrower or any of its Subsidiaries or
Eligible Joint Ventures, the Borrower shall promptly notify the Administrative
Agent of any such breach or event of default and take all such action as may be
reasonably necessary in order to endeavor to avoid having such breach or event
of default have a Material Adverse Effect.
7.9. Accounting Changes. The Borrower shall not make, nor
permit any of its Subsidiaries to make, any change
111
120
in accounting treatment and reporting practices or tax reporting treatment,
except as required by GAAP or law and disclosed to the Lenders and the
Administrative Agent.
7.10. Transactions with Affiliates. The Borrower shall not,
and shall not permit any of its Subsidiaries or Eligible Joint Ventures, to
enter into any transaction or series of related transactions, including,
without limitation, any Asset Sale or the rendering of any service, with any
Affiliate (other than among the Borrower and its wholly owned Subsidiaries)
unless (a) no Default or Event of Default would occur as a result thereof, and
(b) such transaction is (i) in the ordinary course of the Borrower's or such
Subsidiary's or Eligible Joint Venture's business, and (ii) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary or
Eligible Joint Venture, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate.
7.11. Adverse or Speculative Transactions. The Borrower
shall not and shall not permit any of its Subsidiaries or Eligible Joint
Ventures to engage in any transaction involving contracts for commodity options
or futures contracts other than Interest Rate Contracts.
7.12. Environmental Matters. (a) The Borrower shall not,
and shall not permit any of its Subsidiaries or Eligible Joint Ventures or any
Operating Lessee, or, to the extent reasonably practicable, any other Person to
dispose of any Hazardous Material by placing it in or on the ground or waters
of any property owned or leased by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures, or, to the extent practicable,
authorize any other Person to, dispose or to arrange for the disposal of any
Hazardous Material on behalf of the Borrower or any of its Subsidiaries or
112
121
Eligible Joint Ventures except in material compliance with all applicable
Environmental Laws currently and hereinafter in effect.
7.13. Intentionally Omitted.
7.14. Management Continuity. The Borrower acknowledges that
the Lenders have made their determination to enter into this Agreement and the
transactions contemplated herein on the basis of reliance upon the experience,
expertise and reputations of Messrs. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇. as experts in the ownership and asset management of Suite Hotels, and the
Borrower will not suffer or permit its business to be without the active
management of at least one such Person, provided that, in the event of death,
incapacitation or dismissal of both Messrs. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇. a replacement management team shall be appointed for the
Borrower, such team to be (i) proposed by the Borrower within 120 days of the
event referred to above, and (ii) approved by the Majority Lenders in their
sole and absolute discretion.
7.15. ERISA Plan Assets. The Borrower shall not and shall
not permit any of its Subsidiaries to have any of their assets become subject
to Title I of ERISA because they constitute "plan assets" within the meaning of
the DOL Regulation Section 2510.3-101 and by reason of an investment in the
Borrower or any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default. Each of the following events shall
be an Event of Default:
113
122
(a) The Borrower shall fail to pay any principal (including,
without limitation, mandatory prepayments of principal) of, or
interest on, any Loan, any fee, any other amount due hereunder or
under the other Loan Documents or other of the Obligations when the
same becomes due and payable; or
(b) Any representation or warranty made or deemed made by any
Loan Party in any Loan Document or by any Loan Party (or any of its
officers) in connection with any Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) Any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement or in any
other Loan Document if such failure shall remain unremedied for thirty
days after the earlier of the date on which (A) a Responsible Officer
of the Borrower becomes aware of such failure or (B) written notice
thereof shall have been given to the Borrower by the Administrative
Agent or any Lender; or
(d) Any Loan Party or any of its Subsidiaries shall fail to
pay any principal of or premium or interest on any Recourse
Indebtedness of such Loan Party or Subsidiary having a principal
amount of $10,000,000 or more (excluding Indebtedness evidenced by the
Notes and any Non-Recourse Indebtedness), when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or any other event shall occur or
condition shall exist under any agreement or instrument relating to
any such Indebtedness, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall become or be declared to
be due and payable, or required to be prepaid (other than by a
114
123
regularly scheduled required prepayment), or any Loan Party or any of
its Subsidiaries shall be required to repurchase or offer to
repurchase such Indebtedness, prior to the stated maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or any proceeding
shall be instituted by or against the Borrower or any of its
Significant Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a custodian, receiver, trustee or
other similar official for it or for any substantial part of its
property and, in the case of any such proceedings instituted against
the Borrower or any of its Significant Subsidiaries (but not
instituted by it), either such proceedings shall remain undismissed or
unstayed for a period of 60 days or any of the actions sought in such
proceedings shall occur; or the Borrower or any of its Significant
Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess
of $10,000,000 to the extent not fully covered by insurance shall be
rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order, or (ii) there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment
or
115
124
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) An ERISA Event shall occur which, in the reasonable
determination of the Majority Lenders, has a reasonable possibility of
a liability, deficiency or waiver request of the Borrower or any ERISA
Affiliate, whether or not assessed, exceeding $1,000,000; or
(h) The Borrower or any of its Subsidiaries shall have
entered into any consent or settlement decree or agreement or similar
arrangement with an Governmental Authority or any judgment, order,
decree or similar action shall have been entered against the Borrower
or any of its Subsidiaries, in each case based on or arising from the
violation of or pursuant to any Environmental Law, or the generation,
storage, transportation, treatment, disposal or Release of any
Hazardous Material and, in connection with all the foregoing, the
Borrower and its Subsidiaries are likely to incur Environmental
Liabilities and Costs in excess of $1,000,000; or
(i) There shall occur a Material Adverse Change or an event
which is reasonably likely to have a Material Adverse Effect; or
(j) FelCor shall cease, for any reason, to maintain its
status as an equity-oriented real estate investment trust under
Sections 856 through 860 of the Code; or
(k) FelCor shall cease at any time to be the sole general
partner of FelCor LP; or
(l) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. (or (i)
members of their respective families, (ii) entities controlled by
them, or (iii) trusts for the
116
125
benefit of any of the foregoing) shall cease at any time to hold
beneficially, in the aggregate, at least 200,000 of the issued and
outstanding common shares of FelCor and/or units of limited partner
interests of FelCor LP redeemable for such number of shares of stock
(adjusted for any division, reclassification or stock dividend in
respect of common shares); or
(m) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. shall sell,
transfer or encumber (otherwise than to (i) members of their
respective families, (ii) entities controlled by them, or (iii) trusts
for the benefit of any of the foregoing) their voting Class A
membership interest in DJONT; or
(n) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. shall cease
to be active in the management of the Borrower or, in the event of
death, in-capacitation or dismissal of both such Persons either (i)
the Borrower shall fail to propose a replacement senior management
team, or (ii) the Majority Lenders shall not approve any proposed
replacement senior management team, in each case pursuant to and in
accordance with Section 7.14 hereof; or
(o) Any provision of any Subsidiary Guaranty after delivery
thereof under Section 3.1 shall for any reason cease to be valid and
binding on any Significant Subsidiary party thereto, or any
Significant Subsidiary Party shall so state in writing.
8.2. Remedies. (a) If there shall occur and be continuing
any Event of Default, the Administrative Agent (i) shall at the request, or may
with the consent, of the Majority Lenders by notice to the Borrower, declare
the obligation of each Lender to make Loans to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority
117
126
Lenders by notice to the Borrower, declare the Loans, all interest thereon and
all other amounts and Obligations payable under this Agreement to be forthwith
due and payable, whereupon the Notes, all such interest and all such amounts
and Obligations shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that upon the
occurrence of the Event of Default specified in subparagraph 8.1(e) above, (A)
the obligation of each Lender to make Loans shall automatically be terminated
and (B) the Loans, all such interest and all such amounts and Obligations shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. In addition to the remedies set forth above, the Administrative
Agent may exercise any remedies provided by applicable law.
(b) If the Administrative Agent exercises any rights or
remedies pursuant to subparagraph 8.2(a), the Administrative Agent shall not,
without the consent of the Majority Lenders, rescind the exercise of said
rights or remedies.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Authorization and Action. (a) Each Lender hereby
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers as are reasonably incidental thereto.
Without limitation of the foregoing, each Lender hereby authorizes the
Administrative Agent to execute and deliver, and to perform its obligations
118
127
under, each of the Loan Documents to which the Administrative Agent is a party,
and to exercise all rights, powers and remedies that the Administrative Agent
may have under such Loan Documents.
(b) As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action which the Administrative Agent in good faith believes exposes it to
personal liability or is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice of (a) each
notice and, (b) to the extent the Administrative Agent grants any consents,
approvals, disapprovals or waivers to the Borrower pursuant to the directions
of the Majority Lenders or all of the Lenders as required hereunder, notice of
such consent, approval, disapproval or waiver, given to it by, or by it to, any
Loan Party pursuant to the terms of this Agreement or the other Loan Documents.
9.2. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent, nor any of its Affiliates or any of the respective
directors, officers, agents or employees of the Administrative Agent or any
such Affiliate shall be liable for any action taken or omitted to be taken by
it, him, her or them under or in connection with this Agreement or the other
Loan Documents, except for its, his, her or their own gross negligence or
wilful misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent (i) may treat the payee of any Note as the holder thereof
until such note has been assigned in accord-
119
128
ance with Section 10.7; (ii) may rely on the Register to the extent set forth
in Section 10.7(c); (iii) may consult with legal counsel (including, without
limitation, counsel to the Borrower or any other Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (iv) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or any of the other Loan Documents; (v) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or any of the other Loan
Documents on the part of the Borrower or any other Loan Party or to inspect the
property (including, without limitation, the books and records) of the Borrower
or any other Loan Party; (vi) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (vii) shall
incur no liability under or in respect of this Agreement or any of the other
Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, cable, telex or facsimile
transmission) believed by it to be genuine and signed or sent by the proper
party or parties.
9.3. Chase and Affiliates. With respect to its Commitment,
the Loans made by it and each Note issued to it, Chase shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the Administrative Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Chase in its
individual capacity. Chase and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in
120
129
any kind of business with, the Borrower or any other Loan Party or any of their
respective Subsidiaries and any Person who may do business with or own
securities of the Borrower or any other Loan Party or any of their respective
Subsidiaries, all as if Chase were not the Administrative Agent and without any
duty to account therefor to the Lenders.
9.4. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements referred to in Article IV
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents.
9.5. Indemnification. The Lenders agree to indemnify the
Administrative Agent and its Affiliates, and their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Borrower or other Loan Parties), ratably according to the respective principal
amounts of the Notes then held by each of them (or if no Notes are at the time
outstanding, ratably according to the respective amounts of the aggregate of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements (including, without limitation, fees and disbursements of legal
counsel) of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against, the Administrative Agent in any way relating to or arising
out of this Agreement or the other Loan Documents or any action taken or
omitted by the Administrative Agent under this Agreement or the other Loan
Docu-
121
130
ments; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's or such Affiliate's gross negligence or wilful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including, without limitation, fees and disbursements of legal counsel)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement or
the other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower or another Loan Party.
9.6. Successor Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the Borrower and
may be removed by the Super Majority Lenders in the event that the
Administrative Agent commits a willful breach of, or is grossly negligent in
the performance of, its material obligations hereunder. Furthermore, in the
event that at any time the Administrative Agent assigns its entire interest as
a Lender hereunder to an Eligible Assignee as permitted by Section 10.7 hereof,
which Eligible Assignee is not an Affiliate of the Administrative Agent, then
the Administrative Agent shall resign as Administrative Agent. Upon any such
resignation or removal (which shall be effective upon such date as a successor
Agent accepts its appointment), the Majority Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed
by the Majority Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of resignation
or the Super Majority Lenders' removal of the retiring
122
131
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State
thereof, having a combined capital and surplus of at least $50,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Agent, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
ARTICLE X
MISCELLANEOUS
10.1. Amendments, Etc. (a) No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders, and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided that, subject to Sections 10.1(b) and (c) below, the
Administrative Agent shall have the right to make non-material waivers of
non-economic provisions of this Agreement or consent to non- material
departures therefrom. The parties hereto agree that any non-material waiver of
any provision of this Agreement or any other Loan Document shall be effective
upon
123
132
the execution by the party so charged of a written agreement to such effect.
(b) Notwithstanding anything set forth in subparagraph (a)
above, no amendment, waiver or consent shall, unless in writing and signed by
all the Lenders do any of the following: (i) waive any of the conditions
specified in Article III except as otherwise provided therein; (ii) increase
the Commitments of the Lenders or subject the Lenders to any additional
obligations; (iii) reduce the principal of, or interest on, the Loans or any
fees or other amounts payable hereunder; (iv) waive or postpone any date fixed
for any payment of principal of, or interest on, the Loans or any fees or other
amounts payable hereunder; (v) change the percentage of the Commitments, the
aggregate unpaid principal amount of the Loans, or the number of Lenders which
shall be required for the Lenders or any of them to take any action hereunder;
(vi) waive any of the financial covenants specified in Sections 5.1, 5.2 or
5.4; (vii) change the definitions of Available Credit, Borrowing Base or
Aggregate Value (provided that the foregoing shall not include changes in any
defined terms used in such definitions), (viii) release any Loan Party from its
obligations under any Note or any Subsidiary Guaranty, or (ix) amend this
Section 10.1; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent under this Agreement or the other Loan Documents.
(c) Notwithstanding anything set forth in subparagraph (a)
above, no amendment, waiver or consent shall, unless in writing and signed by
the Super Majority Lenders do any of the following: (i) waive any of the
covenants specified in Sections 5.3 or 5.5, (ii) change the definitions of
Eligible Hotels, Eligible Joint Venture or Qualified Lease (provided that the
foregoing shall not
124
133
include changes in any defined terms used in such definitions), (iii) waive
payment of any default rate interest pursuant to Section 2.9(b), or (iv) remove
the Administrative Agent for a willful breach of, or gross negligence in the
performance of, its material obligations hereunder pursuant to Section 9.6.
(d) Each Lender shall reply promptly, but in any event within
ten (10) Business Days of receipt by such Lender of a request for consent,
approval, disapproval or waiver, from the Administrative Agent (the "Lender
Reply Period"). Unless a Lender shall give written notice to the
Administrative Agent that it objects to consenting, approving, disapproving or
waiving any matter as requested by the Administrative Agent (together with a
written explanation of the reasons behind such objection) within the Lender
Reply Period, such Lender shall be deemed to have consented, approved,
disapproved or waived such matters as specified in the Administrative Agent's
request.
10.2. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including, without limitation,
telegraphic, telex, telecopy or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered by hand, if to the Borrower, at its
address at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(telecopy number: ▇▇▇-▇▇▇-▇▇▇▇) (telephone number: ▇▇▇-▇▇▇-▇▇▇▇), Attention:
Chief Financial Officer, with a copy to Attention: General Counsel; if to any
Lender, at its Domestic Lending Office specified opposite its name on Schedule
II; and if to the Administrative Agent, at its address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopy number: ▇▇▇-▇▇▇-▇▇▇▇) (telephone
number: ▇▇▇-▇▇▇-▇▇▇▇), Attention ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; or, as to the Borrower
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties and, as to each other
party, at such other address as shall be desig-
125
134
nated by such party in a written notice to the Borrower and the Administrative
Agent. All such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, cabled or delivered, be effective when deposited in the
mails, delivered to the telegraph company, confirmed by telex answerback,
telecopied with confirmation of receipt, delivered to the cable company or
delivered by hand to the addressee or its agent, respectively, except that
notices and communications to the Administrative Agent pursuant to Article II
or IX shall not be effective until received by the Administrative Agent.
10.3. No Waiver; Remedies. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
10.4. Costs; Expenses; Indemnities. (a) The Borrower agrees
to pay on demand (i) all costs and expenses of the Administrative Agent and its
respective Affiliates in connection with the preparation, execution, delivery,
administration, syndication, modification and amendment of this Agreement, each
of the other Loan Documents and each of the other documents to be delivered
hereunder and thereunder, including, without limitation, the fees and
out-of-pocket expenses of counsel, accountants, appraisers, consultants or
industry experts retained by the Administrative Agent with respect thereto and,
as to the Administrative Agent, with respect to advising it as to its rights
and responsibilities under this Agreement and the other Loan Documents, and
(ii) all costs and expenses of the Administrative Agent or any of the Lenders
(including, without limitation, the fees and out-of-pocket expenses of counsel,
accountants, appraisers, consultants or industry experts retained by the
126
135
Administrative Agent or any Lender) in connection with the restructuring or
enforcement (whether through negotiation, legal proceedings or otherwise) of
this Agreement and the other Loan Documents. Notwithstanding the foregoing,
the Borrower's liability to pay the fees and out-of-pocket expenses of counsel
to Chase in connection with the preparation, execution and delivery of the Loan
Documents shall be limited to payment of a sum not to exceed $175,000.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender and their respective Affiliates, and the
directors, officers, employees, agents, attorneys, consultants and advisors of
or to any of the foregoing (including, without limitation, those retained in
connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article III) (each of the foregoing being an
"Indemnitee") from and against any and all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments, suits, costs, disbursements
and expenses of any kind or nature (including, without limitation, fees and
disbursements of counsel to any such Indemnitee and experts, engineers and
consultants and the costs of investigation and feasibility studies) which may
be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto, whether direct,
indirect, or consequential and whether based on any federal, state or local law
or other statutory regulation, securities or commercial law or regulation, or
under common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of or based upon or attributable to this Agreement,
any other Loan Document, any document delivered hereunder or thereunder, any
Obligation, or any act, event or transaction related or attendant to any
thereof, including, without limitation, (i) arising from any misrepresentation
or breach of warranty under Section 4.18 or any Environmental Claim or any
Environmental Lien or any Remedial
127
136
Action arising out of or based upon anything relating to real property owned or
leased by the Borrower or any of its Subsidiaries (collectively, the
"Indemnified Matters"); provided, however, that the Borrower shall not have any
obligation under this Section 10.4(b) to an Indemnitee with respect to any
Indemnified Matter caused by or resulting from the gross negligence or willful
misconduct of that Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order.
(c) If any Lender receives any payment of principal of, or is
subject to a conversion of, any Eurodollar Rate Loan other than on the last day
of an Interest Period relating to such Loan, as a result of any payment or
conversion made by the Borrower or acceleration of the maturity of the Notes
pursuant to Section 8.2 or for any other reason, the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
to the extent not previously paid to such Lender pursuant to any other
provision hereof, pay to the Administrative Agent for the account of such
Lender all amounts required to compensate such Lender for any additional
losses, costs or expenses which it may reasonably incur as a result of such
payment or conversion, including, without limitation, any loss (including,
without limitation, loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain such Loan.
(d) The Borrower shall indemnify the Administrative Agent and
the Lenders for, and hold the Administrative Agent and the Lenders harmless
from and against, any and all claims for brokerage commissions, fees and other
compensation made against the Administrative Agent and the Lenders for any
broker, finder or consultant with respect to any agreement, arrangement or
understanding made by or on behalf of any Loan Party or any of its Subsidiaries
in connection with the transactions contemplated by this Agreement.
128
137
(e) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 10.4) or any other Loan Document
shall (i) survive payment of the Obligations and (ii) inure to the benefit of
any Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.
10.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any and all
of the Obligations now or hereafter existing whether or not such Lender shall
have made any demand under this Agreement or any Note or any other Loan
Document and although such Obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application made by
such Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
under this Section are in addition to the other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
10.6. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Lender that
such Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.
129
138
10.7. Assignments and Participations. (a) Each Lender may
sell, transfer, negotiate or assign to one or more other Lenders or Eligible
Assignees all or a portion of its Commitments, the Loans owing to it and the
Notes held by it and a commensurate portion of its rights and obligations
hereunder and under the other Loan Documents; provided, however, that (i) the
aggregate amount of the Commitments and Loans being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than the assignor's
entire interest, except (x) with the consent of the Borrower and the
Administrative Agent, or (y) during the continuance of an Event of Default, or
(z) a Lender may assign a portion of its Commitments and Loans to another
existing Lender or Lenders only, provided that the aggregate amount of the
Commitments and Loans retained by the assignor shall in no event be less than
$10,000,000, and (ii) each assignee hereunder shall also be an Eligible
Assignee. The parties to each assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording, an Assignment and
Acceptance, together with the Notes (or an Affidavit of Loss and Indemnity with
respect to such Notes satisfactory to the Administrative Agent) subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (A) the
assignee thereunder shall become a party hereto and, to the extent that rights
and obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Acceptance, have the rights and obligations of
a Lender hereunder and thereunder, and (B) the assignor thereunder shall, to
the extent that rights and obligations under this Agreement have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights (except
those which survive the payment in full of the Obligations) and be released
from its obligations under the Loan Documents (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
130
139
assigning Lender's rights and obligations under the Loan Documents, such Lender
shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any of
the statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document furnished pursuant thereto or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; (ii) such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under this Agreement or any other Loan
Document or of any other instrument or document furnished pursuant hereto or
thereto; (iii) such assigning Lender confirms that it has delivered to the
assignee and the assignee confirms that it has received a copy of this
Agreement and each of the Loan Documents together with a copy of the most
recent financial statements delivered by the Borrower to the Lenders pursuant
to each of the clauses of Section 6.11 (or if no such statements have been
delivered, the financial statements referred to in Section 4.5 of this
Agreement) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is
an Eligible
131
140
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of and principal amount of the
Loans owing to each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Loan Parties, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower, the Administrative Agent or any Lender at any reasonable time and
from time to time upon reasonable prior notice. The Administrative Agent shall
supply to the Borrower promptly after any amendment thereto, a copy of the
amended Register.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its
132
141
own expense, shall execute and deliver to the Administrative Agent, in exchange
for such surrendered Notes, new Notes to the order of such Eligible Assignee in
an amount equal to the Commitments assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained Commitments hereunder,
new Notes to the order of the assigning Lender in an amount equal to the
Commitments retained by it hereunder. Such new Notes shall be dated the same
date as the Surrendered Notes and be in substantially the form of Exhibit A
hereto.
(e) In addition to the other assignment rights provided in
this Section 10.7, each Lender may assign, as collateral or otherwise, any of
its rights under this Agreement (including, without limitation, rights to
payments of principal or interest on the Loans) to any Federal Reserve Bank
without notice to or consent of the Borrower or the Administrative Agent;
provided, however, that no such assignment shall release the assigning Lender
from any of its obligations hereunder. The terms and conditions of any such
assignment and the documentation evidencing such assignment shall be in form
and substance satisfactory to the assigning Lender and the assignee Federal
Reserve Bank.
(f) Each Lender may sell participations to one or more banks
or other Persons in or to all or a portion of its rights and obligations under
the Loan Documents (including, without limitation, all or a portion of its
Commitments, the Loans owing to it and the Notes held by it). The terms of
such participation shall not, in any event, require the participant's consent
to any amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any Loan Party therefrom, or to the
exercising or refraining from exercising any powers or rights which such Lender
may have under or in respect of the Loan Documents (including, without
limitation, the right to enforce the obligations of the Loan Parties), except
if any such amendment, waiver or other modification or consent
133
142
would reduce the amount, or postpone any date fixed for, any amount (whether of
principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation. In the event of the sale of any participation by any Lender,
(i) such Lender's obligations under the Loan Documents (including, without
limitation, its Commitments) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Lender shall remain the holder of such Notes and
Obligations for all purposes of this Agreement, and; (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(g) Each participant shall be entitled to the benefits of
Sections 2.11, 2.13 and 2.15 as if it were a Lender; provided, however, that
anything herein to the contrary notwithstanding, the Borrower shall not, at any
time, be obligated to pay to any assignee or participant of any interest of any
Lender, under Section 2.11, 2.13 or 2.15, any sum in excess of the sum which if
the Borrower would not at the time of such assignment have been obligated to
pay to such assignor Lender any such amount in respect of such interest had
such assignment not been effected or had such participation not been sold.
(h) Notwithstanding the foregoing provisions of this Section
10.7, (i) the aggregate Commitments and Loans of Chase shall not be less than
$20,000,000, and (ii) the aggregate Commitments and Loans of ▇▇▇▇▇ Fargo shall
not be less than $20,000,000; provided that, if an Event of Default exists,
either Chase or ▇▇▇▇▇ Fargo may assign all or any portion of their respective
Commitments and Loans.
10.8. Governing Law; Severability. This Agreement and the
Notes and the rights and obligations of the
134
143
parties hereto and thereto shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York. Wherever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
10.9. Submission to Jurisdiction; Service of Process. (a)
Any legal action or proceeding with respect to this Agreement or the Notes or
any document related thereto 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, the Borrower hereby accepts
for itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens, which any of them may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) The Borrower irrevocably consents to the service of
process of any of the aforesaid courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address provided herein.
(c) Nothing contained in this Section 10.9 shall affect the
right of the agent, any Lender or any holder of a Note to serve process in any
other manner permitted by law or commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
135
144
10.10. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
10.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
10.12. Entire Agreement. This Agreement, together with all
of the other Loan Documents and all certificates and documents delivered
hereunder or thereunder, and the agreements referred to in Section 2.4(b)
embody the entire agreement of the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof.
10.13. Confidentiality. Each Lender and the Administrative
Agent agree to keep information obtained by it pursuant hereto and the other
Loan Documents confidential and agrees that it will only use such information
in connection with the transactions contemplated by this Agreement and not
disclose any of such information other than (i) to such Lender's or the
Administrative Agent's, as the case may be, employees, representatives and
agents who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this Agreement
and who are advised of the confidential nature of such information, (ii) to the
extent such information presently is or hereafter becomes available to such
Lender or the Administrative Agent, as the case may be, on a non- confidential
basis from a source other than the Borrower, (iii) to the extent disclosure is
required by law, regulation or judicial order or requested or required by bank
regulators or auditors, or (iv) to assignees or parti-
136
145
cipants or potential assignees or participants who agree to be bound by the
provisions of this sentence.
10.14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR
WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO.
10.15. Joint and Several Obligations. Unless the context
clearly indicates otherwise each covenant, agreement, undertaking, condition or
other matter stated herein as a covenant, agreement, undertaking or matter
involving the Borrower shall be jointly and severally binding upon each of the
parties comprising Borrower.
137
146
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
FELCOR SUITE HOTELS, INC.
By:
-----------------------------------
Name:
Title:
FELCOR SUITES LIMITED PARTNERSHIP
By: FelCor Suite Hotels, Inc.
its general partner
By
--------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as Administrative Agent
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
as Documentation Agent
By:
-----------------------------------
Name:
Title:
138
147
Lenders
THE CHASE MANHATTAN BANK
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By:
-----------------------------------
Name:
Title:
BANK ONE TEXAS
By:
-----------------------------------
Name:
Title:
BANK OF BOSTON
By:
-----------------------------------
Name:
Title:
PNC BANK, N.A.
By:
-----------------------------------
Name:
Title:
139
148
NATIONSBANK
By:
-----------------------------------
Name:
Title:
FIRST NATIONAL BANK OF CHICAGO
By:
-----------------------------------
Name:
Title:
AMSOUTH BANK
By:
-----------------------------------
Name:
Title:
SOCIETE GENERALE
By:
-----------------------------------
Name:
Title:
CREDIT LYONNAIS
By:
-----------------------------------
Name:
Title:
140
149
BANK OF MONTREAL
By:
-----------------------------------
Name:
Title:
CIBC WOOD GUNDY
SECURITIES, CORP.
By:
-----------------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED
By:
-----------------------------------
Name:
Title:
141
150
SCHEDULE I
COMMITMENTS
Lender Commitment
----- ----------
Chase $ 26,000,000
▇▇▇▇▇ Fargo $ 26,000,000
Bank One Texas $ 21,000,000
Bank of Boston $ 21,000,000
PNC Bank, National $ 21,000,000
Association
NationsBank $ 21,000,000
The First National Bank $ 21,000,000
of Chicago
AmSouth Bank of Alabama $ 18,000,000
Societe Generale Southwest $ 15,000,000
Agency
Credit Lyonnais $ 15,000,000
Bank of Montreal $ 15,000,000
CIBC Inc. $ 15,000,000
The Sumitomo Bank,
Limited $ 15,000,000
TOTAL: $250,000,000
============
I
151
SCHEDULE II
APPLICABLE LENDING OFFICES AND
ADDRESSES FOR NOTICES
Domestic Lending
Office and Address Eurodollar
Lender for Notices Lending Office
------ ------------------ --------------
Chase ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Disbursements Attention: Match Fundings
Administrator Administrator
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Bank ▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ 1717 Main ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ 115 Perimeter Ctr Place
Boston Suite 500 Suite 500
Atlanta, GA 30346 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Attention: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Streander
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PNC Bank, ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
National ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇ Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
NationsBank 901 Main ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
I
152
The First One First National One First National Plaza
National Plaza
Bank of Suite 0151 Suite 0151
Chicago Chicago, IL 60607 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ Misioria
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
AmSouth Bank ▇.▇. ▇▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Societe ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 2001 ▇▇▇▇ Avenue
Generale Suite 4900 Suite 4900
Southwest Dallas, TX 75201 ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Agency Attention: ▇▇▇▇▇▇ ▇. Day Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Credit ▇▇▇▇ ▇▇▇▇▇▇ of the Americas 1301 Avenue of the Americas
Lyonnais ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mischa Zabetin Attention: Hotel Finance/
18th Floor
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇ Salle St.
Montreal Chicago, IL 60603 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC Inc. ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ 350 S. Grand Avenue
Suite 2600 Suite 2600
Los Angeles, CA 90071 ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Sumitomo Sears Tower Sears Tower
Bank Suite 4800 Suite 4800
Limited ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇ Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
II
153
SCHEDULE 4.8
THE FOLLOWING IS A TRUE AND CORRECT LIST OF THE SUBSIDIARIES
AND UNCONSOLIDATED ENTITIES OF THE BORROWERS AS OF SEPTEMBER 30, 1996.
STATE AND FORM OF
NAME ORGANIZATION OWNERSHIP INTEREST
---- ----------------- ------------------
FelCor Suites Limited Partnership Delaware; 89.4% GP interest owned by
Limited Partnership FelCor
FelCor/CSS Hotels, L.L.C. Delaware; Limited 1% owned by Felcor;
("FelCor/CSS Hotels") Liability Company 99% owned by FelCor LP
FelCor/LAX Hotels, L.L.C. Delaware; Limited 1% owned by Felcor;
("FelCor/LAX Hotels") Liability Company 99% owned by FelCor LP
FelCor/CSS Holdings, L.P. Delaware; 1% GP interest owned by
("FelCor/CSS Holdings") Limited Partnership FelCor/CSS Hotels; 99% LP
interest owned by FelCor LP
FelCor/St. ▇▇▇▇ Holdings, L.P. Delaware; 1% GP interest owned by
("FelCor/St. ▇▇▇▇ Holdings") Limited Partnership FelCor/CSS Hotels; 99% LP
interest owned by FelCor LP
FelCor/LAX Holdings, L.P. Delaware; 1% GP interest owned by
("FelCor/LAX Holdings") Limited Partnership FelCor/LAX Hotels; 99% LP
interest owned by FelCor LP
Los Angeles International Airport Texas; 50% GP interest and
Hotel Associates Limited Partnership 47.2% LP interest owned by
FelCor/LAX Holdings
Promus/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Illinois; 50% GP interest owned by
General Partnership FelCor LP
MHV Joint Venture Texas; 50% GP interest owned by
General Partnership FelCor LP
Promus/FelCor Parsippany New Jersey; 50% GP interest owned by
Joint Venture General Partnership FelCor LP
154
STATE AND FORM OF
NAME ORGANIZATION OWNERSHIP INTEREST
---- ----------------- ------------------
Charlotte Limited Minnesota; 1% GP interest owned by
Partnership Limited Partnership FelCor/CSS Hotels; 49% LP
interest owned by FelCor LP
E.S. North, an Indiana Indiana; 1% GP interest owned by
Limited Limited Partnership FelCor/CSS Hotels; 49% LP
Partnership interest owned by FelCor LP
# # # #
THE PERCENTAGE INTERESTS REFLECTED ABOVE REPRESENT THE PERCENTAGES OF AGGREGATE
EQUITY INTEREST IN THE RESPECTIVE ENTITIES. EACH OF THE GP INTERESTS REFLECTED
ABOVE REPRESENTS EITHER THE ENTIRE GENERAL PARTNER INTEREST IN SUCH ENTITY OR
AN INTEREST AS THE SOLE ADMINISTRATIVE GENERAL PARTNER OF SUCH ENTITY WITH
POWER TO CONTROL THE DAY-TO-DAY OPERATIONS THEREOF.
155
FELCOR SUITE HOTELS, INC.
EXISTING INDEBTEDNESS
SCHEDULE 4.10
BALANCE
9/30/96
-------
EXISTING INDEBTEDNESS FOR FELCOR SUITE HOTELS, INC.
(i) All indebtedness of such Person for borrowed money (including,
without limitation, reimbursement and all other obligations with
respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured) or for the deferred
purchase price of property or services.
Irrevocable standby letter of credit Number S5454-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 30,000
(securing ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ promissory note with principal of $900,000)
(ii) All obligations of such Person evidenced by notes, bonds,
debentures or similar instruments.
Bank of Nova Scotia --
Canadian Imperial Bank of Commerce 25,000,000
▇▇▇▇▇▇▇'▇ (Bank IV facility) 85,000,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (associated with ▇▇▇▇▇▇▇ ▇▇ interest) 900,000
Promus Hotel Corporation (associated with the land purchased at Boston) 650,000
-----------
Total 111,550,000
(iii) All indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person. 0
(iv) All Capitalized Lease Obligations of such Person
Capital land leases:
Port Authority of the City of Saint ▇▇▇▇ (St. ▇▇▇▇ lease) 9,757,057
Equipment capital leases:
Tampa
Telerent 28,919
LANMark 16,889
St. ▇▇▇▇
Telerent 64,504
Telerent 75,362
LANMark 15,131
South San Francisco
Telerent 92,228
LANMark 36,253
Vendor Capital 70,770
Phoenix
Telerent 71,668
LANMark 16,848
Squirrel 21,052
Vendor Capital 124,512
Napa
Telerent 64,460
Page 1 of 3
156
FELCOR SUITE HOTELS, INC.
EXISTING INDEBTEDNESS
SCHEDULE 4.10
BALANCE
9/30/96
-------
LANMark 15,418
Vendor Capital 57,550
Minn. Air
Telerent 90,456
Telerent 140,118
LANMark 15,676
Minn. Downtown
Telerent 84,218
Telerent 81,748
LANMark 15,749
Milpitas
Telerent 74,510
LANMark 15,153
Squirrel 19,816
Vendor Capital 135,332
Miami
Telerent 87,456
Telerent 121,719
LANMark 15,150
Mandalay Beach
Telerent 62,237
LANMark 16,421
Vendor Capital 58,027
Los Angeles International Airport
Telerent 93,066
Vendor Capital 195,992
LANMark 16,978
GE Capital 21,532
Ft. Lauderdale
▇▇▇▇ South 19,948
LANMark 13,214
Vendor Capital 79,497
Vendor Capital 176,661
Deerfield Beach
Telerent 111,038
Telerent 69,776
LANMark 17,567
Burlingame
Telerent 101,222
LANMark 10,991
Vendor Capital 81,467
Boca Raton - Doubletree
Telerent 54,183
▇▇▇▇▇▇▇▇▇ 64,823
LANMark 15,602
Birmingham
LANMark 17,127
Homisco 6,751
Vendor Capital 67,436
Vendor Capital 116,917
Page 2 of 3
157
FELCOR SUITE HOTELS, INC.
EXISTING INDEBTEDNESS
SCHEDULE 4.10
BALANCE
9/30/96
-------
Baton Rouge
Telerent 61,889
LANMark 18,376
Vendor Capital 102,335
Squirrel 18,324
Anaheim
Telerent 66,409
LANMark 16,421
Vendor Capital 141,070
-----------
Total capital equipment lease liability 3,581,969
-----------
Total capital lease liability 13,339,026
(v) All Contingent Obligations of such Person 0
(vi) All obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value (other than for other
equity securities) any Stock or Stock Equivalents of such Person,
valued, in the case of mandatory redeemable preferred stock, at
the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends. 0
(vii) All Indebtedness referred to in clause (i), (ii), (iii), (iv),
(v), (vi) or (vii) above secured by any Lien upon or in property
owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness. 0
-----------
TOTAL EXISTING INDEBTEDNESS FOR FELCOR SUITE HOTELS, INC. 124,919,026
===========
EXISTING INDEBTEDNESS FOR UNCONSOLIDATED ENTITIES OF FELCOR SUITE HOTELS, INC.
MHV Joint Venture (The Long-Term Credit Bank of Japan) 20,079,000
Charlotte Limited Partnership (P.N.C.) 17,400,000
E.S. North, an Indiana Limited Partnership (Coast Savings and Loan) 13,143,202
-----------
TOTAL EXISTING INDEBTEDNESS FOR UNCONSOLIDATED ENTITIES
OF FELCOR SUITE HOTELS, INC. 50,622,202
===========
Page 3 of 3
158
FELCOR SUITE HOTELS, INC.
EXISTING INVESTMENTS
SCHEDULE 4.13
Balance Balance
8/31/96 9/30/96
-------- --------
EXISTING INVESTMENTS
(a) Any loan or advance to any other Person
Receivable from DJONT Operations, L.L.C. (balance
as of 8/31/96) 4,249,801 N/A
Receivable from FelCor Inc. (balance as of 8/31/96) 24,075 N/A
The balances for the receivables are scheduled
at 8/31/96 (the date of the last financial
statements)
(b) The ownership, purchase or other acquisition of, any 0 0
Stock, Stock Equivalents, other equity interest,
obligations or other securities of, (i) any other
Person, (ii) or all or substantially all of the
assets of any other Person, or (iii) all or
substantially all of the assets constituting the
business of a division, branch or other unit
operation of any other Person.
(c) Any joint venture or partnership with, or any capital
contribution to, or other investment in, any other
Person or any real property.
Promus/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture (50% interest in the
Lombard Embassy Suites) 13,220,989 13,220,989
MHV Joint Venture (50% interest in the Marin
Embassy Suites) 4,063,491 4,063,491
Promus/FelCor Parsippany Joint Venture (50% interest
in Parsippany ES) 15,377,122 15,377,122
Charlotte Limited Partnership (50% interest in the
Charlotte Embassy Suites) -- 6,695,766
E.S. North, an Indiana Limited Partnership (50%
interest in the Indianapolis ES) -- 4,595,577
---------- ----------
32,661,602 43,952,945
---------- ----------
TOTAL EXISTING INVESTMENTS 36,935,477 N/M
========== ==========
Page 1
159
FELCOR SUITE HOTELS, INC.
SCHEDULE 4.19
ENVIRONMENTAL REPORTS
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇ ▇▇
2 Embassy Suites Corpus Christi TX
3 Embassy Suites Brunswick GA
4 Embassy Suites Chicago-Lombard IL
5 Embassy Suites Minneapolis (Airport) MN
6 Embassy Suites Cleveland OH
7 Embassy Suites Minneapolis (Downtown) MN
8 Doubletree Guest Suites Boca Raton FL
9 Doubletree Guest Suites Tampa (▇▇▇▇▇ Gardens) FL
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
11 Embassy Suites Miami (Airport) FL
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇▇▇▇▇) ▇▇
13 Embassy Suites Milpitas CA
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
15 Embassy Suites Birmingham AL
16 Embassy Suites Phoenix (Biltmore) AZ
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
19 Embassy Suites Anaheim CA
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (Avon/Vail) CO
23 Embassy Suites Los Angeles (Airport) CA
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
25 Embassy Suites Napa CA
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
160
Schedule 4.22(a)
Birmingham
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 242
Year Opened: 1987
Current Flag: Crown Sterling Suites
Flagstaff
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 2/15/95
No. of Suites: 119
Year Opened: 1988
Current Flag: Embassy Suites
Anaheim
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 222
Year Opened: 1987
Current Flag: Embassy Suites
Los Angeles (Airport)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 3/27/96
No. of Suites: 350
Year Opened: 1985
Current Flag: Crown Sterling Suites
Milpitas
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 267
Year Opened: 1987
Current Flag: Embassy Suites
161
Napa
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 5/8/96
No. of Suites: 205
Year Opened: 1985
Current Flag: Crown Sterling Suites
Mandalay Beach
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 5/8/96
No. of Suites: 249
Year Opened: 1986
Current Flag: Crown Sterling Suites
(JV) Marin County
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/18/96
No. of Suites: 235
Year Opened: 1990
Current Flag: Embassy Suites
San Francisco (Airport North)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 312
Year Opened: 1988
Current Flag: Embassy Suites
Beaver Creek Lodge
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 2/20/96
No. of Suites: 72
Year Opened: 1990
Current Flag: Embassy Suites
Orlando (North)
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/28/94
No. of Suites: 210
Year Opened: 1985
Current Flag: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇
▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 11/15/95
No. of Suites: 182
Year Opened: 1989
Current Flag: Doubletree Guest Suites
Boca Raton
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 2/28/96
No. of Suites: 263
Year Opened: 1985
Current Flag: Embassy Suites
Deerfield Beach
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 244
Year Opened: 1987
Current Flag: Crown Sterling Suites
Ft. Lauderdale
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 359
Year Opened: 1986
Current Flag: Embassy Suites
Jacksonville (Bay ▇▇▇▇▇▇▇)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/28/94
No. of Suites: 210
Year Opened: 1985
Current Flag: Embassy Suites
Miami (Airport)
▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 314
Year Opened: 1987
Current Flag: Crown Sterling Suites
3
163
Orlando (South)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/28/94
No. of Suites: 244
Year Opened: 1985
Current Flag: Embassy Suites
Tampa (▇▇▇▇▇ Gardens)
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 11/15/95
No. of Suites: 129
Year Opened: 1985
Current Flag: Doubletree Guest Suites
Brunswick
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/19/95
No. of Suites: 130
Year Opened: 1988
Current Flag: Embassy Suites
Deerfield
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 6/20/96
No. of Suites: 237
Year Opened: 1987
Current Flag: Embassy Suites
(JV) Chicago-Lombard
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 8/1/95
No. of Suites: 262
Year Opened: 1990
Current Flag: Embassy Suites
(JV) Indianapolis (North)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 9/12/96
No. of Suites: 222
Year Opened: 1985
Current Flag: Embassy Suites
4
164
Lexington
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/10/96
No. of Suites: 174
Year Opened: 1987
Current Flag: Hilton Suites
Baton Rouge
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 224
Year Opened: 1985
Current Flag: Embassy Suites
New Orleans
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 12/1/94
No. of Suites: 251
Year Opened: 1984
Current Flag: Embassy Suites
Boston-Marlborough
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 6/30/95
No. of Suites: 100
Year Opened: 1988
Current Flag: Embassy Suites
Minneapolis (Airport)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 11/6/95
No. of Suites: 311
Year Opened: 1986
Current Flag: Embassy Suites
Minneapolis (Downtown)
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 11/15/95
No. of Suites: 218
Year Opened: 1984
Current Flag: Embassy Suites
5
165
(JV) Parsippany
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/31/96
No. of Suites: 274
Year Opened: 1989
Current Flag: Embassy Suites
Piscataway
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/10/96
No. of Suites: 225
Year Opened: 1988
Current Flag: Embassy Suites
(JV) Charlotte
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 9/12/96
No. of Suites: 274
Year Opened: 1989
Current Flag: Embassy Suites
Cleveland
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Date Acquired: 11/17/95
No. of Suites: 268
Year Opened: 1990
Current Flag: Embassy Suites
Tulsa
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/28/94
No. of Suites: 240
Year Opened: 1985
Current Flag: Embassy Suites
Nashville (Airport/Opryland)
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/28/94
No. of Suites: 296
Year Opened: 1986
Current Flag: Embassy Suites
6
166
Corpus Christi
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/19/95
No. of Suites: 150
Year Opened: 1984
Current Flag: Embassy Suites
Dallas (Love Field)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 3/29/95
No. of Suites: 248
Year Opened: 1986
Current Flag: Embassy Suites
Dallas (Park Central)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 7/28/94
No. of Suites: 279
Year Opened: 1985
Current Flag: Embassy Suites
7
167
Schedule 4.22(b)
LSD Phoenix (Camelback)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 1/3/96
No. of Suites: 233
Year Opened: 1985
Current Flag: Crown Sterling Suites
LSD San Francisco (Airport South)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 11/6/95
No. of Suites: 339
Year Opened: 1986
Current Flag: Embassy Suites
LSD St. ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date Acquired: 11/15/95
No. of Suites: 210
Year Opened: 1983
Current Flag: Embassy Suites
168
FELCOR SUITE HOTELS, INC.
ELIGIBLE HOTELS
SCHEDULE 6.23
AS OF SEPTEMBER 30, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
Embassy Suites Corpus Christi, TX
Embassy Suites Brunswick, GA
Embassy Suites Chicago - Lombard, IL
Embassy Suites Minneapolis Airport, MN
Embassy Suites Minneapolis Downtown, MN
Embassy Suites Anahiem, CA
Embassy Suites Baton Rouge, LA
Embassy Suites Birmingham, AL
Embassy Suites Deerfield Beach, FL
Embassy Suites Ft Lauderdale, FL
Embassy Suites Los Angeles Airport, CA
Embassy Suites Mandalay Beach, CA
Embassy Suites Miami, FL
Embassy Suites Milpitas, CA
Embassy Suites Napa, CA
Embassy Suites Phoenix (Camelback), AZ
Embassy Suites San Francisco (Airport North), CA
Embassy Suites Cleveland, OH
Embassy Suites Piscataway, NJ
Embassy Suites Boca Raton, CA
Embassy Suites Beaver Creek, CO
Embassy Suites Chicago - Deerfield, IL
Doubletree Guest Suites Hotel Tampa, FL
Doubletree Guest Suites Hotel Boca Raton, FL
Hilton Suites Hotel Lexington, KY
Embassy Suites Hotel Parsippany, NJ
169
EXHIBIT A
[FORM OF]
NOTE
U.S. $ ____________ Dated: ____________, 1996
FOR VALUE RECEIVED, the undersigned, FelCor Suite Hotels,
Inc. ("FelCor"), a Maryland corporation, and FelCor Suites Limited Partnership
("FelCor LP"), a Delaware limited partnership (collectively, the "Borrower"),
HEREBY PROMISES TO PAY to the order of [NAME OF LENDER] (the "Lender") the
principal sum of ___________ United States Dollars ($_________), or, if less,
the aggregate unpaid principal amount of all Loans (as defined in the Credit
Agreement referred to below) of the Lender to the Borrower, payable at such
times, and in such amounts, as are specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of the Loans from the date made until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to The Chase Manhattan Bank ("Chase") as
administrative agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in
immediately available funds. The Loans made by the Lender to the Borrower, and
all payments made on account of the principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on this Note.
A-1
170
This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Revolving Credit Agreement, dated as of the date hereof
(said Agreement, as it may be amended or otherwise modified from time to time,
being the "Credit Agreement"), among the Borrower, the Lender, the other
financial institutions referred to therein, Chase, as administrative agent for
the Lender and such other financial institutions, and ▇▇▇▇▇ Fargo Bank,
National Association, as documentation agent, and the other Loan Documents
referred to therein and entered into pursuant thereto. The Credit Agreement,
among other things, (i) provides for the making of Loans by the Lender to the
Borrower in an aggregate amount not to exceed at any time outstanding the
United States dollar amount first above mentioned, the indebtedness of the
Borrower resulting from such Loans being evidenced by this Note, and (ii)
contains provisions for acceleration of the maturity of the unpaid principal
amount of this Note upon the happening of certain stated events and also for
prepayments on account of the principal hereof prior to the maturity hereof
upon the terms and conditions therein specified.
Demand, presentment, protest and notice of nonpayment and
protest are hereby waived by the Borrower.
This Note shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York.
FELCOR SUITE HOTELS, INC.,
a Maryland Corporation
By:
-----------------------------------
Name:
Title:
A-2
171
FELCOR SUITES LIMITED PARTNERSHIP,
a Delaware Limited Partnership
By: FelCor Suite Hotels, Inc.,
its general partner
By:
-------------------------------
Name:
Title:
A-3
172
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Paid Notation
Date of Loan or Prepaid Made by
---- ------- -------------- --------
A-4
173
EXHIBIT B
[FORM OF]
NOTICE OF BORROWING
The Chase Manhattan Bank,
as administrative agent for the financial
institutions party
to the Credit Agreement
referred to below
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
_________, 1996
Attention: ______________________
Re: FelCor Suite Hotels, Inc. and FelCor Suites Limited
Partnership
Gentlemen:
The undersigned, FelCor Suite Hotels, Inc. and FelCor Suites
Limited Partnership, refer to the Revolving Credit Agreement, dated as
of______________, 1996, among the undersigned, the financial institutions party
thereto, The Chase Manhattan Bank, as administrative agent for said financial
institutions and ▇▇▇▇▇ Fargo Bank, National Association, as documentation agent
(said Agreement, as it may be amended or otherwise modified from time to time,
being the "Credit Agreement" and capitalized terms not defined herein but
defined therein being used herein as therein defined), and hereby gives you
notice, irrevocably, pursuant to Section 2.3 [2.17] of the Credit Agreement
that the undersigned hereby requests a Borrowing under the Credit Agreement,
and in that connection sets forth below the
B-1
174
information relating to such Borrowing (the "Proposed Borrowing") as required
by Section 2.3 [2.17] of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_________________, 1996.
(ii) The aggregate amount of the Loans
constituting the Proposed Borrowing is $___________, [which
comprises a Swing Line Advance] [of which amount $___________
consists of Base Rate Loans] [and] [$___________ consists of
Eurodollar Rate Loans having an initial Interest Period of
_______ months.]
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(A) the representations and warranties contained in
Article IV of the Credit Agreement and in each of the other
Loan Documents are true and correct as though made on and as
of the date hereof (it being understood and agreed that any
representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct only
as of such specified date); and
(B) no Default or Event of Default has occurred and
is continuing or will result from the Proposed Borrowing.
B-2
175
Very truly yours,
FELCOR SUITE HOTELS, INC.,
a Maryland Corporation
By:
-----------------------------------
Name:
Title:
FELCOR SUITES LIMITED PARTNERSHIP,
a Delaware Limited Partnership
By: FelCor Suite Hotels, Inc.,
its general partner
By:
-------------------------------
Name:
Title:
B-3
176
EXHIBIT C
[FORM OF] NOTICE OF CONVERSION OR CONTINUATION
The Chase Manhattan Bank,
as agent for the financial institutions
party to the Credit Agreement
referred below
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
___________, 1996
Attention: ______________________
Re: FelCor Suite Hotels Inc. and FelCor Suites Limited
Partnership
Gentlemen:
The undersigned, FelCor Suite Hotels Inc. and FelCor Suites
Limited Partnership (collectively, the "Borrower"), refer to the Revolving
Credit Agreement, dated as of _____________ ___, 1996, among the Borrower, the
financial institutions party thereto, The Chase Manhattan Bank, as
administrative agent for the financial institutions party thereto, and ▇▇▇▇▇
Fargo Bank, National Association, as documentation agent (said Agreement, as it
may be amended or otherwise modified from time to time, being the "Credit
Agreement" and capitalized terms not defined herein but defined therein being
used herein as defined therein), and hereby gives you notice pursuant to
Section 2.8 of the Credit Agreement that the undersigned hereby requests a
C-1
177
[conversion] [continuation] on ______________ ___, 19__ of $____________ in
principal amount of presently outstanding Loans that are [Base Rate Loans]
[Eurodollar Rate Loans having an Interest Period ending on _____________ __,
19__] [to] [as] [Base Rate] [Eurodollar Rate] Loans. [The Interest Period for
such amount requested to be converted to or continued as Eurodollar Rate Loans
is [[1] [2] [3] [6] months].]
In connection herewith, the undersigned hereby certifies that
no Default or Event of Default is continuing.
Very truly yours,
FELCOR SUITE HOTELS, INC.,
a Maryland Corporation
By:
-----------------------------------
Name:
Title:
FELCOR SUITES LIMITED PARTNERSHIP,
a Delaware Limited Partnership
By: FelCor Suite Hotels, Inc.,
its general partner
By:
-------------------------------
Name:
Title:
C-2
178
EXHIBIT D
[INTENTIONALLY OMITTED]
D-1
179
EXHIBIT E
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
__________ ___, 19__
Reference is made to the Revolving Credit Agreement, dated as
of _____________, 19__, among FelCor Suite Hotels, Inc., a Maryland corporation
("FelCor") and FelCor Suites Limited Partnership, a Delaware limited
partnership ("FelCor LP" and collectively with FelCor, the "Borrower"), the
financial institutions party thereto, The Chase Manhattan Bank ("Chase"), as
administrative agent for the financial institutions party thereto and ▇▇▇▇▇
Fargo Bank, National Association, as documentation agent (said Agreement, as it
may be amended or otherwise modified from time to time, being the "Credit
Agreement", and capitalized terms not defined herein but defined therein being
used herein as therein defined).
___________________ (the "Assignor") and _________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and
to all of the Assignor's rights and obligations under the Credit Agreement as
of the date hereof which represents the percentage interest specified on
Schedule I of all outstanding rights and obligations under the Credit Agreement
(including, without limitation,
E-1
180
such interest in each of the Assignor's outstanding Commitments, if any, the
Obligations owing to it and the Notes held by it). After giving effect to such
sale and assignment, the Assignee's Commitments (and the Commitments retained
by the Assignor, if any) and the amount of the Loans owing to the Assignee (and
the Assignor, if any) will be as set forth in Section 2 of Schedule I and will
otherwise comply with the requirements of Section 10.7(a).
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document or any other instrument or document
furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or
any other Loan Document or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Credit Agreement or any other Loan Document or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Notes referred to above and
requests that the Agent exchange such Notes for new Notes as follows: [specify
date of Notes, amounts, Assignee].
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.5 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the
E-2
181
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; (v) represents and warrants that it is an Eligible
Assignee; and (vi) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth beneath its name
on the signature pages hereof[; and* (vii) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement and the Notes or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Agent, together
with an assignment processing fee in the sum of $2,500 payable to and for the
benefit of the Agent, for acceptance and recording by the Agent. The effective
date of this Assignment and Acceptance shall be the date of acceptance thereof
by the Agent and, provided no Default or Event of Default exists, the Borrower,
unless otherwise specified on Schedule I hereto (the "Effective Date").
__________________________________
* If Assignee is organized under the laws of a jurisdiction outside of the
United States.
▇-▇
▇▇▇
▇. Upon such acceptance by the Agent and, if applicable, the
Borrower and recording by the Agent, as of the Effective Date (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations under the Credit
Agreement of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and be
construed and interpreted in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution being made
on Schedule I hereto.
E-4
183
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
DATED ________________ __, 19__
Section 1.
---------
Percentage Interest: %
--------------
Section 2.
---------
Assignee's Commitment: $
--------------
Aggregate Outstanding Principal of
Loans Owing to Assignee: $
--------------
Section 3.
---------
Effective Date: ___________ __, 19__
[ASSIGNOR]
By:
-----------------------------------
Name:
Title:
[ASSIGNEE]
By:
-----------------------------------
Name:
Title:
▇-▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ____ day
of ____________, 19__
THE CHASE MANHATTAN BANK, as Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
[ONLY REQUIRED IF NO DEFAULT OR EVENT OF DEFAULT]
Accepted this ____ day
of ____________, 19__
FELCOR SUITE HOTELS, INC.
By:
--------------------------------
Name:
Title:
Accepted this ____ day
of ____________, 19__
FELCOR SUITES LIMITED PARTNERSHIP
By: FelCor Suite Hotels, Inc.
By:
--------------------------------
Name:
Title:
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇
FORM OF
BORROWING BASE CERTIFICATE
TO: Chase Manhattan Bank, as Administrative Agent
FROM: FelCor Suite Hotels, Inc. and
FelCor Suites Limited Partnership
DATE: ____________ __, 19__
Pursuant to the provisions of the Revolving Credit Agreement dated _________
___, 19__, among FelCor Suite Hotels, Inc. and FelCor Suites Limited
Partnership (collectively, the "Borrower"), the financial institutions party
thereto, The Chase Manhattan Bank as administrative agent for said financial
institutions and ▇▇▇▇▇ Fargo Bank, National Association, as documentation agent
(said Agreement, as it may be amended or otherwise modified from time to time,
the "Credit Agreement"; and the terms defined therein being used herein as
therein defined), the undersigned hereby certifies that the following
information is true, complete and accurate as of the close of business on
_______________ ___, 19__:
1. Schedule 1 attached hereto accurately and completely
sets forth, as of the date hereof (i) all Hotels owned or leased by the
Borrower, its wholly owned Subsidiaries and Eligible Joint Ventures, (ii) with
respect to each Hotel owned by an Eligible Joint Venture, the Borrower's JV% in
such Hotel, (iii) for each Hotel owned for four (4) Fiscal Quarters or more,
the Adjusted NOI from such Hotel for the preceding four (4) Fiscal Quarters
divided by ten percent (10%) (iv) for each Hotel owned for less than four (4)
Fiscal Quarters, the Borrower's Investment in such Hotel, (v) those Hotels that
do not meet the requirements for Eligible Hotels (the remaining Hotels being
Eligible Hotels), (vi) the Aggregate Value of the Eligible Hotels, (vii) the
Borrowing Base, and (viii) the Available Credit.
F-1
186
2. Each of the Eligible Hotels is Unencumbered and
otherwise meets the requirements for Eligible Hotels set forth in the Credit
Agreement. Submitted herewith, with respect to each such Eligible Hotel (to
the extent not previously delivered) are copies of the following:
(i) A description of such Hotel, including the age, location
and number of rooms or suites of such Hotel;
(ii) A copy of the most recent ALTA Owner's Policy of Title
Insurance (or commitment to issue such a policy to the Loan
Party owning or to own such Hotel) relating to such Hotel
showing the identity of the fee titleholder thereto and all
matters of record;
(iii) Copies of each of the Operating Lease, Management Agreement
and License relating to such Hotel;
(iv) Copies of all engineering, mechanical, structural and
maintenance studies performed with respect to such Hotel;
(v) A "Phase I" environmental assessment of such Hotel [not
more than 12 months old] prepared by an environmental
engineering firm acceptable to the Administrative Agent,
and any additional environmental studies or assessments
available to the Borrower performed with respect to such
Hotel;
(vi) If such Hotel is owned pursuant to a Qualified Lease, a
copy of such Lease together with all and any amendments
thereto or modifications thereof.
3. Not more than (i) 20% of the Aggregate Value is
attributable to Joint Venture Hotels, or (ii) 15% of the Aggregate Value is
attributable to Eligible Hotels leased pursuant to Qualified Leases.
F-2
187
4. The representations and warranties contained in Article
IV of the Credit Agreement and in each of the other Loan Documents are true and
correct as though made on and as of the date hereof (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct only as of such
specified date); and
5. No Default or Event of Default has occurred and is
continuing.
Authorized Signature:____________________________ Date: ___________
Title: Chief Financial Officer
F-3
188
EXHIBIT G
[FORM OF] COMPLIANCE CERTIFICATE
This COMPLIANCE CERTIFICATE is delivered pursuant to that
certain Revolving Credit Agreement, dated as of______________, 1996 (the
"Credit Agreement") among FelCor Suite Hotels, Inc. ("FelCor"), FelCor Suites
Limited Partnership ("FelCor LP"; FelCor and FelCor LP are collectively
referred to as the "Borrower"), the financial institutions party thereto
(collectively, the "Lenders"), The Chase Manhattan Bank, as administrative
agent for said financial institutions (the "Administrative Agent") and ▇▇▇▇▇
Fargo Bank, National Association, as documentation agent (the "Documentation
Agent"). Capitalized terms not defined herein shall have the same meanings
ascribed thereto in the Credit Agreement.
1. FelCor is the sole general partner of FelCor LP.
2. The individual executing this Certificate is the duly
qualified Chief Financial Officer of FelCor and is executing this Certificate
on behalf of FelCor and FelCor LP.
3. The undersigned has reviewed the terms of the Credit
Agreement and has made a review of the transactions, financial condition and
other affairs of the Borrower and each of its Subsidiaries and Unconsolidated
Entities as of, and during the Fiscal Quarter ending _________, 199__, and the
undersigned has no knowledge of the existence, as of the date hereof, of any
condition or event which (i) renders untrue or incorrect, any of the
representations and warranties contained in Article IV of the Credit Agreement
(it being understood and agreed that any representation or
G-1
189
warranty which by its terms is made as of a specified date shall be required to
be true and correct only as of such specified date), or (ii) constitutes a
Default or Event of Default.
4. Schedule I attached hereto accurately and completely sets
forth the financial data, computations and other matters required to establish
compliance with the following Sections of the Credit Agreement:
a. Section 5.1 - Gross Interest Expense Coverage;
b. Section 5.2 - Debt Service Coverage Ratio;
c. Section 5.3 - Maintenance of Tangible Net Worth;
d. Section 5.4 - Limitations on Total Indebtedness;
e. Section 5.5 - Limitations on Total Secured Indebtedness;
f. Section 6.21 - Hotel Requirements;
g. Section 7.4 - Restricted Payments;
h. Section 7.14 - Management Continuity; and
i Section 8.1 - Minimum Ownership Interests.
5. The aggregate outstanding principal amount of the Loans as
of the date hereof is equal to or less than the Available Credit.
6. The representations and warranties contained in Article IV
of the Credit Agreement and in each of the
G-2
190
other Loan Documents are true and correct as though made on and as of such date
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct only as of such specified date).
7. No Default or Event of Default has occurred and is
continuing.
The Lenders, the Administrative Agent and the Documentation Agent and
their respective successors and assigns may rely on the truth and accuracy of
the foregoing in connection with the extensions of credit to the Borrower
pursuant to the Credit Agreement.
G-3
191
IN WITNESS WHEREOF, the Borrower has caused this Compliance
Certificate to be duly executed by its duly authorized Chief Financial Officer
this ____ day of _________, 1996.
FELCOR SUITE HOTELS, INC
By:
-----------------------------------
[Name], Chief Financial Officer
FELCOR SUITES LIMITED PARTNERSHIP
By: FELCOR SUITE HOTELS, INC
By:
-------------------------------
[Name], Chief Financial Officer
G-4
192
EXHIBIT H
[INTENTIONALLY OMITTED]
H-1
193
EXHIBIT I
[FORM OF] SUBSIDIARY GUARANTY
GUARANTY, dated _____________, 1996, made by __________, a
____________ [limited partnership][limited liability company](the "Guarantor"),
in favor of the Guarantied Parties referred to below.
W I T N E S S E T H:
WHEREAS, FelCor Suite Hotels, Inc., a Maryland corporation and FelCor
Suites Limited Partnership, a Delaware limited partnership (collectively, the
"Borrower"), have entered into a Revolving Credit Agreement, dated as of
__________, 1996, with the financial institutions party thereto, The Chase
Manhattan Bank, as administrative agent for said financial institutions (the
"Administrative Agent") and ▇▇▇▇▇ Fargo Bank, National Association, as
documentation agent (the "Documentation Agent") (said Agreement, as it may be
amended or otherwise modified from time to time, being the "Credit Agreement",
and capitalized terms not defined herein but defined therein being used herein
as therein defined); and
WHEREAS, the Borrower either directly or indirectly owns beneficially
100% of the capital stock of the Guarantor; the Borrower is the principal
financing entity for capital requirements of its Subsidiaries, and from time to
time the Borrower has made and will continue to make capital contributions and
advances to its Subsidiaries, including the Guarantor; the Borrower and the
Guarantor are members of the same consolidated group of companies and are
engaged in related businesses; and the Guarantor will derive direct and
indirect economic benefit from the Loans; and
WHEREAS, it is a condition precedent under the Credit Agreement to the
making of Loans that the Guarantor shall have executed and delivered this
Guaranty; and
I-1
194
WHEREAS, the Lenders, the Administrative Agent and the
Documentation Agent are herein referred to as the "Guarantied Parties";
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders to make Loans, the Guarantor hereby agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
and irrevocably guarantees the full and prompt payment when due, whether at
stated maturity, by acceleration or otherwise, of, and the performance of, the
Obligations, whether now or hereafter existing and whether for principal,
interest, fees, expenses or otherwise, and any and all expenses (including,
without limitation, counsel fees and expenses) incurred by any of the
Guarantied Parties in enforcing any rights under this Guaranty. This Guaranty
is an absolute guaranty of payment and performance and not a guaranty of
collection.
SECTION 2. Guaranty Absolute. The Guarantor guaranties that
the Obligations will be paid strictly in accordance with the terms of the
Credit Agreement, the Notes and the other Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Guarantied Parties with
respect thereto. The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any
provision of any other Loan Document or any other agreement or instrument
relating to any Loan Document, or avoidance or subordination of any of the
Obligations;
(ii) any change in the time, manner or place of payment
of, or in any other term of, or any increase in the amount of, all or any of
the Obligations, or any other amendment or waiver of any term of, or any
consent
I-2
195
to departure from any requirement of, the Credit Agreement, the Notes
or any of the other Loan Documents;
(iii) any release or amendment or waiver of any term of any
other guaranty of, or any consent to departure from any requirement of any
other guaranty of, all or any of the Obligations;
(iv) the absence of any attempt to collect any of the
Obligations from the Borrower or for any other guarantor or any other action to
enforce the same or the election of any remedy by any of the Guarantied
Parties;
(v) any waiver, consent, extension, forbearance or
granting of any indulgence by any of the Guarantied Parties with respect to any
provision of any other Loan Document;
(vi) the election by any of the Guarantied Parties in any
proceeding under chapter 11 of title 11 of the United States Code, as amended,
or any successor statute (the "Bankruptcy Code"), of the application of section
1111(b)(2) of the Bankruptcy Code;
(vii) any borrowing or grant of a security interest by the
Borrower, as debtor-in-possession, under section 364 of the Bankruptcy Code;
(viii) the disallowance, under section 502 of the Bankruptcy
Code, of all or any portion of the claims of any of the Guarantied Parties for
payment of any of the Obligations; or
(ix) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a borrower or a
guarantor.
I-3
196
SECTION 3. Waiver. (a) The Guarantor hereby (i) waives (A)
promptness, diligence, notice of acceptance and any and all other notices with
respect to any of the Obligations or this Guaranty, (B) the filing of any claim
with a court in the event of receivership or bankruptcy of the Borrower, (C)
protest or notice with respect to nonpayment of all or any of the Obligations,
(D) the benefit of any statute of limitation, (E) all demands whatsoever (and
any requirement that same be made on the Borrower as a condition precedent to
the Guarantor's obligations hereunder); and (ii) covenants and agrees that this
Guaranty will not be discharged except by complete performance of the
Obligations and any other obligations of the Guarantor contained herein.
(b) If, in the exercise of any of its rights and
remedies, any of the Guarantied Parties shall forfeit any of its rights or
remedies, including, without limitation, its right to enter a deficiency
judgment against the Borrower or any other Person, whether because of any
applicable law pertaining to "election of remedies" or the like, the Guarantor
hereby consents to such action by such Guarantied Party and waives any claim
based upon such action. Any election of remedies which results in the denial
or impairment of the right of such Guarantied Party to seek a deficiency
judgment against the Borrower shall not impair the obligation of the Guarantor
to pay the full amount of the Obligations or any other obligation of the
Guarantor contained herein.
(c) Intentionally Omitted
(d) The Guarantor agrees that notwithstanding the
foregoing and without limiting the generality of the foregoing if, after the
occurrence and during the continuance of an Event of Default, the Guarantied
Parties are prevented by applicable law from exercising their respective rights
to accelerate the maturity of the
I-4
197
Obligations, to collect interest on the Obligations, or to enforce or exercise
any other right or remedy with respect to the Obligations, the Guarantor agrees
to pay to the Administrative Agent for the account of the Guarantied Parties,
upon demand therefor, the amount that would otherwise have been due and payable
had such rights and remedies been permitted to be exercised by the Guarantied
Parties.
(e) The Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of the Borrower and of each
other guarantor of all or any part of the Obligations, and of all other
circumstances bearing upon the risk of nonpayment of the Obligations or any
part thereof, that diligent inquiry would reveal. The Guarantor hereby agrees
that the Guarantied Parties shall have no duty to advise the Guarantor of
information known to any of the Guarantied Parties regarding such condition or
any such circumstance. In the event that any of the Guarantied Parties in its
sole discretion undertakes at any time or from time to time to provide any such
information to the Guarantor, such Guarantied Party shall be under no
obligation (i) to undertake any investigation not a part of its regular
business routine, (ii) to disclose any information which, pursuant to accepted
or reasonable banking or commercial finance practices, such Guarantied Party
wishes to maintain confidential or (iii) to make any other or future
disclosures of such information or any other information to the Guarantor.
(f) The Guarantor consents and agrees that the Guarantied
Parties shall be under no obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the
Guarantor or otherwise in connection with obtaining payment of any or all of
the Obligations from any Person or source.
SECTION 4. No Subrogation Etc. Except as provided in Section
12 hereof, the Guarantor waives and
I-5
198
relinquishes any and all rights which it may acquire by way of subrogation,
contribution or reimbursement by reason of this Guaranty or by any payment made
hereunder.
SECTION 5. Representations and Warranties. The Guarantor
hereby represents and warrants to the Guarantied Parties as follows:
(a) The Guarantor is a [limited liability
company][limited partnership] duly organized, validly existing and in good
standing under the laws of the State of ____________; (ii) is duly qualified as
a foreign [limited liability company][limited partnership] and in good standing
under the laws of each jurisdiction, except for failures which in the aggregate
would have no Material Adverse Effect; (iii) has all requisite [company]
[partnership] power and authority and the legal right to own, pledge, mortgage
and operate its properties, to lease the property it operates under lease and
to conduct its business as now or currently proposed to be conducted; (iv) is
in compliance with its [certificate of limited partnership and limited
partnership agreement][articles of organization and operating agreement]; (v)
is in compliance with all other applicable Requirements of Law except for such
noncompliances as in the aggregate would have no Material Adverse Effect; and
(vi) has all necessary licenses, permits, consents or approvals from or by, has
made all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents or
approvals which can be obtained by the taking of ministerial action to secure
the grant or transfer thereof or failures which in the aggregate would have no
Material Adverse Effect.
(b) The execution, delivery and performance by the
Guarantor of this Guaranty and the other Loan Documents to which it is a party:
I-6
199
(i) are within its [company][partnership] powers;
(ii) have been duly authorized by all necessary
[company][partnership] action, including, without limitation,
the consent of [members][partners] where required; and
(iii) do not and will not (A) contravene its
[certificate of limited partnership or limited partnership
agreement][articles of organization or operating agreement] or
other comparable governing documents, (B) violate any other
applicable Requirement of Law (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System), or any order or decree of any
Governmental Authority or arbitrator, (C) conflict with or
result in the breach of, or constitute a default under, or
result in or permit the termination or acceleration of, any of
its Contractual Obligations, (D) result in the creation or
imposition of any Lien upon any of its property, or (E)
require the consent, authorization by, or approval of, or
notice to, or filing or registration with, any Governmental
Authority or any other Person, other than those which have
been obtained and copies of which have been delivered to the
Administrative Agent pursuant to Section 3.1 of the Credit
Agreement, each of which is in full force and effect.
(c) This Guaranty has been duly executed and delivered by the
Guarantor and is the legal, valid and binding obligation of the Guarantor
enforceable against it in accordance with its terms except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting the
enforcement of creditor's rights and remedies generally.
I-7
200
(d) There are no pending or, to the knowledge of the
Guarantor, threatened actions, investigations or proceedings affecting the
Guarantor or any of its subsidiaries before any Governmental Authority or
arbitrator other than those that in the aggregate, if adversely determined,
would have no Material Adverse Effect. The performance by the Guarantor under
this Guaranty and under each of the other Loan Documents to which it is a party
is not restrained or enjoined (either temporarily, preliminarily or
permanently) and no conditions have been imposed by any Governmental Authority
or arbitrator that in the aggregate would have a Material Adverse Effect.
SECTION 6. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantor
herefrom shall in any event be effective unless the same shall be in writing,
approved by the Majority Lenders and signed by the Administrative Agent, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Guarantied Parties, limit the liability of the Guarantor [(other than as
expressly provided herein)] or postpone any date fixed for payment hereunder.
SECTION 7. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopy or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered by hand, if to the Guarantor,
addressed to it at the address of such Guarantor specified on the signature
pages hereof, if to any Guarantied Party, addressed to it at the address of
such Guarantied Party specified in the Credit Agreement, or, as to each party,
at such other address as shall be designated by such party in a written notice
to each other party complying as to delivery with the terms of this Section.
All such notices and other
I-8
201
communications shall, when mailed, telegraphed, telexed, telecopied, cabled or
delivered, be effective when deposited in the mails, delivered to the telegraph
company, confirmed by telex answerback, telecopied with confirmation of
receipt, delivered to the cable company or delivered by hand to the addressee
or its agent, respectively.
SECTION 8. No Waiver; Remedies. (a) No failure on the part
of any Guarantied Party to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law or any of the
other Loan Documents.
(b) Failure by any of the Guarantied Parties at any time
or times hereafter to require strict performance by the Borrower, the Guarantor
or any other Person of any of the provisions, warranties, terms or conditions
contained in any of the Loan Documents now or at any time or times hereafter
executed by the Borrower, the Guarantor or such other Person and delivered to
any of the Guarantied Parties shall not waive, affect or diminish any right of
any of the Guarantied Parties at any time or times hereafter to demand strict
performance thereof, and such right shall not be deemed to have been modified
or waived by any course of conduct or knowledge of any of the Guarantied
Parties or any agent, officer, employee of any of the Guarantied Parties.
(c) No waiver by the Guarantied Parties of any default
shall operate as a waiver of any other default or the same default on a future
occasion, and no action by any of the Guarantied Parties permitted hereunder
shall in any way affect or impair any of the rights of the Guarantied Parties
or the obligations of the Guarantor under this Guaranty or under any of the
other Loan Documents. Any determination by a court of competent jurisdiction
of the
I-9
202
amount of any principal and/or interest or other amount constituting any of the
Obligations shall be conclusive and binding on the Guarantor irrespective of
whether the Guarantor was a party to the suit or action in which such
determination was made.
SECTION 9. Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default, each of the Guarantied Parties is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Guarantied Party to or for the credit or
the account of the Guarantor against any and all of the obligations of the
Guarantor now or hereafter existing under this Guaranty, irrespective of
whether or not such Guarantied Party shall have made any demand under this
Guaranty and although such obligations may be contingent and unmatured. Each
of the Guarantied Parties agrees promptly to notify the Guarantor after any
such set-off and application made by such Guarantied Party; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Guarantied Party under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Guarantied Party may have.
SECTION 10. Continuing Guaranty; Transfer of Notes. This
Guaranty is a continuing guaranty and shall (i) remain in full force and effect
until indefeasible payment in full of the Obligations and all other amounts
payable under this Guaranty, (ii) be binding upon the Guarantor, its successors
and assigns, and (iii) inure to the benefit of and be enforceable by the
Guarantied Parties and their respective successors, transferees, and assigns.
Without limiting the generality of the foregoing clause (iii), any of the
Guarantied Parties may assign or otherwise transfer
I-10
203
any Note held by it or Obligation owing to it to any other Person, and such
other Person shall thereupon become vested with all the rights in respect
thereof granted to such Guarantied Party herein or otherwise with respect to
such of the Notes and Obligations so transferred or assigned, subject, however,
to compliance with the provisions of Section 10.7 of the Credit Agreement in
respect of assignments.
SECTION 11. Limitation of Guaranty. Any term or provision of
this Guaranty or any other Loan Document to the contrary notwithstanding, the
maximum aggregate amount of the Obligations for which the Guarantor shall be
liable shall not exceed the maximum amount for which such Guarantor can be
liable without rendering this Guaranty or any other Loan Document, as it
relates to such Guarantor, voidable under Section 548 of the United States
Bankruptcy Code or any comparable provision of any state law or any applicable
law relating to fraudulent conveyance or fraudulent transfer.
SECTION 12. Contribution. To the extent that any Guarantor
shall be required hereunder to pay a portion of the Obligation which shall
exceed the greater of (i) the amount of the economic benefit actually received
by such Guarantor from the Loans and (ii) the amount which such Guarantor would
otherwise have paid if such Guarantor had paid the aggregate amount of the
Obligations (excluding the amount thereof repaid by the Borrower and the other
Guarantors) in the same proportion as such Guarantor's net worth at the date
enforcement hereunder is sought bears to the aggregate net worth of all the
Guarantors at the date enforcement hereunder is sought, then such Guarantor
shall be reimbursed by the Borrower and the other Guarantors for the amount of
such excess, pro rata based on the respective net worths of the Borrower and
such other Guarantors at the date enforcement hereunder is sought.
I-11
204
SECTION 13. Reinstatement. This Guaranty shall remain in
full force and effect and continue to be effective should any petition be filed
by or against any Loan Party for liquidation or reorganization, should any Loan
Party become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of
any Loan Party's assets, and shall, to the fullest extent permitted by law,
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations or such part thereof,
whether as a "voidable preference", "fraudulent transfer", or otherwise, all as
though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall, to the fullest extent permitted by law, be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
SECTION 14. Governing Law. This Guaranty shall be governed
by, and be construed and interpreted in accordance with, the law of the State
of New York. Wherever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity and without invalidating the remaining provisions of
this Guaranty.
SECTION 15. Submission to Jurisdiction; Jury Trial. (a) Any
legal action or proceeding with respect to this Guaranty or any document
related thereto may be brought in the courts of the State of New York or the
United States of America for the Southern District of New York, and, by
execution and delivery of this Guaranty, the Guarantor hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The Guarantor
I-12
205
hereby irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any such
action or proceeding in such respective jurisdictions and consents to the
granting of such legal or equitable relief as is deemed appropriate by the
court.
(b) The Guarantor irrevocably consents to the service of
process of any of the aforesaid courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the guarantor at its address provided herein, such service to become effective
30 days after such mailing.
(c) Nothing contained in this Section 14 shall affect the
right of any Guarantied Party to serve process in any other manner permitted by
law or commence legal proceedings or otherwise proceed against the Guarantor or
any of the Guarantor's property in any other jurisdiction.
(d) The Guarantor waives any right it may have to trial
by jury in respect of any litigation based on, arising out of, under or in
connection with this Guaranty or any other Loan Document, or any course of
conduct, course of dealing, verbal or written statement or other action of any
Loan Party or any Guarantied Party.
SECTION 16. Section Titles. The Section titles contained in
this Guaranty are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of this Guaranty.
SECTION 17. Execution in Counterparts. This Guaranty may be
executed in any number of counterparts and by different parties hereto in
separate counterparts,
I-13
206
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same Guaranty.
SECTION 18. Miscellaneous. All references herein to the
Borrower or to the Guarantor shall include their respective successors and
assigns, including, without limitation, a receiver, trustee or
debtor-in-possession of or for the Borrower or the Guarantor. All references
to the singular shall be deemed to include the plural where the context so
requires.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered by its duly authorized officer on the date first
above written.
[GUARANTOR]
By:
-----------------------------------
Title:
Address:
I-14