1
Exhibit 4(h)
EXECUTION
AMENDED AND RESTATED SENIOR SECURED
REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 17, 1997
AMONG
PRIME HOSPITALITY CORP.,
AND
THE LENDERS PARTY HERETO,
AND
SOCIETE GENERALE, SOUTHWEST AGENCY,
AS DOCUMENTATION AGENT,
AND
CREDIT LYONNAIS NEW YORK BRANCH,
AS SYNDICATION AGENT,
AND
BANKERS TRUST COMPANY,
AS AGENT
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PRIME HOSPITALITY CORP.
CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1.
INTERPRETATION.............................................. 2
1.1 Certain Defined Terms....................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement................................................................ 47
1.3 References to Articles, Sections, Exhibits, Schedules and
Attachments................................................................................. 47
1.4 Captions.................................................................................... 47
1.5 Drafter..................................................................................... 48
1.6 References to Persons Include Permitted Successors and Assigns.............................. 48
1.7 References to Applicable Law and Contracts.................................................. 48
1.8 Herein...................................................................................... 48
1.9 Including Without Limitation................................................................ 48
1.10 Gender...................................................................................... 48
1.11 Singular and Plural......................................................................... 48
1.12 Knowledge................................................................................... 49
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................ 49
2.1 Purchase of Existing Loans.................................................................. 49
2.2 Commitments; Loans; Notes; the Register..................................................... 50
A. Commitments......................................................................... 50
B. Borrowing Mechanics................................................................. 50
C. Disbursement of Funds............................................................... 51
D. Defaulting Lenders.................................................................. 52
E. The Register........................................................................ 54
F. Extension of Maturity Date.......................................................... 54
2.3 Interest on the Loans....................................................................... 55
A. Rate of Interest.................................................................... 55
B. Interest Periods.................................................................... 56
C. Interest Payments................................................................... 56
D. Conversion.......................................................................... 57
E. Default Rate Interest............................................................... 57
F. Computation of Interest............................................................. 58
2.4 Fees .................................................................................... 58
A. Commitment Fees..................................................................... 58
B. Other Fees.......................................................................... 58
(i)
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2.5 Repayments and Prepayments; General Provisions Regarding
Payments.................................................................................... 59
A. Scheduled Reductions of Commitments................................................. 59
B. Prepayments and Unscheduled Reductions in Commitments............................... 59
C. Application of Payments to Principal and Interest................................... 61
D. General Provisions Regarding Payments............................................... 61
2.6 Use of Proceeds............................................................................. 62
A. Loans............................................................................... 62
B. Margin Regulations.................................................................. 62
2.7 Special Provisions Governing Eurodollar Rate Loans.......................................... 63
A. Determination of Applicable Interest Rate........................................... 63
B. Inability to Determine Applicable Interest Rate..................................... 63
C. Illegality or Impracticability of Eurodollar Rate Loans............................. 63
D. Compensation For Breakage or Non-Commencement of
Interest Periods.................................................................... 64
E. Booking of Eurodollar Rate Loans.................................................... 64
F. Assumptions Concerning Funding of Eurodollar Rate Loans............................. 64
2.8 Increased Costs; Taxes; Capital Adequacy.................................................... 65
A. Compensation for Increased Costs and Taxes.......................................... 65
B. Withholding of Taxes................................................................ 66
C. Capital Adequacy Adjustment......................................................... 68
D. Obligation of the Lenders to Mitigate............................................... 69
2.9 Replacement of a Lender..................................................................... 69
A. Affected Lenders.................................................................... 69
B. Defaulting Lenders.................................................................. 70
C. Replacement Lenders................................................................. 70
2.10 Addition and Designation of Mortgaged Properties............................................ 71
A. Addition of Mortgaged Properties.................................................... 71
B. Designation of Mortgaged Properties................................................. 73
C. Removal of Designated Properties.................................................... 73
.................................................................................... 73
2.11 Releases of Mortgaged Properties............................................................ 73
A. Mortgaged Properties................................................................ 73
B. Effect of Release................................................................... 75
C. Revised Schedules................................................................... 75
SECTION 3.
CONDITIONS PRECEDENT........................................... 75
3.1 Conditions to Effectiveness................................................................. 75
A. Corporate Documents................................................................. 75
B. .................................................................................... 76
D. Financial Statements; Certificates.................................................. 76
E. No Material Adverse Effect.......................................................... 76
F. Security Interests.................................................................. 77
(ii)
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G. Casualty, Flood Insurance and Workers' Compensation................................. 81
H. Franchise Agreements; Franchise Estoppel Certificates. ............................. 82
I. Material Leases; Tenant Estoppel Certificates; Tenant
Subordination Agreements............................................................ 82
J. Environmental Audits................................................................ 82
K. Engineering Reports................................................................. 83
L. Appraisals. ........................................................................ 83
M. Opinions of the Company's Counsel................................................... 83
N. Opinion of Agent's Counsel.......................................................... 83
O. No Adverse Litigation............................................................... 84
P. Payment of Fees and Expenses........................................................ 84
Q. Deferred Maintenance Account........................................................ 84
R. Contingent Obligations.............................................................. 84
S. Completion of Proceedings........................................................... 84
T. Other Documents..................................................................... 84
3.2 Conditions to All Loans..................................................................... 85
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES................................. 86
4.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries................................................................................ 86
A. Organization and Powers............................................................. 86
B. Qualification and Good Standing..................................................... 87
C. Conduct of Business................................................................. 87
D. Subsidiaries........................................................................ 87
4.2 Authorization of Borrowing, etc............................................................. 87
A. Authorization of Borrowing.......................................................... 87
B. No Conflict......................................................................... 88
C. Governmental Consents............................................................... 88
D. Binding Obligation.................................................................. 88
E. Valid Issuance of Common Stock...................................................... 89
F. New York Stock Exchange Listing..................................................... 89
G. Related Documents; Representations and Warranties in other
Loan Documents...................................................................... 89
4.3 Financial Condition; No Material Adverse Effect; Contingent
Obligations................................................................................. 89
A. Financial Condition................................................................. 89
B. No Material Adverse Effect.......................................................... 90
C. Contingent Obligations.............................................................. 90
4.4 Mortgaged Properties; Existing Loans........................................................ 90
A. Mortgaged Properties................................................................ 90
B. Servicing Agreements................................................................ 90
C. Franchise Agreements................................................................ 91
(iii)
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D. Leases.............................................................................. 91
E. Liquor Licenses..................................................................... 91
4.5 Litigation; Adverse Facts................................................................... 91
4.6 Taxes....................................................................................... 92
4.7 Performance of Agreements; Materially Adverse Agreements.................................... 92
4.8 Governmental Regulation; Securities Activities.............................................. 93
4.9 Employee Benefit Plans...................................................................... 93
A. ERISA............................................................................... 93
B. ERISA Event......................................................................... 93
C. Unfunded Benefit Liabilities........................................................ 93
D. Potential Withdrawal Liability...................................................... 94
4.10 Certain Fees................................................................................ 94
4.11 Solvency.................................................................................... 94
4.12 Disclosure.................................................................................. 94
4.13 Liens on the Collateral..................................................................... 95
A. General............................................................................. 95
B. Mortgages........................................................................... 95
C. Assignments of Rents and Leases..................................................... 96
D. Mechanics' Liens.................................................................... 96
E. Filings and Recordings.............................................................. 96
4.14 Zoning; Authorizations...................................................................... 96
A. Zoning.............................................................................. 96
B. Authorizations...................................................................... 97
4.15 Physical Condition; Encroachment............................................................ 97
4.16 Insurance................................................................................... 97
4.17 Leases...................................................................................... 98
4.18 Environmental Reports; Engineering Reports; Appraisals; Market
Studies..................................................................................... 98
4.19 No Condemnation or Casualty................................................................. 98
4.20 Utilities and Access........................................................................ 98
4.21 Intellectual Property....................................................................... 98
A. Ownership; IP License Agreements.................................................... 98
B. No Material Adverse Claims.......................................................... 99
4.22 Wetlands.................................................................................... 99
4.23 Cash Management System...................................................................... 99
4.24 Labor Matters............................................................................... 100
4.25 Employment and Labor Agreements............................................................. 100
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS..................................... 100
5.1 Financial Statements and Other Reports...................................................... 100
5.2 Common Stock................................................................................ 107
5.3 Corporate Existence......................................................................... 107
(iv)
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5.4 Taxes and Potential Lien Claims; Tax Consolidation.......................................... 107
A. Taxes and Potential Lien Claims..................................................... 107
B. Tax Consolidation................................................................... 108
5.5 Maintenance of Properties; Repair; Alteration............................................... 108
A. Maintenance, Repair and Alteration.................................................. 108
B. Environmental Repairs............................................................... 108
5.6 Inspection; Lender Meeting; Appraisals...................................................... 109
A. Inspection and Lender Meeting....................................................... 109
B. Appraisals.......................................................................... 109
5.7 Compliance with Laws, Authorizations, etc................................................... 109
5.8 Performance of Loan Documents and Related Documents......................................... 110
A. Loan Documents...................................................................... 110
B. Related Documents................................................................... 110
5.9 Payment of Liens............................................................................ 110
A. Removal by Loan Parties............................................................. 110
B. Removal by the Agent................................................................ 111
C. Title Searches...................................................................... 111
5.10 Insurance................................................................................... 111
A. Risks to be Insured................................................................. 111
B. Policy Provisions................................................................... 114
C. Increases in Coverage............................................................... 115
D. Payment of Proceeds................................................................. 115
E. Delivery of Counterpart Policies; Evidence.......................................... 116
F. Replacement or Renewal Policies..................................................... 116
G. Material Change in Policy........................................................... 116
H. Reports of Insurance Broker......................................................... 116
I. Separate Insurance.................................................................. 117
5.11 Casualty and Condemnation................................................................... 117
A. Notice of Casualty.................................................................. 117
B. Insurance Proceeds.................................................................. 117
C. Notice of Condemnation; Negotiation and Settlement of
Claims.............................................................................. 118
D. Condemnation Proceeds............................................................... 118
E. Certain Minor Casualties and Takings................................................ 119
F. Reduction of Borrowing Base......................................................... 120
G. Restoration......................................................................... 121
H. Engineer's Inspection............................................................... 123
5.12 Renovations................................................................................. 123
A. Notice of Renovation; Renovation Plans.............................................. 123
B. Conduct of Renovation............................................................... 124
C. Completion Certificate.............................................................. 124
D. Engineer's Inspection............................................................... 124
5.13 ▇▇▇▇▇▇▇▇ Clause............................................................................. 124
5.14 Interest Rate Protection.................................................................... 125
(v)
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5.15 Cash Management System; Agent Rights; Application of Cash Flow;
Depository Account Names.................................................................... 125
A. Cash Management System.............................................................. 125
B. Agent Rights........................................................................ 126
C. Application of Cash Flow............................................................ 127
D. Names on Depository Accounts........................................................ 127
5.16 Capital Expenditures........................................................................ 127
5.17 Management of Properties; Liquor Licenses................................................... 128
A. Management of Properties............................................................ 128
B. Liquor Licenses..................................................................... 129
5.18 Further Assurances.......................................................................... 129
A. Assurances.......................................................................... 129
B. Execution of Subsidiary Guaranties.................................................. 129
C. Filing and Recording Obligations.................................................... 129
D. Costs of Defending and Upholding the Lien........................................... 130
E. Costs of Enforcement................................................................ 130
F. Furnishing of Documents............................................................. 130
SECTION 6.
COMPANY'S NEGATIVE COVENANTS....................................... 131
6.1 Indebtedness................................................................................ 131
6.2 Liens and Related Matters................................................................... 133
A. Prohibition on Liens................................................................ 133
B. Equitable Lien in Favor of Lenders.................................................. 133
C. No Further Negative Pledges......................................................... 134
D. No Restrictions on Subsidiary Distributions to the Company
or Other Subsidiaries............................................................... 134
6.3 Investments and Joint Ventures.............................................................. 135
6.4 Contingent Obligations...................................................................... 137
6.5 Restricted Payments......................................................................... 137
6.6 Financial Covenants......................................................................... 138
A. Minimum Consolidated Net Worth...................................................... 138
B. Minimum Interest Coverage Ratio..................................................... 138
C. Maximum Total Debt Leverage Ratio................................................... 139
D. Maximum Total Debt/Market Capitalization Ratio...................................... 140
E. Maximum Total Debt/Book Capitalization.............................................. 140
6.7 Fundamental Changes......................................................................... 141
6.8 Zoning and Contract Changes and Compliance.................................................. 142
6.9 No Joint Assessment; Separate Lots.......................................................... 142
6.10 Transactions with Affiliated Persons........................................................ 142
6.11 Sale-Leaseback Transactions................................................................. 143
6.12 Sale or Discount of Receivables............................................................. 143
6.13 Transfer of Subsidiary Stock................................................................ 143
(vi)
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6.14 Conduct of Business......................................................................... 144
6.15 Management of Mortgaged Properties.......................................................... 144
6.16 Material Leases............................................................................. 144
6.17 Issuance of Preferred Stock................................................................. 144
6.18 Fiscal Year................................................................................. 145
6.19 Intellectual Property; Franchise Agreements................................................. 145
A. Intellectual Property................................................................... 145
B. Franchise Agreements.................................................................... 145
SECTION 7.
EVENTS OF DEFAULT; REMEDIES....................................... 145
7.1 Events of Default........................................................................... 145
A. Failure to Make Payments When Due................................................... 145
B. Default in Other Agreements......................................................... 145
C. Breach of Certain Covenants......................................................... 146
D. Breach of Warranty.................................................................. 146
E. Invalidity of Loan Document; Failure of Security;
Repudiation of Obligations.......................................................... 146
F. Prohibited Transfers................................................................ 147
G. Other Defaults Under Loan Documents or Related
Documents........................................................................... 147
H. Involuntary Bankruptcy; Appointment of Receiver, etc................................ 147
I. Voluntary Bankruptcy; Appointment of Receiver, etc.................................. 148
J. Judgments and Attachments........................................................... 148
K. Dissolution......................................................................... 148
L. Employee Benefit Plans.............................................................. 148
M. Material Adverse Effect............................................................. 148
N. Change of Control................................................................... 149
O. Employment of Simon and ▇▇▇▇▇▇...................................................... 149
P. Ownership of Subsidiaries........................................................... 149
7.2 Remedies.................................................................................... 149
SECTION 8.
MISCELLANEOUS.............................................. 152
8.1 Assignments and Participations in Loans..................................................... 152
A. General............................................................................. 152
B. Participations...................................................................... 152
C. Assignments to Federal Reserve Banks................................................ 152
D. Information......................................................................... 153
8.2 Expenses.................................................................................... 153
8.3 Indemnity................................................................................... 154
A. Indemnity........................................................................... 154
B. Procedure........................................................................... 155
C. Contribution........................................................................ 156
(vii)
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D. No Limitation....................................................................... ▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇ of Indemnity........................................................... 156
8.4 No Joint Venture or Partnership............................................................. 157
8.5 Ratable Sharing............................................................................. 157
8.6 Amendments and Waivers...................................................................... 158
8.7 Independence of Covenants................................................................... 159
8.8 Notices..................................................................................... 159
8.9 Survival of Representations, Warranties and Agreements...................................... 160
8.10 Agent's Discretion.......................................................................... 160
8.11 Obligations Several; Independent Nature of the Lenders' Rights.............................. 160
8.12 Remedies of the Company..................................................................... 160
8.13 Marshalling; Payments Set Aside............................................................. 161
8.14 Maximum Amount.............................................................................. 161
8.15 Severability................................................................................ 162
8.16 Headings.................................................................................... 162
8.17 Applicable Law.............................................................................. 162
8.18 Successors and Assigns...................................................................... 162
8.19 Consent to Jurisdiction and Service of Process.............................................. 163
8.20 Waiver of Jury Trial........................................................................ 163
8.21 Counterparts; Effectiveness................................................................. 164
8.22 Material Inducement......................................................................... 164
8.23 Entire Agreement............................................................................ 165
8.24 Confidentiality............................................................................. 165
8.25 Documentation Agent......................................................................... 165
SECTION 9.
AGENT AND CO-AGENTS.................................................................................. 165
9.1 Appointment................................................................................. 165
9.2 Powers; General Immunity.................................................................... 166
A. Duties Specified.................................................................... 166
B. No Responsibility for Certain Matters............................................... 166
C. Exculpatory Provisions.............................................................. 167
D. Agent and Co-Agents Entitled to Act as Lender....................................... 167
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness............................................................................ 167
9.4 Right to Indemnity.......................................................................... 168
9.5 Payee of Note Treated as Owner.............................................................. 168
9.6 Security Documents, Etc..................................................................... 169
A. Security Documents.................................................................. 169
B. Lender Action....................................................................... 169
9.7 Successor Agent............................................................................. 169
(viii)
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EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF NOTICE OF CONTINUATION
IV FORM OF COMPLIANCE CERTIFICATE
V FORM OF BORROWING BASE CERTIFICATE
VI FORM OF SUBSIDIARY GUARANTY
VII FORM OF SECURITY AND PLEDGE AGREEMENT
VIII FORM OF INTELLECTUAL PROPERTY LICENSE AGREEMENT
IX FORM OF CASH MANAGEMENT LETTER
X FORM OF CASH MANAGER CASH MANAGEMENT AGREEMENT
XI FORM OF ENVIRONMENTAL INDEMNITY
XII FORM OF OPINION OF LOAN PARTIES' COUNSEL
XIII FORM OF ADDITION CERTIFICATE
XIV FORM OF AGREEMENT REGARDING SERVICING AGREEMENTS AND
LIQUOR LICENSES
XV FORM OF OPERATING STATEMENTS
(ix)
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SCHEDULES
1.1A MORTGAGED PROPERTIES
1.1B OTHER PROPERTIES
1.1E COMPANY'S BASIS IN MORTGAGED PROPERTIES
1.1F GROUND LEASES
2.2 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1I MAJOR LEASE ESTOPPELS AND CONSENTS
3.1Q DEFERRED MAINTENANCE
4.1 JURISDICTIONS WHERE THE LOAN PARTIES AND SUBSIDIARIES
CONDUCT BUSINESS
4.2C GOVERNMENT CONSENTS
4.2E OTHER ISSUED AND OUTSTANDING SECURITIES OF THE COMPANY
4.3 CERTAIN CONTINGENT OBLIGATIONS
4.4A RIGHTS OF REPURCHASE/RIGHTS OF REFUSAL
4.4B SERVICING AGREEMENTS
4.4C FRANCHISE AGREEMENTS
4.4D MATERIAL LEASES
4.4E LIQUOR LICENSES
4.5 LITIGATION
4.6 TAX EXTENSIONS
4.7 RESTRICTIONS ON BUSINESS
4.14A ZONING
4.14B AUTHORIZATIONS
4.15 CERTAIN ENVIRONMENTAL AND ENGINEERING ISSUES
4.16 INSURANCE
4.21A INTELLECTUAL PROPERTY
4.22 WETLANDS
4.23 CASH MANAGEMENT SYSTEM
4.25 EMPLOYMENT AND LABOR AGREEMENTS
5.1 FORM OF FINANCIAL PROJECTIONS
6.10 AFFILIATE TRANSACTIONS
(x)
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AMENDED AND RESTATED SENIOR SECURED
REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT is
dated as of December 17, 1997 and entered into among PRIME HOSPITALITY CORP., a
Delaware corporation (the "COMPANY"), THE LENDERS LISTED ON THE SIGNATURE PAGES
HEREOF (individually referred to herein as a "LENDER" and collectively as the
"LENDERS"), SOCIETE GENERALE, SOUTHWEST AGENCY, as documentation agent (in such
capacity, "DOCUMENTATION AGENT"), CREDIT LYONNAIS NEW YORK BRANCH, as
syndication agent (in such capacity, "SYNDICATION AGENT"), and BANKERS TRUST
COMPANY ("BANKERS"), as agent for the Lenders (in such capacity, the "AGENT")
R E C I T A L S
WHEREAS, pursuant to that certain Senior Secured Revolving Credit
Agreement dated as of June 26, 1996, by and among the Company, the financial
institutions listed on the signature pages thereof, Credit Lyonnais New York
Branch, as documentation agent, and the Agent (the "EXISTING AGREEMENT"),
certain credit facilities were made available to the Company to be used for
general corporate purposes of the Company including the acquisition and
development of new hotel properties;
WHEREAS, the lenders under the Existing Agreement (the "EXISTING
LENDERS") desire to sell to the Lenders hereunder, and the Lenders hereunder
desire to purchase from the Existing Lenders the loans (the "EXISTING LOANS")
evidenced by the notes issued under the Existing Agreement (the "EXISTING
NOTES"), together with certain documents, instruments, certificates, agreements,
indemnities and other materials evidencing, governing, securing or otherwise
relating to the Existing Loan (the "EXISTING LOAN DOCUMENTS"); and
WHEREAS, simultaneously with the sale of the Existing Notes to the
Lenders, the Lenders and the Company desire to consolidate, amend and restate
the Existing Notes and the Existing Agreement in order to (i) increase the
Commitments by $100,000,000 to $200,000,000, (ii) change Credit Lyonnais New
York Branch, from documentation agent to syndication agent, (iii) add Societe
Generale, Southwest Agency as documentation agent, (iv) adjust the financial
covenants, (v) allow the Company to make certain debt Investments secured by
mortgages on real property, (vi) add certain Lenders not party to the Existing
Agreement, and (vii) make certain other amendments to the Existing Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Company, the Lenders and the
Agent agree as follows:
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SECTION 1.
INTERPRETATION
This Agreement and the other Loan Documents shall be construed and
interpreted in accordance with this Section 1.
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement and the other Loan Documents
shall have the following meanings when used herein with initial capital letters:
"ACQUISITION AGREEMENTS" means, collectively, the agreements entered
into after the Closing Date by the Company and any of its Subsidiaries in
connection with the acquisition of any fee or ground leasehold interest in any
Mortgaged Property.
"ACQUISITION DATE" means, with respect to any Property, the date such
Property was acquired by the Company or any of its Subsidiaries.
"ADDITION CERTIFICATE" means an Officer's Certificate, substantially in
the form attached hereto as Exhibit XIII, delivered to the Agent pursuant to
subsection 2.10.
"ADDITION DATE" means the following:
(i) with respect to any New Mortgaged Property listed on
Schedule 1.1A as of the Restatement Closing Date, the Restatement
Closing Date;
(ii) with respect to any Existing Mortgaged Property listed on
Schedule 1.1A as of the Restatement Closing Date, the Closing Date or
such other date prior to the Restatement Closing Date on which the
Agent approved the Designation of such Property in accordance with the
provisions of subsection 2.10; and
(iii) with respect to any Additional Mortgaged Property
designated after the Restatement Closing Date in accordance with
subsection 2.10, the date on which the Agent approves the Designation
of such Property in accordance with the provisions of subsection 2.10.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that term
in subsection 2.10.
"ADJUSTED CONSOLIDATED EBITDA" means, for any period, Consolidated
EBITDA calculated only with respect to assets owned by the Company and its
Subsidiaries at the date of such calculation (i.e., excluding assets sold as
part of a sale-leaseback transaction or otherwise).
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"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to a Eurodollar Rate Loan, the rate per annum obtained by
dividing (i) the Eurodollar offered rate for deposits with maturities comparable
to the Interest Period for which such Adjusted Eurodollar Rate will apply as of
approximately 10:00 A.M. (New York time) on such Interest Rate Determination
Date as set forth on Telerate Page 4756 (or such other page as may, in the
opinion of the Agent, replace such page for the purpose of displaying such rate)
by (ii) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.7C.
"AFFECTED LOANS" has the meaning assigned to that term in subsection
2.7C.
"AFFILIATE" means with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGENT" has the meaning assigned to that term in the introduction to
this Agreement and also means and includes any successor Agent hereunder.
"AGREEMENT" means this Amended and Restated Senior Secured Revolving
Credit Agreement dated as of the date first written above among the Company, the
Lenders, Syndication Agent, Documentation Agent and the Agent, as it may be
amended, restated, supplemented or otherwise modified from time to time.
"ALTA" means the American Land Title Association or any successor
thereto.
"ANNIVERSARY" means each of the dates that are anniversaries of the
Restatement Closing Date.
"APPLICABLE LAWS" means, collectively, all statutes, laws, rules,
regulations, ordinances, orders, decisions, writs, judgments, decrees and
injunctions of Governmental Authorities (including Environmental Laws) affecting
the Agent, any Lender, the Company, any Loan Party or the Collateral or any part
thereof (including the acquisition, development, construction, Renovation,
occupancy, use, improvement, alteration, management, operation, maintenance,
repair or restoration thereof), whether now or hereafter enacted and in force,
and all Authorizations relating thereto, and all covenants, conditions and
restrictions contained in any
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instruments, either of record or known to the Company or any other Loan Party,
at any time in force affecting any Property or any part thereof, including any
such covenants, conditions and restrictions which may (i) require improvements,
repairs or alterations in or to such Property or any part thereof or (ii) in any
way limit the use and enjoyment thereof; for purposes of usury, Applicable Laws
means the law of the State of New York applicable to maximum rates of interest.
"APPRAISED VALUE" means, as of any date of determination and with
respect to any Mortgaged Property, the appraised value of such Mortgaged
Property, in each case as most recently determined by an Appraisal approved by
the Agent on or before such date of determination and subject to the
requirements set forth in subsection 5.6B.
"APPRAISER" means CB Commercial Real Estate Group, Inc. or any other
independent appraiser selected by the Agent and reasonably acceptable to the
Company who meets all regulatory requirements applicable to the Agent and the
Lenders, who is a member of the Appraisal Institute with a national practice and
who has at least 10 years experience with real estate of the same type and in
the geographic area of the Property to be appraised.
"APPRAISAL" means, with respect to any Mortgaged Property, a written
appraisal of such Mortgaged Property prepared by an Appraiser and requested by
the Agent pursuant to subsection 5.6B or delivered to the Agent pursuant to
subsection 3.1L, in each case in form, content and methodology satisfactory to
the Agent and in compliance with all applicable legal and regulatory
requirements (including the requirements of Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, 12 U.S.C.
Sections 3331, et seq., as amended (or any successor statute thereto), and the
regulations promulgated thereunder).
"APPROVED ENVIRONMENTAL CONSULTANT" means Dames & ▇▇▇▇▇ or any other
qualified, independent environmental consultant reasonably acceptable to the
Agent.
"ASSET SALE" means (i) the sale, lease (other than operating leases in
respect of facilities which are ancillary to the operation of the Company's or a
Subsidiary's Properties), conveyance or other disposition of any property or
assets of the Company or any Subsidiary of the Company (including by way of a
sale-leaseback transaction and including a disposition by the Company or a
Subsidiary of Equity Interests in a Subsidiary), (ii) the issuance or sale of
Equity Interests of any of the Company's Subsidiaries or (iii) any event of loss
by reason of casualty, condemnation or otherwise, other than, with respect to
clauses (i), (ii), and (iii) above, the following: (1) the sale or disposition
of personal property held for sale in the ordinary course of business, (2) the
sale or disposal of damaged, worn out or other obsolete property in the ordinary
course of business so long as such property is no longer necessary for the
proper conduct of the business of the Company or such Subsidiary, as applicable,
(3) the transfer of assets (other than assets that constitute Collateral) by the
Company to a Subsidiary of the Company or by a Subsidiary of the Company to the
Company or to another Subsidiary of the Company, (4) the exchange of assets
(other than assets which constitute Collateral) held by the Company or a
Subsidiary of the Company for one or more hotels and/or one or more
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Hospitality-Related Businesses of any Person owning one or more hotels and/or
one or more Hospitality-Related Businesses; provided, that the board of
directors of the Company has determined that the terms of any exchange are fair
and reasonable and that the fair market value of the assets received by the
Company as set forth in an opinion of a Qualified Appraiser, are equal to or
greater than the fair market value of the assets exchanged by the Company or a
Subsidiary of the Company, (5) any Restricted Payment, dividend or purchase or
retirement of Equity Interests permitted under this Agreement, (6) the
conversion of or foreclosure on any mortgage or note, provided that the Company
or a Subsidiary of the Company receives the real property underlying any such
mortgage or note and (7) any transaction or series of related transactions
(other than a sale, lease, conveyance or other disposition of any hotel property
or Land) that would otherwise be an Asset Sale where the aggregate fair market
value of the assets subject to such transaction or series of transactions is
less than $5,000,000 unless such transaction or series of transactions, or the
receipt of any proceeds therefrom (or the application or failure to apply any
such proceeds or any other amount determined in whole or in part upon the
receipt or application of such proceeds) would result in or require the
repayment or prepayment of any Indebtedness or the payment of any other amount
under any other agreement.
"ASSIGNMENT OF RENTS AND LEASES" means each Assignment of Rents and
Leases executed and acknowledged by the Loan Party thereto in favor of the Agent
for the benefit of the Agent and the Lenders in the form delivered on the
Closing Date or the Restatement Closing Date, as the case may be, as any such
Assignment of Rents and Leases may be amended, restated, supplemented,
consolidated, extended or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"ASSIGNMENT OF RENTS AMENDMENTS" has the meaning assigned to such term
in subsection 3.1F(xii).
"ASSUMED BORROWING BASE AMOUNT" means as of any date of determination,
the amount which, if (i) multiplied by a per annum interest rate equal to the
Adjusted Eurodollar Rate at the time of such calculation plus 2.00% and such
product is then (ii) divided into the aggregate Property EBITDA with respect to
all Designated Mortgaged Properties, measured for the 12 most recent complete
calendar months for which financial statements have been delivered pursuant to
subsection 5.1(i), results in a ratio equal to or exceeding the applicable ratio
set forth below:
PERIOD RATIO
From and including the Restatement Closing 2.00 to 1.00
Date - to but excluding the third Anniversary
From and including the third Anniversary - to 2.25 to 1.00
but excluding the fourth Anniversary
From and including the fourth Anniversary and 2.50 to 1.00
thereafter
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"AUTHORIZATION" means any authorization, approval, franchise, license,
variance, land use entitlement, sewer and waste water discharge permit, storm
water discharge permit, air pollution authorization to operate, certificate of
occupancy, municipal water and sewer connection permit, and any like or similar
permit now or hereafter required for the construction or Renovation of any
Improvements located on any Mortgaged Property or for the use, occupancy or
operation of any Mortgaged Property and all amendments, modifications,
supplements and addenda thereto.
"AUTHORIZED OFFICER" means any executive officer of the Company,
including the chairman of the board of directors, president, chief executive
officer, chief financial officer, vice president or treasurer of the Company.
"BANKERS" has the meaning assigned to that term in the introduction to
this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the rate per annum that is the higher
of (i) the Prime Rate and (ii) the sum of (a) the Federal Funds Effective Rate
plus (b) 1/2 of 1%.
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.3A.
"BOA LOAN AGREEMENT" means that certain $30,000,000 Master Line of
Credit Agreement made as of August 14, 1996 by and among Extended Stay Limited
Partnership, as predecessor in interest to Homegate, and Bank One, Arizona, N.A.
"BORROWING BASE" means, as of any date of determination from and after
the Restatement Closing Date through and including the Maturity Date, the amount
determined by the Agent as of the last day of the preceding month or, if
subsequent thereto, the most recent Addition Date or Release Date, that is equal
to the sum of the Property Amounts in respect of all Designated Mortgaged
Properties as of such date of determination; provided, that the calculation of
the Borrowing Base shall exclude:
(i) (a) if the applicable date of determination is on or
before the fourth Anniversary, the amount, if any, by which the
aggregate Property Amount from Class 2 Mortgaged Properties that are
Designated Mortgaged Properties exceeds 50% of the amount determined
pursuant to this definition as of such date of determination, and (b)
if the applicable date of determination is after the fourth
Anniversary, the amount, if any, by which the aggregate Property Amount
from Class 2 Mortgaged Properties that are Designated Mortgaged
Properties exceeds 25% of the amount determined pursuant to this
definition as of such date of determination;
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(ii) the amount by which the Property Amount with respect to
any Designated Mortgaged Property exceeds 15% of the amount determined
pursuant to this definition;
(iii) if the applicable date of determination shall occur
during a Zoning Violation with respect to a Mortgaged Property, the
Property Amount with respect to such Mortgaged Property; and
(iv) the Property Amount with respect to any Mortgaged
Property listed on Schedule 4.4A annexed hereto.
provided, that (x) the Borrowing Base is subject to (A) recomputation from time
to time as provided in subsections 2.5B(iii) and 2.10 and (B) adjustment from
time to time as provided in the definitions of "Mortgaged Property Amount" and
"Property EBITDA," respectively and (y) in no event shall the Borrowing Base
exceed the Assumed Borrowing Base Amount as of such date of determination.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the
form annexed hereto as Exhibit V delivered by the Company pursuant to subsection
3.1D(iii) or 5.1(ii).
"▇▇▇▇▇ TROUT" means ▇▇▇▇▇ Trout Investments, Ltd.
"▇▇▇▇▇ TROUT INVESTMENTS" has the meaning assigned to that term in
subsection 6.3(iii).
"BUSINESS DAY" means (i) for all purposes other than as covered by (ii)
below, any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the State of New York or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close and (ii) with respect to notices, determinations,
fundings and payments in connection with the Adjusted Eurodollar Rate or any
Eurodollar Rate Loans, any day that is a Business Day described in clause (i)
above and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL ITEMS" means the cost of capital repairs and replacements of
all or any portion of the Improvements or any other portion of any Property,
including (i) the cost of tenant improvements and brokerage commissions payable
in connection with lease transactions at any Property, (ii) costs of
environmental audits and monitoring, environmental remediation work or any other
costs and expenses incurred with respect to compliance with Environmental Laws,
(iii) the cost of any Restoration, (iv) the cost of any Renovation, (v) costs of
FF&E, (vi) costs of appraisals, valuations, title insurance and inspections and
(vii) any other costs incurred in connection with the Properties to the extent
such costs would be capitalized on a balance sheet in accordance with GAAP.
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"CAPITAL LEASE" means, with respect to any Person, lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a Capital Lease on the balance sheet
of that Person.
"CAPITAL LEASE OBLIGATIONS" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be so required to be capitalized on the balance sheet of
that Person in accordance with GAAP.
"CAPITAL RESERVE ACCOUNT" means, collectively, one or more
interest-bearing accounts to be established and maintained by the Company at the
offices of the Agent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, each in
the name of "Bankers Trust Company, as Agent - Prime Hospitality Corp. Capital
Reserve Account," with such additional identifying references in such name as
the Company and the Agent shall agree.
"CAPITAL STOCK" means, with respect to any Person, any capital stock,
partnership or joint venture interests of such Person and shares, interests,
participations or other ownership interests (however designated) of any Person
and any rights (other than debt securities convertible into any of the
foregoing), warrants or options to purchase any of the foregoing.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means, as of any date of determination, (i)
marketable securities issued or directly and fully guaranteed or insured by the
government of the United States of America or any agency or instrumentality
thereof having maturities of not more than six months from the date of
acquisition, (ii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months from the date of
acquisition and overnight bank deposits, in each case with any domestic
commercial bank having capital and surplus in excess of $500,000,000, (iii)
repurchase obligations with a term not more than seven days for underlying
securities of the types described in clauses (i) and (ii) entered into with any
financial institution meeting the qualifications specified in clause (ii) above,
(iv) commercial paper or commercial paper master notes having a rating of P-2 or
the equivalent thereof by ▇▇▇▇▇'▇ or A-2 or the equivalent thereof by S&P
Corporation and in each case maturing within six months after the date of
acquisition, (v) money market mutual funds that provide daily purchase and
redemption features and (vi) corporate debt with maturities of not greater than
six months and with a rating of A or the equivalent thereof by S&P and a rating
of A2 or the equivalent thereof by ▇▇▇▇▇'▇.
"CASH MANAGEMENT LETTERS" means (i) the Cash Manager Cash Management
Agreement, (ii) each letter agreement among each Loan Party, its Subsidiaries
(if applicable), the financial institutions at which Deposit Accounts are
located pursuant to the Cash Management System and the Agent, in each case
substantially in the form of Exhibit IX annexed hereto with such changes as are
acceptable to the Agent (approval of such changes not to be unreasonably
withheld or delayed, and (iii) all other agreements with or directions to the
financial institutions at which Deposit Accounts are located reasonably
satisfactory to the Agent,
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in either case pursuant to which, in accordance with subsection 5.15, such
financial institutions are to direct funds from such Deposit Accounts to the
Concentration Account.
"CASH MANAGEMENT SYSTEM" means the system of Deposit Accounts of Loan
Parties and their Subsidiaries pursuant to which all Receipts of Loan Parties
and such Subsidiaries related to the Mortgaged Properties are collected and
distributed, all as described in Schedule 4.23 annexed hereto, as it may be
modified from time to time in accordance with the terms hereof.
"CASH MANAGER" means PNC Bank, or any other domestic commercial bank
designated by the Company to the Agent having capital and surplus in excess of
$500,000,000.
"CASH MANAGER CASH MANAGEMENT AGREEMENT" means the letter agreement
substantially in the form of Exhibit X annexed hereto and delivered pursuant to
subsection 3.1F(x) by and among the Cash Manager, the Agent and the Company.
"CASH PROCEEDS" means, with respect to any sale or other disposition or
refinancing of any Property, cash payments (including any cash received by way
of deferred payment pursuant to, or monetization of, a note receivable or
otherwise, but only as an when so received) received from such sale or
disposition or refinancing.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the sale, lease or transfer, in one or a series of related transactions, of all
or substantially all of the Company's assets to any person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) other than to a Subsidiary
Guarantor, (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company, (iii) the acquisition by any person or group (as
such term is used in ▇▇▇▇▇▇▇ ▇▇ (▇)(▇) ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇) of a direct or
indirect interest in more than 50% of the ownership of the Company or the voting
power of the voting stock of the Company by way of purchase, merger or
consolidation or otherwise (other than a creation of a holding company that does
not involve a change in the beneficial ownership of the company as a result of
such transaction), (iv)(a) any consolidation of the Company with, or merger of
the Company into, any other Person, any merger of another Person into the
Company, (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of capital stock of
the Company or reclassification, conversion or exchange of outstanding shares of
capital stock of the Company solely into shares of capital stock of the
Company), or (b) the merger or consolidation of the Company with or into another
corporation or the merger of another corporation into the Company, in each case
with the effect that immediately after such transaction the stockholders of the
Company immediately prior to such transaction hold less than 50% of the total
voting power of all securities generally entitled to vote in the election of
directors, managers, or trustees of the Person surviving such merger or
consolidation, (v)(a) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors or (b) a change
in the Board of Directors of the Company in which the individuals who
constituted the Board of Directors of the Company or whose nomination for
election by the shareholders of the Company was approved by a vote of at least a
majority of
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the directors then in office either who were directors at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors then in office;
provided, however, that, with respect to clauses (iv)(a) and (v)(a), a Change of
Control shall not be deemed to have occurred if any Convertible Notes are
outstanding and the closing price per share of the Company Stock for any five
trading days within the period of ten consecutive trading days ending
immediately before the Convertible Notes shall equal or exceed 105% of the
conversion price of such Convertible Notes in effect on each such trading day. A
"beneficial owner" shall be determined in accordance with Rule 13d-3 promulgated
by the Securities and Exchange Commission under the Exchange Act, as in effect
on the date of execution of the Convertible Note Indenture.
"CLASS 1 MORTGAGED PROPERTIES" means, as of any date of determination,
Mortgaged Properties that have been in full operation more than 12 complete,
consecutive calendar months following the completion of the construction or
Complete Renovation/Restoration thereof.
"CLASS 2 MORTGAGED PROPERTIES" means, as of any date of determination,
Mortgaged Properties that have been in full operation for less than 12 complete,
consecutive calendar months following the completion of the construction or
Complete Renovation/Restoration thereof.
"CLOSING DATE" means June 26, 1996, the date on which the initial loans
under the Existing Agreement were made.
"CO-AGENTS" shall have the meaning assigned to such term in subsection
9.1.
"COLLATERAL" means, collectively, all property (including capital
stock), whether real, personal or mixed, tangible or intangible, owned or to be
owned or leased or to be leased or otherwise held or to be held by the Company
or any of its Subsidiaries or in which the Company or any of its Subsidiaries
has or shall acquire an interest, to the extent of the Company's or such
Subsidiary's interest therein, now or hereafter granted, assigned, transferred,
mortgaged or pledged to the Agent and/or the Lenders or in which a Lien is
granted to the Agent and/or the Lenders to secure all or any part of the
Obligations, whether pursuant to the Security Documents or otherwise, including,
without limitation, the Mortgaged Properties, the Leases, Rents and, Acquisition
Documents related to the Mortgaged Properties, and any and all proceeds of the
foregoing.
"COLLECTING AGENT(S)" has the meaning assigned to that term in
subsection 5.15B(i).
"COMMITMENTS" means, collectively, the commitments of the Lenders to
make Loans to the Company pursuant to subsection 2.2A and to pay the Purchase
Price pursuant to subsection 2.1.
"COMMON STOCK" means the common stock of the Company, par value $.01
per share.
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"COMPANY" has the meaning assigned to that term in the introduction to
this Agreement.
"COMPLETE RENOVATION/RESTORATION" means, as of any date of
determination, any Renovation or Restoration of a Property with respect to which
more than 60% of the available rooms located at the applicable Property have
been, are scheduled to be, or could reasonably be expected to be, "rooms
out-of-order," as determined in accordance with the Uniform System during 5 or
more days during any period of 30 consecutive days.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit IV annexed hereto delivered to the Agent by the Company pursuant to
subsection 5.1(vi).
"CONCENTRATION ACCOUNT" means an interest bearing account established
and maintained in the name of the Agent at the offices of the Cash Manager
pursuant to the terms of the Security Agreement, to which all funds on deposit
in the Deposit Accounts included in the Cash Management System are directed by
the Agent in accordance with subsection 5.15.
"CONDEMNATION PROCEEDS" means all compensation, awards, damages, rights
of action and proceeds awarded to any Loan Party or any of its Subsidiaries by
reason of any Taking.
"CONSOLIDATED EBITDA" means, with respect to the Company and its
Subsidiaries for any period and as of any date of determination, Consolidated
Net Income plus (a) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, to the extent such losses were
deducted in computing Consolidated Net Income, plus (b) the provision for taxes
based on income or profits of the Company and its Subsidiaries for such period,
to the extent such provision for taxes was included in computing Consolidated
Net Income, plus (c) Consolidated Interest Expense of the Company and its
Subsidiaries for such period to the extent such expense was deducted in
computing Consolidated Net Income, plus (d) depreciation and amortization
expense of the Company and its Subsidiaries for such period to the extent
deducted in computing Consolidated Net Income in each case, on a consolidated
basis and determined in accordance with GAAP, less (e) other income of the
Company and its Subsidiaries (including any non-cash items increasing
Consolidated Net Income for such period) for such period to the extent such
other income was added in computing Consolidated Net Income and was calculated
in accordance with GAAP, plus (f) any cash dividends received from joint
ventures (up to 5% of Consolidated EBITDA) for which the earnings of such joint
ventures have been excluded from this calculation, provided that if any hotel
property has been sold subsequent to the commencement of such calculation period
pursuant to a sale-leaseback transaction not prohibited by this Agreement,
Consolidated EBITDA shall be reduced by the amount by which, for the period
beginning at the date of the sale-leaseback transaction, the revenues of such
hotel property exceeded Operating Expenses.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to the Company and
its Subsidiaries for any period and as of any date of determination, without
duplication, the sum of (a) interest expense, whether paid or accrued, to the
extent such expense was deducted in computing Consolidated Net Income (including
amortization or original issue discount, non-cash
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interest payments, the interest component of Capital Lease Obligations, and net
payments (if any) pursuant to Hedging Obligations, but excluding amortization of
deferred financing fees, (b) commissions, discounts and other fees and charges
paid or accrued with respect to letters of credit and bankers' acceptance
financing and (c) interest for which the Company or its Subsidiaries is liable
pursuant to Indebtedness or under a Guaranty of Indebtedness of any other
Person, but only to the extent actually paid by the Company or any of its
Subsidiaries; in each case calculated for the Company and its Subsidiaries for
such period on a consolidated basis as determined in accordance with GAAP;
provided that when this definition is used for purposes of determining
compliance with the financial covenants contained in Section 6.6, it shall be
applied as of the date of determination and measured for the 12 most recent
complete calendar months for which financial statements have been delivered
pursuant to subsection 5.1.
"CONSOLIDATED NET INCOME" means, with respect to any Person as of any
date of determination, the aggregate of the Net Income of such Person and its
Subsidiaries, on a consolidated basis, determined in accordance with GAAP,
measured for the 12 most recent complete calendar months for which financial
statements have been delivered pursuant to subsection 5.1; provided, that (i)
the Net Income of any Person that is not a Subsidiary or that is accounted for
by the equity method of accounting shall be excluded, whether or not distributed
to the Company or one of its Subsidiaries, (ii) the Net Income of any Person
that is a Subsidiary and that is restricted from declaring or paying dividends
or other distributions, directly or indirectly, by operation of the terms of its
charter, any applicable agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation or otherwise shall be included only to the
extent of the amount of dividends or distributions paid to any Person or a
Wholly Owned Subsidiary of any Person, (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (iv) the cumulative effect of change
in accounting principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to the Company as of any
date of determination, the Net Worth of the Company and its Subsidiaries, on a
consolidated basis, determined in accordance with GAAP.
"CONSOLIDATED TOTAL INDEBTEDNESS" means, as of any date of
determination, the sum, without duplication, of all Indebtedness of the Company
and its Subsidiaries, determined on a consolidated basis in conformity with
GAAP.
"CONTINGENT OBLIGATION" means, with respect to any Person, as of any
date of determination and without duplication, any direct or indirect liability,
contingent or otherwise, of that Person which has not been (or to the extent
that it has not been) paid or otherwise discharged with respect to the
following: (i) any Guaranty; (ii) any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings; (iii) performance, surety and similar bonds in respect of any
Restoration, Renovation or other design, construction, restoration, renovation
or repair of any Improvements, in each case with respect to any Mortgaged
Property or other hotel property; (iv) other performance, surety and appeal
bonds; and (v) indemnification or contribution obligations of any nature,
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including, without limitation, liabilities in respect of (a) agreements
providing for indemnification, adjustment of purchase price or similar
obligations or for Guaranties or letters of credit, surety bonds and performance
bonds securing any obligations of that Person pursuant to such agreements, (b)
environmental and "bad deed" indemnities and (c) the issuance or sale of
Securities of that Person, but excluding any indemnity or contribution
obligation (1) which is insured or (2) with respect to which that Person has no
knowledge that a condition exists giving rise to an actual payment liability.
Except as provided in the next two sentences, the amount of any Contingent
Obligation, as of any date of determination, shall be equal to the least of (A)
the amount of the obligation so Guaranteed or that otherwise may be required to
be paid and (B) the amount to which such Contingent Obligation is expressly
limited. The amount of any Contingent Obligation which is a construction
Guaranty, as of any date of determination, shall be an amount equal to 15% of
the total construction costs so guarantied. The amount of any Contingent
Obligations described in clause (v) of this definition, as of any date of
determination, shall be the amount reasonably estimated by the Company and
agreed to by the Agent; provided, however, that in the absence of such
agreement, the amount shall be conclusively and finally determined by an
independent third-party expert selected by the Agent and approved by the
Company, which approval shall not be unreasonably withheld.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Closing Date or (ii) was nominated for election or
elected to such Board of Directors with the affirmative vote of at least a
majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election.
"CONTRACTUAL OBLIGATION" means, with respect to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, deed to secure debt, contract, lease, purchase order,
undertaking, agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of its
properties is subject, including, with respect to the Company or any of its
Subsidiaries, any provision of the Related Documents to which the Company or
such Subsidiary is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CONVERTIBLE NOTE DOCUMENTS" means, collectively, (i) the Convertible
Notes, the Convertible Note Indenture and each agreement, instrument,
certificate, opinion, or other document executed and delivered by or on behalf
of any Loan Party or any of its Subsidiaries in connection with the Convertible
Notes and (ii) each agreement, instrument, indenture, note, certificate, opinion
or other document executed and delivered by or on behalf of any Person in
connection with the issuance of any Securities referred to in clause (ii) or
(iii) of the definition of Convertible Notes; in each case, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
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"CONVERTIBLE NOTE INDENTURE" means the Indenture dated as of April 26,
1995 between the Company and Bank One, Columbus, N.A., as Trustee, pursuant to
which the Company issued the Convertible Notes.
"CONVERTIBLE NOTES" means, collectively, (i) the 7% Convertible
Subordinated Notes due 2002 issued by the Company pursuant to the Convertible
Note Indenture, (ii) any Securities issued by any Person to a holder of any of
the Securities referred to in this definition of Convertible Notes pursuant to
an order of decree of a court of competent jurisdiction and (iii) any Securities
issued by any Person in connection with any refinancing, exchange or refunding
of any of the securities referred to in this definition of Convertible Notes, in
each case with respect to securities referred to in this definition of
Convertible Notes, as such securities are amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"CREDIT BID" means a bid made, in a foreclosure sale pursuant to a
Mortgage, by the Agent consisting of all or a portion of the outstanding amount
of the Obligations.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement designed to protect the Company or any of its
Subsidiaries against fluctuations in currency values.
"DEFAULT RATE" means the rate of interest payable pursuant to
subsection 2.3E.
"DEFAULTING LENDER" shall have the meaning assigned to such term in
subsection 2.2D.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DESIGNATED MORTGAGED PROPERTIES" means, collectively all Mortgaged
Properties other than Mortgaged Properties that have been removed from
calculation of the Borrowing Base pursuant to subsection 2.10C.
"DESIGNATION" means the designation of a Property for inclusion in the
Borrowing Base as provided in subsection 2.10. The term "Designate" used as a
verb has a corresponding meaning.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introductory paragraph of this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
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"ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank or financial
institution organized under the laws of the United States or any state thereof;
(b) a savings and loan association or savings bank organized under the laws of
the United States or any state thereof; (c) a commercial bank organized under
the laws of any other country or a political subdivision thereof; provided,
however, that (x) such bank or financial institution is acting through a branch
or agency located in the United States or (y) such bank or financial institution
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (d) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its principal businesses including, but not limited to, insurance
companies, mutual funds and lease financing companies, in each case (under
clauses (a) through (d) above) that is reasonably acceptable to the Agent; and
(ii) any Lender and any Affiliate of any Lender; provided further, however, that
each Eligible Assignee under clauses (i)(a) through (i)(c) above shall have Tier
1 capital (as defined in the regulations of its primary Federal banking
regulator) of not less than $100,000,000.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA, which is, or was within the six-year period ending on the
applicable date of determination, maintained or contributed to by the Company,
any of its Subsidiaries, or any of their respective ERISA Affiliates.
"ENGINEER" means Dames & ▇▇▇▇▇ or any other qualified engineer
reasonably approved by the Agent licensed as such in the state in which the
applicable Property in question is located.
"ENGINEERING REPORT" means, with respect to any Property, a written
report prepared by an Engineer, describing and analyzing the physical condition
of the Improvements of such Property, describing any necessary or recommended
repairs, estimating the cost of such repairs and otherwise in form and substance
reasonably satisfactory to the Agent.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any other Person for
any damage, including personal injury (including sickness, disease or death),
tangible or intangible property damage, contribution, indemnity, indirect or
consequential damages, damage to the environment, damage to natural resources,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to the Company, any
of its Subsidiaries (including any Person who was a Subsidiary prior to the
Closing Date) or any Property.
"ENVIRONMENTAL INDEMNITY" means the Amended and Restated Environmental
Indemnity executed and delivered by the Company on or before the Restatement
Closing Date, and thereafter by each Subsidiary of the Company that becomes a
party thereto, in favor of the Agent and the Lenders, in substantially the form
of Exhibit XI annexed hereto, as such
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agreement may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms thereof and hereof.
"ENVIRONMENTAL LAWS" means all statutes, laws, ordinances, orders,
rules, regulations, plans, policies, writs, judgments, decrees or injunctions
and the like relating to (i) environmental matters, including those relating
to fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Hazardous Release or
threatened Hazardous Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, or the protection of human,
plant or animal health or welfare, in any manner applicable to any Loan Party or
any of its Subsidiaries or any of their properties, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Sections
1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections
6901, et seq.), the Federal Water Pollution Control Act ( 33 U.S.C. Sections
1251, et seq.), the Clean Air Act (42 U.S.C. Sections 7401, et seq.), the Toxic
Substances Control Act (15 U.S.C. Sections 2601, et seq.), the Solid Waste
Disposal Act (42 U.S.C. Sections 6901, et seq.), as amended by the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901, et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Sections 136, et seq.),
the Occupational Safety and Health Act (29 U.S.C. Sections 651, et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Sections 11001, et
seq.), each as amended or supplemented, and rules and regulations, policies and
guidelines promulgated pursuant thereto and any analogous future or present
local, state and federal statutes and rules and regulations, policies and
guidelines promulgated pursuant thereto, each as in effect as of the date of
determination.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974 (29
U.S.C. Sections 1001 et seq.), as amended from time to time, and any successor
thereto.
"ERISA AFFILIATE" means, with respect to any Person, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue Code of
which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above is a member. Any former ERISA
Affiliate of any Loan Party or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of such Loan Party or such Subsidiary within the
meaning of this definition with respect to the period such entity was an ERISA
Affiliate of such
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Loan Party or such Subsidiary and with respect to liabilities arising after such
period for which such Loan Party or such Subsidiary could be liable under the
Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding (a) those for which the provision for 30-day notice to
the PBGC has been waived by regulation and (b) those for which the PBGC has by
public notice determined that a penalty will not apply for the failure to
provide such 30-day notice to the PBGC), (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan, (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA, (iv) the
withdrawal by any Loan Party, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability pursuant to
Section 4063 or 4064 of ERISA, (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan, (vi) the imposition of liability
on any Loan Party or any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA, (vii) the withdrawal by any Loan Party
or any of its Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any liability therefor, or the
receipt by any Loan Party or any of its Subsidiaries or any of their respective
ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA,
(viii) the occurrence of an act or omission which could give rise to the
imposition on any Loan Party or any of its Subsidiaries or any of their
respective ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409 or Section 502(c),
(i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan,
(ix) the assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against any Loan Party or any of its Subsidiaries or any of their
respective ERISA Affiliates in connection with any such Employee Benefit Plan,
(x) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
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"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.3A.
"EVENT OF DEFAULT" means each of the events set forth in subsection
7.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCESS DEBT" has the meaning assigned to that term in subsection 5.14.
"EXCUSABLE DELAY" means a delay due to acts of God, governmental
restrictions, enemy actions, war, civil commotion, fire, casualty, strikes,
shortages of supplies or labor, work stoppages or other causes beyond the
reasonable control of the Company or any of its Affiliates, but lack of funds
shall not be deemed a cause beyond the reasonable control of the Company or any
of its Affiliates.
"EXISTING AGREEMENT" has the meaning assigned to that term in the
recitals to this Agreement.
"EXISTING ASSIGNMENT OF RENTS AND LEASES" means any Assignment of Rents
and Leases delivered prior to the Restatement Closing Date.
"EXISTING LOAN DOCUMENTS" has the meaning assigned to that term in the
recitals to this Agreement.
"EXISTING LOANS" has the meaning assigned to that term in the recitals
to this Agreement.
"EXISTING MORTGAGE" means any Mortgage delivered prior to the
Restatement Closing Date.
"EXISTING MORTGAGED PROPERTIES" means all Mortgaged Properties
designated as such in accordance with this Agreement prior to the Restatement
Closing Date.
"EXISTING NOTE" has the meaning assigned to that term in the recitals
to this Agreement.
"EXTRAORDINARY RECEIPTS" means the proceeds to any Loan Party or any of
its Subsidiaries from such items as (i) sales, exchanges or other dispositions
of the assets of any Loan Party or any of its Subsidiaries other than in the
ordinary course of business thereof, (ii) damage recoveries and casualty
insurance proceeds (including Condemnation Proceeds or Insurance Proceeds but
other than the proceeds of business interruption insurance or rental loss
insurance), (iii) income derived from Securities and other property acquired for
investment, (iv) condemnation awards or sales in lieu of and under the threat of
condemnation (other than awards or other payments for any Taking for temporary
use), (v) debt or equity financing or
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refinancing, and (vi) all other amounts of any nature paid to any Loan Party or
any of its Subsidiaries not arising out of the ordinary course of business
thereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"FF&E" means, with respect to any Property, any furniture, fixtures and
equipment, including any beds, lamps, bedding, tables, chairs, sofas, curtains,
carpeting, smoke detectors, mini bars, paintings, decorations, televisions,
video and movie equipment, telephones, radios, desks, dressers, towels, bathroom
equipment and supplies, heating, cooling, lighting, laundry, incinerating,
loading, swimming pool, landscaping, garage and power equipment and supplies,
machinery, engines, vehicles, fire prevention, refrigerating, ventilating and
communications apparatus, carts, dollies, elevators, escalators, kitchen
appliances and supplies, restaurant equipment and supplies, computers,
reservation systems, software, cash registers, card keys, switchboards, hotel
cleaning equipment and supplies or any other items of furniture, fixtures and
equipment typically used in hotel properties (including items used in guest
rooms, lobbies, common areas, front desk, back office, bars, restaurants,
kitchens, laundries, concierge, ▇▇▇▇▇▇▇, recreation, amusement, landscaping,
parking and other areas of hotels) and any repairs and replacements of all or
any portion of any of the foregoing as reflected in the Company's capitalization
policy in accordance with GAAP.
"FRANCHISE AGREEMENT" means each of the franchise agreements listed on
Schedule 4.4C annexed hereto, as each such agreement may be amended, restated,
supplemented or otherwise modified or replaced from time to time in accordance
with subsection 6.19B.
"FUNDING DATE" means the date of the funding of a Loan.
"FUNDING DEFAULT" shall have the meaning assigned to such term in
subsection 2.2D.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, in each case as the same are
applicable to the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" or "GOVERNMENTAL AUTHORITIES" means any nation
or government, any state, county, municipality or other political subdivision or
branch thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or
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pertaining to government, including any agency, board, central bank, commission,
court, department or officer thereof.
"GROUND LEASE" means each of the ground leases with respect to the
Mortgaged Properties listed on Schedule 1.1F annexed hereto, as such Schedule
may be revised from time to time in accordance with this Agreement.
"GUARANTY" means, with respect to any Person, any obligation,
contingent or otherwise, of that Person which has not been (or to the extent
that it has not been) paid or otherwise discharged with respect to any
obligation of any other Person if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to the
obligee that such obligation of another Person will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders
of such obligation will be protected (in whole or in part) against loss in
respect thereof. Guaranties shall include, without limitation, with respect to
such obligations (i) the direct or indirect guaranty, endorsement (otherwise
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another, and (ii) any liability of such Person for the obligation of another
Person through any agreement (contingent or otherwise) (a) 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 loans, advances, stock purchases, capital contributions or otherwise) or
(b) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person if, in the case of any agreement described
under subclauses (a) or (b) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any Guaranty
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Guaranty is specifically
limited. Guaranties shall not include any of the foregoing obligations to the
extent that the same constitutes Indebtedness under the definition thereof or is
a Guaranty with respect thereto. The term "Guarantee" used as a verb has a
corresponding meaning.
"HOMEGATE" means Homegate Hospitality, Inc., a Delaware corporation.
"HOMEGATE MERGER" means the transaction whereby Homegate was merged
into a Wholly Owned Subsidiary of the Company with Homegate being the surviving
corporation in such merger and remaining as a Subsidiary of the Company.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic substances",
"pollutant", "contaminant" or any other formulations intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar import under any applicable
Environmental Laws, (ii) any oil, petroleum, petroleum fraction or petroleum
derived substance, (iii) any
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drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources, (iv) any flammable substances or explosives, (v) any radioactive
materials, (vi) asbestos in any form, (vii) urea formaldehyde foam insulation,
(viii) electrical equipment which contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty parts per
million, (ix) pesticides, and (x) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any Governmental
Authority or which may or could pose a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of the Properties; provided,
however, that Hazardous Materials shall not include any materials in a
non-hazardous form such as asphalt contained in road-surfacing materials or
hazardous materials customarily used in the operation of hotel properties and
properly stored and maintained in accordance with applicable Environmental Laws.
"HAZARDOUS RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other receptacles containing any Hazardous Materials), or into or out of any
Property, including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under Interest Rate Agreements.
"HOSPITALITY-RELATED BUSINESS" means the hotel business and other
businesses necessary for, incident to, in support of, connected with or arising
out of the hotel business, including, without limitation (i) developing,
constructing, managing, operating, improving or acquiring lodging facilities,
restaurants and other food-service facilities, sports or entertainment
facilities, and convention or meeting facilities, and marketing services related
thereto, (ii) acquiring, developing, operating, managing or improving the
Properties owned by the Company or one of its Subsidiaries that is a Loan Party
as of the Restatement Closing Date, any real estate taken in foreclosure (or
similar settlement) by the Company or any of its Subsidiaries, or any real
estate ancillary or connected to any hotel owned, managed or operated by the
Company or any of its Subsidiaries that is a Loan Party, (iii) owning and
managing mortgages in, or other Indebtedness secured by Liens on hotels and real
estate related or ancillary to hotels or (iv) other related activities thereto.
"IMPOSITIONS" means all real property taxes and assessments, of any
kind or nature whatsoever, including, without limitation, vault, water and sewer
rents, rates, charges and assessments, levies, permits, inspection and license
fees and other governmental, quasi-governmental or nongovernmental levies or
assessments such as maintenance charges, owner association dues or charges or
fees resulting from covenants, conditions and restrictions affecting the
Mortgaged Properties, assessments resulting from inclusion of any Mortgaged
Property in any taxing district or municipal or other special district, any of
which are assessed or imposed upon the Mortgaged Property, or become due and
payable, and which create or may create a
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Lien upon the Property, or any part thereof. In the event that any penalty,
interest or cost for nonpayment of any Imposition becomes due and payable, such
penalty, interest or cost shall be included within the term "Impositions".
"IMPROVEMENTS" means all buildings, structures, fixtures, tenant
improvements and other improvements of every kind and description now or
hereafter located in or on or attached to any Land, including all building
materials, water, sanitary and storm sewers, drainage, electricity, steam, gas,
telephone and other utility facilities, parking areas, roads, driveways, walks
and other site improvements; and all additions and betterments thereto and all
renewals, substitutions and replacements thereof.
"INDEBTEDNESS" means, with respect to any Person and without
duplication, to the extent required to be shown on a balance sheet prepared in
conformity with GAAP, (i) all indebtedness or other obligations of such Person,
whether or not contingent, for money borrowed or evidenced by bonds, notes,
debentures or similar instruments, (ii) that portion of obligations with respect
to Capital Leases that is classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) all obligations owed for all or any part of the deferred purchase price of
assets or services purchased by that Person, which purchase price is (a) due
more than six months from the date of incurrence of the obligation in respect
thereof or (b) evidenced by a note or similar instrument, (v) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person, (vi) Hedging
Obligations, (vii) any obligations of that Person classified as indebtedness on
a balance sheet in conformity with GAAP and (viii) all Guaranties by that Person
of any of the foregoing obligations.
"INDEMNIFIED PERSON" has the meaning assigned to that term in
subsection 8.3.
"INSURANCE PROCEEDS" means all insurance proceeds, damages, claims and
rights of action and the right thereto under any insurance policies relating to
any portion of any Mortgaged Property.
"INSURANCE REQUIREMENTS" means all terms of any insurance policy
required hereunder covering or applicable to any Mortgaged Property or any part
thereof, all requirements of the issuer of any such policy, and all orders,
rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting any Mortgaged Property or any portion thereof or any use of any
Mortgaged Property or any portion thereof.
"INTELLECTUAL PROPERTY" means, as of any date of determination, all
patents, trademarks, tradenames, copyrights, technology, know-how and processes
used in or necessary for the conduct of the business of the Loan Parties and
their respective Subsidiaries as conducted on such date of determination that
are material to the financial condition, business or operations of
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the Loan Parties and their Subsidiaries, taken as a whole, including any of the
foregoing licensed to the Loan Parties or any of their respective Subsidiaries
by other Persons.
"INTELLECTUAL PROPERTY LICENSE AGREEMENT" means the Intellectual
Property License Agreement by and between the Company and the Agent, in
substantially the form of Exhibit VIII annexed hereto, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.3B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Company or any of its
Subsidiaries against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means each date for calculating the
Adjusted Eurodollar Rate for purposes of determining the interest rate in
respect of an Interest Period. The Interest Rate Determination Date shall be the
second Business Day prior to the first day of the related Interest Period for
any Loan.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"INVESTMENT" means, with respect to any Person or any of its
Subsidiaries, as of any date of determination and without duplication, (i) any
direct or indirect purchase or other acquisition by such investing Person or
Subsidiary of, or of a beneficial interest in, any Securities of any other
Person, (ii) any direct or indirect loan, advance (other than advances to
officers, employees, consultants, accountants, attorneys and other advisors and
members of the Board of Directors of any Person for moving, entertainment and
travel expenses, drawing accounts and similar expenditures in each case incurred
in the ordinary course of business) or capital contribution by any Person to any
other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business, (iii) any commitment or obligation to
make any investment described in clauses (i) and (ii) above and (iv) any
liability that is recourse to such investing Person or Subsidiary and that
arises, by law, contract, ownership of Securities or otherwise, directly or
indirectly, as the result of or otherwise in connection with the origination,
continuation or termination of any investment described in clauses (i) through
(iii) above. The amount of any Investment, as of any date of determination,
shall be equal to (x) with respect to an Investment referred to in clause (i) or
(ii) of the preceding sentence, the remainder of (1) the sum of original cost of
such Investment plus the cost of all additions thereto as of such date of
determination, minus (2) the aggregate amount paid to such Person or Subsidiary
as a return of such Investment, provided, that (A) the calculation of the amount
referred to in this clause (2) shall exclude all fees and other amounts (or the
portion thereof) that shall constitute interest, dividends or other amounts in
respect of the return on such Investment (assuming for such purpose that
payments to such Person or Subsidiary with respect to such Investment shall be
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treated as returns on such Investment unless and to the extent that, after
taking into account the respective amounts and dates of such Investment and such
payments, the aggregate amount that shall have been paid to such Person or
Subsidiary as of any date of determination is greater than the aggregate amount
that would accrue at 20% per annum, compounded on a monthly basis, on the
unreturned amount of such Investment) and (B) the calculation of the amount
referred to in this clause (x) shall exclude, all adjustments for increases or
decreases in value, and write-ups, write-downs or write-offs with respect to
such Investment, (y) with respect to an Investment referred to in clause (ii),
(iii) or (iv) of the preceding sentence, the maximum aggregate liability for
which such investing Person or Subsidiary may become liable, by law, contract,
ownership of Securities or otherwise, with respect to such Investment as of such
date of determination, and (2) with respect to an Investment described in two or
more of clauses (i), (ii) and (iii), the sum of the amounts with respect to such
Investment, as calculated in accordance with the preceding clauses (x) and (y),
in each case as of such date of determination. Investments shall not include (i)
the acquisition of the Capital Stock of Homegate by the Company or (ii) loans
made to Homegate by the Company prior to the Homegate Merger.
"IP LICENSE AGREEMENTS" has the meaning assigned to that term in
subsection 4.21A.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided,
however, that in no event shall any Subsidiary of any Person be considered to be
a Joint Venture to which such Person is a party.
"LAND" means the real property located in the towns, counties and
states listed on Schedule 1.1A annexed hereto (and more particularly described
in Exhibit A to each Mortgage), and Schedule 1.1B annexed hereto together with
all strips and gores within or adjoining such property, all estate, right,
title, interest, claim or demand whatsoever of any Loan Party or any of its
Subsidiaries in the streets, roads, sidewalks, alleys, and ways adjacent thereto
(whether or not vacated and whether public or private and whether open or
proposed), all vaults or chutes adjoining such land, all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights pursuant to any
trackage agreement, rights to the use of common drive entries, rights-of-way and
other rights, privileges and appurtenances thereunto belonging or in any way
pertaining thereto.
"LEASE" means each of the leases, licenses, concession agreements,
franchise agreements (other than the Franchise Agreements) and other occupancy
agreements (other than agreements for letting of rooms or other facilities to
hotel guests) and other agreements demising, leasing or granting rights of
possession or use or, to the extent of the interest therein of any Loan Party or
any of its Subsidiaries, any sublease, subsublease, underletting or sublicense,
which now or hereafter may affect any Mortgaged Property or any part thereof or
interest therein, including any agreement relating to a loan or other advance of
funds made in connection with any such lease, license, concession agreement,
franchise or other occupancy agreement and such sublease, subsublease,
underletting or sublicense, and every amendment, restatement, supplement,
consolidation or other modification of or other agreement relating to or entered
into in
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connection with such lease, license, concession agreement, franchise or other
occupancy agreement and such sublease, subsublease, underletting or sublicense,
and every Guaranty of the performance and observance of the covenants,
conditions and agreements to be performed and observed by the other party
thereto, and any Guaranties of leasing commissions.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 8.1.
"LIEN" means any lien (including any lien or security title granted
pursuant to any mortgage, deed of trust or deed to secure debt), pledge,
hypothecation, assignment, security interest, charge, levy, attachment,
restraint or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any agreement to
give any security interest) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing; provided that
the term "Lien" shall not include any license of Intellectual Property in the
ordinary course of business of the Company (including in connection with the
granting of a Lien on assets other than Intellectual Property) as long as any
such license granted in connection with the incurrence of Indebtedness is on
terms no more favorable to the applicable licensee than the terms of the
Intellectual Property License Agreement.
"LIQUOR LICENSES" means the licenses set forth on Schedule 4.4E annexed
hereto and each other license issued by the Department of Alcoholic Beverage
Control or similar state or local agency to any Loan Party or any of its
Subsidiaries or in respect of any Mortgaged Property, in each case in connection
with the sale of alcoholic beverages at any Mortgaged Property.
"LIQUOR LICENSE AGREEMENT" means the Amended and Restated Agreement
Regarding Liquor Licenses executed and delivered by the Company and each other
Loan Party thereto in favor of the Agent on or before the Restatement Closing
Date, and thereafter by each other Subsidiary of the Company that becomes a
party thereto, substantially in the form of Exhibit XIV annexed hereto, as such
agreement may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms hereof and thereof.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Security Documents, the Environmental Indemnity, the Cash Management Letters and
any other documents entered into in connection with the Cash Management System
and, if executed and delivered by any Subsidiaries of the Company as provided
herein, the Subsidiary Guaranty.
"LOAN PARTIES" means, collectively, the Company, and any Subsidiary of
the Company which is or becomes a party to a Loan Document.
"LOANS" means, collectively, the loans made by the Lenders to the
Company pursuant to subsection 2.2A.
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"LOCAL ACCOUNTS" means, collectively, the Deposit Accounts listed on
Schedule 4.23 annexed hereto as "Local Accounts" and any other Deposit Account
established with respect to one or more Mortgaged Properties for the purpose of
receiving Receipts pursuant to subsection 5.15.
"MAJORITY LENDERS" shall mean Lenders having or holding more than 50%
of the sum of the aggregate Commitments of all Lenders or, if such Commitments
have terminated or expired, the aggregate principal amount of outstanding Loans;
provided that if one Lender shall, together with its Affiliates, hold more than
50% of the aggregate Commitments (or, if applicable, Loans), then Majority
Lenders shall mean such Lender plus at least one other Lender (other than any
Affiliate of such Lender).
"MANAGEMENT FEES" means, collectively, all hotel management fees
(however characterized, including base fees, trade name fees, incentive fees,
special incentive fees, termination fees and all fees in respect of liquor
license operations) and all other fees or charges payable to the manager for the
management and operation of a hotel property, the related land and the
improvements thereof.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"MARKET EQUITY CAPITALIZATION" means, with respect to any issuer and as
of any date of determination, the product of (i) the number of shares of common
stock of such issuer outstanding as of such date multiplied by (ii) the average
of the closing bid prices of such common stock on the New York Stock Exchange,
for each of the 30 consecutive trading days next preceding such date of
determination.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries, taken as a whole, or (ii) the material impairment
of the ability of the Company or any of its Material Subsidiaries to perform, or
of the ability of the Agent or the Lenders to enforce, any of Obligations
(whether monetary of non-monetary) of the Company or any of its Material
Subsidiaries.
"MATERIAL LEASE" means each Lease (i) demising in excess of (x) 500
square feet of the Improvements with respect to any Mortgaged Property, in the
case of limited service and all suite hotels and (y) 2,000 square feet of
Improvements with respect to any Mortgaged Property, in case of full service
hotels, in each case having a term in excess of 3 months or (ii) generating in
excess of 10% of the Property Gross Revenues with respect to such Mortgaged
Property or otherwise identified as a Material Lease by the Company pursuant to
subsection 3.1I.
"MATERIAL RENOVATION/RESTORATION" means, as of any date of
determination, any Renovation or Restoration of a Mortgaged Property with
respect to which more than (i) in the case of full service hotels, 25% or (ii)
in the case of limited service, extended-stay and all-suite
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hotels, 33% of the available rooms located at the applicable Mortgaged Property
have been, are scheduled to be, or could reasonably be expected to be, "rooms
out-of-order", as determined in accordance with the Uniform System, during 5 or
more days during any period of 30 consecutive days; provided, that a Restoration
conducted pursuant to and, as of such date of determination, satisfying the
conditions of subsection 5.11F is not a Material Renovation/Restoration.
"MATERIAL RENOVATION/RESTORATION PERIOD" means with respect to any
Property, the period commencing on the day that a Material
Renovation/Restoration shall commence with respect to such Property, and
terminating on the day that such Material Renovation/Restoration shall terminate
with respect to such Property, in each case as such dates of commencement and
termination shall be determined by the Agent.
"MATERIAL SUBSIDIARY" means, as of any date of determination, any
Subsidiary of the Company that is either (or both of) (i) a Loan Party or (ii) a
Subsidiary of the Company if
(a) the Company's and its other Subsidiaries' investments in
and advances to the Subsidiary equal 5 percent of the total assets of
the Company and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year; or
(b) the Company's and its other Subsidiaries' proportionate
share of the total assets (after intercompany eliminations) of the
Subsidiary exceeds 5 percent of the total assets of the Company and its
Subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(c) the Company's and its other Subsidiaries' equity in the
income from continuing operations before income taxes, extraordinary
items and cumulative effect of a change in accounting principle of the
subsidiary exceeds 5 percent of such income of the Company and its
Subsidiaries consolidated for the most recently completed fiscal year.
"MATURITY DATE" means the earliest of (i) the date that is the fourth
Anniversary of the Restatement Closing Date, as such date may be extended
pursuant to subsection 2.2F to a date not later than the fifth Anniversary of
the Restatement Closing Date, (ii) the date as of which the Obligations shall
have become immediately due and payable pursuant to subsection 7.1 and (iii) the
date as of which the Obligations shall have become immediately due and payable
pursuant to subsection 2.5B(vi).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor to the
business thereof.
"MORTGAGE" means each Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing and each Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing and each Deed to Secure Debt, Assignment of Rents,
Security Agreement and Fixture
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Filing executed and acknowledged by the Loan Party thereto in favor of the Agent
for the benefit of the Lenders (or, in the case of a deed of trust, to a trustee
for the benefit of the Agent and the Lenders) in the form delivered on the
Closing Date or the Restatement Closing Date, as the case may be, as each such
agreement may be amended, restated, supplemented, consolidated, extended or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"MORTGAGE AMENDMENTS" has the meaning assigned to such term in
subsection 3.1F(xi).
"MORTGAGE NOTE DOCUMENTS" means, collectively, (i) the Mortgage Notes,
the Indenture and each agreement, instrument, certificate, opinion, or other
document executed and delivered by or on behalf of any Loan Party or any of its
Subsidiaries in connection with the Mortgage Notes and (ii) each agreement,
instrument, indenture, note, certificate, opinion or other document executed and
delivered by or on behalf of any Person in connection with the issuance of any
Securities referred to in clause (ii) or (iii) of the definition of Mortgage
Notes; in each case, as amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof and hereof.
"MORTGAGE NOTE INDENTURE" means the Indenture dated as of January 23,
1996 between the Company and Norwest Bank Minnesota, National Association, as
Trustee, pursuant to which the Company issued the Mortgage Notes, as such
indenture may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the items thereof and hereof.
"MORTGAGE NOTES" means, collectively, (i) the mortgage notes issued by
the Company pursuant to the Mortgage Note Indenture, (ii) any Securities issued
by any Person to a holder of any of the Securities referred to in this
definition of Mortgage Notes pursuant to an order of decree of a court of
competent jurisdiction and (iii) any Securities issued by any Person in
connection with any refinancing, exchange or refunding of any of the securities
referred to in this definition of Mortgage Notes; in each case with respect to
securities referred to in this definition of Mortgage Notes, as such securities
may be amended, restated, supplemented or otherwise modified from time to time
in accordance with the terms thereof and hereof.
"MORTGAGED PROPERTIES" means, collectively, the hotel properties, the
Land on which they are located, and all Improvements thereon and all fixtures
attached thereto and all personal property used in connection therewith, in each
case as listed on Schedule 1.1A annexed hereto, as such Schedule may be revised
or supplemented from time to time pursuant to subsection 2.10 or 2.11. Mortgaged
Properties shall include New Mortgaged Properties and Existing Mortgaged
Properties.
"MORTGAGED PROPERTY SUBSIDIARY" means any Wholly Owned Subsidiary of
the Company that owns any Mortgaged Property.
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"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined in
Section 3(37) of ERISA.
"NET CASH PROCEEDS" means, the aggregate cash proceeds (including any
cash received by way of deferred payment pursuant to, or by monetization of, a
note receivable or otherwise, but only as and when so received) received by the
Company or any of its Subsidiaries from any sale or other permanent disposition
of a Property or any Asset Sale, as applicable, by a Loan Party or any of its
Subsidiaries less the sum, without duplication, of (i) the amounts required to
be applied to the repayment of Indebtedness or secured by a Lien on such
Property (other than the Obligations), (ii) the direct costs relating to such
sale or other disposition (including, without limitation, legal, accounting and
sales commissions), including income taxes paid or estimated to be actually
payable as a result thereof, after taking into account any available tax credits
or deductions and any tax sharing arrangements (provided that the amount of
income taxes so estimated to be actually payable shall be approved by the Agent,
which approval shall not be unreasonably withheld), (iii) a reserve for all
adjustments that are reasonably likely to be made to the sales price, whether
before or after the closing of such sale or permanent disposition, and for all
modifications to the sales price from time to time before the closing thereof,
by reason of such sale or other permanent disposition and (iv) the amount of the
reserve actually provided by the applicable Loan Party, in accordance with GAAP,
after such sale or other permanent disposition, including, without limitation,
for liabilities related to environmental matters and liabilities under any
indemnification obligations, but only to the extent and for so long as a cash
reserve is actually established.
"NET INCOME" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, any gain (but not
loss), together with any related provision for Taxes on such gain (but not
loss), realized in connection with any Asset Sale, and excluding any
extraordinary gain (but not loss), together with any related provision for taxes
on such extraordinary gain (but not loss).
"NET INSURANCE/CONDEMNATION PROCEEDS" means all Insurance Proceeds on
account of damage or destruction to any Mortgaged Property or all Condemnation
Proceeds in respect of any Mortgaged Property, less the cost, if any, of such
recovery and of paying out such proceeds, including attorneys' fees and costs
allocable to inspecting the Work and the plans and specifications therefor.
"NET WORTH" means, as of any date of determination and in each case
determined in accordance with GAAP, the stockholders' equity of the Company.
"NEW MORTGAGED PROPERTIES" means Mortgaged Properties other than
Existing Mortgaged Properties.
"NON-RECOURSE INDEBTEDNESS" means, with respect to any Person,
Indebtedness or that portion of Indebtedness of such Person (a) as to which
neither the Company nor any of its
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Subsidiaries (i) provides credit support (other than in the form of a Lien on an
asset serving as security for Indebtedness otherwise described in this
definition) pursuant to any undertaking, agreement or instrument that would
constitute Indebtedness, (ii) is directly or indirectly liable (other than in
the form of a Lien on an asset serving as security for Indebtedness otherwise
described in this definition) or (iii) constitutes the lender, and (b) no
default with respect to which would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of the Company or any of its Subsidiaries
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity.
"NOTES" means, collectively, (i) the amended and restated promissory
notes of the Company issued to the Lenders on the Restatement Closing Date and
(ii) any promissory notes issued by the Company pursuant to the last sentence of
subsection 8.1B(i) in connection with assignments of the Commitments and Loans
of any Lenders, in each case substantially in the form of Exhibit I annexed
hereto, as they may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof and hereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit II annexed hereto delivered by the Company to the Agent pursuant to
subsection 2.2B with respect to a proposed borrowing hereunder.
"NOTICE OF CONTINUATION" means a notice substantially in the form of
Exhibit III annexed hereto delivered by the Company to the Agent pursuant to
subsection 2.3D with respect to a proposed continuation of the applicable basis
for determining the interest rate with respect to the Loans specified therein.
"OBLIGATIONS" means, collectively, all obligations of every nature of
the Company or any other Loan Party from time to time owed to the Agent or
Lenders or any of them under or in respect of the Loans and the Loan Documents,
whether for principal, interest, fees, expenses, indemnification or otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by an Authorized Officer;
provided, however, that every Officer's Certificate with respect to the
compliance with a condition precedent to the making of the Loan hereunder shall
include (i) a statement that the officer or officers making or giving such
Officer's Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement that,
in the opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"OPERATING EXPENSES" means, for any period and as calculated on the
accrual basis of accounting, all expenses incurred by the Company or any of its
Subsidiaries during such period
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in connection with the ownership, management, operation, cleaning, maintenance,
ordinary repair or leasing of any Property, including, without duplication:
(i) costs and expenses in connection with the cleaning and the
ordinary repair, maintenance, decoration and painting of such Property;
(ii) wages, benefits, payroll taxes, uniforms, insurance costs
and all other related expenses for employees of the Company engaged in
the management, operation, cleaning, maintenance, ordinary repair and
leasing of such Property and service to guests, customers, Tenants,
concessionaires and licensees of such Property;
(iii) the cost of all services and utilities with respect to
such Property, including all electricity, oil, gas, water, steam,
heating, ventilation, air conditioning, elevator, escalator,
landscaping, model furniture, answering services, telephone
maintenance, credit check, snow removal, trash removal and pest
extermination costs and expenses and any other energy, utility or
similar item and overtime services with respect to such Property;
(iv) the cost of building and cleaning supplies with respect
to such Property;
(v) insurance premiums required in order to maintain the
insurance policies required under this Agreement or any other Loan
Documents, or by any document pursuant to which Indebtedness secured by
such Property is incurred, in each case with respect to such Property
(which, in the case of any policies covering multiple Properties, shall
be allocated among the Properties pro rata in proportion to the insured
value of the Properties covered by such policies);
(vi) legal, accounting, engineering and other fees, costs and
expenses incurred by or on behalf of the Company or such Subsidiary in
connection with the ownership, management, operation, maintenance,
ordinary repair and leasing of such Property, including collection
costs and expenses;
(vii) operating costs and expenses of security and security
systems provided to and/or installed and maintained with respect to
such Property;
(viii) operating costs and expenses of reservation systems,
internal telephone exchanges and key card systems with respect to such
Property;
(ix) costs and expenses of parking and valet services, parking
lot maintenance and ordinary parking lot repairs in respect of such
Property;
(x) costs and expenses of food and beverages with respect to
such Property;
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(xi) real property taxes and assessments with respect to such
Property and the costs incurred in seeking to reduce such taxes or the
assessed value of such Property;
(xii) advertising, marketing and promotional costs and
expenses with respect to such Property;
(xiii) costs and expenses incurred in connection with lock
changes, storage, moving, market surveys, permits (and the application
or registration therefor) and licenses (and the application or
registration therefor) with respect to such Property;
(xiv) maintenance and cleaning costs related to guest and
customer amenities with respect to such Property;
(xv) costs and expenses of maintaining and repairing FF&E
(including the breakage or loss of any such FF&E) with respect to such
Property;
(xvi) franchise fees due and payable with respect to such
Property;
(xvii) rent payments due and payable under any lease agreement
with respect to such Property, if applicable;
(xviii) actual reserves required under any ground lease with
respect to such Property, if applicable;
(xix) Management Fees with respect to such Property for such
period;
(xx) tenant improvements and leasing commissions with respect
to such Property accrued during such period;
(xxi) contributions by the Company or any of its Subsidiaries
to any merchants' association, whether as dues or advertising costs or
otherwise with respect to such Property;
(xxii) costs incurred pursuant to any reciprocal easement
agreement affecting such Property;
(xxiii) refunds the Company or any of its Subsidiaries must
pay to guests, customers, Tenants, concessionaires and licensees and
other occupants of such Property;
(xxiv) reserves (other than reserves required to be deposited
in the Capital Reserve Account) for such purposes and in such amounts
as the Company and the Agent may reasonably agree upon;
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(xxv) costs and expenses of maintaining operating, repairing
and servicing vehicles, including fuel and insurance premiums; and
(xxvi) all other ongoing expenses which in accordance with the
accrual basis of accounting should be included in the Company's or any
of its Subsidiaries' annual financial statements as operating expenses
of such Property.
Notwithstanding the foregoing, Operating Expenses shall not include, without
duplication, (a) Consolidated Interest Expense, including such items included
within the definition thereof as shall apply to any Property or Properties with
respect to which such Operating Expenses are being determined, (b) income taxes,
(c) depreciation, (d) amortization, (e) principal, if any, due in respect of
Indebtedness, or (f) any other items that are capitalized on the financial
statements of the Company or any of its Subsidiaries in conformity with GAAP.
"OPERATING LEASE" means, with respect to any Person, lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is not accounted for as a Capital Lease on the balance
sheet of that Person.
"PARTNERSHIP SUBSIDIARIES" means, collectively, the Subsidiaries of the
Company, if any, that are general partnerships or limited partnerships.
"PAYMENT DATE" means the fifteenth day of each month, beginning January
15, 1997, or, if such fifteenth day is not a Business Day, the next succeeding
Business Day.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto).
"PENSION PLAN" means any employee benefit pension plan as defined in
Section 3(2) of ERISA, other than a Multiemployer Plan, which is, or was within
the six-year period ending on the applicable date of determination, maintained
or contributed to by the Company, any of its Subsidiaries or any of their
respective ERISA Affiliates and which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means, with respect to any Mortgaged Property
on the Restatement Closing Date, the following types of Liens (other than any
such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA):
(i) Liens for real property Taxes, assessments, vault charges,
water and sewer rents, and other Impositions the payment of which is
not, at the time, required by subsection 5.4;
(ii) the Leases in existence on the Restatement Closing Date
and any Leases entered into thereafter in accordance with the
requirements of the Loan Documents;
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(iii) covenants, easements, rights-of-way, restrictions, minor
encroachments or other similar encumbrances not impairing the
marketability of such Mortgaged Property and not interfering, and which
could not reasonably be expected to interfere, with the use of such
Mortgaged Property for hotel purposes or with the ordinary conduct of
the business of the Company and its Subsidiaries;
(iv) Liens securing the Obligations;
(v) Liens that are bonded and thereby released of record in a
manner reasonably satisfactory to the Agent;
(vi) rights of guests to occupy rooms and of Tenants under
Leases;
(vii) all exceptions contained in the Title Policies approved
by the Agent on or prior to the Restatement Closing Date or contained
in any Title Policy approved by the Agent with respect to the
Acquisition of a Property;
(viii) mechanics', workmen's, materialmen's, operator or
similar statutory Liens arising in the ordinary course of business for
sums that are not yet delinquent or are being contested in good faith
and by appropriate action, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefore; and
(ix) Liens arising after the Restatement Closing Date securing
purchase money, permanent or other financing permitted by this
Agreement incurred or assumed in connection with the acquisition,
purchase, refurbishment or lease of FF&E used or to be used in
connection with the Mortgaged Properties; provided that the aggregate
amount at any time outstanding, secured by such Liens does not exceed
$125,000 with respect to any Mortgaged Property and; provided further,
that such Liens encumber only the property purchased, financed or
refinanced with the amounts secured by such Liens.
"PERSON" means, collectively, natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and Governmental Authorities.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within the applicable grace period.
"POTENTIAL TAX EFFECT" means, with respect to each individual property
(the "RELINQUISHED PROPERTY") being exchanged for a property held by ▇▇▇▇▇
Trout, the product of (1) the difference of the sale price of such Relinquished
Property less the tax basis of such Relinquished Property immediately prior to
the sale times (2) forty percent (40%).
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"PREFERRED STOCK" means any Equity Interest with preferential rights in
the payment of dividends or upon liquidation or any Capital Stock that is not
Qualified Capital Stock.
"PRIME RATE" means the rate that Bankers announces from time to time as
its prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PROPERTIES" means, collectively, the Mortgaged Properties as listed on
Schedule 1.1A annexed hereto and all other hotel properties owned by the Company
or any of its Subsidiaries as listed on Schedule 1.1B annexed hereto, the land
on which such hotel properties are located and all Improvements thereon and all
fixtures attached thereto and all personal property used in connection
therewith, in each case as such Schedules may be revised or supplemented from
time to time pursuant to subsection 2.10 or 2.11.
"PROPERTY AMOUNT" means, with respect to any Designated Mortgaged
Property and as of any date of determination, the following:
(i) with respect to any Class 1 Mortgaged Property, the
product of (a) Property EBITDA with respect to such Designated
Mortgaged Property, calculated based on the 12 most recent complete
calendar months for which financial statements have been delivered
pursuant to subsection 5.1(i), multiplied by (b) on or before the
fourth Anniversary, 4.0 and thereafter, 3.5; and
(ii) with respect to any Class 2 Mortgaged Property, the
product of (a) the basis for such Designated Mortgaged Property,
multiplied by (b) 50%; as used herein, the term basis shall mean the
cost of construction of such Designated Mortgaged Property as set forth
on Schedule 1.1F annexed hereto with respect to all Class 2 Mortgaged
Properties as of the date hereof and as approved by the Agent in its
reasonable discretion with respect to any Class 2 Mortgaged Property
added after the date hereof;
provided, that in no event shall the Property Amount with respect to (x) any
Class 1 Mortgaged Property exceed the lesser of (1) 85% of the Replacement Cost
of such Designated Mortgaged Property and (2) 55% of the Appraised Value of such
Designated Mortgaged Property and (y) any Class 2 Mortgaged Property exceed 55%
of the Appraised Value of such Designated Mortgaged Property.
"PROPERTY EBITDA" means, with respect to any Property, for any period
and as of any date of determination and calculated on the accrual basis of
accounting, whether a positive or negative number, the amount equal to the
remainder of the following:
(i) all Property Gross Revenues for such period in respect of
such Property; provided, that Property Gross Revenues for such period
in respect of any Property shall
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be included in the calculation of Property EBITDA for such period only
to the extent that the Agent and Lenders shall have received the
financial statements for such period required to be delivered on or
before such date of determination pursuant to subsection 2.10 or
5.1(i), as the case may be; minus
(ii) all Operating Expenses for such period with respect to
such Property; provided, that the aggregate amount of Management Fees,
franchise fees and marketing expenses included in the calculation of
Property EBITDA for such period in respect of such Property, shall not
be less than (1) with respect to full-service hotels, 10.7%, and (2)
with respect to all-suite, extended-stay and limited-service hotels,
9.0% of Property Gross Revenues for such period in respect of the
applicable Property;
provided that:
(a) Property EBITDA with respect to any Property shall be zero
for such period if (y) the Acquisition Date with respect to such
Property shall not have occurred on or before such date of
determination or (z) such Property shall have been sold or otherwise
permanently disposed of or any Loan Party or any of its Subsidiaries
shall have executed a definitive agreement with respect to the sale or
other permanent disposition of such Property, in each case on or before
such date of determination, provided that this subclause (z) shall not
be given effect upon the execution of such agreement (I) if the
proposed Net Cash Proceeds with respect to such sale or other permanent
disposition shall be greater than the aggregate amount of principal and
interest that would be required to be paid by the Company to ensure
that the Total Utilization shall not exceed the Borrowing Base in
effect as of such date after giving effect to any recomputation in the
Borrowing Base required pursuant to the terms of this Agreement,
including without limitation, subsection 2.5B(iii), if the closing
thereof were to occur on such date of determination, as such
determination shall be specified by written notice delivered to the
Agent, together with the information used by the Company to make such
determination or (II) the Agent shall have approved the proposed sales
price, which approval shall not be unreasonably withheld, conditioned
or delayed;
(b) if the Acquisition Date with respect to such Property
shall have occurred after the Restatement Closing Date and after the
commencement of such period but before the termination of such period,
Property EBITDA with respect to such Property for such period shall be
the sum of (y) for the portion of such period commencing on the first
day of such period and ending on the day before such Acquisition Date,
Property EBITDA, as the same shall be determined based upon the
financial statements for such period required by clause (iii) of the
definition of "Property Information" to be delivered with respect to
such Property and such other information with respect thereto that may
be provided by the Loan Parties and their respective Subsidiaries,
subject to such adjustments as may be reasonably required by the Agent
in its sole discretion to conform such financial statements and other
information to the basis on which the Company's financial statements
are prepared, plus (z) for the portion of such period commencing on
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such Acquisition Date and ending on the last day of such period,
Property EBITDA with respect to such Property, based upon the financial
statements for such period required to be delivered on or before such
date of determination pursuant to subsection 5.1(i); and
(c) if such date of determination shall occur during a
Material Renovation/Restoration Period with respect to such Property
and the Property EBITDA with respect to such Property for such period
is a positive number, then Property EBITDA shall be equal to the
product of (y) Property EBITDA for such period multiplied by (z) a
fraction, the numerator of which is equal to the remainder of (I) the
number of complete months in such period minus (II) the number of
complete or partial months (rounding to the next higher whole number)
that shall have been reasonably estimated by the Company and reasonably
approved by the Agent as the duration of such Material
Renovation/Restoration Period (as such estimate may be revised from
time to time thereafter to the reasonable satisfaction of the Agent,
and the denominator of which is the number of complete months in such
period); provided that, Property EBITDA with respect to any Mortgaged
Property with respect to which more than 50% of the available rooms
have been, are scheduled to, or could reasonably be expected to be,
"rooms out-of-order", as determined in accordance with the Uniform
System, during 5 or more days during any period of 30 consecutive days
shall be zero for the period during which such Material
Renovation/Restoration is occurring.
"PROPERTY GROSS REVENUE" means, for any period, all Receipts resulting
from the operation of such Property, including, without limitation, Rents or
other payments from guests and customers, Tenants, licensees and concessionaires
and business interruption and rental loss insurance payments; provided, that
Gross Revenue shall be determined net of allowances in accordance with the
Uniform System and shall exclude (i) excise, sales, use, occupancy and similar
taxes and charges collected from guests or customers and remitted to
Governmental Authorities, (ii) gratuities collected for employees of such
Property, (iii) security deposits and other advance deposits, until and unless
same are forfeited to any Loan Party or Subsidiary thereof or applied for the
purpose for which collected, (iv) federal, state or municipal excise, sales, use
or similar taxes collected directly from patrons or guests or included as part
of the sales price of any goods or services, (v) interest income on such
Property's bank accounts or otherwise earned by the Company, (vi) rebates,
refunds or discounts (including, without limitation, free or discounted
accommodations) and (vii) Management Fees.
"PROPERTY INFORMATION" means, with respect to any Designation of any
Additional Mortgaged Property pursuant to subsection 2.10:
(i) financial statements in respect of such Additional
Mortgaged Property for the most recently completed three calendar
years, to the extent such financial statements exist and are in the
possession of any Loan Party or can be obtained by a Loan Party at no
cost;
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(ii) copies of all other consolidated balance sheets and
related statements of operations and statements of cash flows of such
Additional Mortgaged Property that are to be or were delivered to any
Loan Party or any of its Subsidiaries in connection with the
Acquisition of such Additional Mortgaged Property, if applicable;
(iii) financial information, satisfactory in form and
substance to the Agent, sufficient to permit the calculation of
Property EBITDA with respect to such Additional Mortgaged Priority
pursuant to clause (ii) to the proviso to the definition of Property
EBITDA, if applicable;
(iv) to the extent Renovation is then proposed for such
Additional Mortgaged Property, a preliminary project plan and a project
budget for such Mortgaged Property satisfactory in form and substance
to the Agent in its sole discretion;
(v) (a) a comprehensive environmental audit (which shall
include a Phase I environmental audit and, if necessary or desirable in
the Agent's opinion, a Phase II environmental audit), satisfactory in
form and substance to the Agent, conducted and certified by an Approved
Environmental Consultant (the Company shall certify as of the closing
date of such Acquisition or the Addition Date that, as to any
environmental audit delivered by the Company prior to such date, to the
Company's knowledge, the information contained in such audit remains
true, correct and complete), (b) a reliance letter from such Approved
Environmental Consultant with respect to each such environmental audit
addressed to the Agent and Lenders, which reliance letter shall be
satisfactory in form and substance to the Agent, (c) if requested by
the Agent, evidence that all required approvals from all Governmental
Authorities having jurisdiction with respect to the environmental
condition of such Additional Mortgaged Property, if any, have been
obtained, and (d) such other environmental reports, inspections and
investigations as the Agent shall, in its sole discretion, require,
prepared, in each instance, by an Approved Environmental Consultant,
which audits, approvals, reports, inspections and investigations shall
be satisfactory in form and substance to the Agent, in its sole
discretion;
(vi) with respect to an Additional Mortgaged Property, (a) a
written Engineering Report with respect to such Additional Mortgaged
Property dated not more than 90 days (or such longer period not to
exceed 180 days as the Agent may approve) prior to the closing date and
prepared by an Engineer which Engineering Report shall be satisfactory
in form and substance to the Agent and (b) a reliance letter from such
Engineer with respect to each such Engineering Report addressed to the
Agent and Lenders, which letter shall be in form and substance
reasonably satisfactory to the Agent;
(vii) copies (if available) or drafts of the Acquisition
Agreements with respect to such Additional Mortgaged Property, all
other purchase agreements, letters of intent or other related
agreements entered into by any Loan Party or any of its Subsidiaries in
connection with the acquisition thereof (it being understood and agreed
that, to the extent
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such agreements or letters of intent have not been entered into at such
time, copies of such agreements and letters of intent shall be
delivered reasonably promptly after the execution thereof);
(viii) a market study with respect to such Additional
Mortgaged Property as of a date not earlier than 90 days (or such
longer period not to exceed 180 days as the Agent may approve) before
the acquisition of such Additional Mortgaged Property and copies of all
other appraisals and market studies with respect to such Additional
Mortgaged Property to the extent such appraisals and market studies
exist and can be readily obtained by any Loan Party or any of its
Subsidiaries; and
(ix) any other information relating to such Mortgaged Property
reasonably requested by the Agent.
"PRO RATA SHARE" means with respect to each Lender, the percentage
obtained by dividing (i) as of any date of determination prior to the
termination of the Commitments (a) that Lender's Commitment by (b) the sum of
the aggregate Commitments of all Lenders and (ii) as of any date of
determination after the termination of the Commitments, (A) the aggregate
principal amount of that Lender's Loans by (B) the sum of the aggregate
principal amount of all Lenders' Loans.
"PURCHASE PRICE" has the meaning assigned to that term in subsection
2.1B to this Agreement.
"QUALIFIED APPRAISER" means an independent, qualified appraiser that is
a member of the American Institute of Real Estate Appraisers.
"QUALIFIED CAPITAL STOCK" means, with respect to any Person, any series
or class of Capital Stock of that Person which may not be required to be
redeemed or repurchased, in whole or in part, by that Person or any of its
Subsidiaries, in whole or in part, at the option of the holder thereof, on or
prior to the Maturity Date, or not be convertible or exchangeable into or
exercisable for Capital Stock of the Company that is not Qualified Capital Stock
on or prior to the Maturity Date; provided that Capital Stock will be deemed to
be Qualified Capital Stock if it may only be so redeemed or put solely in
consideration of Qualified Capital Stock.
"RECEIPTS" means, collectively, but in each case only to the extent
derived from a Mortgaged Property, all cash, Cash Equivalents, checks, notes,
drafts and any items of payment or collection received, by or on behalf of the
Company or any of its Subsidiaries, or by any officers, employees or agents of
the Company or any of its Subsidiaries or other Persons acting for or in concert
with the Company or such Subsidiary to make collections on the Company's or such
Subsidiary's behalf in connection with or in any way relating to the Company or
such Subsidiary or the operation of the Company's or such Subsidiary's business,
including, without limitation, any proceeds received from or pursuant to (i) any
sales of, or loans against, accounts of the Company or any of its Subsidiaries
(other than the Loans pursuant to this Agreement),
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(ii) any disposition of assets (including, without limitation, any disposition
of assets permitted hereunder or consented to by the Agent, but excluding
amounts applied to the repayment of indebtedness or other obligations secured by
a Lien on the assets subject to such disposition) or issuance or sale of equity
Securities by the Company or any of its Subsidiaries, (iii) the incurrence of
Indebtedness by the Company or any of its Subsidiaries and the issuance and sale
by the Company or any of its Subsidiaries of equity or debt Securities, in each
case other than the Obligations and other Indebtedness permitted by this
Agreement, (iv) insurance policies (other than liability insurance payable
directly or indirectly to a third party) maintained by the Company or any of its
Subsidiaries, whether or not the Agent is an additional insured or named as loss
payee thereunder and (v) the successful prosecution (including any settlement)
of any claims, actions or other litigation or proceeding by or on behalf of or
against the Company or any of its Subsidiaries; it being understood and agreed
that nothing contained in this definition shall in any respect be deemed to
permit any transactions by the Company or any of its Subsidiaries otherwise
restricted or prohibited by this Agreement.
"REGISTER" has the meaning assigned to that term in subsection 2.2E.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means, collectively, the Acquisition Agreements,
the Franchise Agreements, the Intellectual Property License Agreements, Ground
Leases and the Material Leases.
"RELEASE" means any satisfaction, release, assignment instrument, deed
of reconveyance or similar instrument or instruments (each in recordable form
and otherwise in form reasonably satisfactory to the Company but without any
representation or warranty of the Agent or the Lenders necessary to release any
Collateral from the Lien of all applicable Security Documents.
"RELEASE DATE" means the date of a release of the Lien of the Security
Documents on any Mortgaged Property pursuant to subsection 2.11.
"REMOVAL PERIOD" means with respect to any Mortgaged Property, the
period commencing on the day that the Mortgaged Property is removed from the
calculation of the Borrowing Base pursuant to subsection 2.10C and terminating
on the day on which either (i) the Mortgaged Property is Released pursuant to
subsection 2.11 or (ii) the Borrower elects to designate the Mortgaged Property
for inclusion in the Borrowing Base pursuant to subsection 2.10.
"RENOVATION" means the rebuilding, repair, restoration, refurbishment,
fixturing and equipping of the Improvements at a Mortgaged Property.
"RENTS" means, collectively, with respect to any Mortgaged Property,
all rents, issues, profits, royalties, receipts, revenues, accounts receivable,
security deposits and other deposits
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(subject to the prior right of Tenants making such deposits) and income,
including room receipts, rack charges, vending machine receipts, food and
beverage receipts, concession fees and charges, public assembly room receipts,
fixed, additional and percentage rents, occupancy charges, operating expense
reimbursements, reimbursements for increases in taxes, sums paid by Tenants
pursuant to any Lease to any Loan Party or any of its Subsidiaries as landlord
thereunder to reimburse such Loan Party or such Subsidiary for amounts
originally paid or to be paid by such Loan Party or such Subsidiary or such Loan
Party's or such Subsidiary's agents or Affiliates for which such Tenants were
liable (as, for example, tenant improvements costs in excess of any work letter,
lease takeover costs, moving expenses and tax and operating expense
pass-throughs for which a Tenant is solely liable), deficiency rents and
liquidated damages, and other benefits.
"REORGANIZATION SECURITIES" means, collectively, (i) the 8% Secured
Promissory Note of the Company due 2002, (ii) the 9.20% Secured Promissory Note
of the Company due 2002 and (iii) the 10.00% Senior Secured Note of the Company
due 1999.
"REPLACED LENDER" has the meaning assigned to that term in subsection
2.9C.
"REPLACEMENT COST" means, for the Designated Mortgaged Properties set
forth herein, the following:
================================================================================
BRAND REPLACEMENT COST/ROOM
--------------------------------------------------------------------------------
Wellesley Inn $50,000
--------------------------------------------------------------------------------
AmeriSuites (formerly ▇▇▇▇▇▇▇▇) $55,000
--------------------------------------------------------------------------------
AmeriSuites $65,000
--------------------------------------------------------------------------------
Trevose Radisson $80,000
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ Heights $100,000
--------------------------------------------------------------------------------
Homegate $55,000
================================================================================
; provided that the Replacement Costs for other full-service hotels shall be
mutually agreed upon by the Company and the Agent.
"REPLACEMENT LENDER" has the meaning assigned to that term in
subsection 2.9C.
"RESTATEMENT CLOSING DATE" means the date of this Agreement.
"RESTORATION" means the construction, design services, labor, materials
and other indirect costs and direct costs required to repair, restore (including
demolition), replace and rebuild all or any portion of a Property (or the
Improvements thereof) following the destruction,
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damage, loss or Taking thereof. The term "RESTORE" used as a verb has a
corresponding meaning.
"RESTRICTED ASSETS" means, collectively, the Mortgaged Properties, the
capital stock of the Subsidiaries of the Borrower, the Intellectual Property,
Investments permitted pursuant to subsection 6.3(b), and licenses related to
more than one Mortgaged Property.
"RESTRICTED PAYMENTS" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of the
Company now or hereafter outstanding (other than (a) dividends payable in
Qualified Capital Stock of the Company and (b) dividends or distributions by a
Subsidiary of the Company provided that to the extent that a portion of such
dividend or distribution is paid to a holder of Equity Interests of a Subsidiary
other than the Company or a Wholly Owned Subsidiary of the Company, such portion
is not greater than such holder's pro rata aggregate common Equity Interests in
such Subsidiary), (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any equity Securities, now or hereafter outstanding, of the Company or
any of its Subsidiaries that are not Wholly Owned Subsidiaries, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any now or hereafter outstanding,
of the Company or any of its Subsidiaries that are not Wholly Owned Subsidiaries
and (iv) any payment or prepayment of principal of, premium, if any, or interest
on, or redemption, purchase, retirement, defeasance (including in substance or
legal defeasance), sinking fund or similar payment with respect to, any
Indebtedness of the Company or any of its Subsidiaries.
"SECONDARY MERGER" means a transaction, following the consummation of
the Homegate Merger, whereby Homegate will be merged directly into the Company
and any Subsidiaries of Homegate may be merged into Homegate or directly into
the Company.
"SECURITIES" means any stock, shares, partnership interests, interests
in limited liability companies, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "SECURITIES" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SECURITY AGREEMENT" means the Amended and Restated Security and Pledge
Agreement executed and delivered by each Loan Party and the Agent on or before
the Restatement Closing Date, and thereafter by each other Subsidiary of the
Company that becomes a party thereto, in substantially the form of Exhibit VII
annexed hereto, pursuant to which such
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Loan Party will pledge and grant a security interest in the Collateral described
therein to Agent for the benefit of the Agent and the Lenders, as such Amended
and Restated Security and Pledge Agreement may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.
"SECURITY DOCUMENTS" means, collectively, the Mortgages, the Existing
Mortgages as modified by the Mortgage Amendments, the Assignments of Rents and
Leases, the Existing Assignments of Rents and Leases as modified by the
Assignment of Rents Amendments, the Security Agreement, the Cash Management
Letters, Liquor License Agreement, the Tenant Subordination Agreements and all
deeds of trust, deeds to secure debt, mortgages, security agreements, pledge
agreements, assignments and all other instruments or documents (including UCC-1
financing statements, fixture filings, amendments of financing statements or
similar documents required or advisable in order to perfect or maintain the
Liens created by the Security Documents) delivered by any Person pursuant to
this Agreement or any of the other Loan Documents, whether such delivery is
prior to, contemporaneous with or after delivery of this Agreement, in order to
grant to the Agent Liens in real, personal or mixed property of that Person, and
to maintain such Liens as each of the foregoing may be amended, restated,
consolidated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof. Security Documents do not include this
Agreement or the Notes.
"SENIOR SUBORDINATED NOTES" means, collectively, (i) the $200,000,000
of senior subordinated notes issued by the Company pursuant to the Senior
Subordinated Note Indenture, (ii) any Securities issued by any Person to a
holder of any of the Securities referred to in this definition of Senior
Subordinated Notes pursuant to an order of decree of a court of competent
jurisdiction and (iii) any Securities issued by any Person in connection with
any refinancing, exchange or refunding of any of the securities referred to in
this definition of Senior Subordinated Notes; in each case with respect to
securities referred to in this definition of Senior Subordinated Notes, as such
securities may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms thereof and hereof.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as of
March 26, 1997 between the Company and PNC Bank, as Trustee, pursuant to which
the Company issued the Senior Subordinated Notes.
"SERVICING AGREEMENTS" means, collectively, the management agreements,
if any, entered into between the Company, on the one part, and each Subsidiary
of the Company that owns a fee or leasehold interest in any Mortgaged Property,
on the other part, in form and substance satisfactory to the Agent delivered on
the Closing Date, as any such agreement may be amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms thereof and
hereof.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard
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to the occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons performing
similar functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"SUBSIDIARY GUARANTOR" means each Loan Party from time to time, that is
party to the Subsidiary Guaranty.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty by each Loan Party
(other than the Company) and any other Subsidiary of the Company that becomes a
party thereto in accordance with the terms of this Agreement, including without
limitation subsection 2.10A(i), substantially in the form of Exhibit VI annexed
hereto, as such Subsidiary Guaranty may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and
hereof.
"SUPERMAJORITY LENDERS" shall mean Lenders having or holding 66-2/3% or
more of the sum of the aggregate Commitments of all Lenders or, if such
Commitments have terminated or expired, the aggregate principal amount of
outstanding Loans; provided that if one Lender shall, together with its
Affiliates, hold 66-2/3% or more of the aggregate Commitments (or, if
applicable, Loans), then Supermajority Lenders shall mean such Lender plus at
least one other Lender (other than any Affiliate of such Lender).
"SURVEY" means, with respect to any Mortgaged Property, a current
survey map prepared by a surveyor licensed in the state in which such Property
is located, reasonably acceptable to the Agent, containing the legal description
of such Property and conforming, and certified by such surveyor to the Agent and
the Lenders and the Title Company as conforming, to the Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys for urban survey class as adopted
by ALTA and American Congress on Surveying & Mapping, and showing, to the extent
possible, all matters described as 1, 2, 3, 4, 6, 7(a), 7(b)(1), 8, 9, 10 and 11
in "Table A/Optional Survey Responsibilities and Specifications" in such Minimum
Standard Detail Requirements; provided, however, that the survey need not meet
the foregoing requirements if the Title Company has eliminated the survey
exception from the Title Policies and all other exceptions to the Title Policies
based upon such survey are acceptable. Any such survey shall contain a
certification by such surveyor to the Agent and the Lenders stating whether the
Mortgaged Property is located in an area having special flood hazards as
identified by the Federal Emergency Management Agency.
"SYNDICATION AGENT" has the meaning assigned to that term in the
introductory paragraph of this Agreement.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
Inc., or any successor to the business thereof.
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"TAKING" means the taking or appropriation (including by deed in lieu
of condemnation or by voluntary sale or transfer under threat of condemnation or
while legal proceedings for condemnation are pending) of any Mortgaged Property,
or any part thereof or interest therein, for public or quasi-public use under
the power of eminent domain, by reason of any public improvement or condemnation
proceeding, or in any other manner or any damage or injury or diminution in
value through condemnation, inverse condemnation or other exercise of the power
of eminent domain.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, on
whomsoever and wherever imposed, levied, collected, withheld or assessed by a
Governmental Authority; provided, however, that "TAX ON THE OVERALL NET INCOME"
of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office (and/or, in the case of any
Lender, its lending office) is located or in which that Person is deemed to be
doing business on all or part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise).
"TENANT" means any Person liable by contract or otherwise to pay rent
or a percentage of income, revenue or profits pursuant to a Lease, and includes
a tenant, subtenant, lessee and sublessee.
"TENANT SUBORDINATION AGREEMENT" means any Subordination,
Nondisturbance and Attornment Agreement executed and acknowledged by a Tenant,
the Company or any other Loan Party and the Agent, and reasonably satisfactory
in form and substance to the Agent, as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof.
"TITLE COMPANY" means Chicago Title Insurance Company or other
nationally recognized title insurance company reasonably acceptable to the
Agent.
"TITLE POLICIES" means, with respect to the Mortgaged Properties, the
paid mortgagee policies of title insurance in the form of a 1970 ALTA loan
policy (or other form of loan policy available in the applicable state and
reasonably acceptable to the Agent) and issued by the Title Company.
"TOTAL MORTGAGED PROPERTY EBITDA" means, for any period and as of any
date of determination, the aggregate Property EBITDA in respect of all Mortgaged
Properties.
"TOTAL PROPERTY EBITDA" means, for any period and as of any date of
determination, the aggregate Property EBITDA for such period in respect of all
Properties.
"TOTAL UTILIZATION" means, as of any date of determination, the sum of
the following, without duplication:
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(i) the aggregate principal amount of the outstanding Loans;
plus
(ii) the aggregate amount of reserves against Total
Utilization established by the Company in accordance with the
provisions of subsection 5.16 in respect of required capital reserve
deposits.
"TRANSFER" means any conveyance, assignment, sale, mortgaging,
encumbrance, pledging, hypothecation, granting of a security interest in,
granting of options with respect to or other disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) all or any portion of any legal
or beneficial interest (i) in all or any portion of any Property, or (ii) in any
other assets of any Loan Party or any of its Subsidiaries.
"UNIFORM SYSTEM" means the Uniform System of Accounts for Hotels, 8th
Revised Edition, 1986, as published by the Hotel Association of New York City,
as the same may be further revised from time to time.
"WHOLLY OWNED" means, with respect to any Subsidiary of any Person, a
Subsidiary of the outstanding equity Securities of which (other than any
director's qualifying shares or Investments by foreign nationals mandated by
Applicable Law) are owned directly or indirectly by such Person.
"WORK" has the meaning assigned to that term in subsection 5.11G.
"ZONING VIOLATION" means, with respect to any Mortgaged Property, any
material zoning violation, as determined by the Agent, in its sole discretion.
"ZONING VIOLATION PERIOD" means with respect to any Mortgaged Property,
the period commencing on the day that a Zoning Violation shall commence with
respect to such Mortgaged Property, and terminating on the day that such Zoning
Violation has been remedied or a variance with respect to such Zoning Violation
has been issued by the proper Governmental Authority, in each case as such dates
of commencement and termination shall be determined by the Agent.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by the Company to the Agent and the Lenders pursuant to
subsection 3.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation. Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize accounting
principles and policies in conformity with those used to prepare the financial
statements referred to in subsection 4.3(i).
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1.3 REFERENCES TO ARTICLES, SECTIONS, EXHIBITS, SCHEDULES AND ATTACHMENTS.
All references appearing in a Loan Document to Articles, Sections,
subsections, clauses, Recitals, Exhibits, Schedules or Attachments are
references to the Articles, Sections, subsections, clauses and Recitals thereof
and to the Exhibits, Schedules or Attachments annexed to such Loan Document
unless expressly otherwise designated in such Loan Document. All references
appearing in a Loan Document to Exhibits, Schedules and Attachments are
references to such documents as initially annexed to such Loan Document or as
supplemented or revised in accordance with the terms of this Agreement or such
other Loan Document.
1.4 CAPTIONS.
All captions to any Article, Section, subsection, clause, Recital,
Exhibit, Schedule or Attachment in a Loan Document are used for convenience and
reference only and in no way define, limit or describe the scope or intent of,
or in any way affect, such Loan Document.
1.5 DRAFTER.
No inference against or in favor of any party to any Loan Document
shall be drawn from the fact that such party has drafted any portion of any Loan
Document.
1.6 REFERENCES TO PERSONS INCLUDE PERMITTED SUCCESSORS AND ASSIGNS.
Except as otherwise specified in a Loan Document, all references in
such Loan Document to any Person, other than the Company or any of its
Affiliates, shall be deemed to include the successors and assigns of such
Person.
1.7 REFERENCES TO APPLICABLE LAW AND CONTRACTS.
Except as otherwise specified in a Loan Document, all references in
such Loan Document to any Applicable Law or contracts specifically defined or
referred to therein, shall be deemed references to such Applicable Law or
contracts as may be amended, restated, supplemented, consolidated or otherwise
modified from time to time, or, in the case of any such contract, as the terms
thereof may be waived or modified, but only in the case of each such amendment,
waiver or modification of a contract, to the extent permitted by, and effected
in accordance with, the terms thereof and hereof and only to the extent such
amendment, waiver or modification of a contract is not prohibited by any of the
Loan Documents.
1.8 HEREIN.
The words "HEREIN", "HEREINABOVE", "HEREINBELOW", "HEREOF", "HEREUNDER"
and words of similar import, when used in a Loan Document, shall refer to such
Loan Document as a whole.
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1.9 INCLUDING WITHOUT LIMITATION.
The words "INCLUDES", "INCLUDING" and similar terms used in any Loan
Document shall be construed as if followed by the words "WITHOUT LIMITATION".
1.10 GENDER.
Whenever the context so requires, the neuter gender includes the
masculine or feminine and the singular number includes the plural, and vice
versa.
1.11 SINGULAR AND PLURAL.
Any of the terms defined in a Loan Document may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
1.12 KNOWLEDGE.
As used in this Agreement or in any other Loan Document, the phrases
"TO THE COMPANY'S ACTUAL KNOWLEDGE", "TO THE KNOWLEDGE OF THE COMPANY" and any
variations thereof shall mean, as of any date of determination and after due
inquiry, the actual knowledge or awareness, as of such date, of the Persons who
occupy one or more of the offices of Chairman of the Board of Directors, Chief
Executive Officer, President, Executive Vice President, Chief Financial Officer,
General Counsel, Senior Vice- President/Development, Senior Vice President/Sales
and Marketing, Senior Vice President/Human Resources, Vice President and
Corporate Controller, Secretary, Treasurer, vice presidents of operations and
regional directors of operations; provided, however, that the knowledge of a
vice president of operations or a regional director of operations shall be
imputed to the Company only with respect to matters affecting the region or the
Mortgaged Properties for which such vice president or regional director provides
regional or property management services. The Company represents and warrants
that the foregoing Persons have executive and administrative responsibility for
the Company and its assets and, in the performance of their duties in the
ordinary course of business, would customarily have knowledge of the matters
referred to herein.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 PURCHASE OF EXISTING LOANS.
A. PURCHASE. Upon and subject to the terms and conditions herein set
forth, the
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Lenders shall purchase all right, title and interest in and to the Existing
Notes and the loans evidenced thereby.
B. PURCHASE PRICE. Company represents and warrants to Lenders that (i)
there will be outstanding under the Existing Agreement on the Restatement
Closing Date the principal sum of $30,000,000 (the "Purchase Price") and (ii)
Company has no defenses to and waives all offsets, claims or counterclaims it
may have with respect to the Existing Agreement and the Existing Notes. Each
Lender severally agrees to advance its Pro Rata Shares of the aggregate amount
of $30,000,000 in connection with the purchase of the Existing Notes and the
loans evidenced thereby by the Lenders.
C. MANNER OF PAYMENT. The Agent, on behalf of the Lenders, shall pay
the Purchase Price on the Closing Date by causing an amount of same day funds
equal to $30,000,000 to be credited to the account of Bankers at the office of
the Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
D. CONDITIONS TO CLOSING. The obligations of the Lenders to purchase
the Existing Notes and the loans evidenced thereby shall be subject to
satisfaction of all of the conditions set forth in subsections 3.1B and 3.1C
below.
E. CONSOLIDATION, SPLITTER, AMENDMENT AND RESTATEMENT OF EXISTING LOAN
DOCUMENTS. Simultaneously with the purchase and sale of the Existing Notes and
the loans evidenced thereby, the Lenders and the Company shall, and hereby do,
consolidate the Existing Notes so that the same shall constitute and evidence
single indebtedness, and in addition the Lenders and the Company shall, and
hereby do, split such single indebtedness into the several Loans of each of the
several Lenders and amend and restate the Existing Loan Documents in their
entirety so that, from and after the Restatement Closing Date, all of the
agreements, covenants, representations, warranties, indemnities, rights and
obligations of the parties to the Existing Agreement shall be as provided in
this Agreement and the other Loan Documents and as otherwise provided by
Applicable Law with respect to the Loans hereunder.
2.2 COMMITMENTS; LOANS; NOTES; THE REGISTER.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of the Company herein
set forth, each Lender hereby severally agrees, subject to the limitations set
forth below with respect to the maximum amount of Loans permitted to be
outstanding from time to time, to lend to the Company from time to time during
the period from the Restatement Closing Date to but excluding the Maturity Date
an aggregate amount not exceeding such Lender's Pro Rata Share of the aggregate
amount of the Commitments to be used for the purposes identified in subsection
2.6A. The original amount of each Lender's Commitment (including such Lender's
share of the Existing Loans) and such Lender's Pro Rata Share is set forth
opposite its name on Schedule 2.2 annexed hereto and the aggregate original
amount of the Commitments (including the Lenders' Commitment to purchase the
Existing Loans) is $200,000,000; provided, however, that the Commitments of the
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Lenders shall be adjusted from time to time to give effect to any assignments of
the Commitments pursuant to subsection 8.1; provided further, however, that the
amount of the Commitments shall be automatically reduced by the amount of any
reductions to the Commitments made pursuant to subsection 2.5B.
Each Lender's Commitment shall expire on the Maturity Date and all
Loans and all other amounts owed hereunder with respect to the Loans and the
Commitments shall be paid in full no later than the Maturity Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Loans and the Commitments shall be subject to the limitations that the Total
Utilization of the Commitments shall not exceed the least of (i) the Borrowing
Base, (ii) the aggregate amount of the Commitments then in effect and (iii) the
aggregate amount of title insurance pursuant to Title Policies delivered
pursuant to subsections 2.10A(vi) and 3.1F(v) and (xiii).
B. BORROWING MECHANICS. Loans made on any Funding Date shall be in an
aggregate minimum amount of $1,000,000. The Company shall be permitted to
request a Loan pursuant to this subsection 2.2B only four times during any 30
day period. Whenever the Company desires that the Lenders make Loans, it shall
deliver to the Agent a Notice of Borrowing no later than 10:00 A.M. (New York
time) at least three Business Days in advance of the proposed Funding Date with
respect to a Eurodollar Rate Loan or, in the case of a Loan bearing interest
with reference to the Base Rate, one Business Day in advance of the proposed
Funding Date.
Each Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount of Loans requested, (iii)
whether such Loans shall be Base Rate Loans or Eurodollar Rate Loans (it being
understood that all Loans shall be Eurodollar Rate Loans except as otherwise
expressly permitted or required hereunder), (iv) if such Loan is a Eurodollar
Rate Loan, the initial Interest Period applicable thereto, (v) that not more
than three other Funding Dates shall have occurred within the 30 days next
preceding the proposed Funding Date, and (vi) that the amount of the proposed
Loan will not cause the Total Utilization of the Commitments to exceed the
Borrowing Base then in effect.
The Company may give the Agent telephonic notice by the required time
of any proposed Loan under this subsection 2.2B; provided, however, that such
notice shall be promptly confirmed in writing by delivery of a Notice of
Borrowing to the Agent on or before the applicable Funding Date. Neither the
Agent nor any Lender shall incur any liability to the Company in acting upon any
telephonic notice referred to above that the Agent believes in good faith to
have been given by a duly Authorized Officer or other Person authorized to
borrow on behalf of the Company or for otherwise acting in good faith under this
subsection 2.2B, and upon funding of Loans by the Lenders in accordance with
this Agreement pursuant to any such telephonic notice the Company shall have
effected Loans hereunder.
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The Company shall notify the Agent (who shall notify the Lenders) prior
to the funding of any Loans in the event that any of the matters to which the
Company is required to certify in the applicable Notice of Borrowing is no
longer true and correct as of the applicable Funding Date, and the acceptance by
the Company of the proceeds of any Loans shall constitute a re-certification by
the Company, as of the applicable Funding Date, as to the matters to which the
Company is required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.7B and 2.7C, a Notice of
Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Company shall be bound to make a borrowing in accordance therewith.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall be made
by the Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender be increased or decreased as a
result of a default by any other Lender in that other Lender's obligation to
make a Loan requested hereunder. Promptly after receipt by the Agent of a Notice
of Borrowing pursuant to subsection 2.2B (or telephonic notice in lieu thereof),
the Agent shall notify each Lender of the proposed Loan. Each Lender shall make
its Pro Rata Share of the aggregate amount of the Loan available to the Agent,
in same day funds, at the office of the Agent located at One Bankers Trust
Plaza, New York, New York, not later than 12:00 Noon (New York time) on the
applicable Funding Date in same day funds in Dollars. Upon satisfaction or
waiver of the conditions precedent specified in subsections 3.1 and 3.2 (in the
case of Loans made on the Restatement Closing Date) and 3.2 (in the case of all
Loans), the Agent shall make the proceeds of such Loans available to the Company
on the applicable Funding Date by causing an amount of same day funds equal to
the proceeds of all such Loans received by the Agent from the Lenders to be
transferred to the account designated in the Notice of Borrowing.
Unless the Agent shall have been notified by any Lender prior to the
Funding Date for any Loans that such Lender does not intend to make available to
the Agent the amount of such Lender's Loan requested on such Funding Date, the
Agent may assume that such Lender has made such amount available to the Agent on
such Funding Date and the Agent may, in its sole discretion, but shall not be
obligated to, make available to the Company a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made available to the
Agent by such Lender, the Agent shall be entitled to recover such corresponding
amount on demand from such Lender together with interest thereon, for each day
from such Funding Date until the date such amount is paid to the Agent, at the
Federal Funds Effective Rate for three Business Days and thereafter at the Base
Rate. If such Lender does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Company and the
Company shall immediately pay such corresponding amount to the Agent together
with interest thereon, for each day from such Funding Date until the date such
amount is paid to the Agent, at the rate payable under this Agreement for Base
Rate Loans. Nothing in this
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subsection 2.2C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment hereunder or to prejudice any rights that the Company may
have against any Lender as a result of any default by such Lender hereunder.
D. DEFAULTING LENDERS.
Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "DEFAULTING LENDER") defaults (a "FUNDING DEFAULT") in its
obligation to fund any Loan (a "DEFAULTED LOAN") in accordance with subsection
2.1 then (i) during any Default Period (as defined below) with respect to such
Defaulting Lender, such Defaulting Lender shall be deemed not to be a "Lender"
for purposes of voting on any matters (including the granting of any consents or
waivers) with respect to any of the Loan Documents, (ii) to the extent permitted
by applicable law, until such time as the Default Excess (as defined below) with
respect to such Defaulting Lender shall have been reduced to zero, (a) any
voluntary prepayment of the Loans pursuant to subsection 2.5B(i) shall, if
Company so directs at the time of making such voluntary prepayment, be applied
to the Loans of other Lenders as if such Defaulting Lender had no Loans
outstanding and the Loan Exposure of such Defaulting Lender were zero, and (b)
any mandatory prepayment of the Loans pursuant to subsection 2.5B(iv) or
subsection 2.5B(v) shall, if Company so directs at the time of making such
mandatory prepayment, be applied to the Loans of other Lenders (but not to the
Loans of such Defaulting Lender) as if such Defaulting Lender had funded all
Defaulted Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Loans that is not paid to such Defaulting Lender solely as a result of the
operation of the provisions of this clause (b), (iii) such Defaulting Lender's
Commitment and outstanding Loans shall be excluded for purposes of calculating
the commitment fee payable to Lenders pursuant to subsection 2.4A in respect of
any day during any Default Period with respect to such Defaulting Lender, and
such Defaulting Lender shall not be entitled to receive any commitment fee
pursuant to subsection 2.4A with respect to such Defaulting Lender's Commitment
in respect of any Default Period with respect to such Defaulting Lender, and
(iv) the Total Utilization as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting
Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means, with
respect to any Defaulting Lender, the period commencing on the date of the
applicable Funding Default and ending on the earliest of the following dates:
(A) the date on which all Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Loans of such Defaulting Lender or by the non-pro rata application of
any voluntary or mandatory prepayments of the Loans in accordance with the terms
of this subsection 2.2D or by a combination thereof) and (2) such Defaulting
Lender shall have delivered to Company and Agent a written reaffirmation of its
intention to honor its obligations under this Agreement with respect to its
Commitment, and (C) the date on which Company and Agent waive all Funding
Defaults of such Defaulting Lender in writing, and (II) "DEFAULT EXCESS" means,
with
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respect to any Defaulting Lender, the excess, if any, of such Defaulting
Lender's Pro Rata Share of the aggregate outstanding principal amount of Loans
of all Lenders (calculated as if all Defaulting Lenders (other than such
Defaulting Lender) had funded all of their respective Defaulted Loans) over the
aggregate outstanding principal amount of Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise affected,
and, except as otherwise expressly provided in this subsection 2.2D, performance
by Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.2D. The rights and remedies against a
Defaulting Lender under this subsection 2.2D are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Agent or any Lender may have against such
Defaulting Lender with respect to any Funding Default.
E. THE REGISTER.
(i) The Agent shall maintain, at its address referred to in
subsection 8.8, a register for the recordation of the names and
addresses of the Lenders and the Commitment and Loans of each Lender
from time to time (the "REGISTER"). The Company, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(ii) The Agent shall record in the Register the Commitment and
the Loans from time to time of each Lender, and each repayment or
prepayment in respect of the principal amount of the Loans of each
Lender. Any such recordation shall be prima facie evidence of such
matters as against the Company and each Lender, absent manifest error;
provided, however, that failure to make any such recordation, or any
error in such recordation, shall not affect the Company's Obligations
in respect of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including any promissory note described in subsection 2.2E(iv)) the
amount of each Loan made by it and each payment in respect thereof. Any
such recordation shall be prima facie evidence of such matters as
against the Company absent manifest error; provided, however, that
failure to make any such recordation, or any error in such recordation,
shall not affect the Company's Obligations in respect of the applicable
Loans; provided further, however, that in the event of any
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern, absent manifest error.
(iv) Any Lender may, by notice to the Agent and the Company,
request that all or part of the principal amount of the Company's Loans
from such Lender hereunder
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be evidenced by a Note. Within three Business Days of the Company's
receipt of such notice, the Company shall execute and deliver to the
Agent for delivery to the appropriate Lender a Note in the principal
amount(s) of such Loans, payable to the notifying Lender or, if so
specified in such notice, any Person who is an assignee of such Lender
pursuant to subsection 8.1 hereof. If the foreclosure or other
enforcement of any Mortgage or any other Security Document requires the
presentation of a Note evidencing the Obligations secured by such
Security Document and the Company fails or refuses to comply with a
request for such Note, then a copy of this Agreement may be presented
in lieu of such a Note.
F. EXTENSION OF MATURITY DATE. At any time that is not more than 180
days and not less than 90 days before the fourth Anniversary, the Company may
deliver a written notice to the Agent requesting that the Maturity Date be
extended from the fourth Anniversary to the fifth Anniversary and, if such
notice is delivered, the Maturity Date shall be so extended provided that the
following conditions are satisfied:
(i) as of the fourth Anniversary, no Potential
Event of Default or Event of Default shall have occurred and
be continuing and the Company shall have delivered an
Officer's Certificate certifying thereto; provided that, if a
Potential Event of Default (but not any Event of Default)
exists on the fourth Anniversary, the conditions set forth in
this clause (i) shall be satisfied if, on the date that is 30
days after the fourth Anniversary, no Potential Event of
Default or Event of Default shall have occurred and be
continuing and the Company shall have delivered an Officer's
Certificate certifying thereto;
(ii) on or prior to the fourth Anniversary, the
Company shall have paid to the Agent in immediately available
funds, for distribution to the Lenders in accordance with
their Pro Rata Shares, a fee equal to 0.25% of the aggregate
principal amount of the Loans outstanding on the fourth
Anniversary; and
(iii) after giving effect to the proposed
extension, the date on which any Capital Stock or other
Security issued by any Loan Party by its terms (or by the
terms of any Security into which it is convertible or for
which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking
fund or otherwise, or otherwise redeemable, in Cash at the
option of the holder thereof, in whole or in part, shall not
be a date that is prior to the Maturity Date, as so extended.
2.3 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.3E, 2.7
and 2.8, each Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Adjusted
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Eurodollar Rate; provided, however, that in the event that any Loan is
to be made on a day when there are already five (5) Interest Periods
outstanding, such Loan shall bear interest at a rate determined by
reference to the Base Rate until the commencement of the next
succeeding Interest Period, at which time such Loan shall be converted
(automatically and without the necessity of any action on the part of
any Person) to a Eurodollar Rate Loan in accordance with subsection
2.3D. The basis for determining the interest rate with respect to any
Loan shall be changed from time to time in accordance with subsection
2.3D.
Subject to the provisions of subsections 2.3E, 2.5B(iv) and 2.8, the
Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at a rate equal to the Base Rate
plus 1.00%.
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus 2.00%.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan, the
Company shall, pursuant to the applicable Notice of Borrowing or Notice of
Continuation, as the case may be, select an interest period (each an "INTEREST
PERIOD") to be applicable to such Loan, which Interest Period shall be at the
Company's option a one, two or three month period; provided, however, that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan;
(ii) each successive Interest Period shall commence on the day
on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that, if any Interest
Period would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iv) 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, subject to clause (v) of this subsection 2.3B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date;
(vi) there shall be no more than five (5) Interest Periods
outstanding at any time;
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(vii) if five Interest Periods are outstanding, at least one
Interest Period shall be either (a) a one month Interest Period or (b)
an Interest Period with less than 30 days remaining; and
(viii) in the event the Company shall fail to specify an
Interest Period for a Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Continuation, the Company shall be deemed to
have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.3E,
interest on the Loans shall be payable monthly in arrears on and to each Payment
Date, upon any prepayment of the Loans (to the extent accrued on the amount
being prepaid) and at maturity (including final maturity).
D. CONVERSION/CONTINUATION. Subject to the provisions of subsections
2.3E and 2.7, each Base Rate Loan shall be automatically converted into a
Eurodollar Rate Loan on the first day of the next succeeding Interest Period,
but in any event within 30 days of the making of such Base Rate Loan; provided,
however, that, unless expressly required by the terms of this Agreement, no Loan
may be made as a Base Rate Loan during the period from December 24 of any year
to and including January 7 of the next succeeding year.
Upon the expiration of any Interest Period applicable to a Eurodollar
Rate Loan, the Company shall continue such Loan as a Eurodollar Rate Loan. The
Company shall deliver a Notice of Continuation to the Agent no later than 10:00
A.M. (New York) at least three Business Days in advance of the proposed
continuation date for the applicable Eurodollar Rate Loan. A Notice of
Continuation shall specify (i) the proposed continuation date (which shall be a
Business Day), (ii) the amount and type of the Eurodollar Rate Loan to be
continued, (iii) the nature of the proposed continuation, (iv) the requested
Interest Period (which, if a Potential Event of Default has occurred and is
continuing shall be a one month period), and (v) that no Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Continuation, the Company may give the Agent telephonic notice by the required
time of any proposed continuation under this subsection 2.3D; provided, however,
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Continuation to the Agent on or before the proposed continuation date. Upon
receipt of written or telephonic notice of any proposed continuation under this
subsection 2.3D, the Agent shall promptly transmit such notice by telefacsimile
or telephone to each Lender.
Neither the Agent nor any Lender shall incur any liability to the
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly Authorized Officer or other
Person authorized to act on behalf of the Company or for otherwise acting in
good faith under this subsection 2.3D, and upon continuation of the applicable
basis for determining the interest rate with respect to any Loans in accordance
with this Agreement pursuant to any such telephonic notice the Company shall
have effected a continuation, as the case may be, hereunder.
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Except as otherwise provided in subsections 2.3E, 2.7B and 2.7C, a
Notice of Continuation for continuation of a Eurodollar Rate Loan (or telephonic
notice in lieu thereof) shall be irrevocable on and after the related Interest
Rate Determination Date, and Company shall be bound to effect a continuation in
accordance therewith.
E. DEFAULT RATE INTEREST. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by Applicable Law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 3% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 3% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided, however, that, in the case of Eurodollar Rate Loans,
if such Event of Default is continuing, upon the expiration of the Interest
Period in effect at the time any such increase in interest rate is effective,
such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 3% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans. Payment or acceptance of the increased rates of interest provided for in
this subsection 2.3E is not a permitted alternative to timely payment and shall
not constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of the Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan shall be included, and the date of payment of such Loan or the expiration
date of an Interest Period applicable to such Loan shall be excluded; provided,
however, that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.4 FEES.
A. COMMITMENT FEES. The Company agrees to pay to the Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Restatement Closing Date
to and excluding the Maturity Date, equal to (i) the average of the daily unused
portion of the Commitments, multiplied by (ii) 0.25% per annum, such commitment
fees to be calculated on the basis of a 360-day year and the actual number of
days elapsed and to be payable quarterly in arrears on the last day of each
calendar quarter, commencing with the first such date to occur after the
Restatement Closing Date, and on the Maturity Date. Anything contained in this
Agreement to the contrary notwithstanding, for purposes of calculating the
commitment fees payable by the Company pursuant to this subsection 2.4A, the
"unused portion of the Commitments," as of any date if determination, shall be
an
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amount equal to the aggregate amount of Commitments as of such date minus the
aggregate principal amount of all outstanding Loans on such date. The commitment
fee shall be payable as provided in this subsection notwithstanding that the
amount available to be borrowed hereunder may be less than the amount of the
Commitments due to the operation of the Borrowing Base.
B. OTHER FEES. The Company agrees to pay to the Agent such other fees
in the amounts and at the times separately agreed upon in writing between the
Company and the Agent.
2.5 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED REDUCTIONS OF COMMITMENTS. The Commitments shall be
permanently reduced on the dates and in the amounts set forth below:
Schedule Reduction
DATE of Commitments
---- ------------------
third Anniversary $25,000,000
fourth Anniversary $50,000,000
; provided that the scheduled reductions of the Commitments set forth above
shall be reduced in connection with any voluntary or mandatory reductions of the
Commitments in accordance with subsection 2.5B(viii).
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. The Company may, upon not less than
one Business Day's prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days' prior written or telephonic
notice in the case of Eurodollar Rate Loans, in each case confirmed in
writing to the Agent (which notice the Agent will promptly transmit by
telecopy, telex or telephone to each Lender), at any time and from time
to time prepay any Loans on any Business Day in whole or in part in an
aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount (or, if less, the total amount of all
outstanding Loans); provided, however, that in the event a Eurodollar
Rate Loan is prepaid on a day other than the last day of the Interest
Period applicable thereto, such prepayment shall be accompanied by the
payment of any amounts payable under subsection 2.7D. Notice of
prepayment having been given as aforesaid, the principal amount of the
Loans specified in such notice shall become due and payable on the
prepayment date specified therein; provided, however, that in the case
of any such withdrawal, the Company shall promptly pay all amounts then
due to the Lenders pursuant to subsection 2.7D. Any such voluntary
prepayment shall be applied as specified in subsection 2.5B(vii).
Amounts prepaid pursuant to this subsection 2.5B(i) may be reborrowed
pursuant to subsection 2.2A.
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(ii) Voluntary Reductions of Commitments. The Company may,
upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to the Agent (which notice the Agent will
promptly transmit by telecopy, telex or telephone (confirmed in
writing) to each Lender), at any time and from time to time terminate
in whole or permanently reduce in part, without premium or penalty, the
Commitments in an amount up to the amount by which the Commitments
exceed the Total Utilization of Commitments; provided, however, that
any such partial reduction of the Commitments shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount. The Company's notice to the Agent shall
designate the date (which shall be a Business Day) of such termination
or reduction and the amount of any partial reduction, and such
termination or reduction of the Commitments shall be effective on the
date specified in the Company's notice and shall reduce the Commitment
of each Lender proportionately to its Pro Rata Share. Any such
voluntary reduction of the Commitments shall be applied as specified in
subsection 2.5B(viii).
(iii) Reductions in Borrowing Base Due to Casualty,
Condemnation or Disposition of a Designated Mortgaged Property. If
there shall occur a casualty or Taking with respect to any Designated
Mortgaged Property (or any portion thereof) or a sale or other
permanent disposition of such Designated Mortgaged Property, with
respect to which occurrence a prepayment is required to be made, then
the Borrowing Base shall be recomputed as of such date, after giving
effect to any reduction in the related Property EBITDA or Release.
(iv) Prepayments Due to Borrowing Base. If at any time the
Total Utilization exceeds the Borrowing Base then in effect, as
demonstrated by a Borrowing Base Certificate delivered (or required to
be delivered) pursuant to subsection 5.1(ii), the Company shall prepay
the Loans in an amount equal to such excess not later than 5 Business
Days after the date that such Borrowing Base Certificate shall have
been delivered (or, if such Borrowing Base Certificate shall not have
been delivered) timely or at all, on the last day that such Borrowing
Base Certificate is permitted by subsection 5.1(ii) to be delivered).
Any mandatory prepayments pursuant to subsection 2.5B(iv) shall be
applied as specified in subsection 2.5B(vii).
(v) Prepayments from Asset Sales. At any time prior to the
date which is 364 days following the date of receipt of such Net Cash
Proceeds from an Asset Sale by any Loan Party or any of its
Subsidiaries but in any event not later than the day before the day on
which the Company shall be obligated to pay any amount of such Net Cash
Proceeds (or other amount determined by reference to such Net Cash
Proceeds) to satisfy all or part of any other obligation that may
become due by reason of such sale or other disposition other than any
Indebtedness secured by the assets from which such Net Cash Proceeds
were derived, the Company may spend all or any part of Net Cash
Proceeds (or other amount determined by reference to such Net Cash
Proceeds) on a Renovation or Restoration permitted hereunder or
otherwise invest such amounts in property or assets used in a
Hospitality-Related Business; provided that if an Event of Default
resulting
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from a failure to pay principal or interest hereunder has occurred and
is continuing, the Company shall not use any part of such Net Cash
Proceeds to make any capital expenditures for any purpose (including,
without limitation, the investment of any amount in any property or
assets used in a Hospitality-Related Business, but excluding the
purchase of FF&E and expenditures in furtherance of any Renovation or
Restoration of any Property (including any Property that is not a
Mortgaged Property) that shall have commenced before the occurrence of
such Event of Default and that cannot be terminated without material
cost to the Company or a material adverse effect on the Property)
unless and until the Company shall have prepaid the Loans in the
amounts required by, and in accordance with the provisions of, the
sentence next following. Any amounts not expended in accordance with
the preceding sentence at the earlier of (i) the day before the day on
which the Company is obligated to apply such amounts to satisfy all or
part of any other obligation that may become due by reason of such sale
or other disposition, other than any Indebtedness secured by the assets
from which such Net Cash Proceeds were derived, or (ii) the date that
is 365 days after the receipt of such Net Cash Proceeds, shall be
applied to prepay the Loans and the Commitments shall be automatically
and permanently reduced by the aggregate amount of such prepayments.
Concurrently with any prepayment of the Loans pursuant to this
subsection 2.5B(v), the Company shall deliver to the Agent an Officer's
Certificate demonstrating the derivation of the Net Cash Proceeds. Any
mandatory prepayments pursuant to this subsection 2.5B(v) shall be
applied as specified in subsection 2.5(B)(vii). Net Cash Proceeds from
the sale of more than one Property shall be deemed expended in the
order in which such amounts were received by the applicable Loan Party
or Subsidiary.
(vi) Acceleration Due to Reduction of the Facility Amount. In
the event that the aggregate amount of the Commitments at any time is
less than $10,000,000, whether due to a prepayment or reduction in the
Commitments or otherwise, (a) the Commitments shall be automatically
terminated and (b) the Loans outstanding and all other Obligations of
the Company shall become immediately due and payable.
(vii) Application of Prepayments. Each prepayment of the Loans
shall be applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a manner
which minimizes the amount of any payments required to be made by the
Company pursuant to subsection 2.7D.
(viii) Application of Unscheduled Reductions of Commitments.
Any voluntary reduction of the Commitments pursuant to subsection
2.5B(ii) shall be applied to reduce the scheduled reductions of the
Commitments set forth in subsection 2.5A in inverse chronological
order.
C. APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST. All payments in
respect of the principal amount of the Loans shall include payment of accrued
interest on the principal amount being repaid or prepaid, and all such payments
shall be applied to the payment of unpaid interest before application to
principal.
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D. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by the Company of
principal, interest, fees and other Obligations hereunder and under the
Notes and the other Loan Documents shall be made in same day funds and
without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to the Agent not later than 1:00 P.M. (New
York time) on the date due at its office located at One Bankers Trust
Plaza, New York, New York, for the account of the Lenders; funds
received by the Agent after that time on such due date shall be deemed
to have been paid by the Company on the next succeeding Business Day.
The Company hereby authorizes the Agent to instruct the Cash Manager to
charge its accounts with the Cash Manager (including the Concentration
Account and the Operating Account) in order to cause timely payment to
be made to the Agent of all principal, interest, fees and expenses due
hereunder or under the Notes or the other Loan Documents (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to the
Lenders' respective Pro Rata Shares. The Agent shall promptly
distribute to each Lender, at its primary address set forth below its
name on the appropriate signature page hereof or at such other address
as such Lender may request, its Pro Rata Share of all such payments
received by the Agent and the facility fees and commitment fees of such
Lender when received by the Agent pursuant to subsection 2.4.
Notwithstanding the foregoing provisions of this subsection 2.5D(ii),
if, pursuant to the provisions of subsection 2.5C, any Affected Lender
makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar
Rate Loans, the Agent shall give effect thereto in apportioning
payments received thereafter.
(iii) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
(iv) Notation of Payment. Each Lender agrees that before
disposing of the Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided, however, that the failure to make (or any error in
the making of) a notation of any Loan made under such Note shall not
limit or otherwise affect the obligations of the Company hereunder or
under such Note with respect to any Loan or any payments of principal
or interest on such Note.
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2.6 USE OF PROCEEDS.
A. LOANS. Subject to subsection 2.6B, the proceeds of the Loans shall
be applied by the Company for the general corporate purposes of the Company.
B. MARGIN REGULATIONS. No portion of the proceeds of any Loan under
this Agreement shall be used by any Loan Party or any of its Subsidiaries in any
manner that might cause the Loan to violate Regulation G, Regulation U,
Regulation T or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board or to violate the Exchange Act, in
each case as in effect on the date or dates of the making of such Loan.
2.7 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to the Eurodollar Rate Loans
as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York time) on each Interest Rate Determination Date, the
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to the Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
the Agent shall have determined (which determination shall absent manifest error
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances affecting the interbank Eurodollar market adequate and
fair means do not exist for ascertaining the interest rate applicable to such
Loans on the basis provided for in the definition of Adjusted Eurodollar Rate,
the Agent shall on such date give notice (by telefacsimile or by telephone
confirmed in writing) to the Company and each Lender of such determination,
whereupon (i) no Loans may be made as, or converted to Eurodollar Rate Loans
until such time as the Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist and (ii) any Notice of
Borrowing or Notice of Continuation given by the Company with respect to the
Loans in respect of which such determination was made shall be deemed to contain
a request that such Loans be made as or converted to Base Rate Loans.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the
event that on any date any Lender shall have determined in good faith (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with the Company and the Agent) that
the making, maintaining or continuation of its Eurodollar Rate Loans (i) has
become unlawful as a result of compliance by such Lender in good faith with any
law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such
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treaty, governmental rule, regulation, guideline or order not having the force
of law even though the failure to comply therewith would not be unlawful) or
(ii) has become impracticable, or would cause such Lender material hardship, as
a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market, or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to the Company and the Agent of such
determination (which notice the Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to make Loans as,
or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by the Company to be made or continued hereunder, the Affected
Lender shall make such Loan as, or convert such Loan to, as applicable, a Base
Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans (the "AFFECTED LOANS") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Except as provided in the immediately preceding sentence, nothing in this
subsection 2.7C shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate
Loans in accordance with the terms of this Agreement. Once the conditions
causing a Lender to be an Affected Lender no longer exist, such Lender shall,
promptly after it becomes aware thereof, withdraw the notice that it is an
Affected Lender by giving notice (by telecopy or by telephone confirmed in
writing) to the Company and the Agent and such Lender's obligations to make
Eurodollar Rate Loans hereunder shall be immediately reinstated.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
The Company shall compensate each Lender, upon written request by that Lender
(which request shall set forth in reasonable detail the basis for requesting
such amounts), for all reasonable losses, expenses and liabilities (including
any interest paid by that Lender to lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any loss, expense or liability sustained by
that Lender in connection with the liquidation or re-employment of such funds)
which that Lender may sustain: (i) if for any reason (other than a default by
that Lender) a borrowing or continuation of any Eurodollar Rate Loan does not
occur on a date specified therefor in a Notice of Borrowing or a Notice of
Continuance, as applicable, or a telephonic request for borrowing, or a
conversion to or continuation of any Eurodollar Rate Loan does not occur on the
date specified therefor, (ii) if any prepayment or conversion of any of its
Eurodollar Rate Loans occurs on a date that is not the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment (including any
prepayment pursuant to subsection 2.5B(i)) or other principal payment of any of
its Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by the Company or (iv) as a consequence of any other default by
the Company in the repayment of its Eurodollar Rate Loans when required by the
terms of this Agreement.
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E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.7 and under
subsection 2.8A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.7 and
under subsection 2.8A.
2.8 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.8B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a Governmental
Authority, in each case that becomes effective after the date hereof, or
compliance by such Lender with any guideline, request or directive issued or
made after the date hereof by any central bank or other Governmental Authority
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
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(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, the Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to the Company (with a copy to the Agent) a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Lender under this subsection 2.8A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error. No Person shall be entitled to receive a payment pursuant to
this subsection 2.8A for costs incurred by such Person more than 180 days prior
to delivery of such statement.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by the
Company under this Agreement and the other Loan Documents shall be paid
free and clear of and (except to the extent required by law) without
any deduction or withholding on account of any Tax (excluding in the
case of each Lender and the Agent, Taxes imposed on its income, and
franchise and similar Taxes imposed on it, by a jurisdiction under the
laws of which such Lender is organized or in which its principal
executive office is located or in which its applicable lending office
for funding or booking its Loans hereunder is located) imposed, levied,
collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of
America.
(ii) Grossing-up of Payments. If the Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by the Company to
the Agent or any Lender under any of the Loan Documents:
(a) the Company shall notify the Agent of any such
requirement or any change in any such requirement as soon as
the Company becomes aware of it;
(b) the Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on the Company) for
its own account or (if that liability is imposed on the Agent
or such Lender, as the case may be) on behalf of and in the
name of the Agent or such Lender;
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(c) the sum payable by the Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, the Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, the Company shall
deliver to the Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other
authority;
provided, however, that no such additional amount shall be required to
be paid to any Lender under clause (c) above except to the extent that
any change after the date hereof (in the case of each Lender listed on
the signature pages hereof) or after the date such Lender became a
Lender pursuant to subsection 8.1 (in the case of each other Lender) in
any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of
this Agreement (in the case of each Lender listed on the signature
pages hereof) or at the date such Lender became a Lender pursuant to
subsection 8.1 (in the case of each other Lender) as the case may be,
in respect of payments to such Lender.
(iii) U.S. Tax Certificates. Each Lender that is organized
under the laws of any jurisdiction other than the United States of
America or any state or other political subdivision thereof shall
deliver to the Agent for transmission to the Company, on or prior to
the Restatement Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date it becomes a Lender pursuant to
subsection 8.1 (in the case of each other Lender), and at such other
times as may be necessary in the determination of the Company or the
Agent (each in the reasonable exercise of its discretion), (i) such
certificates, documents or other evidence, properly completed and duly
executed by such Lender (including Internal Revenue Service Form 1001
or Form 4224 or any other certificate or statement of exemption
required by Treasury Regulations Section 1.1441-4(a) or Section 1.1441-
6(c) or any successor thereto) or (ii) a Form W-8 (or any successor
form thereto), together with an annual certificate stating that such
Lender (or beneficial owner, as the case may be) (w) is not a "bank"
within the meaning of Section 881(c) (3)(A) of the Code, (x) is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Company, (y) is not a controlled foreign corporation
related to the Company (within the meaning of Section 871(h)(4)(B) of
the Code) and (z) is not acting as a conduit entity (within the meaning
of U.S. Treasury Regulation Section 1.881-3) to establish that such
Lender is not subject to deduction or withholding of United States
federal income tax under Section 1441 or 1442 of the
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Internal Revenue Code or otherwise (or under any comparable provisions
of any successor statute) with respect to any payments to such Lender
of principal, interest, fees or other amounts payable under any of the
Loan Documents. The Company shall not be required to pay any additional
amount to any Lender under clause (c) of subsection 2.8B(ii) if such
Lender shall have failed to satisfy the requirements of the immediately
preceding sentence or if any deduction, withholding or payment is
required by reason of the failure by such Lender (or, if such Lender is
not the beneficial owner of the Loan, such beneficial owner) to comply
with applicable certification, information, documentation or other
reporting requirements (including, without limitation, the failure to
timely submit a Form 1001, 4224 or W-8 (together with the annual
certificate required under clause (ii) above), as applicable)
concerning the nationality, residence, identity or connections with the
United States of America of such Lender (or beneficial owner, as the
case may be) if such compliance is required by statute or regulation of
the United States of America as a precondition to relief or exemption
from such deduction, withholding or payment; provided, however, that if
such Lender shall have satisfied such requirements on the Restatement
Closing Date (in the case of each Lender listed on the signature pages
hereof) or on the date it becomes a Lender (in the case of each other
Lender), nothing in this subsection 2.8B(iii) shall relieve Company of
its obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.8B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or
any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in the
immediately preceding sentence.
(iv) If the Company pays any additional amount under this
subsection 2.8B to a Lender and such Lender determines in its sole
discretion that it has actually received or realized as a result of
such payment any refund or any reduction of, or credit against, its
Taxes in or with respect to the taxable year in which the additional
amount is paid, such Lender shall pay to the Company an amount that the
Lender shall, in its sole discretion, determine is equal to the net
benefit, after tax, which was obtained by the Lender in such year as a
consequence of such refund, reduction or credit.
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability of any law, rule or
regulation (or any provision thereof) regarding capital adequacy, or any change
therein or in the interpretation or administration thereof by any Governmental
Authority, including any central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of, or with reference to, such Lender's Loans or Commitment or
participations herein or other obligations hereunder with respect to the Loans
to a level below that which such Lender or such controlling corporation could
have
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achieved but for such adoption, effectiveness, phase-in, applicability, change
or compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by the Company from such Lender of
the statement referred to in the next sentence, the Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to the Company (with a copy to the Agent) a written statement,
setting forth in reasonable detail the basis of the calculation of such
additional amounts, which statement shall be conclusive and binding upon all
parties hereto absent manifest error. No Person shall be entitled to receive a
payment pursuant to this subsection 2.8C for costs incurred by such Person more
than 180 days prior to delivery of such statement.
D. OBLIGATION OF THE LENDERS TO MITIGATE. Each Lender agrees that, as
promptly as practicable after the officer of such Lender responsible for
administering the Loans becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments under this
subsection 2.8, it will, to the extent not inconsistent with the internal
policies of such Lender and any applicable legal or regulatory restrictions, use
reasonable efforts (i) to make, fund or maintain the Commitment of such Lender
or the affected Loans of such Lender through another lending office of such
Lender, or (ii) take such other measures as such Lender may deem reasonable, if
as a result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender pursuant to this subsection 2.8
would be materially reduced and if, as determined by such Lender in its sole
discretion, the making, funding or maintaining of such Commitment or Loans
through such other lending office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely affect such Commitment
or Loans or the interests of such Lender; provided, however, that such Lender
will not be obligated to utilize such other lending office pursuant to this
subsection 2.8D unless the Company agrees to pay all incremental expenses
incurred by such Lender as a result of utilizing such other lending office as
described in clause (i) above. A certificate as to the amount of any such
expenses payable by the Company pursuant to this subsection 2.8D (setting forth
in reasonable detail the basis for requesting such amount) submitted by such
Lender to the Company (with a copy to the Agent) shall be conclusive absent
manifest error.
2.9 REPLACEMENT OF A LENDER.
A. AFFECTED LENDERS. In the event that any Lender shall give notice to
the Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.8 or in the event that any
Lender is unable to fund Loans as described in subsection 3.2B(iv), and unless
the circumstances which have caused such payments or which cause such Lender to
be unable to fund Loans are no longer in effect, the Company may, if such Lender
shall fail to withdraw such notice within five Business Days after the Company's
request for such withdrawal, upon ten days' prior written notice by the Company
to the Agent and such Lender, elect to cause such Lender to assign its Loans and
Commitments in full in accordance
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with the provisions of subsection 8.1A to an Eligible Assignee designated by the
Company and reasonably satisfactory to the Agent; provided that at any time
prior to the consummation of any such assignment, the Agent may (but shall have
no obligation to) designate another Eligible Assignee in substitution for the
Eligible Assignee designated by the Company, in which event the applicable
Lender shall assign its Loans and Commitments to such other Eligible Assignee.
B. DEFAULTING LENDERS. In the event that any Funding Default is
continuing, (1) the Company may, if the Defaulting Lender shall fail to cure the
default within five Business Days after the Company's and/or Agent's request
that it cure such default, by giving notice to Agent and any Defaulting Lender
of its election to do so (1) (a) terminate the Commitment, of such Defaulting
Lender upon receipt by such Defaulting Lender of such notice and (b) prepay on
the date of such termination any outstanding Loans made by such Defaulting
Lender, together with accrued and unpaid interest thereon and any other amounts
payable to such Defaulting Lender hereunder pursuant to subsection 2.6,
subsection 2.7 or subsection 3.6 or otherwise; provided that, in the event such
Defaulting Lender has any Loans outstanding at the time of such termination, the
written consent of Agent (which consent shall not be unreasonably withheld or
delayed) shall be required in order for Company to make the election set forth
in this clause (1); (2) the Agent may, if such Defaulting Lender shall fail to
cure the default within five Business Days after the Agent's request that it
cure such default, by giving notice to Company and any Defaulting Lender of its
election to do so (a) terminate the Commitment, of such Defaulting Lender upon
receipt by such Defaulting Lender of such notice and (b) cause the Company to
prepay on the date of such termination any outstanding Loans made by such
Defaulting Lender, together with accrued and unpaid interest thereon and any
other amounts payable to such Defaulting Lender hereunder pursuant to subsection
2.6, subsection 2.7 or subsection 3.6 or otherwise; or (3) the Company or the
Agent may cause such Defaulting Lender to assign its Loans and Commitments in
full to an Eligible Assignee in accordance with the provisions of subsection
8.1A.
C. REPLACEMENT LENDERS. (i) At the time of any replacement pursuant to
this subsection 2.9, the Eligible Assignee (the "REPLACEMENT LENDER") replacing
the applicable Lender (the "REPLACED LENDER") shall enter into one or more
assignment agreements, in form and substance satisfactory to the Agent, pursuant
to which the Replacement Lender shall acquire all of the Commitments and
outstanding Loans of the Replaced Lender and, in connection therewith, shall pay
to the Replaced Lender in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, and (B) an amount equal to all accrued, but
theretofore unpaid, fees owing to the Replaced Lender; and
(ii) all obligations of the Company owing to the Replaced
Lender (excluding those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid by the Company in full to such
Replaced Lender concurrently with such replacement.
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Upon the execution of the respective assignment documentation, the payments of
amounts referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, the delivery of the appropriate Note or Notes executed by
the Company, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to Company's obligations regarding the indemnification provisions under
this Agreement, which will survive for the benefit of such Replaced Lender.
2.10 ADDITION AND DESIGNATION OF MORTGAGED PROPERTIES.
A. ADDITION OF MORTGAGED PROPERTIES. The Company may, with the prior
written approval of Supermajority Lenders (including the Agent), which approval
may be granted, withheld, conditioned or delayed in their sole discretion, add
one or more Properties which are not Mortgaged Properties immediately prior to
the time of such addition (each, an "ADDITIONAL MORTGAGED PROPERTY") as
Mortgaged Properties; provided that, in any event:
(i) such Additional Mortgaged Property shall be or will be
owned either by the Company or, if approved in writing by,
Supermajority Lenders (including the Agent), a Mortgaged Property
Subsidiary; provided that such Mortgaged Property Subsidiary shall have
executed a counterpart of the Subsidiary Guaranty and the Security
Agreement;
(ii) each Additional Mortgaged Property shall include the
entire fee interest or leasehold interest pursuant to a Ground Lease in
a full service, all-suite, extended-stay or limited service hotel, as
the case may be, located in the United States of America and otherwise
be of a type, quality and character consistent with the Company's
business plan and strategy;
(iii) at least 30 days (or such shorter period as shall be
acceptable to the Agent) before the proposed Addition Date, the
Company, at its expense, shall deliver to the Agent the Property
Information with respect to such Additional Mortgaged Property, which
Property Information shall be satisfactory in form and substance to
Supermajority Lenders (including the Agent), in their sole discretion;
(iv) if such Additional Mortgaged Property is the subject of
an acquisition, all Investments and Guaranties to be made by the
Company and its Subsidiaries in connection with the proposed
acquisition shall be permitted pursuant to subsections 6.3 and 6.4;
(v) if such Additional Mortgaged Property is owned by a
Mortgaged Property Subsidiary, such Mortgaged Property Subsidiary shall
have entered into a Servicing Agreement with the Company and, if a
Liquor License exists with respect to such Additional Mortgaged
Property or is required thereafter, the holders thereof shall have
entered into a Liquor Operation Servicing Agreement, in each case
substantially in the form delivered on or before the Closing Date
pursuant to subsection 3.1H or in such
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other form as may be reasonably acceptable to the Agent, which shall
provide for Management Fees in amounts and on other terms satisfactory
to the Agent; and
(vi) on or before such Addition Date, the Company, at its
expense, shall deliver to the Agent the following with respect to the
applicable Additional Mortgaged Property:
(a) an Officer's Certificate of the Company setting
forth a schedule of insurance with respect to each of the
insurance policies required pursuant to subsection 5.10, and
the Agent shall be satisfied with the nature and scope of such
insurance policies and each such insurance policy shall name
the Agent on behalf of the Lenders, as loss payee, or as
additional insured, as the case may be,
(b) a statement of Property Gross Revenues and
Operating Expenses and any other expenses with respect to such
Additional Mortgaged Property for the 12 most recently
completed calendar months ending not less than 10 days before
such Addition Date, in reasonable detail satisfactory to the
Agent and certified by the Authorized Officer of the Company
to the effect provided in subsection 6.1(i), mutatis mutandis,
(c) an Addition Certificate in reasonable detail
satisfactory to the Agent and together with the financial
statements and other information used by the Company to
calculate the Borrowing Base and certified by the Authorized
Officer of the Company and, if applicable, the Mortgaged
Property Subsidiary,
(d) supplements to the Schedules to this Agreement,
the Environmental Indemnity, the Security Agreement and the
Liquor License Agreement reflecting the designation of such
Additional Mortgaged Property, which Schedules shall be
acceptable to the Agent,
(e) each of the other documents and satisfy each of
the other conditions set forth in paragraphs F, G, I, J and K
of subsection 3.1, mutatis mutandis, with respect to such
Additional Mortgaged Property,
(f) an Appraisal with respect to such Additional
Mortgaged Property, which Appraisal shall be satisfactory in
form and substance to the Agent,
(g) executed or certified, conformed copies of any
applicable Acquisition Agreement, and such other documents,
certificates and opinions executed and delivered by or on
behalf of the Company and any of its Subsidiaries as the Agent
or any Lender may reasonably request,
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(h) if the Additional Mortgaged Property includes a
leasehold interest, original counterparts of estoppel
certificates and agreements and subordination and
nondisturbance agreements with respect to each of the
applicable Ground Leases, satisfactory in form and substance
to the Agent, and duly executed and acknowledged by each
lessor under such Ground Lease, and
(i) payment pursuant to subsection 8.2 of the
expenses incurred by the Agent in connection with the matters
subject to this subsection 2.10.
B. DESIGNATION OF MORTGAGED PROPERTIES. The Company may designate any
Mortgaged Property as a Designated Mortgaged Property by delivering a written
notice of such designation to the Agent. Upon receipt of such notice, the
applicable Mortgaged Property shall be a Designated Mortgaged Property for all
purposes of this Agreement, including without limitation, the calculation of the
Borrowing Base.
C. REMOVAL OF DESIGNATED PROPERTIES. The Company may, from time to time
after the Restatement Closing Date, deliver to the Agent written notice that it
elects to exclude the Property Amount of a specified Mortgaged Property from the
calculation of the Borrowing Base; provided that, after giving effect to such
exclusion, the Borrowing Base shall be at least equal to the Total Utilization.
Upon receipt by the Agent of such notice, the specified Mortgaged Property shall
be excluded from the calculation of the Borrowing Base unless the Borrower
elects to again designate such Mortgaged Property as provided in subsection
2.10B, but such Property shall remain a Mortgaged Property for all purposes of
this Agreement unless such Property is Released pursuant to subsection 2.11.
2.11 RELEASES OF MORTGAGED PROPERTIES.
A. MORTGAGED PROPERTIES. At any time and from time to time after the
Restatement Closing Date, in connection with the sale or other permanent
disposition of any Mortgaged Property or mandatory prepayments made pursuant to
subsection 2.5B(iv) or otherwise, the Company may obtain a Release of the Lien
of the Security Documents in respect of all, but except as provided below not a
portion of, such Mortgaged Property subject to the following terms and
conditions on the applicable Release Date; provided that no Mortgaged Property
shall be Released within three months of the Addition Date of such Mortgaged
Property:
(i) the Company shall have delivered written notice to the
Agent (a) not less than 30 days (or such shorter period as shall be
acceptable to the Agent) prior to the proposed Release Date specifying
the proposed Release Date and such Mortgaged Property and (b) not less
than five (5) days prior to the actual Release Date specifying such
actual Release Date and such Mortgaged Property;
(ii) no Event of Default or Potential Event of Default shall
have occurred and be continuing as of the date of the delivery of the
notice pursuant to clause (i) above (other than any which will be cured
by such Release and, if applicable, the application
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of proceeds in connection therewith) and no Event of Default or
Potential Event of Default shall be continuing as of the Release Date
after giving effect to such Release;
(iii) concurrently with such Release, the Borrowing Base shall
be recomputed by giving effect to such Release;
(iv) the Company shall have prepaid the Loans in the amount
required by subsection 2.5B(iv);
(v) the Company shall have delivered to the Agent and the
Lenders (a) an Officer's Certificate dated the Release Date, certifying
as to the matters referred to in clause (ii) above, (b) a Borrowing
Base Certificate setting forth in reasonable detail the computation of
the Borrowing Base as of the Release Date and giving effect to such
Release and (c) a Compliance Certificate giving effect to such Release;
(vi) the Company, at its sole cost and expense, shall have (a)
with respect to any partial Release of the Lien of the Security
Documents in respect of such Mortgaged Property, delivered to the Agent
one or more endorsements to the Title Policy in respect of such
Mortgaged Property insuring that, after giving effect to such partial
Release and with respect to the portion of such Mortgaged Property
which is not being Released, the Liens created by the applicable
Mortgage and insured under such Title Policy are in full force and
effect and unaffected by such partial Release as to the remaining
portion of such Mortgaged Property, (b) prepared any and all documents
and instruments necessary to effect such Release, all of which shall be
satisfactory in form and substance to the Agent, and (c) paid all
reasonable costs and expenses incurred by the Agent and its counsel in
connection with the review, execution and delivery of the release
documents;
(vii) after giving effect to such Release, the Company shall
be able to incur $1.00 of additional Loans under this Agreement,
without giving effect to limitations with respect to the frequency and
minimum amounts of Loans; and
(viii) all other proceedings taken or to be taken in
connection with such Release and all documents incidental thereto shall
be satisfactory in form and substance to the Agent and the Agent's
counsel. The Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as the
Agent may reasonably request and counsel for the Agent shall have
received such documents and evidence that such counsel shall require in
order to establish compliance with the conditions set forth in this
subsection.
The Company may obtain a Release of the Lien of the Security Documents in
respect of a portion of any Mortgaged Property, if title to such portion has
been permanently Taken, by complying with the foregoing terms and conditions on
the applicable Release Date.
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B. EFFECT OF RELEASE. Upon any Release of any Mortgaged Property in
accordance with this subsection 2.11, such Property shall cease to be a
Mortgaged Property for the purposes of this Agreement (other than for purposes
of any indemnity contained herein or in any of the other Loan Documents to the
extent such indemnification applies to such Mortgaged Property, prior to giving
effect to such Release), including subsections 4.2G and 5.8 (to the extent such
subsections apply to such Mortgaged Property and incorporate the Environmental
Indemnity) and subsection 8.3.
C. REVISED SCHEDULES. Upon the Release of any Mortgaged Property
pursuant to this subsection 2.11, the Company shall deliver to the Agent revised
Schedules to this Agreement, the Environmental Indemnity, the Security Agreement
and the Liquor License Agreement, as applicable, reflecting the Release of such
Mortgaged Property, which Schedules shall be satisfactory to the Agent and shall
become effective upon the date of such Release.
SECTION 3.
CONDITIONS PRECEDENT
3.1 CONDITIONS TO EFFECTIVENESS.
The obligations of Lenders to make Loans hereunder and to pay the
Purchase Price hereunder are subject to the satisfaction of the following
conditions:
A. CORPORATE DOCUMENTS. On or before the Restatement Closing Date, each
Loan Party shall deliver or cause to be delivered to the Agent (with, except in
the case of the Notes, sufficient originally executed copies for each Lender and
the Agent's counsel) the following, each, unless otherwise noted, dated the
Closing Date:
(i) executed originals of each of the following Loan Documents
to which such Loan Party is a party: this Agreement, the Security
Agreement, the Intellectual Property License Agreement, the
Environmental Indemnity, the Liquor License Agreement and a Note in
favor of each Lender requesting a Note under subsection
2.2E(iv);
(ii) certified copies of its Certificate of Incorporation,
together with (a) a good standing certificate (including verification,
where generally available, of tax good standing) from the Secretary of
State (or similar official) of the State of its jurisdiction of
incorporation and each other state or other jurisdiction in which a
Mortgaged Property owned or leased by such Loan Party is located), each
dated a recent date prior to the Restatement Closing Date and (b) a
telegram from each such Secretary of State (or similar official)
certifying as to the foregoing matters and dated the Restatement
Closing Date;
(iii) copies of its Bylaws, certified as of the Restatement
Closing Date by its corporate secretary or an assistant secretary;
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(iv) resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of each Loan
Document and Related Document to which it is a party, and any other
agreements, documents, instruments and certificates required to be
executed by such Loan Party in connection therewith, certified as of
the Restatement Closing Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or
amendment; and
(v) signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents to which it is a
party.
B. INTENTIONALLY OMITTED.
C. EXISTING CONSOLIDATED LOAN DOCUMENTS. On or before the Restatement
Closing Date, the Existing Lenders shall deliver or cause to be delivered to the
Agent, on behalf of the Lenders, the following:
(i) the original Existing Notes
(ii) an original endorsement to the Existing Notes in favor of
the Agent duly executed on behalf of the applicable Existing Lender and
in form and substance reasonably satisfactory to the Agent; and
(iii) an original Assignment of Existing Loan Documents duly
executed by Bankers (on behalf of the Existing Lenders), as assignor,
in favor of the Agent, as assignee, and in form and substance, and in a
number of counterparts, reasonably satisfactory to the Agent.
D. FINANCIAL STATEMENTS; CERTIFICATES. On or before the Restatement
Closing Date, the Company shall have delivered to the Agent, on behalf of the
Lenders, the following:
(i) the financial statements referred to in subsection 4.3;
(ii) a Compliance Certificate dated as of the Restatement
Closing Date with respect to the twelve months ending November 30,
1997; and
(iii) a Borrowing Base Certificate dated as of the Restatement
Closing Date.
E. NO MATERIAL ADVERSE EFFECT. Since December 31, 1995, in the sole
opinion of the Agent, no Material Adverse Effect shall have occurred on or
before the Restatement Closing Date.
F. SECURITY INTERESTS. On or before the Restatement Closing Date, the
Company shall have taken or caused to be taken all such actions as may be
necessary or desirable to give the Agent a valid, enforceable and perfected
first priority Lien on or first priority security
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interest in the Collateral, subject only to Liens permitted pursuant to
subsection 6.2A, it being understood by each Lender that perfection against
Persons other than the Company of such Lien on the Rents may in certain
jurisdictions require the Agent to have possession of the Rents. Such actions
shall include the following:
(i) the delivery to the Agent of fully executed and
acknowledged counterparts of the Mortgage and the Assignment of Rents
and Leases, the Liquor License Agreement, the Security Agreement, and
all other Security Documents with respect with respect to the New
Mortgaged Properties, and the delivery of evidence satisfactory to the
Agent that counterparts of the Mortgage, the Assignment of Rents and
Leases and all other documents the Agent desires to have recorded have
been or will be recorded in all places necessary or desirable to create
and maintain (a) valid and enforceable first priority Liens on the fee
simple interest of the Company, as applicable, in the New Mortgaged
Properties in favor of the Agent, on behalf of the Agent and the
Lenders, as mortgagee (or as beneficiary in those jurisdictions where
the Lien is granted to a trustee for the benefit of the Agent), (b)
valid and enforceable first priority Liens on the Rents and Leases in
favor of the Agent, on behalf of the Agent and the Lenders, (c) valid
and enforceable first priority Liens in all fixtures at the New
Mortgaged Properties, in favor of the Agent, on behalf of the Agent and
the Lenders, as secured party and (d) valid and enforceable first
priority Liens in all other items of Collateral in favor of the Agent
on behalf of the Agent and the Lenders;
(ii) (a) the delivery to the Agent for filing pursuant to the
Security Documents of properly executed financing statements under the
Uniform Commercial Code (or any equivalent or similar legislation), or
any other documents required to be filed by other Applicable Laws,
satisfactory in form and substance to the Agent in each jurisdiction as
may be necessary to (in the Agent's reasonable judgment) effectively
perfect and maintain the security interests in the Collateral created
by such Security Documents and (b) the delivery of evidence that such
financing statements or other documents will have been or will be
recorded in all places necessary or desirable, in the reasonable
judgment of the Agent, to create and maintain valid and enforceable
first priority Liens on the Collateral in favor of the Agent, on behalf
of the Agent and the Lenders, subject only to Liens permitted pursuant
to subsection 6.2A;
(iii) the delivery to the Agent of a title report or
commitment (together with copies of all documents listed therein as
exceptions to title) dated not more than 90 days prior to the
Restatement Closing Date with respect to each New Mortgaged Property
and pro forma Title Policies dated not more than 30 days prior to the
Restatement Closing Date with respect to each New Mortgaged Property,
each in form and substance reasonably satisfactory to the Agent;
(iv) the delivery to the Agent of an opinion of counsel in
each state in which any New Mortgaged Property is located dated the
Restatement Closing Date addressed to the Agent and the Lenders in form
and substance reasonably satisfactory to the Agent;
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(v) the delivery to the Agent of the Title Policies or marked
title commitments insuring fee simple or leasehold title to each of the
New Mortgaged Properties vested in the Company and insuring the first
priority of the Liens created under the Mortgages in an amount for each
New Mortgaged Property equal to not less than (a) the most recent
Appraised Value with respect to such New Mortgaged Property, where
interstate tie-in endorsement is not available and (b) where interstate
tie-in endorsement is available, after giving effect to such tie-in
endorsement, the lesser of 70% of the aggregate most recent Appraised
Values of all "tied-in" Mortgaged Properties and $200,000,000, but in
any event in an amount sufficient to avoid any co-insurance of title
losses, in each case subject only to Permitted Encumbrances, and such
other title exceptions as are satisfactory to the Agent. Such Title
Policies shall be reinsured with title insurance companies acceptable
to the Agent in amounts as required by the Agent subject to facultative
reinsurance agreements in form satisfactory to the Agent. Such Title
Policies shall also contain such endorsements and affirmative insurance
provisions as the Agent may reasonably require and to the extent the
same are available in the applicable jurisdiction, including
"comprehensive" endorsements, revolving credit endorsements,
affirmative insurance against mechanic's liens, provisions relating to
construction loans in respect of the New Mortgaged Properties that are
to be renovated, survey exceptions, violations of covenants, conditions
and restrictions, encroachments, gap insurance, contiguity
endorsements, tie-in endorsements, access endorsements, "Last- dollar"
endorsements, survey endorsements, contingent loss/first loss
endorsements, variable rate mortgage endorsements, leasehold
endorsement for New Mortgaged Properties that are leaseholds, and any
other endorsements required by the Agent to address issues raised by
the Agent's due diligence or as a matter of Applicable Law to the
extent such endorsement is available at commercially reasonable cost.
In addition, the Company shall have paid to the Title Company or to the
appropriate Governmental Authority all expenses and premiums of the
Title Company in connection with the issuance of such Title Policies or
in connection with any Loan hereunder and an amount equal to the
recording and stamp taxes (including mortgage recording and intangible
and similar Taxes) based on an amount no more than the most recent
Appraised Value with respect to such New Mortgaged Property, in each
case as most recently determined by an Appraisal approved by the Agent
on or before such determination date, payable in connection with
recording the Mortgage and the Assignment of Rents and Leases in the
appropriate county land offices or in connection with any Loans
hereunder;
(vi) the delivery to the Title Company of such certificates
and affidavits as the Title Company may reasonably require in
connection with the issuance of the Title Policies;
(vii) the delivery to the Agent of a Survey with respect to
each of the New Mortgaged Properties, dated or re-dated to within 120
days prior to the Restatement Closing Date, which Surveys shall be
reasonably satisfactory in form and substance to the Agent;
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(viii) the delivery to the Agent of a letter from the
applicable zoning authority with respect to each of the New Mortgaged
Properties, reasonably satisfactory to the Agent stating that all
Improvements on each such New Mortgaged Property have been constructed
and are being used and operated in material compliance with (a) all
applicable zoning and subdivision Applicable Laws of all Governmental
Authorities or quasi-governmental authorities having jurisdiction with
respect to each such New Mortgaged Property, and (b) all building
permits issued in respect of each such New Mortgaged Property and the
certificate of occupancy for each such Property, including a copy (if
available) certified by the Company for each such Property or other
evidence satisfactory to the Agent that the New Mortgaged Properties
have been constructed and are being used and operated in material
compliance with all applicable zoning and subdivision Applicable Laws
of all Governmental Authorities or quasi-governmental authorities
having jurisdiction with respect to the New Mortgaged Properties;
(ix) the delivery to the Agent pursuant to the Security
Agreement of the promissory notes or other instruments (in each case
duly endorsed to the order of the Agent, as secured party),
representing the promissory notes and other instruments, if any, to be
pledged on the Restatement Closing Date pursuant to the Security
Agreement;
(x) the delivery to the Agent of (a) evidence satisfactory to
the Agent that all other filings, recordings and other actions the
Agent deems necessary or advisable to establish, perfect and preserve
the Liens granted to the Agent in the Collateral shall have been made
and (b) such other evidence as the Agent may reasonably request
demonstrating compliance of such New Mortgaged Property with all
Applicable Laws.
(xi) the delivery to the Agent of fully-executed and
acknowledged counterparts of amendments to each Existing Mortgage in
form and substance satisfactory to the Agent (such amendments,
collectively, the "MORTGAGE AMENDMENTS") for each Existing Mortgaged
Property owned in fee directly by the Company, and the delivery of
evidence satisfactory to the Agent that counterparts of the Mortgage
Amendments have been or will be recorded in all places necessary or
desirable to maintain valid and enforceable first priority Liens on the
fee simple or leasehold interests of the Company, as applicable, in the
Existing Mortgaged Properties as of the Restatement Closing Date in
favor of the Agent, as mortgagee (or as beneficiary in those
jurisdictions where the Lien is granted to a trustee for the benefit of
the Agent);
(xii) the delivery to the Agent of fully executed and
acknowledged counterparts of amendments to each Existing Assignment of
Rents and Leases in form and substance satisfactory to the Agent (such
amendments, collectively, the "ASSIGNMENT OF RENTS AMENDMENTS") and the
delivery of evidence satisfactory to the Agent that counterparts of the
Assignment of Rents Amendments have been or will be recorded in all
places necessary or desirable to maintain valid and enforceable first
priority Liens on the Rents and Leases in favor of the Agent, on behalf
of the Agent and the Lenders;
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(xiii) the delivery to the Agent of opinions of counsel or
other written advice from local counsel in each state in which any
Existing Mortgaged Property is located as of the Restatement Closing
Date as to the enforceability of the Mortgage Amendments to be recorded
in such states and such other matters as the Agent shall reasonably
request, which opinions shall be dated the Restatement Closing Date,
addressed to the Agent and the Lenders and otherwise in form and
substance reasonably satisfactory to the Agent;
(xiv) the delivery to the Agent of signed endorsements to the
Title Policies, new Title Policies or marked title commitments
("DATE-DOWN POLICIES") insuring on the Restatement Closing Date fee
simple or leasehold title to each of the Existing Mortgaged Properties
vested in the Company and insuring the first priority of the Liens
created under the Existing Mortgages amended by the Mortgage Amendments
in an amount for each Existing Mortgaged Property equal to not less
than (a) the most recent Appraised Value with respect to such Existing
Mortgaged Property, where interstate tie-in endorsement is not
available and (b) where interstate tie-in endorsement is available,
after giving effect to such tie-in endorsement, the lesser of 70% of
the aggregate most recent Appraised Values of all "tied-in" Mortgaged
Properties and $200,000,000, but in any event in an amount sufficient
to avoid any co-insurance of title losses, in each case subject only to
Permitted Encumbrances, and such other title exceptions as are
satisfactory to the Agent. Such Date-Down Policies shall be reinsured
with title insurance companies acceptable to Agent in amounts as
required by the Agent subject to facultative reinsurance agreements in
form satisfactory to the Agent. Such Title Policies shall also contain
such endorsements and affirmative insurance provisions as the Agent may
reasonably require and to the extent the same are available in the
applicable jurisdiction, including "comprehensive" endorsements,
revolving credit endorsements, affirmative insurance against mechanic's
liens, provisions relating to construction loans in respect of the
Existing Mortgaged Properties that are to be renovated, survey
exceptions, violations of covenants, conditions and restrictions,
encroachments, gap insurance, contiguity endorsements, tie-in
endorsements, access endorsements, "Last-dollar" endorsements, survey
endorsements, contingent loss/first loss endorsements, variable rate
mortgage endorsements, leasehold endorsement for Existing Mortgaged
Properties that are leaseholds, and any other endorsements required by
the Agent to address issues raised by the Agent's due diligence or as a
matter of Applicable Law to the extent such endorsement is available at
commercially reasonable cost. In addition, the Company shall have paid
to the Title Company or to the appropriate Governmental Authority all
expenses and premiums of the Title Company in connection with the
issuance of such Date-Down Policies or in connection with any Loan
hereunder and an amount equal to the recording and stamp taxes
(including mortgage recording, intangible and similar taxes) payable in
connection with recording each Mortgage Amendment in the appropriate
county or parish land offices or in connection with any Loans
hereunder;
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(xv) the delivery to the Title Company of such certificates
and affidavits as the Title Company may reasonably require in
connection with the issuance of the Date-Down Policies; and
(xvi) the delivery to the Agent of evidence reasonably
satisfactory to the Agent that all other filings, recordings and other
actions that the Agent deems necessary or advisable to establish,
continue, perfect and preserve the Liens granted to the Agent in the
Collateral as of the Restatement Closing Date shall have been made.
G. CASUALTY, FLOOD INSURANCE AND WORKERS' COMPENSATION. On or before
the Restatement Closing Date, the Company shall have delivered to the Agent (i)
duplicate originals or true and complete copies or other evidence satisfactory
to Agent of each policy of insurance required by this Agreement evidencing (a)
the issuance of such policies, (b) the payment of all premiums payable for the
period ending not earlier than the first Anniversary and (c) coverage which
meets all of the requirements set forth in this Agreement; (ii) an Officer's
Certificate dated the Restatement Closing Date to the effect that the insurance
coverage required by this Agreement is in full force and effect, that all annual
premiums therefor have been paid and that the amount of each limit of property
insurance provided for in the policies of insurance delivered to the Agent which
evidence such coverage are sufficient to cover all cost of replacing the
property and Improvements covered thereby; and (iii) evidence satisfactory to
the Agent that the Company is insured for workers' compensation liability with a
maximum deductible of $250,000.
To the extent permitted by law, the Company hereby irrevocably waives,
releases and discharges any and all rights of action, demands and other claims
of any kind or nature against the Agent or any Lender arising from any failure
of the Agent to comply with the National Flood Insurance Act of 1968 (Pub. L.
90-448, 42 U.S.C. Sections 4001, et seq.), the Flood Disaster Protection
Act of 1973 (Pub. L. 93-234, 42 U.S.C. Sections 4001, et seq.) or the
National Flood Insurance Reform Act of 1994 (Pub. L. 103-325), as such Acts may
be amended, modified, supplemented or replaced from time to time, including any
failure of the Agent to provide the Company with written notification within ten
days prior to the Closing Date whether any Mortgaged Property is in a special
flood hazard area or whether federal disaster relief assistance will be
available in the event of flood damage to any Mortgaged Property.
H. FRANCHISE AGREEMENTS; FRANCHISE ESTOPPEL CERTIFICATES. On or before
the Restatement Closing Date, the Company shall have delivered to the Agent (i)
executed or conformed, certified copies of each of the Franchise Agreements and
all amendments thereto entered into on or before the Restatement Closing Date
that relate to the Mortgaged Properties, as indicated on Schedule 4.4C annexed
hereto, which Franchise Agreements shall be satisfactory in form and substance
to the Agent; as of the Restatement Closing Date, the Franchise Agreements, as
so amended, shall be in full force and effect and no term or condition thereof
shall have been further amended or modified, or waived after the execution
thereof; and no Person shall have failed in any material respect to perform any
material obligation or covenant or satisfy any material condition required by
the Franchise Agreements to be performed or
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complied with on or before the Restatement Closing Date; and (ii) original
counterparts of estoppel certificates and consent agreements with respect to
each Franchise Agreement specified on Schedule 4.4C, satisfactory in form and
substance to the Agent, and duly executed by the franchisee with respect to the
Franchise Agreement.
I. MATERIAL LEASES; TENANT ESTOPPEL CERTIFICATES; TENANT SUBORDINATION
AGREEMENTS. On or before the Restatement Closing Date, the Company shall have
delivered to the Agent (i) executed or conformed, certified copies of each
Material Lease with respect to each Mortgaged Property and all amendments
thereto and as of the Restatement Closing Date, the Material Leases, as so
amended, shall be in full force and effect and no term or condition thereof
shall have been further amended, modified or waived after the execution thereof;
and no Person shall have failed in any material respect to perform any material
obligation or covenant or satisfy any material condition required by the
Material Leases to be performed or complied with on or before the Restatement
Closing Date; and (ii) original counterparts of estoppel certificates and
consent agreements with respect to each of the Material Leases listed on
Schedule 3.1I annexed hereto, satisfactory in form and substance to the Agent,
duly executed and delivered by each Tenant party to such Material Lease; and
(iii) unless the applicable Material Lease is subordinated to the Lien of the
applicable Mortgage on terms satisfactory to the Agent, a Tenant Subordination
Agreement with respect to such Material Leases, if any, satisfactory in form and
substance to the Agent, and duly executed by each tenant party to such Material
Lease.
J. ENVIRONMENTAL AUDITS. On or before the Restatement Closing Date, the
Company shall have delivered to the Agent and Lenders evidence satisfactory to
the Lenders, in their sole discretion, that (i) there are no material pending or
threatened claims, suits, actions or proceedings arising out of or relating to
the existence of any Hazardous Materials at, in, on, from, around or under any
of the New Mortgaged Properties; (ii) each such New Mortgaged Property is in
compliance in all material respects with all applicable Environmental Laws with
respect to such New Mortgaged Property; and (iii) no Hazardous Materials exist
at, in, on, from, around or under any such New Mortgaged Property, except in
compliance in all material respects with applicable Environmental Laws and all
other Hazardous Materials have been removed from each New Mortgaged Property to
the extent required by Applicable Law. Such evidence shall include (a) a
comprehensive environmental audit (which shall include a Phase I environmental
audit and, if necessary or desirable in the Agent's opinion, a Phase II
environmental audit), satisfactory in form and substance to the Agent, conducted
and certified by an Approved Environmental Consultant (the Company shall certify
as of the Restatement Closing Date that, as to any environmental audit delivered
by the Company prior to the Restatement Closing Date, to the Company's
knowledge, the information contained in such audit remains true, correct and
complete), (b) if the report referred to in clause (a) above is not addressed to
the Agent and Lenders, a reliance letter from such Approved Environmental
Consultant with respect to each such environmental audit addressed to the Agent
and Lenders, which reliance letter shall be satisfactory in form and substance
to the Agent, (c) if requested by the Agent, evidence that all required
approvals from all Governmental Authorities having jurisdiction with respect to
the environmental condition of the New Mortgaged Properties, if
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any, have been obtained, and (d) such other environmental reports, inspections
and investigations as the Agent shall, in its sole discretion, require,
prepared, in each instance, by an Approved Environmental Consultant, which
approvals, reports, inspections and investigations shall be satisfactory in form
and substance to the Agent, in its sole discretion.
K. ENGINEERING REPORTS. On or before the Restatement Closing Date, the
Company shall have delivered to the Agent and the Lenders (i) a written
Engineering Report with respect to each New Mortgaged Property dated not more
than 120 days prior to the Restatement Closing Date and prepared by an Engineer
acceptable to the Agent, which Engineering Report may contain repair
recommendations and shall in all other respects be satisfactory in form and
substance to the Lenders; and (ii) if the report referred to in clause (a) above
is not addressed to the Agent and Lenders, a reliance letter from such Engineer
with respect to each such Engineering Report addressed to the Agent and Lenders,
which letter shall be in form and substance reasonably satisfactory to the
Agent.
L. APPRAISALS. On or before the Restatement Closing Date, the Agent and
the Lenders shall have received (i) an Appraisal of each New Mortgaged Property
dated not more than 45 days prior to the Restatement Closing Date and performed
by an Appraiser designated by the Agent, which Appraisal shall be satisfactory
in form and substance to the Lenders; and (ii) copies of all appraisals, market
studies, and similar information with respect to each of the New Mortgaged
Properties in the possession or under the control of the Company or any of its
Subsidiaries.
M. OPINIONS OF THE COMPANY'S COUNSEL. On the Restatement Closing Date
the Company shall have delivered to the Agent, its counsel and the Lenders (i)
executed copies of each of the favorable written opinions of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, counsel for the Loan Parties substantially in the form of Exhibit XII
annexed hereto, with such changes as the Agent may approve and dated the
Restatement Closing Date; (ii) evidence satisfactory to the Agent that the
Company has requested such counsel to deliver such opinions to the Agent and its
counsel and the Lenders.
N. OPINION OF AGENT'S COUNSEL. On the Restatement Closing Date the
Lenders shall have received executed copies of the favorable written opinion of
O'Melveny & ▇▇▇▇▇ LLP, counsel to the Agent, dated as of the Restatement Closing
Date.
O. NO ADVERSE LITIGATION. Except as set forth on Schedule 4.5 annexed
hereto, as of the Restatement Closing Date, there shall not be pending or, to
the knowledge of the Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Company or
any of its Subsidiaries or any property of the Company or any of its
Subsidiaries that has not been disclosed by the Company in writing pursuant to
subsection 4.5 prior to the execution of this Agreement and that is reasonably
likely materially and adversely to affect any Mortgaged Property or that is
reasonably likely to have a Material Adverse Effect, and there shall have
occurred no development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either
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event, in the opinion of the Agent, is reasonably likely to have a Material
Adverse Effect. No injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated by this
Agreement or the making of the Loans hereunder.
P. PAYMENT OF FEES AND EXPENSES. On the Restatement Closing Date, the
Company shall have paid to the Agent, for distribution (as appropriate) to the
Lenders and the Agent the fees payable on the Restatement Closing Date referred
to in subsection 2.4 and any other fees and expenses payable by the Company to
the Agent on the Closing Date pursuant to subsection 8.2 or otherwise.
Q. DEFERRED MAINTENANCE. The Company agrees that the amounts necessary
to complete the repairs to the Properties, as set forth on Schedule 3.1Q hereto,
shall be included in the Company's 1998 Capital Plan and all such repairs shall
be completed no later than December 31, 1998. The Company shall certify to the
Agent that it has completed the repairs with respect to the Properties listed on
Schedule 3.1Q in accordance with the terms of this subsection 3.1Q.
R. CONTINGENT OBLIGATIONS. The Agent and the Lenders shall have
received and approved a list of all Contingent Obligations substantially in the
form of Schedule 4.3 annexed hereto.
S. COMPLETION OF PROCEEDINGS. On or before the Restatement Closing
Date, all corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incidental thereto
not previously found acceptable by the Agent and its counsel shall be reasonably
satisfactory in form and substance to the Agent and such counsel, and the Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as the Agent may reasonably request.
T. OTHER DOCUMENTS. On or before the Restatement Closing Date, each
Loan Party shall have delivered to the Agent such other information and
documents as the Agent may reasonably request.
3.2 CONDITIONS TO ALL LOANS.
The obligations of the Lenders to make Loans on each Funding Date or to
pay the Purchase Price on the Restatement Closing Date are subject to the
following further conditions precedent:
A. The Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.2B, an originally executed Notice
of Borrowing, in each case signed by an Authorized Officer of the Company or by
any executive officer of the Company
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designated by any of the above-described officers on behalf of the Company in a
writing delivered to the Agent.
B. If the aggregate principal amount of the outstanding Loans as of
that Funding Date is less than the amount secured by the Mortgages recorded in
New York and Florida, then the Company shall pay all mortgage recording taxes,
general intangible taxes or similar Taxes payable as a result of the borrowing
of Loans on such Funding Date, in all states in which a Mortgaged Property is
located (including, without limitation, New York and Florida) to the extent
required by subsection 3.1F(v), and the Company shall provide evidence
satisfactory to the Agent that all such taxes have been paid.
C. As of that Funding Date:
(i) the representations and warranties contained herein and in
the other Loan Documents shall be true and correct in all material
respects on and as of that Funding Date to the same extent as though
made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date (including
references to "the Restatement Closing Date" or "the date hereof"), in
which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date;
(ii) no event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default, including a breach or violation of Section
4.09 of the Mortgage Note Indenture with respect to the consummation of
such borrowing;
(iii) each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) no order, judgment or decree of any arbitrator or
Governmental Authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) the making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System;
(vi) there shall not be pending or, to the knowledge of the
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Company of its
Subsidiaries that has not been disclosed by the Company in writing
pursuant to subsection 4.5 or 5.1(xii) prior to the making of such
Loans and that would be reasonably likely materially and adversely to
affect the Mortgaged
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Properties, taken as a whole, or that would be reasonably likely to
have a Material Adverse Effect, and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either
event, in the opinion of the Agent, would be reasonably likely to have
a Material Adverse Effect; and no injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder; and
(vii) after giving effect to the proposed Loan, the Borrowing
Base shall not be less than the Total Utilization and the Company shall
have delivered to the Agent the Borrowing Base Certificate for the most
recent calendar month as required pursuant to subsection 5.1(ii); and
(viii) after giving effect to the proposed borrowing, the
Company will be in compliance, on a pro forma basis, with the
provisions of subsections 6.6D and 6.6E.
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and to pay the Purchase Price, the Company
represents and warrants to the Agent and the Lenders that the following
statements in this Section 4 are true, correct and complete as of the date this
Agreement is executed and delivered, on the Restatement Closing Date and on each
Funding Date.
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party and each of its
Subsidiaries (other than any Partnership Subsidiary) is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation (which jurisdiction is set forth on Schedule 4.1
annexed hereto). Each such Loan Party and each such Subsidiary has the requisite
corporate power and authority to own and operate its properties (including the
Properties identified as being owned or leased by such Loan Party or such
Subsidiary on Schedule 1.1A and Schedule 1.1B annexed hereto), to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents and the Related Documents to which it is a party, to carry out
the transactions contemplated thereby and, in the case of the Company, to issue
and pay the Notes. Each Partnership Subsidiary, if any, is a limited partnership
duly formed and validly existing under the laws of its jurisdiction of
organization and each Partnership Subsidiary has all requisite partnership power
and authority to own and operate its
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properties (including the Properties identified on Schedule 1.1A and Schedule
1.1B as being owned or leased by such Partnership Subsidiary), to carry on its
business as now conducted and proposed to be conducted, to enter into each Loan
Document and Related Document to which it is a party and to carry out the
transactions contemplated thereby. The books and records of each Loan Party and
each of its Subsidiaries reflect the properties and assets purported to be owned
by such Loan Party or Subsidiary, as applicable.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party and each of its
Subsidiaries is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations except where the failure to be qualified or in good
standing could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. The jurisdictions in which each Loan Party
and each of its Subsidiaries owns property or otherwise conducts business as of
the Restatement Closing Date are set forth on Schedule 4.1 annexed hereto.
C. CONDUCT OF BUSINESS. The Company and each of its Subsidiaries are
engaged only in the businesses permitted to be engaged in by them pursuant to
subsection 6.14.
D. SUBSIDIARIES. The capital stock of the Company and each of its
Subsidiaries (other than any Partnership Subsidiary) is duly authorized, validly
issued and fully paid and nonassessable. All of the Subsidiaries of each Loan
Party are identified on Schedule 4.1 annexed hereto, as said Schedule 4.1 may be
supplemented from time to time pursuant to subsection 5.1(xxi). Except for the
Common Stock, the capital stock of each Person identified on Schedule 4.1 (as so
supplemented) is not Margin Stock. Schedule 4.1 hereto correctly sets forth the
ownership interests in each Loan Party (other than the Company) and each of its
Subsidiaries, as Schedule 4.1 may be supplemented from time to time pursuant to
the provisions of subsection 5.1(xxi) or 6.7(ii). Each Subsidiary of the Company
is a Wholly Owned Subsidiary.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of this Agreement and the other Loan Documents and the Related Documents to
which each Loan Party is a party and the issuance, delivery and payment of the
Notes have been duly authorized by all necessary corporate or partnership
action on the part of each Loan Party, as the case may be.
B. NO CONFLICT. The execution, delivery and performance by each Loan
Party of each Loan Document and each Related Document to which it is a party and
the other transactions contemplated by this Agreement, the other Loan Documents
and the Related Documents do not and will not (i) violate any provision of law
applicable to any Loan Party or any of its Subsidiaries, the Certificate of
Incorporation or Bylaws or partnership agreement of any Loan Party or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on any Loan Party or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any
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material Contractual Obligation of any Loan Party (including without limitation
the Mortgage Note Indenture, the Convertible Note Indenture, the Senior
Subordinated Note Indenture, the Reorganization Securities and the Franchise
Agreements), (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of any Loan Party or any of its
Subsidiaries (other than Liens securing the Obligations) or (iv) require any
approval of stockholders or any approval or consent of any Person under any
material Contractual Obligation of any Loan Party other than approvals or
consents which will be or have been obtained on or before the Restatement
Closing Date or the applicable Funding Date, as the case may be, and disclosed
in writing to the Agent and the Lenders.
C. GOVERNMENTAL CONSENTS. Except as set forth on Schedule 4.2C annexed
hereto, the execution, delivery and performance by each Loan Party of each Loan
Document and each Related Document to which it is a party, and the consummation
of each Acquisition and the other transactions contemplated by this Agreement,
the other Loan Documents and the Related Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any Governmental Authority, except for (i) such of the foregoing
which will have been made or obtained on or before the Restatement Closing Date
or the applicable Funding Date, as the case may be, and (ii) the recordings and
filings required to perfect the Liens granted pursuant to the Security
Documents. As of the Restatement Closing Date, all consents or approvals from or
notices to or filings with any federal, state, or other (domestic or foreign)
regulatory authorities required to be obtained on or before such date in
connection with the documents or transactions described or referred to in the
preceding sentence will have been accomplished in all material respects in
compliance in all material respects with all Applicable Laws. None of the
consummation of the transactions contemplated by this Agreement, the other Loan
Documents and the Related Documents violates any Applicable Law or regulation in
any material respect.
D. BINDING OBLIGATION. This Agreement is, and the other Loan Documents
when executed and delivered hereunder will be, the legally valid and binding
obligations of the applicable Loan Parties, enforceable against the applicable
Loan Parties in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally, and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or law).
E. VALID ISSUANCE OF COMMON STOCK. All the issued and outstanding
Common Stock has been duly authorized by all necessary corporate action of the
Company and is validly issued, fully paid and nonassessable. Except as set forth
on Schedule 4.2E annexed hereto, as of the Restatement Closing Date no other
Securities of the Company are issued and outstanding, and no Person has any
rights to acquire Securities of the Company.
F. NEW YORK STOCK EXCHANGE LISTING. The Common Stock shall at all times
be duly listed on the New York Stock Exchange, Inc. The Company shall timely
file all reports
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required to be filed by it with the New York Stock Exchange, Inc. and the
Securities and Exchange Commission.
G. RELATED DOCUMENTS; REPRESENTATIONS AND WARRANTIES IN OTHER LOAN
DOCUMENTS. As of the date hereof, each Related Document to which any Loan Party
or any of its Subsidiaries is a party is in full force and effect and no term or
condition thereof has been amended or modified in any material respect, except
as disclosed herein. Each Loan Party has delivered to the Agent complete and
correct copies of all Related Documents to which such Loan Party or any of its
Subsidiaries is a party (including in each case all exhibits and schedules
thereto), as amended, modified or waived to date, and of all material notices or
other writings delivered to or by such Loan Party or such Subsidiary in
connection therewith. Each of the representations and warranties given by each
Loan Party in each Loan Document (other than this Agreement) to which it is a
party are true and correct and such representations and warranties are hereby
incorporated herein by this reference with the same effect as though set forth
in their entirety herein.
4.3 FINANCIAL CONDITION; NO MATERIAL ADVERSE EFFECT; CONTINGENT
OBLIGATIONS.
A. FINANCIAL CONDITION. The Company has heretofore delivered to the
Agent, at the Agent's request, the following financial statements and
information: the audited consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 1996 and the related consolidated statements of
income, stockholders' equity and cash flows of the Company and its Subsidiaries
for the year then ended, (ii) the unaudited consolidated balance sheet of the
Company and its Subsidiaries as at September 30, 1997 and the related
consolidated statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for the 3 months then ended, (iii) the unaudited
statements of Property Gross Revenues and Operating Expenses for each of the
Mortgaged Properties for the year ended December 31, 1996 and the twelve months
ended October 31, 1997. The statements referred to in clause (i) of the
preceding sentence were prepared in conformity with GAAP and fairly present, in
all material respects, the financial position of the Company and its
Subsidiaries as at the date thereof and the results of operations of the Company
and its Subsidiaries for the period then ended, subject to changes resulting
from audit and normal year end adjustments. Schedule 4.3 annexed hereto sets
forth all material Contingent Obligations, contingent liabilities and
liabilities for taxes, long-term lease or unusual forward or long-term
commitments other than those permitted by this Agreement and incurred since the
date of the most recent financial statements referred to above or delivered
pursuant to subsections 5.1(iv) or (v), or the notes to such financial
statements. Such financial statements or notes include all such obligations and
commitments required to be included therein in accordance with GAAP.
B. NO MATERIAL ADVERSE EFFECT. Since December 31, 1995, no conditions
or events have occurred that has had or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect or (ii) a
material adverse effect on the Mortgaged Properties taken as a whole.
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C. CONTINGENT OBLIGATIONS. As of the Restatement Closing Date, the Loan
Parties and their respective Subsidiaries are not directly or indirectly liable
with respect to any Contingent Obligations other than as set forth on Schedule
4.3 annexed hereto or, with respect to such Contingent Obligations, in amounts
greater than the respective estimated maximum amounts specified thereon.
4.4 MORTGAGED PROPERTIES; EXISTING LOANS.
A. MORTGAGED PROPERTIES. Each of Schedule 1.1A and Schedule 1.1B
correctly sets forth the interest of each Loan Party and each of its
Subsidiaries in each of the Mortgaged Properties and the other Properties,
respectively. Except as set forth on Schedule 4.4A annexed hereto, there are no
outstanding options, rights of first refusal, rights of first offer or similar
rights to purchase or otherwise acquire such fee interest or leasehold interest,
as the case may be, in any such Mortgaged Property, other than options and
rights owned by a Loan Party or Subsidiary thereof, as applicable. Such Loan
Party or Subsidiary thereof, as applicable, has good and marketable fee simple
title to, or a valid leasehold interest in, the Mortgaged Properties and good
title to the remainder of the Collateral purported to be owned by it, free and
clear of all Liens, in each case except Permitted Encumbrances and Liens
permitted pursuant to subsection 6.2A. All material fixtures, furnishings,
attachments and equipment necessary for the operation, use and occupancy of each
such Mortgaged Property have been installed or incorporated into such Mortgaged
Property and, each Loan Party or Subsidiary thereof, as applicable, is the sole
owner of all of the same, free and clear of all chattel mortgages, conditional
vendor's liens and other liens, and security interests other than Permitted
Encumbrances and Liens Permitted pursuant to subsection 6.2A. Except as
heretofore disclosed in writing by the Company to the Agent, no tax liens have
been filed against the Company or any of its Subsidiaries and/or any of their
respective properties, including any Mortgaged Property, other than Liens for
non-delinquent real property taxes.
B. SERVICING AGREEMENTS. The Servicing Agreements, if applicable, with
respect to the Mortgaged Properties, in each case with all amendments thereto
that have been or will be entered into on or before the Restatement Closing
Date, are listed on Schedule 4.4B annexed hereto. The Servicing Agreements, as
so amended,if any, will be in full force and effect and no term or condition
thereof will have been further amended or modified, or waived after the
execution thereof, in each instance in any material respect; and no Person will
have failed in any respect to perform any obligation or covenant or satisfy any
condition required by the Servicing Agreements to be performed or complied with
on or before the Restatement Closing Date except where failure to do so comply
will not then have had and could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
C. FRANCHISE AGREEMENTS. Each of the Franchise Agreements and all
amendments thereto entered into on or before the Restatement Closing Date are
listed on Schedule 4.4C annexed hereto. The Franchise Agreements, as so amended,
are in full force and effect in all material respects and no term or condition
thereof has been further amended or modified, or waived after the execution
thereof, except as disclosed herein; and no Person has failed in any
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respect to perform any obligation or covenant or satisfy any condition required
by the Franchise Agreements to be performed or complied with on or before the
Restatement Closing Date except where failure to do so comply will not then have
had and could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
D. LEASES. Each Material Lease with respect to each Mortgaged Property
and all amendments thereto that have been entered into on or before the
Restatement Closing Date are listed on Schedule 4.4D annexed hereto. As of the
date hereof, the Material Leases, as so amended, are in full force and effect in
all material respects and no term or condition thereof has been further amended
or modified, or waived after the execution thereof, except as disclosed herein;
and no Person will have failed in any respect to perform any obligation or
covenant or satisfy any condition required by the Material Leases to be
performed or complied with on or before the Restatement Closing Date except
where failure to so comply will not then have had and could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
E. LIQUOR LICENSES. The owner of each Liquor License issued in
connection with each Mortgaged Property is set forth on Schedule 4.4E annexed
hereto and each such Liquor License is validly issued and in full force and
effect. The owner of each Liquor License has the legal right to utilize each
such Liquor License in connection with the operation of any restaurant, bar or
other alcoholic beverage service located at the applicable Mortgaged Property.
All cash and other revenues and receipts from the operation by any owner of a
Liquor License of an alcoholic beverage service at any Mortgaged Property are
collected by the licensee thereof and are then deposited directly into Deposit
Accounts subject to the Cash Management System.
4.5 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 4.5 annexed hereto, there is no action,
suit, proceeding, arbitration or governmental investigation (whether or not
purportedly on behalf of the Company or any of its Subsidiaries) at law or in
equity or before or by any Governmental Authority, or changes to Applicable Law,
pending or, to the knowledge of the Company, threatened against or affecting any
Loan Party or any of its Subsidiaries, any Property or any other property of the
Company or any of its Subsidiaries that has had, or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect. No
Loan Party nor any of its Subsidiaries is (i) subject to of any Applicable Law
that has had, or could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect or (ii) in violation of or in default
with respect to (a) any Applicable Law not described in the foregoing subclause
(a) which could result in criminal liability or (b) any Applicable Law, except
any which could not reasonably be expected to result, either individually or in
the aggregate, a Material Adverse Effect. To the knowledge of the Company, there
are no pending or threatened actions, suits or proceedings to revoke, attack,
invalidate, rescind or modify the zoning affecting any Mortgaged Property or any
Authorizations heretofore issued with respect to any Mortgaged Property or
asserting in writing that such Authorizations or the zoning affecting any
Mortgaged Property do not permit the continued use of such Mortgaged Property as
contemplated by the
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Loan Documents except any which could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Except as set forth
on Schedule 4.5, to the knowledge of the Company, no Person has asserted any
claimed material violation of Applicable Laws arising from the operation, use or
occupancy of the Properties which has not been cured.
4.6 TAXES.
Except to the extent permitted by subsection 5.4 and as set forth on
the financial statements delivered pursuant to subsections 3.1C and 4.3, (i) all
federal, state and material local Tax returns and reports relating to any Loan
Party or any of its Subsidiaries or the Properties required to be filed have
been timely filed (or extensions have been obtained), and all Taxes,
Impositions, assessments, fees and other governmental charges upon any Loan
Party or any of its Subsidiaries or upon the Properties which are due and
payable have been paid when due and payable and (ii) the Company does not know
of any proposed material Tax assessment against any Loan Party or any of its
Subsidiaries or the Properties. Except as set forth in Schedule 4.6 annexed
hereto, as of the Restatement Closing Date neither any Loan Party nor any of its
Subsidiaries (a) has executed or filed with the Internal Revenue Service or any
other Governmental Authority any agreement or other document extending, or
having the effect of extending, the period for assessment or collection of any
Taxes, assessments, fees or other governmental charges or (b) has any obligation
under any written Tax sharing agreement or agreement regarding payments in lieu
of Taxes.
4.7 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any Contractual Obligation, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default. Except as disclosed on Schedule 4.7, no Loan
Party nor any of its Subsidiaries is a party to or otherwise subject to any
agreement or instrument, any charge or other internal restriction or any
Contractual Obligation which by its terms or effect (i) prohibits or restricts
such Loan Party or Subsidiary from acquiring, loaning or disposing of any
Mortgaged Property or other Collateral, or any interest therein, or (ii)
otherwise restricts the conduct by such Loan Party or any of its Subsidiaries of
any business, except in each case where the consequences, direct or indirect, of
any violation thereof could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. No Loan Party nor
any of its Subsidiaries is a party to or is otherwise subject to any agreement
or instrument, any charter or other internal restriction or any Contractual
Obligation which has had, or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or materially
adversely affect the Mortgaged Properties, taken as a whole.
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4.8 GOVERNMENTAL REGULATION; SECURITIES ACTIVITIES.
No Loan Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935 (15 U.S.C. Sections
79, et seq.), the Federal Power Act, the Interstate Commerce Act (49 U.S.C.
Sections 1, et seq.) or the Investment Company Act of 1940 (15 U.S.C.
Sections 80a-1, et seq.) or under any other federal or state statute or
regulation which could limit its ability to incur Indebtedness or which could
otherwise render all or any portion of the Obligations unenforceable. No Loan
Party nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
4.9 EMPLOYEE BENEFIT PLANS.
A. ERISA. Each Loan Party, each of its Subsidiaries and each of their
respective ERISA Affiliates are in compliance in all material respects with all
applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed their respective obligations under each Employee Benefit Plan
except to the extent that any noncompliance or nonperformance could not
reasonably be expected to have, either individually or in aggregate, in a
Material Adverse Effect. The sponsor of each Employee Benefit Plan which is
intended to qualify under Section 401(a) of the Internal Revenue Code has
received a determination letter from the Internal Revenue Service concluding
that such Employee Benefit Plan is so qualified, and to the knowledge of each
Loan Party, each of its Subsidiaries and each of their respective ERISA
Affiliates, no event has occurred, amendment been adopted or action been taken
that would cause such Employee Benefit Plan to lose its qualified status.
B. ERISA EVENT. No ERISA Event has occurred or is reasonably expected
to occur which could be reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect.
C. UNFUNDED BENEFIT LIABILITIES. As of the most recent valuation date
for any Pension Plan, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), either individually or in the aggregate for all
Pension Plans (excluding for purposes of such computation any Pension Plans with
respect to which assets exceed benefit liabilities), does not exceed $1,000,000.
D. POTENTIAL WITHDRAWAL LIABILITY. As of the most recent valuation date
for each Multiemployer Plan for which the actuarial report is available, the
potential liability of the Loan Parties, their Subsidiaries and their respective
ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within
the meaning of Section 4203 of ERISA), when aggregated with such potential
liability for a complete withdrawal from all Multiemployer Plans, based on
information available pursuant to Section 4221(e) of ERISA, does not exceed
$2,000,000.
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4.10 CERTAIN FEES.
No broker's or finder's fee or commission will be payable by any Loan
Party or any of its Subsidiaries with respect to this Agreement or any of the
transactions contemplated hereby (other than the fees payable pursuant to this
Agreement), and the Company hereby indemnifies the Agent and the Lenders
against, and agrees that it will hold the Agent and the Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees or
commissions payable by the Company alleged to have been incurred in connection
herewith or therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
4.11 SOLVENCY.
After giving effect to the consummation of the other transactions
contemplated by this Agreement, the other Loan Documents and the Related
Documents, with respect to each Loan Party and each of its Subsidiaries, (i) (a)
the then fair saleable value of the property of such Person is (y) greater than
the total amount of liabilities (including contingent liabilities) of such
Person and (z) not less than the amount that will be required to pay the
probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such person; (b) such Person's capital is (or will
be, as the case may be), not unreasonably small in relation to its business or
any contemplated or undertaken transaction; and (c) such Person does not intend
to incur, or believe (nor should it reasonably believe) that it will incur,
debts beyond its ability to pay such debts as they become due; and (ii) such
Person is (or will be, as the case may be), "SOLVENT" within the meaning given
that term and similar terms under Applicable Laws relating to fraudulent
transfers and conveyances. For purposes of clause (i) of the preceding sentence,
the amount of any contingent liability at any time shall be computed as the
amount that, in light of all of the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual
or matured liability.
4.12 DISCLOSURE.
No representation or warranty of any Loan Party contained in this
Agreement, the other Loan Documents and the Related Documents to which it is a
party or in any other document, certificate or written statement furnished to
the Agent or the Lenders by or on behalf of any Loan Party for use in connection
with the transactions contemplated by the Loan Documents and the Related
Documents (as from time to time superseded by subsequent materials furnished to
the Agent) contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact (known to such Loan Party, in the
case of any document not furnished by it) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made or will be made, as the case may be.
The projections and pro forma financial information contained in such materials
(as from time to time superseded by subsequent materials furnished to the Agent)
are based or will be based upon good faith estimates and assumptions believed to
be reasonable at the time made, it being
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recognized by the Agent and the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ materially from the
projected results. There is no fact known (or which should upon the reasonable
exercise of diligence be known) to the Company (other than matters of a general
economic nature) that has had, or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect and that has not
been disclosed in any of the Loan Documents and the Related Documents to which
any Loan Party is a party as of the date hereof or in such other documents,
certificates and statements furnished to the Lenders for use in connection with
the transactions contemplated hereby.
4.13 LIENS ON THE COLLATERAL.
A. GENERAL. The provisions of this Agreement and the Security Documents
are effective to create and maintain, upon proper filing or recording or taking
of possession, as applicable, in favor of the Agent on behalf of the Lenders
valid and legally enforceable Liens on or security interests in all of the
Mortgaged Properties and all of the remainder of the Collateral and, when all
necessary and appropriate recordings and filings have been effected in all
necessary and appropriate public offices, and payment is made of any applicable
mortgage recording and/or intangible taxes, and taking possession, as
applicable, this Agreement and the Security Documents will constitute perfected
Liens on and security interests in all of such Mortgaged Properties and all of
the remainder of the Collateral to the extent such Liens and security interests
can be perfected by filing, recording or taking possession prior and superior to
all other Liens except Permitted Encumbrances; provided, however, that the
perfection against Persons other than the Company of such a Lien on the Rents in
respect of such Mortgaged Properties may in certain jurisdictions require the
Agent to have possession of such Rents and/or control of such Mortgaged
Properties.
B. MORTGAGES. Each Mortgage upon execution and delivery of such
Mortgage by the Company will be a valid and enforceable first priority Lien on
the Mortgaged Property that such Mortgage purports to encumber, and such
Mortgage, when such Mortgage is recorded in the real property records of the
county in which such Mortgaged Property encumbered by such Mortgage is located
and upon payment of any applicable mortgage recording and or intangible taxes,
will be a perfected, valid and enforceable first priority Lien on the portion of
such Mortgaged Property which constitutes real property in favor of the Agent,
which Mortgaged Property will then be free and clear of all Liens having
priority over the first Lien of such Mortgage, except for Permitted
Encumbrances.
C. ASSIGNMENTS OF RENTS AND LEASES. Each Assignment of Rents and
Leases, upon execution and recordation of such Assignment of Rents and Leases in
the real property records of the county in which the Mortgaged Property affected
by such Assignment of Rents and Leases is located and upon payment of any
applicable recording or intangible taxes, will be, a perfected, valid and
enforceable first priority present assignment of the Leases affecting such
Mortgaged Property and of the Rents of and from such Mortgaged Property, which
Mortgaged Property will then be free and clear of all Liens having priority over
the Assignment of Rents and Leases,
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except for Permitted Encumbrances. As of the Restatement Closing Date, the
Company represents that upon recordation of each Assignment of Rents and Leases
the Agent has taken all actions necessary to obtain, and as of the Restatement
Closing Date the Agent has, a valid and perfected first priority assignment of
the Rents from the Mortgaged Properties and of all security for the Leases
affecting such Mortgaged Properties, including cash or securities deposited as
security under such Leases subject to the prior right of the Tenants making such
deposits; provided, however, that the perfection against Persons other than the
Company of such a Lien on the Rents in respect of such Mortgaged Properties may
in certain jurisdictions require the Agent to have possession of such Rents
and/or control of such Mortgaged Properties.
D. MECHANICS' LIENS. Except as permitted by the definition of Permitted
Encumbrances, there are no existing mechanics' liens affecting any Mortgaged
Property.
E. FILINGS AND RECORDINGS. All filings (including all financing
statements and all assignments of financing statements under the Uniform
Commercial Code) have been delivered to the Agent for filing in each public
office in which such filings and recordings are required or advisable to perfect
the Liens and security interests in each of the Mortgaged Properties and the
other Collateral granted by the Loan Parties pursuant to the Security Documents
and, except for the filing of continuation statements with respect to such
financing statements as may be required or advisable to be filed at periodic
intervals, no periodic refiling or periodic recording is presently required to
protect and preserve such Liens and security interests.
4.14 ZONING; AUTHORIZATIONS.
A. ZONING. Except as set forth on Schedule 4.14A annexed hereto, the
use and operation by each Loan Party or any of its Subsidiaries, as applicable,
of each Mortgaged Property as a commercial hotel with related uses, separate and
apart from any other properties, constitutes a legal use under applicable zoning
regulations (as the same may be modified by special use permits or the granting
of variances) and complies in all material respects with all Applicable Laws and
all applicable Insurance Requirements, and does not violate any, material
restrictions of record or any material agreement affecting any Mortgaged
Property (or any portion thereof) to which such Loan Party or such Subsidiary is
a party or by which such Loan Party, such Subsidiary or such Mortgaged Property
(or portion thereof) is bound. Except as set forth on Schedule 4.14A annexed
hereto or pursuant to Permitted Encumbrances, neither the zoning nor any right
of access to or use of any Mortgaged Property is to any extent dependent upon or
related to any real property other than such Mortgaged Property.
B. AUTHORIZATIONS. There have been issued in respect of each Mortgaged
Property all material Authorizations necessary to own, operate, use and occupy
such Mortgaged Property in the manner operated by the Loan Parties and their
respective Subsidiaries as of the date hereof and contemplated by the Loan
Parties and their respective Subsidiaries to be operated on and after the
Restatement Closing Date (including any required permits relating to Hazardous
Materials). To the knowledge of the Company, except as set forth on Schedule
4.14B annexed hereto, there have been issued in respect of each Mortgaged
Property all Authorizations
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necessary, required or desirable to own, operate, use and occupy such Mortgaged
Property in the manner currently operated by the Tenants under any Material
Lease and contemplated to be operated by the Tenants on and after the
Restatement Closing Date (including any required permits relating to Hazardous
Materials), other than any such Authorizations which, if not obtained, could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. Each such Authorization is in full force and effect,
and no Loan Party nor any of its Subsidiaries nor, to the knowledge of the
Company, any prior owner thereof, has received any notice of violation or
revocation thereof except for those which could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
4.15 PHYSICAL CONDITION; ENCROACHMENT.
Except as disclosed on Schedule 4.15 annexed hereto or on the
Engineering Reports delivered pursuant to subsection 2.10 or 3.1K (ii) or (iii),
each Mortgaged Property is free of structural defects and is in good repair
(normal wear and tear excepted) and all building systems contained therein and
all other items of Collateral are in good working order subject to ordinary wear
and tear, except as disclosed in the Engineering Reports, and is free and clear
of any damage that would affect materially and adversely the value of such
Mortgaged Property or the use of such Property for its intended purposes. To the
knowledge of the Company, other than as described in the Title Policy and in any
Survey, no Improvement at any Mortgaged Property encroaches upon any building
line, setback line, side yard line or any recorded or visible easement.
4.16 INSURANCE.
All insurance required to be maintained by the Loan Parties and their
respective Subsidiaries pursuant to this Agreement or any other Loan Document is
in full force and effect in accordance with the terms thereof. As to each
Mortgaged Property located in an area identified by the Federal Emergency
Management Agency as having special flood hazards, if flood insurance is
available, a flood insurance policy is in effect. All premiums have been paid
with respect to each insurance policy required to be maintained by the Company
and its Subsidiaries pursuant to this Agreement or any other Loan Document.
Schedule 4.16 annexed hereto contains a complete and accurate description of all
policies of insurance that will be in effect as of the Restatement Closing Date.
4.17 LEASES.
As of the date hereof, there is no material default or event which with
notice or lapse of time or both would constitute a material default under any of
the provisions of any Material Lease affecting any Mortgaged Property. No
litigation is currently pending or has been threatened by any Tenant in
connection with any Material Lease affecting any Property that has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
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4.18 ENVIRONMENTAL REPORTS; ENGINEERING REPORTS; APPRAISALS; MARKET STUDIES.
To the knowledge of the Company, the Company has delivered to the Agent
and the Lenders correct and complete copies of all environmental audits,
engineering reports, appraisals and market studies with respect to each
Mortgaged Property that any Loan Party or any of its Subsidiaries has in its
possession.
4.19 NO CONDEMNATION OR CASUALTY.
Except as disclosed to the Agent pursuant to subsection 5.11, no
condemnation or Taking (including relocation of any roadways abutting any
Property or change in grade of such roadways or denial of access to any
Mortgaged Property) are pending and served nor, to the knowledge of the Company,
threatened against any Mortgaged Property in any manner whatsoever and (ii) as
of the Restatement Closing Date, no casualty requiring expenditures in excess of
$50,000 exists as to any Mortgaged Property.
4.20 UTILITIES AND ACCESS.
To the extent necessary for the utilization of each Mortgaged Property
in accordance with its current use, telephone services, gas, steam, electric
power, storm sewers, sanitary sewers and water facilities and all other utility
services are available to each Mortgaged Property, are adequate to serve each
such Mortgaged Property and are not subject to any conditions, other than normal
charges to the utility supplier, which would limit the use of such utilities.
All streets and easements necessary for the occupancy and operation of each
Mortgaged Property are available to the boundaries of the Land. All necessary
rights-of-way for all roads, which are sufficient to permit each Mortgaged
Property to be utilized fully for its current use, have been completed and are
serviceable, and, to the knowledge of the Company, all public rights-of-way
through or adjacent to the Mortgaged Properties have been acquired and dedicated
and accepted for maintenance and public use by the applicable Governmental
Authorities.
4.21 INTELLECTUAL PROPERTY.
A. OWNERSHIP; IP LICENSE AGREEMENTS. The Loan Parties and their
respective Subsidiaries own, or are licensed to use or otherwise have the lawful
right to use, the Intellectual Property material to the Company and its
Subsidiaries as a whole and, except as set forth on Schedule 4.21A annexed
hereto, all such Intellectual Property is fully protected and to the extent
permitted by Applicable Law and deemed reasonably necessary by the Company duly
and properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filing or issuances. All registered
Intellectual Property and all pending applications and the jurisdictions in
which such Intellectual Property is registered and the Loan Party holding rights
therein are identified in Schedule 4.21A. Each of the license agreements
(together with any such agreements entered into after the Restatement Closing
Date, the "IP LICENSE AGREEMENTS") pursuant to which any Loan Party or any of
its Subsidiaries has rights to use any material Intellectual Property as of the
Restatement Closing Date is identified in
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Schedule 4.21A. Each Loan Party and each of its Subsidiaries is in compliance
with the material terms of each IP License Agreement to which it is a party and
each such License Agreement is in full force and effect, except where the
failure to be in compliance or the failure to be in full force and effect will
not result in an Event of Default hereunder.
B. NO MATERIAL ADVERSE CLAIMS. (i) No claim has been asserted by any
Person with respect to the use of any such Intellectual Property, or challenging
or questioning the validity or effectiveness of any such Intellectual Property
and the Company does not know of any valid basis for any such claim; and (ii)
the use of such Intellectual Property by each Loan Party and each of its
Subsidiaries does not infringe on the rights of any Person, subject to such
claims and infringements as do not, in the aggregate, give rise to any liability
on the part of any Loan Party or any of its Subsidiaries, except in the case of
(i) and (ii) for claims or infringements which could not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect. The
consummation of the transactions contemplated by this Agreement will not in any
manner or to any extent impair the ownership of (or the license to use, as the
case may be) any of such Intellectual Property by any Loan Party or any of its
Subsidiaries.
4.22 WETLANDS.
To the knowledge of the Company and except as disclosed on Schedule
4.22 annexed hereto, none of the Improvements on any Mortgaged Property are
constructed on land designated by any Governmental Authority having land use
jurisdiction as wetlands.
4.23 CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System attached hereto as Schedule
4.23 is accurate and complete in all material respects as of the Restatement
Closing Date. No Loan Party nor any of its Subsidiaries owns any Deposit Account
which relates to any Mortgaged Property that is not described in Schedule 4.23
or otherwise permitted pursuant to subsection 5.15. There has been no change to
the Cash Management System (other than as permitted by subsection 5.15) since
the Closing Date except such changes as have been disclosed to the Agent in
writing and approved by the Agent.
4.24 LABOR MATTERS.
There are no strikes or other labor disputes against any Loan Party or
any of its Subsidiaries, pending or, to the knowledge of the Loan Parties,
threatened that have had or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
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4.25 EMPLOYMENT AND LABOR AGREEMENTS.
Except as disclosed on Schedule 4.25 annexed hereto, there are no
employment agreements covering management employees of any Loan Party or any of
its Subsidiaries and there are no collective labor agreements covering any
employees of any Loan Party or any of its Subsidiaries. Each Loan Party and each
of its Subsidiaries is in compliance with the terms and conditions of all such
collective bargaining agreements.
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as the Commitments
hereunder shall remain in effect and until payment in full of the Loans and the
other Obligations, the Company shall perform and shall cause each of its
Subsidiaries to perform all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
The Company will maintain and cause each of its Subsidiaries to
maintain a system of accounting established and administered in accordance with
sound business practices to permit preparation of consolidated and consolidating
financial statements in conformity with GAAP. The Company will deliver to the
Agent and the Lenders:
(i) Monthly Property Operating Statements: as soon as
available and in any event within 20 days after the end of each
calendar month of each calendar year, an operating statement with
respect to each Mortgaged Property and a consolidated operating
statement with respect to all Mortgaged Properties, in each case for
the 12 month period ending on the last day of such calendar month, in
substantially the form of Exhibit XV annexed hereto and in reasonable
detail satisfactory to the Agent and certified by an Authorized Officer
of the Company stating that such operating statements and consolidated
operating statements fairly present, in all material respects, the
results of operations of the Mortgaged Properties for the periods
indicated;
(ii) Borrowing Base Certificates: as soon as available and in
any event (a) within 20 days after the end of each calendar month of
each calendar year, a Borrowing Base Certificate, in reasonable detail
satisfactory to the Agent and certified by an Authorized Officer of the
Company, calculated as of the last day of such calendar month, (b)
within five (5) days after the delivery of a written notice pursuant to
subsection 5.11E (but in no event later than the occurrence or
effectiveness of the event or condition required to be specified in
such written notice), a Borrowing Base Certificate calculated as of the
date of the occurrence or effectiveness of the event or condition
specified therein, in reasonable detail satisfactory to the Agent (c)
within five (5) days after the delivery of a written notice of
renovation or restoration pursuant to subsection 5.11G (but in no event
later than the commencement of a Material Renovation/Restoration), a
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Borrowing Base Certificate calculated as of the date of commencement of
any related Material Renovation/Restoration, in reasonable detail
satisfactory to the Agent and together with the financial statements
and other information used by the Company to calculate the Borrowing
Base, (d) within five (5) days after a casualty and at least five (5)
days prior to a Taking with respect to, or the Release of, any
Mortgaged Property (or any portion thereof), a Borrowing Base
Certificate calculated as of the date of such casualty, Taking or
Release, in reasonable detail satisfactory to the Agent and together
with the information used by the Company to calculate the Borrowing
Base, and (e) upon written request from the Agent or at the option of
the Company, a Borrowing Base Certificate calculated as of the date
requested by the Agent in such request or selected by the Company, as
the case may be, in reasonable detail satisfactory to the Agent;
(iii) Quarterly Property Operating Statements: as soon as
available and in any event within 45 days after the end of each
calendar quarter of each year, (a) an operating statement with respect
to each Mortgaged Property, (b) a consolidated operating statement with
respect to all Mortgaged Properties and (c) a consolidated operating
statement with respect to all Designated Mortgaged Properties, in each
case for such calendar quarter (and, in the case of clauses (a) and
(c), setting forth in comparative form the corresponding figures for
the corresponding calendar quarter of the prior year, all of the
foregoing in reasonable detail satisfactory to the Agent and certified
by an Authorized Officer of the Company stating that such statements of
Property Gross Revenues and Operating Expenses and other expenses
fairly present, in all material respects, the results of operations of
the Properties indicated for the periods indicated;
(iv) Quarterly Financial Statements: as soon as available and
in any event within 45 days after the end of each calendar quarter of
each calendar year, the consolidated balance sheet of the Company and
its Subsidiaries as at the end of such calendar quarter and the related
consolidated statements of income, stockholders' equity and cash flows
of the Company and its Subsidiaries for such calendar quarter and for
the period from the beginning of the then current calendar year to the
end of such calendar quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding periods of the
previous year all in reasonable detail and certified by an Authorized
Officer of the Company stating that they fairly present, in all
material respects, the financial condition of the Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments;
(v) Year-End Financial Statements: as soon as available and in
any event within 90 days after the end of each calendar year, (a) the
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such calendar year and the related consolidated statements
of income, stockholders' equity and cash flows of the Company and its
Subsidiaries for such calendar year, setting forth in each case in
comparative form the corresponding figures for the previous calendar
year all of the foregoing in reasonable detail and certified by an
Authorized Officer of the Company stating that they present
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fairly, in all material respects, the financial condition of the
Company and its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated, and
(b) in the case of such consolidated financial statements, a report
thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent accountants of
recognized national standing selected by the Company and reasonably
satisfactory to the Agent, which report shall be unqualified, shall
express no doubts about the ability of the Company and its Subsidiaries
to continue as a going concern and shall state that such consolidated
and consolidating financial statements fairly present, in all material
respects, the financial position of the Company and its Subsidiaries as
at the dates indicated and the results of their operations and their
cash flows for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(vi) Officer's and Compliance Certificates: together with each
delivery of financial statements of the Company and its Subsidiaries
pursuant to subdivisions (i), (iii), (iv), and (v) above, (a) an
Officer's Certificate of the Company stating that the signers have
reviewed the terms of this Agreement and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of the Company and its Subsidiaries and the
Collateral during the accounting period covered by such financial
statements and state that such review has not disclosed the existence
during or at the end of such accounting period, and that the signers do
not have knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action the Company has taken, is taking and proposes
to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the covenants set forth in
Section 6;
(vii) Accountants' Certification: together with each delivery
of financial statements of the Company pursuant to subdivisions (v)
above, a written statement by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent
accountants of recognized national standing selected by the Company and
reasonably satisfactory to the Agent giving the report thereon (a)
stating in substance that their audit examination has included a review
of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that constitutes an
Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided, however, that such accountants shall not be liable by reason
of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating in substance that based on
their audit examination nothing
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has come to their attention that causes them to believe either or both
that the information contained in the certificates delivered therewith
pursuant to subdivision (vi) above is not correct or that the matters
set forth in the Compliance Certificates delivered therewith pursuant
to subdivision (vi) above for the applicable calendar year are not
stated in accordance with the terms of this Agreement;
(viii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to the Company by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or any other
independent accountants in connection with each annual, interim or
special audit of the consolidated financial statements of the Company
and its Subsidiaries made by such accountants, including any comment
letter submitted by such accountants to management in connection with
their annual audit;
(ix) Quarterly FF&E and Capital Items Reports; Certain
Contingent Obligations: as soon as available and in any event within 25
days after the end of each calendar quarter, (a) a statement as to the
Company's reserves for FF&E as of the last day of such quarter and as
to the amount actually spent by the Company on FF&E and Capital Items
during such quarter with respect to each Mortgaged Property, in
reasonable detail satisfactory to the Agent and certified by an
Authorized Officer of the Company and (b) a list of all material
Contingent Obligations, contingent liabilities and liabilities for
taxes, long-term lease or unusual forward or long-term commitments that
were not set forth in the financial statements delivered pursuant to
this subsection 5.1 (including the notes thereto) or on Schedule 4.3
annexed hereto.
(x) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by the
Company to its security holders, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by the Company with the New York
Stock Exchange, Inc., any other securities exchange or with the
Securities and Exchange Commission or any Governmental Authority or
private regulatory authority, and (c) all press releases and other
statements made available generally by the Company or any of its
Subsidiaries to the public or to the security holders of the Company;
(xi) Events of Default, etc.: promptly upon the Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that
the Agent or any Lender has given any notice or taken any other action
with respect to a claimed Event of Default or Potential Event of
Default, (b) that any Person has given any notice to the Company or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 7.1B, 7.1C, 7.1D or
7.1E, (c) of any condition or event that constitutes or may (upon the
giving or receiving of notice or the lapse of time, later, or
otherwise) a default, a potential event of default, an event of default
(in each case, as defined in the agreement or instrument creating,
evidencing or governing any such Indebtedness) under
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or with respect to any Indebtedness in an aggregate principal amount of
$1,000,000 or more (other than the Indebtedness hereunder), or any
Related Document, or becoming aware that any agent, trustee, lender or
security holder with respect thereto has given any notice or taken any
other action with respect to such condition or event, (d) of any
condition or event that would be required to be disclosed in a current
report filed by the Company with the Securities and Exchange Commission
on Form 8-K (Items 1, 2, 4, and 6 of such Form as in effect on the date
hereof) if the Company were required to file such reports under the
Exchange Act, (e) that there has commenced, or is intended to be
commenced, a Material Renovation/Restoration of any Property with
respect to which a written notice of renovation or restoration shall
not previously have been delivered to the Agent or (f) of the
occurrence of any event or change that has had, or could reasonably be
expected to have, either individually or in the aggregate, a Material
Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action the Company has taken, is taking
and proposes to take with respect thereto;
(xii) Litigation or Other Proceedings: (a) promptly upon the
Company obtaining knowledge of (x) the institution of any action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting the
Company or any of its Subsidiaries, or any property of the Company or
such Subsidiary (collectively, "PROCEEDINGS") not previously disclosed
in writing by the Company to the Lenders or (y) any material
development in any Proceeding that, in any case:
(a) if adversely determined, could reasonably be
expected to have, a material adverse effect on any Mortgaged
Property or to have, either individually or in the aggregate,
a Material Adverse Effect; or
(b) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to the Company to enable the Agent and its counsel
to evaluate such matters; and (b) within 90 days after the end of each
calendar year, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, the Company and its
Subsidiaries equal to or greater than $1,000,000 individually or
$5,000,000 in the aggregate, and promptly after request by the Agent
such other information as may be reasonably requested by the Agent to
enable the Agent and its counsel to evaluate any of such Proceedings;
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(xiii) ERISA Events and Notices: (a) promptly upon becoming
aware of the occurrence of or forthcoming occurrence of any ERISA
Event, a written notice specifying the nature thereof, what action the
Company or any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
thereto; and (b) with reasonable promptness, copies of (x) each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by the Company or any of its ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan; (y) all
notices received by the Company or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (z) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as the Agent shall reasonably request;
(xiv) Financial Plans: as soon as practicable and in any
event no later than November 30 of each year, projected financial
statements for each Mortgaged Property for the next succeeding calendar
year (or, if reasonably requested by the Agent, the five next
succeeding calendar years) setting forth in detail each line item
appearing in the form of projected financial statement set forth in
Schedule 5.1 annexed hereto, together with an explanation of the
assumptions on which such forecasts are based, and such other
information and projections as the Agent may reasonably request for any
Mortgaged Property, all the Mortgaged Properties or the Company or any
of its Subsidiaries;
(xv) Insurance: as soon as practicable and in any event by
the last day of each calendar year, a report in form and substance
reasonably satisfactory to the Agent outlining all material insurance
coverage maintained as of the date of such report by the Company and
its Subsidiaries and all material insurance coverage planned to be
maintained by the Company and its Subsidiaries in the next succeeding
calendar year;
(xvi) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports, whether prepared by personnel of the Company or any
of its Subsidiaries or by independent consultants, with respect to
material environmental matters at any Property or which relate to an
Environmental Claim which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;
(xvii) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of the Company;
(xviii) Change in Name or Chief Place of Business: (a)
notification of any change in any Loan Party's name, identity or
corporate structure within 30 days of such change and (b) 30 days'
prior written notice of any change in any Loan Party's executive office
or chief place of business;
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(xix) UCC Search Report: as promptly as practicable upon
the request of the Agent after delivery to the Agent of any UCC
financing statement executed by any Loan Party pursuant to subsection
3.1D(ii) or 5.9A, copies of completed UCC searches evidencing the
proper filing, recording and indexing of all such UCC financing
statements and listing all other effective financing statements that
name such Loan Party as debtor, together with copies of all such other
financing statements not previously delivered to the Agent by or on
behalf of the Company or such Loan Party;
(xx) Notices with Respect to Properties: (i) immediately
upon the Company's acquiring actual knowledge of the same, a written
notice with respect to the occurrence or effectiveness of any event or
condition that could reasonably be expected to have a material adverse
effect on one or more of the Mortgaged Properties or to cause the
Property EBITDA in respect of any Designated Mortgaged Property to be
excluded for purposes of calculating the Borrowing Base; and (ii) at
least 20 days prior to the commencement of any Material
Restoration/Renovation of any Mortgaged Property, a written notice of
renovation or restoration with respect thereto and upon the completion
of such Material Renovation/Restoration, a written notice of such
completion;
(xxi) Supplements to Schedules: if at any time, the
information contained on any Schedule to this Agreement or any other
Loan Document is incomplete or incorrect, the Company shall promptly
and, in any event prior to the next Funding Date, deliver to the Agent
written information that completes or corrects such Schedule; provided
that unless such information (other than any information provided with
respect to Schedules 4.21A and 4.25) is approved in writing by the
Agent, such information shall not be deemed to supplement the
applicable Schedule (other than Schedules 4.21A and 4.25) for purpose
of this Agreement and the other Loan Documents unless such information
solely reflects an action by the Company which it is expressly
permitted pursuant to the terms of the Loan Documents; and
(xxii) Other Information: with reasonable promptness, such
other information and data with respect to the Loan Parties and their
respective Subsidiaries, the Properties (separately and for all
Properties), the Leases, the other Collateral and the other assets and
liabilities of the Loan Parties and their respective Subsidiaries, as
from time to time may be reasonably requested by the Agent.
5.2 COMMON STOCK.
The Company shall (i) cause its Common Stock to be duly listed on the
New York Stock Exchange, Inc. and (ii) file timely all reports required to be
filed by the Company with the New York Stock Exchange, Inc. or the National
Association of Securities Dealers, Inc., as the case may be, and the Securities
and Exchange Commission.
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5.3 CORPORATE EXISTENCE.
Except as permitted pursuant to subsection 6.7, each Loan Party shall, and
shall cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate or partnership existence and all Authorizations,
rights and franchises material to its business.
5.4 TAXES AND POTENTIAL LIEN CLAIMS; TAX CONSOLIDATION.
A. TAXES AND POTENTIAL LIEN CLAIMS. Each Loan Party shall, and shall cause
each of its Subsidiaries to, pay or discharge or cause to be paid or discharged
all Taxes and Impositions imposed upon any Loan Party or any of its
Subsidiaries, or payable by any Loan Party or any of its Subsidiaries with
respect to any Property or other assets or in respect of any of the franchises,
business, income or other property of any Loan Party or any of its Subsidiaries
before the same shall become delinquent and before any penalty accrues thereon,
and will pay, discharge or otherwise satisfy or cause to be paid, discharged or
otherwise satisfied at or before maturity or before they become delinquent, all
claims, including claims for labor, supplies, materials and services that, if
unpaid, might become a Lien (other than a Lien permitted by subsection 6.2) on
the property of any Loan Party or any of its Subsidiaries; provided, however,
that if, by law, any such Imposition is payable, or may at the option of the
taxpayer be paid, in installments, the Company may pay the same or cause it to
be paid, together with any accrued interest on the unpaid balance of such
Imposition, in installments as the same become due and before any fine, penalty,
interest or cost may be added thereto for the nonpayment of any such installment
and interest; provided further, however, that no such charge or claim (other
than the Notes and any Obligations arising under any of the Loan Documents)
needs to be paid if (i) such charge or claim is being diligently contested in
good faith by appropriate proceedings, (ii) reserves consistent with GAAP or
otherwise consented to by the Agent shall have been made therefor by such Loan
Party or such Subsidiary, (iii) such charge or claim does not constitute and is
not secured by any Lien (other than a Lien permitted by subsection 6.2) on any
portion of the Collateral and none of the Collateral is in jeopardy of being
sold, forfeited or lost during or as a result of such contest, (iv) none of any
Loan Party, or any of its Subsidiaries, the Agent or any Lender could become
subject to any civil fine or penalty not adequately reserved against (in the
case of any Loan Party or Subsidiary thereof) or criminal fine or penalty, in
each case as a result of non-payment of such charge or claim and (v) such
contest has not had and could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Upon request by the
Agent, each Loan Party shall, and shall cause each of its Subsidiaries to,
deliver to the Agent all receipts evidencing the payment of all such Taxes,
Impositions, assessments, levies, permits, fees, rents and other public charges
imposed upon or in respect of or assessed against any Loan Party, any of its
Subsidiaries or any of their respective properties or assets.
B. TAX CONSOLIDATION. Each Loan Party will not, and will not permit any of
its Subsidiaries to, file or consent to the filing of any consolidated income
tax return with any Person other than the Company and its Subsidiaries.
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5.5 MAINTENANCE OF PROPERTIES; REPAIR; ALTERATION. Each Loan Party shall,
and shall cause each of its Subsidiaries to, (i) maintain or cause to be
maintained each Mortgaged Property and all other items of Collateral in a manner
consistent for hotel properties and related property, and other property and
assets constituting the Collateral, in each case of the same quality and
character and shall keep or cause to be kept every part thereof and its other
properties in good condition and repair, reasonable wear and tear excepted, and
make all reasonably necessary repairs, renewals or replacements thereto as may
be reasonably necessary to conduct the business of such Loan Party and its
Subsidiaries; (ii) not remove, demolish or structurally alter, or permit or
suffer the removal, demolition or structural alteration of, any of the
Improvements relating to a Mortgaged Property if the cost of such removal,
demolition or structure alteration (together with the cost of any related
Renovation) would exceed $500,000 in the case of any individual Mortgaged
Property or $2,000,000 in the aggregate in the case of all Mortgaged Properties
(measured, with respect to the applicable Mortgaged Properties, on a cumulative
basis from the applicable Addition Date), except as expressly permitted
hereunder or with the prior written consent of the Agent; (iii) complete
promptly and in a good and workmanlike manner any Improvements which may be now
or hereafter constructed on any Mortgaged Property and, subject to subsection
5.11, promptly restore in like manner any portion of such Improvements which may
be damaged or destroyed thereon from any cause whatsoever, and pay when due all
claims for labor performed and materials furnished therefor; (iv) comply in all
material respects with all Applicable Laws, applicable Insurance Requirements
and all covenants, conditions and restrictions now or hereafter affecting any
Mortgaged Property or other item of Collateral or any part thereof or requiring
any alterations or improvements; and (v) not commit, or permit, any waste of the
Collateral which constitutes real property.
5.6 INSPECTION; LENDER MEETING; APPRAISALS.
A. INSPECTION AND LENDER MEETING. Upon reasonable notice and at
such reasonable times during normal business hours and as often as may be
reasonably requested, each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by the Agent
to visit and inspect any Mortgaged Property, including its and their financial
and accounting records, tenant leasing files and other management books and
records, and to make copies and take extracts therefrom, and to discuss its and
their affairs, operations, finances and accounts with its and their officers,
property managers and independent accountants (provided that any Loan Party or
any such Subsidiary may, if it so chooses, be present at or participate in any
such discussion) Without in any way limiting the foregoing, the Company will,
upon the request of the Agent, participate in a meeting with the Agent and the
Lenders once during each calendar year to be held at the Company's corporate
offices (or such other location as may be agreed to by the Company and the
Agent) at such time as may be agreed to by the Company and the Agent.
B. APPRAISALS. The Agent may from time to time (and shall upon
the written request of the Company, which request shall be made no more than
once in each calendar year) obtain Appraisals of any Mortgaged Property (which
Appraisals shall, if applicable with respect to any
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approved Renovation of such Property, contain an estimate of the appraised value
of such Property upon completion of such Renovation) and each Loan Party shall,
and shall cause each of its Subsidiaries to, cooperate fully with the Appraiser
selected by the Agent to conduct such Appraisals; provided that the Agent shall
not request an Appraisal for any Property more than once in each calendar year
unless the Agent reasonably believes that an event has occurred which could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. In the event that any Loan Party or any of its
Subsidiaries obtains an appraisal of one or more of the Mortgaged Properties
other than pursuant to this subsection, the Company shall deliver a copy of such
appraisal to the Agent promptly upon the completion thereof and the Agent may
elect, in its sole discretion and subject to Applicable Laws, to treat such
appraisal as an "APPRAISAL." In the event that the Agent obtains an Appraisal of
one or more of the Mortgaged Properties, the Agent shall deliver a copy of such
Appraisal to the Company upon the completion thereof. The Company shall take all
such actions as are necessary to ensure that the Appraised Value of any
Mortgaged Property at no time exceeds the amount secured by the Mortgage
applicable to such Mortgaged Property. Without limiting the generality of the
foregoing, before an increase in Appraised Value with respect to a Designated
Mortgaged Property may be taken into account in calculating the Property Amount
with respect to such Designated Mortgaged Property, the Company must amend the
applicable Mortgage to secure the full amount of the increased Appraised Value.
5.7 COMPLIANCE WITH LAWS, AUTHORIZATIONS, ETC.
Each Loan Party shall, and shall cause each of its Subsidiaries to, comply
in all material respects with the requirements of all Applicable Laws, except
where such noncompliance could not reasonably be expected, either individually
or in the aggregate, (i) to result in any criminal liability or (ii) to have a
Material Adverse Effect. Each Loan Party shall, and shall cause each of its
Subsidiaries to, keep all material Authorizations which are from time to time
required for the use and operation of each Mortgaged Property in full force and
effect.
5.8 PERFORMANCE OF LOAN DOCUMENTS AND RELATED DOCUMENTS.
A. LOAN DOCUMENTS. Each Loan Party shall, and shall cause each of its
Subsidiaries to, observe and perform, or cause to be observed and performed all
its covenants, agreements, conditions and requirements contained in each of the
Loan Documents to which it is or will be a party in accordance with the terms
thereof and will maintain the validity and effectiveness of such Loan Documents.
B. RELATED DOCUMENTS. Each Loan Party shall, and shall cause each of its
Subsidiaries to, observe and perform, or cause to be observed and performed in
all material respects, all its material covenants, agreements, conditions and
requirements contained in each of the Related Documents to which it is a party
in accordance with the terms thereof. Each Loan Party shall take no action, nor
permit any action to be taken, which will release any party to the Related
Documents from any of such party's obligations or liabilities thereunder, or
will result in the termination, modification or amendment, or will materially
impair the validity or
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effectiveness, of any Related Document except as expressly provided for herein
and therein, which termination, modification, amendment, release, invalidity or
ineffectiveness could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect. The Company shall give the Agent
written notice of any material default by any party to any Related Document
promptly after such default becomes known to the Company.
5.9 PAYMENT OF LIENS.
A. REMOVAL BY LOAN PARTIES. In the event that, notwithstanding the
covenants contained in subsection 6.2, a Lien not otherwise permitted under
subsection 6.2 may encumber any Mortgaged Property, other item of Collateral or
Restricted Asset or any portion thereof, the Company shall promptly discharge or
cause to be discharged by payment to the lienor or lien claimant or promptly
secure removal by bonding or deposit with the county clerk or otherwise or, at
the Agent's option, promptly obtain insurance against, any such Lien or
mechanics' or materialmen's claims of lien filed or otherwise asserted against
any Mortgaged Property, other item of Collateral or Restricted Asset or any
portion thereof or against any funds due any contractor, subcontractor,
materials supplier or laborer within 30 days after the date of notice thereof;
provided that this subsection 5.9A shall not be deemed to be a consent to any
such Lien or an waiver of any Event of Default or Potential Event of Default
resulting therefrom. The Company shall exhibit to the Agent upon request all
receipts or other satisfactory evidence of payment of taxes, assessments, Liens
or any other item which may cause any such Lien to be filed against any
Mortgaged Property, other items of Collateral or Restricted Asset of any Loan
Party or any of its Subsidiaries. Each Loan Party and each of its Subsidiaries
shall fully preserve the Lien and the priority of each of the Mortgages and the
other Security Documents without cost or expense to the Agent or the Lenders.
B. REMOVAL BY THE AGENT. If any Loan Party or any of its Subsidiaries
fails to promptly discharge or remove any such Lien or mechanics' or
materialmen's claim of lien, other than the Liens permitted pursuant to
subsection 6.2, within 30 days after the receipt of notice thereof, then the
Agent may, but shall not be required to, procure the release and discharge of
such Lien, mechanics' or materialmen's claim of lien and any judgment or decree
thereon, and in furtherance thereof may, in its sole discretion, effect any
settlement or compromise with the lienor or lien claimant or post any bond or
furnish any security or indemnity as the Agent, in its sole discretion, may
elect. In settling, compromising or arranging for the discharge of any Liens
under this subsection, the Agent shall not be required to establish or confirm
the validity or amount of the Lien. The Company agrees that all costs and
expenses expended or otherwise incurred pursuant to this subsection 5.9
(including reasonable attorneys' fees and disbursements) by the Agent shall be
paid by the Company in accordance with the terms hereof.
C. TITLE SEARCHES. In the event that the Agent believes that a Lien not
otherwise permitted under subsection 6.2 may encumber any Mortgaged Property,
other item of Collateral or any Restricted Asset or any portion thereof, the
Agent may, at the expense of the applicable Loan Party or Subsidiary thereof,
obtain an updated title and/or lien search regarding such Mortgaged Property,
other item of Collateral or Restricted Asset.
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5.10 INSURANCE.
A. RISKS TO BE INSURED. With respect to each Mortgaged Property,
each Loan Party shall procure or cause to be procured, and each Loan Party shall
maintain or cause to be maintained continuously in effect, insurance coverage
issued by an insurer (i) authorized to issue such insurance in all applicable
jurisdictions, (ii) rated "A" (or its equivalent) or better by ▇▇▇▇▇▇ ▇. Best
Company, Inc., (iii) with a financial size rating of "IX" (or its equivalent) or
better with respect to the Company's umbrella liability policy and "X" (or its
equivalent) with respect to all other coverage, in each case by ▇▇▇▇▇▇ ▇. Best
Company, Inc., and (iv) otherwise satisfactory to the Agent. Each Loan Party
shall pay, and shall cause each of its Subsidiaries to pay, in a timely manner
all premiums due in connection therewith. All insurance policies shall be issued
by insurers doing business as admitted licensed carriers in the state where such
Mortgaged Property is located, and shall be authorized and licensed to issue
insurance in such state. The insurance to be procured and maintained by the
Company is the following:
(i) Casualty. The Company shall keep, or shall cause its
Subsidiaries to keep, each Mortgaged Property insured for the benefit
of the Agent, in each case, as follows:
(a) All Risk of Physical Loss. Insurance with
respect to the Improvements now or hereafter located on the
Mortgaged Properties and any alterations or additions thereto
and the furniture, fixtures and equipment against any peril
included within the classification "All Risks of Physical
Loss" with extended coverage (including fire, lightning,
windstorm, sprinkler, hail, explosion, riot, riot attending a
strike, civil commotion, vandalism, malicious mischief,
terrorist acts, aircraft, vehicle and smoke) in an amount
equal to the full insurable value of such Improvements and
such furniture, fixtures and equipment. The term "FULL
INSURABLE VALUE" shall mean the actual replacement cost of
such Improvements and such furniture, fixtures and equipment
(without taking into account any depreciation, and exclusive
of excavations, footings and foundations, landscaping and
paving) determined annually by an insurer, a recognized
independent insurance broker or an appraiser selected (and
approved by the Agent) and paid by the applicable Loan Party
or its Subsidiary; provided, however, that such amount shall
be sufficient to prevent such Loan Party or such Subsidiary
from becoming a co-insurer, and the policy shall contain a
stated value endorsement to that effect.
(b) Builder's Risk. During any period of
construction of Improvements and any repair, restoration,
Renovation or replacement thereof, a standard builder's all
risk policy (completed value non-reporting form) for an amount
at least equal to the full insurable value of the work to be
performed and equipment, supplies and materials to be
furnished, as shall be reasonably approved by the Agent for
such purpose, the coverage of which shall include the hazards
described in subsection 5.10A(i)(a) and building collapse;
provided, however, that such policy may be obtained by a
contractor if it names the Agent and the Company
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as additional named insureds and if it otherwise complies with
this Agreement. Such policy shall contain a stated value
endorsement so that no co-insurance provision shall be
applicable to any loss thereunder. Such policy shall contain
the provision that "permission is hereby granted to complete
and/or occupy" upon the earlier to occur of substantial
completion of any discrete increment of the work or a Tenant
taking occupancy of any Mortgaged Property (or portion
thereof) as to which work was being performed.
(c) Flood. Insurance against damage or loss by
flood as to any Mortgaged Property that is located in an area
now or subsequently designated as an area having special flood
hazards and in which flood insurance has been made available
under the National Flood Insurance Act of 1968 (Pub. L. 90-
448, 42 U.S.C. Sections 4001, et seq.), the Flood Disaster
Protection Act of 1973 (Pub. L. 93-234, 42 U.S.C. Sections
4001, et seq.) or the National Flood Insurance Reform Act of
1994 (Pub. L. 103-325), as such Acts may be amended, modified,
supplemented or replaced from time to time, on such basis and
not less than such amounts as shall be reasonably approved by
the Agent, but not less than the amount required by law. If
any Loan Party or any of its Subsidiaries fails to obtain
flood insurance as required, the Agent may purchase such flood
insurance, and the Company shall pay all premiums and other
costs and expenses incurred by the Agent.
(d) Boilers. Broad form boiler and machinery
insurance (without exclusion for explosion) covering all
boilers, boiler tanks, heating and air conditioning equipment,
pressure vessels, auxiliary piping and similar apparatus,
machinery and equipment located in, on or about each Mortgaged
Property insuring against damage or loss from boilers, boiler
tanks, heating and air conditioning equipment, pressure
vessels, auxiliary piping and similar apparatus, machinery and
equipment and insurance against loss of occupancy or use
arising from any such breakdown in such amounts as are
generally available at reasonable premiums and are generally
required by institutional lenders for properties comparable to
the Mortgaged Properties.
(e) Business Interruption or Rental Income
Insurance. Business interruption and/or loss of rental value
or use and occupancy insurance insuring against business
interruption at and against loss of rental income from each
Mortgaged Property due to any of the hazards listed in
subsection 5.10A(i)(a) above in an amount sufficient to avoid
any co-insurance penalty and to provide proceeds for a period
not less than one year of loss.
(f) Earthquake Insurance. With respect to any
Mortgaged Property located in California or other area at high
risk for earthquakes, as determined by the Agent, and at the
discretion of the Agent, earthquake insurance on such basis
and in such amounts as shall be reasonably required by the
Agent.
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(ii) Worker's Compensation. Each Loan Party shall maintain, and
shall cause each of its Subsidiaries to maintain, for itself and for each
Mortgaged Property at which such Loan Party or such Subsidiary maintains
employees, statutory workers' compensation insurance (to the extent the risks to
be covered thereby are not already covered by other policies of insurance
maintained by such Loan Party or such Subsidiary), in statutory amounts as
required by law.
(iii) Liability. The Company shall procure and maintain:
(a) Comprehensive General Liability Insurance. Comprehensive
general liability insurance, on an occurrence basis in the amount of
$1,000,000 per occurrence per Mortgaged Property and $3,000,000 in
the aggregate per Mortgaged Property covering each Loan Party, each
of its Subsidiaries and the Agent against claims for bodily injury,
death and property damage (including claims and legal liability to
the extent insurable imposed upon the Agent and all court costs and
attorneys' fees and expenses), arising out of or connected with the
possession, use, leasing, operation, maintenance or condition of
each Mortgaged Property or occurring in, upon or about or resulting
from each Mortgaged Property, or any drive, sidewalk, curb or
passageway adjacent thereto (to the extent insurable), which
insurance shall include blanket contractual liability coverage which
insures contractual liability (to the extent insurable) under the
indemnification set forth in subsection 8.3 of this Agreement (but
such coverage or the amount thereof shall in no way limit such
indemnification), garage liability (if applicable), products
liability (if applicable) and elevator liability (if applicable)
coverage and during any period of construction of any Improvements,
owner's and contractor's protective liability coverage, including
completed operations liability coverage.
(b) Employer's Liability. Employer's liability insurance on
such basis and in such amounts as shall be reasonably required by
the Agent.
(c) Public Liability and Property Damage. Broad form public
liability and property damage insurance on an occurrence basis in
connection with any Renovation being performed at any Mortgaged
Property, to be carried by any contractor or construction manager or
by any Person, including any Loan Party or any of its Subsidiaries,
performing a similar function, including "Course of Construction"
coverage in the amount of $1,000,000 per occurrence and $3,000,000
in the aggregate.
(d) Liquor Liability and Dram Shop Insurance. Liquor liability
and dram shop insurance on such basis and in such amounts as shall
be reasonably required by the Agent.
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(e) Umbrella Liability. Umbrella liability to be maintained in
excess of the comprehensive general liability, employer's liability,
public liability and property damage, liquor liability and dram shop
insurance required pursuant to subsections 5.10A(iii)(a) through
5.10A(iii)(d) above, inclusive, in an amount not less than
$50,000,000 per occurrence and in the annual aggregate, written on a
per location basis covering all the Mortgaged Properties.
(iv) Additional Insurance. Each Loan Party shall procure and
maintain, and shall cause each of its Subsidiaries to procure and
maintain, such other insurance with respect to the Mortgaged Properties
against loss or damage of the kinds from time to time customarily insured
against and in such amounts as are generally available at reasonable
premiums and are generally required by institutional lenders for
properties comparable to the Mortgaged Properties.
B. POLICY PROVISIONS. Each policy of insurance maintained in respect of
any Loan Party, any of its Subsidiaries and/or any Mortgaged Property pursuant
to this subsection 5.10 shall (a) in the case of each category of public
liability insurance, name such Loan Party or such Subsidiary, as the case may
be, as insured and name the Agent (for the benefit of the Lenders) as an
additional insured, and in the case of all other insurance required under this
Agreement (other than any such policy maintained solely in respect of one or
more hotel properties that is not a Mortgaged Property), name the Agent (for the
benefit of the Lenders) as an additional insured or as a loss payee, as Agent
shall require; (b) except in the case of public liability insurance and workers'
compensation insurance, provide that all proceeds thereunder shall be payable to
the Agent pursuant to a standard first mortgagee endorsement, without
contribution, that all losses with respect to each Mortgaged Property shall be
paid directly to the Agent, without contribution by any similar insurance
carried by the Agent and that adjustment and settlement of any material loss
shall be subject to the reasonable approval of the Agent; (c) include effective
waivers by the insurer of all rights of subrogation against any loss payee,
additional insured or named insured; (d) permit the Agent to pay the premiums
and continue any insurance upon failure of such Loan Party or such Subsidiary,
as the case may be, to pay premiums when due, upon the insolvency of such Loan
Party or such Subsidiary, as the case may be, or through foreclosure or other
transfer of title to such Mortgaged Property; (e) provide that such insurance
shall not be impaired or invalidated by virtue of any act, failure to act,
negligence of, or violation of declarations, warranties or conditions contained
in such policy by such Loan Party or such Subsidiary, as applicable, the
Company, the Agent, the Lenders or any other named insured, additional insured
or loss payee, except for the willful misconduct of the Agent or the Lenders
knowingly in violation of the conditions of such policy, the occupation or use
of such Mortgaged Property for purposes more hazardous than permitted by the
terms of the policy, any foreclosure or other proceeding or notice of sale
relating to such Mortgaged Property or any change in the possession of such
Mortgaged Property without a change in the identity of the holder of actual
title to such Mortgaged Property (provided that with respect to items (3) and
(4) any notice requirements of the applicable policies are satisfied); (f) be
subject to a deductible, if any, not greater than $50,000 (or, with respect to
coverage for wind damage or earthquake damage, such greater amount as shall not
exceed 5% of the affected Mortgaged
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Property's agreed value); (g) contain an endorsement providing that none of the
Agent, the Lenders or such Loan Party or such Subsidiary, as applicable, shall
be, or shall be deemed to be, a co-insurer with respect to any risk insured by
such policy; and (h) provide that if all or any part of such policy shall be
canceled or terminated, or shall expire, the insurer will forthwith give notice
thereof to each named insured, additional insured and loss payee and that no
cancellation, termination, expiration, reduction in amount of, or material
change (other than an increase) in, coverage thereof shall be effective until at
least 30 days (or 10 days in the case of non-payment for premiums) after receipt
by each named insured, additional insured and loss payee of written notice
thereof.
C. INCREASES IN COVERAGE. The policy limits of any policy of insurance
required hereunder shall be increased from time to time to reflect what a
reasonable prudent owner of land and improvements similar in type and locality
to each Mortgaged Property would carry.
D. PAYMENT OF PROCEEDS. If any such insurance proceeds required to be paid
to the Agent are instead made payable to the Company or any Loan Party or
Subsidiary thereof, the Company hereby appoints the Agent as its
attorney-in-fact, irrevocably and coupled with an interest, to endorse and/or
transfer any such payment to the Agent. Notwithstanding anything to the contrary
contained herein, all Insurance Proceeds attributable to insurance required
pursuant to subsection 5.10A(i)(e) shall be paid to and retained by the
applicable Loan Party so long as no Event of Default shall be continuing.
E. DELIVERY OF COUNTERPART POLICIES; EVIDENCE. Each Loan Party shall
deliver, and shall cause each of its Subsidiaries to deliver, to the Agent on or
prior to the Restatement Closing Date valid evidence of insurance acceptable to
the Agent for the policies of insurance required by this Agreement or any other
Loan Document to be carried evidencing (i) the issuance of such policies, (ii)
the payment of all premiums payable for the period ending not earlier than the
first anniversary of the Closing Date and (iii) coverage which meets all of the
requirements set forth in this Agreement. At each time after the Restatement
Closing Date that any Loan Party or any of its Subsidiaries is required by this
Agreement or by any Security Document or any other Loan Document to deliver
evidence of insurance, such Loan Party shall deliver, or shall cause such
Subsidiary to deliver, such evidence of valid policies of insurance acceptable
to the Agent evidencing (a) the issuance of the policies of insurance required
by this Agreement or other Loan Document to be carried, (b) the payment of all
premiums then due to the applicable insurer, (c) coverage which meets all of the
requirements set forth in this Agreement or other Loan Document, and (d) that
the required policies are in full force and effect.
F. REPLACEMENT OR RENEWAL POLICIES. Not less than 10 days prior to the
expiration, termination or cancellation of any insurance policy which any Loan
Party or any of its Subsidiaries is required to maintain hereunder, such Loan
Party shall obtain, or shall cause such Subsidiary to obtain, a replacement or
renewal policy or policies (or a binding commitment for such replacement or
renewal policy or policies), which shall be effective no later than the date of
the expiration, termination or cancellation of the previous policy, and shall
deliver to the
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Agent a valid binder in respect of such policy or policies in the same form and
containing the same information as the expiring policy or policies required to
be delivered by each Loan Party and its Subsidiaries pursuant to subsection
5.10E or a copy of the binding commitment for such policy complying with all the
requirements of this subsection, followed by a certified true copy of the policy
or policies when issued.
G. MATERIAL CHANGE IN POLICY. Each Loan Party shall deliver, and shall
cause each of its Subsidiaries to deliver, to the Agent concurrently with each
material change in any insurance policy covering any part of the Mortgaged
Properties required to be maintained by each Loan Party and its Subsidiaries
hereunder, a valid binder or policy endorsement with respect to such changed
insurance policy certified by the insurance company issuing such policy, in the
same form and containing the same information as the original evidence of
insurance required to be delivered by each Loan Party and its Subsidiaries
pursuant to subsection 5.10E.
H. REPORTS OF INSURANCE BROKER. Upon request of the Agent, for so long as
any portion of the Loans is outstanding, each Loan Party shall, and shall cause
each of its Subsidiaries to, within 120 days following the end of each calendar
year commencing with the end of 1997, and concurrently with the delivery of each
replacement policy or a binding commitment for the same pursuant to subsection
5.10F deliver to the Agent a report from a reputable and experienced insurance
broker, or from the insurer, setting forth the particulars as to all insurance
obtained by any Loan Party or any of its Subsidiaries pursuant to this
subsection 5.10 and then in effect and stating that all premiums then due
thereon have been paid to the applicable insurers, that the same are in full
force and effect and that, in the opinion of such insurance broker or insurer,
such insurance otherwise complies in all material respects with the requirements
of this subsection (or if such report shall not be available after such Loan
Party or such Subsidiary shall have used reasonable efforts to provide the same,
such Loan Party or such Subsidiary, as applicable, will deliver to the Agent an
Officer's Certificate containing the information to be provided in such report).
I. SEPARATE INSURANCE. Each Loan Party will not take out, nor will it
permit any of its Subsidiaries to take out, separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
pursuant to this subsection unless such insurance complies with all of the
requirements of this subsection.
5.11 CASUALTY AND CONDEMNATION.
A. NOTICE OF CASUALTY. Upon the occurrence of any damage to or loss or
destruction of all or any portion of any Mortgaged Property, whether or not
covered by insurance, which results in, or is reasonably expected to result in,
any Insurance Proceeds, (i) the Company shall promptly deliver to the Agent
written notice of the same which shall, among other things, describe such
casualty, and (ii) as soon as practicable but in any event prior to the
commencement of Restoration of such Mortgaged Property, the Company shall inform
the Agent of the details of such casualty, including the Company's plans with
respect thereto.
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B. INSURANCE PROCEEDS. All Insurance Proceeds in respect of a Mortgaged
Property or (other than Insurance Proceeds attributable to insurance required
pursuant to subsection 5.10A(ii) and (iii) and 5.10A(i)(e)) and the right
thereto are hereby irrevocably assigned and pledged by each Loan Party to the
Agent for the benefit of the Lenders, and the Agent on behalf of the Lenders is
authorized, at its option, to collect and receive all of the same and to give
proper receipts and acquittances therefor; provided, however, that such Loan
Party shall have the right to cause the Agent to apply Insurance Proceeds in
accordance with subsections 5.11E, 5.11F and 5.11G. Each Loan Party agrees to
execute and to cause each of its Subsidiaries to execute such further
assignments and pledges of any Insurance Proceeds in respect of Mortgaged
Properties as the Agent may reasonably require and shall otherwise cooperate
with the Agent in obtaining for the Agent and the Lenders the benefit of any
Insurance Proceeds lawfully or equitably payable in respect of any such
Mortgaged Property. In no event shall any Loan Party or any of its Subsidiaries
settle, adjust or compromise any claim for Insurance Proceeds in respect of any
Mortgaged Property in excess of $300,000 without the prior written consent of
the Agent, which shall not be unreasonably withheld, delayed or conditioned. If
any Loan Party or any of its Subsidiaries receives any Insurance Proceeds
resulting from such casualty in respect of any Mortgaged Property, such Loan
Party shall promptly endorse and transfer, or cause such Subsidiary to endorse
and transfer, such Insurance Proceeds to the Agent and each Loan Party covenants
that until so paid over to the Agent, such Loan Party or such Subsidiary, as
applicable, shall hold such Insurance Proceeds in trust for the benefit of the
Agent and shall not commingle such Insurance Proceeds with any other funds or
assets of such Loan Party or Subsidiary or any other Person. If, prior to the
receipt by the Agent of such Insurance Proceeds, any Mortgaged Property shall
have been transferred upon foreclosure of the applicable Mortgage (or by deed in
lieu thereof), (x) the property transferred in such foreclosure (or deed in
lieu) shall include the right to collect such Insurance Proceeds to the extent
permitted by law and (y) to the extent not included in the property transferred,
the Agent shall have the right to receive such Insurance Proceeds to the extent
of any deficiency found to be due upon such sale, with legal interest thereon,
and reasonable counsel fees, costs and disbursements incurred by the Agent in
connection with the collection of such Insurance Proceeds. The Agent may, but
shall not be obligated to, make proof of loss if not made promptly by the
applicable Loan Party or Subsidiary thereof. Upon the occurrence and during the
continuance of an Event of Default (but not otherwise), the Agent is hereby
authorized and empowered by the Company to settle, adjust or compromise any
claims for damage, destruction or loss thereunder, with or without the consent
of any Loan Party or any of its Subsidiaries (and the Company hereby irrevocably
appoints and constitutes the Agent as the Company's lawful attorney-in-fact,
coupled with an interest and with full power of substitution, for such purpose).
C. NOTICE OF CONDEMNATION; NEGOTIATION AND SETTLEMENT OF CLAIMS. The Loan
Parties shall, and shall cause their respective Subsidiaries to, promptly
deliver written notice to the Agent upon obtaining knowledge of the institution,
or the proposed institution, of any bona fide action or proceeding for the
Taking of all or any portion of any Mortgaged Property which will cost (or may
reasonably be expected to cost) more than $300,000 to Restore. The Agent shall
have the right to participate in any negotiation, action or proceeding relating
to any such action or proceeding affecting any Mortgaged Property, and no
settlement or compromise of any
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claim in connection with any such action or proceeding shall be made without the
consent of the Agent, which consent shall not be unreasonably withheld, delayed
or conditioned. Upon the occurrence of any Taking with respect to a Mortgaged
Property which will cost (or may reasonably be expected to cost) more than
$300,000 to Restore, as determined by the Company and so certified in an
Officer's Certificate delivered to the Agent, as soon as practicable thereafter
but in any event prior to the commencement of any Restoration of such Mortgaged
Property, the Company shall deliver to the Agent a written notice of renovation
or restoration which shall, among other things, describe the applicable Taking,
the Company's plans with respect to Restoration of such Mortgaged Property.
D. CONDEMNATION PROCEEDS. All Condemnation Proceeds in respect of each of
the Mortgaged Properties and the right thereto are hereby irrevocably assigned
and pledged by each Loan Party to the Agent for the benefit of the Lenders, and
the Agent on behalf of the Lenders is authorized, at its option, to collect and
receive all such Condemnation Proceeds and to give proper receipts and
acquittances therefor; provided, however, that such Loan Party shall have the
right to cause the Agent to apply Condemnation Proceeds in accordance with
subsections 5.11E, 5.11F and 5.11G. Each Loan Party agrees to execute, and to
cause each of its Subsidiaries to execute, such further assignments of any
Condemnation Proceeds in respect of any Mortgaged Property as the Agent may
reasonably require and shall otherwise cooperate with the Agent in obtaining for
the Agent and the Lenders the benefit of any Condemnation Proceeds lawfully or
equitably payable in respect of such Mortgaged Property. In no event shall any
Loan Party or any of its Subsidiaries settle, adjust or compromise any claim for
Condemnation Proceeds in excess of $300,000 in respect of any Mortgaged Property
without the prior written consent of the Agent, which shall not be unreasonably
withheld, delayed or conditioned. If any Loan Party or any of its Subsidiaries
receives any Condemnation Proceeds resulting from such condemnation in respect
of any Mortgaged Property, such Loan Party or such Subsidiary shall promptly
endorse and transfer such Condemnation Proceeds to the Agent and each Loan Party
covenants that until so paid over to the Agent, such Loan Party or Subsidiary,
as the case may be, shall hold such Condemnation Proceeds in trust for the
benefit of the Agent and shall not commingle such Condemnation Proceeds with any
other funds or assets of such Loan Party or Subsidiary or any other Person. If,
prior to the receipt by the Agent of such Condemnation Proceeds, the portion of
the Mortgaged Property, subject to such action or proceeding shall have been
sold on foreclosure of the applicable Mortgage (or by deed in lieu thereof), the
Agent shall have the right to receive such Condemnation Proceeds to the extent
(x) such Condemnation Proceeds are attributable to a Taking occurring prior to
foreclosure or delivery of any deed in lieu thereof and (y) of any deficiency
found to be due upon such sale, with legal interest thereon, and reasonable
counsel fees, costs and disbursements incurred by the Agent in connection with
the collection of such Condemnation Proceeds. The Agent may, but shall not be
obligated to, make proof of loss if not made promptly by the applicable Loan
Party or Subsidiary thereof. Upon the occurrence and during the continuance of
an Event of Default (but not otherwise), the Agent is hereby authorized and
empowered by each Loan Party to settle, adjust or compromise any claims for
Condemnation Proceeds with or without the consent of such Loan Party or any of
its Subsidiaries (and the Company hereby irrevocably appoints and constitutes
the Agent as
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the Company's lawful attorney-in-fact, coupled with an interest and with full
power of substitution, for such purpose).
E. CERTAIN MINOR CASUALTIES AND TAKINGS. In the event of any
casualty or Taking with respect to a Mortgaged Property, which will cost (or may
reasonably be expected to cost) less than $300,000 to Restore, as determined by
the Company and so certified in an Officer's Certificate delivered to the Agent:
(i) the Company shall commence the Restoration of such
Mortgaged Property and may deliver to the Agent, no more frequently
than once in any thirty day period, an Officer's Certificate to the
Agent certifying (a) the aggregate amount of expenditures made by the
Company in furtherance of the Restoration since the commencement of the
Restoration or, if applicable, the delivery of the preceding Officer's
Certificate and (b) if applicable, that the Restoration has been
completed;
(ii) upon receipt of an Officer's Certificate pursuant to
clause (i) above, the Agent shall reimburse the Company for the
expenditures referred to in such Officer's Certificate in an aggregate
amount not greater than the amount of Insurance Proceeds then held by
the Agent with respect to such casualty or Taking and, the Restoration
is complete, pay to the Company all remaining Insurance Proceeds then
held by the Agent with respect to such casualty or Taking to the
Company.
F. REDUCTION OF BORROWING BASE. In the event of any casualty or
Taking with respect to a Mortgaged Property, which will cost (or may reasonably
be expected to cost) more than $300,000 to Restore, as determined by the Company
and so certified in an Officer's Certificate delivered to the Agent, the Company
shall elect by written notice delivered to the Agent as soon as practicable
thereafter, but in any event before the earlier of (i) twenty-one (21) days
after the occurrence of such casualty or Taking and (ii) the commencement of the
Restoration of such Mortgaged Property, either:
(a) to Release such Mortgaged Property pursuant to
subsection 2.11, prepay the Loans to the extent required by subsection
2.5B(iv) and recompute the Borrowing Base as provided in subsection
2.5B(iii) or
(b) if all the following conditions shall be satisfied,
to Restore such Property pursuant to subsection 5.11G:
(1) the Maturity Date shall then not have occurred;
(2) no Potential Event of Default or Event of Default
shall have occurred and be continuing;
(3) the Agent shall have determined that the Company
is in compliance in all respects with the provisions of
subsection 5.11G;
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(4) the Agent shall have determined, in its
reasonable discretion, that Restoration of such Property is,
under the circumstances then existing, physically and
economically feasible and can be completed in accordance with
subsection 5.11G on or before a date not less than six months
prior to the Maturity Date;
(5) the Loan Parties and their respective
Subsidiaries shall have business interruption insurance
complying with subsection 4.10 in an amount at least equal to
the reduction in Property EBITDA with respect to such
Mortgaged Property, if any, which the Company reasonably
expects to suffer during the period of Restoration;
(6) either (A) the Net Insurance/Condemnation
Proceeds shall be sufficient to complete the costs of such
Restoration, as determined by the Agent in its reasonable
discretion, or (B) the Loan Parties and their respective
Subsidiaries shall have provided a letter of credit
satisfactory to the Agent, in its reasonable discretion (or
other collateral reasonably satisfactory to the Agent), for
the amount of any shortfall in the amount of Net
Insurance/Condemnation Proceeds necessary to cover the costs
to complete such Restoration.
If the Loan Parties and their respective Subsidiaries shall fail to
satisfy the conditions set forth in clause (b) of the preceding sentence or in
subsection 5.11G with respect to the related Mortgaged Property, or shall fail
to diligently and continuously prosecute the Work to completion, as determined
by the Agent, in its reasonable discretion, then, the Borrowing Base shall be
recomputed as provided in subsection 2.5B(iii), the Company shall prepay the
Loans to the extent required by subsection 2.5B(iv) and the Agent shall apply
any or all remaining Insurance Proceeds or Condemnation Proceeds, as applicable,
towards such prepayment and the Mortgaged Property shall be Released pursuant to
subsection 2.11.
G. RESTORATION WITH NET INSURANCE/CONDEMNATION PROCEEDS. In the
event of any casualty or Taking with respect to a Mortgaged Property, which will
cost (or may reasonably be expected to cost) more than $300,000 to Restore, as
determined by the Company and so certified in an Officer's Certificate delivered
to the Agent, if any of the Loan Parties and their respective Subsidiaries
elects to Restore a Mortgaged Property, pursuant to this subsection 5.11G and
the conditions set forth in clause (ii) of the first sentence of subsection
5.11F are satisfied, all Net Insurance/Condemnation Proceeds shall be held by
the Agent in an interest-bearing account at the Agent, with all interest to be
held therein until completion and final inspection of the Work, and shall be
applied by the Agent to the payment of the cost of Restoring such Mortgaged
Property so damaged or destroyed or of the portion or portions of such Mortgaged
Property not so Taken (the "WORK") and shall be paid out from time to time to
the Company as the Work progresses, subject to retainage as determined by the
Agent and otherwise in accordance with any conditions reasonably imposed by the
Agent but subject to each of the following conditions:
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(i) The Company shall promptly (and in any event within
90 days after the applicable casualty or Taking) commence, or cause the
commencement of, Restoration of such Mortgaged Property.
(ii) If the Work is structural or if the cost of the Work,
as estimated by the Company, shall exceed with respect to a Mortgaged
Property, the lesser of 25% of the Property Amount with respect to such
Mortgaged Property and $300,000, the Work shall be in the charge of an
architect or Engineer. Before any Loan Party or any of its Subsidiaries
commences any Work, other than temporary work to protect property or
prevent interference with business, the Agent shall have approved the
plans and specifications and the general contract for the Work to be
submitted by such Loan Party or such Subsidiary, which approval shall
not be unreasonably withheld, delayed or conditioned. Such plans and
specifications shall provide for such Work that, upon completion
thereof, the Improvements shall (x) be in compliance in all material
respects with all Applicable Laws and (y) be at least equal in value
and general utility to the Improvements which were on such Property
prior to the casualty or Taking. Such plans and specifications shall be
accompanied by (1) a signed estimate of the Company, or, if an
architect or Engineer is required to supervise the Work, such architect
or Engineer, stating the estimated cost of completing the Work, which
estimate shall bear the architect's or Engineer's seal if not made by
the Company and (2) to the extent necessary at such stage of the Work,
certified copies of all Authorizations required in connection with the
commencement and performance of the Work.
(iii) Each request for payment shall be made on seven days'
prior notice to the Agent and shall be accompanied by paid invoices and
by a certificate to be made by such architect or Engineer, if one be
required under clause (ii) above, otherwise by an Officer's Certificate
of the Company, stating (a) that all of the Work completed has been
done in substantial compliance with the approved plans and
specifications, if any be required under said clause (ii) above, (b)
that the sum requested is justly required to reimburse any of the Loan
Parties and their respective Subsidiaries for payments made by the
applicable Loan Party or Subsidiary thereof to, or is justly due to,
the contractor, subcontractors, materialmen, laborers, engineers,
architects or other Persons rendering services or materials for the
Work (giving a brief description of such services and materials), and
that when added to all sums previously paid out by the Agent does not
exceed the cost of the Work done to the date of such certificate, and
(c) that either (x) the amount of such proceeds remaining in the hands
of the Agent, or (y) the amount of such funds, plus funds in the hands
of the applicable Loan Party or Subsidiary thereof from other sources
irrevocably committed to the completion of the Work in a manner
satisfactory to the Agent (including delivery of such funds to the
Agent for application to pay the costs of the Restoration), will be
sufficient on completion of the Work to pay for the same in full
(giving in such reasonable detail as the Agent may require an estimate
of the cost of such completion).
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(iv) Each request shall be accompanied by waivers of lien
satisfactory to the Agent covering that part of the Work for which
payment or reimbursement is being requested and by a search prepared by
the Title Company satisfactory to the Agent establishing that there has
not been filed with respect to such Mortgaged Property any mechanics'
or other lien or instrument for the retention of title in respect of
any part of the Work not discharged of record or bonded to the
reasonable satisfaction of the Agent and insuring the continued
priority of the Mortgage and Assignment of Rents and Leases on such
Mortgaged Property.
(v) The request for any payment after the Work has been
completed shall be accompanied by (a) evidence that the improvements
being rebuilt, repaired or restored have been accomplished in
accordance with all Applicable Laws and the certificate of occupancy,
if applicable; and (b) final lien waivers for all labor, materials and
supplies from all contractors, subcontractors and materialmen.
(vi) After commencing the Work, the Company shall, subject
to Excusable Delays, perform, or shall cause the applicable Loan Party
or Subsidiary thereof to perform, the Work diligently and in good faith
in a good and workmanlike manner to completion in accordance with the
approved plans and specifications, if applicable.
(vii) The Company shall have obtained and maintained, or
shall have caused the applicable Loan Party or Subsidiary thereof to
obtain and maintain, completed value builders' risk (all risk)
insurance with an insurer reasonably satisfactory to the Agent, and
with loss payable to the Agent.
(viii) The Agent shall have received, or the Company shall
have done, each other item reasonably requested by the Agent.
All costs and expenses of any Restoration, including, without
limitation, any Work, Engineer's fees, architect's fees or contractors fees and
the cost and expenses of complying with this subsection 5.11G, shall be for the
account of the Company.
Upon completion of the Work and payment in full therefor, the Agent
will return to the Company the amount of any unspent Insurance Proceeds or
Condemnation Proceeds then or thereafter in the hands of the Agent on account of
the casualty or Taking that necessitated such Work, together with all
undisbursed accrued interest thereon. Nothing in this subsection shall prevent
the Agent from applying at any time all or any part of the Insurance Proceeds or
Condemnation Proceeds to the curing of any Potential Event of Default or Event
of Default under this Agreement or any other Loan Document.
H. ENGINEER'S INSPECTION. At any time after the Agent becomes
aware of a casualty or Taking involving an aggregate amount in excess of
$300,000 (as reasonably determined by the Company and so certified in an
Officer's Certificate delivered to the Agent) the Agent may hire an independent
engineer to inspect the applicable Mortgaged Property and the Agent may
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deem any related Restoration not complete unless the engineer approves the
Restoration. The cost of such inspection shall be for the account of the
Company.
5.12 RENOVATIONS.
A. NOTICE OF RENOVATION; RENOVATION PLANS. If the Company or any of its
Subsidiaries intends to Renovate any Mortgaged Property and such Renovation
shall constitute a Material Renovation/Restoration, the Company shall, prior to
the commencement of any such Renovation, deliver to the Agent the following: (i)
a written notice of renovation or restoration with respect thereto, which shall,
among other things, described the Company's plans with respect to such
Renovation and the nature and extent of any interruption in operations
(including the percentage of available rooms that will be out-of-order and the
duration of any such unavailability) caused by the Renovation; (ii) a project
budget (as revised and supplemented from time to time in accordance with this
subsection 5.12A, the "RENOVATION BUDGET") satisfactory in form to the Agent and
setting forth, among other things, the aggregate costs for such Renovation, and
the aggregate cost for each line item in such budget; (iii) an estimated time
schedule for such Renovation, satisfactory in form to the Agent and setting
forth, among other things, the projected completion date, the number of rooms
that will be unavailable for business as a result of such Renovation and the
duration of such unavailability; (iv) a description of such Renovation in
reasonable detail as may be requested by the Agent (as revised and supplemented
from time to time in accordance with this subsection 5.12A, the "RENOVATION
PLANS") which shall be reasonably satisfactory in form and substance to the
Agent; and (v) all such other information or materials with respect to the
Renovation that the Agent may reasonably request. In the event the Company, or
any applicable Subsidiary changes the scope of the intended Renovation, revises
the Renovation Budget (including the estimated amounts contained therein), or
revises or modifies the Renovation Plans, the Company shall promptly deliver to
the Agent a supplement to the Renovation Budget or Renovation Plans or a revised
Renovation Budget or revised Renovation Plans, as applicable, which shall be
satisfactory in form and substance to the Agent.
B. CONDUCT OF RENOVATION; COSTS. The Company shall, or shall cause its
Subsidiaries to, complete the Renovation promptly, in a good and workmanlike
manner and in accordance with the Renovation Plans. All costs and expenses of
any Renovation, including, without limitation, the cost and expenses of
complying with this subsection 5.12, shall be for the account of the Company.
C. COMPLETION CERTIFICATE. Upon completion of the Renovation, the
Company shall promptly deliver to the Agent a written notice of completion with
respect thereto.
D. ENGINEER'S INSPECTION. At any time after the Agent becomes aware of
a Renovation involving an aggregate amount in excess of $300,000 (as reasonably
determined by the Company and so certified in an Officer's Certificate delivered
to the Agent), the Agent may, hire an independent engineer to inspect the
applicable Mortgaged Property and the related
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Renovation and the Agent may deem such Renovation not complete unless the
engineer approves such Renovation. The cost of such inspection shall be for the
account of the Company.
5.13 ▇▇▇▇▇▇▇▇ CLAUSE.
In the event of the enactment of or change in (including a change in
interpretation of) any Applicable Law (i) deducting or allowing any Loan Party
or any of its Subsidiaries to deduct from the value of any Mortgaged Property
for the purpose of taxation any Lien thereon, (ii) subjecting any Lender to any
tax in respect of, or changing the basis of taxation in respect of, the
Mortgages, or the manner of collection of such taxes, or (iii) for the taxation
of mortgages or debts secured by mortgages or in the means of collection of any
such tax, in each such case, so as to affect any Lender or the Notes or the
Mortgages or any other Loan Document, and the result is to increase the taxes
imposed upon or the cost to any Lender of maintaining the Loans, or to reduce
the amount of any payments receivable under the Notes, the Mortgages or any
other Loan Document, or to invalidate the Lien created by any Security Document,
then, in any such event, the Company shall, within ten days of receipt of a
request therefor, pay to such Lender additional amounts to compensate for such
increased costs or reduced amounts; provided, however, that if any Lender makes
such a request, or if the Lien created by any Security Document may be
invalidated, then the Company shall have the right, and, in the case of such
invalidation, shall have the obligation, to reduce the Commitments and prepay
the Loans, in accordance with the provisions of this Agreement and the Notes;
provided further, however, that if any such payment or reimbursement shall be
unlawful or would constitute usury or render the Loans wholly or partially
usurious under Applicable Law, then the Agent may, in its sole discretion,
declare the Loans immediately due and payable and/or require the Company to pay
or reimburse the Lenders for payment of the lawful and non-usurious portion
thereof not less than 180 days after notice of such declaration.
5.14 INTEREST RATE PROTECTION.
In the event and to the extent that the sum of (i) the aggregate principal
amount of the Loans plus (ii) the aggregate principal amount of other
Indebtedness of the Company and its Subsidiaries bearing interest or requiring
other payments to be made based on a rate that is not fixed to maturity exceeds
50% of the Consolidated Total Indebtedness ("EXCESS DEBT") of the Company and
its Subsidiaries, then, within five Business Days from the day such excess
occurs, the Company shall obtain and thereafter shall maintain (until such time
as no such Excess Debt is outstanding) interest rate protection on terms and
with counterparties acceptable to the Agent in a notional amount at least equal
to the Excess Debt as in effect from time to time.
5.15 CASH MANAGEMENT SYSTEM; AGENT RIGHTS; APPLICATION OF CASH FLOW; DEPOSITORY
ACCOUNT NAMES.
A. CASH MANAGEMENT SYSTEM. Each Loan Party shall, and shall cause each of
its Subsidiaries to, maintain the Cash Management System as described in
Schedule 4.23; provided that the Company shall deliver the Cash Management
Letter for each account in the Cash
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Management System to the Agent no later than the date that is 90 days after the
Restatement Closing Date or shall close any account with respect to which a Cash
Management Letter cannot be obtained and open a substitute account with respect
to which a Cash Management Letter can be delivered by such date; provided,
further, that each Loan Party may open and close Local Accounts and make other
changes to the Cash Management System in the ordinary course of business upon
prior written notice to the Agent and as long as (i) no Event of Default or
Potential Event of Default has occurred and is continuing or would result
therefrom, (ii) such changes, either individually or in the aggregate are not
adverse to either the Agent or any Lender (in its capacity as a Lender) or
impair any rights, priority or perfection of the Agent under the Security
Documents, (iii) in the case of any closing of any Local Account, a replacement
Deposit Account reasonably satisfactory to the Agent is opened by such Loan
Party or such Subsidiary, as the case may be, and a Cash Management Letter is
entered into with respect to such replacement Deposit Account prior to the
closing of such Local Account and (iv) except as expressly permitted by this
subsection 5.15A, all Receipts of each Loan Party continue to be collected and
distributed pursuant to procedures subject to Cash Management Letters at all
times.
B. AGENT RIGHTS. All funds on deposit in the Local Accounts of each
Loan Party and each of its Subsidiaries shall be transferred at least weekly to
the Concentration Account, and each Loan Party agrees to perform and comply and
to cause each of their respective Subsidiaries to perform and comply with the
following covenants and agreements:
(i) Receipts shall be received and held by the Company and such
Subsidiary and any of their respective officers, employees, agents,
managers or other Persons acting for or in concert with the Company or
such Subsidiary to make collections for or on behalf of the Company or
such Subsidiary (collectively, "COLLECTING AGENTS"), in trust for the
Agent as Collateral. Notwithstanding any other provision of this Agreement
or any other Loan Document, all Receipts shall be paid by the obligor
thereon into the Deposit Accounts subject to the Cash Management System.
At least weekly, each Loan Party, or any Collecting Agent, shall deposit
or shall cause to be deposited, all Receipts into the Concentration
Account or other Deposit Accounts included in the Cash Management System
and (except as expressly permitted pursuant to subsection 5.15A) subject
to Cash Management Letters on or before the first Business Day following
receipt thereof after receipt in the applicable accounting office of the
Company or such Subsidiary, as applicable and as soon as practical in the
case of Receipts received in any other manner.
(ii) As long as no Event of Default shall have occurred and be
continuing, unless otherwise notified by the Company, the Agent shall
instruct the Cash Manager to transfer Receipts on deposit in the
Concentration Account to another account maintained by the Company at the
Cash Manager and designated in writing by the Company to the Cash Manager;
provided that such instructions by the Agent to the Cash Manager may be in
the form of standing instructions that authorize the Cash Manager to
transfer amounts in accordance with the Company's request until the Agent
notifies the Cash Manager otherwise. Upon the occurrence and during the
continuance of an Event of
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Default, the Agent may instruct the Cash Manager to transfer amounts on
deposit in the Concentration Account to an account maintained at the
Agent.
(iii) Effective upon the occurrence and during the continuance
of an Event of Default without the need of any further action by Loan
Parties, each Loan Party irrevocably makes, constitutes and appoints
the Agent, and all Persons designated by Agent for that purpose
(including the Cash Manager), at any time, as such Loan Party's true
and lawful attorney-in-fact to endorse such Loan Party's name on any
checks, notes, drafts or any other form of payment relating to
Collateral or Receipts or proceeds of Collateral or Receipts that come
into the Agent's or the Cash Manager's possession or under the Cash
Manager's or the Agent's control; provided, however, that such
appointment by such Loan Party of the Agent as such Loan Party's
attorney-in-fact shall in no case impose upon the Agent or any such
Person any obligation or duty to take any actions on behalf of such
Loan Party or any fiduciary obligations with respect to such Loan
Party.
C. APPLICATION OF CASH FLOW.
Upon the occurrence and during the continuance of an Event of Default,
the Agent may, in its sole discretion in accordance with subsection 5.15B(iv),
apply funds on deposit in the Deposit Accounts and other Receipts received by
the Agent, (i) to the payment of (a) all Operating Expenses for the Mortgaged
Properties; (b) all scheduled payments of rent, principal or interest with
respect to the Indebtedness permitted hereunder related to the Mortgaged
Properties; and (c) real estate taxes related to the Mortgaged Properties;and/or
(ii) to the payment of the Obligations. In the event that the Agent determines
to apply funds or Receipts to the payment of the foregoing expenses, the Company
shall deliver to the Agent (x) within five days of the first day of each
calendar month, a budget setting forth the estimated Operating Expenses and
other amounts set forth above for such calendar month, (y) within three Business
Days of the date on which the Company desires a disbursement to be made, but not
more frequently than once in any calendar week, a request for disbursements with
respect to Operating Expenses and amounts set forth above for such calendar week
and (z) such other budgets and related information as the Agent may request, in
its sole discretion. Upon receipt of any such request for disbursements, the
Agent may, in its sole discretion, transfer or instruct the Cash Manager to
transfer funds on deposit in the Concentration Account to an interest bearing
operating account of the Company at the Agent which account shall be pledged to
secure the Obligations in a manner satisfactory to the Agent in its sole
discretion to be applied to the payment of amounts set forth in such request for
disbursements and approved by the Agent.
D. NAMES ON DEPOSITORY ACCOUNTS. The Company shall cause each
Local Account listed on Schedule 4.23 annexed hereto in respect of a Mortgaged
Property to be changed to the extent necessary so that such Deposit Account is,
at all times on and after the Closing Date, maintained by and in the name of the
Company or any Mortgaged Property Subsidiary.
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5.16 CAPITAL EXPENDITURES.
On the first Business Day of each calendar quarter commencing January
1, 1998 the Company shall do the following:
(i) either (a) deposit or cause to be deposited into the
Capital Reserve Account an amount equal to the remainder of (1) a
percentage of Property Gross Revenues for each of the Mortgaged
Properties for the 12 most recently completed calendar months for which
the Agent and the Lenders have received the financial statements
referred to in subsection 5.1(i) based on the number of complete,
consecutive calendar months each such Mortgaged Property has been in
full operation following the completion of construction thereof as of
the end of such preceding calendar quarter, as set forth below:
MONTHS PERCENTAGE
------ ----------
less than 12 2%
more than 12 but less than 24 3%
more than 24 4%
minus (2) the aggregate amount that shall have been incurred by the Company or
its Subsidiaries for Capital Items in respect of such Mortgaged Properties for
such calendar quarter or (b) if no Event of Default or Potential Event of
Default then exists, increase the amount of the Total Utilization by the amount
calculated pursuant to clause (a) above; and
(ii) deliver to the Agent a schedule with respect to (a) the
allocation of such amount among such Mortgaged Properties, which
allocation shall reflect the amounts determined with respect to the
Mortgaged Properties pursuant to the preceding clause (i), and (b) the
allocation of the resulting balance in the Capital Reserve Account
among the Mortgaged Properties, which allocation shall reflect the
allocation of all deposits in the Capital Reserve Account pursuant to
this subsection 5.16 and all transfers therefrom pursuant to this
subsection 5.16.
So long as no Event of Default or Potential Event of Default has occurred and is
continuing, upon the Company's written request and not more frequently than once
each month, the Agent shall transfer funds to the Company then on deposit in the
Capital Reserve Account for the payment of costs of Capital Items or for the
deposit of funds into Other Capital Reserve Accounts, in each case in amounts
not greater than the amount of funds then required by the terms of the related
Indebtedness to be so deposited; provided, however, that the aggregate amount of
such funds applied towards Capital Items or for deposit in Other Capital Reserve
Account in respect of any Property shall not exceed the aggregate amount of
funds deposited in the Capital Reserve Account in respect of such Property.
Together with each such request, the
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Company shall deliver to the Agent, upon the request of the Agent, copies of
bills and other documentation as may be reasonably required by the Agent to
establish that such Capital Items or such deposits in such Other Capital Reserve
Accounts, as the case may be, are then due.
5.17 MANAGEMENT OF PROPERTIES; LIQUOR LICENSES.
A. MANAGEMENT OF PROPERTIES. The Company shall (i) manage and operate each
of the Mortgaged Properties in a commercially reasonable and prudent manner, and
(ii) to the extent the Company charges a fee for managing any Mortgaged
Property, not charge more than would be charged by an independent third party
providing such services. No Person other than the Company shall have substantial
authority over the management and operation of any Mortgaged Property.
B. LIQUOR LICENSES. The Company shall cause each liquor license related to
any Mortgaged Property to be issued to, and held in the name of, the Company.
5.18 FURTHER ASSURANCES.
A. ASSURANCES. Without expense or cost to the Agent or the Lenders, each
Loan Party shall, and shall cause each of its Subsidiaries to, from time to time
hereafter execute, acknowledge, file, record, do and deliver all and any further
acts, deeds, conveyances, mortgages, deeds of trust, deeds to secure debt,
security agreements, pledges, assignments, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments as the Agent may from time to time reasonably
require in order to carry out more effectively the purposes of this Agreement or
the other Loan Documents and to subject any Mortgaged Property or other items of
Collateral, intended now or hereafter to be covered, to the Liens and security
interests created by the Security Documents, to perfect and maintain such Liens
and security interests, and to assure, convey, assign, transfer and confirm unto
the Agent the property and rights hereby conveyed and assigned or intended now
or hereafter to be conveyed or assigned or which any Loan Party or any such
Subsidiary may be or may hereafter become bound to convey or to assign to the
Agent or for carrying out the intention of or facilitating the performance of
the terms of this Agreement, or any other Loan Documents or for filing,
registering or recording this Agreement or any other Loan Documents. Promptly
upon request or, in an emergency, upon demand, each Loan Party shall execute and
deliver, and hereby authorizes the Agent to execute and file in the name of such
Loan Party, to the extent the Agent may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments to evidence
more effectively the Lien and security interest hereof upon the Collateral.
B. EXECUTION OF SUBSIDIARY GUARANTIES. If any Subsidiary of the Company
Guarantees the Mortgage Notes, the Senior Subordinated Notes or any other
Indebtedness of the Company, such Subsidiary shall, concurrently with the
effectiveness of such Guaranty, execute and deliver to the Agent a Guaranty of
the Obligations satisfactory in form and substance to the Agent.
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C. FILING AND RECORDING OBLIGATIONS. Each Loan Party shall pay all filing,
registration and recording fees and all expenses incident to the execution and
acknowledgement of any Mortgage or other Loan Document, including any instrument
of further assurance, and shall pay all mortgage recording Taxes, transfer
Taxes, general intangibles Taxes and governmental stamp and other Taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution, delivery, filing, recording or registration of any Mortgage or other
Loan Document, including any instrument of further assurance, or by reason of
its interest in, or measured by amounts payable under, the Notes, the Mortgages
or any other Loan Document, including any instrument of further assurance, and
shall pay all stamp Taxes and other Taxes required to be paid on the Notes or
any other Loan Document; provided, however, that such Loan Party may contest in
good faith and through appropriate proceedings, any such Taxes, duties, imposts,
assessments and charges; provided further, however, that such Loan Party shall
pay all such Taxes, duties, imposts and charges when due to the appropriate
taxing authority during the pendency of any such proceedings. If any Loan Party
fails to make any of the payments described in the preceding sentence within 10
days after notice thereof from the Agent (or such shorter period as is necessary
to protect the loss of or diminution in value of any Collateral by reason of Tax
foreclosure or otherwise, as determined by the Agent, in its sole discretion),
the Agent may (but shall not be obligated to) pay the amount due and such Loan
Party shall reimburse all amounts in accordance with the terms hereof. If
Applicable Law prohibits any Loan Party from paying such Taxes, charges, filing,
registration and recording fees, excises, levies, stamp Taxes or other Taxes,
then the Agent may declare the Property Amount with respect to the applicable
Mortgaged Property in accordance with the terms of this Agreement to be
immediately due and payable without premium or penalty not less than 30 days
after such declaration. Notwithstanding the foregoing, no Loan Party shall be
obligated to pay any income, franchise or doing business taxes pursuant to this
subsection 5.18C.
D. COSTS OF DEFENDING AND UPHOLDING THE LIEN. The Agent may, upon at least
five days' prior notice to the Company, (i) appear in and defend any action or
proceeding, in the name and on behalf of the Agent, the Lenders, any Loan Party
or any of its Subsidiaries, in which the Agent or any Lender is named or which
the Agent in its sole discretion determines is reasonably likely to materially
adversely affect any Mortgaged Property, or other Collateral, any Mortgage, the
Lien thereof or any other Loan Document and (ii) institute any action or
proceeding which the Agent reasonably determines should be instituted to protect
the interest or rights of the Agent and the Lenders in any Mortgaged Property or
other Collateral or under this Agreement or any other Loan Document. The Company
agrees that all costs and expenses expended or otherwise incurred pursuant to
this subsection (including reasonable attorneys' fees and disbursements) by the
Agent shall be paid by the Company or reimbursed to the Agent, as the case may
be, immediately upon demand.
E. COSTS OF ENFORCEMENT. The Company agrees to bear and shall pay or
reimburse the Agent and the Lenders in accordance with the terms of subsection
8.2 for all sums, costs and expenses incurred by the Agent and the Lenders
(including reasonable attorneys' fees and the expenses and fees of any receiver
or similar official) of or incidental to the collection of any of the
Obligations, any foreclosure (or Transfer in lieu of foreclosure) of this
Agreement, any
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Mortgage or any other Loan Document or any sale of all or any portion of any
Mortgaged Property or all or any portion of the other Collateral.
F. FURNISHING OF DOCUMENTS. The Company shall, at its sole cost and
expense, furnish to the Agent all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
Appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by a Loan Party pursuant to the terms of the Loan Documents.
G. ZONING VIOLATIONS. Immediately upon the Company obtaining knowledge of
any condition or event that could reasonably be expected to constitute a Zoning
Violation, the Company shall notify the Agent of such condition or event. Upon
obtaining knowledge of a Zoning Violation, the Agent, in its sole discretion,
may require the Company, at the Company's sole cost and expense, to promptly
within a reasonable time thereafter obtain ALTA Form 3.1 zoning endorsements, in
form and substance satisfactory to the Agent, with respect to all or any portion
of the Mortgaged Properties.
SECTION 6.
COMPANY'S NEGATIVE COVENANTS
The Company covenants and agrees that, so long as the Commitments
hereunder shall remain in effect and until payment in full of the Loans and the
other Obligations, the Company shall perform and shall cause each of its
Subsidiaries to perform all covenants in this Section 6.
6.1 INDEBTEDNESS.
The Loan Parties will not, and will not permit any of their respective
Subsidiaries to, directly or indirectly, create, incur, assume, or otherwise
become directly or indirectly liable with respect to, any Indebtedness or,
solely to the extent in excess of $20,000,000, any Contingent Obligations or
refinance, exchange or refund existing Indebtedness, or become liable with
respect to any Guaranty, in each case owed to or for the benefit of any Person
other than the Company or any of its Wholly Owned Subsidiaries that are
guarantors of the Obligations; provided that, if (i) no Event of Default (or
event subject to subsection 7.1A that would be an Event of Default with the
lapse of time) has occurred and is continuing, (ii) the Company and its
Subsidiaries are in compliance with subsections 6.6B and 6.6C (assuming, for
purposes of such calculations, that (x) the Company has incurred Indebtedness in
an amount equal to the amount of the proposed Indebtedness or Guaranty (i.e.,
Consolidated Total Indebtedness and Consolidated Interest Expense shall be
adjusted to reflect the addition of the proposed Indebtedness and the removal of
any Indebtedness repaid with the proceeds of such proposed Indebtedness)) and
(y) Consolidated EBITDA shall be increased by an amount equal to Property EBITDA
with respect to any Property acquired in whole or in part with the proceeds of
such Indebtedness for the portion of such period commencing on the first day of
the period with
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respect to which Consolidated EBITDA shall be calculated and ending on the day
before such Acquisition Date, as the same shall be determined based upon the
financial statements for such period required by clause (iii) of the definition
of "Property Information" to be delivered with respect to such Property and such
other information with respect thereto that may be provided by the Loan Parties
and their respective Subsidiaries, subject to such adjustments as may be
reasonably required by the Agent in its sole discretion to conform such
financial statements and other information to the basis on which the Company's
financial statements are prepared and (iii) the Company and its Subsidiaries are
in compliance with the debt incurrence provisions of all other Indebtedness of
the Company and its Subsidiaries, then the Company and its Subsidiaries may
incur, create, assume, refinance, exchange, refund or otherwise become directly
or indirectly liable for, Indebtedness or become liable with respect to
Guaranties and Contingent Obligations, as the case may be, if such Indebtedness
or Guaranties (and, if applicable, any security into which it is convertible or
for which it is exchangeable), whether upon the happening of any event
(excluding (i) the occurrence of an event of default provided that such event of
default has not occurred and (ii) any payment due solely as a result of sales of
assets or a change of control of the Company) or otherwise:
(a) does not mature, become payable or require the payment of any
principal amount thereof (or any other amount in lieu thereof) and, with
respect to such Indebtedness, shall not be mandatorily redeemable,
pursuant to a sinking fund or otherwise, or redeemable at the option of
the holder thereof, in whole or in part, before the date that is 91 days
after the Maturity Date (as such Maturity Date may be extended pursuant to
subsection 2.2F);
(b) has required principal payments (or any other amount in lieu
thereof), or payments to be made under a Guaranty, prior to the Maturity
Date, but does not mature or become payable prior to the Maturity Date;
provided that (1) the sum of the aggregate principal payments (or any
other amount in lieu thereof) due in respect of Indebtedness incurred
pursuant to this clause (b) after the Restatement Closing Date plus the
aggregate amount of payments in respect of Guaranties does not exceed (y)
$50,000,000 in the aggregate during the period from the Restatement
Closing Date to and including the Maturity Date and (z) no more than the
applicable amount set forth below during the corresponding year set forth
below:
PERIOD MAXIMUM AMOUNT
------ --------------
Restatement Closing Date-first $10,000,000
Anniversary
first Anniversary-second $10,000,000
Anniversary
second Anniversary-third $15,000,000
Anniversary
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third Anniversary-fourth $15,000,000
Anniversary
fourth Anniversary-Maturity Date $15,000,000
and (2) such Indebtedness does not provide for aggregate amortization
payments in any year in excess of the aggregate amount of amortization
payments that would be due in respect of such Indebtedness if amortization
were calculated on a level pay basis over a 15 year schedule;
(c) refinances Indebtedness in existence on the Closing Date;
provided that the aggregate amount of principal payments (or any other
amounts in lieu thereof) due during the period from the Restatement
Closing Date to and including the Maturity Date in respect of such
refinancing Indebtedness does not exceed the aggregate amount of such
payments due during the period from the Restatement Closing Date to and
including the Maturity Date in respect of the Indebtedness that was
refinanced;
(d) is a guaranty by Homegate and its Subsidiaries (i) on a pari
passu basis, of all obligations of the Company with respect to the
Mortgage Notes and (ii) on an unsecured senior subordinated basis, of all
the obligations of the Company with respect to the Senior Subordinated
Notes, in each case, solely to the extent required by the terms of such
Mortgage Notes or such Senior Subordinated Notes;
(e) is Indebtedness incurred by Homegate pursuant to the BOA Loan
Agreement and the aggregate principal amount of such Indebtedness does not
exceed $30,000,000 at any time; or
(f) in addition to any Indebtedness or Guaranties described in
clauses (a)-(e) above, matures, becomes payable or requires the payment of
any principal amount thereof (or any other amount in lieu thereof) prior
to or after the Maturity Date; provided that the aggregate principal
amount of Indebtedness incurred pursuant to this clause (f) after the
Closing Date shall not exceed $20,000,000.
6.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. The Loan Parties shall not, and shall not
permit any of their respective Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any Restricted
Asset, whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except (i) Permitted
Encumbrances, (ii) pledges of stock of Subsidiaries in existence on the Closing
Date and approved by the Agent and other pledges of the stock of a Subsidiary to
secure transactions permitted under subsection 6.11, provided that
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all of the assets of such Subsidiary and each Subsidiary of such Subsidiary are
subject to such permitted sale-leaseback transaction, (iii) pledges of stock of
a Subsidiary of the Company to secure Indebtedness of such Subsidiary; provided
that substantially all the assets of such Subsidiary, and of all the
Subsidiaries of such Subsidiary, are also pledged to secure such Indebtedness
and such Indebtedness is not secured by the assets of, or otherwise recourse to,
the Company or any of its other Subsidiaries.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If any Loan Party or any
of its Subsidiaries shall create or assume any Lien upon any Restricted Asset,
whether now owned or hereafter acquired, other than Liens excepted by the
provisions of subsection 6.2A, the Company shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided, however, that, notwithstanding
the foregoing, this covenant shall not be construed as a consent by the Agent or
any Lender to the creation or assumption of any such Lien not permitted by the
provisions of subsection 6.2A.
C. NO FURTHER NEGATIVE PLEDGES. The Loan Parties shall not and
shall not permit any of their respective Subsidiaries to, directly or
indirectly, enter into any agreement prohibiting the creation or assumption of
any Lien (whether in favor of the Lenders or otherwise) upon any of the
Mortgaged Properties or other Collateral, whether now owned or hereafter
acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO THE COMPANY OR
OTHER SUBSIDIARIES. Except as provided herein, the Loan Parties shall not, and
shall not permit any of their respective Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any such
Subsidiary to (i) pay dividends or make any other distributions on any of
Subsidiary's capital stock owned by the Company or any other Subsidiary of the
Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to the
Company or any other Subsidiary of the Company, (iii) make loans or advances to
the Company or any other Subsidiary of the Company, or (iv) transfer any of its
property or assets to the Company or any other Subsidiary of the Company, except
for such encumbrances or restrictions existing under or by reasons of:
(a) Existing Indebtedness in existence on the Restatement
Closing Date, as in effect on the Closing Date;
(b) the Mortgage Note Indenture and the Mortgage Notes;
(c) the Senior Subordinated Note Indenture and the Senior
Subordinated Notes;
(d) applicable law;
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(e) any instrument governing Indebtedness or Capital Stock of
a Persons acquired by the Company or any of its Subsidiaries or any
Person that becomes a Subsidiary as in effect at the time of such
acquisition or such Person becoming a Subsidiary (except to the extent
such Indebtedness was incurred in connection with or, if incurred
within one year prior to such acquisition or such Person becoming a
Subsidiary, in contemplation of such acquisition or such Person
becoming a Subsidiary), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so
acquired;
(f) any instrument governing Indebtedness or Capital Stock of
a Person who becomes a Guarantor as in effect at the time of becoming a
Subsidiary Guarantor (except to the extent such Indebtedness was
incurred in connection with or, if incurred within one year prior to
the time of becoming a Subsidiary Guarantor, in contemplation of such
Subsidiary Guaranty), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person who
became a Subsidiary Guarantor
(g) by reason of customary non-assignment and net worth
provisions in leases entered into in the ordinary course of business
and consistent with past practices;
(h) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature
described in clause (e) above on the property so acquired;
(i) Indebtedness permitted pursuant to subsection 6.1(c)
provided that the restrictions contained in the agreements governing
such Indebtedness are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced;
(j) customary restrictions in security agreements or mortgages
securing Indebtedness of a Subsidiary to the extent such restrictions
restrict the transfer of the property subject to security agreements
and mortgages; or
(k) minimum net worth or other provisions contained in leases
entered into by Subsidiaries of the Company permitted pursuant to
subsection 6.11 which restrictions are not applicable to any Person, or
the properties or assets of any Person, other than such Subsidiary.
6.3 INVESTMENTS AND JOINT VENTURES.
The Loan Parties shall not and shall not permit any of their respective
Subsidiaries to, directly or indirectly, make, from and after June 26, 1996, any
Investment (other than Cash Equivalents) in any Subsidiary, Affiliate, Joint
Venture or other entity, except that if (i) no
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Event of Default or Potential Event of Default has occurred and is continuing
and (ii) the Company would be able to incur $1 of additional Indebtedness
pursuant to the Mortgage Note Indenture (as in effect on the Closing Date):
(i) the Company and its Subsidiaries may make Investments in
Subsidiaries, Affiliates, Joint Ventures or other entities engaged only in
Hospitality Related Businesses (excluding casinos and other gaming
properties) located in the United States of America in an aggregate amount
not to exceed $75,000,000 at any time; provided, that the aggregate amount
of such Investments (a) in any entity and all Affiliates of such entity
(other than the Company) shall not exceed $25,000,000 at any time, (b) in
any hotel property owned or leased by such entity shall not exceed
$5,000,000 at any time and (c) in any hotel property owned or leased by
such entity, together with all Investments in other hotel properties that
secure Indebtedness that is cross-defaulted or cross-collateralized with
Indebtedness secured by such hotel property, shall not exceed $10,000,000
at any time;
(ii) the Company and its Subsidiaries may acquire notes receivable
or other debt instruments secured by real property in an aggregate amount
not to exceed $20,000,00 at any time; and
(iii) the Company may make debt Investments in ▇▇▇▇▇ Trout, or
another entity approved by Majority Lenders, secured by mortgages or deeds
of trust on real property in order to facilitate like-kind exchanges under
Section 1031 of the Internal Revenue Code ("▇▇▇▇▇ TROUT INVESTMENTS");
provided that (a) at the time such ▇▇▇▇▇ Trout Investments are made (1)
such ▇▇▇▇▇ Trout Investments, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect and (2)
the Company shall not, and shall cause its Subsidiaries to not, pledge or
permit a lien on, or any security interest in, any such ▇▇▇▇▇ Trout
Investment, (b) each such ▇▇▇▇▇ Trout Investment shall be secured by a
perfected mortgage or deed of trust (a "RELATED MORTGAGE") on the property
(the "RELATED PROPERTY") acquired or financed with the proceeds of such
▇▇▇▇▇ Trout Investment, (c) each Related Property shall be leased to
Company pursuant to a lease/option to purchase agreement (a "RELATED
LEASE/PURCHASE AGREEMENT") that, among other things, shall give Company a
valid and enforceable right to purchase, at Company's option, the Related
Property for consideration in an aggregate amount not to exceed the amount
of the applicable Investment by Company plus a nominal charge to exercise
such option, (d) each ▇▇▇▇▇ Trout Investment shall be evidenced by a
promissory note (a "RELATED NOTE") that provides for (1) a market rate of
interest and (2) annual interest at least equal to the rent payable by
Company during such period pursuant to the applicable Related
Lease/Purchase Agreement, (e) each Related Note, Related Mortgage, and
Related Lease/Purchase Agreement shall be valid and enforceable and
satisfactory in form and substance to Agent (provided, that any Related
Note, Related Mortgage or Related Lease/Purchase Agreement that is
delivered to Agent and is substantially in the form of the Related Notes,
Related Mortgages and Related Lease/Purchase Agreements, as applicable,
delivered to Agent prior to the date
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hereof shall be deemed satisfactory to Agent), (f) at all times during
which any such Investment exists, the Company shall appoint and maintain a
member of the Board of Directors of ▇▇▇▇▇ Trout, or such other entity (the
"COMPANY DIRECTOR"), and such Company Director's vote shall be necessary
for ▇▇▇▇▇ Trout, or such other entity, to incur indebtedness, dissolve,
liquidate or commence bankruptcy proceedings, (g) Company Director shall
not vote to permit ▇▇▇▇▇ Trout, or such other entity, to incur any
indebtedness other than indebtedness owed to Company or indebtedness
incurred in the ordinary course, dissolve, liquidate, commence any
bankruptcy proceedings, make loans or other advances of credit, declare or
pay dividends, redeem or acquire any outstanding stock, issue additional
stock or other securities (other than to Company), merge or consolidate
▇▇▇▇▇ Trout (or such other entity) with any other Person, sell (other than
directly or indirectly to Company) substantially all of the assets of
▇▇▇▇▇ Trout (or such other entity), adopt, amend or repeal any bylaw or
the certificate of incorporation of ▇▇▇▇▇ Trout (or such other entity)
without the prior consent of the Agent, or engage in any business other
than the ownership and development of hotels subject to mortgages or deeds
of trust in favor of the Company and the leasing of property to the
Company, (h) together with each delivery of operating statements of the
Company and its Subsidiaries pursuant to subsection 5.1(i), Company shall
deliver to the Agent an Officer's Certificate certifying as to its
compliance with all conditions set forth in (b)-(g) above, and (i) the
aggregate Potential Tax Effect of all such ▇▇▇▇▇ Trout Investments shall
at no time exceed $125,000,000.
provided further that, in each case above, (a) the Company shall not, and shall
cause its Subsidiaries to not, pledge or permit a lien on, or any security
interest in, any such Investment except for pledges of the Capital Stock of a
Subsidiary of the Company permitted pursuant to clauses (ii) and (iii) of
subsection 6.2A., (b) upon the occurrence and during the continuance of an Event
of Default, no further investments may be made in Investments described in
clauses (iii) or (vi) of the definition of Cash Equivalents, (c) the Company and
its Subsidiaries shall not incur any Contingent Obligations in connection with
any such Investment, arising under contract or by law (including, without
limitation, by reason of the acquisition of a partnership interest or the
assumption of any contribution, payment or advance obligation), except as
otherwise permitted by the Loan Documents and (d) except as specifically
permitted by this subsection 6.3, neither the Company nor any of its
Subsidiaries shall purchase or otherwise acquire any notes receivable or other
debt instruments secured by real estate at any time after the Restatement
Closing Date without the prior written consent of Majority Lenders.
For the purpose of this subsection 6.3 and without limiting any other
method of making an Investment, the Company and its Subsidiaries shall be deemed
to make an Investment in each Investment owned by a Person at the time such
Person becomes a Subsidiary of the Company or any of its Subsidiaries.
6.4 CONTINGENT OBLIGATIONS.
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The Loan Parties shall not and shall not permit any of their respective
Subsidiaries to, directly or indirectly, create or become liable with respect to
Contingent Obligations in an aggregate amount in excess of $20,000,000 at any
time unless the excess amount of such Contingent Obligations are by permitted
subsection 6.1.
6.5 RESTRICTED PAYMENTS.
The Loan Parties shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, declare, order, pay, make, give or
publish notice or fix a date in respect of or set apart any sum for any
Restricted Payment, enter into an agreement or make any commitment to effect any
of the foregoing or take any other similar action in furtherance of or otherwise
in connection with the foregoing; provided that, (i) if no Potential Event of
Default or Event of Default exists and the Company would be able to incur $1 of
additional Indebtedness pursuant to the Mortgage Note Indenture (as in effect on
the Closing Date), the Company may (A) purchase, redeem, acquire, cancel or
otherwise retire for value shares of Capital Stock of the Company, options on
any such shares or related stock appreciation rights or similar securities held
by officers and employees or former officers and employees (or their estates or
beneficiaries under their estates), upon death, disability, retirement,
severance or termination of employment and (B) pay dividends or make other
distributions on shares or purchase shares of Capital Stock of the Company in an
aggregate amount not to exceed $25,000,000; (ii) the Company and its
Subsidiaries may make Restricted Payments (but not any voluntary prepayments) in
respect of Indebtedness permitted pursuant to subsection 6.1 in accordance with,
and to the extent required by, the terms and provisions of the applicable
Indebtedness; (iii) the Company may prepay Indebtedness permitted pursuant to
subsection 6.1 with the proceeds of refinancing indebtedness permitted pursuant
to subsection 6.1(c) and (iv) the Company may prepay Indebtedness permitted
pursuant to subsection 6.1(d), provided that the aggregate amount of principal
payments prior to the Maturity Date in respect of such Indebtedness shall not
exceed $20,000,000.
6.6 FINANCIAL COVENANTS.
A. MINIMUM CONSOLIDATED NET WORTH. The Company shall not permit at any
time its Consolidated Net Worth to be less than $325,000,000 and no more than
10% of such Consolidated Net Worth may consist of security deposits (or similar
cash holdback requirements) of Subsidiaries engaged in sale-leaseback
transactions pursuant to subsection 6.11.
B. MINIMUM INTEREST COVERAGE RATIOS.
(1) As of the last day of any quarter occurring during any of the
periods set forth below, the Company shall not permit the ratio of (i)
Consolidated EBITDA to (ii) the sum of (a) Consolidated Interest Expense plus
(b) all capitalized interest expense to be less than the correlative ratio
indicated (such amounts to be determined with reference to the preceding
12-month period ending on such last day):
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============================================================
PERIOD MINIMUM INTEREST
COVERAGE RATIO
============================================================
from and including Restatement 2.00 to 1.00
Closing Date - to but excluding the
first Anniversary
------------------------------------------------------------
from and including first Anniversary -
to but excluding the second 2.25 to 1.00
Anniversary
------------------------------------------------------------
from and including second
Anniversary - to but excluding the 2.50 to 1.00
third Anniversary
------------------------------------------------------------
from and including third Anniversary
- to but excluding the fourth 2.75 to 1.00
Anniversary
------------------------------------------------------------
from and including fourth Anniversary
and thereafter 2.75 to 1.00
============================================================
(2) As of the last day of any quarter occurring during any of the periods
set forth below, the Company shall not permit the ratio of (i) Adjusted
Consolidated EBITDA to (ii) the sum of (a) Consolidated Interest Expense plus
(b) all capitalized interest expense to be less than the correlative ratio
indicated (such amounts to be determined with reference to the preceding
12-month period ending on such last day):
============================================================
PERIOD MINIMUM INTEREST
COVERAGE RATIO
============================================================
from and including Restatement 1.50 to 1.00
Closing Date - to but excluding the
first Anniversary
------------------------------------------------------------
from and including first Anniversary -
to but excluding the second 1.75 to 1.00
Anniversary
------------------------------------------------------------
from and including second
Anniversary - to but excluding the 2.25 to 1.00
third Anniversary
------------------------------------------------------------
from and including third Anniversary
- to but excluding the fourth 2.50 to 1.00
Anniversary
------------------------------------------------------------
from and including fourth Anniversary
and thereafter 2.75 to 1.00
============================================================
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C. MAXIMUM TOTAL DEBT LEVERAGE RATIO.
As of the last day of any quarter occurring during any of the
periods set forth below, the Company shall not permit the ratio of (i)
Consolidated Total Indebtedness reduced by the amount of (a) unrestricted cash
on the balance sheet and (b) the 7% Convertible Subordinated Notes due 2002
issued by the Company pursuant to the Convertible Note Indenture (the "7%
NOTES") (provided that the market price of the Common Stock exceeds the
conversion price of the 7% Notes) to (ii) Adjusted Consolidated EBITDA to exceed
the correlative ratio indicated (the Consolidated Total Indebtedness and
unrestricted cash calculations to be determined as of such last day and Adjusted
Consolidated EBITDA to be determined with reference to the preceding 12-month
period ending on such day):
============================================================
PERIOD MAXIMUM TOTAL
DEBT LEVERAGE RATIO
============================================================
Restatement Closing Date-6/30/98 5.500 to 1.00
------------------------------------------------------------
7/1/98-12/31/99 5.000 to 1.00
------------------------------------------------------------
1/1/00-12/31/00 4.500 to 1.00
------------------------------------------------------------
1/1/01-Maturity Date 4.250 to 1.00
============================================================
D. MAXIMUM TOTAL DEBT/MARKET CAPITALIZATION RATIO. As of the last day of
any quarter occurring during any of the periods set forth below, the Company
shall not permit the quotient of (i) Consolidated Total Indebtedness of the
Company and its Subsidiaries divided by (ii) the sum of (a) Consolidated Total
Indebtedness of the Company and its Subsidiaries plus (b) the Market Equity
Capitalization to exceed the correlative percentage indicated:
============================================================
PERIOD PERCENTAGE
============================================================
Restatement Closing Date-6/30/98 60%
------------------------------------------------------------
7/1/98-12/31/98 60%
------------------------------------------------------------
Thereafter 55%
============================================================
E. MAXIMUM TOTAL DEBT/BOOK CAPITALIZATION. As of the last day of any
quarter occurring during any of the periods set forth below, the Company shall
not permit the quotient of (i) Consolidated Total Indebtedness of the Company
and its Subsidiaries divided by (ii) the
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sum of (a) Consolidated Total Indebtedness plus (b) Consolidated Net Worth to
exceed the correlative percentage indicated:
============================================================
PERIOD PERCENTAGE
============================================================
Restatement Closing Date-6/30/98 65%
------------------------------------------------------------
7/1/98-12/31/98 60%
------------------------------------------------------------
Thereafter 55%
============================================================
6.7 FUNDAMENTAL CHANGES.
The Loan Parties shall not, and shall not permit any of their respective
Subsidiaries to alter the corporate or legal structure of any Loan Party in any
manner that adversely affects the Agent or the Lenders, to incorporate or
otherwise organize any Subsidiaries, or to enter into any transaction of merger
or consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or make or permit any Transfer or Transfer any
Property except that, from time to time after the Restatement Closing Date:
(i) so long as no Event of Default or Potential Event of Default
has occurred and is continuing or would be caused thereby, upon the prior
approval of the Agent, in its sole discretion, any Wholly Owned Subsidiary
of the Company may be merged with or into the Company or another Wholly
Owned Subsidiary, or be liquidated, wound up or dissolved, or all or any
part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to the Company; provided, however, that, in the case of such
a merger, the Company shall be the continuing or surviving corporation;
provided further that, notwithstanding the foregoing, the Company may
consummate the Secondary Merger without the prior approval of the Agent,
so long as, prior to and immediately following the consummation of the
Secondary Merger, (A) the Company would be able to incur $1 of additional
Indebtedness pursuant to the Mortgage Note Indenture (as in effect on the
Closing Date), (B) no Event of Default or Potential Event of Default has
occurred or is continuing, (C) the Secondary Merger could not reasonably
be expected to have a Material Adverse Effect, and (D) the Company has
provided evidence, satisfactory to the Agent, as to the absence of any
material liabilities of Homegate and/or any of Homegate's Subsidiaries
whether direct or indirect, contingent or absolute, known or unknown other
than those liabilities certified by the Company to the Agent as of the
date of the Secondary Merger;
(ii) the Company and any Subsidiary (other than a Mortgaged Property
Subsidiary) may create one or more Subsidiaries (including, without
limitation, Property Subsidiaries); provided that each such Subsidiary
shall be a Wholly Owned Subsidiary of the Company or another Wholly Owned
Subsidiary and;
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(iii) the Company and its Subsidiaries may make Transfers; provided
that if the aggregate fair market value of the assets subject to any
Transfer, is equal to or greater than $5,000,000 (whether in one
transaction or a series of related transactions), at least 75% of the
consideration for such Transfer shall be cash; and
(iv) the Company and its Subsidiaries may create, incur, assume and
permit to exist any Lien permitted pursuant to subsection 6.2.
6.8 ZONING AND CONTRACT CHANGES AND COMPLIANCE.
The Loan Parties shall not and shall not permit any of their respective
Subsidiaries to initiate or consent to any zoning reclassification of any
Mortgaged Property or seek any variance under any existing zoning ordinance or
use or permit the use of any Mortgaged Property in any manner that could result
in such use becoming a non-conforming use under any zoning ordinance or any
other applicable land use law, rule or regulation. The Loan Parties shall not
and shall not permit any of their respective Subsidiaries to initiate or consent
to any change in any laws, requirements of Governmental Authorities or
obligations created by private contracts and Material Leases which now or
hereafter could reasonably be likely to materially and adversely affect the
ownership, occupancy, use or operation of any Mortgaged Property without the
prior written consent of the Agent.
6.9 NO JOINT ASSESSMENT; SEPARATE LOTS.
Each Loan Party shall not suffer, permit or initiate nor shall it permit
any of its Subsidiaries to suffer, permit or initiate, the joint assessment of
any Mortgaged Property (i) with any other real property constituting a separate
tax lot (other than another Mortgaged Property) and (ii) with any portion of any
Mortgaged Property which may be deemed to constitute personal property, or any
other procedure whereby the lien of any Taxes which may be levied against any
such personal property shall be assessed or levied or charged to any Mortgaged
Property as a single lien. Each Mortgaged Property is comprised of one or more
parcels, each of which, to the knowledge of the Company, constitutes a separate
tax lot (except with respect to any lot constituting another Property) and none
of which constitutes a portion of any other tax lot.
6.10 TRANSACTIONS WITH AFFILIATED PERSONS.
The Loan Parties shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property, the rendering of any service or the making of any
Investment) with any holder of 5% or more of any class of equity Securities of
the Company or any Affiliate of any of the foregoing or of the Company on terms
that are less favorable than those that could be obtained in a comparable
transaction at the time on an arms-length basis from any Person who is not such
a holder or Affiliate; provided that with respect to any transaction or series
of transactions involving aggregate payments in excess of
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$5,000,000, a majority of the members of the Board of Directors of the Company
who are not officers, employees, partners, beneficiaries, principals or holders
of 5% or more of any class of equity Securities of the Company or any Affiliate
of the foregoing or the Company shall determine that the terms thereof are not
less favorable to such Loan Party or Subsidiary, as the case may be, than those
that might be obtained in a comparable transaction or series of transactions at
the time on an arms-length basis from Persons who are not such a holder or
Affiliate; provided, however, that the foregoing restriction shall not apply to
(i) any transaction between the Company and any Subsidiary Guarantor or between
any Subsidiary Guarantors, (ii) reasonable and customary fees paid to members of
the Boards of Directors of the Company and its Subsidiaries, (iii) reasonable
compensation payable or paid to senior management personnel of the Company and
(iv) any transaction described in Schedule 6.10 annexed hereto.
6.11 SALE-LEASEBACK TRANSACTIONS.
The Loan Parties shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, enter into any arrangement with any
Person providing for the leasing by any Loan Party or any of its Subsidiaries of
any real or tangible personal property, which property has been or is to be sold
or transferred by any Loan Party or any of its Subsidiaries to such Person in
contemplation of such leasing, unless (i) the aggregate fair market value of
Properties subject to such transaction, at the date thereof, shall not exceed
$103,000,000, (ii) the leasehold interests in the subject Properties shall be
held by one or more Subsidiaries of the Company, and (iii) Indebtedness or other
obligations of any such Subsidiary (including obligations under the related
leases) may be secured by any or all the assets of such Subsidiary but shall not
be secured by the assets of, or otherwise recourse to, the Company or any of its
other Subsidiaries.
6.12 SALE OR DISCOUNT OF RECEIVABLES.
The Loan Parties shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes (other
than mortgages and notes owned by the Loan Parties on the Restatement Closing
Date) or accounts receivable; provided that the Company may discount sell or
otherwise sell for less than the face value mortgages and notes acquired after
the Restatement Closing Date and accounts receivable owned on the Restatement
Closing Date or acquired thereafter if the aggregate discount realized in all
such sales pursuant to this proviso after the Restatement Closing Date does not
exceed $5,000,000.
6.13 TRANSFER OF SUBSIDIARY STOCK.
Except as expressly permitted pursuant to subsection 6.7(i) or in
connection with an Asset Sale in compliance with the provisions of subsection
2.5B(v), the Loan Parties shall not, and shall not permit any of their
respective Subsidiaries to directly or indirectly Transfer any shares of capital
stock or other equity Securities of any of its Subsidiaries, except to qualify
directors
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if required by Applicable Laws or permit Investments by foreign nationals
mandated by Applicable Law.
6.14 CONDUCT OF BUSINESS.
From and after the Restatement Closing Date, the Loan Parties shall not,
and shall not permit any of their respective Subsidiaries to, directly or
indirectly, (i) engage in any business other than the acquisition, ownership,
renovation, management, operation and disposition of all-suite, full-service,
extended-stay and limited-service hotels and development of all-suite hotels,
(ii) convert or reposition any Property into any hotel other than an all-suite,
full service, extended-stay or limited-service hotel or (iii) convert or
reposition any Mortgaged Property from (a) an all-suite hotel to a full service,
extended-stay or limited service hotel, (b) a full service hotel to an
all-suite, extended-stay or limited service hotel or (c) a limited service hotel
to an all-suite or full service hotel.
6.15 MANAGEMENT OF MORTGAGED PROPERTIES.
The Loan Parties shall not, and shall not permit any of their respective
Subsidiaries to, enter into or otherwise become obligated with respect to, any
agreement regarding the management or operation of any Mortgaged Property.
6.16 MATERIAL LEASES.
With respect to the Mortgaged Properties, the Loan Parties shall not, and
shall not permit any of their respective Subsidiaries to, (i) enter into any
Lease other than Leases incidental to the operation of the Mortgaged Properties
as hotels or (ii) enter into any Material Lease without the prior written
approval of the Agent, which approval shall not be unreasonably withheld,
conditioned or delayed; it being understood and agreed that if after the
Restatement Closing Date any Loan Party or any of its Subsidiaries enters into a
Material Lease, the Agent may require that the Tenant thereunder enter into a
Tenant Subordination Agreement reasonably satisfactory in form and substance to
the Agent. In the event any Material Lease necessary to the operation of any
Mortgaged Property as a hotel is terminated, the applicable Loan Party or
Subsidiary thereof shall replace such Lease with a suitable comparable Lease
within a reasonable period of time following such termination. The Loan Parties
shall not, and shall not permit any of their respective Subsidiaries to, enter
into any Material Lease or other agreement subsequent to the date hereof with
any Person that would, evaluated alone or in conjunction with any then existing
Leases or other agreements, result in a Material Adverse Effect.
6.17 ISSUANCE OF PREFERRED STOCK.
Neither the Company nor any of its Subsidiaries shall issue any Capital
Stock which by its terms (or the terms of any Security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable,
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pursuant to a sinking fund or otherwise redeemable at the option of the holder
thereof, no whole or in part, before the date that is 91 days after the Maturity
Date.
6.18 FISCAL YEAR.
The Company shall not change its fiscal year-end from December 31.
6.19 INTELLECTUAL PROPERTY; FRANCHISE AGREEMENTS.
A. INTELLECTUAL PROPERTY. The Loan Parties shall not, and shall not permit
any of their respective Subsidiaries, to Transfer any Intellectual Property
unless the Company shall have determined that the Intellectual Property so
Transferred is no longer material to the business, operations, condition
(financial or otherwise) or prospects of the Company and its Subsidiaries.
B. FRANCHISE AGREEMENTS. The Loan Parties shall not, and shall not permit
any of their respective Subsidiaries to, enter into or otherwise become
obligated with respect to, any Franchise Agreement with respect to a Mortgaged
Property, except that, from time to time after the Restatement Closing Date, the
Company may (subject to subsection 6.10) enter into Franchise Agreements as a
franchisor; provided, that (i) each hotel property subject to such Franchise
Agreement shall be of a type, quality and character consistent with the
Company's business plan and strategy, (iv) the Loan Parties and their respective
Subsidiaries may not make any Investment in, or become liable with respect to
any Guaranty for the benefit of, or make any payment to any Person owning or
leasing the hotel property subject to such Franchise Agreement or otherwise in
connection with such Franchise Agreement, and (iii) such Franchise Agreement
shall not constitute, have the form of or contain provisions creating a
leasehold interest in any real or personal property. Neither the Company nor any
of its Subsidiaries shall terminate or amend any Franchise Agreement with
respect to a Mortgaged Property in any material respect without the prior
written consent of the Agent.
SECTION 7.
EVENTS OF DEFAULT; REMEDIES
7.1 EVENTS OF DEFAULT.
If any of the following conditions or events ("EVENTS OF DEFAULT") shall
occur:
A. FAILURE TO MAKE PAYMENTS WHEN DUE. Failure to pay any installment of
principal of any Loan when due or any interest or any other amount due under
this Agreement within three days after the due date, in each case, whether at
stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise;
B. DEFAULT IN OTHER AGREEMENTS. (i) Failure of the Company or any of its
Subsidiaries to pay when due (at maturity, upon acceleration or otherwise) any
principal of or
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interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in subsection 7.1) or
Contingent Obligations (a) in an aggregate principal amount of $10,000,000 or
more, with respect to Indebtedness or Contingent Obligations that are recourse
to the Company and its Subsidiaries or (b) in an aggregate principal amount of
$30,000,000 or more, with respect to Indebtedness or Contingent Obligations that
are non-recourse to the Company and its Subsidiaries, in each case beyond the
end of any grace period provided therefor; or (ii) breach or default by Company
or any of its Subsidiaries with respect to any other material term of (a) one or
more items of Indebtedness or Contingent Obligations in the individual or
aggregate principal amounts referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligations, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); provided that, for purposes of this
subsection 7.1B any Indebtedness owed by a Subsidiary of the Company shall be
deemed to be non-recourse if it is secured by substantially all the assets of
such Subsidiary and each Subsidiary of such Subsidiary, but is not secured by
the assets of, or otherwise recourse to, the Company or any of its other
Subsidiaries; or
C. BREACH OF CERTAIN COVENANTS. Failure of the Company to perform or
comply with any term or condition contained in subsection 2.6, 5.14, 5.15 or
Section 6 (other than 6.2 except to the extent that a default under subsection
6.2 is caused by the imposition of a Lien created or evidenced by an agreement,
instrument or other document signed by or filed at the direction of the Company
or any of its Subsidiaries, 6.4 and 6.17); or
D. BREACH OF WARRANTY. Any representation, warranty, certification or
other statement of any Loan Party or any of its Subsidiaries made in this
Agreement or in any other Loan Document or in any Related Document to which such
Loan Party or such Subsidiary is a party or in any statement or certificate at
any time given in writing pursuant hereto or thereto or in connection herewith
or therewith shall be false in any material respect on the date as of which made
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) such Loan Party's or such Subsidiary's obtaining knowledge of
such default and (ii) receipt by such Loan Party or such Subsidiary of notice
from the Agent of such default; provided, however, that if such default cannot
be cured solely by the payment of money and the cure of such default requires a
period in excess of 30 days, and if such Loan Party or such Subsidiary, as
applicable, is diligently and continuously prosecuting such cure, then such
default shall not be an Event of default unless such Loan Party or such
Subsidiary fails to cure such default within 90 days, after such Loan Party or
such Subsidiary obtain knowledge or notice thereof, as the case may be; or
E. INVALIDITY OF LOAN DOCUMENT; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS. At any time after the execution and delivery thereof, (i) any Loan
Document (other than a
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Security Document) or any material provision thereof shall cease to be in full
force and effect (other than in accordance with its terms) or shall be declared
null and void; (ii) any Security Document or any material provision thereof
shall cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, or any
other termination of such Security Document in accordance with the terms hereof
or thereof) or shall be declared null and void, or the Agent shall not have or
shall cease to have a valid and perfected first priority Lien or security
interest in any Collateral purported to be covered thereby, in each case for any
reason other than the failure of the Agent to take any action within its
control; or (iii) any Loan Party shall contest in writing the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by the Lenders,
under any Loan Document to which it is a party; or
F. PROHIBITED TRANSFERS. Any Loan Party attempts to assign its rights
under this Agreement or any other Loan Document or any interest herein or
therein, or if any Transfer occurs other than in accordance with this Agreement
and the other Loan Documents; or
G. OTHER DEFAULTS UNDER LOAN DOCUMENTS OR RELATED DOCUMENTS. Any Loan
Party or any of its Subsidiaries shall default in the performance of or
compliance with any term contained in this Agreement or any other Loan Document
or any material term of any Related Document to which such Loan Party or such
Subsidiary is a party, other than any such term referred to in any other clause
of this subsection 7.1, and such default shall not have been remedied or waived
within 30 days after the earlier of (i) such Loan Party's or such Subsidiary's
obtaining knowledge of such default or (ii) receipt by such Loan Party or such
Subsidiary of notice from the Agent of such default; provided, however, that if
such default cannot be cured solely by the payment of money and the cure of such
default requires a period in excess of 30 days, and if such Loan Party or such
Subsidiary is diligently and continuously prosecuting such cure, then such
default shall not be an Event of Default unless such Loan Party or such
Subsidiary fails to cure such default within 90 days after any Loan Party or any
of its Subsidiaries obtains knowledge or notice thereof, as the case may be; or
H. INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) A court
having jurisdiction in the premises shall enter a decree or order for relief in
respect of any Loan Party or any of its Subsidiaries in an involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be commenced against any Loan Party
or any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over any Loan Party or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of any Loan Party or any of its Subsidiaries for all
or a substantial part of its property; or a warrant of attachment,
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execution or similar process shall have been issued against any substantial part
of the property of any Loan Party or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
I. VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) Any Loan Party
or any of its Subsidiaries shall have an order for relief entered with respect
to it or commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or any
Loan Party or any of its Subsidiaries shall make any assignment for the benefit
of creditors; or (ii) any Loan Party or any of its Subsidiaries shall be unable,
or shall fail generally, or shall admit in writing its inability, to pay its
debts as such debts become due; or the Board of Directors of any Loan Party or
any of its Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
J. JUDGMENTS AND ATTACHMENTS. Any money judgment, writ or warrant of
attachment or similar process involving individually or in the aggregate at any
time an amount in excess of $1,000,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage in writing) shall be entered or filed against the Company
or any of its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any
event later than five days prior to the date of any proposed sale thereunder);
or
K. DISSOLUTION. Any order, judgment or decree shall be entered against any
Loan Party or any of its Subsidiaries decreeing the dissolution or split up of
such Loan Party or that Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
L. EMPLOYEE BENEFIT PLANS. There shall occur one or more ERISA Events
which individually or in the aggregate results in or could reasonably be
expected to result in a Material Adverse Effect; or there shall exist an amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
either individually or in the aggregate for all Pension Plans, which exceeds
$1,000,000; or
M. MATERIAL ADVERSE EFFECT. Any event or change shall occur that has
caused or evidences, either in any case or in the aggregate, a (i) material
adverse effect upon the business, operations or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, and (ii) a
material impairment of the ability of the Company or any of its Material
Subsidiaries to perform, or of the ability of the Agent or the Lenders to
enforce, any material obligation of the Company or any of its Material
Subsidiaries under the Loan Documents; or
N. CHANGE OF CONTROL. Any Change of Control shall occur; or
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O. EMPLOYMENT OF SIMON AND ▇▇▇▇▇▇. Either of ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇
cease to be employed in a senior position by the Company for any reason
(including the voluntary termination of such employment by ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇
▇▇▇▇▇▇) except in the event of death or disability of either of ▇▇▇▇▇ ▇▇▇▇▇ or
▇▇▇▇ ▇▇▇▇▇▇ or the termination of any or all of their employment by the Company
for cause; or
P. OWNERSHIP OF SUBSIDIARIES. The Company shall cease to own, directly
or indirectly, all the equity Securities of any Subsidiary that at the time in
question is obligated with respect to a Subsidiary Guaranty.
THEN (i) upon the occurrence of any Event of Default described in subsection
7.1I or 7.1J, each of (a) the unpaid principal amount of and accrued interest on
the Loans and (b) all other Obligations shall automatically become immediately
due and payable, without notice, presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by the
Company and the obligations of each Lender to make any Loan shall thereupon
terminate, and (ii) upon the occurrence and during the continuance of any other
Event of Default, the Agent may, in its sole discretion, by written notice to
the Company, declare all or any portion of the amounts described in clauses (a)
and (b) above to be, and the same shall forthwith become, immediately due and
payable and the obligation of each Lender to make any Loan shall thereupon
terminate.
The occurrence of any condition or event may constitute an Event of
Default (or a Potential Event of Default) under more than one provision of this
subsection 7.1.
7.2 REMEDIES.
A. Upon the occurrence of an Event of Default, all or any one or more
of the rights, powers, privileges and other remedies available to the Agent or
the Lenders against the Company under this Agreement, the Notes, the Mortgages,
the Security Documents or any of the other Loan Documents, or at law or in
equity, may be exercised by the Agent, in such order as the Agent in its own
sole discretion at any time and from time to time, whether or not all or any
portion of the Obligations shall be declared due and payable, and whether or not
the Agent shall have commenced any foreclosure proceeding or other action for
the enforcement of its rights and remedies under any of the Loan Documents with
respect to all or any portion of the Mortgaged Property. Without limiting the
generality of the foregoing, the Agent shall have the right in its sole
discretion to bring an action or proceeding against any Loan Party without first
seeking recourse against the Collateral or any part thereof, and the Agent shall
have the right to seek recourse against such portions of or all of the
Collateral in such order and such manner as the Agent in its sole discretion
shall determine. Any such actions taken by the Agent shall be cumulative and
concurrent and may be pursued independently, singly, successively, together or
otherwise, at such time and in such order as the Agent in its sole discretion
may determine, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of the Agent or the Lenders
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents.
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B. In the event of the foreclosure or other action by the Agent to enforce
its remedies in connection with one or more of the Mortgaged Properties or any
other Collateral, whether such foreclosure (or other remedy) yields net proceeds
in an amount less than, equal to or more than the Property Amount of such
Mortgaged Property, the Agent shall apply all net proceeds received to repay the
Obligations, the Obligations shall be reduced to the extent of such net proceeds
and the remaining portion of the Obligations shall remain outstanding and
secured by the Mortgages and the other Loan Documents, it being understood and
agreed by the Company that the Company is liable for the repayment of the
Obligations and that any "excess" foreclosure proceeds are part of the
cross-collateralized and cross-defaulted security granted to the Agent on behalf
of the Lenders pursuant to the Mortgages; provided, however, that, if the Agent
so elects, the Loans and the Notes shall be deemed to have been accelerated only
to the extent of the net proceeds actually received by the Lenders with respect
to any individual Mortgaged Property (or, in the event that the Agent on behalf
of the Lenders is the purchaser of such Mortgaged Property by Credit Bid at a
foreclosure sale, the Loans and the Notes shall be deemed to have been
accelerated only at such time as the Agent subsequently disposes of such
Property and then only to the extent of the amount of such Credit Bid) and
applied in reduction of the Obligations in accordance with the provisions of
this Agreement and the Notes, after payment by the Company of all transaction
costs and expenses and costs of enforcement.
C. It is intended that the Liens of the Mortgages shall each be construed
and treated as a separate, distinct Lien for the purpose of securing the entire
Obligations secured thereby in the same manner as though each Mortgaged Property
was mortgaged and transferred to the Agent on behalf of the Lenders by a
separate and distinct mortgage and security agreement, so that if it should at
any time appear or be held that any Mortgage fails to mortgage, and transfer to
the Agent on behalf of the Lenders a Lien upon and the title to any Mortgaged
Property, or any part thereof, as against creditors of the Company other than
the Lenders or otherwise, such failure shall not operate to affect in any way
the transfer of the other Mortgaged Properties or any part thereof to the Agent
on behalf of the Lenders; but nothing contained herein or in the Mortgages shall
be construed as requiring the Agent on behalf of the Lenders to resort to any
Mortgaged Property for the satisfaction of the Obligations secured thereby in
preference or priority to any other Mortgaged Property thereby conveyed, but the
Agent, acting in its sole discretion may seek satisfaction out of all of the
Mortgaged Property or any part thereof.
D. In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default the Agent is hereby authorized by the
Company at any time or from time to time, without notice to the Company or to
any other Person, any such notice being hereby expressly waived, to the extent
permitted by Applicable Law, to set off and to appropriate and to apply any and
all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by the Agent to
or for the credit or the account of the Company against and on account of the
obligations and liabilities of the Company to the Agent under this Agreement and
the Notes, including all claims of any nature or description arising out of or
connected with this Agreement or any other Loan Document, irrespective of
whether or
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not (i) the Agent shall have made any demand hereunder or (ii) the principal of
or the interest on the Loan or any other amounts due hereunder shall have become
due and payable pursuant to subsection 8.1 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
E. Upon the occurrence and during the continuance of an Event of Default,
the Agent, in its sole discretion, shall have the right, to the extent permitted
by law, to impound and take possession of books, records, notes, and other
documents evidencing the Company's Deposit Accounts, accounts receivable and
other claims for payment of money (including Rents) arising in connection with
the Mortgaged Properties, to give notice to the obligors thereunder of the
Agent's interest therein, and to make direct collections on such Deposit
Accounts, accounts receivable and claims.
F. Upon the occurrence and during the continuance of a default in the
payment of any principal or interest of any Indebtedness owed or alleged to be
owed by the Company or any Subsidiary, and following the initiation of any
proceeding or the taking of any other action to collect the payment thereof by
the Person entitled to such payment, which proceeding or action could reasonably
be expected to directly affect any Collateral, the Agent may, in its sole
discretion, advance either to such Person or to the Company, for payment to such
Person, all or any portion of the amount of such payment, to the extent the
Agent deems necessary or proper to protect the security of the Collateral. Each
such advance shall be deemed a Loan hereunder and shall be subject to the
provisions of this Agreement.
G. The rights, powers and remedies of the Agent and the Lenders under this
Agreement shall be cumulative and not exclusive of any other right, power or
remedy which the Agent or the Lenders may have against the Company pursuant to
this Agreement or the other Loan Documents executed by or with respect to the
Company, or existing at law or in equity or otherwise. The rights, powers and
remedies of the Agent and the Lenders may be pursued singly, concurrently or
otherwise, at such time and in such order as the Agent, acting in its own sole
discretion, may determine. No delay or omission to exercise any remedy, right or
power accruing upon an Event of Default shall impair any such remedy, right or
power or shall be construed as a waiver thereof, but any such remedy, right or
power may be exercised from time to time and as often as may be deemed
expedient. A waiver of any Event of Default or Potential Event of Default with
respect to the Company shall not be construed to be a waiver of any subsequent
Event of Default or Potential Event of Default by the Company or to impair any
remedy, right or power consequent thereon.
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SECTION 8.
MISCELLANEOUS
8.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Each Lender shall have the right at any time, so long as it
has obtained the prior written consent of the Agent (which consent shall not be
unreasonably withheld), to (i) sell, assign, transfer or negotiate to any
Eligible Assignee (provided that such Eligible Assignee complies with the
requirements of subsection 2.8B(iii) as of the date it becomes a Lender
hereunder, to the extent applicable), or (ii) sell participations to any Person
in, all or any part of its Commitment or any Loan or Loans made by it or
participations therein or any other interest herein or in any other Obligations
owed to it; provided, however, that no such assignment or participation shall,
without the consent of the Company, require the Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
assignment or participation under the securities laws of any state; and
provided, further that no such sale, assignment, transfer or participation of
any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Loan Commitment and
the Loans of the Lender effecting such sale, assignment, transfer or
participation. In the case of any assignment authorized under this subsection
8.1, (i) the Agent shall notify the Company of the effective date of such
assignment, (ii) as of such effective date, the assignee shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it, shall have the rights and obligations of a Lender hereunder and (iii) the
assigning Lender shall, to the extent that its rights and obligations hereunder
have been assigned by it, relinquish its rights and be released from its
obligations under this Agreement. In the event of an assignment hereunder, the
Commitments shall be modified to reflect the Commitments of such assignee.
Except with respect to the portion of the Loans and Commitments assigned
pursuant to this subsection 8.1, no Lender shall, as between the Company and
such Lender, be relieved of any of its obligations hereunder as a result of any
sale, assignment, transfer or negotiation of, or any granting of participations
in, all or any part of its Commitment or the Loans, or other Obligations owed to
such Lender.
B. PARTICIPATIONS. The Company and each Lender hereby acknowledge and
agree that, solely for purposes of subsections 2.7, 2.8, and 8.5, (i) any
participation will give rise to a direct obligation of the Company to the
participant and (ii) the participant shall be considered to be a "Lender";
provided that no participant shall be entitled to receive any greater amount
pursuant to such subsections than the transferor Lender would have been entitled
to receive in respect of the amount of the participation effected by such
transferor Lender to such participant had no such participation occurred and the
Company shall reduce the amount payable to the transferor Lender by the amount
payable to the participant.
C. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
8.1, any Lender may assign and pledge all or any portion of its Loans and the
other Obligations owed to such Lender to any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of
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Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank. No Lender shall, as between the Company and such
Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge.
D. INFORMATION. Each Lender may furnish any information concerning the
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants).
8.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be consummated,
the Company agrees to pay promptly (i) all the costs of furnishing all opinions
of counsel for the Company and the other Loan Parties (including any opinions
requested by the Agent) as to any legal matters arising hereunder and of the
each Loan Party's performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement and
the other Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements and with respect to the
Security Documents and the Liens created pursuant thereto; (ii) actual costs and
expenses of creating, perfecting and maintaining Liens in favor of the Agent for
the benefit of the Lenders pursuant to any Loan Document, including filing and
recording fees and expenses, mortgage recording taxes and transfer and stamp
taxes, title searches, title insurance premiums, UCC searches and UCC filing
charges; (iii) all the reasonable out-of-pocket expenses incurred by the Agent
and payable to auditors, accountants, architects, engineers or appraisers and
any environmental or other consultants, advisors and agents employed or retained
by the Agent or its counsel in connection with performing due diligence,
including obtaining and reviewing any Appraisals, any environmental audits or
reports, market surveys, title reports, surveys and similar information; (iv)
all the reasonable fees, expenses and disbursements of counsel for the Agent in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and the syndication of the Loans, including, without
limitation, in connection with any consents, amendments, waivers or other
modifications to the Loan Documents; (v) all reasonable expenses incurred by the
Agent, including, without limitation, the reasonable fees, expenses and
disbursements of counsel for the Agent (including allocated costs of internal
counsel) in connection with (a) the administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto, and (b) the
preparation or review of any documents or matters requested by any Loan Party;
and (vi) after the occurrence of an Event of Default, all costs and expenses,
including reasonable attorneys' fees and costs of settlement, incurred by the
Agent and the Lenders in enforcing any Obligations of or in collecting any
payments due from the Company hereunder or under the other Loan Documents by
reason of such Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
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8.3 INDEMNITY.
A. INDEMNITY. In addition to the payment of expenses pursuant to
subsection 8.2, whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to defend, indemnify, pay and hold harmless the
Agent, the Documentation Agent, Syndication Agent, Lenders and Bankers and their
respective Affiliates and Persons deemed to be "CONTROLLING PERSONS" thereof
within the meaning of the Securities Act or the Exchange Act and the respective
directors, officers, employees, agents, attorneys and representatives of the
foregoing (collectively, "INDEMNIFIED PERSONS" and individually, an "INDEMNIFIED
PERSON"), to the full extent lawful, from and against any and all losses,
claims, damages, liabilities, costs and expenses or other obligations of any
kind or nature whatsoever incurred by each such Indemnified Person (including
fees, charges and disbursements of both counsel and the allocated costs and
expenses of internal counsel for such Indemnified Person) which are related to,
arise out of or result from (a) any untrue statements or alleged untrue
statements or omissions or alleged omissions to state therein a material fact
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, in each case made or, to the extent contemplated
by the Loan Documents, to be made, by or on behalf of any Loan Party or any of
its Affiliates, (x) in the representations and warranties of the Loan Parties
contained in the Loan Documents, (y) in or pursuant to the Loan Documents or the
Related Documents or (z) otherwise in connection with the Loan Documents or the
Related Documents, (b) with respect to information provided by or on behalf of
any Loan Party or any of their Affiliates for use in connection with any
syndication, assignment or participation of any portion of the Commitments, the
Loans, the Notes, the other Loan Documents or the Obligations, or in connection
with any Loan Document or any Related Document or any transactions contemplated
hereby or thereby, (c) the transactions contemplated by the Loan Documents
(including the Lenders' agreements to make the Loans or the use or intended use
of the proceeds thereof) or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Subsidiary Guaranty), (d) any actions taken
or omitted to be taken by an Indemnified Person with the consent of the Company
or in conformity with the instructions of the Company, or (e) any other
transactions contemplated by the Loan Documents or the Related Documents and
will reimburse each Indemnified Person for all reasonable costs and expenses,
including fees and disbursements of both outside and internal counsel for such
Indemnified Person, as they are incurred, in connection with investigating,
preparing for, or defending any formal or informal claim, action, suit,
investigation, inquiry or other proceeding, whether or not in connection with
pending or threatening litigation, caused by or arising out of or in connection
with the foregoing, whether or not such Indemnified Person is named as a party
thereto and whether or not any liability results therefrom. The Company shall
not, however, be responsible for any losses, claims, damages, liabilities, costs
or expenses pursuant to clauses (c), (d) or (e) of the preceding sentence which
have resulted primarily from the bad faith or recklessness of such Indemnified
Person as determined by a final judgment of a court of competent jurisdiction.
Neither the Agent nor any other Indemnified Person shall have any liability
(whether direct or indirect, in contract or tort otherwise) to any of the Loan
Parties and their respective Affiliates or any director, officer, employee,
agent or representative of any of the foregoing, or any other person,
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for or in connection with the foregoing, or otherwise arising out of or in any
way relating to the matters contemplated by the Loan Documents, the Related
Documents or any commitment to lend except for such liability for losses,
claims, damages, liabilities, costs or expenses of any Indemnified Person
pursuant to clauses (c), (d) or (e) of the preceding sentence to the extent they
are determined to have resulted primarily from the bad faith or recklessness of
such Indemnified Person as determined by a final judgment of a court of
competent jurisdiction and in no event shall the Agent or any other Indemnified
Person be responsible for or liable to any of the Loan Parties or any of their
respective Affiliates or any other Person for consequential, punitive or
exemplary damages. The Company further agrees that the Loan Parties shall not,
nor shall they permit their respective Subsidiaries to, without the prior
written consent of the Agent and Bankers, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit,
investigation, inquiry or other proceeding in respect of which indemnification
is actually sought hereunder unless such settlement, compromise or consent
includes an unconditional release of the Agent and each other Indemnified Person
hereunder from all liability arising out of such claim, action, suit,
investigation, inquiry or other proceeding.
B. PROCEDURE. If any action, suit, investigation, inquiry or other
proceeding is commenced, as to which an Indemnified Person proposes to demand
indemnification hereunder, such Indemnified Person shall notify the Company with
reasonable promptness; provided, however, that any failure by such Indemnified
Person to notify the Company shall not relieve the Company or any of its
Affiliates from its obligations hereunder (except to the extent that the Company
or such Affiliate is prejudiced in a material respect by such failure to so
promptly notify). The Company shall be entitled to assume the defense of any
such action, suit, investigation, inquiry or other proceeding, including the
employment of counsel reasonably satisfactory to the Indemnified Person and the
payment of all reasonable fees and expenses incurred in connection therewith.
The Indemnified Person shall have the right to employ separate counsel in any
such action, suit, investigation, inquiry or other proceeding, or to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Indemnified Person unless (i) the Company has agreed to pay
such fees and expenses, (ii) the Company shall have failed promptly upon written
demand therefor to assume the defense of such action, suit, investigation,
inquiry or other proceeding, and employ counsel reasonably satisfactory to the
Indemnified Person in connection therewith or (iii) such Indemnified Person
shall have been advised by counsel that there exists actual or potential
conflicting interests between the Company and such Indemnified Person, including
situations in which one or more legal defenses may be available to such
Indemnified Person that are different from or additional to those available to
the Company, in which case, if such Indemnified Person notifies the Company in
writing that it elects to employ separate counsel at the expense of the Company,
the Company shall not have the right to assume the defense of such action or
proceeding on behalf of such Indemnified Person; provided, however, that the
Company shall not, in connection with any one such action, suit, investigation,
inquiry or other proceeding or separate but substantially similar or related
actions, suits, investigations, inquiries or other proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for
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all such Indemnified Persons (in addition to local counsel), which firm shall be
designated in writing by the Agent.
C. CONTRIBUTION. In order to provide for just and equitable contribution
with respect to matters subject to subsection 8.3A if a claim for
indemnification is made pursuant to these provisions but is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification is not available for any reason (except, with respect
to indemnification sought solely pursuant to subsection 8.3A, for the reasons
specified in the second sentence of subsection 8.3A), even though the express
provisions hereof provide for indemnification in such case, or is insufficient
to hold an Indemnified Party harmless, then the Company, on the one hand, and
the Agent, the Lenders or Bankers, on the other hand, shall contribute to such
loss, claim, damage, liability, cost or expense for which such indemnification
or reimbursement is held unavailable or is insufficient in such proportion as is
appropriate to reflect the relative benefits to the Loan Parties and their
respective Affiliates, on the one hand, and the Agent, Lenders or Bankers, on
the other hand, in connection with the transactions described in the Loan
Documents and the Related Documents, as well as any other equitable
considerations. The parties agree that for the purpose of this subsection 8.3C,
the relative benefits to the Loan Parties and their respective Affiliates, on
the one hand, and the Agent, Lenders and Bankers, on the other hand shall be
deemed to be in the same proportion as the proceeds received or to be received
by the Loan Parties from the Loan Documents bears to the fees paid or to be paid
to the Agent, Lenders and Bankers under the Loan Documents. Notwithstanding the
foregoing, the Agent, Lenders and Bankers shall not be required to contribute
under this subsection 8.3C any amount in excess of the amount of fees actually
received by the Agent, Lenders and Bankers, respectively, in respect of the Loan
Documents. The Company, Agent, Bankers and the Lenders agree that it would not
be just and equitable if contribution pursuant to this subsection 8.3C were
determined by pro rata allocation or by any other method which does not take
into account the equitable considerations referred to in this subsection 8.3C.
D. NO LIMITATION. The foregoing rights to indemnity and contribution shall
be in addition to any rights that any Indemnified Person may have at common law
or otherwise and shall remain in full force and effect following the completion
or any termination of the transactions contemplated by the Loan Documents and
the Related Documents. In no event shall the Agent, the Lenders, or Bankers be
responsible or liable to any person for consequential damages which may be
alleged as a result of the Loan Documents and the Related Documents or any
transaction contemplated thereby.
E. INDEPENDENCE OF INDEMNITY. The Company acknowledges and agrees that the
provisions of this subsection 8.3 are separate from and in addition to the
provisions contained in the Environmental Indemnity.
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8.4 NO JOINT VENTURE OR PARTNERSHIP.
The Lenders and the Company acknowledge and agree that the relationship
created hereunder or under the other Loan Documents is that of creditor/debtor.
The Company acknowledges and agrees that (a) the Company through its directors,
officers and employees, is a knowledgeable and sophisticated business
practitioner with particular expertise and broad experience in the area of real
estate acquisition and finance; (b) the Agent and the Lenders individually and
collectively, do not owe, and have expressly disclaimed, any fiduciary or
special obligation to the Company and/or any of the Company's partners, agents,
or representatives; and (c) nothing contained in this Agreement or any other
Loan Document shall affect the relationship between the Lenders and the Company
as that of creditor/debtor hereunder and under the other Loan Documents. Nothing
herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between the Company, any other
Loan Party or Subsidiary thereof and the Agent or any Lender nor to grant the
Agent or the Lenders any interest in the Mortgaged Property other than that of
mortgagee or lender.
8.5 RATABLE SHARING.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with this Agreement), by realization upon security,
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to that Lender hereunder or under the other Loan Documents (collectively,
the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify the Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase participations (which it
shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided, however, that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of the Company
or otherwise, those purchases shall be rescinded and the purchase prices paid
for such participations shall be returned to such purchasing Lender ratably to
the extent of such recovery, but without interest. The Company expressly
consents to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by the Company
to that holder with respect thereto as fully as if that holder were owed the
amount of the participation held by that holder.
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8.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by any
Loan Party therefrom, shall in any event be effective without the written
concurrence of Majority Lenders; provided that (i) no such amendment,
modification, termination, waiver or consent shall be effective without the
written concurrence of all Lenders if such amendment, modification, termination,
waiver or consent (A) increases the amount of any of the Commitments or reduces
the principal amount of any of the Loans; (B) changes in any manner the
definition of "Pro Rata Share", the definition of "Supermajority Lenders" or the
definition of "Majority Lenders"; (C) changes in any manner any provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of a specified percentage of Lenders; (D) postpones the scheduled
final maturity date of any of the Loans; (E) postpones the date on which any
interest or any fees are payable; (F) decreases the interest rate borne by any
of the Loans (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.3E) or the amount of any
commitment fees payable pursuant to subsection 2.4A; (G) increases the maximum
duration of Interest Periods permitted hereunder; (H) releases any Lien granted
in favor of Agent with respect to any of the Collateral except in accordance
with the provisions of the Loan Documents regarding permitted dispositions or
subsection 2.11 hereof; (I) releases any Subsidiary from its obligations under
the Subsidiary, other than as provided in subsection 2.9 of the Subsidiary
Guaranty; (J) amends, modifies, waives or supplements any mandatory reduction of
the Commitments pursuant to subsection 2.5A; or (K) changes in any manner the
provisions contained in this subsection 8.6A, (ii) no such amendment,
modification, termination, waiver or consent shall be effective without the
written concurrence of Supermajority Lenders if such amendment, modification,
termination, waiver or consent (A) waives, amends, supplements or modifies any
provision requiring any mandatory prepayment of the Loans, (B) waives, amends,
supplements or modifies the financial covenants contained in subsection 6.6, (C)
after the occurrence and during the continuance of an Event of Default (x) prior
to acceleration of the Obligations, results in a determination to make a Loan
hereunder or (y) waives, amends, supplements or modifies the provisions of any
Loan Document, and (D) relates to any mergers, liquidations or other
transactions pursuant to subsections 6.7(i) and (iii) (except to the extent such
subsections apply to Subsidiaries of the Company), (iii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of
that Note; and (iv) no amendment, modification, termination or waiver of any
provision of Section 9 or of any other provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of the Agent shall be
effective without the written concurrence of the Agent. The Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 8.6A shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by
the Company, on the Company.
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The Company shall be entitled to conclusively assume that any written amendment,
modification, termination or waiver of any Loan Document executed by the Agent
has been duly authorized, to the extent necessary, by the Lenders.
If the Agent notifies any Lender in writing that one or more requirements
set forth in subsection 3.1 will not be satisfied, or that performance of all or
any part of such requirement will be deferred, and, subsequent to such
notification, such Lender delivers (or continues to authorize delivery of) its
signature page hereto, then such Lender shall be deemed to have waived (subject
to any conditions set forth in the applicable notice) such requirement as a
condition precedent to the effectiveness of the Commitments.
B. DEEMED CONSENT. If the Agent delivers a written request for the
Lenders' approval or a proposed amendment or modification to, or waiver of, this
Agreement, each Lender shall, within 10 Business Days of receiving such request
for approval or proposed amendment, modification or waiver, give Agent written
notice that either (i) it grants its consent or approves such amendment,
modification or waiver or (ii) it does not grant its consent or does not approve
such amendment, modification or waiver; provided that if any Lender does not
respond within such 10 Business Days, such Lender shall be deemed to have
granted its consent or approved such amendment, modification or waiver; provided
further that the Agent shall send such request by telecopy, messenger or
overnight courier.
8.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
8.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed, or sent by telefacsimile or courier service
and shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex; provided, however, that notices
to the Agent shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or (i) as to the Company and the Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to the Agent.
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8.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder and, notwithstanding anything in this Agreement or implied by law to
the contrary, the representations and warranties set forth in subsection 4.2G
(to the extent it incorporates the Environmental Indemnity) shall survive the
payment in full of the Obligations and the termination of this Agreement.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Company set forth in subsections 2.7, 2.8, 3.5A,
3.6, 6.8 (to the extent it incorporates the Environmental Indemnity), 8.2, 8.3
and 8.5 shall survive the payment in full of the Obligations and the termination
of this Agreement.
8.10 AGENT'S DISCRETION.
Whenever pursuant to this Agreement or any other Loan Document the Agent
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to the Agent, the decision of the Agent to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of the Agent. The Company acknowledges and agrees that,
notwithstanding anything in this Agreement to the contrary, certain decisions to
be made by the Agent under this Agreement may be subject to or determined by the
further decision by the Lenders or a percentage of the Lenders.
8.11 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF THE LENDERS' RIGHTS.
The obligations of the Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitment of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
the Lenders pursuant hereto or thereto, shall be deemed to constitute the
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
8.12 REMEDIES OF THE COMPANY.
In the event that a claim or adjudication is made that the Agent or any
Lender or their respective agents has acted unreasonably or unreasonably delayed
acting in any case where by law or under this Agreement, the Notes, the
Mortgages or the other Loan Documents, the Agent, such Lender or such agent, as
the case may be, has an obligation to act reasonably or promptly, the Company
agrees that none of the Agent, such Lender or such agents, shall be liable for
any monetary damages, and the Company's sole remedies shall be limited to
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commencing an action seeking injunctive relief or declaratory judgement. The
parties hereto agree that any action or proceeding to determine whether the
Agent or any Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.
8.13 MARSHALLING; PAYMENTS SET ASIDE.
Neither the Agent nor any Lenders shall be under any obligation to marshal
any assets in favor of the Company, any other Loan Party or any other party or
against or in payment of any or all of the Obligations. To the extent that the
Company or any other Loan Party makes a payment or payments to the Lenders or
the Agent (or to the Agent for the benefit of the Lenders), or the Agent or the
Lenders enforce any security interests or the Agent exercises its rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, any other state or federal
law, common law or any equitable cause of action, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
8.14 MAXIMUM AMOUNT.
A. It is the intention of the Company and the Lenders to conform strictly
to the usury and similar laws relating to interest from time to time in force,
and all agreements between the Loan Parties and their respective Subsidiaries
and the Lenders, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the
amount paid or agreed to be paid in the aggregate to the Lenders as interest
hereunder or under the other Loan Documents or in any other security agreement
given to secure the indebtedness of the Company to the Lenders, or in any other
document evidencing, securing or pertaining to the indebtedness evidenced
hereby, exceed the maximum amount permissible under applicable usury or such
other laws (the "MAXIMUM AMOUNT"). If under any circumstances whatsoever
fulfillment of any provision hereof, or any of the other Loan Documents, at the
time performance of such provision shall be due, shall involve exceeding the
Maximum Amount, then, ipso facto, the obligation to be fulfilled shall be
reduced to the Maximum Amount. For the purposes of calculating the actual amount
of interest paid and/or payable hereunder in respect of laws pertaining to usury
or such other laws, all sums paid or agreed to be paid to the holder hereof for
the use, forbearance or detention of the indebtedness of the Company evidenced
hereby, outstanding from time to time shall, to the extent permitted by
Applicable Law, be amortized, pro-rated, allocated and spread from the date of
disbursement of the proceeds of the Notes until payment in full of all of such
indebtedness, so that the actual rate of interest on account of such
indebtedness is uniform through the term hereof. The terms and provisions of
this subsection shall control and supersede every other provision of all
agreements between the Company or any endorser of the Notes and the Lenders.
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B. If under any circumstances any Lender shall ever receive an amount
which would exceed the Maximum Amount, such amount shall be deemed a payment in
reduction of the principal amount of the Loans and shall be treated as a
voluntary prepayment under subsection 2.5B(i) and shall be so applied in
accordance with subsection 2.5 hereof or if such excessive interest exceeds the
unpaid balance of the Loans and any other indebtedness of the Company in favor
of such Lender, the excess shall be deemed to have been a payment made by
mistake and shall be refunded to the Company.
8.15 SEVERABILITY.
In case any provision in or obligation under this Agreement or any Note or
any other Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction or under any set of circumstances, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction or under any other set of circumstances,
shall not in any way be affected or impaired thereby.
8.16 HEADINGS.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
8.17 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
8.18 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Agent and the Lenders (it being
understood that the Lenders' rights of assignment are subject to subsection
8.1). Neither the Company's rights or obligations hereunder nor any interest
therein may be assigned or delegated by the Company.
8.19 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY
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STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, THE COMPANY, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 8.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT THE AGENT RETAINS THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST THE
COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 8.19 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
8.20 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED HEREBY AND THEREBY. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship, that
each has already relied on this waiver in entering into this Agreement and the
other Loan Documents, and that each will continue to rely on this waiver in
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their related future dealings. Each party hereto further warrants and represents
that it has reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SUBSECTION 8.20 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.
In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
8.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by the Company and
the Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
8.22 MATERIAL INDUCEMENT.
The Company acknowledges that its representations, warranties, covenants
and agreements contained in this Agreement and the other Loan Documents are
material inducements to the Lenders to enter into this Agreement and to make the
Loans, that the Lenders have already relied on such representations, warranties,
covenants and agreements in entering into this Agreement and agreeing to make
the Loans (notwithstanding any investigation heretofore or hereafter made by or
on behalf of the Lenders), and that the Lenders will continue to rely on such
representations, warranties, covenants and agreements in their future dealings
with the Company. The Company agrees that its representations, warranties,
covenants and agreements contained in this Agreement and the other Loan
Documents are reasonable in purpose and scope. The Company represents and
warrants that it has reviewed this Agreement and the other Loan Documents with
its legal counsel and that it knowingly and voluntarily is entering into this
Agreement and the other Loan Documents following consultation with legal
counsel.
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8.23 ENTIRE AGREEMENT.
This Agreement is evidence of the indebtedness incurred pursuant hereto
and, taken together with all of the other Loan Documents and all certificates
and other documents delivered to the Agent and the Lenders hereunder and
thereunder, embodies the entire agreement and supersede all prior agreements,
written and oral, relating to the subject matter hereof.
8.24 CONFIDENTIALITY.
Each Lender and the Agent, severally and not jointly, agrees to exercise
commercially reasonable efforts to keep any non-public information delivered or
made available to such Lender or the Agent pursuant to the Loan Documents, which
any Loan Party or its authorized representative has identified as confidential
information, confidential from any Person other than Persons employed by or
retained by such Lender or the Agent who are or are expected to become engaged
in evaluating, approving, structuring or administering the Loans and other
extensions of credit or Obligations hereunder; provided, that nothing herein
shall prevent any Lender or the Agent from disclosing such information to any
bona fide assignee, transferee or participant that has agreed to comply with
this subsection 8.24 in connection with the contemplated assignment or transfer
of any Commitments, Loans or other extensions of credit or Obligations hereunder
or participation therein or as required or requested by any Governmental
Authority or representative thereof or pursuant to legal process or in
connection with the exercise of any remedy under the Loan Documents.
8.25 DOCUMENTATION AGENT.
The Documentation Agent, as such, shall have no duties or obligations
whatsoever with respect to this Agreement, the Notes or any other document or
any matter related thereto. The Syndication Agent, as such, shall have no duties
or obligations whatsoever with respect to this Agreement, the Notes or any other
document or any matter related thereto.
SECTION 9.
AGENT AND CO-AGENTS
9.1 APPOINTMENT.
Bankers Trust Company is hereby appointed the Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes the Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. The Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of the Agent, Syndication Agent,
Documentation Agent (for purposes of Section 9 only, Syndication Agent and
Documentation Agent are collectively referred to as the "CO-AGENTS") and
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Lenders and no Loan Party or any other Person shall have any rights as a third
party beneficiary of any of the provisions hereof. In performing its functions
and duties under this Agreement and the other Loan Documents, the Agent shall
act solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for the Company or any of its Subsidiaries.
9.2 POWERS; GENERAL IMMUNITY.
A. DUTIES SPECIFIED. Each Lender irrevocably authorizes the Agent to take
such action on such Lender's behalf and to exercise such powers hereunder and
under the other Loan Documents as are specifically delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents and it may
perform such duties by or through their agents or employees. The Agent shall not
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein. The Agent shall be deemed to have exercised reasonable care
in servicing the Loans if it accords the Loans treatment substantially equal to
that which the Agent accords loans for its own account.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. The Agent and the Co-Agents
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any Loan Document or for any representations, warranties, recitals
or statements made herein or therein or made in any written or oral statements
or in any financial or other statements (other than representations made by the
Agent or the Co-Agents in this Agreement), instruments, reports or certificates
or any other documents furnished or made by the Agent or the Co-Agents to
Lenders or by or on behalf of any Loan Party to the Agent or the Co-Agents or
any Lender in connection with the other Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of the
Company or any other Person liable for the payment of any Obligations, nor
(except as expressly set forth in the Loan Documents) shall the Agent or any
Co-Agent be required to ascertain or inquire as to the performance of any of the
provisions of the Loan Documents or the existence or possible existence of any
Event of Default or Potential Event of Default. Anything contained in this
Agreement or in the other Loan Documents to the contrary notwithstanding, the
Agent and the Co-Agents shall not have any liability arising from confirmations
of the amount of outstanding Loans or the component amounts thereof, absent
gross negligence or willful misconduct.
C. EXCULPATORY PROVISIONS. Neither the Agent nor the Co-Agents nor any of
their officers, directors, employees or agents shall be liable to Lenders for
any action taken or omitted by the Agent or the Co-Agents under or in connection
with any of the Loan Documents except to the extent caused by the Agent's or any
Co-Agent's gross negligence or
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willful misconduct. If the Agent or any Co-Agent shall request instructions from
Lenders with respect to any act or action (including the failure to take an
action) in connection with this Agreement or any of the other Loan Documents,
the Agent or such Co-Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent or such Co-Agent shall have received
instructions from Majority Lenders (or, if expressly required by the terms of
this Agreement, Supermajority Lenders or all Lenders). Without prejudice to the
generality of the foregoing, (i) the Agent and the Co-Agents shall be entitled
to rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of attorneys (who
may be attorneys for the Company and its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against the Agent or any Co-Agent as a result of the
Agent or such Co-Agent's acting or (where so instructed) refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of Majority Lenders (or, if expressly required by this Agreement,
all Lenders).
D. AGENT AND CO-AGENTS ENTITLED TO ACT AS LENDER. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, the Agent or any Co-Agent in its
individual capacity as a Lender hereunder. With respect to its participation in
the Loans, the Agent and the Co-Agents shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include the Agent and the Co-Agents in its individual
capacity as a Lender. The Agent, the Co-Agents and their Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company or any other Loan Party for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF CREDIT-
WORTHINESS.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of the Company, its
Subsidiaries and the other Loan Parties in connection with the making of the
Loans under the Credit Agreement and that it has made and shall continue to make
its own appraisal of the creditworthiness of the Company, its Subsidiaries and
the other Loan Parties. The Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders. The Agent shall not have any responsibility
with respect to the accuracy of or the completeness of any information provided
by the Agent to Lenders.
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9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify the Agent and the Co-Agents, to the extent that the Agent or any
Co-Agent shall not have been reimbursed by the Company or any other Loan Party
within 30 days of delivery by the Agent or any Co-Agent to the Company of a
written request for reimbursement, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent or any Co-Agent in performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as the
Agent or a Co-Agent in any way relating to or arising out of this Agreement or
the other Loan Documents; provided 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 Agent's or
any Co-Agent's gross negligence or willful misconduct or for any expenses
incurred by the Agent or any Co-Agent prior to the Restatement Closing Date;
provided further that upon the consummation of an assignment of all or any
portion of a Lender's interest under the Loan Documents in accordance with
subsection 8.1 of this Agreement (including without limitation the requirements
that (i) the assignee assume all obligations (or the applicable percentage
thereof) of the assigning Lender and (ii) the Agent consent in writing to such
assignment), the assigning Lender shall be released from its obligations
pursuant to this Section 9.4 (or the applicable percentage thereof). If any
indemnity furnished to the Agent or any Co-Agent for any purpose shall, in the
opinion of the Agent or such Co-Agent, be insufficient or become impaired, the
Agent or such Co-Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The Agent and Co-Agents shall remit to each applicable Lender its
allocable share of any recovery from the Company of amounts previously paid by
such Lender.
9.5 PAYEE OF NOTE TREATED AS OWNER.
The Agent may deem and treat the holder of any Note as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent by the registered holder
of the applicable Note. Any request, authority or consent of any person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor.
9.6 SECURITY DOCUMENTS, ETC.
A. SECURITY DOCUMENTS. Each Lender hereby further authorizes the Agent to
enter into the Security Documents as secured party on behalf of and for the
benefit of Lenders in connection with the Obligations and agrees to be bound by
the terms of the
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Security Documents; provided that anything in this Agreement or the other Loan
Documents to the contrary notwithstanding:
(i) The Agent is authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from the Lenders, from time
to time to take any action with respect to any Collateral or the Security
Documents which may be necessary or reasonably desirable to perfect and
maintain perfected the security interest in and Liens upon the Collateral
granted pursuant to the Security Documents.
(ii) The Lenders irrevocably authorize the Agent, at its option and
in its discretion, to release any Lien granted to or held by the Agent
upon any Collateral (a) upon termination of the Commitments and payment in
full of the Loans and all other Obligations payable under this Agreement
and under any other Loan Document; (b) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition
permitted under the Credit Agreement (including the application of
Insurance Proceeds and Condemnation Proceeds in accordance with the terms
of the Credit Agreement); (c) constituting property leased to any Loan
Party under a lease which has expired or been terminated in a transaction
permitted under the Credit Agreement or is about to expire and which has
not been, and is not intended by such Loan Party to be, renewed or
extended; or (d) consisting of an instrument evidencing Indebtedness if
the Indebtedness evidenced thereby has been paid in full. Upon request by
the Agent at any time, Lenders will confirm in writing the Agent's
authority to release particular types or items of Collateral pursuant to
this subsection 9.6.
B. LENDER ACTION. Anything contained in any of the Loan Documents to
the contrary notwithstanding, each Lender agrees that, without prior written
consent of the Agent, no Lender shall have any right individually to realize
upon any of the Collateral under the Security Documents (including without
limitation through the exercise of a right of set-off against call deposits of
such Lender in which any funds on deposit in the Security Documents may from
time to time be invested), it being understood and agreed that all rights and
remedies under the Security Documents may be exercised solely by the Agent for
the benefit of Lenders in accordance with the terms thereof.
9.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving 30 days' prior written notice
thereof to Lenders and the Company, and the Agent may be removed at any time
solely for cause by an instrument or concurrent instruments in writing delivered
to the Company and the Agent and signed by Supermajority Lenders. Upon any such
notice of resignation or any such removal, Supermajority Lenders shall have the
right, upon five Business Days' notice to the Company, to appoint a successor
Agent (which successor shall, in the absence of any Potential Event of Default
or Event of Default, be reasonably acceptable to the Company); provided, that if
Supermajority Lenders cannot agree on a successor Agent by the thirtieth (30th)
day after the
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Agent's delivery of such notice or upon such removal, the Agent shall have the
right to appoint a successor Agent. Upon the acceptance of any appointment as
the Agent hereunder by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent and the retiring or removed Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Agent's resignation or removal hereunder as the Agent, such
retiring or removed Agent shall continue to have the benefit of the provisions
of this Agreement with respect to any actions taken or omitted to be taken by it
while it was the Agent under this Agreement and the other Loan Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
PRIME HOSPITALITY CORP.
By: ________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
Prime Hospitality Corp.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President and Law Department
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AGENT:
BANKERS TRUST COMPANY,
as Agent
By: ________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
LENDERS:
BANKERS TRUST COMPANY,
as a Lender
By: ________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇-▇
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CREDIT LYONNAIS NEW YORK BRANCH
As Documentation Agent and as a Lender
By: ________________________________________
Name:
Title:
Notice Address:
Credit Lyonnais, New York Branch
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mischa Zabotin
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MIDLANTIC BANK, NATIONAL ASSOCIATION
As a Lender
By: ________________________________________
Name:
Title:
Notice Address:
Midlantic Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇-▇
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Exhibit
FIRST AMENDMENT
TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of February 23, 1998 and entered into by and among PRIME HOSPITALITY
CORP., a Delaware corporation ("COMPANY"), the financial institutions listed on
the signature pages hereof ("LENDERS") SOCIETE GENERALE, SOUTHWEST AGENCY, as
Documentation Agent, CREDIT LYONNAIS NEW YORK BANK, as Syndication Agent and
BANKERS TRUST COMPANY, as agent for Lenders ("AGENT"), and, for purposes of
Section 6 hereof, the Credit Support Parties (as defined in Section 6 hereof)
listed on the signature pages hereof, and is made with reference to that certain
Amended and Restated Senior Secured Credit Agreement dated as of December 17,
1997 the "CREDIT AGREEMENT"), by and among Company, Lenders, Documentation
Agent, Syndication Agent and Agent. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, Company and Lenders desire to amend the Credit
Agreement to (i) to provide for Swing Line Loans in the maximum aggregate
principal amount of $41,000,000, and (ii) make certain other amendments as set
forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1: PROVISIONS RELATING
TO DEFINED TERMS
Subsection 1.1 of the Credit Agreement is hereby amended by
deleting each of the definitions of "Lenders", "Loans", "Maturity Date",
"Notes", "Pro Rata Share", "Security Documents" and "Total Utilization"
therefrom in their entirety and adding thereto the following definitions, which
shall be inserted in proper alphabetical order:
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNTS" means the Restricted Deposit Account and
the Securities Account and any other accounts in which Investments (as such term
is defined in the Third-Party
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Account Agreement) may be credited, held or registered by Securities
Intermediary under the Third-Party Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Agent on the First Amendment
Date, substantially in the form of Exhibit XVII annexed hereto, pursuant to
which Company may pledge cash to Agent to secure the obligations of Company
under Swing Line Loans as provided in Section 2.2, as such Collateral Account
Agreement may hereafter be amended, supplemented or otherwise modified from time
to time.
"COLLATERAL VALUE" has the meaning assigned to that term in
the Third-Party Account Agreement.
"ELIGIBLE INVESTMENTS" means, as at any date of determination,
marketable securities (i) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (ii) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within thirty days.
"FINANCIAL ASSET" has the meaning assigned to that term in the
Third-Party Account Agreement.
"FIRST AMENDMENT" means that certain First Amendment to Credit
Agreement dated as of February 23, 1998 by and among Company, Subsidiary
Guarantors, the financial institutions listed as lenders on the signature pages
thereto, Documentation Syndication Agent and Agent.
"FIRST AMENDMENT DATE" means February 23, 1998.
"LENDER" and "LENDERS" means the person identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 8.1; provided that
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having the Commitments.
"LOAN" or "LOANS" means one or more of the Revolving Loans or
Swing Line Loans or any combination thereof.
"MATURITY DATE" means the earliest of (i) the date that is the
fourth Anniversary of the Restatement Closing Date, as such date may be extended
pursuant to subsection 2.2F to a date not later than the fifth Anniversary of
the Restatement Closing Date, (ii) the date as of which the Obligations shall
have become immediately due and payable pursuant to subsection 7.1 and (iii) the
date as of which the Obligations shall have become immediately due and payable
pursuant to subsection 2.5B(viii).
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"MINIMUM COLLATERAL VALUE AMOUNT" means, as at any date of
determination, the sum of (i) the cash balance in the Restricted Deposit Account
plus (ii) 95% of the Collateral Value of all Collateral in the Securities
Account.
"NOTES" means one or more of the Revolving Notes or Swing Line
Notes or any combination thereof.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender, the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan
Exposure of all Lenders, (ii) with respect to all payments, computations and
other matters relating to the Swing Line Loan Commitment or the Swing Line Loans
of any Lender, the percentage obtained by dividing (x) the Swing Line Loan
Exposure of that Lender by (y) the aggregate Swing Line Loan Exposure of all
Lenders, and (iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Revolving Loan Exposure of
that Lender by (y) the sum of the aggregate Revolving Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 8.1. The initial Pro Rata Share of
each Lender for purposes of each of clauses (i), (ii) and (iii) of the preceding
sentence is set forth opposite the name of that Lender in Schedule 2.2 annexed
hereto.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.2A(ii).
"RESTRICTED DEPOSIT ACCOUNT" means the restricted deposit
account established and maintained by Agent with Securities Intermediary
pursuant to Section 2(a) of the Third-Party Account Agreement.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.2A(i).
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Company pursuant to subsection 2.2A(i), and
"REVOLVING LOAN COMMITMENTS" means such commitment of all Lenders in the
aggregate.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of the aggregate
outstanding principal amount of the Revolving Loans of that Lender.
"REVOLVING NOTES" means (i) the amended and restated
promissory notes of Company issued to Lenders on the Restatement Closing Date
and (ii) any promissory notes issued by Company pursuant to subsection 2.2E(iv)
in connection with assignments of the Revolving Loan Commitments and Revolving
Loans of any Lenders, in each case substantially
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in the form of Exhibit I annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"SECURITIES ACCOUNT" means the restricted securities account
established and maintained with Securities Intermediary pursuant to Section 2(b)
of the Third-Party Account Agreement.
"SECURITIES INTERMEDIARY" means the bank or trust company
identified as the "Securities Intermediary" in the Third-Party Account
Agreement.
"SECURITY DOCUMENTS" means, collectively, the Mortgages, the
Existing Mortgages as modified by the Mortgage Amendments, the Assignments of
Rents and Leases, the Existing Assignments of Rents and Leases as modified by
the Assignment of Rents Amendments, the Security Agreement, the Cash Management
Letters, Liquor License Agreement, the Tenant Subordination Agreements, the
Collateral Account Agreement, the Third-Party Account Agreement and all deeds of
trust, deeds to secure debt, mortgages, security agreements, pledge agreements,
assignments and all other instruments or documents (including UCC-1 financing
statements, fixture filings, amendments of financing statements or similar
documents required or advisable in order to perfect or maintain the Liens
created by the Security Documents) delivered by any Person pursuant to this
Agreement or any of the other Loan Documents, whether such delivery is prior to,
contemporaneous with or after delivery of this Agreement, in order to grant to
the Agent Liens in real, personal or mixed property of that Person, and to
maintain such Liens as each of the foregoing may be amended, restated,
consolidated, supplemented or otherwise modified from time to time in accordance
with the terms thereof and hereof. Security Documents do not include this
Agreement or the Notes.
"SWING LINE LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.2A(ii).
"SWING LINE LOAN COMMITMENT" means the commitment of a Lender
to make Swing Line Loans to Company pursuant to subsection 2.2A(ii), and "SWING
LINE COMMITMENTS" means such commitments of all Lenders in the aggregate.
"SWING LINE LOAN EXPOSURE" means, with respect to any Lender
as of any date of determination (i) prior to the termination of the Swing Line
Loan Commitments, that Lender's Swing Line Loan Commitment and (ii) after the
termination of the Swing Line Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Swing Line Loans of that Lender (net of any
participations therein purchased by other Lenders) plus (b) the aggregate amount
of all participations purchased by that Lender in any outstanding Swing Line
Loans.
"SWING LINE NOTES" means (i) any promissory notes of Company
issued on the First Amendment Date to evidence the Swing Line Loans and (ii) any
promissory note of Company issued pursuant to subsection 2.2E(iv), in connection
with the assignment of Swing
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Line Loan Commitments and Swing Line Loans of any Lenders, in each case
substantially in the form of Exhibit XVI annexed hereto, as it may be amended,
supplemented or otherwise modified from time to time.
"THIRD-PARTY ACCOUNT AGREEMENT" means the Third-Party Account
Agreement, substantially in the form of Annex A to the Collateral Account
Agreement, entered into among Company, Agent and Securities Intermediary, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"TOTAL UTILIZATION" means, as of any date of determination,
the sum of the following, without duplication:
(i) the aggregate principal amount of the outstanding
Revolving Loans; plus
(ii) the aggregate principal amount of all outstanding
Swing Line Loans; plus
(iii) the aggregate amount of reserves against Total
Utilization established by the Company in accordance with the
provisions of subsection 5.16 in respect of required capital reserve
deposits.
1.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF
COMMITMENTS AND LOANS
A. COMMITMENTS; LOANS; NOTES; THE REGISTER. Subsection 2.2 of the
Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:
"2.2 COMMITMENTS; LOANS; NOTES; THE REGISTER.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of the Company herein
set forth, each Lender hereby severally agrees to make the Loans described in
subsection 2.2A(i) and 2.2A(ii).
(i) Revolving Loans. Each Lender severally agrees, subject to
the limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend
to the Company from time to time during the period from the Restatement
Closing Date to but excluding the Maturity Date an aggregate amount not
exceeding such Lender's Pro Rata Share of the aggregate amount of the
Revolving Loan Commitments to be used for the purposes identified in
subsection 2.6A. The original amount of each Lender's Revolving Loan
Commitment (including such Lender's share of the Existing Loans) and
such Lender's Pro Rata Share is set forth opposite its name on Schedule
2.2 annexed hereto and the aggregate original amount of the Revolving
Loan Commitments (including the Lenders' Revolving Loan Commitment to
purchase the Existing Loans) is $200,000,000; provided, however, that
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the Revolving Loan Commitments of the Lenders shall be adjusted from
time to time to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 8.1; provided, further, that the
amount of the Revolving Loan Commitments shall be automatically reduced
by the amount of any reductions to the Revolving Loan Commitments made
pursuant to subsection 2.5B.
Each Lender's Revolving Loan Commitment shall expire on the
Maturity Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than the Maturity Date.
The proceeds of Revolving Loans may be applied to pay all or
any amount of the principal of and interest on any one or more of the
Swing Line Loans. The provisions of subsection 2.7B shall apply to such
payments.
Unless otherwise directed by Company in writing to the Agent,
if Revolving Loans shall be made on the same day on which Swing Line
Loans shall be repaid, the Revolving Loans shall be made immediately
before the Swing Line Loans shall be repaid. To the extent that the
proceeds of the Revolving Loans are to be applied to repay Swing Line
Loans and other amounts in connection therewith, such proceeds shall
not be paid to the Company and shall be applied by the Agent for such
purpose.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Commitments
shall be subject to the limitations that the Total Utilization shall
not exceed the least of (i) the Borrowing Base, (ii) the aggregate
amount of the Revolving Loan Commitments then in effect and (iii) the
aggregate amount of title insurance pursuant to Title Policies
delivered pursuant to subsections 2.10A(vi) and 3.1F(v) and (xiii).
(ii) Swing Line Loans. Each Lender severally agrees, subject
to the limitations set forth below with respect to the maximum amount
of Swing Line Loans permitted to be outstanding from time to time, to
make, upon the election of the Company, a portion of the Revolving Loan
Commitments available to the Company from time to time during the
period from the First Amendment Date to but excluding the Maturity Date
by making Swing Line Loans to Company in an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Swing Line
Loan Commitments to be used for the purposes identified in subsection
2.5B. The original amount of each Lender's Swing Line Commitment is set
forth opposite its name on Schedule 2.2 annexed hereto and the
aggregate amount of the Swing Line Loan Commitments is $41,000,000;
provided that the Swing Line Loan Commitments of any Lender shall be
adjusted to give effect to any assignment of the Swing Line Loan
Commitment of such Lender pursuant to subsection 8.1B; provided,
further, that any reduction of the Revolving Loan Commitments made
pursuant to subsection 2.4B(ii) or 2.4B(iii) which reduces the
aggregate Revolving Loan Commitments to an amount less than the then
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current amount of the aggregate Swing Line Loan Commitments shall
result in an automatic reduction of the aggregate Swing Line Loan
Commitments to the amount of the aggregate Revolving Loan Commitments
and shall also result in a corresponding reduction in the Swing Line
Loan Commitment of each Lender proportionately to its Pro Rata Share,
without any further action on the part of Company, Agent or Lenders;
provided, further, that the amount of the Swing Line Loan Commitments
available shall be reduced by the amount of any Revolving Loan
outstanding until such amount is repaid and the Swing Line Commitment
of each Lender shall also be correspondingly reduced in proportion to
its Pro Rata Share until such amount is repaid. The Swing Line Loan
Commitment shall expire on the Maturity Date and all Swing Line Loans
and all other amounts owed hereunder with respect to the Swing Line
Loans shall be paid in full no later than that date. Amounts borrowed
under this subsection 2.2A(ii) may be repaid and reborrowed to but
excluding the Maturity Date.
Unless otherwise directed by Company in writing to the Agent,
if Swing Line Loans shall be made on the same day on which Revolving
Loans shall be repaid, the Swing Line Loans shall be made immediately
before the Revolving Loans shall be repaid. To the extent that the
proceeds of the Swing Line Loans are to be applied to repay Revolving
Loans and other amounts in connection therewith, such proceeds shall
not be paid to the Company and shall be so applied by the Agent for
such purpose.
Notwithstanding anything contained herein to the contrary, the
Swing Line Loans and the Swing Line Loan Commitments shall be subject
to the following limitations:
(a) in no event shall the Total Utilization exceed
the least of (i) the Borrowing Base, (ii) the aggregate amount
of the Revolving Loan Commitments then in effect and (iii) the
aggregate amount of title insurance pursuant to Title Policies
delivered pursuant to subsections 2.10A(vi) and 3.1F(v) and
3.1F(xiii); and
(b) in no event shall the aggregate amount of the
Swing Line Loans exceed the Minimum Collateral Value Amount;
provided, however, that the Company may deposit a portion of
the proceeds of a Swing Line Loan into the Collateral Accounts
so that after giving effect to such deposit, the aggregate
amount of the Swing Line Loans does not exceed the Minimum
Collateral Value.
Notwithstanding anything contained herein to the contrary, the
outstanding principal amount of the Loans under this Agreement at all
times shall consist of the outstanding principal amounts under the
Revolving Loans and under the Swing Line Loans, respectively.
Upon (x) the occurrence of an Event of Default pursuant to
subsection 7.1A (including, without limitation, a failure timely to pay
a Swing Line Loan) or (y) upon the occurrence of any other Event of
Default or a Potential Event of Default and at the
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written request of Lenders having or holding more than 50% of the
aggregate Swing Line Commitments or, if such Swing Line Commitments
have terminated or expired, the aggregate principal amount of all Swing
Line Loans, then Agent shall, as promptly as possible, sell or redeem,
collect or otherwise realize upon the Collateral (as defined in the
Third-Party Agreement) and apply all credit balances included as
Collateral and all proceeds received by the Agent in respect of any
sale or redemption of, collection from, or other realization upon all
or any part of the Collateral to prepay the Swing Line Loans and all
other amounts then required to be paid. If for any reason the
Collateral and the proceeds thereof are insufficient to prepay in full
the Swing Line Loans and such other amounts, Agent may, at any time in
its sole and absolute discretion, deliver to Lenders (with a copy to
Company), no later than 10:00 A.M. (New York City time) on the first
Business Day in advance of the proposed Funding Date, a notice (which
shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Loans that are Base Rate Loans on
such Funding Date in an amount equal to the amount of the Swing Line
Loans (the "REFUNDED SWING LINE LOANS") outstanding on the date such
notice is given which Agent requests Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (i) the
proceeds of such Revolving Loans made by Lenders other than Lenders
with outstanding Swing Line Loans shall be applied to repay a
corresponding portion of the Refunded Swing Line Loans and apportioned
among all Refunded Swing Line Loans proportionately to each Lender's
Pro Rata Share and shall not be delivered to Company and (ii) on the
day such Revolving Loans are made, the Pro Rata Share of the Refunded
Swing Line Loans of each Lender that has Swing Line Loans outstanding
shall be deemed to be paid with the proceeds of a Revolving Loan made
by such Lender, and such portion of the Swing Line Loans deemed to be
so paid shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note of such Lender but shall
instead constitute part of such Lender's outstanding Revolving Loans
and shall be due under the Revolving Note of such Lender; provided,
however, that if such Lender's Revolving Loan made in accordance with
this subsection 2.2A(ii) exceeds such Lender's outstanding Swing Line
Loans, the remaining proceeds of such Lender's Revolving Loans shall be
applied in accordance with subsection (i). Company hereby authorizes
Agent and each Lender with Swing Line Loans to charge Company's
accounts with Agent and such Lender (up to the amount available in each
such account) in order to immediately pay such Lenders the amount of
the Refunded Swing Line Loans to the extent the proceeds of such
Revolving Loans made by Lenders, including the Revolving Loan deemed to
be made by Lenders with outstanding Swing Line Loans, are not
sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to any such
Lender should be recovered by or on behalf of Company from such Lender
in bankruptcy, by assignment for the benefit of creditors or otherwise,
the loss of the amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by subsection 8.5.
If for any reason the Revolving Loan Commitments are
terminated at a time when any Swing Line Loans are outstanding, each
Lender shall be deemed to, and hereby
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agrees to, have purchased a participation in such outstanding Swing
Line Loans in an amount equal to its Pro Rata Share of the Revolving
Loans (calculated, immediately prior to such termination of the
Revolving Loan Commitments) of the unpaid amount of such Swing Line
Loans together with accrued interest thereon. Upon one Business Day's
notice from Agent, each Lender shall deliver to Agent an amount equal
to its respective participation in same day funds at the Funding and
Payment Office. Agent shall promptly deliver such amount to Lenders
with such outstanding Swing Line Loans in proportion to such
outstanding Swing Line Loans. In order to further evidence such
participation (and without prejudice to the effectiveness of the
participation provisions set forth above), each Lender agrees to enter
into a separate participation agreement at the request of Agent in form
and substance reasonably satisfactory to Agent and such Lender. In the
event any Lender fails to make available to Agent the amount of such
Lender's participation as provided in this paragraph, Agent, on behalf
of Lenders shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the rate customarily used by
Agent for the correction of errors among banks for three Business Days
and thereafter at the Base Rate. In the event that any Lender with
outstanding Swing Line Loans receives a payment of any amount in which
other Lenders have purchased participations as provided in this
paragraph, such Lender shall promptly distribute to each such other
Lender its Pro Rata Share of such payment.
The provisions of subsection 2.7B shall apply to all payments
and prepayments of Swing Line Loans or Refunded Swing Line Loans
pursuant to this subsection 2.2A(ii).
Anything contained herein to the contrary notwithstanding,
each Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Lender's obligation to purchase a participation in
any unpaid Swing Line Loans pursuant to the immediately preceding
paragraph shall be absolute and unconditional and shall not be affected
by any circumstance, including (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against
any other Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or continuation of an Event of Default
or a Potential Event of Default; (c) any adverse change in the
business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party
thereto; or (e) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that such
obligations of each Lender are subject to the condition that (X) Agent
believed in good faith that all conditions under Section 3 to the
making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, as the case may be, were satisfied at the time such
Refunded Swing Line Loans or unpaid Swing Line Loans were made or (Y)
the satisfaction of any such condition not satisfied had been waived in
accordance with subsection 8.6 prior to or at the time such Refunded
Swing Line Loans or other unpaid Swing Line Loans were made.
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B. BORROWING MECHANICS. Revolving Loans (other than Revolving Loans
made pursuant to a request by Agent pursuant to subsection 2.2A(ii) for the
purpose of repaying any Refunded Swing Line Loans) made on any Funding Date
shall be in an aggregate minimum amount of $1,000,000. The Company shall be
permitted to request a Revolving Loan pursuant to this subsection 2.2B only four
times during any 30 day period. Requests for Swing Line Loans shall not count as
requests for Revolving Loans for purposes of the preceding sentence. Swing Line
Loans made on any Funding Date shall be in an aggregate minimum amount of
$5,000,000. The Company shall be permitted to request a Swing Line Loan pursuant
to this subsection 2.2B only three times during any calendar year. Whenever the
Company desires that the Lenders make Loans, it shall deliver to the Agent a
Notice of Borrowing no later than 10:00 A.M. (New York time) at least three
Business Days in advance of the proposed Funding Date with respect to a
Eurodollar Rate Loan or, in the case of a Loan bearing interest with reference
to the Base Rate, one Business Day in advance of the proposed Funding Date.
Each Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount of Loans requested, (iii)
whether such Loan shall be Swing Line Loan or a Revolving Loan, (iv) whether
such Loans shall be Base Rate Loans or Eurodollar Rate Loans (it being
understood that all Revolving Loans shall be Eurodollar Rate Loans except as
otherwise expressly permitted or required hereunder), (v) if such Loan is a
Eurodollar Rate Loan, the initial Interest Period applicable thereto, (vi) in
the case of Revolving Loans that not more than three other Funding Dates shall
have occurred within the 30 days next preceding the proposed Funding Date, (vii)
in the case of Swing Line Loans that no more than two other Funding Dates shall
have occurred within the calendar year of such Funding Date, in each case
specifying the related Funding Date, (viii) that after giving effect to the
Borrowing there are either no Swing Line Loans outstanding or the total
aggregate amount of outstanding Loans shall not exceed $41,000,000 and (ix) that
the amount of the proposed Loan will not cause the Total Utilization of the
Commitments to exceed the Borrowing Base then in effect.
The Company may give the Agent telephonic notice by the required time
of any proposed Loan under this subsection 2.2B; provided, however, that such
notice shall be promptly confirmed in writing by delivery of a Notice of
Borrowing to the Agent on or before the applicable Funding Date. Neither the
Agent nor any Lender shall incur any liability to the Company in acting upon any
telephonic notice referred to above that the Agent believes in good faith to
have been given by a duly Authorized Officer or other Person authorized to
borrow on behalf of the Company or for otherwise acting in good faith under this
subsection 2.2B, and upon funding of Loans by the Lenders in accordance with
this Agreement pursuant to any such telephonic notice the Company shall have
effected Loans hereunder.
The Company shall notify the Agent (who shall notify the Lenders) prior
to the funding of any Loans in the event that any of the matters to which the
Company is required to certify in the applicable Notice of Borrowing is no
longer true and correct as of the applicable Funding Date, and the acceptance by
the Company of the proceeds of any Loans shall constitute a re-certification by
the Company, as of the applicable Funding Date, as to the matters to which the
Company is required to certify in the applicable Notice of Borrowing.
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Except as otherwise provided in subsections 2.7B and 2.7C, a Notice of
Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Company shall be bound to make a borrowing in accordance therewith.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall be made
by the Lenders simultaneously and proportionately to their respective Pro Rata
Shares with respect to the Revolving Loans or the Swing Line Loans, as the case
may be, it being understood that no Lender shall be responsible for any default
by any other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender be increased or decreased as a
result of a default by any other Lender in that other Lender's obligation to
make a Loan requested hereunder. Promptly after receipt by the Agent of a Notice
of Borrowing pursuant to subsection 2.2B (or telephonic notice in lieu thereof),
the Agent shall notify each Lender of the proposed Loan. Each Lender shall make
its Pro Rata Share of the aggregate amount of the Loan available to the Agent,
in same day funds, at the office of the Agent located at One Bankers Trust
Plaza, New York, New York, not later than 12:00 Noon (New York time) on the
applicable Funding Date in same day funds in Dollars. Except as provided in
subsection 2.2A(ii) with respect to Revolving Loans used to repay Refunded Swing
Line Loans, upon satisfaction or waiver of the conditions precedent specified in
subsections 3.1 and 3.2, the Agent shall make the proceeds of such Loans
available to the Company on the applicable Funding Date by causing an amount of
same day funds equal to the proceeds of all such Loans received by the Agent
from the Lenders to be transferred to the account designated in the Notice of
Borrowing.
Unless the Agent shall have been notified by any Lender prior to the
Funding Date for any Loans that such Lender does not intend to make available to
the Agent the amount of such Lender's Loan requested on such Funding Date, the
Agent may assume that such Lender has made such amount available to the Agent on
such Funding Date and the Agent may, in its sole discretion, but shall not be
obligated to, make available to the Company a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made available to the
Agent by such Lender, the Agent shall be entitled to recover such corresponding
amount on demand from such Lender together with interest thereon, for each day
from such Funding Date until the date such amount is paid to the Agent, at the
Federal Funds Effective Rate for three Business Days and thereafter at the Base
Rate. If such Lender does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Company and the
Company shall immediately pay such corresponding amount to the Agent together
with interest thereon, for each day from such Funding Date until the date such
amount is paid to the Agent, at the rate payable under this Agreement for Base
Rate Loans. Nothing in this subsection 2.2C shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment hereunder or to prejudice
any rights that the Company may have against any Lender as a result of any
default by such Lender hereunder.
D. DEFAULTING LENDERS.
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Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "DEFAULTING LENDER") defaults (a "FUNDING DEFAULT") in its
obligation to fund any Loan (a "DEFAULTED LOAN") in accordance with subsection
2.2 then (i) during any Default Period (as defined below) with respect to such
Defaulting Lender, such Defaulting Lender shall be deemed not to be a "Lender"
for purposes of voting on any matters (including the granting of any consents or
waivers) with respect to any of the Loan Documents, (ii) to the extent permitted
by applicable law, until such time as the Default Excess (as defined below) with
respect to such Defaulting Lender shall have been reduced to zero, (a) any
voluntary prepayment of the Loans pursuant to subsection 2.5B(i) shall, if
Company so directs at the time of making such voluntary prepayment, be applied
to the Loans of other Lenders as if such Defaulting Lender had no Loans
outstanding and the Loan Exposure of such Defaulting Lender were zero, and (b)
any mandatory prepayment of the Loans pursuant to subsection 2.5B(iv),
subsection 2.5B(v) subsection 2.5B(vi), subsection 2.5B(vii) or subsection
2.5B(viii) shall, if Company so directs at the time of making such mandatory
prepayment, be applied to the Loans of other Lenders (but not to the Loans of
such Defaulting Lender) as if such Defaulting Lender had funded all Defaulted
Loans of such Defaulting Lender, it being understood and agreed that Company
shall be entitled to retain any portion of any mandatory prepayment of the Loans
that is not paid to such Defaulting Lender solely as a result of the operation
of the provisions of this clause (b), (iii) such Defaulting Lender's Commitment
and outstanding Loans shall be excluded for purposes of calculating the
commitment fees payable to Lenders pursuant to subsection 2.4A in respect of any
day during any Default Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any commitment fee pursuant
to subsection 2.4A with respect to such Defaulting Lender's Commitment in
respect of any Default Period with respect to such Defaulting Lender, and (iv)
the Total Utilization as at any date of determination shall be calculated as if
such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means, with
respect to any Defaulting Lender, the period commencing on the date of the
applicable Funding Default and ending on the earliest of the following dates:
(A) the date on which all Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Loans of such Defaulting Lender or by the non-pro rata application of
any voluntary or mandatory prepayments of the Loans in accordance with the terms
of this subsection 2.2D or by a combination thereof) and (2) such Defaulting
Lender shall have delivered to Company and Agent a written reaffirmation of its
intention to honor its obligations under this Agreement with respect to its
Commitment, and (C) the date on which Company and Agent waive all Funding
Defaults of such Defaulting Lender in writing, and (II) "DEFAULT EXCESS" means,
with respect to any Defaulting Lender, the excess, if any, of such Defaulting
Lender's Pro Rata Share of the aggregate outstanding principal amount of Loans
of all Lenders (calculated as if all Defaulting Lenders (other than such
Defaulting Lender) had funded all of their respective Defaulted Loans) over the
aggregate outstanding principal amount of Loans of such Defaulting Lender.
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No Commitment of any Lender shall be increased or otherwise affected,
and, except as otherwise expressly provided in this subsection 2.2D, performance
by Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.2D. The rights and remedies against a
Defaulting Lender under this subsection 2.2D are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Agent or any Lender may have against such
Defaulting Lender with respect to any Funding Default.
E. THE REGISTER.
(i) The Agent shall maintain, at its address referred to in
subsection 8.8, a register for the recordation of the names and
addresses of the Lenders and the Commitment and Loans of each Lender
from time to time (the "REGISTER"). The Company, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(ii) The Agent shall record in the Register the Revolving Loan
Commitment and the Swing Line Loan Commitment and the Revolving Loans
and Swing Line Loans from time to time of each Lender, and each
repayment or prepayment in respect of the principal amount of the
Revolving Loans or Swing Line Loans of each Lender. Any such
recordation shall be prima facie evidence of such matters as against
the Company and each Lender, absent manifest error; provided, however,
that failure to make any such recordation, or any error in such
recordation, shall not affect the Company's Obligations in respect of
the applicable Loans.
(iii) Each Lender shall record on its internal records
(including any promissory note described in subsection 2.2E(iv)) the
amount of each Revolving Loan and each Swing Line Loan made by it and
each payment in respect thereof. Any such recordation shall be prima
facie evidence of such matters as against the Company absent manifest
error; provided, however, that failure to make any such recordation, or
any error in such recordation, shall not affect the Company's
Obligations in respect of the applicable Loans; provided further,
however, that in the event of any inconsistency between the Register
and any Lender's records, the recordations in the Register shall
govern, absent manifest error.
(iv) Any Lender may, by notice to the Agent and the Company,
request that all or part of the principal amount of the Company's
Revolving Loans or Swing Line Loans from such Lender hereunder be
evidenced by a Note. Within three Business Days of the Company's
receipt of such notice, the Company shall execute and deliver to the
Agent for delivery to the appropriate Lender a Revolving Note or Swing
Line Note in the principal amount(s) of such Loans, payable to the
notifying Lender or, if so specified
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in such notice, any Person who is an assignee of such Lender pursuant
to subsection 8.1 hereof. If the foreclosure or other enforcement of
any Mortgage or any other Security Document requires the presentation
of a Note evidencing the Obligations secured by such Security Document
and the Company fails or refuses to comply with a request for such
Note, then a copy of this Agreement may be presented in lieu of such a
Note.
F. EXTENSION OF MATURITY DATE. At any time that is not more than 180
days and not less than 90 days before the fourth Anniversary, the Company may
deliver a written notice to the Agent requesting that the Maturity Date be
extended from the fourth Anniversary to the fifth Anniversary and, if such
notice is delivered, the Maturity Date shall be so extended provided that the
following conditions are satisfied:
(i) as of the fourth Anniversary, no Potential
Event of Default or Event of Default shall have occurred and
be continuing and the Company shall have delivered an
Officer's Certificate certifying thereto; provided that, if a
Potential Event of Default (but not any Event of Default)
exists on the fourth Anniversary, the conditions set forth in
this clause (i) shall be satisfied if, on the date that is 30
days after the fourth Anniversary, no Potential Event of
Default or Event of Default shall have occurred and be
continuing and the Company shall have delivered an Officer's
Certificate certifying thereto;
(ii) on or prior to the fourth Anniversary, the
Company shall have paid to the Agent in immediately available
funds, for distribution to the Lenders in accordance with
their Pro Rata Shares, a fee equal to 0.25% of the aggregate
amount of the Commitments on the fourth Anniversary; and
(iii) after giving effect to the proposed
extension, the date on which any Capital Stock or other
Security issued by any Loan Party by its terms (or by the
terms of any Security into which it is convertible or for
which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking
fund or otherwise, or otherwise redeemable, in Cash at the
option of the holder thereof, in whole or in part, shall not
be a date that is prior to the Maturity Date, as so extended."
B. RATE OF INTEREST. Subsection 2.3A of the Credit Agreement
is hereby amended by deleting it in its entirety and substituting the following
therefor:
"A. RATE OF INTEREST. Subject to the provisions of subsections 2.3E,
2.7 and 2.8, each Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
Eurodollar Rate and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Adjusted
Eurodollar Rate; provided, however, that in the event that any Revolving Loan is
to be made on a day when there are
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already five (5) Interest Periods outstanding with respect to Revolving Loans,
or any Swing Line Loan is to be made on a day when there are already three (3)
Interest Periods outstanding with respect to Swing Line Loans, such Loan shall
bear interest at a rate determined by reference to the Base Rate until the
commencement of the next succeeding Interest Period, at which time such Loan
shall be converted (automatically and without the necessity of any action on the
part of any Person) to a Eurodollar Rate Loan in accordance with subsection
2.3D. The basis for determining the interest rate with respect to any Loan shall
be changed from time to time in accordance with subsection 2.3D.
Subject to the provisions of subsections 2.3E, 2.5B(iv) and 2.8, the
Revolving Loans shall bear interest through maturity (whether by acceleration or
otherwise) as follows:
(i) if a Base Rate Loan, then at a rate equal to the Base Rate
plus 1.00%.
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus 2.00%.
Subject to the provisions of subsections 2.3E, 2.5B(iv) and 2.8, the
Swing Line Loans shall bear interest through maturity (whether by acceleration
or otherwise) as follows:
(i) if a Base Rate Loan, then at a rate equal to the Base
Rate.
(ii) if a Eurodollar Rate Loan at the sum of the Adjusted
Eurodollar Rate plus .5%;
provided that, if any Lender shall have purchased a participation in any Swing
Line Loan or shall have been deemed to have purchased a participation in any
Swing Line Loan, in each case pursuant to the last paragraph of subsection
2.2A(ii), then, subject to the provisions of subsections 2.3E, 2.5B(iv) and 2.8,
all Swing Line Loans shall bear interest through maturity liability acceleration
or otherwise) as follows:
(i) if a Base Rate Loan, then at a rate equal to the Base Rate
plus 1.00%.
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus 2.00%.
C. INTEREST PERIODS. Subsection 2.3B of the Credit Agreement is hereby
amended by deleting in its entirety and substituting the following therefor:
"B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan, the
Company shall, pursuant to the applicable Notice of Borrowing or Notice of
Continuation, as the case may be, select an interest period (each an "INTEREST
PERIOD") to be applicable to such Loan, which Interest Period shall be a one,
two or three month period, at the Company's option, in the case
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of Revolving Loans and a two-week or one month period in the case of Swing Line
Loans; provided, however, that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan;
(ii) each successive Interest Period shall commence on the day
on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that, if any Interest
Period would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iv) 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, subject to clause (v) of this subsection 2.3B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date;
(vi) there shall be no more than five (5) Interest Periods
outstanding at any time with respect to the Revolving Loans and no more
than three (3) Interest Periods outstanding at any time with respect to
the Swing Line Loans;
(vii) if five (5) Interest Periods are outstanding with
respect to the Revolving Loans or if three (3) Interest Periods are
outstanding with respect to the Swing Line Loans, then with respect to
the Revolving Loans or the Swing Line Loans, as the case may be, at
least one Interest Period shall be either (a) a one month Interest
Period or (b) an Interest Period with less than 30 days remaining; and
(viii) in the event the Company shall fail to specify an
Interest Period for a Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Continuation, the Company shall be deemed to
have selected an Interest Period of one month."
C. COMMITMENT FEES. Subsection 2.4A of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting the following
therefor:
"2.4 FEES.
A. COMMITMENT FEES. The Company agrees to pay to the Agent, for
distribution to each Lender, commitment fees for the period from and including
the Restatement Closing
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Date to and excluding the Maturity Date, equal to the average of the daily
unused portion of the Revolving Loan Commitment of such Lender, multiplied by
(y) 0.25% per annum. Anything contained in this Agreement to the contrary
notwithstanding, for purposes of calculating the commitment fees payable by the
Company pursuant to this subsection 2.4A, the "unused portion of the Revolving
Loan Commitment" of each Lender, as of any date of determination, shall be an
amount equal to the sum of the Revolving Loan Commitment of such Lender as of
such date minus the aggregate principal amount of all outstanding Revolving
Loans of such Lender on such date plus the aggregate principal amount of all
outstanding Swing Line Loans of such Lender on such date. The commitment fee
shall be payable as provided in this subsection notwithstanding that the amount
available to be borrowed hereunder may be less than the amount of the
Commitments due to the operation of the Borrowing Base."
D. SCHEDULED REDUCTIONS OF COMMITMENTS; MANDATORY PAYMENT OF
SWING LINE LOANS. Subsection 2.5A of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"2.5 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED REDUCTIONS OF COMMITMENTS; MANDATORY PAYMENT OF SWING LINE
LOANS.
(i) Scheduled Reductions of Commitments. The Revolving Loan
Commitments shall be permanently reduced on the dates and in the
amounts set forth below:
SCHEDULE REDUCTION
DATE OF COMMITMENTS
------------------ ------------------
third Anniversary $25,000,000
fourth Anniversary $50,000,000
; provided that the scheduled reductions of the Revolving Commitments
set forth above shall be reduced in connection with any voluntary or
mandatory reductions of the Revolving Commitments in accordance with
subsection 2.5B(ix).
(ii) Mandatory Payment of Swing Line Loans. Each Swing Line
Loan shall be paid in full no later than the date which is 60 days
after the Funding Date for such Swing Line Loan; provided, however,
that all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans and the Swing Line Commitments shall be
paid in full no later than the Maturity Date."
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E. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN COMMITMENTS.
Subsection 2.5B of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting the following therefor:
"B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. The Company may, upon not less than
two Business Day's prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days' prior written or telephonic
notice in the case of Eurodollar Rate Loans, in each case confirmed in
writing to the Agent (which notice the Agent will promptly transmit by
telecopy, telex or telephone to each Lender), at any time and from time
to time prepay (i) any Revolving Loans on any Business Day in whole or
in part in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of that amount (or, if less, the total
amount of all outstanding Revolving Loans or (ii) any Swing Line Loans
on any Business Day in whole or in part in an aggregate minimum amount
of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount (or, if less, the total amount of all outstanding Swing Line
Loans)); provided, however, that in the event a Swing Line Eurodollar
Rate Loan or Revolving Eurodollar Rate Loan is prepaid on a day other
than the last day of the Interest Period applicable thereto, such
prepayment shall be accompanied by the payment of any amounts payable
under subsection 2.7D. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice
shall become due and payable on the prepayment date specified therein;
provided, however, that in the case of any such withdrawal, the Company
shall promptly pay all amounts then due to the Lenders pursuant to
subsection 2.7D. Any such voluntary prepayment shall be applied as
specified in subsection 2.5B(viii). Amounts prepaid pursuant to this
subsection 2.5B(i) may be reborrowed pursuant to subsection 2.2A.
(ii) Voluntary Reductions of Revolving Loan Commitments. The
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to the Agent (which notice the
Agent will promptly transmit by telecopy, telex or telephone (confirmed
in writing) to each Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount
by which the Revolving Loan Commitments exceed the Total Utilization of
Commitments; provided, however, that any such partial reduction of the
Revolving Loan Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that
amount; provided, further that the Revolving Loan Commitments, may not
be reduced to an amount that is less than the aggregate amount of
outstanding Swing Line Loans at the time of any such prepayment. The
Company's notice to the Agent shall designate the date (which shall be
a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving
Loan Commitments shall be effective on the date specified in the
Company's notice and shall reduce the Revolving Loan Commitment of each
Lender proportionately to its Pro
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Rata Share. Any such voluntary reduction of the Revolving Loan
Commitments shall be applied as specified in subsection 2.5B(ix).
(iii) Reductions in Borrowing Base Due to Casualty,
Condemnation or Disposition of a Designated Mortgaged Property. If
there shall occur a casualty or Taking with respect to any Designated
Mortgaged Property (or any portion thereof) or a sale or other
permanent disposition of such Designated Mortgaged Property, with
respect to which occurrence a prepayment is required to be made, then
the Borrowing Base shall be recomputed as of such date, after giving
effect to any reduction in the related Property EBITDA or Release.
(iv) Prepayments Due to Borrowing Base. If at any time the
Total Utilization exceeds the Borrowing Base then in effect, as
demonstrated by a Borrowing Base Certificate delivered (or required to
be delivered) pursuant to subsection 5.1(ii), the Company shall prepay
first the Swing Line Loans and second the Revolving Loans in an amount
equal to such excess not later than 5 Business Days after the date that
such Borrowing Base Certificate shall have been delivered (or, if such
Borrowing Base Certificate shall not have been delivered timely or at
all, on the last day that such Borrowing Base Certificate is permitted
by subsection 5.1(ii) to be delivered). Any mandatory prepayments
pursuant to subsection 2.5B(iv) shall be applied as specified in
subsection 2.5B(x).
(v) Prepayments from Asset Sales. At any time prior to the
date which is 364 days following the date of receipt of such Net Cash
Proceeds from an Asset Sale by any Loan Party or any of its
Subsidiaries but in any event not later than the day before the day on
which the Company shall be obligated to pay any amount of such Net Cash
Proceeds (or other amount determined by reference to such Net Cash
Proceeds) to satisfy all or part of any other obligation that may
become due by reason of such sale or other disposition other than any
Indebtedness secured by the assets from which such Net Cash Proceeds
were derived, the Company may spend all or any part of Net Cash
Proceeds (or other amount determined by reference to such Net Cash
Proceeds) on a Renovation or Restoration permitted hereunder or
otherwise invest such amounts in property or assets used in a
Hospitality-Related Business; provided that if an Event of Default
resulting from a failure to pay principal or interest hereunder has
occurred and is continuing, the Company shall not use any part of such
Net Cash Proceeds to make any capital expenditures for any purpose
(including, without limitation, the investment of any amount in any
property or assets used in a Hospitality-Related Business, but
excluding the purchase of FF&E and expenditures in furtherance of any
Renovation or Restoration of any Property (including any Property that
is not a Mortgaged Property) that shall have commenced before the
occurrence of such Event of Default and that cannot be terminated
without material cost to the Company or a material adverse effect on
the Property) unless and until the Company shall have prepaid the Loans
in the amounts required by, and in accordance with the provisions of,
the sentence next following. Any amounts not expended in accordance
with the preceding sentence at the earlier of (i) the day before
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the day on which the Company is obligated to apply such amounts to
satisfy all or part of any other obligation that may become due by
reason of such sale or other disposition, other than any Indebtedness
secured by the assets from which such Net Cash Proceeds were derived,
or (ii) the date that is 365 days after the receipt of such Net Cash
Proceeds, shall be applied to prepay the Loans and the Revolving Loan
Commitments shall be automatically and permanently reduced by the
aggregate amount of such prepayments. Concurrently with any prepayment
of the Loans pursuant to this subsection 2.5B(v), the Company shall
deliver to the Agent an Officer's Certificate demonstrating the
derivation of the Net Cash Proceeds. Any mandatory prepayments pursuant
to this subsection 2.5B(v) shall be applied as specified in subsection
2.5(B)(ix). Net Cash Proceeds from the sale of more than one Property
shall be deemed expended in the order in which such amounts were
received by the applicable Loan Party or Subsidiary.
(vi) Minimum Collateral Value Prepayments Due to Reduction of
Funds in Collateral Account. If at any time the aggregate amount of the
Swing Line Loans exceeds the Minimum Collateral Value Amount, the
Company shall immediately repay the Swing Line Loans in an amount equal
to such deficiency; provided, however, that if the Company shall not be
required to repay the Swing Line Loans pursuant to this subsection
2.5B(vi) in an amount equal to the amount of funds transferred to the
Deposit Account in accordance with Section 3(b) of the Collateral
Account Agreement to reduce or eliminate the amount by which the
aggregate amount of the Swing Line Loans exceeds the Minimum Collateral
Value Amount.
(vii) Prepayment Due to Outstanding Loans Exceeding Maximum
Amount of Swing Line Commitments. If at any time the aggregate amount
of outstanding Revolving Loans and Swing Line Loans exceeds
$41,000,000, the Company shall immediately repay all outstanding Swing
Line Loans.
(viii) Acceleration Due to Reduction of the Facility Amount.
In the event that the aggregate amount of the Revolving Loan
Commitments at any time is less than $10,000,000, whether due to a
prepayment or reduction in the Revolving Commitments or otherwise, (a)
the Revolving Loan Commitments and the Swing Line Loan Commitments
shall be automatically terminated and (b) the Revolving Loans and Swing
Line Loans outstanding and all other Obligations of the Company shall
become immediately due and payable.
(ix) Application of Prepayments. Each prepayment of the
Revolving Loans shall be applied first to Base Rate Loans to the full
extent thereof before application to Eurodollar Rate Loans, in each
case in a manner which minimizes the amount of any payments required to
be made by the Company pursuant to subsection 2.7D. Each prepayment of
the Swing Line Loans shall be applied first to Base Rate Loans to the
full extent thereof before application to Eurodollar Rate Loans, in
each case in a manner which minimizes the amount of any payments
required to be made by the Company pursuant to subsection 2.7D.
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(x) Application of Unscheduled Reductions of Revolving Loan
Commitments. Any voluntary reduction of the Revolving Loan Commitments
pursuant to subsection 2.5B(ii) shall be applied to reduce the
scheduled reductions of the Revolving Loan Commitments set forth in
subsection 2.5A(i) in inverse chronological order.
(xi) Application of Voluntary Prepayments by Type of Loans.
Any voluntary prepayments pursuant to subsection 2.5B(i) shall be
applied as specified by Company in the applicable notice of prepayment;
provided that in the event Company fails to specify the Loans to which
any such prepayment shall be applied, such prepayment shall be applied
first to repay outstanding Swing Line Loans to the full extent thereof
and second to repay outstanding Revolving Loans to the full extent
thereof.
(xii) Application of Mandatory Prepayments by Type of Loans.
Any amount (the "APPLIED AMOUNT") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.5B(iv) or (v) shall be applied
first to prepay the Swing Line Loans to the full extent thereof and, in
the case of prepayments pursuant to subsection 2.5(B)(v), to
permanently reduce the Revolving Loan Commitments by the amount of such
prepayment, second, to the extent of any remaining portion of the
Applied Amount, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, and third, to the extent
of any remaining portion of the Applied Amount, to further permanently
reduce the Revolving Loan Commitments to the full extent thereof."
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1.3 Amendments to Section 8: Miscellaneous.
A. ASSIGNMENT AND PARTICIPATIONS IN LOANS; GENERAL. Section 8.1A of the
Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:
"A. GENERAL. Each Lender shall have the right at any time, so
long as it has obtained the prior written consent of the Agent (which
consent shall not be unreasonably withheld), to (i) assign to any one
Eligible Assignee (provided that such Eligible Assignee complies with
the requirements of subsection 2.8B(iii) as of the date it becomes a
Lender hereunder, to the extent applicable) all of its Swing Line Loan
Commitments together with all of its Swing Line Loans, (ii) sell,
assign, transfer or negotiate to one or more Eligible Assignees
(provided that such Eligible Assignee complies with the requirements of
subsection 2.8B(iii) as of the date it becomes a Lender hereunder, to
the extent applicable) all or any part of its Revolving Loan Commitment
or any Revolving Loan or Revolving Loans made by it, in each case in an
aggregate principal amount not less than $5,000,000, or (iii) sell
participations to one or more Persons in (a) all or any part of its
Revolving Loan Commitment, any Revolving Loan, Revolving Loans, Swing
Line Commitment, any Swing Line Loan or Swing Line Loans made by it or
participations therein or (b) any other interest herein or in any other
Obligations owed to it; provided, however, that no such assignment or
participation shall, without the consent of the Company, require the
Company to file a registration statement with the Securities and
Exchange Commission or apply to qualify such assignment or
participation under the securities laws of any state; and provided,
further that no such sale, assignment, transfer or participation of any
participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Loan
Commitment and the Loans of the Lender effecting such sale, assignment,
transfer or participation. In the case of any assignment authorized
under this subsection 8.1, (i) the Agent shall notify the Company of
the effective date of such assignment, (ii) as of such effective date,
the assignee shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it, shall have the rights
and obligations of a Lender hereunder and (iii) the assigning Lender
shall, to the extent that its rights and obligations hereunder have
been assigned by it, relinquish its rights and be released from its
obligations under this Agreement. In the event of an assignment
hereunder, the Commitments shall be modified to reflect the Commitments
of such assignee. Except with respect to the portion of the Loans and
Commitments assigned pursuant to this subsection 8.1, no Lender shall,
as between the Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part
of its Commitment or the Loans, or other Obligations owed to such
Lender."
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1.4 AMENDMENTS TO SECTION 9: AGENT AND CO-AGENTS
Section 9 of the Credit Agreement is hereby amended by adding
a new subsection 9.8 at the end thereof as follows:
"9.6 COLLATERAL ACCOUNT AGREEMENT.
Each Lender hereby further authorizes Agent, on behalf of and
for the benefit of Lenders, to enter into the Collateral Account Agreement as
secured party, and each Lender agrees to be bound by the terms of the Collateral
Account Agreement; provided that Agent shall not enter into or consent to any
amendment, modification, termination or waiver of (i) the definition of
"Eligible Investments" in this Agreement or in the Third-Party Account Agreement
without the written concurrence of all Lenders or (ii) any provision contained
in the Collateral Account Agreement without the prior consent of Majority
Lenders. Anything contained in any of the Loan Documents to the contrary
notwithstanding, Company, Agent and each Lender hereby agree that no Lender
shall have any right individually to realize upon any of the collateral under
the Collateral Account Agreement, it being understood and agreed that all
powers, rights and remedies under the Collateral Account Agreement may be
exercise solely by Agent for the benefit of Lenders in accordance with the terms
thereof."
1.5 SUBSTITUTION OF SCHEDULES
A. SCHEDULE 2.2: LENDERS COMMITMENTS AND PRO RATA SHARE.
Schedule 2.2 to the Credit Agreement is hereby amended by deleting said Schedule
2.2 in its entirety and substituting in place thereof a new Schedule 2.2 in the
form of Annex A to this Amendment.
1.6 SUBSTITUTION AND ADDITION OF EXHIBITS
A. EXHIBIT I: FORM OF NOTICE OF BORROWING. Exhibit I to the
Credit Agreement is hereby amended by deleting said Exhibit I in its entirety
and substituting in place thereof a new Exhibit I in the form of Annex B to this
Amendment.
B. EXHIBIT II: FORM OF NOTICE OF CONVERSION/CONTINUATION.
Exhibit II to the Credit Agreement is hereby amended by deleting said Exhibit II
in its entirety and substituting in place thereof a new Exhibit II in the form
of Annex C to this Amendment.
C. EXHIBIT XVI: FORM OF SWING LINE NOTE. The Credit Agreement
is hereby amended by adding thereto a new Exhibit XVI in the form of Annex D to
this Amendment.
D. EXHIBIT XVII: FORM OF COLLATERAL ACCOUNT AGREEMENT. The
Credit Agreement is hereby amended by adding thereto a new Exhibit XVII in the
form of Annex E to this Amendment.
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SECTION 2. SWING LINE NOTES
Company agrees to execute and deliver to each Lender with
Swing Line Loan Commitments (or to Agent for that Lender) an Note (each an
"SWING LINE NOTE" and collectively the "SWING LINE NOTES"), in the form of Annex
D to this Amendment with appropriate insertions, to evidence the Swing Line
Loans. Each of the parties hereto hereby acknowledges and agrees that each Swing
Line Note is a Swing Line Note for all purposes under the Credit Agreement and
the other Loan Documents and that the loans evidenced by the Swing Line Notes
shall constitute Swing Line Loans for all purposes under the Credit Agreement
and the other Loan Documents.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIRST AMENDMENT
EFFECTIVE DATE"):
A. On or before the First Amendment Effective Date, Company
shall deliver to Agent (with, except in the case of the Swing Ling Notes,
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) the following, each, unless otherwise noted, dated the First
Amendment Effective Date:
1. Resolutions of its Board of Directors approving
and authorizing the execution, delivery, and performance of this
Amendment and the Collateral Account Agreement and approving and
authorizing the execution, delivery and payment of the Swing Line
Notes, certified as of the First Amendment Effective Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
2. Signature and incumbency certificates of its
officers executing this Amendment, the Collateral Account Agreement,
the Third-Party Account Agreement and the Swing Line Notes; and
3. Executed copies of this Amendment, the Collateral
Account Agreement, the Third-Party Account Agreement and the Swing Line
Notes.
B. Lenders and their respective counsel shall have received
originally executed copies of one or more favorable written opinions of ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for Company and its Subsidiaries, in form and
substance reasonably satisfactory to Agent and its counsel, dated as of the
First Amendment Effective Date and setting forth substantially the matters in
the opinions designated in Annex F to this Amendment, with respect to the
enforceability of the Amended Agreement (as hereinafter defined) and as to such
other matters as Agent acting on behalf of Lenders may reasonably request.
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C. On or before the First Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Agent and such counsel,
and Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Each of Company and the
Subsidiary Guarantors that are a party thereto have all requisite corporate
power and authority to enter into this Amendment, the Collateral Account
Agreement, the Third-Party Account Agreement to issue the Swing Line Notes and
to carry out the transactions contemplated by, and perform its obligations
under, the Credit Agreement as amended by this Amendment (the "AMENDED
AGREEMENT"), the Collateral Account Agreement and the Third-Party Account
Agreement.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment, the Collateral Account Agreement, the Third-Party Account
Agreement and the Swing Line Notes and the performance of the Amended Agreement,
the Collateral Account Agreement and the Third-Party Account Agreement and the
issuance, delivery and payment of the Swing Line Notes have been duly authorized
by all necessary corporate action on the part of Company and the Subsidiary
Guarantors, as the case may be.
C. NO CONFLICT. The execution and delivery by each of Company
and the Subsidiary Guarantors that are a party thereto of this Amendment, the
Collateral Account Agreement, the Third-Party Account Agreement and the Swing
Line Notes and the performance by Company and the Subsidiary Guarantors of the
Amended Agreement, the Collateral Account Agreement, the Third-Party Account
Agreement and the issuance, delivery and payment of the Swing Line Notes by
Company do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its Subsidiaries
(other than Liens created under any of the Loan Documents in favor of Agent on
behalf of Lenders), or (iv) require any approval of stockholders or any approval
or consent of any Person under any Contractual Obligation of Company or any of
its Subsidiaries, except for such approvals or consents which have been
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obtained on or before the First Amendment Effective Date and disclosed in
writing to Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each
of Company and the Subsidiary Guarantors that are a party thereto of this
Amendment, the Collateral Account Agreement, the Third-Party Account Agreement
and all other operative documents being delivered pursuant to the Amendment and
the Swing Line Notes and the performance by Company of the Amended Agreement,
the Collateral Account Agreement and the Third-Party Account Agreement and the
issuance, delivery and payment of the Swing Line Notes by Company do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement, the Collateral Account Agreement, the Third-Party Account Agreement
and the Swing Line Notes have been duly executed and delivered by each of
Company and the Subsidiary Guarantors that are a party thereto, and the Swing
Line Notes, when executed and delivered, will be legally valid and binding
obligations of Company and the Subsidiary Guarantors that are a party thereto,
enforceable against Company and the Subsidiary Guarantors that are a party
thereto, in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. GOVERNMENTAL REGULATION; SECURITIES ACTIVITIES. Neither the
making of the Loans pursuant to the Amended Agreement nor the granting of a
Security Interest in any Collateral (as defined in the Security Agreement)
pursuant to the Security Documents violates Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System. It is not necessary in
connection with the execution and delivery of the Amended Agreement or the Swing
Line Notes to register the Swing Line Notes or the Loans under the Securities
Act or to qualify any indenture under the Trust Indenture Act of 1939, as
amended.
G. LIENS OF THE COLLATERAL.
(i) The Collateral Account Agreement creates in favor of the
Secured Party a perfected security interest in the Securities Account, the
Security Entitlement (as defined in the Third-Party Account Agreement) carried
in the Securities Account and the Restricted Deposit Account (as defined in the
Third-Party Account Agreement) under the Uniform Commercial Code as in effect in
the State of New York (the "Code") and the Federal Book-Entry Regulations. The
security interest of the Secured Party in the Securities Account, the Security
Entitlement carried in the Securities Account and the Restricted Deposit Account
is prior to any other security interest therein under the Code.
(ii) Assuming the Secured Party retains dominion and control
over the Restricted Deposit Account in the manner set forth in the Security
Agreement, the Security
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Agreement creates in favor of the Secured Party a lien on the Restricted Deposit
Account senior to the claim of later attaching or executing "lien creditors" (as
that term is defined in Section 9- 301(3) of the Code).
H. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
I. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Amended and Restated Pledge and
Security Agreement, Amended and Restated Intellectual Property License
Agreement, and Amended and Restated Environmental Indemnity, in each case as
amended through the First Amendment Date, pursuant to which Company has created
Liens in favor of Agent on certain Collateral to secure the Obligations. Each
Subsidiary Guarantor is a party to the Subsidiary Guaranty, as amended through
the First Amendment Date, pursuant to which such has (i) guarantied the
Obligations and (ii) created Liens in favor of Agent on certain Collateral to
secure the obligations of such Subsidiary Guarantor under the Subsidiary
Guaranty. Company, and Subsidiary Guarantors are collectively referred to herein
as the "CREDIT SUPPORT PARTIES", and the Amended and Restated Pledge and
Security Agreement, Amended and Restated Intellectual Property License
Agreement, Amended and Restated Environmental Indemnity and Subsidiary Guaranty
are collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guaranty or secure, as the case may be, to the fullest
extent possible the payment and performance of all "Guarantied Obligations" and
"Secured Obligations," as the case may be (in each case as such terms are
defined in the applicable Credit Support Document), including without limitation
the payment and performance of all such "Guarantied Obligations" or "Secured
Obligations," as the case may be, in respect of the Obligations of Company now
or hereafter existing under or in respect of the Amended Agreement and the Notes
defined therein. Without limiting the generality of the foregoing, each Credit
Support Party hereby acknowledges and confirms the understanding and intent of
such party that, upon the effectiveness of this Amendment, and as a result
thereof, the definition of
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"Obligations" contained in the Amended Agreement includes the obligations of
Company under the Swing Line Notes.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the First Amendment Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
Each Credit Support Party (other than Company) acknowledges
and agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the First Amendment Date, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
28
212
B. FEES AND EXPENSES. Company acknowledges that all costs,
fees and expenses as described in subsection 8.2 of the Credit Agreement
incurred by Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon the execution of a counterpart hereof by Company, and Lenders and
each of the Credit Support Parties and receipt by Company and Agent of written
or telephonic notification of such execution and authorization of delivery
thereof.
[Remainder of page intentionally left blank]
29
213
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PRIME HOSPITALITY CORP.
By:
-------------------------------------
Name:
Title:
HOMEGATE AUSTIN, INC., (for purposes of
Section 6 only) as a Credit Support Party
By:
-------------------------------------
Name:
Title:
HOMEGATE HOSPITALITY, INC., (for
purposes of Section 6 only) as a Credit
Support
Party
By:
-------------------------------------
Name:
Title:
Notice Address:
Prime Hospitality Corp.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President and Law Dept.
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BANKERS TRUST COMPANY,
as Agent and as Lender
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇-▇
215
CREDIT LYONNAIS NEW YORK BRANCH
As Syndication Agent and as a Lender
By:
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Credit Lyonnais New York Branch
1301 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mischa Zabotin
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ AGENCY
As Documentation Agent and as a Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. Day
Title: Vice President
Notice Address:
Societe Generale, Southwest Agency
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-4
217
BANK LEUMI USA
As a Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
Notice Address:
Bank Leumi USA
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-5
218
BANKBOSTON, N.A.
As a Lender
By:
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Notice Address:
The First National Bank of Boston
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-6
▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇ NATIONAL ASSOCIATION
As a Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Notice Address:
Bank One, Texas National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-7
220
CIBC, INC.
As a Lender
By:
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Director
Notice Address:
CIBC, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-8
221
FIRST NATIONAL BANK OF COMMERCE
As Lender
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
Notice Address:
First National Bank of Commerce
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-9
222
IMPERIAL BANK
As Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Notice Address:
Imperial Bank
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-10
223
NATIONSBANK, N.A.
As Lender
By:
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Notice Address:
Nationsbank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-11
224
ORIX USA CORPORATION
As Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
ORIX USA Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-12
225
PNC BANK, N.A.
As Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
PNC Bank, N.A.
Two ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇-▇▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
As Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
Notice Address:
Southern Pacific Bank
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-14
227
ANNEX A
SCHEDULE 2.2
LENDERS' COMMITMENTS AND PRO RATA SHARES
Revolving Swing Line
Loan Pro Rata Loan Pro Rata
Lender Commitment Share Commitment Share
------ ------------ -------- ----------- --------
Bankers Trust Company $ 20,000,000 10% $ 3,875,000 9.45122%
Credit Lyonnais New York Branch $ 20,000,000 10% $ 3,875,000 9.45122%
Societe Generale, Southwest Agency $ 20,000,000 10% $ 3,875,000 9.45122%
PNC Bank, N.A. $ 25,000,000 12.5% $ 3,875,000 9.45122%
Imperial Bank $ 10,000,000 5% $ 3,875,000 9.45122%
BankBoston, N.A. $ 10,000,000 5% $ 3,875,000 9.45122%
CIBC Inc. $ 20,000,000 10% $ 3,875,000 9.45122%
Nationsbank, N.A. $ 20,000,000 10% $ 3,875,000 9.45122%
Southern Pacific Bank $ 15,000,000 7.5% -- 0.0%
First National Bank of Commerce $ 10,000,000 5% $ 3,875,000 9.45122%
ORIX USA Corporation $ 10,000,000 5% -- 0.0%
Bank Leumi USA $ 10,000,000 5% $ 3,875,000 9.45122%
Bank One, Texas National Association $ 10,000,000 5% $ 2,250,000 5.48780%
------------------------------------------------------------------------
TOTAL: $200,000,000 100% $41,000,000 100.0%
A-1
228
ANNEX B
EXHIBIT II
FORM OF NOTICE OF BORROWING
DATED: ,
Pursuant to that certain Amended and Restated Senior Secured
Revolving Credit Agreement dated as of December 17, 1997, as amended, restated,
supplemented or otherwise modified to the date hereof (said Amended and Restated
Credit Agreement, as so amended, supplemented or otherwise modified, the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Prime Hospitality Corp., a
Delaware corporation (the "COMPANY"), the financial institutions listed therein
as Lenders ("LENDERS"), Societe Generale, Southwest Agency, as Documentation
Agent, Credit Lyonnais New York Branch, as Syndication Agent, and Bankers Trust
Company, as Agent, this represents the Company's election to borrow from Lenders
as follows:
1. Funding Date: ,
2. Amount of borrowing: $
3. Type of Loan: | | a. Revolving Loans
| | b. Swing Line Loans
4. Interest rate option: | | a. Eurodollar Rate Loans with an
initial Interest Period of
month(s)
| | b. Base Rate Loan(s)
The proceeds of such Loan(s) are to be deposited in .
The undersigned officer, to the best of his or her knowledge, and
the Company certify that:
[(i) not more than three other Funding Dates for a
Revolving Loan have occurred within the thirty days next
preceding the proposed Funding Date specified in item 1 above,
and the last Funding Date occurred on [INSERT DATE];]
[(i) not more than two other Funding Dates for a Swing
Line Loan have occurred within the calendar year of the proposed
Funding Date specified in item 1 above, and the Funding Dates
occurred on [INSERT DATES];]
(ii) the amount of the proposed borrowing specified in
item 2 above will not cause the Total Utilization of Commitments
to exceed the Borrowing Base;
B-1
229
(iii) after giving effect to the proposed borrowing
specified in item 2 above, the Total Utilization of Commitments
will not exceed the aggregate Commitments in effect on the
proposed Funding Date specified in item 1 above;
[(iv) that after giving effect to the Borrowing there
shall be no Swing Line Loans outstanding;]
[OR]
[(iv) after giving effect to the Borrowing the aggregate
amount of outstanding Loans shall not exceed $41,000,000, the
aggregate amount of outstanding Swing Line Loans is $____ and the
aggregate amount of outstanding Revolving Line Loans is $_____;]
(v) the representations and warranties contained in the
Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the date hereof to
the same extent as though made on and as of the date hereof,
except to the extent such representations and warranties
specifically relate to an earlier date (including the
"Restatement Closing Date" and the "date hereof"), in which case
such representations and warranties were true and correct in all
material respects on and as of such earlier date;
(vi) the Company has performed in all material respects
all agreements which the Credit Agreement provides shall be
performed by it on or before the date hereof and each of the
other conditions to funding set forth in subsection 3.2 of the
Credit Agreement will be satisfied by the proposed Funding Date
specified in item 1 above;
(vii) the Schedules to the Credit Agreement are updated,
pursuant to subsection 5.1(xxi) of the Credit Agreement, as set
forth in Exhibit A hereto; and
[Remainder of page intentionally left blank.]
B-2
230
IN WITNESS WHEREOF, the undersigned officer (in his or her
corporate and not individual capacity) does hereby execute this Notice of
Borrowing.
PRIME HOSPITALITY CORP.
By:
-------------------------------------
Name:
Title:
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231
EXHIBIT A
1. The following schedules (limited to Schedules 4.21A and 4.25) are hereby
supplemented as follows:
(iv) Schedule 4.21A
(v) Schedule 4.25
2. The following schedules are hereby supplemented (subject to the approval of
the Agent) as follows:
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232
ANNEX C
EXHIBIT III
FORM OF NOTICE OF CONTINUATION
Pursuant to that certain Amended and Restated Senior Secured
Revolving Credit Agreement dated as of December 17, 1997 as amended, restated,
supplemented or otherwise modified to the date hereof (said Amended and Restated
Credit Agreement, as so amended, restated, supplemented or otherwise modified,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among Prime
Hospitality Corp., a Delaware corporation (the "COMPANY"), the financial
institutions listed therein as Lenders, Societe Generale, Southwest Agency, as
Documentation Agent, Credit Lyonnais New York Branch, as Syndication Agent, and
Bankers Trust Company, as Agent, this represents the Company's election to
continue Eurodollar Rate Loans as follows:
1. Date of continuation: __________________, _______
2. Amount of Loans being continued: $__________________
3. Type of Loan:
|_| a. Revolving Loans
|_| b. Swing Line Loans
4. Duration of new Interest Period that
commences on the continuation date:
___________________ month(s)
The undersigned officer (in his or her corporate and not
individual capacity), to the best of his or her knowledge, and the Company
certify that no Event of Default or Potential Event of Default has occurred and
is continuing under the Credit Agreement.
DATED: _____________________ PRIME HOSPITALITY CORP.
By:
-------------------------------------
Name:
Title:
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233
ANNEX D
EXHIBIT XVI
[FORM OF SWING LINE NOTE]
PRIME HOSPITALITY CORP.
$___________ New York, New York
February , 1998
FOR VALUE RECEIVED, PRIME HOSPITALITY CORP., a Delaware
corporation ("COMPANY"), promises to pay to _________________________________
("PAYEE"), on or before the Maturity Date, the lesser of (x) ___________________
($_______________) and (y) the unpaid principal amount of all advances made by
Payee to Company as Swing Line Loans under the Credit Agreement referred to
below.
Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Amended and Restated Senior Secured Credit Agreement dated as of
December 17, 1997, as amended by that certain First Amendment to Credit
Agreement dated as of February , 1998, by and among Company, the financial
institutions listed therein as Lenders, Credit Lyonnais New York Branch, as
Syndication Agent, Societe Generale, Southwest Agency, as Documentation Agent
and Bankers Trust Company, as Agent (said Amended and Restated Senior Secured
Credit Agreement, as so amended and as it may be hereafter amended, supplemented
or otherwise modified from time to time, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined).
This Note is one of Company's "Swing Line Notes" in the
initial aggregate principal amount of $41,000,000 and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the Funding and Payment Office or at such other place as shall be designated
in writing for such purpose in accordance with the terms of the Credit
Agreement.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
D-1
234
This Note is subject to mandatory and optional prepayment as
provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in subsections 8.1 and 8.18 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
Company promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in subsection 8.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company and
any endorsers of this Note hereby consent to renewals and extensions of time at
or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
D-2
235
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
PRIME HOSPITALITY CORP.
By: __________________________
Name:
Title:
D-3
236
TRANSACTIONS
ON
SWING LINE NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
D-4
237
ANNEX E
EXHIBIT XVII
COLLATERAL ACCOUNT AGREEMENT
This COLLATERAL ACCOUNT AGREEMENT (this "AGREEMENT") is dated
as of February 23, 1998 and entered into by and between Prime Hospitality Corp.
a Delaware corporation ("PLEDGOR"), and Bankers Trust Company as agent for and
representative of (in such capacity herein called "SECURED PARTY") the financial
institutions ("LENDERS") party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party and Lenders have entered into a Amended and
Restated Senior Revolving Credit Agreement dated as of December 17, 1997, as
amended by that certain First Amendment to Credit Agreement dated as of February
23, 1998 (said Amended and Restated Senior Secured Revolving Credit Agreement as
so amended and as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined)
with Pledgor pursuant to which Lenders have made certain commitments, subject to
the terms and conditions set forth in the Credit Agreement, to extend certain
credit facilities to Pledgor.
B. It is a condition precedent to the extension of Swing Line
Loans that Pledgor shall have granted the security interests and undertaken the
obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Swing Line Loans and other extensions of credit under
the Credit Agreement and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. CERTAIN DEFINITIONS.
A. Specific Definitions. The following terms used in this
Agreement shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code as in effect in
New York.
"COLLATERAL" shall have the meaning given to that term in the
Third-Party Account Agreement.
"COLLATERAL ACCOUNTS" shall have the meaning given to that
term in the Third-Party Account Agreement.
E-1
238
"COLLATERAL VALUE" shall have the meaning given to that term
in the Third-Party Account Agreement.
"ELIGIBLE INVESTMENTS" shall have the meaning given to that
term in the Third-Party Account Agreement.
"FINANCIAL ASSET" shall have the meaning given to that term in
the Third-Party Account Agreement.
"INVESTMENTS" shall have the meaning given to that term in the
Third-Party Account Agreement.
"MINIMUM COLLATERAL VALUE AMOUNT" means, as at any date of
determination, the sum of (i) the cash balance in the Restricted Deposit Account
plus (ii) 95% of the Collateral Value of all Collateral in the Securities
Account.
"PERMITTED LIEN" shall mean a clearing Lien in favor of
Securities Intermediary pursuant to Section 6(c) of the Third-Party Account
Agreement.
"RESTRICTED DEPOSIT ACCOUNT" shall have the meaning given to
that term in the Third-Party Account Agreement.
"SECURITIES ACCOUNT" shall have the meaning given to that term
in the Third-Party Account Agreement.
"SECURED OBLIGATIONS" means all obligations and liabilities of
every nature of Pledgor now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and all
extensions or renewals thereof, whether for principal, interest (including
interest that, but for the filing of a petition in bankruptcy with respect to
Pledgor, would accrue on such obligations), fees, expenses, indemnities or
otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender as
a preference, fraudulent transfer or otherwise, and all obligations of every
nature of Pledgor now or hereafter existing under this Agreement.
"SECURITIES INTERMEDIARY" means the bank or trust company
identified as the "Securities Intermediary" in the Third-Party Account
Agreement.
"THIRD-PARTY ACCOUNT AGREEMENT" means the Third-Party Account
Agreement, substantially in the form of Annex A hereto, entered into among
Pledgor, Secured Party and Securities Intermediary, as such agreement may be
amended, supplemented or otherwise modified from time to time.
E-2
239
"VALUATION DATE" shall have the meaning given to that term in
the Third-Party Agreement.
B. General Provisions. Capitalized terms used but not defined
herein shall have the meaning given to such terms in the Third-Party Account
Agreement or the Credit Agreement, although in the event of a conflict, the
meaning given to such term in the Third-Party Account Agreement shall control.
Unless otherwise defined herein, in the Credit Agreement or in the Third-Party
Account Agreement, terms used in Articles 8 and 9 of the Code are used herein as
therein defined. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate. When a reference is made in this Agreement to
an Appendix, Section, Recital, Schedule, or Exhibit or to the Introduction, such
reference shall be to the Introduction, an Appendix, Section, or a Section of,
or an Exhibit, Recital or Schedule to, this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
SECTION 2. ESTABLISHMENT AND OPERATION OF THE COLLATERAL
ACCOUNTS.
A. Establishment of Restricted Deposit Account. On the date
hereof, in accordance with the terms of the Third-Party Account Agreement,
Pledgor shall establish with Securities Intermediary at its office at Four
Albany Street, New York, NY, as a deposit account in the name of Secured Party
and under the sole dominion and control of Secured Party, a restricted deposit
account designated as "Prime Hospitality Corp./Bankers Trust Company Restricted
Deposit Account". Pledgor and Secured Party agree that Securities Intermediary
shall credit the Restricted Deposit Account to, and shall hold it in and subject
to, the Securities Account.
B. Establishment of Securities Account. On the date hereof, in
accordance with the terms of the Third-Party Account Agreement, Pledgor shall
establish with Securities Intermediary at its office at Four Albany Street, New
York, NY as a securities account in the name of Secured Party, a restricted
securities account designated as "Prime Hospitality Corp./Bankers Trust Company
Securities Account".
C. Compliance with Third-Party Account Agreement. The
Collateral Accounts shall be operated and all Investments shall be purchased,
registered or held (as applicable), in accordance with the terms of the
Third-Party Account Agreement.
D. Reasonable Reliance. Secured Party shall be fully protected
and shall suffer no liability in acting in accordance with any written
instructions reasonably believed by it to have been given by Pledgor with
respect to any aspect of the operation of the Collateral Accounts (including any
such instructions relating to any Investments of any amounts or Financial Assets
credited thereto).
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SECTION 3. TRANSFERS OF COLLATERAL; MARGIN FROM PLEDGOR;
RETURN OF EXCESS COLLATERAL; DIRECTED PAYMENT.
A. Transfers to Restricted Deposit Account. All transfers of
funds to the Restricted Deposit Account shall be made in accordance with the
terms of the Third-Party Account Agreement. Pledgor shall, promptly after
initiating a transfer of funds to the Restricted Deposit Account, give notice to
Securities Intermediary (with a copy to Secured Party) by facsimile of the date,
amount and method of delivery of such transfer.
B. Margin From Pledgor. If on any Valuation Date the aggregate
amount of the Swing Line Loans exceeds the Minimum Collateral Value Amount, upon
demand by Secured Party, Pledgor shall immediately (and in any event within one
Business Day) either (i) prepay the Swing Line Loans pursuant to subsection
2.5B(v) of the Credit Agreement in the amount of such excess or (ii) transfer to
the Restricted Deposit Account, in accordance with Section 3(A), an amount of
funds to reduce or eliminate the amount by which the Swing Line Loans exceed the
Minimum Collateral Value Amount and prepay the Swing Line Loans pursuant to
subsection 2.5B(v) of the Credit Agreement in an amount equal to any remaining
amount by which after such transfer the Swing Line Loans exceeds the Minimum
Collateral Value Amount.
C. Release of Excess Collateral. So long as no Event of
Default or Potential Event of Default shall have occurred and be continuing, if
on any Valuation Date the Minimum Collateral Value Amount exceeds the Swing Line
Loans, then, upon written demand by Pledgor, Secured Party shall promptly (and
in any event within two Business Days) instruct Securities Intermediary pursuant
to Section 4(e) of the Third-Party Account Agreement, to transfer to Pledgor in
accordance with such written instructions as may have been delivered by Pledgor,
Financial Assets and other property designated by Pledgor (or in the absence of
such a designation, reasonably selected by Secured Party or Securities
Intermediary) having a total value, determined on a basis consistent with the
determination of Collateral Value, equal to the lesser of the amount of funds
requested by Pledgor in writing and the amount by which the Minimum Collateral
Value Amount exceeds the Swing Line Loans on the date of transfer.
D. Directed Payment. So long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, upon
irrevocable written demand by Pledgor Secured Party shall promptly (and in any
event within two Business Days) instruct Securities Intermediary pursuant to
Section 4(e) of the Third-Party Account Agreement, to transfer to Secured Party,
to prepay Swing Line Loans pursuant to subsection 2.5B of the Credit Agreement,
Financial Assets and other property designated by Pledgor (or in the absence of
such a designation, reasonably selected by Secured Party of Securities
Intermediary) in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount (or such lesser amount as shall
constitute the aggregate amount of all outstanding Swing Line Loans).
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SECTION 4. PLEDGE OF SECURITY FOR SECURED OBLIGATIONS. Pledgor
hereby pledges and assigns to Secured Party, and hereby grants to Secured Party
a security interest in, the Collateral as collateral security for the prompt
payment or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
362(a)), of all Secured Obligations.
SECTION 5. INVESTMENT OF AMOUNTS IN THE COLLATERAL ACCOUNTS.
A. Strict Compliance On Investment of Collateral. Credit
balances held by Securities Intermediary in the Collateral Accounts shall not be
invested or reinvested except as provided in this Section 5 and in the
Third-Party Account Agreement.
B. Management by Pledgor. So long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, Secured Party
(a) shall not deliver a Prohibition Notice (as defined in the Third Party
Account Agreement) and (b) shall instruct Securities Intermediary to follow, in
accordance with the terms of the Third-Party Account Agreement, any written
instruction received by Securities Intermediary from Pledgor (with a copy to
Secured Party) (i) to invest and reinvest funds on held for the credit of the
Collateral Accounts in Eligible Investments for credit to the Securities
Account, (ii) to transfer funds held in the Restricted Deposit Account to the
Securities Account to the extent required for such investments, against delivery
of the related Financial Assets to Securities Intermediary for credit to the
Securities Account, and (iii) to sell or redeem any Investment against delivery
of the proceeds to the Restricted Deposit Account or settlement to purchase an
Eligible Investment for credit to the Securities Account.
C. Treatment of Income and other Proceeds. Subject to Secured
Party's rights under Section 5(D), (i) any interest, cash dividends or other
cash distributions received in respect of any Investments and the net proceeds
of any sale or payment of any Investments shall promptly be transferred to, and
held in, the Restricted Deposit Account pending investment thereof pursuant to
Section 5(B), and (ii) any distribution of property in respect of any Investment
shall be credited to, and held for the credit of, the Securities Account.
D. Power of Secured Party to Sell. Pledgor agrees that Secured
Party may sell or cause the sale or redemption of any Investment and instruct
Securities Intermediary to transfer the proceeds of such sale or any other
credit balance in the Collateral Accounts to any third party or account, in
either case (i) if such sale or redemption is necessary to permit Secured Party
to perform its duties under this Agreement or the Credit Agreement, or (ii) as
provided in Section 10.
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SECTION 6. REPRESENTATIONS AND WARRANTIES. Pledgor represents
and warrants as follows:
A. Ownership of Collateral; Security Interest; Perfection and
Priority. Pledgor is (or at the time of transfer thereof to Securities
Intermediary will be) the beneficial owner of the Collateral from time to time
transferred by Pledgor to Securities Intermediary, as agent for Secured Party,
free and clear of any Lien except for any Permitted Liens, and the security
interest created by this Agreement and the Third-Party Account Agreement. The
pledge and assignment of the Collateral pursuant to this Agreement and the
Third-Party Account Agreement creates a valid security interest in the
Collateral securing the Payment of the Secured Obligations. Assuming execution
and due performance of the Third-Party Account Agreement by Securities
Intermediary, the security interest in the Collateral Accounts is or will be
perfected and senior in priority to any other Lien therein other than any
Permitted Liens.
B. Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the grant by Pledgor of the security
interest granted hereby or by the Third-Party Account Agreement, (ii) the
execution, delivery or performance of this Agreement or the Third-Party Account
Agreement by Pledgor, or (iii) the perfection of or the exercise by Secured
Party or Securities Intermediary of its rights and remedies hereunder or under
the Third-Party Account Agreement (except as may have been taken by or at the
direction of Pledgor).
C. Other Information. All information heretofore, herein or
hereafter supplied to Secured Party or Securities Intermediary by or on behalf
of Pledgor with respect to the Collateral is accurate and complete in all
respects.
SECTION 7. FURTHER ASSURANCES. Pledgor agrees that from time
to time, at the expense of Pledgor, Pledgor shall promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
by the Third-Party Account Agreement or to enable Secured Party or Securities
Intermediary to exercise and enforce its rights and remedies hereunder or under
the Third-Party Account Agreement with respect to any Collateral. Without
limiting the generality of the foregoing, Pledgor shall: (a) execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may request, in order to perfect and preserve the security interests granted or
purported to be granted hereby or by the Third-Party Account Agreement, and (b)
at Secured Party's request, appear in and defend any action or proceeding that
may affect Pledgor's title to or Secured Party's security interest in all or any
part of the Collateral.
SECTION 8. TRANSFERS AND OTHER LIENS. Pledgor agrees that,
except as permitted in Section 5(B), it shall not (a) sell, assign (by operation
of law or otherwise), redeem or otherwise dispose of any of the Collateral or
(b) create or suffer to exist any Lien upon or with respect to any of the
Collateral, except for the security interest created under this Agreement and
the Third-Party Account Agreement and any Permitted Liens.
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SECTION 9. SECURED PARTY APPOINTED ATTORNEY-IN-FACT; SECURED
PARTY PERFORMANCE.
A. Secured Party Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement or the Third-Party
Account Agreement, including (a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Collateral
without the signature of Pledgor and (b) to receive, endorse and collect any
instruments or other Investments made payable to Pledgor representing any
dividend, principal or interest payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
B. Performance by Secured Party. If Pledgor fails to perform
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 12.
SECTION 10. REMEDIES.
A. Transfer or Sequestration of Collateral. If any Event of
Default or Potential Event of Default shall have occurred and be continuing,
Secured Party may instruct Securities Intermediary to (i) sell or redeem any of
the Collateral, (ii) transfer any or all of the Collateral constituting cash to
the Restricted Deposit Account or transfer any or all of the Collateral to any
account designated by Secured Party, including account or accounts established
in Secured Party's name (whether with Secured Party or Securities Intermediary
or otherwise), (iii) register title to any Collateral in any name specified by
Secured Party, including the name of Secured Party or any of its nominees or
agents, without reference to any interest of Pledgor, or (iv) otherwise deal
with the Collateral as directed by Secured Party.
B. Rights of Secured Party. If any Event of Default shall have
occurred and be continuing, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "UCC") (whether or not the UCC applies to the affected
Collateral), and Secured Party may also in its sole discretion sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Collateral. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given.
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Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
C. Agreement as to Manner of Sale. Pledgor hereby agrees that
the Collateral is of a type customarily sold on recognized markets and,
accordingly, that no notice to any Person is required before any sale of any of
the Collateral pursuant to the terms of this Agreement; provided that, without
prejudice to the foregoing, Pledgor agrees that, to the extent notice of any
such sale shall be required by law, at least ten days' notice to Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification.
D. Deficiency. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Pledgor shall be liable for the deficiency and the fees of any
attorneys employed by Secured Party to collect such deficiency.
E. Setoff. Anything contained herein to the contrary
notwithstanding, any of the Collateral consisting of a deposit or an other
obligation of Secured Party or any Lender, whether credited to the Securities
Account or otherwise, shall be subject to Secured Party's or Lender's rights of
set-off under subsection 7.2D of the Credit Agreement.
SECTION 11. APPLICATION OF PROCEEDS. If any Event of Default
shall have occurred and be continuing, all credit balances included as
Collateral and all proceeds received by Secured Party in respect of any sale or
redemption of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Secured Party, be held by or for Secured
Party as Collateral for, or then, or at any other time thereafter, applied in
full or in part by Secured Party against, the Secured Obligations in the
following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Pledgor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection with
the exercise of any right or remedy hereunder, all in accordance with
Section 12;
SECOND: To the payment of all other Secured Obligations in
such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
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SECTION 12. EXCULPATION; INDEMNITY; EXPENSES.
A. Exculpation. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral, it being understood that Secured Party shall
have no responsibility for (a) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relating to
any Collateral, whether or not Secured Party has or is deemed to have knowledge
of such matters, (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession of
the Collateral) to preserve rights against any parties with respect to any
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Collateral, (d) initiating any action to protect the Collateral against the
possibility of a decline in market value, (e) any loss resulting from
Investments made, held or sold pursuant to Section 5, except for a loss
resulting from Secured Party's gross negligence or wilful misconduct in
complying with Section 5, or (f) determining (i) the correctness of any
statement or calculation made by Pledgor in any written or telex (tested or
otherwise) instructions or (ii) whether any transfer to or from the Collateral
Accounts is proper. Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property of like kind. In addition to the foregoing and without
limiting the generality thereof, Secured Party (in its capacity as such) shall
not be responsible for any actions or omissions of Securities Intermediary.
B. Indemnification. Pledgor agrees to indemnify Secured Party
and each Lender from and against any and all claims, losses and liabilities in
any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including enforcement of this Agreement),
except to the extent such claims, losses or liabilities result solely from
Secured Party's or such Lender's gross negligence or wilful misconduct as
finally determined by a court of competent jurisdiction.
C. Expenses. Pledgor shall pay to Secured Party upon demand
the amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of Secured Party hereunder, or (iv) the failure by Pledgor
to perform or observe any of the provisions hereof and any other costs and
expenses as provided for in subsection 8.2 of the Credit Agreement.
SECTION 13. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the indefeasible payment in full
of the Secured Obligations and the cancellation or termination of the
Commitments (b) be binding upon Pledgor, its successors and assigns, and (c)
inure, together with the rights and remedies of Secured Party hereunder, to the
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benefit of Secured Party and Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), but subject to the provisions of subsection 8.1 of the Credit Agreement,
Secured Party or any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to Secured Party or such Lender, as
the case may be herein or otherwise. Upon the indefeasible payment in full of
all Secured Obligations and the cancellation or termination of the Commitments,
the security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Pledgor. Upon any such termination Secured Party
shall, at Pledgor's expense, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination (including the
notice described in Section 9 of the Third-Party Account Agreement) and Pledgor
shall be entitled to the return, upon its request and at its expense, against
receipt and without recourse to Secured Party, of such of the Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 14. SECURED PARTY AS AGENT.
A. Secured Party has been appointed to act as Secured Party
hereunder by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement.
B. Secured Party shall at all times be the same Person that is
Agent under the Credit Agreement. Written notice of resignation by Agent
pursuant to subsection 9.7 of the Credit Agreement shall also constitute notice
of resignation as Secured Party under this Agreement; removal of Agent pursuant
to subsection 9.7 of the Credit Agreement shall also constitute removal as
Secured Party under this Agreement; and appointment of a successor Agent
pursuant to subsection 9.7 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Agent under subsection 9.7 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all items of Collateral held by Secured Party hereunder
(which shall be credit to, and held for the credit of, a substitute Securities
Account established and maintained by such successor Secured Party), together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Secured Party under this
Agreement, and (ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Agent's
resignation or removal hereunder as Secured Party, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Secured Party hereunder.
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SECTION 15. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 16. NOTICES. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed, or sent by
telefacsimile or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile or
telex; provided, however, that notices to the Secured Party shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to the Company and the Agent, such other address as shall be
designated by such Person in a written notice delivered to the other parties
hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to the Agent.
SECTION 17. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 18. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 19. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 20. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
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SECTION 21. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Pledgor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address as provided in Section 16, such service
being hereby acknowledged by Pledgor to be sufficient for personal jurisdiction
in any action against Pledgor in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Pledgor in the courts of any other
jurisdiction.
SECTION 22. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE THIRD-PARTY
ACCOUNT AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. Pledgor
and Secured Party each acknowledge that this waiver is a material inducement for
Pledgor and Secured Party to enter into a business relationship, that Pledgor
and Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Pledgor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR THE THIRD-PARTY
ACCOUNT AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 23. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PRIME HOSPITALITY CORP.
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
Prime Hospitality Corp.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
BANKERS TRUST COMPANY, as Secured Party
By: ____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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ANNEX A
[FORM OF THIRD-PARTY ACCOUNT AGREEMENT]
This THIRD-PARTY ACCOUNT AGREEMENT (this "AGREEMENT") is dated
as of February 23, 1998 and entered into by and among PRIME HOSPITALITY CORP. a
Delaware corporation ("PLEDGOR"), BANKERS TRUST COMPANY a banking corporation
("SECURITIES INTERMEDIARY"), and BANKERS TRUST COMPANY as agent for and
representative of (in such capacity herein called "SECURED PARTY") the financial
institutions ("LENDERS") party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
(a) Secured Party and Lenders have entered into that certain
Amended and Restated Senior Secured Credit Agreement dated as of December 17,
1997 and as amended by that certain First Amendment to Credit Agreement dated as
of February 23, 1998 (said Credit Agreement, as so amended and as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT") with Pledgor pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Pledgor.
(b) Pursuant to the terms of the Credit Agreement, Pledgor and
Secured Party have entered into a Collateral Account Agreement dated as of
February 23, 1998 (said Collateral Account Agreement, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the
"COLLATERAL ACCOUNT AGREEMENT") pursuant to which Pledgor has granted a security
interest in favor of Secured Party in the Collateral (as hereinafter defined).
(c) In accordance with the terms of Section 2 of the
Collateral Account Agreement, Pledgor wishes to establish a restricted deposit
account and a restricted investment account with Securities Intermediary,
subject to such security interest in favor of Secured Party.
(d) It is a condition precedent to the establishment and
maintenance of such accounts with Securities Intermediary that Pledgor,
Securities Intermediary and Secured Party enter into this Agreement setting
forth the terms on which Securities Intermediary shall establish and operate
such accounts and invest and reinvest amounts held therein or transferred
thereto.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgor, Securities Intermediary and Secured Party hereby agree as
follows:
SECTION 1. DEFINITIONS.
(a) Specific Definitions. The following terms used in this
Agreement shall have the following meanings:
▇-▇-▇
▇▇▇
"▇▇▇▇" shall mean the Uniform Commercial Code as in effect in
New York.
"COLLATERAL" means (i) the Collateral Accounts, (ii) all
credit balances held from time to time in the Collateral Accounts, (iii) all
Investments, including all Financial Assets, Security Entitlements, Securities
(whether certificated or uncertificated), instruments, accounts, chattel paper,
general intangibles and deposits representing or evidencing any Investments,
(iv) all interest, dividends, cash, instruments, securities and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Collateral, and (v) to the extent not covered
by clauses (i) through (iv) above, all proceeds of any or all of the foregoing
Collateral.
"COLLATERAL ACCOUNTS" means the Restricted Deposit Account and
the Securities Account and any other accounts in which Investments may be
credited, held or registered by Securities Intermediary under this Agreement.
"COLLATERAL VALUE" means, as at any date of determination, the
value of all Collateral (other than Investments which are not Eligible
Investments) in U.S. dollars as of such date.
"ELIGIBLE INVESTMENTS" means, as at any date of determination,
marketable securities (i) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (ii) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within thirty days
after such date.
"ENTITLEMENT HOLDER" shall have the meaning given to such term
in Section 8-102(a)(7) of the Code.
"ENTITLEMENT ORDER" shall have the meaning given to such term
in Section 8- 102(a)(8) of the Code.
"FINANCIAL ASSET" shall have the meaning given to such term in
Section 8- 102(a)(9) of the Code.
"INVESTMENTS" means any property, including any Financial
Asset, credited to the Securities Account by Securities Intermediary, the
Restricted Deposit Account, and any other property acquired by Securities
Intermediary as securities intermediary hereunder in exchange for, with proceeds
from or distributions on, or otherwise in respect of any Investments.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"RESTRICTED DEPOSIT ACCOUNT" means the restricted deposit
account established and maintained with Securities Intermediary pursuant to
Section 2(a).
"SECURITIES ACCOUNT" means the restricted securities account
established and maintained with Securities Intermediary pursuant to Section
2(b).
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"SECURITY" shall have the meaning given to such term in
Section 8-102(a)(15).
"SECURITY ENTITLEMENT" shall have the meaning given to such
term in Section 8-102(a)(17).
"S&P" means Standard & Poor's Rating Services.
"SUSPENSION PERIOD" means the period (i) beginning promptly
after receipt by Securities Intermediary of written notice from Secured Party,
substantially in the form of the Prohibition Notice attached to this Agreement
as Attachment 1, suspending Pledgor's right to direct the investment of funds
held for the credit of the Collateral Accounts, and (ii) ending promptly after
receipt by Securities Intermediary of written notice from Secured Party,
substantially in the form of the Rescission of Prohibition Notice attached to
this Agreement as Attachment 2, rescinding the preceding Prohibition Notice.
"VALUATION DATE" means (i) the date hereof and (ii) the last
Business Day of each month thereafter, (iii) any other date on which valuation
of all or part of the Collateral is required under the terms of this Agreement;
and (iv) any other Business Day specified in a written notice given by Secured
Party to Securities Intermediary not less than one Business Day before the
Valuation Date specified by Secured Party.
(b) General Provisions. Capitalized terms used but not defined
herein shall have the meaning given to such terms in the Code. Words used
herein, regardless of the number and gender specifically used, shall be deemed
and construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context indicates is appropriate.
When a reference is made in this Agreement to an Introduction, Recital, Section
or Schedule, such reference shall be to the Introduction, a Recital or a Section
of, or a Schedule to, this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." Any reference to a
rating from S&P or Moody's shall refer to such rating without regard to any plus
or minus.
SECTION 2. ESTABLISHMENT AND OPERATION OF COLLATERAL ACCOUNTS.
(a) Establishment of Restricted Deposit Account. Pledgor
hereby authorizes and directs Securities Intermediary to establish and maintain
at its office at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as a blocked account in
the name of Secured Party and under the sole dominion and control of Secured
Party, a restricted deposit account designated as "Prime Hospitality
Corp./Bankers Trust Company Restricted Deposit Account". Securities Intermediary
shall credit the Restricted Deposit Account to, and shall hold it in and subject
to, the Securities Account.
(b) Establishment of Securities Account. Pledgor hereby
authorizes and directs Securities Intermediary to establish and maintain at its
office at Four Albany Street, New York,
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NY, as a securities account in the name of Secured Party, a restricted
securities account designated as "Prime Hospitality Corp./Bankers Trust Company
Securities Collateral Account". Securities Intermediary hereby undertakes to
treat Secured Party as the person entitled to exercise the rights that comprise
any Financial Asset credited to the Securities Account.
(c) Operations of the Collateral Accounts. The Collateral
Accounts shall be operated, and all Investments shall be acquired and registered
or held (as applicable), in accordance with the terms of this Agreement.
(d) Account Statements. Securities Intermediary shall send
Secured Party and Pledgor written account statements with respect to the
Collateral Accounts not less frequently than monthly.
SECTION 3. MECHANICS OF DEPOSITS OF FUNDS IN THE RESTRICTED
DEPOSIT ACCOUNT TRANSFERS OF FUNDS BETWEEN THE COLLATERAL ACCOUNTS TO THE
SECURITIES ACCOUNT.
(a) Transfers to Restricted Deposit Account. All transfers of
funds to the Restricted Deposit Account shall be made by wire transfer (or, if
applicable, intra-bank transfer from another account of Pledgor with Securities
Intermediary) of immediately available funds, in each case addressed as follows:
Account No.: ▇▇-▇▇▇-▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Reference: Prime Hospitality Corp./Bankers Trust Company
Restricted Deposit Account
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) Acknowledgement of Deposit. Securities Intermediary
acknowledges the deposit by Pledgor of $20,000,000.00 in the Restricted Deposit
Account on the date hereof.
(c) Transfers to the Securities Account. All transfers of
funds to the Securities Account shall be made by wire transfer (or, if
applicable, intra-bank transfer) of immediately available funds addressed as
follows:
Account No.: ▇▇-▇▇▇-▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Reference: Prime Hospitality Corp./Bankers Trust Company
Securities Collateral Account
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(d) Notice of Transfers. In the event of any transfer of funds
to or from the Securities Account or the Restricted Deposit Account pursuant to
any provision of Section 3, Pledgor, Secured Party or Securities Intermediary,
as the case may be, shall promptly after initiating or sending out written
instructions with respect to such transfer, give notice to the other such party
by facsimile of the date and amount of such transfer.
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SECTION 4. ELIGIBLE INVESTMENTS AND TRANSFERS OF AMOUNTS IN
THE COLLATERAL ACCOUNTS.
(a) Strict Compliance. Credit balances held by Securities
Intermediary in the Collateral Accounts shall not be (i) invested or reinvested,
(ii) sold or redeemed, or (iii) transferred from any of the Collateral Accounts
except as provided in this Section 4.
(b) Pledgor's Right to Direct Investment. Except during any
Suspension Period, Securities Intermediary shall, in accordance with Pledgor's
written Entitlement Orders given to Securities Intermediary from time to time,
sell or redeem Investments, transfer funds from the Restricted Deposit Account
for the credit of the Securities Account, and apply credit balances transferred
to or held for the credit of the Securities Account to make investments for
credit to the Restricted Securities Account, in Securities Intermediary's name
and as custodian under this Agreement, in Eligible Investments denominated and
payable in United States dollars. During any Suspension Period, Pledgor's right
to direct such investments under this Section 4(b) shall be suspended, and
Securities Intermediary shall not accept Entitlement Orders with respect to the
Collateral Accounts from any person other than Secured Party.
(c) Actions of Securities Intermediary on Purchase of
Investments. Promptly upon the purchase, acquisition or transfer for credit of
the Collateral Accounts of any Investment, Securities Intermediary shall take
all steps that it customarily takes in the ordinary course of its business to
ensure that such Investment is credited on its books to the Securities Account.
Without limiting the generality of the foregoing, Securities Intermediary shall
promptly (i) send to Pledgor and Secured Party a written confirmation of the
acquisition of such Investment, and (ii) indicate by book entry in its records
that such Investment has been credited to, and is held for the credit of, the
Securities Account. Securities Intermediary agrees with Pledgor and Secured
Party that any credit balances, the Restricted Deposit Account or other property
credited to, or held for the credit of, the Collateral Accounts shall be treated
as Financial Assets for purposes of Section 8-102(a)(9)(iii) of the Code.
(d) No Interest on Restricted Deposit Account. Amounts on
deposit in the Restricted Deposit Account shall not bear interest.
(e) Control Agreement. Anything contained herein to the
contrary notwithstanding, Securities Intermediary shall, if and as directed in
writing by Secured Party, without the consent of Pledgor, (i) comply with
Entitlement Orders originated by Secured Party with respect to the Collateral
Accounts and any Security Entitlements carried therein, (ii) transfer, sell or
redeem any of the Collateral, (iii) transfer any or all of the Collateral
constituting cash to the Restricted Deposit Account or transfer any or all of
the Collateral to any account or accounts designated by Secured Party, including
an account established in Secured Party's name (whether at Secured Party or
Securities Intermediary or otherwise), (iv) register title to any Collateral in
any name specified by Secured Party, including the name of Secured Party or any
of its nominees or agents, without reference to any interest of Pledgor, or (v)
otherwise deal with the Collateral as directed by Secured Party.
▇-▇-▇
▇▇▇
(▇) Proceeds. Any credit balance, including any interest, cash
dividends or other cash distributions received in respect of any Investments and
the net proceeds of any sale or payment of any Investments shall be promptly
transferred to, and held for the credit of, the Restricted Deposit Account. Any
distribution of property other than cash in respect of any Investment shall be
credited to, and held for the credit of, the Securities Account; provided that,
unless otherwise instructed in writing by Secured Party, Securities Intermediary
shall, for credit to the Collateral Accounts, promptly sell, redeem or otherwise
liquidate any such property that, as of the date of receipt, is not an Eligible
Investment.
(g) Valuation of Collateral. On each Valuation Date,
Securities Intermediary shall determine the Collateral Value as of that date.
The Collateral Value shall be the value determined by Securities Intermediary in
its reasonable judgment based on pricing information supplied by Securities
Intermediary on a basis consistent with its usual practice, including values
obtained from a generally recognized source (including any pricing service or
services regularly utilized by Securities Intermediary). Any information
supplied by Securities Intermediary shall be conclusive absent manifest error.
SECTION 5. ACKNOWLEDGEMENT OF SECURITY INTEREST IN FAVOR OF
SECURED PARTY; COVENANT AGAINST CREATION OF OTHER INTERESTS.
(a) Acknowledgement of Security Interest. Securities
Intermediary acknowledges the security interest granted by Pledgor in favor of
Secured Party in the Collateral.
(b) Acknowledgement of Securities Intermediary's Role.
Securities Intermediary hereby further acknowledges that it holds the Collateral
Accounts, all Security Entitlements carried therein, and all other Collateral
held by Securities Intermediary under this Agreement, as custodian for, for the
benefit of, and subject to the control of, Secured Party. Securities
Intermediary shall, by book entry or otherwise, indicate that the Collateral
Accounts, and all Security Entitlements carried therein, are subject to the
control of Secured Party as provided in Section 4(e).
(c) Securities Intermediary Has No Notice of Adverse Claims.
Securities Intermediary represents and warrants that (i) it has no notice of any
Adverse Claim against any of the Collateral other than the claim of Secured
Party under this Agreement; and (ii) it is not party to any agreement other than
this Agreement that governs its rights or duties, or limits or conflicts with
the rights of Secured Party, including the exclusive right of Secured Party to
control as provided in Section 4(e), with respect to the Collateral Accounts.
(d) Securities Intermediary Shall Not Acknowledge Other
Claims. Securities Intermediary agrees that, except as expressly provided in
this Agreement or with the written consent of Secured Party, it shall not agree
to or acknowledge (i) any right by any person other than Secured Party to
originate Entitlement Orders or control with respect to the Collateral Accounts;
or (ii) any limitation on the right of Secured Party to originate Entitlement
Orders with respect to or direct the transfer of any Investments or credit
balances credited to the Collateral Accounts.
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SECTION 6. SECURITIES INTERMEDIARY MAINTENANCE OF THE
COLLATERAL ACCOUNTS.
(a) Transactions Shall Comply With Rules. The parties
acknowledge that all transactions in Financial Assets under this Agreement shall
be in accordance with the rules and customs of the exchange, market or clearing
organization, if any, in which the transactions are executed or settled and in
conformity with applicable law and regulations of governmental authorities and
future amendments or supplements thereto.
(b) Fees and Charges of Securities Intermediary. Pledgor shall
promptly pay Securities Intermediary, in accordance with the written agreement
between Securities Intermediary and Pledgor, any fees or charges imposed by
Securities Intermediary (including the reasonable compensation and the
reasonable expenses and disbursements of its legal counsel and all persons not
regularly in its employ) with respect to the establishment or maintenance of, or
transactions in or affecting, the Collateral Accounts.
(c) Leverage of Investments. Securities Intermediary shall not
execute any transaction to acquire Financial Assets under Section 4(b) unless
(i) there are sufficient funds for settlement thereof in the Collateral Accounts
or reasonably expected with respect to pending transactions to settle such
transaction, or (ii) sufficient funds for settlement thereof are expected to be
timely received for credit of the Collateral Accounts with respect to
transactions in which Securities Intermediary has been authorized and directed
to sell or redeem Financial Assets credited to the Collateral Accounts, or
reasonably expected to be acquired for credit to the Collateral Accounts in
pending transactions. Notwithstanding the foregoing sentence, in the event that
Securities Intermediary executes a transaction without sufficient funds to
settle the transaction. Securities Intermediary shall have a clearing lien on
the Financial Assets or other property so acquired. Pledgor agrees to pay
interest charges which may be imposed by Securities Intermediary in accordance
with its usual custom, with respect to late payments for Financial Assets or
other property purchased for credit to the Collateral Accounts and prepayments
in the Collateral Accounts (i.e., the crediting of the proceeds of sale before
the settlement date or receipt by Securities Intermediary of the items sold in
good deliverable form). Pledgor agrees to pay promptly any amount which may
become due in order to satisfy demands for additional margin or marks to market
with respect to any security purchased or sold on instruction from Pledgor.
Pledgor agrees to pay promptly any custody or other fees which may be imposed by
Securities Intermediary with respect to the Collateral Accounts.
(d) Risk of Investments and Transactions. It is not the
intention of the parties that Securities Intermediary should bear any investment
risk associated with Eligible Investments acquired for the credit of the
Collateral Accounts in accordance with Section 4. Any losses or gains realized
on such Investments shall be charged or credited to the Collateral Accounts, as
appropriate. On committing to a transaction for the credit of the Collateral
Accounts pursuant to an instruction permitted in accordance with Section 4,
Securities Intermediary may, (i) pending settlement of such transactions, block
(A) the Investments to be sold or (B) credit balances sufficient to settle any
acquisition, or Investment the liquidation of which will yield funds sufficient
to settle any acquisition and, (ii) at the time of settlement, deliver such
Investments or funds in accordance with the rules, custom or practice of the
particular market.
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(e) Use of Intermediaries and Nominees. Securities
Intermediary is authorized, subject to Secured Party's written instructions, to
register any Financial Assets acquired by Securities Intermediary pursuant to
this Agreement in the name of Securities Intermediary or in the name of its
nominee, or to cause such securities to be registered in the name of a Federal
reserve bank or a recognized securities intermediary or clearing corporation, or
any nominee thereof. Securities Intermediary may at any time and from time to
time appoint, and may at any time remove, any bank, trust company, clearing
corporation, or Broker-Dealer as its agent to carry out such of the provisions
of this Agreement. The appointment or use of any intermediary, or the
appointment of any such agent, shall not relieve Securities Intermediary of any
responsibility or liability under this Agreement.
(f) Corporate Actions. Except as otherwise set forth herein,
Pledgor and Secured Party agree that Securities Intermediary shall have no
responsibility for ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters relating to any
Financial Assets credited to or held for the credit of the Collateral Accounts
(except based on written instructions originated by Pledgor or Secured Party),
or for informing Pledgor or Secured Party with respect thereto, whether or not
Securities Intermediary has, or is deemed to have, knowledge of any of the
aforesaid. Securities Intermediary is authorized to withdraw securities sold or
otherwise disposed of, and to credit the Collateral Accounts with the proceeds
thereof or make such other disposition thereof as may be directed in accordance
with this Agreement. Securities Intermediary is further authorized to collect
all income and other payments which may become due on Financial Assets and other
property credited to the Collateral Accounts, to surrender for payment maturing
obligations and those called for redemption and to exchange certificates in
temporary form for like certificates in definitive form, or, if the par value of
any shares is changed, to effect the exchange for new certificates. It is
understood and agreed by Pledgor and Secured Party that, although Securities
Intermediary will use reasonable efforts to effect the transactions set forth in
the preceding sentence, Securities Intermediary shall incur no liability for its
failure to effect the same unless its failure is the result of wilful
misconduct.
(g) Disclosure of Account Relationships. Pledgor and Secured
Party acknowledge that Securities Intermediary may be required to disclose to
securities issuers the name, address and securities positions with respect to
Financial Assets or other property credited to the Collateral Accounts, and
hereby consent to such disclosures.
(h) Forwarding of Documents. Securities Intermediary shall
forward to Pledgor and, if requested, Secured Party, or notify Pledgor and, if
requested, Secured Party by telephone of, all communications received by
Securities Intermediary as owner of any Financial Assets or other property
credited to the Collateral Accounts and which are intended to be transmitted to
the beneficial owner thereof.
(i) Direction of Secured Party Controls in Disputes. Pledgor,
Securities Intermediary and Secured Party hereby agree that in the event any
dispute arises with respect to the payment, ownership or right to possession of
the Collateral Accounts or any other Collateral credited to or held therein,
Securities Intermediary shall take such actions and shall refrain from taking
such actions with respect thereto as may be directed by Secured Party.
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(j) No Setoff, etc. Securities Intermediary shall not exercise
on its own behalf any claim, right of set-off, banker's lien, clearing lien,
counterclaim or similar right against any of the Collateral; provided that
Securities Intermediary may deduct, from amounts held for the credit of the
Restricted Deposit Account and subject to the limitations stated in Section
6(b), any usual and ordinary transaction and administration fees payable in
connection with the administration and operation of the Collateral Accounts.
Except for claims for deductions permitted in the preceding sentence, Securities
Intermediary agrees that any security interest it may have in the Collateral
Accounts or any Security Entitlement carried therein shall be subordinate and
junior to the interest of Secured Party.
(k) Only Agreement. This Agreement shall govern the actions,
rights and obligations of Securities Intermediary, and the governing law, with
respect to the Collateral Accounts and the Collateral notwithstanding any term
or condition in any agreement other than this Agreement as it may be amended,
supplemented or otherwise modified in writing.
(l) Care of Financial Assets. Securities Intermediary shall
maintain possession or control of all Financial Assets and other property
credited to the Collateral Accounts by segregating such Financial Assets and
other property from its proprietary assets and keeping them free of any lien,
charge or claim of any third party granted or created by Securities Intermediary
except as may be necessary or required under customary market practice.
Securities Intermediary shall take such other steps to ensure that Financial
Assets credited to the Collateral Accounts are identified as being held for
customers of Securities Intermediary as may required under applicable law or in
accordance with custom and practice in the industry.
(m) Further Actions. Securities Intermediary shall take such
further actions as Secured Party shall reasonably request as being necessary or
desirable to maintain or achieve perfection or priority of Secured Party's
security interest with respect to the Collateral and to permit Secured Party to
exercise its rights with respect to the Collateral.
SECTION 7. LIMITATIONS ON DUTIES, AND EXCULPATION AND
INDEMNIFICATION, OF SECURITIES INTERMEDIARY.
(a) Limitation on Duty of Care; Exculpation. Securities
Intermediary's duties hereunder are only those specifically provided herein, and
neither Securities Intermediary nor any of its officers, directors, employees or
agents shall incur any liability whatsoever for any actions or omissions
hereunder except for any such liability arising out of or in connection with
Securities Intermediary's gross negligence or wilful misconduct. Securities
Intermediary has no obligation to ensure the sufficiency of this Agreement or
the arrangements described hereunder to satisfy any objectives of Secured Party
or Pledgor. Securities Intermediary shall have no duty to supervise or to
provide investment counseling or advice to Pledgor or Secured Party with respect
to the purchase, sale, retention or other disposition of any Financial Assets
held hereunder. Without prejudice to the generality of the foregoing, (i) the
Securities Intermediary shall be entitled to rely, and shall be fully protected
in relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be fully protected in relying
on opinions and advice of attorneys (who may be attorneys for the Pledgor or
Secured
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Party), accountants, experts and other professional advisors selected by it
without independent investigation of the underlying facts. Except as
specifically otherwise provided in this Agreement, Securities Intermediary shall
not be responsible for enforcing compliance by the other parties to this
Agreement with their respective duties and obligations to each other under this
or any other Agreement.
(b) Consultation with Counsel. Securities Intermediary may
consult with, and obtain advice from, legal counsel as to the construction of
any of the provisions of this Agreement, and shall incur no liability in acting
in good faith in accordance with the reasonable advice or opinion of such
counsel.
(c) Reasonable Reliance. Securities Intermediary shall be
fully protected and shall suffer no liability in acting in accordance with any
written instructions reasonably believed by it to have been given (i) by Secured
Party with respect to any aspect of the operation of the Collateral Accounts
(including any such instructions relating to any investment or transfer of any
amounts held therein), (ii) by Pledgor, to the extent provided in Section 4(b),
with respect to the Collateral Accounts, or (iii) by Secured Party until such
time as Securities Intermediary receives notice of the substitution of such
Secured Party pursuant to Section 11.
(d) Indemnification. Pledgor agrees to indemnify Securities
Intermediary and its officers, directors, agents and employees from and against
any and all claims, losses, liabilities, damages, injuries and expenses
(including reasonable attorneys' fees and expenses) in any way relating to,
growing out of or resulting from this Agreement or the performance of its
obligations hereunder, except to the extent arising out of or in connection with
Securities Intermediary's gross negligence or wilful misconduct.
(e) None of the provisions of this Agreement shall require the
Securities Intermediary to expend or risk its own funds or otherwise to incur
any liability , financial or otherwise, in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.
(f) The Securities Intermediary shall have no obligation to
invest and reinvest any cash held in the Securities Account in the absence of
timely and specific written investment direction from the Secured Party or the
Pledgor, as the case may be. In no event shall the Securities Intermediary be
liable for the selection of investments or for investment losses incurred
thereon. The Securities Intermediary shall have no liability in respect of
losses incurred as a result of the liquidation of any investment prior to its
stated maturity or the failure of the Secured Party to provide timely written
investment direction.
SECTION 8. REPRESENTATIONS AND WARRANTIES BY SECURITIES
INTERMEDIARY. Securities Intermediary hereby represents and warrants to Pledgor
and Secured Party as follows:
(a) Corporate Power. Securities Intermediary has all necessary
corporate power and authority to enter into and perform this Agreement.
▇-▇-▇▇
▇▇▇
(▇) Execution Authorized. The execution, delivery and
performance of this Agreement by Securities Intermediary have been duly
authorized by all necessary corporate action on the part of Securities
Intermediary.
(c) Securities Intermediary. Securities Intermediary is a
"securities intermediary" (as that term is defined in Section 8-102(a)(14) of
the Code) and is acting in such capacity with respect to the Collateral
Accounts. Securities Intermediary is not a "clearing corporation" (as that term
is defined in Section 8-102(a)(5) of the Code).
SECTION 9. TERMINATION. This Agreement shall terminate, and
all rights to the Collateral Accounts and all other Collateral registered to or
held therein shall revert to Pledgor, upon Securities Intermediary's receipt of
written notice, signed by an authorized officer of Secured Party, that the
Collateral Account Agreement has terminated. The provisions of Sections 6(b) and
7 shall survive any termination of this Agreement.
SECTION 10. RESIGNATION AND REMOVAL OF SECURITIES
INTERMEDIARY.
(a) Removal. Securities Intermediary may be removed at any
time by written notice given by Secured Party to Securities Intermediary and
Pledgor, but such removal shall not become effective until a successor
Securities Intermediary reasonably acceptable to Pledgor shall have been
appointed by Secured Party and shall have accepted such appointment in writing.
(b) Resignation. Securities Intermediary may resign at any
time by giving not less than thirty days' written notice to Secured Party and
Pledgor, but such removal shall not become effective until a successor
Securities Intermediary reasonably acceptable to Pledgor shall have been
appointed by Secured Party and shall have accepted such appointment in writing.
If an instrument of acceptance by a successor Securities Intermediary shall not
have been delivered to the resigning Securities Intermediary within sixty days
after the giving of any such notice of resignation, the resigning Securities
Intermediary may, at the expense of Pledgor, petition any court of competent
jurisdiction for the appointment of a successor Securities Intermediary.
(c) Successor Securities Intermediary. Any successor
Securities Intermediary shall be a bank or trust company, having capital and
surplus of at least $50 million, located in the State of New York. If any
successor Securities Intermediary does not accept deposits for non-fiduciary
customers it may establish, in its name as custodian under this agreement, an
noninterest-bearing deposit account ("SUBSTITUTE DEPOSIT ACCOUNT") to hold any
credit balances which would otherwise have been held for the credit of the
Restricted Deposit Account on terms comparable to those required of the
Restricted Deposit Account. The Substitute Deposit Account may be established
with any depository institution, including a depository institution affiliated
with the successor Securities Intermediary, that (1) has one of the three
highest deposit ratings available from S&P or ▇▇▇▇▇'▇ or, if the institution is
not rated, is a subsidiary of a holding company that has one of the three
highest long term credit ratings available from S&P or ▇▇▇▇▇'▇, (2) is a member
of the Federal Deposit Insurance Corporation, and (3) has Tier 1 capital (as
defined in such regulations of its primary Federal banking regulator) of not
less than $50,000,000. In such circumstances, the successor Securities
Intermediary shall credit the Substitute Deposit Account to the Securities
Account.
▇-▇-▇▇
▇▇▇
(▇) Waiver of Pledgor's Objection to Successor. If Pledgor
does not object in writing to the appointment of a successor Securities
Intermediary within five days after notice of such appointment from Secured
Party, Pledgor shall be deemed to have consented to such appointment.
(e) Process of Succession. Upon the appointment of a successor
Securities Intermediary and its acceptance of such appointment, the resigning or
removed Securities Intermediary shall transfer all items of Collateral held by
it to such successor (which items of Collateral shall be transferred to new
Collateral Accounts established and maintained by such successor). Following
such appointment all references herein to Securities Intermediary shall be
deemed a reference to such successor; provided that the provisions of Section
6(b) and 7 hereof shall continue to inure to the benefit of the resigning or
removed Securities Intermediary with respect to any actions taken or omitted to
be taken by it under this Agreement while it was Securities Intermediary
hereunder.
SECTION 11. SECURED PARTY AS AGENT. Secured Party has been
appointed to act as Secured Party by Lenders. Secured Party shall at all times
be the same Person that is Agent under the Credit Agreement. Written notice of
resignation by Agent pursuant to subsection 9.7 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Agent pursuant to subsection 9.7 of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 9.7 of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 9.7 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all items of Collateral held by Securities Intermediary
hereunder (which shall be credited to, and held for the credit of, a Restricted
Securities Account maintained for such successor Secured Party), together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Agent's resignation or removal
hereunder as Secured Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder. Secured Party (as notified to
Securities Intermediary from time to time in accordance with this provision)
shall give notice to Securities Intermediary of the appointment of a successor
Secured Party and, thereafter, Securities Intermediary shall treat such
successor as Secured Party under this Agreement for all purposes.
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SECTION 12. TIN; FURTHER ASSURANCE.
(a) Certification. Pledgor certifies to Securities
Intermediary under penalty of perjury that the taxpayer identification number(s)
shown in below Pledgor's name on the signature page to this Agreement is or are
the Pledgor's correct taxpayer identification number(s).
(b) Further Assurance. Pledgor and Secured Party agree that
from time to time, at the expense of Pledgor, Pledgor or Secured Party shall
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Securities
Intermediary may reasonably request, in order to permit it to performance its
duties hereunder, or to enable Securities Intermediary to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, Pledgor shall execute and deliver to
Securities Intermediary an Internal Revenue Form W-9.
SECTION 13. NOTICES. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed, or sent by
telefacsimile or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile or
telex; provided, however, that notices to the Secured Party shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or as to the Securities Intermediary and the Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto.
SECTION 14. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by any party herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the other parties, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
SECTION 15. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 16. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
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SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECURITIES INTERMEDIARY'S JURISDICTION SHALL BE NEW YORK.
SECTION 18. WAIVER OF JURY TRIAL. PLEDGOR, SECURED PARTY AND
SECURITIES INTERMEDIARY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims. Pledgor, Secured
Party and Securities Intermediary each acknowledge that this waiver is a
material inducement for Pledgor and Secured Party to enter into a business
relationship, that Pledgor, Secured Party and Securities Intermediary have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Pledgor,
Secured Party and Securities Intermediary further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 19. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
PRIME HOSPITALITY CORP., AS PLEDGOR
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
Prime Hospitality Corp.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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265
BANKERS TRUST COMPANY, as Secured Party
By: ____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
BANKERS TRUST COMPANY, as Securities
Intermediary
By: ____________________________________
Name:
Title:
Notice Address:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Market Services
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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ATTACHMENT 1
[FORM OF PROHIBITION NOTICE]
[Letterhead of Secured Party]
[date of notice]
TO: [Securities Intermediary]
_________________________
_________________________
_________________________
Attn: ___________________
Facsimile no. ___________
CC: [Pledgor]
_________________________
_________________________
_________________________
Attn: ___________________
Facsimile no. ___________
Re: Prohibition Notice under that Certain Third-Party Account
Agreement Securities Account Number _____________________
Ladies and Gentlemen:
Pursuant to the Third-Party Account Agreement dated _________ ___, 19[__]
("Third-Party Account Agreement") among [Secured Party], [Pledgor] and
Securities Intermediary, we hereby give you this Prohibition Notice and notify
you of the commencement of a Suspension Period. Until further notice from the
undersigned substantially in the form of Attachment 2 to the Third-Party Account
Agreement, [Securities Intermediary] shall not accept or follow instructions
from Pledgor pursuant to Section 4(b) of the Third-Party Account Agreement.
Capitalized terms used and not otherwise defined in this notice are used with
their respective meanings in the Third-Party Account Agreement.
Yours truly,
[Secured Party]
By: ____________________
Its: ____________________
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267
ATTACHMENT 2
[FORM OF RESCISSION OF PROHIBITION NOTICE]
[Letterhead of Secured Party]
[date of notice]
TO: [Securities Intermediary]
_________________________
_________________________
_________________________
Attn: ___________________
Facsimile no. ___________
CC: [Pledgor]
_________________________
_________________________
_________________________
Attn: ___________________
Facsimile no. ___________
Re: Rescission of Prohibition Notice under that Certain
Third-Party Account Agreement Securities Account Number ______
Ladies and Gentlemen:
Pursuant to the Third-Party Account Agreement dated _________ ___, 19[__]
("Third-Party Account Agreement") among [Secured Party], [Pledgor] and
Securities Intermediary, we hereby notify you of the rescission by [Secured
Party] of the Prohibition Notice dated [date of Prohibition Notice] and the end
of the related Suspension Period. You are hereby instructed that, until receipt
of a new Prohibition Notice, you shall accept and follow written instructions
from Pledgor pursuant to Section 4(b) of the Third-Party Account Agreement.
Capitalized terms used and not otherwise defined in this notice are used with
their respective meanings in the Third-Party Account Agreement.
Yours truly,
[Secured Party]
By: ____________________
Its: ___________________
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ANNEX F
[FORM OF OPINION OF COUNSEL TO COMPANY]
F-1