Exhibit 10.1
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CREDIT AGREEMENT
among
EXTENDED STAY AMERICA, INC.,
VARIOUS LENDERS,
MORGAN STANLEY SENIOR FUNDING, INC.,
as SOLE LEAD ARRANGER AND SOLE BOOK RUNNER,
BEAR STEARNS CORPORATE LENDING INC.
and
FLEET NATIONAL BANK,
as CO-SYNDICATION AGENTS,
and
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Administrative Agent
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Dated as of July 24, 2001
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit............................................................................1
1.01 The Commitments....................................................................................1
1.02 Minimum Amount of Each Borrowing...................................................................5
1.03 Notice of Borrowing................................................................................6
1.04 Disbursement of Funds..............................................................................7
1.05 Notes..............................................................................................7
1.06 Conversions.......................................................................................10
1.07 Pro Rata Borrowings...............................................................................11
1.08 Interest..........................................................................................11
1.09 Interest Periods..................................................................................12
1.10 Increased Costs, Illegality, etc..................................................................13
1.11 Compensation......................................................................................15
1.12 Change of Lending Office..........................................................................16
1.13 Replacement of Lenders............................................................................16
1.14 Incremental Loan Commitments......................................................................17
SECTION 2. Letters of Credit....................................................................................19
2.01 Letters of Credit.................................................................................19
2.02 Maximum Letter of Credit Outstandings; Final Maturities...........................................20
2.03 Letter of Credit Requests; Minimum Stated Amount..................................................21
2.04 Letter of Credit Participation....................................................................21
2.05 Agreement to Repay Letter of Credit Drawings......................................................23
2.06 Increased Costs...................................................................................24
SECTION 3. Fees; Reductions of Commitment.......................................................................24
3.01 Fees..............................................................................................25
3.02 Voluntary Termination of Unutilized Commitments...................................................26
3.03 Mandatory Reduction of Commitments................................................................27
SECTION 4. Prepayments; Payments; Taxes.........................................................................28
4.01 Voluntary Prepayments.............................................................................28
4.02 Mandatory Repayments..............................................................................29
4.03 Method and Place of Payment.......................................................................38
4.04 Net Payments; Taxes...............................................................................38
SECTION 5. Conditions Precedent to Initial Borrowing Date.......................................................41
5.01 Effective Date; Notes.............................................................................41
5.02 Fees, etc.........................................................................................41
5.03 Opinion of Counsel................................................................................41
(i)
Page
5.04 Corporate Documents; Proceedings; etc.............................................................41
5.05 Employee Benefit Plans; Shareholders' Agreements; Management Agreements; Collective
Bargaining Agreements; Existing Indebtedness Agreements; Tax Sharing Agreements;
Material Leases................................................................................42
5.06 Existing Credit Agreement.........................................................................43
5.07 Pledge Agreement..................................................................................43
5.08 Security Agreement................................................................................44
5.09 Subsidiary Guarantor..............................................................................44
5.10 Adverse Change, etc...............................................................................44
5.11 Litigation........................................................................................45
5.12 Solvency Certificate; Insurance Certificates......................................................45
5.13 Projections.......................................................................................45
5.14 Compliance with the 9.15% Senior Subordinated Note Indenture......................................45
SECTION 6. Conditions Precedent to All Credit Events............................................................45
6.01 No Default; Representations and Warranties........................................................46
6.02 Notice of Borrowing; Letter of Credit Request.....................................................46
SECTION 7. Representations and Warranties.......................................................................46
7.01 Corporate and Other Status........................................................................46
7.02 Corporate or Partnership Power and Authority......................................................47
7.03 No Violation......................................................................................47
7.04 Governmental Approvals............................................................................47
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc..............47
7.06 Litigation........................................................................................49
7.07 True and Complete Disclosure......................................................................49
7.08 Use of Proceeds; Margin Regulations...............................................................49
7.09 Tax Returns and Payments..........................................................................50
7.10 Compliance with ERISA.............................................................................50
7.11 The Security Documents............................................................................51
7.12 Manager Subordination Agreements..................................................................52
7.13 Properties........................................................................................52
7.14 Capitalization....................................................................................52
7.15 Subsidiaries......................................................................................52
7.16 Compliance with Statutes, etc.....................................................................53
7.17 Investment Company Act............................................................................53
7.18 Public Utility Holding Company Act................................................................53
7.19 Environmental Matters.............................................................................53
7.20 Labor Relations...................................................................................53
7.21 Patents, Licenses, Franchises and Formulas........................................................54
7.22 Indebtedness......................................................................................54
7.23 Hotel Properties..................................................................................54
7.24 Subordination.....................................................................................54
(ii)
Page
SECTION 8. Affirmative Covenants................................................................................54
8.01 Information Covenants.............................................................................55
8.02 Books, Records and Inspections....................................................................58
8.03 Maintenance of Property; Insurance................................................................58
8.04 Corporate Franchises..............................................................................59
8.05 Compliance with Statutes, etc.....................................................................59
8.06 Compliance with Environmental Laws................................................................59
8.07 ERISA.............................................................................................60
8.08 End of Fiscal Years; Fiscal Quarters..............................................................61
8.09 Performance of Obligations........................................................................61
8.10 Payment of Taxes..................................................................................62
8.11 Additional Security; Further Assurances...........................................................62
8.12 Foreign Subsidiaries Security.....................................................................63
8.13 Hotel Property Management.........................................................................63
8.14 Maintenance of Corporate Separateness.............................................................63
SECTION 9. Negative Covenants...................................................................................64
9.01 Liens.............................................................................................64
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc............................................66
9.03 Dividends.........................................................................................68
9.04 Indebtedness......................................................................................69
9.05 Advances, Investments and Loans...................................................................71
9.06 Transactions with Affiliates......................................................................72
9.07 Capital Expenditures..............................................................................73
9.08 Consolidated Interest Coverage Ratio..............................................................73
9.09 Maximum Consolidated Leverage Ratio...............................................................73
9.10 Maximum Consolidated Senior Debt Leverage Ratio...................................................73
9.11 Limitation on Payments of Certain Indebtedness; Modifications of Certain Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Agreements; etc.............74
9.12 Limitation on Certain Restrictions on Subsidiaries................................................75
9.13 Limitation on Issuance of Capital Stock...........................................................75
9.14 Business..........................................................................................75
9.15 Limitation on Creation of Subsidiaries............................................................76
9.16 Representative....................................................................................76
SECTION 10. Events of Default...................................................................................76
10.01 Payments.........................................................................................76
10.02 Representations, etc.............................................................................77
10.03 Covenants........................................................................................77
10.04 Default Under Other Agreements...................................................................77
10.05 Bankruptcy, etc..................................................................................77
10.06 ERISA............................................................................................78
10.07 Security Documents...............................................................................78
(iii)
Page
10.08 Subsidiaries Guaranty............................................................................79
10.09 Judgments........................................................................................79
10.10 Manager Subordination Agreements.................................................................79
10.11 Change of Control................................................................................79
SECTION 11. Definitions and Accounting Terms....................................................................80
11.01 Defined Terms....................................................................................80
SECTION 12. The Administrative Agent...........................................................................106
12.01 Appointment.....................................................................................106
12.02 Nature of Duties................................................................................106
12.03 Lack of Reliance on the Agents..................................................................106
12.04 Certain Rights of the Agents....................................................................107
12.05 Reliance........................................................................................107
12.06 Indemnification.................................................................................107
12.07 The Agents in Their Individual Capacities.......................................................107
12.08 Holders.........................................................................................108
12.09 Resignation by the Agents.......................................................................108
SECTION 13. Miscellaneous......................................................................................109
13.01 Payment of Expenses, etc........................................................................109
13.02 Right of Setoff.................................................................................110
13.03 Notices.........................................................................................110
13.04 Benefit of Agreement............................................................................110
13.05 No Waiver; Remedies Cumulative..................................................................112
13.06 Payments Pro Rata...............................................................................113
13.07 Calculations; Computations......................................................................113
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL..........................113
13.09 Counterparts....................................................................................114
13.10 Effectiveness...................................................................................115
13.11 Headings Descriptive............................................................................115
13.12 Amendment or Waiver; etc........................................................................115
13.13 Survival........................................................................................116
13.14 Domicile of Loans...............................................................................116
13.15 Confidentiality.................................................................................117
13.16 Register........................................................................................117
13.17 Limitation on Increased Costs...................................................................118
(iv)
SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Existing Letters of Credit
SCHEDULE IV ERISA Matters
SCHEDULE V Subsidiaries
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Designated Properties
SCHEDULE X Exceptions to Section 7.01(i)
SCHEDULE XI Legal Names; Organizational Identification Numbers; Jurisdiction
of Organization; Type of Organization; Etc.
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 A-1 Term Note
EXHIBIT B-2 A-2 Term Note
EXHIBIT B-3 A-3 Term Note
EXHIBIT B-4 B Term Note
EXHIBIT B-5 Revolving Note
EXHIBIT B-6 Swingline Note
EXHIBIT C Incremental Term Loan Commitment Agreement
EXHIBIT D Letter of Credit Request
EXHIBIT E Section 4.04(b)(ii) Certificate
EXHIBIT F Opinion of Shearman & Sterling
EXHIBIT G Officers' Certificate
EXHIBIT H Pledge Agreement
EXHIBIT I Security Agreement
EXHIBIT J Subsidiaries Guaranty
EXHIBIT K Solvency Certificate
EXHIBIT L Assignment and Assumption Agreement
(v)
CREDIT AGREEMENT, dated as of July 24, 2001, among EXTENDED
STAY AMERICA, INC., a Delaware corporation (the "Borrower"), the Lenders party
hereto from time to time, MORGAN STANLEY SENIOR FUNDING, INC., as Sole Lead
Arranger and Sole Book Runner (in such capacity, the "Lead Arranger"), BEAR
STEARNS CORPORATE LENDING INC. and FLEET NATIONAL BANK, as Co-Syndication Agents
(in each capacity, the "Co-Syndication Agents"), and THE INDUSTRIAL BANK OF
JAPAN, LIMITED, as Administrative Agent (in such capacity, the "Administrative
Agent") (all capitalized terms used herein and defined in Section 11 are used
herein as therein defined).
W I T N E S S E T H:
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WHEREAS, subject to and upon the terms and conditions herein
set forth, the Lenders are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Lender with a A-1 Term Loan Commitment
severally agrees to make a term loan or term loans (each an "A-1 Term Loan" and,
collectively, the "A-1 Term Loans") to the Borrower, which A-1 Term Loans (i)
shall be incurred pursuant to a single drawing on the Initial Borrowing Date,
(ii) shall be denominated in Dollars, (iii) except as hereinafter provided,
shall, at the option of the Borrower, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans, provided that, (A) except
as otherwise specifically provided in Section 1.10(b), all A-1 Term Loans
comprising the same Borrowing shall at all times be of the same Type, and (B)
unless either the Lead Arranger otherwise agrees in its sole discretion or has
determined that the Syndication Date has occurred (at which time this clause (B)
shall no longer be applicable), (1) no A-1 Term Loans may be incurred or
maintained as Eurodollar Loans prior to the fifth day following the Initial
Borrowing Date and (2) thereafter and prior to the 90th day following the
Initial Borrowing Date, A-1 Term Loans may only be incurred as and maintained
as, and/or converted into, Eurodollar Loans so long as all such outstanding
Eurodollar Loans, together with all outstanding A-2 Term Loans, A-3 Term Loans,
B Term Loans and Revolving Loans that are maintained as Eurodollar Loans, are
subject to an Interest Period of one month which begins and ends on the same
day, and (iv) shall be made by each such Lender in that aggregate principal
amount which does not exceed the A-1 Term Loan Commitment of such Lender on the
Initial Borrowing Date. Once repaid, A-1 Term Loans incurred hereunder may not
be reborrowed.
(b) Subject to and upon the terms and conditions set forth
herein, each Lender with an A-2 Term Loan Commitment severally agrees to make a
term loan or term loans (each an "A-2 Term Loan" and, collectively, the "A-2
Term Loans") to the Borrower, which Term Loans (i) shall be incurred on one or
more A-2 Term Loan Borrowing Dates, (ii) shall be denominated in Dollars, (iii)
except as hereinafter provided, shall, at the option of the Borrower, be
incurred
and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that, (A) except as otherwise specifically provided in Section 1.10(b),
all A-2 Term Loans comprising the same Borrowing shall at all times be of the
same Type, and (B) unless either the Lead Arranger otherwise agrees in its sole
discretion or has determined that the Syndication Date has occurred (at which
time this clause (B) shall no longer be applicable), (1) no A-2 Term Loans may
be incurred or maintained as Eurodollar Loans prior to the fifth day following
the Initial Borrowing Date and (2) thereafter and prior to the 90th day
following the Initial Borrowing Date, A-2 Term Loans may only be incurred and
maintained as, and/or converted into, Eurodollar Loans so long as all such
outstanding Eurodollar Loans, together with all outstanding A-1 Term Loans, A-3
Term Loans, B Term Loans and Revolving Loans that are maintained as Eurodollar
Loans, are subject to an Interest Period of one month which begins and ends on
the same day, and (iv) shall be made on each such A-2 Term Loan Borrowing Date
by each such Lender in that aggregate principal amount which does not exceed the
A-2 Term Loan Commitment of such Lender on such A-2 Term Loan Borrowing Date.
Once repaid, A-2 Term Loans incurred hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth
herein, each Lender with an A-3 Term Loan Commitment severally agrees to make a
term loan or term loans (each an "A-3 Term Loan" and, collectively, the "A-3
Term Loans") to the Borrower, which Term Loans (i) shall be incurred on one or
more A-3 Term Loan Borrowing Dates, (ii) shall be denominated in Dollars, (iii)
except as hereinafter provided, shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that, (A) except as otherwise specifically provided in Section
1.10(b), all A-3 Term Loans comprising the same Borrowing shall at all times be
of the same Type, and (B) unless either the Lead Arranger otherwise agrees in
its sole discretion or has determined that the Syndication Date has occurred (at
which time this clause (B) shall no longer be applicable), (1) no A-3 Term Loans
may be incurred or maintained as Eurodollar Loans prior to the fifth day
following the Initial Borrowing Date and (2) thereafter and prior to the 90th
day following the Initial Borrowing Date, A-3 Term Loans may only be incurred
and maintained as, and/or converted into, Eurodollar Loans so long as all such
outstanding Eurodollar Loans, together with all outstanding A-1 Term Loans, A-2
Term Loans, B Term Loans and Revolving Loans that are maintained as Eurodollar
Loans, are subject to an Interest Period of one month which begins and ends on
the same day, and (iv) shall be made on each such A-3 Term Loan Borrowing Date
by each such Lender in that aggregate principal amount which does not exceed the
A-3 Term Loan Commitment of such Lender on such A-3 Term Loan Borrowing Date.
Once repaid, A-3 Term Loans incurred hereunder may not be reborrowed.
(d) Subject to and upon the terms and conditions set forth
herein, each Lender with a B Term Loan Commitment severally agrees to make a
term loan or term loans (each a "B Term Loan" and, collectively, the "B Term
Loans") to the Borrower, which B Term Loans (i) shall be incurred pursuant to a
single drawing on the Initial Borrowing Date, (ii) shall be denominated in
Dollars, (iii) except as hereinafter provided, shall, at the option of the
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or Eurodollar Loans, provided that, (A) except as otherwise specifically
provided in Section 1.10(b), all B Term Loans comprising the same Borrowing
shall at all times be of the same Type, and (B) unless either the Lead Arranger
otherwise agrees in its sole discretion or has determined that the
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Syndication Date has occurred (at which time this clause (B) shall no longer be
applicable), (1) no B Term Loans may be incurred or maintained as Eurodollar
Loans prior to the fifth day following the Initial Borrowing Date and (2)
thereafter and prior to the 90th day following the Initial Borrowing Date, B
Term Loans may only be incurred and maintained as, and/or converted into,
Eurodollar Loans so long as all such outstanding Eurodollar Loans, together with
all outstanding A-1 Term Loans, A-2 Term Loans, A-3 Term Loans and Revolving
Loans that are maintained as Eurodollar Loans, are subject to an Interest Period
of one month which begins and ends on the same day, and (iv) shall be made by
each such Lender in that aggregate principal amount which does not exceed the B
Term Loan Commitment of such Lender on the Initial Borrowing Date. Once repaid,
B Term Loans incurred hereunder may not be reborrowed.
(e) Subject to Section 1.14, the other terms and conditions
set forth herein and the relevant Incremental Term Loan Commitment Agreement,
each Lender with an Incremental Term Loan Commitment severally agrees to make a
term loan or term loans (each, an "Incremental Term Loan" and, collectively, the
"Incremental Term Loans") to the Borrower, which Incremental Term Loans: (i)
only may be incurred on the respective Incremental Term Loan Borrowing Date or
Dates as shall be set forth in the applicable Incremental Term Loan Commitment
Agreement pursuant to which such Incremental Term Loans are to be made and shall
not be later than the Incremental Term Loan Commitment Termination Date; (ii)
shall be Term Loans under the Tranche specified in the applicable Incremental
Term Loan Commitment Agreement provided that no Incremental Term Loans may be
incurred as A Term Loans; (iii) except as hereafter provided, shall, at the
option of the Borrower, be incurred and maintained as, and/or converted into,
Base Rate Loans or Eurodollar Loans, provided that (x) all Incremental Term
Loans made as part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of Incremental Term Loans of the same Type; and (iv)
shall be made by each such Lender in that aggregate principal amount which does
not exceed the Incremental Term Loan Commitment of such Lender under the
relevant Tranche on the respective Incremental Term Loan Borrowing Date. Once
repaid, Incremental Term Loans incurred hereunder may not be reborrowed.
(f) Subject to and upon the terms and conditions set forth
herein, each Lender with a Revolving Loan Commitment severally agrees, at any
time and from time to time on and after the Initial Borrowing Date and prior to
the Revolving Maturity Date, to make a revolving loan or revolving loans (each,
a "Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall, at the option of the Borrower, be Base Rate
Loans or Eurodollar Loans, provided that, (A) except as otherwise specifically
provided in Section 1.10(b), all Revolving Loans comprising the same Borrowing
shall at all times be of the same Type, and (B) unless either the Lead Arranger
otherwise agrees in its sole discretion or has determined that the Syndication
Date has occurred (at which time this clause (B) shall no longer be applicable)
(1) no Revolving Loans may be incurred or maintained as Eurodollar Loans prior
to the fifth day following the Initial Borrowing Date and (2) thereafter and
prior to the 90th day following the Initial Borrowing Date, Revolving Loans may
only be incurred as, and/or converted into, Eurodollar Loans so long as all such
outstanding Eurodollar Loans, together with all outstanding A Term Loans and B
Term Loans that are maintained as Eurodollar Loans are subject to an Interest
Period of one month which begins and ends on the same day, (ii) may be repaid or
reborrowed at any time in accordance with the provisions hereof and (iii) shall
not
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exceed for any such Lender at any time outstanding that aggregate principal
amount which, when added to the product of (A) such Lender's RL Percentage and
(B) the sum of (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time and (II) the aggregate principal amount of all Swingline
Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) then outstanding, equals the Revolving Loan Commitment of such Lender at
such time and (iv) shall not exceed for all Lenders at any time outstanding that
aggregate principal amount which, when added to (I) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Total Revolving Loan
Commitment at such time.
(g) Subject to and upon the terms and conditions set forth
herein, the Swingline Lender agrees to make, at any time and from time to time
on and after the Initial Borrowing Date and prior to the Swingline Expiry Date,
a revolving loan or revolving loans (each a "Swingline Loan" and, collectively,
the "Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made
and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in
accordance with the provisions hereof, (iii) shall not exceed in aggregate
principal amount at any time outstanding, when combined with the aggregate
principal amount of all Revolving Loans then outstanding and the Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Swingline Loans) at such time, an amount equal to the Total
Revolving Loan Commitment at such time, and (iv) shall not exceed in aggregate
principal amount at any time outstanding the Maximum Swingline Amount.
Notwithstanding anything to the contrary contained in this Section 1.01(g), the
Swingline Lender shall not be obligated to make any Swingline Loans at a time
when a Lender Default exists with respect to a RL Lender unless the Swingline
Lender has entered into arrangements satisfactory to it and the Borrower, to
eliminate the Swingline Lender's risk with respect to such Defaulting Lender's
or Lenders' participation in such Swingline Loans, including by cash
collateralizing such Defaulting Lender's or Lenders' RL Percentage of the
outstanding Swingline Loans and (ii) the Swingline Lender shall not make any
Swingline Loan after it has received written notice from the Borrower or the
Required Lenders stating that a Default or an Event of Default exists and is
continuing until such time as the Swingline Lender shall have received written
notice (i) of rescission of all such notices from the party or parties
originally delivering such notice, (ii) of the waiver of such Default or Event
of Default by the Required Lenders or (iii) that the Administrative Agent in
good faith believes that such Default or Event of Default has ceased to exist.
(h) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the RL Lenders that its outstanding Swingline Loans
shall be funded with one or more Borrowings of Revolving Loans (provided that
such notice shall be deemed to have been automatically given upon the occurrence
of a Default or an Event of Default under Section 10.05 or upon the exercise of
any of the remedies provided in the last paragraph of Section 10), in
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which case one or more Borrowings of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day by all RL Lenders (other than the Swingline
Lenders) pro rata based on each such Lender's RL Percentage (determined before
giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 10) and the proceeds thereof shall be applied
directly by the Swingline Lender to repay the Swingline Lender for such
outstanding Swingline Loans. Each such Lender hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by the Swingline Lender notwithstanding (i)
the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing
Amount otherwise required hereunder, (ii) whether any conditions specified in
Section 6 are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) the date of such Mandatory Borrowing and (v) the amount of the
Total Revolving Loan Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each such RL
Lender hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause such RL Lenders to share in such Swingline Loans
ratably based upon their respective RL Percentages (determined before giving
effect to any termination of the Total Revolving Loan Commitment pursuant to the
last paragraph of Section 10), provided that (x) all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until the date
as of which the respective participation is required to be purchased and, to the
extent attributable to the purchased participation, shall be payable to the
participant from and after such date, (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing RL
Lender shall be required to pay the Swingline Lender interest on the principal
amount of participation purchased for each day from and including the day upon
which the Mandatory Borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the overnight Federal Funds Rate for
the first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter and (z) whenever
the Swingline Lender receives a payment in respect of a Swingline Loan in which
such a participation has been purchased, the Swingline Lender shall pay to the
RL Lenders which acquired such participation an amount equal to such RL Lenders'
share in such Swingline Loan.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Loans shall not be less than the Minimum Borrowing
Amount applicable thereto. More than one Borrowing may occur on the same date,
and at no time shall there be outstanding as Eurodollar Loans more than (a)
twenty Borrowings of A Term Loans and Revolving Loans, (b) five Borrowings of B
Term Loans and (c) twenty Borrowings of any one Tranche of Incremental Term
Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
incur a Borrowing of Loans (excluding Swingline Loans and Revolving Loans
incurred pursuant to a Mandatory Borrowing), the Borrower shall give the
Administrative Agent at its Notice Office at
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least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Base Rate Loan and at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Eurodollar Loan to be made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if given before 1:00 P.M.
(New York time) on such day. Each such written notice or written confirmation of
telephonic notice (each a "Notice of Borrowing"), except as otherwise expressly
provided in Section 1.10, shall be irrevocable and shall be given by the
Borrower in the form of Exhibit A, appropriately completed to specify (i) the
aggregate principal amount of the Loans to be incurred pursuant to such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day) and
(iii) whether the Loans being made pursuant to such Borrowing shall constitute
A-1 Term Loans, A-2 Term Loans, A-3 Term Loans, B Term Loans, Incremental Term
Loans or Revolving Loans and whether the Loans being incurred pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or Eurodollar Loans
and, if Eurodollar Loans, the initial Interest Period to be applicable thereto.
The Administrative Agent shall promptly give each Lender which is required to
make Loans of the Tranche specified in the respective Notice of Borrowing notice
of such proposed Borrowing, of such Lender's proportionate share thereof and of
the other matters required by the immediately preceding sentence to be specified
in the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to incur Swingline Loans
hereunder, the Borrower shall give the Swingline Lender no later than 2:00 P.M.
(New York time) on the date that a Swingline Loan is to be incurred, written
notice or telephonic notice promptly confirmed in writing of each Swingline Loan
to be incurred hereunder. Each such notice shall be irrevocable and specify in
each case (A) the date of Borrowing (which shall be a Business Day) and (B) the
aggregate principal amount of the Swingline Loans to be incurred pursuant to
such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(h), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as
set forth in Section 1.01(g).
(c) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Administrative Agent or the Swingline Lender, as the case may be, may
act without liability upon the basis of telephonic notice of such Borrowing or
prepayment believed by the Administrative Agent or the Swingline Lender, as the
case may be, in good faith to be from an Authorized Officer of the Borrower
prior to receipt of written confirmation. In each such case, the Borrower hereby
waives the right to dispute the Administrative Agent's or the Swingline Lender's
record of the terms of such telephonic notice of such Borrowing or prepayment of
Loans (absent manifest error).
1.04 Disbursement of Funds. No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 3:00 P.M. (New York time) on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no
later than 12:00 Noon (New York time) on the date specified in Section 1.01(h)),
each Lender which has received the notice referred to in the last sentence of
Section 1.03(a) (or (x) in the case of Swingline Loans, Section 1.03(b)(i) or
(y) in the case of Mandatory Borrowings, Section 1.01(h)) will disburse its pro
rata portion of each Borrowing
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requested to be made on such date (or, in the case of Swingline Loans, the
Swingline Lender will make available the full amount thereof). All such amounts
shall be disbursed in Dollars and in immediately available funds at the Payment
Office, and the Administrative Agent will promptly disburse to the Borrower at
the Payment Office, in Dollars and in immediately available funds, the aggregate
of the amounts so made available by the Lenders (other than in respect of
Mandatory Borrowings). Unless the Administrative Agent shall have been notified
by any Lender prior to the date of Borrowing that such Lender does not intend to
disburse to the Administrative Agent such Lender's portion of any Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
disbursed such amount to the Administrative Agent on such date of Borrowing and
the Administrative Agent may, in reliance upon such assumption, disburse to the
Borrower a corresponding amount. If such corresponding amount is not in fact
disbursed to the Administrative Agent by such Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrower and the Borrower shall within three Business Days thereafter
pay such corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover (without duplication) on demand from
such Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was
disbursed by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Lender, at the overnight Federal Funds
Rate for the first three days and at the interest rate otherwise applicable to
such Loans for each day thereafter and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined pursuant
to Section 1.08. Nothing in this Section 1.04 shall be deemed to relieve any
Lenders from its obligation to make Loans hereunder or to prejudice any rights
which the Borrower may have against any Lenders as a result of any failure by
such Lenders to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made by each Lender shall be evidenced in the
Register maintained by the Administrative Agent pursuant to Section 13.16 and
shall, if requested by such Lender, also be evidenced by (i) if A-1 Term Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-1 with blanks appropriately completed in conformity
herewith (each, an "A-1 Term Note" and, collectively, the "A-1 Term Notes"),
(ii) if A-2 Term Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2 with blanks appropriately
completed in conformity herewith (each, an "A-2 Term Note" and, collectively,
the "A-2 Term Notes"), (iii) A-3 Term Loans, by a promissory note duly executed
and delivered by the Borrower substantially in the form of Exhibit B-3 with
blanks appropriately completed in conformity herewith (each, an "A-3 Term Note"
and, collectively, the "A-3 Term Notes"), (iv) if B Term Loans, by a promissory
note duly executed and delivered by the Borrower substantially in the form of
Exhibit B-4 with blanks appropriately completed in conformity herewith (each, a
"B Term Note" and, collectively, the "B Term Notes"), (v) if Incremental Term
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form provided for in the Incremental Term Loan Commitment
Agreement relating to such Incremental Term Loans (each an "Incremental Term
Note" and
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collectively, the "Incremental Term Notes") (v) if Revolving Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-5, with blanks appropriately completed in conformity herewith
(each, a "Revolving Note" and, collectively, the "Revolving Notes") and (vi) if
Swingline Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-6, with blanks appropriately
completed in conformity herewith (the "Swingline Note").
(b) The A-1 Term Note issued to each Lender that has an A-1
Term Loan Commitment or outstanding A-1 Term Loans shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the date of the issuance thereof, (iii) be in a stated principal amount equal to
the outstanding A-1 Term Loans of such Lender on such date of issuance and be
payable in the principal amount of A-1 Term Loans evidenced thereby, (iv) mature
on the A Maturity Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) The A-2 Term Note issued to each Lender that has an A-2
Term Loan Commitment or outstanding A-2 Term Loans shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the date of the issuance thereof, (iii) be in a stated principal amount equal to
the A-2 Term Loan Commitment of such Lender on such date of issuance plus the
outstanding A-2 Term Loans of such Lender on such date of issuance, and be
payable in the principal amount of A-2 Term Loans evidenced thereby, (iv) mature
on the A Maturity Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(d) The A-3 Term Note issued to each Lender that has an A-3
Term Loan Commitment or outstanding A-3 Term Loans shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the date of the issuance thereof, (iii) be in a stated principal amount equal to
the A-3 Term Loan Commitment of such Lender on such date of issuance plus the
outstanding A-3 Term Loans of such Lender on such date of issuance, and be
payable in the principal amount of A-3 Term Loans evidenced thereby, (iv) mature
on the A Maturity Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(e) The B Term Note issued to each Lender that has a B Term
Loan Commitment or outstanding B Term Loans shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the date of the issuance thereof, (iii) be in a stated principal amount equal to
the outstanding B Term Loans of such Lender on such date of issuance
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and be payable in the principal amount of B Term Loans evidenced thereby, (iv)
mature on the B Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(f) The Incremental Term Note issued to each Lender that has
an Incremental Term Loan Commitment or outstanding Incremental Term Loans shall
(i) be executed by the Borrower, (ii) be payable to such Lender or its
registered assigns and be dated the date of the issuance thereof, (iii) be in a
stated principal amount equal to the Incremental Term Loan Commitment of such
Lender plus the outstanding Incremental Term Loans of such Lender on such date
of issuance and be payable in the principal amount of Incremental Term Loans
evidenced thereby, (iv) mature on the respective Incremental Term Loan Maturity
Date for such Incremental Term Loans, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(g) The Revolving Note issued to each Lender that has a
Revolving Loan Commitment or outstanding Revolving Loans shall (i) be executed
by the Borrower, (ii) be payable to such Lender or its registered assigns and be
dated the date of the issuance thereof, (iii) be in a stated principal amount
equal to the Revolving Loan Commitment of such Lender (or, if issued after the
termination thereof, be in a stated principal amount equal to the Revolving
Loans of such Lender at such time) and be payable in the outstanding principal
amount of the Revolving Loans evidenced thereby, (iv) mature on the Revolving
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(h) The Swingline Note issued to the Swingline Lender shall
(i) be executed by the Borrower, (ii) be payable to the Swingline Lender or its
registered assigns and be dated the date of the issuance thereof, (iii) be in a
stated principal amount equal to the Maximum Swingline Amount and be payable in
the outstanding principal amount of the Swingline Loans evidenced thereby from
time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(i) Each Lender will note on its internal records the amount
of each Loan made by it and each payment in respect thereof and will prior to
any transfer of its Note endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to
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make any such notation (or any error in such notation) shall not affect the
Borrower's obligations in respect of such Loans.
(j) Notwithstanding anything to the contrary contained above
in this Section 1.05 or elsewhere in this Agreement, Notes shall only be
delivered to Lenders which at any time specifically request the delivery of such
Notes. No failure of any Lender to request or obtain a Note evidencing its Loans
to the Borrower shall affect or in any manner impair the obligations of the
Borrower to pay the Loans (and all related Obligations) incurred by the Borrower
which would otherwise be evidenced thereby in accordance with the requirements
of this Agreement, and shall not in any way affect the security or guaranties
therefor provided pursuant to the various Credit Documents. Any Lender which
does not have a Note evidencing its outstanding Loans shall in no event be
required to make the notations otherwise described in preceding clause (i). At
any time when any Lender requests the delivery of a Note to evidence any of its
Loans, the Borrower shall promptly execute and deliver to the respective Lender
the requested Note in the appropriate amount or amounts to evidence such Loans.
1.06 Conversions. The Borrower shall have the option to
convert, on any Business Day, all or a portion equal to at least the applicable
Minimum Borrowing Amount of the outstanding principal amount of Loans made to
the Borrower into a Borrowing or Borrowings (of the same Tranche) of another
Type of Loan, provided that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Loans being converted and no partial
conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single Borrowing to
less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans
may only be converted into Eurodollar Loans if no Default and no Event of
Default is in existence on the date of the conversion, (iii) unless the Lead
Arranger otherwise agrees in its sole discretion or has determined that the
Syndication Date has occurred (at which time this clause (iii) shall no longer
be applicable), prior to the 90th day following the Initial Borrowing Date,
conversions of Base Rate Loans into Eurodollar Loans shall be subject to the
provisions of clause (B) of the proviso in each of Sections 1.01(a)(iii),
1.01(b)(iii), 1.01(c)(iii), 1.01(d)(iii) and 1.01(f)(ii), and (iv) no conversion
pursuant to this Section 1.06 shall result in a greater number of Borrowings of
Eurodollar Loans than is permitted under Section 1.02. Each such conversion
shall be effected by the Borrower by giving the Administrative Agent at its
Notice Office prior to 1:00 P.M. (New York time) at least three Business Days'
prior written notice (each a "Notice of Conversion") specifying the Loans to be
so converted, the Borrowing or Borrowings pursuant to which such Loans were made
and, if to be converted into Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans of a Tranche
under this Agreement shall be incurred from the Lenders pro rata on the basis of
their respective Commitments under such Tranche. It is understood that no Lender
shall be responsible for any default by any other Lender of its obligation to
make Loans hereunder and that each Lender shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other
Lender to make its Loans hereunder.
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1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date the
proceeds thereof are made available to the Borrower or from the date of any
conversion to a Base Rate Loan pursuant to Sections 1.06, 1.09 or 1.10, as
applicable, until the earlier of (i) the maturity (whether by acceleration or
otherwise) of such Base Rate Loan and (ii) the conversion of such Base Rate Loan
to a Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall
be equal to the sum of the Applicable Margin for the Tranche under which such
Loans were incurred, plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date the proceeds
thereof are made available to the Borrower or from the date of any conversion to
a Eurodollar Loan pursuant to Section 1.06 until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Eurodollar Loan and (ii) the
conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06,
1.09 or 1.10, as applicable, at a rate per annum which shall, during each
Interest Period applicable thereto, be equal to the sum of the Applicable Margin
for the Tranche under which such Loans were incurred, plus the Eurodollar Rate
for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall, in each case, bear interest at a
rate per annum equal to the greater of (x) 2% per annum in excess of the rate
otherwise applicable to Base Rate Loans of the respective Tranche from time to
time and (y) the rate which is 2% in excess of the rate otherwise applicable to
such Loans, and all other overdue amounts payable hereunder and under any other
Credit Document shall bear interest at a rate per annum equal to the rate which
is 2% in excess of the rate applicable to Revolving Loans maintained as Base
Rate Loans from time to time. Interest which accrues under this Section 1.08(c)
shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative
Agent shall determine the Eurodollar Rate for the Interest Period applicable to
the Eurodollar Loans related thereto and shall promptly notify the Borrower and
the Lenders thereof. Each such determination shall, absent manifest error, be
final and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of an
Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan,
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which Interest Period shall, at the option of the Borrower (but otherwise
subject to the provisions of clause (B) of the proviso in each of Sections
1.01(a)(iii), 1.01(b)(iii), 1.01(c)(iii), 1.01(d)(iii) and 1.01(f)(ii)), be a
one, two, three or six-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including
the date of any conversion thereto from a Loan of a different Type) and
each Interest Period occurring thereafter in respect of such Eurodollar
Loan shall commence on the day on which the next preceding Interest
Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which 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;
(v) no Interest Period may be selected at any time when a
Default or an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the respective
Maturity Date for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of any
Tranche of Term Loans shall be selected which extends beyond any date
upon which a mandatory repayment of such Tranche of Term Loans will be
required to be made under Section 4.02(b)(i), (ii), (iii) or (iv) or,
in the case of any Tranche of Incremental Term Loans, under the
relevant Incremental Term Loan Commitment Agreement pursuant to which
such Tranche of Incremental Term Loans were made, if the aggregate
principal amount of such Tranche of Term Loans which have Interest
Periods which will expire after such date will be in excess of the
aggregate principal amount of such Tranche of Term Loans then
outstanding less the aggregate amount of such required prepayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be
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deemed to have elected to convert such Eurodollar Loans into Base Rate Loans
effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
any Lender shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the Effective Date affecting the interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
Effective Date in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payment to any Lender of the
principal of or interest on such Eurodollar Loan or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or net profits of such
Lender, or any franchise tax based on the net income or net profits of
a Lender, in either case pursuant to the laws of the jurisdiction in
which such Lender is organized or in which such Lender's principal
office or applicable lending office is located or any subdivision
thereof or therein) (it being understood that this Section 1.10(a)(ii)
shall not apply to any such increased costs or reductions resulting
from or representing Taxes that are paid or reimbursed by the Borrower
pursuant to Section 4.04(a) or Excluded Taxes), or (B) a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation
of the Eurodollar Rate and/or (y) other circumstances since the
Effective Date affecting such Lender or the interbank Eurodollar market
or the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Lender
in good faith with any governmental request (whether or not having
force of law) or (z) impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the
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Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred (including by
way of conversion) shall be deemed rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower shall, subject to the provisions of Section
13.17 (to the extent applicable), pay to such Lender, upon written demand
therefor, such additional 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 shall be required to compensate such Lender
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing the basis for the calculation thereof, submitted to the Borrower by such
Lender in good faith shall, absent manifest error, be final and conclusive and
binding on all the parties hereto) and (z) in the case of clause (iii) above,
the Borrower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by law.
Each of the Administrative Agent and each Lender agrees that if it gives notice
to the Borrower of any of the events described in clause (i) or (iii) above, it
shall promptly notify the Borrower and, in the case of any such Lender, the
Administrative Agent, if such event ceases to exist. If any such event described
in clause (iii) above ceases to exist as to a Lender, the obligations of such
Lender to make Eurodollar Loans and to convert Base Rate Loans into Eurodollar
Loans on the terms and conditions contained herein shall be reinstated. In
addition, if the Administrative Agent gives notice to the Borrower that the
events described in clause (i) above cease to exist, then the obligations of the
Lenders to make Eurodollar Loans and to convert Base Rate Loans into Eurodollar
Loans on the terms and conditions contained herein (but subject to clause (iii)
above) shall also be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) the Borrower shall) either (x) if the affected Eurodollar
Loan is then being made initially or pursuant to a conversion, cancel the
respective Borrowing by giving the Administrative Agent telephonic notice
(confirmed in writing) on the same date that the Borrower was notified by the
affected Lender or the Administrative Agent pursuant to Section 1.10(a)(ii) or
(iii) or (y) if the affected Eurodollar Loan is then outstanding, upon at least
three Business Days' written notice to the Administrative Agent, require the
affected Lender to convert such Eurodollar Loan into a Base Rate Loan, provided
that, if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this Section 1.10(b).
(c) If at any time any Lender determines that, after the
Effective Date, the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law and including, without limitation, those
announced or published prior to the Effective Date) concerning capital adequacy,
or any change in interpretation or administration thereof by the NAIC or any
governmental authority, central bank or comparable agency, will have the effect
of increasing the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender based on the existence of
such Lender's Commitments hereunder or its obligations hereunder, then the
Borrower shall, subject to the provisions of Section 13.17 (to the extent
applicable), pay to such Lender, upon its written demand therefor, such
additional
- 14 -
amounts as shall be required to compensate such Lender or such other corporation
for the increased cost to such Lender or such other corporation or the reduction
in the rate of return to such Lender or such other corporation as a result of
such increase of capital. In determining such additional amounts, each Lender
will act reasonably and in good faith and will use averaging and attribution
methods which are reasonable, provided that such Lender's reasonable good faith
determination of compensation owing under this Section 1.10(c) shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
Each Lender, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show the basis for calculation of such additional
amounts. In addition, each such Lender, upon determining that the circumstances
giving rise to the payment of additional amounts pursuant to this Section
1.10(c) cease to exist, will give prompt written notice thereof to the Borrower.
1.11 Compensation. The Borrower shall compensate each Lender,
upon its written request (which request shall set forth the basis for requesting
such compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund its Eurodollar Loans but excluding any loss of anticipated
profit) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.01 or 4.02
or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of the Borrower's Eurodollar Loans occurs on a date which is
not the last day of an Interest Period with respect thereto; (iii) if any
prepayment of any of the Borrower's Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Lender or (y)
any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Lender agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another lending
office for any Loans and/or Letters of Credit affected by such event, provided
that such designation is made on such terms that such Lender and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Sections
1.10, 2.06 and 4.04.
1.13 Replacement of Lenders. (a) (x) If any Lender (i) becomes
a Defaulting Lender or otherwise defaults in its obligations to make Loans or
fund Unpaid Drawings or (ii) refuses to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which have
been approved by the Required Lenders as provided in Section 13.12(b) or (y)
upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii)
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or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to any
Lender which results in such Lender charging to the Borrower increased costs in
excess of those being generally charged by the other Lenders, the Borrower shall
have the right, in accordance with the requirements of Section 13.04(b), if no
Default or Event of Default will exist after giving effect to such replacement,
to replace such Lender (the "Replaced Lender") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Lender at
the time of such replacement (collectively, the "Replacement Lender"),
reasonably acceptable to the Administrative Agent, provided that (i) at the time
of any replacement pursuant to this Section 1.13, the Replaced Lender and the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and all of the
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 (1) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender together with all then unpaid interest with respect
thereto at such time, (2) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Lender, together with all then
unpaid interest with respect thereto at such time and (3) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to
Section 3.01 and (ii) all obligations of the Borrower owing to the Replaced
Lender (other than 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 in full to such Replaced Lender concurrently with such
replacement.
(b) Upon the execution of the respective Assignment and
Assumption Agreements, the payment of amounts referred to in clauses (i) and
(ii) of Section 1.13(a) and, if so requested by the Replacement Lender, delivery
to the Replacement Lender of the appropriate Note executed by the Borrower, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 2.06, 4.04, 13.01 and 13.06), which shall survive as to such Replaced
Lender.
1.14 Incremental Term Loan Commitments. (a) So long as no
Default or Event of Default then exists or would result therefrom, the Borrower
shall, in consultation with the Lead Arranger and the Administrative Agent, have
the right to request, on one or more occasions on and after the earlier of (i)
the Syndication Date and (ii) 90 days following the Initial Borrowing Date but
prior to the Incremental Term Loan Commitment Termination Date, that one or more
Lenders (and/or one or more other Persons which will become Lenders as provided
below) provide Incremental Term Loan Commitments under any Tranche, other than
under the A-1 Term Loan Tranche, the A-2 Term Loan Tranche, the A-3 Term Loan
Tranche or the Revolving Loan Tranche, but including any new Tranche as
designated in the respective Incremental Term Loan Commitment Agreement and,
subject to the terms and conditions contained in this Agreement and the
respective Incremental Term Loan Commitment Agreement, make Incremental Term
Loans pursuant thereto, it being understood and agreed, however, that:
(i) no Lender shall be obligated to provide an Incremental
Term Loan Commitment as a result of any such request by the Borrower,
and until such time, if any,
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as such Lender has agreed in its sole discretion to provide an
Incremental Term Loan Commitment and executed and delivered to the
Administrative Agent an Incremental Term Loan Commitment Agreement as
provided in clause (b) of this Section 1.14, such Lender shall not be
obligated to fund any Incremental Term Loans;
(ii) any Lender (or, in the circumstances contemplated by
clause (vii) below, any other Person which is an Eligible Transferee)
may so provide an Incremental Term Loan Commitment without the consent
of any other Lender;
(iii) each provision of Incremental Term Loan Commitments
pursuant to this Section 1.14 on a given date shall be in a minimum
aggregate amount (for all Lenders (including in the circumstances
contemplated by clause (vii) below, Eligible Transferees who will
become Lenders)) of at least $50,000,000;
(iv) the aggregate principal amount of all outstanding
Incremental Term Loans plus the aggregate amount of unutilized
Incremental Term Loan Commitments shall not at any time exceed the
remainder of (x) the Permitted Incremental Debt Amount less (y) the
aggregate principal amount of Indebtedness outstanding at such time
pursuant to Section 9.04(viii);
(v) each Incremental Term Loan Commitment Agreement shall
specifically set forth the Tranche or Tranches (including any new
Tranche thereunder) of the Incremental Term Loan Commitments being
provided thereunder;
(vi) each Lender agreeing to provide an Incremental Term Loan
Commitment shall make Incremental Term Loans under the Tranche of Term
Loans specified in the relevant Incremental Term Loan Commitment
Agreement pursuant to Section 1.01(d) and such Loans shall thereafter
be deemed to be Term Loans under such Tranche for all purposes of this
Agreement and the other Credit Documents;
(vii) if, within 7 Business Days after the Borrower has
requested the then existing Lenders (other than Defaulting Lenders) to
provide Incremental Term Loan Commitments pursuant to this Section 1.14
the Borrower has not received Incremental Term Loan Commitments in an
aggregate amount equal to that amount of Incremental Term Loan
Commitments which the Borrower desires to obtain pursuant to such
request (as set forth in the notice provided by the Borrower as
provided below), then the Borrower may, with the consent of the Lead
Arranger (which consent shall not be unreasonably withheld or delayed),
request Incremental Term Loan Commitments from Persons which are
Eligible Transferees hereunder in an aggregate amount equal to such
deficiency;
(viii)in no event shall the maturity date for any Tranche of
Incremental Term Loans be earlier than the B Maturity Date; and
(ix) all actions taken by the Borrower pursuant to this
Section 1.14 shall be taken in coordination with the Administrative
Agent.
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(b) At the time of any provision of Incremental Term Loan
Commitments pursuant to this Section 1.14, (i) the Borrower, the Administrative
Agent and each such Lender or other Eligible Transferee which agrees to provide
an Incremental Term Loan Commitment (each an "Incremental Term Loan Lender")
shall execute and deliver to the Administrative Agent an Incremental Term Loan
Commitment Agreement substantially in the form of Exhibit C (appropriately
completed), with the effectiveness of such Incremental Term Loan Lender's
Incremental Term Loan Commitment to occur on the date set forth in such
Incremental Term Loan Commitment Agreement, (ii) the Borrower and its
Subsidiaries shall have delivered such amendments, modifications and/or
supplements to the Security Documents as are necessary or in the reasonable
opinion of the Administrative Agent, desirable to insure that the additional
Obligations to be incurred pursuant to the Incremental Term Loan Commitments are
secured by, and entitled to the benefits of, the Security Documents, (iii) the
Administrative Agent shall have received evidence satisfactory to it that the
additional Obligations to be incurred pursuant to the Incremental Term Loan
Commitments are permitted by, and constitute "Senior Debt" or any similar term
under the 9.15% Senior Subordinated Notes Documents and the 9-7/8% Senior
Subordinated Note Documents; and (iv) the Borrower shall deliver to the
Administrative Agent an opinion or opinions, in form and substance reasonably
satisfactory to the Administrative Agent, from counsel to the Borrower
reasonably satisfactory to the Administrative Agent and dated such date,
covering such of the matters set forth in the opinions of counsel delivered to
the Administrative Agent on the Initial Borrowing Date pursuant to Section 5.03
as may be reasonably requested by the Administrative Agent, and such other
matters as the Administrative Agent may reasonably request (including, without
limitation, the matters described in immediately preceding clause (iii)). The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Incremental Term Loan Commitment Agreement, and (i) at such time Annex I
shall be deemed modified to reflect the Incremental Term Loan Commitments of
such Incremental Term Loan Lenders under the relevant Tranche or Tranches and
(ii) to the extent requested by such Incremental Term Loan Lenders, the
appropriate Notes will be issued, at the Borrower's expense, to such Incremental
Term Loan Lenders, to be consistent with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the Incremental Term
Loans made by such Incremental Term Loan Lenders.
(c) In connection with each incurrence of Incremental Term
Loans pursuant to Section 1.01(d) under a then existing Tranche of Term Loans,
the Lenders and the Borrower hereby agree that, notwithstanding anything to the
contrary contained in this Agreement, the Borrower and the Administrative Agent
may take all such actions as may be necessary to ensure that all Lenders with
outstanding Term Loans under the relevant Tranche continue to participate in
each Borrowing of outstanding Term Loans under such Tranche (after giving effect
to the incurrence of any such Incremental Term Loans pursuant to Section
1.01(d)) on a pro rata basis, including by adding such Incremental Term Loans to
be so incurred to the then outstanding Borrowings of Term Loans on a pro rata
basis even though as a result thereof such new Incremental Term Loan (to the
extent required to be maintained as Eurodollar Loans), may effectively have a
shorter Interest Period than the then outstanding Borrowings of Term Loans under
such Tranche and it is hereby agreed that (x) to the extent any then outstanding
Borrowings of Term Loans that are maintained as Eurodollar Loans are affected as
a result thereof, any costs of the type described in Section 1.11 incurred by
such Lenders in connection therewith shall be
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for the account of the Borrower or (y) to the extent the Incremental Term Loans
to be so incurred are added to the then outstanding Borrowings of Term Loans
which are maintained as Eurodollar Loans, the Lenders that have made such
additional Incremental Term Loans shall be entitled to receive an effective
interest rate on such additional Incremental Term Loans as is equal to the
Eurodollar Rate as in effect two Business Days prior to the incurrence of such
additional Incremental Term Loans plus the then Applicable Margin for such
Tranche of Term Loans until the end of the respective Interest Period or
Interest Periods with respect thereto.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that any Issuing Lender
issue, at any time and from time to time on and after the Initial Borrowing Date
and prior to the 30th day prior to the Revolving Maturity Date, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee, agent
or other similar representative for any such holders) of L/C Supportable
Obligations of the Borrower or any of its Subsidiaries, an irrevocable standby
letter of credit, in a form customarily used by such Issuing Lender or in such
other form as has been approved by such Issuing Lender (each such standby letter
of credit, a "Standby Letter of Credit") in support of such L/C Supportable
Obligations and (y) for the account of the Borrower and for the benefit of
sellers of goods and materials used in the ordinary course of business of the
Borrower or any of its Subsidiaries an irrevocable sight commercial letter of
credit in a form customarily used by such Issuing Lender or in such other form
as has been approved by such Issuing Lender (each such commercial letter of
credit, a "Trade Letter of Credit", and each such Trade Letter of Credit and
each Standby Letter of Credit, a "Letter of Credit") in support of commercial
transactions of the Borrower and its Subsidiaries. All Letters of Credit shall
be denominated in Dollars. It is acknowledged and agreed that each of the
letters of credit which were issued under the Existing Credit Agreement prior to
the Initial Borrowing Date and which remain outstanding on the Initial Borrowing
Date and are set forth on Schedule III (each such letter of credit, an "Existing
Letter of Credit" and, collectively, the "Existing Letters of Credit") shall,
from and after the Initial Borrowing Date, constitute a Letter of Credit for all
purposes of this Agreement and shall, for purposes of Sections 2.04 and 3.01, be
deemed issued on the Initial Borrowing Date. The Stated Amount of each Existing
Letter of Credit and the expiry date therefor is set forth on Schedule III.
(b) Subject to and upon the terms and conditions set forth
herein, each Issuing Lender hereby agrees that it will, at any time and from
time to time on and after the Effective Date and prior to the 30th day prior to
the Revolving Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower, one or more Letters of
Credit (x) in the case of Standby Letters of Credit, in support of such L/C
Supportable Obligations of the Borrower or any of its Subsidiaries or as are
permitted to remain outstanding without giving rise to a Default or an Event of
Default and (y) in the case of Trade Letters of Credit, in support of sellers of
goods or materials used in the ordinary course of business of the Borrower or
any of its Subsidiaries as referenced in Section 2.01(a), provided that the
respective Issuing Lender shall be under no obligation to issue any Letter of
Credit of the types described above if at the time of such issuance:
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(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or restrain such
Issuing Lender from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Lender or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction over
such Issuing Lender shall prohibit, or request that such Issuing Lender refrain
from, the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Lender with respect to such Letter
of Credit any restriction or reserve or capital requirement (for which such
Issuing Lender is not otherwise compensated) not in effect on the date hereof,
or any unreimbursed loss, cost or expense which was not applicable, in effect or
known to such Issuing Lender as of the date hereof and which such Issuing Lender
reasonably and in good faith deems material to it; or
(ii) such Issuing Lender shall have received notice from the
Required Lenders prior to the issuance of such Letter of Credit of the type
described in the penultimate sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the initial Stated Amount of which, when added
to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter of
Credit) at such time would exceed either (x) $25,000,000 or (y) when added to
the aggregate principal amount of all Revolving Loans then outstanding and the
aggregate principal amount of all Swingline Loans then outstanding, an amount
equal to the Total Revolving Loan Commitment at such time and (ii) each Letter
of Credit shall by its terms terminate on or before (A) in the case of Standby
Letters of Credit, the earlier of (x) the date which occurs 12 months after the
date of the issuance thereof (although any such Standby Letter of Credit may be
extendable for successive periods of up to 12 months, but not beyond the third
Business Day prior to the Revolving Maturity Date, on terms acceptable to the
respective Issuing Lender) and (y) the third Business Day prior to the Revolving
Maturity Date and (B) in the case of Trade Letters of Credit, the earlier of (x)
the date which occurs 360 days after the date of issuance thereof and (y) 30
days prior to the Revolving Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a)
Whenever the Borrower desires that a Letter of Credit be issued for its account,
the Borrower shall give the Administrative Agent and the respective Issuing
Lender at least five Business Days' (or such shorter period as is acceptable to
the respective Issuing Lender) written notice thereof. Each notice shall be in
the form of Exhibit D (each a "Letter of Credit Request"). The Administrative
Agent shall promptly transmit copies of each Letter of Credit Request to each RL
Lender.
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.02. Unless the respective Issuing Lender has received notice from
the Required Lenders or the Administrative Agent before it issues a Letter of
Credit that one or more of the conditions specified in Section 5 are not
satisfied on the Initial Borrowing Date or Section 6 are not then satisfied, or
that the issuance of such Letter of Credit would violate Section 2.02, then such
Issuing Lender may issue the
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requested Letter of Credit for the account of the Borrower in accordance with
such Issuing Lender's usual and customary practices. Upon the issuance of or
amendment or modification to a Letter of Credit, the respective Issuing Lender
shall promptly notify the Borrower and the Administrative Agent of such
issuance, amendment or modification and such notification shall be accompanied
by a copy of the issued Letter of Credit or amendment or modification.
(c) The initial Stated Amount of each Letter of Credit shall
not be less than $10,000 or such lesser amount as is acceptable to the
respective Issuing Lender.
2.04 Letter of Credit Participation. (a) Immediately upon the
issuance by the respective Issuing Lender of any Letter of Credit, such Issuing
Lender shall be deemed to have sold and transferred to each RL Lender, other
than such Issuing Lender (each such RL Lender, in its capacity under this
Section 2.04, a "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from such Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such Participant's RL Percentage in such Letter of Credit, each
drawing or payment made thereunder and the obligations of the Borrower under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments of the
Lenders pursuant to Section 1.13 or 13.04, it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings, there shall be
an automatic adjustment to the participations pursuant to this Section 2.04 to
reflect the new RL Percentages of the assignor and assignee Lender, as the case
may be.
(b) In determining whether to pay under any Letter of Credit,
the respective Issuing Lender shall have no obligation relative to the other
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Lender under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing Lender
any resulting liability to the Borrower, any other Credit Party, any Lender or
any other Person.
(c) In the event that any Issuing Lender makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to such Issuing Lender pursuant to Section 2.05(a), such Issuing
Lender shall promptly notify the Administrative Agent, which shall promptly
notify each Participant of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative Agent so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to such Issuing Lender in Dollars
such Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its RL Percentage of the amount of such payment available to such Issuing
Lender, such Participant agrees to pay to such Issuing Lender, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to such Issuing Lender at the overnight
Federal Funds Rate for the first three days and at the interest rate applicable
to
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Revolving Loans maintained as Base Rate Loans for each day thereafter. The
failure of any Participant to make available to such Issuing Lender its RL
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to such Issuing Lender
its RL Percentage of any Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to such Issuing Lender such other Participant's RL
Percentage of any such payment.
(d) Whenever any Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Lender shall pay to each
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) Upon the request of any Participant, each Issuing Lender
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation relating thereto as may reasonably be requested by
such Participant.
(f) The obligations of the Participants to make payments to
each Issuing Lender with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee may
be acting), the Administrative Agent, any Participant, or any other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
or any Subsidiary of the Borrower and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
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2.05 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Issuing Lender, by making
payment to the Administrative Agent in immediately available funds at the
Payment Office, for any payment or disbursement made by such Issuing Lender
under any Letter of Credit issued by it (each such amount, so paid until
reimbursed, an "Unpaid Drawing"), immediately after, and in any event on the
date of, such payment or disbursement, with interest on the amount so paid or
disbursed by such Issuing Lender, to the extent not reimbursed prior to 3:00
P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but excluding the date such Issuing
Lender was reimbursed by the Borrower therefor at a rate per annum which shall
be the Base Rate in effect from time to time plus the Applicable Margin for
Revolving Loans maintained as Base Rate Loans; provided, however, to the extent
such amounts are not reimbursed prior to 3:00 P.M. (New York time) on the third
Business Day following the receipt by the Borrower of notice of such payment or
disbursement or following the occurrence of a Default or an Event of Default
under Section 10.05, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Lender (and until reimbursed by the Borrower) at a
rate per annum which shall be the Base Rate in effect from time to time plus the
Applicable Margin for Revolving Loans maintained as Base Rate Loans plus 2%, in
each such case, with interest to be payable on demand. The respective Issuing
Lender shall give the Borrower prompt written notice of each Drawing under any
Letter of Credit, provided that the failure to give any such notice shall in no
way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the respective Issuing Lender with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Lender
(including in its capacity as Issuing Lender or as a Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse any Issuing Lender for any wrongful payment made by such
Issuing Lender under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Lender.
2.06 Increased Costs. If at any time after the Effective Date,
the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by the NAIC or any governmental authority charged with the interpretation or
administration thereof, or compliance by any Issuing Lender or any Participant
with any request or directive by any such authority (whether or not having the
force of law), shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against letters of credit
issued by any Issuing Lender or participated in by any Participant, or (ii)
impose on any Issuing Lender or any Participant any other conditions relating,
directly or indirectly, to this Agreement; and the result of any of the
foregoing is to increase the cost to any Issuing Lender or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by any Issuing Lender or any
Participant hereunder or reduce the rate of return on its capital with respect
to Letters of Credit (except for changes in the rate of tax on, or determined by
reference to, the net income or profits
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of such Issuing Lender or such Participant pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon the delivery of the certificate referred to below to the Borrower by
such Issuing Lender or any Participant, the Borrower shall, subject to the
provisions of Section 13.17 (to the extent applicable), pay to such Issuing
Lender or such Participant such additional amount or amounts as will compensate
such Lender for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Any Issuing Lender or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.06, will give prompt written notice thereof to the
Borrower, which notice shall include a certificate submitted to the Borrower by
such Issuing Lender or such Participant (a copy of which certificate shall be
sent by such Issuing Lender or such Participant to the Administrative Agent),
setting forth in reasonable detail the basis for the calculation of such
additional amount or amounts necessary to compensate such Issuing Lender or such
Participant. In determining such additional amounts, each Issuing Lender and
each Participant will act reasonably and in good faith, provided that the
certificate required to be delivered pursuant to this Section 2.06 shall, absent
manifest error, be final and conclusive and binding on the Borrower.
SECTION 3. Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower shall pay to the Administrative
Agent, for distribution to each Non-Defaulting Lender with an A-2 Term Loan
Commitment, a commitment commission (the "A-2 Term Loan Commitment Commission")
for the period from the Effective Date to but not including the A-2 Term Loan
Commitment Termination Date (or such earlier date on which the Total A-2 Term
Loan Commitment shall have been terminated), computed at a rate per annum for
each day equal to 0.50% of the A-2 Term Loan Commitment of such Non-Defaulting
Lender on such day. Accrued A-2 Term Loan Commitment Commission shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the A-2 Term
Loan Commitment Termination Date or such earlier day upon which the Total A-2
Term Loan Commitment is terminated.
(b) The Borrower shall pay to the Administrative Agent, for
distribution to each Non-Defaulting Lender with an A-3 Term Loan Commitment, a
commitment commission (the "A-3 Term Loan Commitment Commission") for the period
from the Effective Date to but not including the A-3 Term Loan Commitment
Termination Date (or such earlier date on which the Total A-3 Term Loan
Commitment shall have been terminated), computed at a rate per annum for each
day equal to 0.50% of the A-3 Term Loan Commitment of such Non-Defaulting Lender
on such day. Accrued A-3 Term Loan Commitment Commission shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the A-3 Term
Loan Commitment Termination Date or such earlier day upon which the Total A-3
Term Loan Commitment is terminated.
(c) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender with a Revolving Loan Commitment, a
commitment commission (the "Revolving Loan Commitment Commission") for the
period from the Effective Date to but not including the Revolving Maturity Date
(or such earlier date on which the Total Revolving Loan Commitment shall have
been terminated), computed at a rate per annum for each day equal
- 24 -
to 0.50% of the Unutilized Revolving Loan Commitment of such Non-Defaulting
Lender on such day. Accrued Revolving Loan Commitment Commission shall be due
and payable quarterly in arrears on each Quarterly Payment Date and on the
Revolving Maturity Date or such earlier date on which the Total Revolving Loan
Commitment is terminated.
(d) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender with an Incremental Term Loan
Commitment such facility fees, commitment commission and other amounts, if any,
as are specified in the Incremental Term Loan Commitment Agreement pursuant to
which such Incremental Term Loan Commitment has been provided, with such
facility fees, commitment commission and other amounts, if any, to be payable at
the times set forth in such Incremental Term Loan Commitment Agreement.
(e) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender (based on each such Lender's
respective RL Percentage) a fee in respect of each Letter of Credit issued
hereunder (the "Letter of Credit Fee"), for the period from and including the
date of issuance of such Letter of Credit to and including the date of
termination or expiration of such Letter of Credit, computed at a rate per annum
equal to the Applicable Margin for Revolving Loans maintained as Eurodollar
Loans on the daily Stated Amount of such Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the first day after the termination of the Total Revolving
Loan Commitment upon which no Letters of Credit remain outstanding.
(f) The Borrower agrees to pay to each Issuing Lender, for its
own account, a facing fee in respect of each Letter of Credit issued by such
Issuing Lender (the "Facing Fee"), (x) in the case of each Standby Letter of
Credit, for the period from and including the date of issuance of such Standby
Letter of Credit to and including the date of the termination of such Standby
Letter of Credit, computed at a rate equal to 1/4 of 1% per annum (or such
lesser rate as is agreed on by the Borrower and the respective Issuing Lender)
of the daily Stated Amount of such Standby Letter of Credit and (y) in the case
of each Trade Letter of Credit, in an amount equal to 1/4 of 1% (or such lesser
rate as is agreed on by the Borrower and the respective Issuing Lender) of the
Stated Amount of such Trade Letter of Credit as of the date of issuance thereof.
Accrued Facing Fees payable with respect to Standby Letters of Credit shall be
due and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day after the termination of the Total Revolving Loan Commitment upon
which no Standby Letters of Credit remain outstanding and all Facing Fees
payable with respect to each Trade Letter of Credit shall be due and payable on
the date of issuance of such Trade Letter of Credit.
(g) The Borrower agrees to pay, upon each drawing under,
issuance of, or amendment to, any Letter of Credit, such amount as shall at the
time of such event be the reasonable administrative charge and the reasonable
expenses which the applicable Issuing Lender is generally imposing in connection
with such occurrence with respect to letters of credit.
(h) The Borrower agrees to pay to the Administrative Agent,
for its own account, such fees as may be agreed to in writing by the Borrower
with the Administrative Agent.
- 25 -
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon
at least one Business Day's prior notice to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), the Borrower shall have the right at any time or from time
to time, without premium or penalty, to terminate or partially reduce the Total
A-2 Term Loan Commitment in integral multiples of $1,000,000, provided that any
such reduction shall apply to proportionately and permanently reduce the A-2
Term Loan Commitment of each of the Lenders with such a Commitment.
(b) Upon at least one Business Day's prior notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrower shall have the
right at any time or from time to time, without premium or penalty, to terminate
or partially reduce the Total A-3 Term Loan Commitment in integral multiples of
$1,000,000, provided that any such reduction shall apply to proportionately and
permanently reduce the A-3 Term Loan Commitment of each of the Lenders with such
a Commitment.
(c) Upon at least one Business Days' prior written notice to
the Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), the Borrower shall have
the right, at any time or from time to time, without premium or penalty, to
terminate or partially reduce the Total Unutilized Revolving Loan Commitment, in
integral multiples of $1,000,000; provided that each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each RL
Lender.
(d) In the event of certain refusals by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as provided in
Section 13.12(b), the Borrower may, subject to the requirements of said Section
13.12(b) and upon five Business Days' written notice to the Administrative Agent
at its Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Lenders) terminate the entire Commitment of such Lender
so long as all Loans, together with accrued and unpaid interest, Fees and all
other amounts owing to such Lender are repaid concurrently with the
effectiveness of such termination pursuant to this Section 3.02(c) (at which
time Schedule I shall be deemed modified to reflect such changed amounts), and
at such time, such Lender shall no longer constitute a "Lender" for purposes of
this Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and
13.06), which shall survive as to such repaid Lender.
3.03 Mandatory Reduction of Commitments. (a) The Total
Commitments shall terminate in their entirety on August 31, 2001 unless the
Initial Borrowing Date has occurred on or prior to such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total A-1 Term Loan Commitment (and the A-1
Term Loan Commitment of each Lender with such a Commitment) shall terminate in
its entirety on the date the A-1 Term Loans are incurred (after giving effect to
the making of A-1 Term Loans on such date).
- 26 -
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total A-2 Term Loan Commitment shall (i) be
permanently reduced on each A-2 Term Loan Borrowing Date in an amount equal to
the aggregate principal amount of A-2 Term Loans incurred on such date, (ii) be
permanently reduced on each date after the Effective Date upon which the Total
A-2 Term Loan Commitment is required to be reduced pursuant to Section 4.02(h)
by the amount required to be applied to the Total A-2 Term Loan Commitment
pursuant to said Section and (iii) terminate in its entirety (to the extent not
theretofore terminated) on the A-2 Term Loan Commitment Termination Date (after
giving effect to any A-2 Term Loans to be made on such date).
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the A-3 Term Loan Commitment shall (i) be
permanently reduced on each A-3 Term Loan Borrowing Date in an amount equal to
the aggregate principal amount of A-3 Term Loans incurred on such date, (ii) be
permanently reduced on each date after the Effective Date upon which the Total
A-3 Term Loan Commitment is required to be reduced pursuant to Section 4.02(h)
by the amount required to be applied to the Total A-3 Term Loan Commitment
pursuant to said Section and (iii) terminate in its entirety (to the extent not
theretofore terminated) on the A-3 Term Loan Commitment Termination Date (after
giving effect to any A-3 Term Loans to be made on such date).
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total B Term Loan Commitment (and the B Term
Loan Commitment of each Lender with such a Commitment) shall terminate in its
entirety on the date the B Term Loans are incurred (after giving effect to the
making of B Term Loans on such date).
(f) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Incremental Term Loan Commitment of each
Lender provided pursuant to a particular Incremental Term Loan Commitment
Agreement shall (i) terminate in its entirety (to the extent not theretofore
terminated) on the earlier of the date set forth in such Incremental Term Loan
Agreement for the termination thereof and the Incremental Term Loan Commitment
Termination Date (after giving effect to any Incremental Term Loans to be made
on either such date pursuant to such Incremental Term Loan Commitment Agreement)
and (ii) be permanently reduced on each Incremental Term Loan Borrowing Date on
which Incremental Term Loans are incurred pursuant to such Incremental Term Loan
Commitment in an amount equal to the aggregate principal amount of such
Incremental Term Loans incurred on such date. The aggregate Incremental Term
Loan Commitments of each Tranche of Incremental Term Loan Commitments shall be
permanently reduced at the times, and in the amounts, required by Section
4.02(h).
(g) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, (i) on each date after the Effective Date upon
which the Total Revolving Loan Commitment is required to be reduced pursuant to
Section 4.02(h), the Total Revolving Loan Commitment shall be permanently
reduced by the amount required to be applied to the Total Revolving Loan
Commitment pursuant to said Section and (ii) the Total Revolving Loan Commitment
(and the Revolving Loan Commitment of each Lender) shall terminate in its
entirety on the Revolving Loan Maturity Date.
- 27 -
(h) Each reduction and/or termination of the Total A-1 Term
Loan Commitment, the Total A-2 Term Loan Commitment, the Total A-3 Term Loan
Commitment, the Total B Term Loan Commitment or the Total Revolving Loan
Commitment pursuant to this Section 3.03 shall be applied proportionately to
reduce and/or terminate the A-1 Term Loan Commitment, the A-2 Term Loan
Commitment, the A-3 Term Loan Commitment, the B Term Loan Commitment or the
Revolving Loan Commitment, as the case may be, of each Lender with such a
Commitment. Each reduction to the Incremental Term Loan Commitments provided
pursuant to any Incremental Term Loan Commitment Agreement pursuant to this
Section 3.03 shall be applied proportionately to reduce the Incremental Term
Loan Commitment of each Lender as provided in the respective Incremental Term
Loan Commitment Agreement.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent prior to 2:00 P.M. (New York time)
at its Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of the Borrower's intent to
prepay Base Rate Loans and (y) at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of the Borrower's
intent to prepay Eurodollar Loans, whether A-1 Term Loans, A-2 Term Loans, A-3
Term Loans, B Term Loans, Incremental Term Loans, Revolving Loans or Swingline
Loans shall be prepaid, the amount of such prepayment and the Types of Loans to
be prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Administrative Agent shall
promptly transmit to each of the Lenders; (ii) each prepayment of Loans shall be
in an aggregate principal amount of at least $500,000 (or $100,000 in the case
of Swingline Loans), provided that if any partial prepayment of Eurodollar Loans
made pursuant to any Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto, then such Borrowing may not be continued as a
Borrowing of Eurodollar Loans and any election of an Interest Period with
respect thereto given by the Borrower shall have no force or effect; (iii) at
the time of any prepayment of Eurodollar Loans pursuant to this Section 4.01 on
any date other than the last day of the Interest Period applicable thereto, the
Borrower shall pay the amounts required pursuant to Section 1.11; (iv) each
voluntary prepayment of Term Loans pursuant to this Section 4.01(a) shall be
applied pro rata to each Tranche of Term Loans, with each such Tranche of Term
Loans to receive the Relevant Term Loan Percentage of such repayment; and (v)
each prepayment in respect of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans, provided that at the Borrower's election in
connection with any prepayment of Revolving Loans, such prepayment shall not be
applied to the prepayment of Revolving Loans of a Defaulting Lender. Each
prepayment of principal of any Tranche of Term Loans pursuant to this Section
4.01 shall be applied to reduce the then remaining Scheduled Repayments of such
Tranche of Term Loans pro rata based upon the then remaining principal amounts
of the Scheduled Repayments of such Tranche after giving effect to all prior
reductions thereto.
(b) In the event of a refusal by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by
- 28 -
the Required Lenders as provided in Section 13.12(b), the Borrower may, upon
five Business Days' prior written notice to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders) repay all Loans, together with accrued and unpaid interest,
Fees, and all other amounts owing to such Lender in accordance with said Section
13.12(b) so long as (A) in the case of the repayment of any Loans of any Lender
pursuant to this Section 4.01(b), the Commitments of such Lender are terminated
concurrently with such repayment pursuant to Section 3.02(d) (at which time
Schedule I shall be deemed modified to reflect the changed Commitments) and (B)
the consents required by Section 13.12(b) in connection with the repayment
pursuant to this Section 4.01(b) have been obtained.
4.02 Mandatory Repayments. (a) On any day on which the
aggregate outstanding principal amount of Revolving Loans, Swingline Loans and
the Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower shall prepay on such day principal of Swingline
Loans and, after all Swingline Loans have been repaid in full, Revolving Loans
in an amount equal to such excess. If, after giving effect to the prepayment of
all outstanding Swingline Loans and Revolving Loans, the aggregate amount of the
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower shall pay to the Administrative Agent at the
Payment Office on such day an amount of cash or Cash Equivalents equal to the
amount of such excess (up to a maximum amount equal to the Letter of Credit
Outstandings at such time), such cash or Cash Equivalents to be held as security
for all obligations of the Borrower hereunder in a cash collateral account to be
established by the Administrative Agent.
(b) (i) In addition to any mandatory repayments or commitment
reductions pursuant to this Section 4.02, the Borrower shall be required to
repay on each date set forth below the principal amount of A-1 Term Loans, to
the extent outstanding, set forth opposite such date (each such repayment as the
same may be reduced as provided in Sections 4.01 and 4.02(h) and (i), a
"Scheduled A-1 Term Loan Repayment"):
- 29 -
Scheduled A-1 Term Loan Repayment Date Amount
- -------------------------------------- ------
Each of September 30, 2001, December An amount equal to 1.25% of the
31, 2001, March 31, 2002 and June 30, 2002 aggregate principal amount of
A-1 Term Loans outstanding on
the Initial Borrowing Date
(after giving effect to the
incurrence of A-1 Term Loans on
such date)
Each of September 30, 2002, December An amount equal to 1.875% of the
31, 2002, March 31, 2003 and June 30, 2003 aggregate principal amount of
A-1 Term Loans outstanding on
the Initial Borrowing Date
(after giving effect to the
incurrence of A-1 Term Loans on
such date)
Each of September 30, 2003, December An amount equal to 2.5% of the
31, 2003, March 31, 2004 and June 30, 2004 aggregate principal amount of
A-1 Term Loans outstanding on
the Initial Borrowing Date
(after giving effect to the
incurrence of A-1 Term Loans on
such date)
Each of September 30, 2004, December An amount equal to 5% of the
31, 2004, March 31, 2005 and June 30, 2005 aggregate principal amount of
A-1 Term Loans outstanding on
the Initial Borrowing Date
(after giving effect to the
incurrence of A-1 Term Loans on
such date)
Each of September 30, 2005, December An amount equal to 6.25% of the
31, 2005, March 31, 2006 and June 30, 2006 aggregate principal amount of
A-1 Term Loans outstanding on
the Initial Borrowing Date
(after giving effect to the
incurrence of A-1 Term Loans on
such date)
- 30 -
Each of September 30, 2006, December An amount equal to 8.125% of the
31, 2006, March 31, 2007 and the A aggregate principal amount of
Maturity Date A-1 Term Loans outstanding on
the Initial Borrowing Date
(after giving effect to the
incurrence of A-1 Term Loans on
such date)
(ii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, the Borrower shall be
required to repay on each date set forth below the principal amount of the A-2
Term Loans, to the extent outstanding, set forth opposite such date (each such
repayment as the same may be reduced as provided in Section 4.01 and 4.02(h) and
(i), a "Scheduled A-2 Term Loan Repayment"):
Scheduled A-2 Term Loan Repayment Date Amount
- -------------------------------------- ------
Each of March 31, 2002 and June 30, 2002 An amount equal to 2.5% of the
aggregate principal amount of
A-2 Term Loans outstanding on
the A-2 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-2
Term Loans on such date)
Each of September 30, 2002, December An amount equal to 1.875% of the
31, 2002, March 31, 2003 and June 30, 2003 aggregate principal amount of
A-2 Term Loans outstanding on
the A-2 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-2
Term Loans on such date)
Each of September 30, 2003, December An amount equal to 2.5% of the
31, 2003, March 31, 2004 and June 30, 2004 aggregate principal amount of
A-2 Term Loans outstanding on
the A-2 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-2
Term Loans on such date)
- 31 -
Each of September 30, 2004, December An amount equal to 5% of the
31, 2004, March 31, 2005 and June 30, 2005 ggregate principal amount of
A-2 Term Loans outstanding on
the A-2 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-2
Term Loans on such date)
Each of September 30, 2005, December An amount equal to 6.25% of the
31, 2005, March 31, 2006 and June 30, 2006 aggregate principal amount of
A-2 Term Loans outstanding on
the A-2 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-2
Term Loans on such date)
Each of September 30, 2006, December An amount equal to 8.125% of the
31, 2006, March 31, 2007 and the A aggregate principal amount of
Maturity Date A-2 Term Loans outstanding on
the A-2 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-2
Term Loans on such date)
(iii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, the Borrower shall be
required to repay on each date set forth below the principal amount of the A-3
Term Loans, to the extent outstanding, set forth opposite such date (each such
repayment as the same may be reduced as provided in Section 4.01 and 4.02(h) and
(i), a "Scheduled A-3 Term Loan Repayment"):
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Scheduled A-3 Term Loan Repayment Date Amount
- -------------------------------------- ------
Each of March 31, 2002 and June 30, 2002 An amount equal to 2.5% of the
aggregate principal amount of
A-3 Term Loans outstanding on
the A-3 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-3
Term Loans on such date)
Each of September 30, 2002, December An amount equal to 1.875% of the
31, 2002, March 31, 2003 and June 30, 2003 aggregate principal amount of
A-3 Term Loans outstanding on
the A-3 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-3
Term Loans on such date)
Each of September 30, 2003, December An amount equal to 2.5% of the
31, 2003, March 31, 2004 and June 30, 2004 aggregate principal amount of
A-3 Term Loans outstanding on
the A-3 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-3
Term Loans on such date)
Each of September 30, 2004, December An amount equal to 5% of the
31, 2004, March 31, 2005 and June 30, 2005 aggregate principal amount of
A-3 Term Loans outstanding on
the A-3 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-3
Term Loans on such date)
Each of September 30, 2005, December An amount equal to 6.25% of the
31, 2005, March 31, 2006 and June 30, 2006 aggregate principal amount of
A-3 Term Loans outstanding on
the A-3 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-3
Term Loans on such date)
- 33 -
Each of September 30, 2006, December An amount equal to 8.125% of the
31, 2006, March 31, 2007 and the A aggregate principal amount of
Maturity Date A-3 Term Loans outstanding on
the A-3 Term Loan Commitment
Termination Date (after giving
effect to the incurrence of A-3
Term Loans on such date)
(iv) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, the Borrower shall be
required to repay on each date set forth below the principal amount of B Term
Loans, to the extent outstanding, set forth opposite such date (each such
repayment as the same may be reduced as provided in Sections 4.01 and 4.02(h)
and (i), a "Scheduled B Term Loan Repayment"):
Scheduled B Term Loan Repayment Date Amount
- ------------------------------------ ------
Each June 30 commencing June 30, 2002 An amount equal to 1% of the
through and including aggregate principal amount of B
June 30, 2007 Term Loans outstanding on the
Initial Borrowing Date (after
giving effect to the incurrence
of B Term Loans on such Date)
Each of September 30, 2007 and the An amount equal to 47% of the
B Maturity Date aggregate principal amount of B
Term Loans outstanding on the
Initial Borrowing Date (after
giving effect to the incurrence
of B Term Loans on such date)
(v) In addition to any other mandatory repayments pursuant to
this Section 4.02, the Borrower shall be required to repay the principal amount
of Term Loans (other than any such Incremental Term Loans designated as B Term
Loans) on the dates and in the amounts set forth in the respective Incremental
Term Loan Commitment Agreement or Agreements for such Incremental Term Loans
(each such repayment as the same may be reduced as provided in Sections 4.01(a)
and 4.02(h), a "Scheduled Incremental Term Loan Repayment"), provided (i) that
in no event may the Weighted Average Life to Maturity of any Tranche of
Incremental Term Loans be permitted to be less than the Weighted Average Life to
Maturity applicable to the B Term Loans and (ii) if any Incremental Term Loans
are incurred which are added to (and form part of) the B Term Loan Tranche, the
amount of the then remaining Scheduled B Term Loan Repayments shall be
proportionally increased (with the aggregate amount of increases to the then
remaining Scheduled B Term Loan Repayments to equal the
- 34 -
aggregate principal amount of such new Incremental Term Loans then being
incurred) in accordance with the requirements of Section 1.14(c).
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Effective Date upon which the Borrower (and, in the case of any such issuance of
its equity, any of its Subsidiaries) receives any cash proceeds from any sale or
issuance of its equity (excluding (i) cash proceeds received from capital
contributions to, or equity investments in, any Wholly-Owned Subsidiary of the
Borrower or any Subsidiary Guarantor to the extent made by the Borrower or any
Subsidiary of the Borrower, (ii) cash proceeds received from sales or issuances
of equity to directors or employees of the Borrower or any of its Subsidiaries
pursuant to any stock option or other similar incentive plan and (iii) cash
proceeds from any such sale or issuance of equity to the extent such proceeds
are contemporaneously used to finance the purchase of assets of the type
described in the definition of Hotel Property contained in Section 11.01 (or to
purchase the equity interests of a Person whose assets are all or substantially
all of the type described in the definition of Hotel Property contained in
Section 11.01) as otherwise permitted under this Agreement), an amount equal to
100% of the Net Equity Proceeds of the respective sale or issuance shall be
applied as a mandatory repayment of Revolving Loans (with no corresponding
reduction to the Total Revolving Loan Commitment) to the extent outstanding at
such time in accordance with the requirements of Section 4.02(i).
(d) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Effective Date upon which the Borrower or any of its Subsidiaries receives any
cash proceeds from any incurrence by the Borrower or any of its Subsidiaries of
Indebtedness for borrowed money (excluding Indebtedness for borrowed money
permitted to be incurred pursuant to Section 9.04), an amount equal to 100% of
the Net Debt Proceeds of the respective incurrence of Indebtedness shall be
applied as a mandatory repayment (or commitment reduction, as the case may be)
of outstanding Loans (or Commitments) in accordance with the requirements of
Section 4.02(h) and (i).
(e) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 3 days following
each date after the Effective Date upon which the Borrower or any of its
Subsidiaries receives proceeds from any sale or other disposition of assets
(including capital stock and securities held by the Borrower or any such
Subsidiary, but excluding (i) sales or transfers of assets permitted by Sections
9.02(ii), (v), (ix) and (x), (ii) sales or transfers of assets with a fair
market value less than $35,000,000 in the aggregate for all such transfers in
any fiscal year and (iii) so long as no Default or Event of Default then exists,
sales or transfers of assets the Net Sale Proceeds of which do not exceed
$100,000,000 in any fiscal year of the Borrower and Net Sale Proceeds from any
sales permitted under Section 9.02(xii) and (xiii), provided in each case that
such Net Sale Proceeds are used to construct, exchange for or purchase
(including by means of the acquisition of, or merger with, any Person pursuant
to a transaction otherwise permitted under this Agreement) similar assets within
two years following the receipt of such Net Sale Proceeds and the Borrower
delivers a certificate to the Administrative Agent within 3 days of such date of
receipt stating that such Net Sale Proceeds shall be reinvested in similar
assets as provided above within two years following the date of the receipt of
such Net Sale Proceeds (which certificate shall set forth the estimates of
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the proceeds to be so expended), an amount equal to 100% of the Net Sale
Proceeds therefrom shall be applied as a mandatory repayment (or commitment
reduction, as the case may be) of outstanding Loans (or Commitments) in
accordance with the requirements of Section 4.02(h) and (i). To the extent Net
Sale Proceeds are not required to be applied pursuant to this Section 4.02(e) as
a result of clause (iii) contained in the parenthetical appearing in the first
sentence of this Section 4.02(e) and all or any portion of such Net Sale
Proceeds are not so reinvested in like assets within such two-year period, then
the remaining portion of such Net Sale Proceeds shall be applied on the last day
of such applicable period as otherwise required by this Section 4.02(e)
(determined without regard to clause (iii) contained in the parenthetical
appearing in the first sentence of this Section 4.02(e)). In addition, to the
extent that the Borrower is required to apply any portion of any Net Sale
Proceeds from any asset sale to prepay or to make an offer to prepay the 9.15%
Senior Subordinated Notes, the 9-7/8% Senior Subordinated Notes or any Third
Party Incremental Debt, the Borrower shall apply such Net Sale Proceeds as a
mandatory repayment or commitment reduction, (as the case may be) of outstanding
Loans (or Commitments) in accordance with the requirements of Section 4.02(h)
and (i).
(f) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each Excess Cash Payment
Date, so long as Excess Cash Flow for the relevant Excess Cash Payment Period
exceeds $30,000,000, an amount equal to 50% of the Excess Cash Flow in excess of
$30,000,000 for such relevant Excess Cash Payment Period shall be applied as a
mandatory repayment (or commitment reduction, as the case may be) of outstanding
Loans (or Commitments) in accordance with the requirements of Section 4.02(h)
and (i).
(g) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 10 days following
each date after the Effective Date on which the Borrower or any of its
Subsidiaries receives any proceeds from one or more Recovery Events in excess of
$35,000,000 in the aggregate in any given fiscal year of the Borrower, an amount
equal to 100% of the Net Insurance Proceeds in excess of $35,000,000 in the
aggregate in such fiscal year shall be applied as a mandatory repayment (or
commitment reduction, as the case may be) of outstanding Loans (or Commitments)
in accordance with Section 4.02(h) and (i), provided that so long as no Default
or Event of Default then exists, such Net Insurance Proceeds shall not be
required to be so applied on such date of receipt to the extent that the
Borrower has delivered a certificate to the Administrative Agent within 10 days
of such date stating that such proceeds shall be used to replace or restore any
properties or assets in respect of which such proceeds were paid, or to invest
in alternative properties (to the extent otherwise permitted under this
Agreement) within two years following the date of receipt of such proceeds
(which certificate shall set forth the estimates of the proceeds to be so
expended) and provided further, that if all or any portion of such Net Insurance
Proceeds not required to be applied to the repayment of Loans and/or the
reduction of Commitments pursuant to the preceding proviso are not so used
within two years after the date of receipt of such proceeds then such remaining
portion not used shall be applied on the date which is the second anniversary of
the date of receipt of such proceeds as a mandatory repayment (or commitment
reduction, as the case may be) of outstanding Loans (or Commitments) in
accordance with the requirements of Section 4.02(h) and (i).
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(h) Each amount required to be applied to repay Loans (or to
reduce Commitments) pursuant to Sections 4.02(d), (e), (f) and (g) shall be
applied (1) first to repay outstanding Term Loans as provided below, (2) second,
to the extent such amount is in excess of the amount required to be applied as
provided in preceding clause (1), to permanently reduce the Total A-2 Term Loan
Commitment, (3) third, to the extent such amount is in excess of the amount
required to be applied as provided in preceding clauses (1) and (2), to
permanently reduce the Total A-3 Term Loan Commitment, (4) fourth, to the extent
such amount is in excess of the amount required to be applied as provided in
preceding clauses (1) through (3), to permanently reduce the Total Revolving
Loan Commitment and (5) fifth, to the extent such amount is in excess of the
amount required to be applied as provided in preceding clauses (1) through (4),
to permanently reduce Incremental Term Loan Commitments as provided below. The
amount of each principal repayment of Term Loans made as required by Section
4.02(d), (e), (f) and (g) shall be applied pro rata to each Tranche of Term
Loans with each Tranche of Term Loans to receive the Relevant Term Loan
Percentage of such repayment. Each amount required to be applied to Incremental
Term Loan Commitments pursuant to Section 4.02(d), (e), (f) and (g) shall be
applied pro rata to each Tranche of Incremental Term Loan Commitments, with each
such Tranche of Incremental Term Loan Commitments to be allocated the Relevant
Incremental Term Loan Commitment Percentage of such amount (and each Incremental
Term Loan Lender's Incremental Term Loan Commitments under each such Tranche
shall be proportionately reduced based on the relative amount of each such
Incremental Term Loan Lender's Incremental Term Loan Commitments under each such
Tranche of Incremental Term Loan Commitments). The amount of each principal
repayment of Term Loans made as required by Sections 4.02(d), (e), (f), and (g)
shall be applied to reduce the then remaining Scheduled Repayments of the
respective Tranche pro rata based upon the then remaining principal amounts of
the Scheduled Repayments of the respective Tranche after giving effect to all
prior reductions thereto.
(i) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans of the respective
Tranche which are to be repaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, provided that: (i)
repayments of Eurodollar Loans pursuant to this Section 4.02 shall be made on
the last day of an Interest Period applicable thereto unless all Eurodollar
Loans with Interest Periods ending on such date of required repayment and all
Base Rate Loans have been paid in full; (ii) if any repayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding
Eurodollar Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto, such Borrowing shall be converted
at the end of the then current Interest Period into a Borrowing of Base Rate
Loans; and (iii) each repayment of Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans of all Lenders. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion.
(j) Notwithstanding anything to the contrary contained
elsewhere in the Agreement, all then outstanding Loans shall be repaid in full
on the respective Maturity Date therefor.
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(k) Notwithstanding anything to the contrary contained in
Section 4.01(a) or above in this Section 4.02, at any time and to the extent
that A Term Loans remain outstanding, with respect to any mandatory repayments
of B Term Loans or Incremental Term Loans otherwise required above pursuant to
this Section 4.02, and with respect to that portion of any voluntary prepayment
of Term Loans pursuant to Section 4.01(a) which, in accordance with the
provisions of clause (iv) thereof is required to be applied to B Term Loans or
Incremental Term Loans, if on or prior to the date the respective mandatory
repayment is otherwise required to be made pursuant to this Section 4.02 or on
or prior to the date of the respective voluntary prepayment pursuant to Section
4.01(a), the Borrower has given the Administrative Agent written notification
that the Borrower has elected to give each Lender with a B Term Loan and an
Incremental Term Loan the right to waive such Lender's right to receive such
repayment or prepayment (the "Waivable Repayment"), the Administrative Agent
shall notify such Lenders of such receipt and the amount of the repayment or
prepayment to be applied to each such Lender's B Term Loans or Incremental Term
Loans, as the case may be. In the event any such Lender with a B Term Loan or an
Incremental Term Loan, as the case may be, desires to waive such Lender's right
to receive any such Waivable Repayment in whole or in part, such Lender shall so
advise the Administrative Agent no later than 5:00 P.M. (New York time) three
Business Days after the date of such notice from the Administrative Agent which
notice shall also include the amount such Lender desires to receive. If any such
Lender does not reply to the Administrative Agent within such three Business Day
period, it will be deemed to have accepted 100% of the total payment. If any
such Lender does not specify an amount it wishes to receive, it will be deemed
to have accepted 100% of the total payment. In the event that any such Lender
waives such Lender's right to receive any such Waivable Repayment, the
Administrative Agent shall apply 100% of the amount so waived by such Lender to
prepay the A Term Loans pro rata in accordance with Section 4.01(a) or 4.02, as
the case may be (determined, in each case, as if no B Term Loans or Incremental
Term Loans, as the case may be, are outstanding).
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Lender or
Lenders entitled thereto not later than 2:00 P.M. (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office. Whenever any payment to be made hereunder or under any Note
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest shall be payable at the applicable rate
during such extension.
4.04 Net Payments; Taxes. (a) All payments made by any Credit
Party hereunder or under any Note will be made without setoff, counterclaim or
other defense. Except as provided in Section 4.04(b), all such payments will be
made free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Lender or Agent, as
the case may be, or any franchise tax based on the net income or net profits of
a Lender or Agent, as the case may be, in either case pursuant to the laws of
the jurisdiction in which such Lender or such Agent is
- 38 -
organized or the jurisdiction in which the principal office or applicable
lending office of such Lender or such Agent is located or any subdivision
thereof or therein all such excluded taxes being referred to collectively as
"Excluded Taxes") and all interest, penalties or similar liabilities with
respect to such non-excluded taxes, levies, imposts, duties, fees or other
charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as "Taxes"). Subject to Section
4.04(b), if any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Lender or Agent, as the case may be, promptly after the written
request of such Lender or such Agent, for taxes imposed on or measured by the
net income or net profits of such Lender or such Agent, or any franchise tax
based on the net income or net profits of such Lender or such Agent, in either
case pursuant to the laws of the jurisdiction in which such Lender or such Agent
is organized or in which the principal office or applicable lending office of
such Lender or such Agent is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Lender or
such Agent is organized or in which the principal office or applicable lending
office of such Lender or such Agent is located and for any withholding of taxes
as such Lender or such Agent shall determine are payable by, or withheld from,
such Lender or such Agent in respect of such amounts so paid to or on behalf of
such Lender or such Agent pursuant to the preceding sentence and in respect of
any amounts paid to or on behalf of such Lender or such Agent pursuant to this
sentence. The Borrower will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Lender or Agent, as the case
may be, and reimburse such Lender or such Agent upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender or such
Agent. All amounts payable pursuant to this Section 4.04(a) shall be subject to
the provisions of Section 13.17 (to the extent applicable).
(b) Each Lender and Agent that is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) agrees to deliver
to the Borrower and the Administrative Agent on or prior to the Effective Date,
or in the case of a Lender or Agent that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 13.04 (unless the
respective Lender or Agent was already a Lender or Agent hereunder immediately
prior to such assignment or transfer), on the date of such assignment or
transfer to such Lender or Agent, (i) two accurate and complete original signed
Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete
exemption under an income tax treaty) (or successor forms) certifying to such
Lender's or such Agent's entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Lender or Agent is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form W-8ECI or Form W-8BEN (with the respect to
a complete exemption under an income tax treaty) pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit E (any such certificate,
a "Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed
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Internal Revenue Service Form W-8BEN (with respect to the portfolio interest
exemption) (or successor form) certifying to such Lender's or such Agent's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Lender and Agent agrees that
from time to time after the Effective Date, when a lapse in time or change in
circumstances or any changes after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the official
interpretation thereof, renders the previous certification obsolete or
inaccurate in any material respect, such Lender or such Agent will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the
benefits of any income tax treaty), or Form W-8BEN (with respect to the
portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as the case
may be, and such other forms as may be required in order to confirm or establish
the entitlement of such Lender or such Agent to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate,
in which case such Lender or such Agent shall not be required to deliver any
such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to Section
13.04(b) and the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, Fees or other
amounts payable hereunder for the account of any Lender or Agent, as the case
may be, which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Lender or such Agent has not provided to the Borrower U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
4.04(a) to gross-up payments to be made to a Lender or Agent, as the case may
be, in respect of income or similar taxes imposed by the United States if (I)
such Lender or such Agent has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Lender or
Agent, as the case may be, described in clause (ii) above, to the extent that
such Forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 13.04(b), the
Borrower agrees to pay additional amounts and to indemnify each Lender or Agent,
as the case may be, in the manner set forth in Section 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the official interpretation thereof, relating to the deducting or
withholding of such income or similar taxes.
(c) If the Borrower pays any additional amount under this
Section 4.04 to a Lender and such Lender determines in its sole discretion that
it has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
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Lender shall pay to the Borrower 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 Tax Benefit; provided,
however, that (i) any Taxes that are imposed on a Lender as a result of a
disallowance or reduction (including through the expiration of any tax credit
carryover or carryback of such Lender that otherwise would not have expired) of
any Tax Benefit with respect to which such Lender has made a payment to the
Borrower pursuant to this Section 4.04(c) shall be treated as a Tax for which
the Borrower is obligated to indemnify such Lender pursuant to this Section 4.04
without any exclusions or defenses; and (iii) nothing in this Section 4.04(c)
shall require the Lender to disclose any confidential information to the
Borrower (including, without limitation, its tax returns).
SECTION 5. Conditions Precedent to Initial Borrowing Date. The
obligation of each Lender to make Loans, and the obligation of each Issuing
Lender to issue Letters of Credit, on the Initial Borrowing Date, is subject at
the time of the occurrence of the following conditions:
5.01 Effective Date; Notes. (i) On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred as provided in Section
13.10 and (ii) there shall have been delivered to the Administrative Agent for
the account of each Lender that has requested same the appropriate Term Note
and/or Revolving Note executed by the Borrower, and to the extent requested by
the Swingline Lender, the Swingline Note executed by the Borrower, in each case
in the amount, maturity and as otherwise provided herein.
5.02 Fees, etc. On or prior to the Initial Borrowing Date, the
Borrower shall have paid to the Lead Arranger, the Administrative Agent and the
Lenders all reasonable costs, fees and expenses (including, without limitation,
reasonable legal fees and expenses) payable to the Lead Arranger, the
Administrative Agent and the Lenders pursuant to the terms hereof or of a
separate writing to the extent then due, provided that in the case of costs and
expenses, the Borrower shall have received invoices therefor at least three
Business Days prior to the Initial Borrowing Date.
5.03 Opinion of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received from Shearman & Sterling, counsel to
the Borrower and the Subsidiary Guarantors, an opinion addressed to each of the
Lead Arranger, the Administrative Agent and each of the Lenders and dated the
Initial Borrowing Date covering the matters set forth in Exhibit F and such
other matters incident to the transactions contemplated herein as the Lead
Arranger may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Administrative Agent shall have received a certificate,
dated the Initial Borrowing Date, signed by the chairman of the board, the
president, any vice president or the treasurer of the Borrower and each
Subsidiary of the Borrower which is to become a Credit Party on the Initial
Borrowing Date, and attested to by the secretary or any assistant secretary of
the respective such Person, in the form of Exhibit G with appropriate
insertions, together with copies of the certificate of incorporation and by-laws
(or equivalent organizational documents) of the
- 41 -
respective such Person, and the resolutions of the respective such Person
referred to in such certificate, and the foregoing shall be reasonably
acceptable to the Administrative Agent.
(b) On or prior to the Initial Borrowing Date, all corporate
and legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Lead Arranger and the
Required Lenders, and the Lead Arranger and the Administrative Agent shall have
received all information and copies of all documents and papers, including
records of corporate, limited liability company and partnership proceedings,
governmental approvals, good standing certificates and bring-down telegrams, if
any, which the Lead Arranger may have reasonably requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate, or governmental authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining Agreements; Existing Indebtedness
Agreements; Tax Sharing Agreements; Material Leases. (a) On or prior to the
Initial Borrowing Date, there shall have been delivered to the Administrative
Agent true and correct copies of the following documents, in each case as same
will be in effect on the Initial Borrowing Date:
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in Section
3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees of
the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such
plan) (collectively, the "Employee Benefit Plans");
(ii) all material agreements entered into by the Borrower or
any of its Subsidiaries governing the terms and relative rights of its
capital stock and any agreements entered into by shareholders relating
to any such entity with respect to its capital stock (collectively, the
"Shareholders' Agreements");
(iii) all material agreements with members of, or with respect
to, the senior management and management of the Borrower or any of its
Subsidiaries (collectively, the "Management Agreements");
(iv) all collective bargaining agreements applying or relating
to any employee of the Borrower or any of its Subsidiaries
(collectively, the "Collective Bargaining Agreements");
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(v) all agreements evidencing or relating to Indebtedness of
the Borrower or any of its Subsidiaries which is to remain outstanding
after the Effective Date to the extent such Indebtedness exceeds (or
upon the utilization of any unused commitments may exceed) $10,000,000
(the "Existing Indebtedness Agreements");
(vi) all tax sharing, tax allocation and other similar
agreements entered into by the Borrower or any of its Subsidiaries
(collectively, the "Tax Sharing Agreements"); and
(vii) all material leases under which the Borrower or any of
its Subsidiaries lease (as lessee) any Hotel Property (collectively,
the "Material Leases");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Collective Bargaining Agreements, Tax Sharing Agreements and
Material Leases shall be in full force and effect on the Initial Borrowing Date.
5.06 Existing Credit Agreement. On the Initial Borrowing Date,
simultaneously with the incurrence of Loans on such date, the total commitments
in respect of the Existing Credit Agreement shall have been terminated, and all
loans and notes with respect thereto (together with interest thereon) shall have
been repaid in full, all letters of credit issued thereunder shall have been
terminated (or either incorporated as Existing Letters of Credit hereunder or
fully supported with Letters of Credit issued hereunder) and all other amounts
(including premiums) owing pursuant to the Existing Credit Agreement shall have
been repaid in full and all documents in respect of the Existing Credit
Agreement and all guarantees with respect thereto shall have been terminated
(except as to indemnification and similar provisions, which may survive to the
extent provided therein) and be of no further force and effect. In addition,
simultaneously with the incurrence of Loans on the Initial Borrowing Date, the
creditors in respect of the Existing Credit Agreement shall have terminated and
released all security interests in and Liens on the assets of the Borrower and
its Subsidiaries created pursuant to the security documentation relating to the
Existing Credit Agreement, and such creditors shall have returned all such
assets to the Borrower or such Subsidiary.
5.07 Pledge Agreement. On or prior to the Initial Borrowing
Date, each Credit Party shall have duly authorized, executed and delivered the
Pledge Agreement in the form of Exhibit H (as amended, modified or supplemented
from time to time, the "Pledge Agreement") and shall have delivered to the
Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral,
if any, referred to therein and then owned by such Credit Party, (x) endorsed in
blank in the case of promissory notes constituting Pledge Agreement Collateral
and (y) together with executed and undated endorsements for transfer in the case
of equity interests constituting certificated Pledge Agreement Collateral, along
with evidence that all other actions necessary or, in the reasonable opinion of
the Lead Arranger, desirable, to perfect the security interests purported to be
created by the Pledge Agreement have been taken and the Pledge Agreement shall
be in full force and effect.
5.08 Security Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered the Security
Agreement in the form of Exhibit I (as
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amended, modified or supplemented from time to time, the "Security Agreement")
covering all of such Credit Party's Security Agreement Collateral, together
with:
(a) proper Financing Statements (Form UCC-1) fully executed
for filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Lead Arranger, desirable to perfect the security interests purported to
be created by the Security Agreement, as the case may be;
(b) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing
statements that name such Credit Party as debtor and that are filed in
the jurisdictions referred to in clause (a) above, together with copies
of such other financing statements that name any such Credit Party as
debtor (none of which shall cover the Collateral except to the extent
evidencing Permitted Liens or in respect of which the Collateral Agent
shall have received termination statements (Form UCC-3 or such other
termination statements as shall be required by local law) fully
executed for filing); and
(c) evidence that all other actions reasonably necessary or,
in the reasonable opinion of the Lead Arranger, desirable to perfect
and protect the security interests purported to be created by the
Security Agreement have been taken.
5.09 Subsidiary Guarantor. On the Initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit J (as amended, modified or
supplemented from time to time, the "Subsidiaries Guaranty").
5.10 Adverse Change, etc. (a) On the Initial Borrowing Date,
nothing shall have occurred (and none of the Lead Arranger, the Administrative
Agent or the Lenders shall have become aware of any facts, conditions or other
information not previously known) which the Lead Arranger, the Administrative
Agent or the Required Lenders believe would reasonably be expected to have a
material adverse effect (i) on the rights or remedies of the Lead Arranger, the
Administrative Agent or the Lenders, or on the ability of any Credit Party to
perform its respective obligations to the Lead Arranger, the Administrative
Agent and the Lenders or (ii) on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
(b) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents
(if any) in connection with the making of the Loans and the transactions
contemplated by the Credit Documents and otherwise referred to herein or therein
shall have been obtained and remain in effect, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse conditions
upon the making of the Loans and the transactions contemplated by the Credit
Documents or otherwise referred to herein or therein. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
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prohibiting or imposing materially adverse conditions upon the making of the
Loans or the transactions contemplated by the Credit Documents.
5.11 Litigation. On the Initial Borrowing Date, no litigation
by any entity (private or governmental) shall be pending or, to the best of the
Borrower's knowledge, threatened with respect to the making of the Loans or the
Credit Documents or any documentation executed in connection therewith or the
transactions contemplated thereby.
5.12 Solvency Certificate; Insurance Certificates. On or prior
to the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent:
(a) a solvency certificate in the form of Exhibit K, addressed
to the Lead Arranger, the Administrative Agent and each of the Lenders and dated
the Initial Borrowing Date from the Chief Financial Officer of the Borrower
providing the opinion of such Chief Financial Officer as to the solvency of the
Borrower and the Borrower's Subsidiaries;
(b) certificates of insurance complying with the requirements
of Section 8.03 for the business and properties of the Borrower and its
Subsidiaries, in scope, form and substance reasonably satisfactory to the Lead
Arranger and naming the Collateral Agent as an additional insured and/or loss
payee (as its respective interest may appear), and stating that such insurance
shall not be cancelled or materially changed without at least 30 days' prior
written notice by the respective insurer to the Collateral Agent.
5.13 Projections. On or prior to the Initial Borrowing Date,
the Lead Arranger and the Administrative Agent shall have received copies of the
financial statements and Projections referred to in Sections 7.05(a) and (d).
5.14 Compliance with the 9.15% Senior Subordinated Note
Indenture. On the Initial Borrowing Date, the Borrower shall deliver to the
Administrative Agent a certificate (i) dated the Initial Borrowing Date and (ii)
certifying that this Agreement and the incurrence of all Loans and the issuance
of all Letters of Credit as permitted under this agreement are, and when
incurred or issued will be, permitted under Section 4.03(a)(z) of the 9.15%
Senior Subordinated Note Indenture, which certificate shall set forth in
reasonable detail the calculations supporting such certification.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Lender to make Loans (including any Loans made on the Initial
Borrowing Date), and the obligation of each Issuing Lender to issue Letters of
Credit (including any Letters of Credit issued on the Initial Borrowing Date),
is subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
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being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior
to the making of each Loan (other than a Swingline Loan or a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received
a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the
making of each Swingline Loan, the Swingline Lender shall have received the
notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Lender shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
The occurrence of the Initial Borrowing Date and the
acceptance of the proceeds of each Loan and the making of each Letter of Credit
Request shall constitute a representation and warranty by the Borrower to the
Lead Arranger, the Administrative Agent and each of the Lenders that all the
conditions specified in Section 5 (with respect to Credit Events on the Initial
Borrowing Date) and in this Section 6 (with respect to Credit Events on and
after the Initial Borrowing Date) and applicable to the Initial Borrowing Date
and/or such Credit Event, as the case may be, exist as of that time. All of the
Notes, certificates, legal opinions and other documents and papers referred to
in Section 5 and in this Section 6, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account of
each of the Lenders and, except for the Notes, in sufficient counterparts for
each of the Lenders and shall be in form and substance reasonably satisfactory
to the Lead Arranger and the Required Lenders.
SECTION 7. Representations and Warranties. In order to induce
the Lenders to enter into this Agreement and to make the Loans and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes the
following representations, warranties and agreements, all of which shall survive
the execution and delivery of this Agreement and the Notes and the making of the
Loans and issuance of the Letters of Credit, with the occurrence of the Initial
Borrowing Date and the occurrence of each Credit Event on or after the Initial
Borrowing Date being deemed to constitute a representation and warranty that the
matters specified in this Section 7 are true and correct on and as of the
Initial Borrowing Date and on the date of each such Credit Event (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
7.01 Corporate and Other Status. The Borrower and each of its
Subsidiaries (i) except as set forth on Schedule X, is a duly organized and
validly existing Company in good standing under the laws of the jurisdiction of
its organization, (ii) has the Company power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the conduct of its business
requires such qualifications except for failures to be so qualified which,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the business, operations, property,
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assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
7.02 Corporate or Partnership Power and Authority. Each Credit
Party has the Company power and authority, to execute, deliver and perform the
terms and provisions of each of the Credit Documents to which it is a party and
has taken all necessary Company action to authorize the execution, delivery and
performance by it of each of such Credit Documents. Each Credit Party has duly
executed and delivered each of the Credit Documents to which it is a party, and
each of such Credit Documents constitutes the legal, valid and binding
obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, nor the consummation
of the transactions contemplated therein, (i) will contravene any provision of
any applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the properties or assets of the Borrower
or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage,
deed of trust, credit agreement or loan agreement, or any other material
agreement, contract or instrument, to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets is bound
or to which it may be subject or (iii) will violate any provision of the
certificate of incorporation, by-laws or equivalent organizational document of
the Borrower or any of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document or (ii)
the legality, validity, binding effect or enforceability of any such Credit
Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) (i) The consolidated balance sheet of the
Borrower and its Subsidiaries at December 31, 2000 and the related consolidated
statements of operations, cash flows and shareholders' equity of the Borrower
and its Subsidiaries for the fiscal year ended on such date and (ii) the
consolidated balance sheet of the Borrower and its Subsidiaries at March 31,
2001 and the consolidated statements of operations and cash flows of the
Borrower and its Subsidiaries for the three-month period ended on such date,
copies of which have been furnished to the Lenders prior to the Effective Date,
present fairly the financial position of the Borrower and its Subsidiaries at
the date of such balance sheets and the results of the operations of the
Borrower and its Subsidiaries for the periods covered thereby. All such
financial statements have been
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prepared in accordance with generally accepted accounting principles
consistently applied (provided that the aforementioned interim financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial statements and the requirements of Regulation
S-X under the Securities Act). Since December 31, 2000, there has been no
material adverse change in the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole; it being understood and agreed that the
occurrence of any event that occurred, and was disclosed by the Borrower or any
of its Subsidiaries by means of public Exchange Act filings, at any time from
December 31, 2000 to the Effective Date shall not constitute an event which had
a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole during such period.
(b) (i) On and as of the Initial Borrowing Date and after
giving effect to the transaction contemplated hereby and to all Indebtedness
(including the Loans) being incurred or assumed and Liens created by the Credit
Parties in connection therewith, (a) the sum of the assets, at a fair valuation,
of each of the Borrower on a stand alone basis and of the Borrower and its
Subsidiaries taken as a whole will exceed its debts; (b) each of the Borrower on
a stand alone basis and the Borrower and its Subsidiaries taken as a whole has
not incurred and does not intend to incur, and does not believe that they will
incur, debts beyond their ability to pay such debts as such debts mature; and
(c) each of the Borrower on a stand alone basis and the Borrower and its
Subsidiaries taken as a whole will have sufficient capital with which to conduct
its business. For purposes of this Section 7.05(b), "debt" means any liability
on a claim, and "claim" means (i) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(c) Except (i) as fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) and (ii) without duplication, any Existing
Indebtedness, there were as of the Effective Date no liabilities or obligations
with respect to the Borrower or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, would reasonably be expected to be
material to the Borrower and its Subsidiaries taken as a whole. As of the
Effective Date, the Borrower does not know of any basis for the assertion
against it or any of its Subsidiaries of any liability or obligation of any
nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) or otherwise referred to in the
immediately preceding sentence which, either individually or in the aggregate,
would reasonably be expected to be material to the Borrower and its Subsidiaries
taken as a whole.
(d) On and as of the Effective Date, the Projections have been
prepared in good faith and are based on reasonable assumptions, and there are no
statements or conclusions in the Projections which are based upon or include
information known to the Borrower to be
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misleading in any material respect or which fail to take into account material
information known to the Borrower regarding the matters reported therein. On the
Effective Date, the Borrower believes that the Projections are reasonable, it
being understood that the Projections include assumptions as to future events
that are not to be viewed as facts and there can be no assurance that such
assumptions, statements, estimates and Projections will be realized and that
actual results may differ from the projected results and such differences may be
material and adverse.
7.06 Litigation. There are no actions, suits or proceedings
pending or, to the Borrower's knowledge, threatened (i) with respect to any
Credit Document or (ii) that would reasonably be expected to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. To the best knowledge of
the Borrower, all factual information (taken as a whole) regarding the Borrower
or any of its Subsidiaries furnished by or on behalf of the Borrower or any of
its Subsidiaries in writing to the Lead Arranger, the Administrative Agent or
any Lender (including, without limitation, all information contained in the
Credit Documents) for purposes of or in connection with this Agreement, the
other Credit Documents or any transaction contemplated herein or therein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of the Borrower or any of its Subsidiaries in writing to the Lead
Arranger, the Administrative Agent or any Lender will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided. It is understood that the Projections do not constitute factual
information for purposes of this Section 7.07.
7.08 Use of Proceeds; Margin Regulations. (a) The proceeds of
all A-1 Term Loans and B Term Loans shall be utilized by the Borrower (i) first,
to finance the Refinancing and the payment of fees and expenses relating thereto
and (ii) second, after the application of such Loans as provided in preceding
clause (i), for its general corporate purposes, including, without limitation,
the construction or acquisition of assets of the type described in the
definition of Hotel Properties contained in Section 11.01 (or the equity
interests of a Person whose assets are all or substantially all of the type
described in the definition of Hotel Properties contained in Section 11.01) and
for such other purposes as are not prohibited hereby.
(b) The proceeds of all A-2 Term Loans, A-3 Term Loans,
Incremental Term Loans, Revolving Loans and Swingline Loans shall be utilized by
the Borrower for its general corporate purposes, including, without limitation,
the construction or acquisition of assets of the type described in the
definition of Hotel Properties contained in Section 11.01 (or the equity
interests of a Person whose assets are all or substantially all of the type
described in the definition of Hotel Properties contained in Section 11.01) and
for such other purposes as are not prohibited hereby, provided that no proceeds
of Revolving Loans or Swingline Loans may be utilized to finance the
Refinancing.
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(c) No part of any Credit Event (or the proceeds thereof) will
be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the use of the proceeds thereof nor the occurrence of any other Credit
Event will violate or be inconsistent with the provisions of Regulation T, U or
X of the Board of Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of the Borrower and each
of its Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all material taxes and assessments payable by it which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of the Borrower and its Subsidiaries in
accordance with generally accepted accounting principles. The Borrower and each
of its Subsidiaries have at all times paid, or have provided adequate resources
(in the good faith judgment of the management of the Borrower) for the payment
of all federal, state and foreign income taxes applicable for all prior fiscal
years and for the current fiscal year to date. There is no (with respect to the
Borrower and its Subsidiaries taken as a whole) action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of the Borrower,
threatened by any authority regarding any material amount of taxes relating to
the Borrower or any of its Subsidiaries.
7.10 Compliance with ERISA. (i) Schedule IV sets forth each
Plan; each Plan (and each related trust, insurance contract or fund) is in
substantial compliance with its terms and with all applicable laws, including
without limitation ERISA and the Code; each Plan (and each related trust, if
any) which is intended to be qualified under Section 401(a) of the Code has
received a determination letter from the Internal Revenue Service to the effect
that it meets the requirements of Sections 401(a) and 501(a) of the Code; no
Reportable Event has occurred; no Plan which is a multiemployer plan (as defined
in Section 4001(a)(3) of ERISA) is insolvent or in reorganization except to the
extent that such insolvency or reorganization would not reasonably be expected
to have a material adverse effect on the business, operations, assets,
liabilities, conditions (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole; no Plan has an Unfunded Current Liability
which, when added to the aggregate amount of Unfunded Current Liabilities with
respect to all other Plans, exceeds $10,000,000; no Plan which is subject to
Section 412 of the Code or Section 302 of ERISA has an accumulated funding
deficiency, within the meaning of such sections of the Code or ERISA, or has
applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan have been timely made; neither the Borrower nor any Subsidiary
of the Borrower nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such liability under any of the foregoing sections with
respect to any Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate or appoint
a trustee to administer any Plan which is subject to Title IV of ERISA; no
action, suit, proceeding, hearing,
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audit or investigation with respect to the administration, operation or the
investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Credit Event, would not exceed such amount as would reasonably be expected to
have a material adverse effect on the business, operations, assets, liabilities,
conditions (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole; each group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered
employees or former employees of the Borrower, any Subsidiary of the Borrower,
or any ERISA Affiliate has at all times been operated in material compliance
with the provisions of Part 6 of subtitle B of Title I of ERISA and Section
4980B of the Code; no lien imposed under the Code or ERISA on the assets of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and the Borrower and its Subsidiaries
may cease contributions to or terminate any employee benefit plan maintained by
any of them without incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Borrower nor any of its
Subsidiaries has incurred any obligation in connection with the termination of
or withdrawal from any Foreign Pension Plan. The present value of the accrued
benefit liabilities (whether or not vested) under each Foreign Pension Plan,
determined as of the end of the Borrower's most recently ended fiscal year on
the basis of actuarial assumptions, each of which is reasonable, did not exceed
the current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities.
7.11 The Security Documents. (a) On and after the Effective
Date, the provisions of the Security Agreement are effective to create in favor
of the Collateral Agent for the benefit of the Secured Creditors a legal, valid
and enforceable security interest in all right, title and interest of the Credit
Parties in the Security Agreement Collateral described therein, and the Security
Agreement, upon the filing of Form UCC-1 financing statements or the appropriate
equivalent (which filings shall have been made within ten days following the
Effective Date), create a fully perfected first lien on, and security interest
in, all right, title and interest in all of the Security Agreement Collateral
described therein, to the extent that a security interest may be perfected
therein by filing a financing statement under the UCC, subject to no other Liens
other than Permitted Liens. The recordation of the Assignment of Security
Interest in U.S. Patents and Trademarks in the form attached to the Security
Agreement in the United States Patent and Trademark Office together with filings
on Form UCC-1 made pursuant to the Security Agreement will be effective, under
applicable law, to perfect the security interest granted to the Collateral Agent
in the trademarks and patents covered by the Security Agreement. Each of the
Credit Parties party to the Security Agreement has good and valid title to all
Security Agreement Collateral owned by such Credit Party described therein, free
and clear of all Liens. Except for
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filings made pursuant to Section 5.09 on or prior to the Effective Date, no
additional filings with respect to the Security Agreement are required at the
time of, or in connection with the occurrence of, the Effective Date.
(b) The security interests created under the Pledge Agreement
in favor of the Collateral Agent, as Pledgee, for the benefit of the Secured
Creditors, constitute perfected security interests in the Pledge Agreement
Collateral described in the Pledge Agreement, subject to no security interests
of any other Person. No filings or recordings are required in order to perfect
(or maintain the perfection or priority of) the security interests created in
the Pledge Agreement Collateral under the Pledge Agreement other than with
respect to that portion of the Pledge Agreement Collateral constituting a
"general intangible" under the UCC.
7.12 Manager Subordination Agreements. To the extent required
to be executed and delivered pursuant to Section 8.13, each Manager
Subordination Agreement is in full force and effect and all Obligations
hereunder and under the other Credit Documents are within the definition of
"senior debt" or any substantially similar definition contained in the
subordination provisions of each Manager Subordination Agreement.
7.13 Properties. The Borrower and each of its Subsidiaries
have good and marketable title to all properties owned by them, including all
property reflected in the consolidated balance sheets of the Borrower referred
to in Section 7.05(a) (except as sold or otherwise disposed of since the date of
such balance sheets in the ordinary course of business), free and clear of all
Liens, other than Permitted Liens.
7.14 Capitalization. On the Effective Date, the authorized
capital stock of the Borrower shall consist of (i) 500,000,000 shares of common
stock, $.01 par value per share and (ii) 10,000,000 shares of preferred stock,
$.01 par value per share, none of which preferred stock is issued and
outstanding. All outstanding shares of such capital stock have been duly and
validly issued, are fully paid and nonassessable and are free of preemptive
rights. Except for certain options issued pursuant to employee and director
stock option plans (including any assumed plans), the Borrower does not, as of
the Effective Date, have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
7.15 Subsidiaries. The Borrower has no Subsidiaries other than
(i) those Subsidiaries listed on Schedule V and (ii) new Subsidiaries created in
compliance with Section 9.15. Schedule V correctly sets forth, as of the
Effective Date, the percentage ownership (direct or indirect) of the Borrower in
each class of capital stock or other equity interest of each of its Subsidiaries
and also identifies the direct owner thereof.
7.16 Compliance with Statutes, etc. The Borrower and each of
its Subsidiaries are in compliance with all applicable statutes, regulations and
orders of all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
Environmental Laws) except such noncompliances as would not,
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individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
7.17 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) The Borrower and each of its
Subsidiaries have complied with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the Borrower's knowledge, threatened Environmental Claims against
the Borrower or any of its Subsidiaries or any Real Property owned or operated
by the Borrower or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences on any Real Property owned or operated by the Borrower
or any of its Subsidiaries or, to the Borrower's knowledge, on any property
adjoining or in the vicinity of any such Real Property that would reasonably be
expected (i) to form the basis of an Environmental Claim against the Borrower or
any of its Subsidiaries or any such Real Property or (ii) to cause any such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property by the Borrower or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, or Released on or from,
any Real Property owned or operated by the Borrower or any of its Subsidiaries
except in compliance with all applicable Environmental Laws.
(c) Notwithstanding anything to the contrary in this Section
7.19, the representations made in this Section 7.19 shall only be untrue if the
aggregate effect of all failures, noncompliance, activities, facts,
circumstances, conditions and occurrences of the types described above would
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries nor any Facility Manager is engaged in any unfair labor practice
that could reasonably be expected to have a material adverse effect on the
Borrower and its Subsidiaries taken as a whole. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or
any Facility Manager or, to the best knowledge of the Borrower, threatened
against any of them, before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or any
Facility Manager or, to the best knowledge of the Borrower, threatened
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against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against the Borrower or any of its Subsidiaries or any Facility Manager or, to
the best knowledge of the Borrower, threatened against any of them and (iii) no
union representation question exists with respect to the employees of the
Borrower or any of its Subsidiaries or any Facility Manager, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as would not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of the
Borrower and each of its Subsidiaries owns all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises, proprietary
information (including but not limited to rights in computer programs and
databases) and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others which, or the failure to obtain which, as the case may
be, would reasonably be expected to result in a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule VI sets forth a true and complete
list of all Indebtedness of the Borrower and its Subsidiaries as of the
Effective Date (all such Indebtedness other than the Loans, the Letters of
Credit, the 9.15% Senior Subordinated Notes and the 9-7/8% Senior Subordinated
Notes, herein called the "Existing Indebtedness"), in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such Indebtedness.
7.23 Hotel Properties. The Borrower owns no Hotel Properties
directly and (i) on the Effective Date, each Hotel Property is owned by a
Wholly-Owned Subsidiary of the Borrower and (ii) after the Effective Date, each
Hotel Property is owned by a Wholly-Owned Subsidiary of the Borrower which is a
Foreign Subsidiary or a Subsidiary of the Borrower which is a Subsidiary
Guarantor. Each Hotel Property which is located in the United States is owned by
a Subsidiary Guarantor which is organized under the laws of a state in the
United States.
7.24 Subordination. The subordination provisions contained in
each of the 9.15% Senior Subordinated Note Documents and the 9-7/8% Senior
Subordinated Note Documents are enforceable against the Borrower and each of its
Subsidiaries and all Obligations hereunder and under the other Credit Documents
are within the definition of "senior debt" or any similar definition contained
in such documentation.
SECTION 8. Affirmative Covenants. The Borrower hereby
covenants and agrees that on and after the Effective Date and until the Total
Commitments and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other obligations incurred
hereunder and thereunder, are paid in full:
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8.01 Information Covenants. The Borrower will make available
through the Internet or e-commerce or will furnish to the Administrative Agent
(with sufficient copies for each of the Lenders, and the Administrative Agent
will promptly forward to each of the Lenders):
(a) Quarterly Financial Statements. Within 55 days after the
close of the first three quarterly accounting periods in each fiscal
year of the Borrower, (i) the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such quarterly
accounting period and the related consolidated statements of income and
retained earnings and statement of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly accounting period, in each case
setting forth comparative figures for the related periods in the prior
fiscal year, all of which shall be certified by the Chief Financial
Officer of the Borrower, subject to normal recurring adjustments and
(ii) management's discussion and analysis of the important operational
and financial developments during the quarterly and year-to-date
periods, it being understood that the delivery by the Borrower of its
Form 10-Q as filed with the SEC shall satisfy the requirements of this
Section 8.01(a).
(b) Annual Financial Statements. (A) Within 100 days after the
close of each fiscal year of the Borrower, (i) the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal year setting forth
comparative figures for the preceding fiscal year and certified by
Pricewaterhouse Coopers LLP, any other "Big Five" independent certified
public accountants or such other independent certified public
accountants of recognized national standing reasonably acceptable to
the Administrative Agent and (ii) management's discussion and analysis
of the important operational and financial developments during the
respective fiscal year, it being understood that the delivery by the
Borrower of its Form 10-K as filed with the SEC shall satisfy the
requirements of this Section 8.01(b).
(B) At the time of the delivery of the annual financial
statements pursuant to clause (A) above, a report of the applicable
accounting firm stating that in the course of its regular audit of the
financial statements of the Borrower and its Subsidiaries, which audit
was conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or Event of
Default which has occurred and is continuing under Section 9.08, 9.09
or 9.10 or, if in the opinion of such accounting firm such a Default or
an Event of Default has occurred and is continuing, a statement as to
the nature thereof.
(c) Budgets. No later than the 30th day of each fiscal year of
the Borrower, a budget in form reasonably satisfactory to the
Administrative Agent (including, in any event, budgeted statements of
income and sources and uses of cash and balance sheets of cash flow and
budgeted debt and cash balances) for such fiscal year prepared by the
Borrower in reasonable detail and accompanied by a statement of the
Chief Financial Officer of the Borrower to the effect that, to the best
of such officer's knowledge, the budget is a reasonable estimate of the
period covered thereby.
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(d) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(a) and (b), a
certificate of the Chief Financial Officer of the Borrower to the
effect that, to the best of such officer's knowledge, no Default or
Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature
and extent thereof, which certificate shall (x) set forth the
calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections
4.02(d), 4.02(e) and 4.02(g), 9.01 through 9.05, inclusive, and 9.07
through 9.10, inclusive, at the end of such fiscal quarter or year, as
the case may be and (y) if delivered with the financial statements
required by Section 8.01(b), set forth the amount of (and the
calculations required to establish) Excess Cash Flow for the respective
Excess Cash Payment Period.
(e) Management Letters. Promptly after the Borrower's or any
of its Subsidiaries' receipt thereof, a copy of any "management letter"
received from its certified public accountants.
(f) Notice of Default or Litigation. Promptly, and in any
event within five Business Days after any officer of any Credit Party
obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or an Event of Default and (ii) any
litigation or governmental investigation or proceeding pending or
threatened (x) against the Borrower or any of its Subsidiaries which
would reasonably be expected to materially and adversely affect the
business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole or (y) with respect to the transactions
contemplated hereby or any other Credit Document.
(g) Other Reports and Filings. Promptly after the filing or
delivery thereof, copies of all financial information, proxy materials
and other information and reports with respect to the Borrower or any
of its Subsidiaries, if any, which the Borrower or any of its
Subsidiaries shall file with or furnish to the Securities and Exchange
Commission or any successor thereto (the "SEC") and copies of all
material notices and reports which the Borrower or its Subsidiaries
shall deliver to holders of its Indebtedness (or any trustee, agent or
other representative therefor) pursuant to the terms of the
documentation governing such Indebtedness.
(h) Environmental Matters. Promptly upon, and in any event
within fifteen Business Days after, any senior or executive officer of
any Credit Party obtaining knowledge thereof, notice of one or more of
the following environmental matters, unless such environmental matters
would not, individually or when aggregated with all other such
environmental matters, be reasonably expected to materially and
adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole:
(i) any pending or threatened material Environmental
Claim against the Borrower or any of its Subsidiaries or any
Real Property owned or operated by the Borrower or any of its
Subsidiaries;
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(ii) any condition or occurrence on or arising from
any Real Property owned or operated by the Borrower or any of
its Subsidiaries that (a) results in non-compliance by the
Borrower or any of its Subsidiaries with any applicable
Environmental Law or (b) could reasonably be expected to form
the basis of a material Environmental Claim against the
Borrower or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real
Property owned or operated by the Borrower or any of its
Subsidiaries that could reasonably be expected to cause such
Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by it or any of
its Subsidiaries of such Real Property under any Environmental
Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by the
Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency, provided that in any event the Borrower shall deliver
to each Lender all notices received by the Borrower or any of
its Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify the Borrower or
any of its Subsidiaries as potentially responsible parties for
remediation costs or which otherwise notify the Borrower or
any of its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response or proposed response thereto. In
addition, the Borrower and any of its Subsidiaries will provide the Lenders with
copies of all material communications with any governmental agency or other
third Person that is adverse to the Borrower or such Subsidiary relating to
material Environmental Claims, and such detailed reports of any material
Environmental Claim as may reasonably be requested by the Lead Arranger, the
Administrative Agent or any Lender.
(i) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to the
Borrower or its Subsidiaries as the Administrative Agent may reasonably
request.
8.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. Upon reasonable
notice, the Borrower will, and will cause each of its Subsidiaries to, permit
officers and designated representatives of the Lead Arranger, the Administrative
Agent or any Lender (at the expense of the Lead Arranger, the Administrative
Agent or such Lender, as the case may be) to visit and inspect, under guidance
of officers of its or such Subsidiary, any of the properties of the Borrower or
any of its Subsidiaries, and to examine the books of account of the Borrower and
any of its Subsidiaries and discuss the affairs, finances and accounts of the
Borrower and any of
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its Subsidiaries with, and be advised as to the same by, its and their officers
and independent accountants, all at such reasonable times and intervals and to
such reasonable extent as the Lead Arranger, the Administrative Agent or such
Lender may reasonably request (provided that the Borrower shall have the right
to take part in any discussions with its independent accountants).
8.03 Maintenance of Property; Insurance. (a) Schedule VII sets
forth a true and complete listing of all insurance maintained by, or on behalf
of, the Borrower and its Subsidiaries as of the Effective Date. The Borrower
will, and will cause each of its Subsidiaries and Facility Managers to, (i) keep
all property necessary to the business of the Borrower and its Subsidiaries in
good working order and condition, ordinary wear and tear excepted, (ii) maintain
insurance on all its property in at least such amounts and against at least such
risks as is consistent and in accordance with industry practice for a company
similarly situated and (iii) furnish to the Lead Arranger and the Administrative
Agent, upon written request, full information as to the insurance carried.
(b) The Borrower will, and will cause each of its Subsidiaries
and Facility Managers to, at all times keep its property insured in favor of the
Collateral Agent, and all policies or certificates with respect to such
insurance (and any other insurance maintained by, or on behalf of, the Borrower
or any Subsidiary of the Borrower) (i) shall be endorsed to the Collateral
Agent's satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and/or additional
insured), (ii) shall state that such insurance policies shall not be cancelled
without at least 30 days' prior written notice thereof by the respective insurer
to the Collateral Agent (or such shorter period of time as a particular
insurance company policy generally provides), (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall contain
the standard non-contributory mortgage clause endorsement in favor of the
Collateral Agent with respect to hazard insurance coverage, (v) shall, except in
the case of public liability insurance, provide that any losses shall be payable
notwithstanding (A) any act or neglect of the Borrower or any Subsidiary of the
Borrower, (B) the occupation or use of the properties for purposes more
hazardous than those permitted by the terms of the respective policy if such
coverage is obtainable at commercially reasonable rates and is of the kind from
time to time customarily insured against by Persons owning or using similar
property and in such amounts as are customary, (C) any foreclosure or other
proceeding relating to the insured properties or (D) any change in the title to
or ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries or any Facility
Manager shall fail to insure its property in accordance with this Section 8.03,
or if the Borrower or any of its Subsidiaries or any Facility Manager shall fail
to so endorse and deposit all policies or certificates with respect thereto, the
Collateral Agent shall have the right (but shall be under no obligation), after
giving the Borrower at least five Business Days' prior written notice, to
procure such insurance and the Borrower agrees to reimburse the Collateral Agent
for all reasonable costs and expenses of procuring such insurance.
8.04 Corporate Franchises. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and
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effect its existence and its material rights, franchises, licenses and patents;
provided, however, that nothing in this Section 8.04 shall prevent (i) any of
the transactions permitted in accordance with Section 9.02 or (ii) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal would not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable Environmental Laws), except such noncompliances as would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) The Borrower will
comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by the Borrower or any of its Subsidiaries
(except such noncompliances as would not, individually or in the aggregate,
reasonably be expected to have the material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole), will promptly
pay or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws except for
Permitted Liens. Neither the Borrower nor any of its Subsidiaries will generate,
use, treat, store, Release or dispose of, or knowingly permit the generation,
use, treatment, storage, Release or disposal of Hazardous Materials on any Real
Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property except for Hazardous Materials generated,
used, treated, stored, released or disposed of at any such Real Properties in
compliance with all applicable Environmental Laws (except such noncompliances as
would not, individually or in the aggregate, reasonably be expected to have the
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole), and reasonably required in connection with
the operation, use and maintenance of the business or operations of the Borrower
or any of its Subsidiaries.
(b) To the extent any Credit Party delivers notice of the
occurrence of the environmental matters as described in Section 8.01(i), the
Borrower will provide, upon the written request of the Lead Arranger, the
Administrative Agent or the Required Lenders, which request shall specify in
reasonable detail the basis therefor, at its sole cost and expense, an
environmental site assessment report concerning the relevant Real Property now
or hereafter owned or operated by such Credit Party, prepared by an
environmental consulting firm reasonably approved by the Lead Arranger,
indicating the presence or absence of Hazardous Materials and the potential cost
of any removal or remedial action in connection with any Hazardous Materials on
such Real Property. If the Borrower fails to provide the same within 90
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days after such request was made, the Lead Arranger may order the same, and the
Borrower shall grant and hereby grants, to the Lead Arranger, the Administrative
Agent and the Lenders and their agents access to such Real Property and
specifically grants, the Lead Arranger, the Administrative Agent and the Lenders
an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Borrower's reasonable expense.
8.07 ERISA. As soon as possible and, in any event, within ten
(10) days after the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
the Borrower will deliver to the Administrative Agent a certificate of the Chief
Financial Officer of the Borrower setting forth the full details as to such
occurrence and the action, if any, that the Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred (except
to the extent that the Borrower has previously delivered to the Administrative
Agent a certificate and notices (if any) concerning such event pursuant to the
next clause hereof); that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan or Foreign
Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability which, when added to the
aggregate amount of Unfunded Current Liabilities with respect to all other
Plans, exceeds $10,000,000; that proceedings may be or have been instituted to
terminate or appoint a trustee to administer a Plan which is subject to Title IV
of ERISA; that a proceeding has been instituted pursuant to Section 515 of ERISA
to collect a delinquent contribution to a Plan; that the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate will or may incur any material
liability (including any indirect, contingent, or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or
502(l) of ERISA or with respect to a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code; or that the Borrower or any Subsidiary of the Borrower may incur any
material liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan or
any Foreign Pension Plan. Upon written request, the Borrower will deliver to
each of the Administrative Agent (i) a complete copy of the annual report (on
Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and
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information) required to be filed with the Internal Revenue Service and (ii)
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. In addition
to any certificates or notices delivered to the Administrative Agent pursuant to
the first sentence hereof, copies of any material notices received by the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with respect to
any Plan or Foreign Pension Plan shall be delivered to the Administrative Agent
no later than ten (10) days after the date such notice has been received by the
Borrower, the Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
December 31 and (ii) each of its, and each of its Subsidiaries', fiscal quarters
to end on March 31, June 30, September 30 and December 31, provided any such
fiscal year or fiscal quarter, as the case may be, may be modified so long as
(i) no Default or Event of Default then exists or would result therefrom, (ii)
the Borrower shall have given the Administrative Agent at least 10 Business
Days' prior written notice thereof and (iii) at the time of such modification,
the Borrower and the Required Lenders shall have entered into certain technical
amendments and modifications to this Agreement to preserve the intent of the
parties with respect to the covenants and agreements set forth in Sections 9.08
through 9.10, inclusive and any other provisions of this Agreement deemed
appropriate by the Lead Arranger and the Borrower.
8.09 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, deed of trust, indenture, security agreement, loan
agreement or credit agreement and each other material agreement, contract or
instrument by which it or any Real Property is bound, except such
non-performances as would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for sums that have become
due and payable which, if unpaid, might become a Lien not otherwise permitted
under Section 9.01(i); provided, that neither the Borrower nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
8.11 Additional Security; Further Assurances. (a) On the
Effective Date and thereafter, at the reasonable request from time to time by
the Lead Arranger, the Borrower will, and will cause each of the Subsidiary
Guarantors to, grant to the Collateral Agent security interests in such assets
and properties (other than Real Property) of the Borrower and such Subsidiary
Guarantors, which assets and property are of the kind that are the subject of
the Pledge Agreement and/or the Security Agreement and which are not covered by
the original Security Documents (collectively, the "Additional Security
Documents"). All such security
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interests shall be granted pursuant to documentation reasonably satisfactory in
form and substance to the Lead Arranger and shall constitute valid and
enforceable perfected security interests superior to and prior to the rights of
all third Persons and subject to no other Liens except for Permitted Liens. The
Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
(b) On the Effective Date and thereafter, the Borrower will,
and will cause each of the Subsidiary Guarantors to, at the expense of the
Borrower, take such further reasonable steps relating to the collateral covered
by any of the Security Documents as the Lead Arranger or the Collateral Agent
may reasonably require which are necessary to maintain the liens and security
interest pursuant to the Security Documents. Furthermore, the Borrower will
cause to be delivered to the Collateral Agent such opinions of counsel and other
related documents as may be reasonably requested by the Lead Arranger to assure
itself that this Section 8.11 has been complied with.
(c) The Borrower agrees that each action required above by
this Section 8.11 shall be completed within 90 days after such action is either
requested to be taken by the Lead Arranger or the Collateral Agent; provided
that (x) in no event will the Borrower be required to take any action, other
than using its best efforts, to obtain consents from third parties with respect
to its compliance with this Section 8.11 and (y) the Borrower shall not be
deemed to be in default under its obligations under this clause (c) to the
extent that any action is not completed within the time required hereunder
solely by reason of the failure of a third Person to take such actions provided
that the Borrower has utilized, and continues to utilize, its best efforts to
cause such third Person to take such action.
8.12 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Lead Arranger does not within 30 days
after a request in writing from the Lead Arranger or the Required Lenders
deliver evidence, in form and substance mutually satisfactory to the Lead
Arranger and the Borrower, with respect to any Foreign Subsidiary of the
Borrower which has not already had all of its stock pledged pursuant to the
Pledge Agreement that (i) a pledge of 66-2/3% or more of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary entitled
to vote, (ii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement and (iii) the
entering into by such Foreign Subsidiary of a guaranty in substantially the form
of the Subsidiaries Guaranty, in any such case would cause the undistributed
earnings of such Foreign Subsidiary as determined for Federal income tax
purposes to be treated as a deemed dividend to a United States shareholder for
Federal income tax purposes, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock not theretofore pledged pursuant to the
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed), and in the case of a failure to
deliver the evidence described in clause (ii) above,
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such Foreign Subsidiary (to the extent that same is a Wholly-Owned Foreign
Subsidiary) will execute and deliver the Security Agreement (or another security
agreement in substantially similar form, if needed), granting the Secured
Creditors a security interest in all of such Foreign Subsidiary's assets and
securing the Obligations of the Borrower under the Credit Documents and under
any Interest Rate Protection Agreement or Other Hedging Agreement and, in the
event the Subsidiaries Guaranty shall have been executed by such Foreign
Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the
case of a failure to deliver the evidence described in clause (iii) above, such
Foreign Subsidiary (to the extent that same is a Wholly-Owned Foreign
Subsidiary) will execute and deliver the Subsidiaries Guaranty (or another
guaranty in substantially similar form, if needed), guaranteeing the Obligations
of the Borrower under the Credit Documents and under any Interest Rate
Protection Agreement or Other Hedging Agreement, in each case to the extent that
the entering into such Security Agreement or Subsidiaries Guaranty is permitted
by the laws of the respective foreign jurisdiction and with all documents
delivered pursuant to this Section 8.12 to be in form and substance reasonably
satisfactory to the Lead Arranger.
8.13 Hotel Property Management. The Borrower will take, and
will cause each of its Subsidiaries to take, all action necessary so that each
Hotel Property owned or leased by a Subsidiary of the Borrower is managed by
either the Subsidiary Guarantor owning such Hotel Property or another
Wholly-Owned Subsidiary of the Borrower, provided that such Hotel Property may
be managed by a Person other than such owner or such Wholly-Owned Subsidiary of
the Borrower so long as (i) such manager is a Permitted Facility Manager and
(ii) such Permitted Facility Manager executes and delivers a Hotel Property
Management Agreement and Manager Subordination Agreement.
8.14 Maintenance of Corporate Separateness. (a) The Borrower
will, and will cause each of its Unrestricted Subsidiaries to, satisfy customary
corporate formalities, including the holding of regular board of directors' and
shareholders' meetings or action by directors or shareholders without a meeting
and the maintenance of corporate offices and records. Neither the Borrower nor
any of its Subsidiaries will make any payment to a creditor of any Unrestricted
Subsidiary in respect of any liability of any Unrestricted Subsidiary, and no
bank account of any Unrestricted Subsidiary shall be commingled with any bank
account of the Borrower or any of its Subsidiaries. Any financial statements
distributed to any creditors of any Unrestricted Subsidiary shall clearly
establish or indicate the corporate separateness of such Unrestricted Subsidiary
from the Borrower and its Subsidiaries. Finally, neither the Borrower nor any of
its Subsidiaries shall take any action, or conduct its affairs in a manner,
which is likely to result in the corporate existence of the Borrower or any of
its Subsidiaries or Unrestricted Subsidiaries being ignored, or in the assets
and liabilities of the Borrower or any of its Subsidiaries being substantively
consolidated with those of any other such Person or any Unrestricted Subsidiary
in a bankruptcy, reorganization or other insolvency proceeding.
(b) All Hotel Properties owned by a Subsidiary shall be owned
by a Wholly-Owned Subsidiary of the Borrower which is a Foreign Subsidiary or by
a Subsidiary Guarantor. The Borrower shall not directly own any Hotel Property.
All Hotel Properties owned by a Subsidiary which are located in the United
States will be owned by a Subsidiary Guarantor which is organized under the laws
of a state in the United States.
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SECTION 9. Negative Covenants. The Borrower covenants and
agrees that on and after the Effective Date and until the Total Commitments and
all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full:
9.01 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to the Borrower
or any Subsidiary of the Borrower), or assign any right to receive income or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute, provided that the
provisions of this Section 9.01 shall not prevent the creation, incurrence,
assumption or existence of the following Liens (collectively, "Permitted
Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have
been established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from
the value of the Borrower's or such Subsidiary's property or assets or
materially impair the use thereof in the operation of the business of
the Borrower or such Subsidiary or (y) which are being contested in
good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;
(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, in Schedule VIII,
but only to the respective date, if any, set forth in such Schedule
VIII for the removal and termination of any such Liens, but no renewals
or extensions of such Liens shall be permitted;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not
materially interfering with the conduct of the business of the Borrower
or any of its Subsidiaries or the interest of a ground lessor arising
by operation of law in real property interests located on the property
subject to such ground lease;
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(vii) Liens upon assets subject to Capitalized Lease
Obligations to the extent such Capitalized Lease Obligations are
permitted by Section 9.04(iii), provided that (x) such Liens only serve
to secure the payment of Indebtedness arising under such Capitalized
Lease Obligation and (y) the Lien encumbering the asset giving rise to
the Capitalized Lease Obligation does not encumber any other asset of
the Borrower or any of the Borrower's Subsidiaries;
(viii) Liens placed upon equipment or machinery used in the
ordinary course of business of the Borrower or any of its Subsidiaries
at the time of acquisition thereof by the Borrower or any such
Subsidiary or within 90 days thereafter to secure Indebtedness incurred
to pay all or a portion of the purchase price thereof, provided that
(x) the aggregate outstanding principal amount of all Indebtedness
secured by Liens permitted by this clause (viii) is permitted by
Section 9.04(iii) and (y) in all events, the Lien encumbering the
equipment or machinery so acquired does not encumber any other asset of
the Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and not materially interfering with
the conduct of the business of the Borrower or any of its Subsidiaries;
(x) Liens arising from precautionary UCC financing statement
filings in respect of operating leases;
(xi) statutory and common law landlords' liens under leases to
which the Borrower or any of its Subsidiaries is a party;
(xii) Liens (other than Liens created or imposed under ERISA)
incurred in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety bonds, bids, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money), provided that the aggregate outstanding
amount of obligations secured by Liens permitted by this clause (xii)
(and the value of all cash and property encumbered by Liens permitted
pursuant to this clause (xii)) shall not at any time exceed
$20,000,000;
(xiii) Liens arising out of judgments or awards in respect of
which the Borrower or any of the Borrower's Subsidiaries shall in good
faith be prosecuting an appeal or proceedings for review in respect of
which there shall have been secured a subsisting stay of execution
pending such appeal or proceedings, provided that the aggregate amount
of all such judgments or awards does not exceed $20,000,000 at any time
outstanding;
(xiv) Liens on property or assets acquired pursuant to a Hotel
Property acquisition effected pursuant to Section 9.02(viii), or on
property or assets of a Subsidiary of the Borrower in existence at the
time such property or assets are acquired pursuant to
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such Hotel Property acquisition, provided that (i) all Indebtedness
secured by such Liens is permitted to exist under Section 9.04(ix) and
(ii) such Liens are not incurred in connection with or in anticipation
of such Hotel Property acquisition and do not attach to any other asset
of the Borrower or any of its Subsidiaries;
(xv) Liens upon cash and Cash Equivalents not exceeding
$20,000,000 at any one time to secure Indebtedness in respect of any
letters of credit issued pursuant to Section 9.04(x); and
(xvi) additional Liens incurred by the Borrower and its
Subsidiaries so long as the aggregate amount of the Indebtedness and
other obligations secured thereby do not exceed $50,000,000.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
The Borrower will not, and will not permit any of the Borrower's Subsidiaries
to, wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or any part of its
property or assets, or enter into any sale-leaseback transactions, or purchase
or otherwise acquire (in one or a series of related transactions) any part of
the property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any Person,
except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 9.07;
(ii) the Borrower and each of its Subsidiaries may in the
ordinary course of business, sell or otherwise dispose of equipment and
materials which, in the reasonable opinion of such Person, are
obsolete, uneconomic or no longer useful in the conduct of such
Person's business;
(iii) Investments may be made to the extent permitted by
Section 9.05;
(iv) the Borrower and each of its Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business
(so long as any such lease does not create a Capitalized Lease
Obligation unless permitted by Section 9.04(iii));
(v) the Borrower and each of its Subsidiaries may make sales
of inventory in the ordinary course of business;
(vi) each of the Borrower and its Subsidiaries may sell other
assets (other than less than all of the capital stock of any Subsidiary
held by the Borrower and/or its Subsidiaries) so long as (i) no Default
or Event of Default then exists or would result therefrom, (ii) each
such sale is in an arm's-length transaction and the Borrower or the
respective Subsidiary receives at least fair market value therefor (as
determined in good faith by the Borrower or such Subsidiary, as the
case may be), (iii) at least 75% of the total consideration received by
the Borrower or such Subsidiary is cash and is received at the time of
the consummation of such sale and (iv) the amount of the proceeds
received
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from the assets sold pursuant to this clause (vi) shall not exceed
$35,000,000 in the aggregate for all such sales in any fiscal year of
the Borrower;
(vii) each of the Borrower and its Subsidiaries may sell other
assets (other than less than all of the capital stock of any Subsidiary
held by the Borrower and/or its Subsidiaries) so long as (i) no Default
or Event of Default then exists or would result therefrom, (ii) each
such sale is in an arm's-length transaction and the Borrower or the
respective Subsidiary receives at least fair market value therefor (as
determined in good faith by the Borrower or such Subsidiary, as the
case may be), (iii) at least 75% of the total consideration received by
the Borrower or such Subsidiary is cash and is received at the time of
the consummation of such sale, (iv) the aggregate amount of the
proceeds received from all assets sold pursuant to this clause (vii)
shall not exceed $100,000,000 in any fiscal year of the Borrower and
(v) the Net Sale Proceeds therefrom are either applied as provided in
Section 4.02(e) or reinvested in assets to the extent permitted by
Section 4.02(e);
(viii) any of the Borrower's Subsidiaries may acquire (for
cash or capital stock of the Borrower) or construct assets of the type
described in the definition of Hotel Properties contained in Section
11.01 (including by purchasing the capital stock or other equity
interests of any Person or Persons whose assets are all or
substantially all of the type described in the definition of Hotel
Properties contained in Section 11.01);
(ix) the Borrower may transfer assets to a Subsidiary
Guarantor, and any Wholly-Owned Subsidiary of the Borrower may merge
with and into any Subsidiary Guarantor which is a Wholly-Owned
Subsidiary, in each case so long as the respective Subsidiary Guarantor
is the surviving corporation of any such merger;
(x) each of the Borrower and its Subsidiaries may grant leases
or subleases to other Persons not materially interfering with the
conduct of the business of the Borrower or any of its Subsidiaries;
(xi) each of the Borrower and its Subsidiaries may, in the
ordinary course of business, license, as licensor or licensee (or
pursuant to franchising arrangements), patents, trademarks, copyrights
and know-how to and from third Persons and to and from one another so
long as any such license by the Borrower or any other Credit Party in
its capacity as licensor is permitted to be assigned pursuant to the
Security Agreement (to the extent that the security interest in such
patents, trademarks, copyrights and know-how is granted thereunder) and
does not otherwise prohibit the granting of a Lien by the Borrower or
any other Credit Party pursuant to the Security Agreement in the
intellectual property covered by such license;
(xii) the Borrower and its Subsidiaries may sell Crosslands
Hotel Properties so long as (i) no Default or Event of Default then
exists or would result therefrom, (ii) such sale is in an arm's-length
transaction and the Borrower receives at least fair market value
therefor (as determined in good faith by the Borrower), (iii) at least
75% of the total consideration received by the Borrower or such
Subsidiary is cash and is received at the
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time of the consummation of such sale and (iv) the Net Sale Proceeds
therefrom are either applied as provided in Section 4.02(e) or
reinvested in assets to the extent permitted by Section 4.02(e); and
(xiii) the Borrower and its Subsidiaries may sell Designated
Properties so long as (i) no Default or Event of Default then exists or
would result therefrom, (ii) each such sale is in an arm's-length
transaction and the borrower receives at least fair market value
therefor (as determined in good faith by the Borrower), (iii) at least
75% of the total consideration received by the Borrower or such
Subsidiary is cash and is received at the time of the consummation of
each such sale and (iv) the Net Sale proceeds therefrom are either
applied as provided in Section 4.02(e) or reinvested in assets to the
extent permitted by Section 4.02(e).
To the extent the Required Lenders or all of the Lenders, as the case may be,
waive the provisions of this Section 9.02 with respect to the sale of any
Collateral, or any Collateral is sold or otherwise disposed of as permitted by
this Section 9.02, such Collateral shall be sold or otherwise disposed of free
and clear of the Liens created by the Security Documents, and the Administrative
Agent and the Collateral Agent shall be authorized to take any actions deemed
appropriate in order to effect the foregoing.
9.03 Dividends. The Borrower will not, and will not permit any
of its Subsidiaries to, authorize, declare or pay any Dividends with respect to
the Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends to
the Borrower or to a Wholly-Owned Subsidiary of the Borrower,
(ii) so long as there shall exist no Default under Section
10.01 or Event of Default (both before and after giving effect to the
payment thereof) any non-Wholly-Owned Subsidiary of the Borrower may
pay cash Dividends to its shareholders or partners generally so long as
the Borrower or its respective Subsidiary which owns the equity
interest or interests in the Subsidiary paying such Dividends receives
at least its proportionate share thereof (based upon its relative
holdings of equity interests in the Subsidiary paying such Dividends
and taking into account the relative preferences, if any, of the
various classes of equity interests in such Subsidiary);
(iii) so long as there shall exist no Default or Event of
Default (both before and after giving effect to the payment thereof),
the Borrower may repurchase its outstanding capital stock, so long as
the aggregate amount paid by the Borrower and its Subsidiaries in
respect of all such repurchases made after the Effective Date, when
added to the aggregate amount of all repurchases of 9.15% Senior
Subordinated Notes and 9-7/8% Senior Subordinated Notes, and all
repayments and repurchases of Incremental Third Party Debt, made
pursuant to Section 9.11(i), does not exceed $100,000,000, provided
that the Borrower may make such repurchases pursuant to this clause
(iii) in excess of such amount to the extent that on the date of any
such repurchase in excess of such amount it certifies to the
Administrative Agent that such excess amount does not exceed
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the Retained Excess Cash Flow Amount as then in effect (and such excess
repurchase shall constitute a utilization of the Retained Excess Cash
Flow Amount as provided in the definition thereof); and
(iv) so long as there shall exist no Default or Event of
Default (both before and after giving effect to the payment thereof),
the Borrower may pay Dividends in respect of (but not as a repurchase
of) its outstanding capital stock so long as the aggregate amount of
Dividends paid by the Borrower pursuant to this clause (iv) in any
fiscal year of the Borrower does not exceed $20,000,000, provided that
the Borrower may pay additional Dividends pursuant to this clause (iv)
in excess of such amount to the extent that on the date of any such
Dividends in excess of such amount the Borrower certifies to the
Administrative Agent that the amount of such excess Dividends does not
exceed the Retained Excess Cash Flow Amount as then in effect (and such
excess Dividends shall constitute a utilization of the Retained Excess
Cash Flow Amount as provided in the definition thereof).
9.04 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Existing Indebtedness to the extent the same is listed on
Schedule VI, but no refinancings or renewals thereof;
(iii) Indebtedness of the Borrower and its Subsidiaries (but
not any guarantees thereof by any Subsidiary Guarantor) evidenced by
Capitalized Lease Obligations (to the extent permitted pursuant to
Section 9.07) and purchase money Indebtedness described in Section
9.01(viii), provided that in no event shall the aggregate principal
amount of Capitalized Lease Obligations and purchase money Indebtedness
permitted by this clause (iii) exceed $100,000,000 at any time
outstanding;
(iv) Indebtedness of the Borrower and its Subsidiaries secured
by Liens described in Section 9.01(xii) or (xiii) to the extent that
such Indebtedness does not constitute Indebtedness of a type described
in clause (i), (ii), (iii), (iv) or (v) of the definition of
Indebtedness;
(v) intercompany Indebtedness among the Borrower and
Subsidiaries of the Borrower to the extent permitted by Section
9.05(iv);
(vi) Indebtedness of the Borrower under Interest Rate
Protection Agreements;
(vii) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection with
the Borrower's or any of its Subsidiaries' ordinary course of business
operations so long as management of the Borrower or such Subsidiary, as
the case may be, has determined in good faith that the entering into of
such Other Hedging Agreements are bona fide hedging activities;
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(viii) Incremental Third Party Debt so long as (w) the
aggregate principal amount thereof does not at any time exceed the
remainder of (A) the Permitted Incremental Debt Amount at such time
less (B) the sum of the aggregate principal amount of all Incremental
Term Loans outstanding at such time plus the aggregate amount of
unutilized Incremental Term Loan Commitments at such time, (x) at least
three days prior to the incurrence of any Incremental Third Party Debt,
the Borrower shall have delivered to the Lead Arranger and the
Administrative Agent substantially final drafts of the documents
pursuant to which such Incremental Third Party Debt is to be incurred
and with any changes thereto made after the initial delivery of such
documents to be delivered to the Lead Arranger and the Administrative
Agent at least one day prior to the incurrence of such Incremental
Third Party Debt, (y) all terms and conditions of all Incremental Third
Party Debt and the documentation with respect thereto (including,
without limitation, the maturity thereof, the interest rate applicable
thereto, the required repayments with respect thereto, the covenants
and events of default) shall be in form and substance reasonably
satisfactory to the Lead Arranger (it being understood that the terms
and conditions of such Incremental Third Party Debt shall be
satisfactory to the Lead Arranger if the terms and conditions of such
Incremental Third Party Debt are substantially similar to, or no more
restrictive on the Borrower than the corresponding terms and conditions
of the 9-7/8% Senior Subordinated Notes), and (z) no Default or Event
of Default then exists or would result from the incurrence of the
respective Incremental Third Party Debt;
(ix) Indebtedness of a Subsidiary of the Borrower acquired
pursuant to a Hotel Property acquisition, provided that (i) such
Indebtedness was not incurred in connection with or in anticipation of
such Hotel Property acquisition, (ii) such Indebtedness does not
constitute Indebtedness for borrowed money, it being understood and
agreed that Capitalized Lease Obligations and purchase money
Indebtedness shall not constitute Indebtedness for borrowed money for
purposes of this clause (ix), and (iii) at the time of such Hotel
Property acquisition such Indebtedness does not exceed 20% of the total
value of the assets of the Subsidiary so acquired; and
(x) additional Indebtedness of the Borrower and its
Subsidiaries (but not any guarantees thereof by any Subsidiary
Guarantors) not to exceed $20,000,000 in aggregate principal amount at
any time outstanding.
9.05 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, lend
money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person, or purchase or own a futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business
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and payable or dischargeable in accordance with customary terms, and
the Borrower and its Subsidiaries may own Investments received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(ii) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents;
(iii) the Borrower may enter into Interest Rate Protection
Agreements;
(iv) the Borrower and its Subsidiaries may hold and to the
extent permitted by Section 9.15 acquire Investments in Subsidiaries of
the Borrower and may make additional Investments in such Subsidiaries
so long as (i) no more than $10,000,000 in the aggregate for all such
Investments made after the Effective Date pursuant to this clause (iv)
shall be made in Subsidiaries that are not Subsidiary Guarantors, (ii)
each intercompany loan or advance evidenced by a note or other
instrument having a principal amount in excess of $2,500,000 shall be
pledged to the Collateral Agent pursuant to (and to the extent required
by) the Pledge Agreement and (iii) to the extent required by Section
9.15, the equity interests of the Subsidiary in which such Investments
are made are pledged to the Collateral Agent pursuant to (and to the
extent required by) the Pledge Agreement;
(v) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs
of such loans and advances) shall not exceed $35,000,000 (although no
more than $5,000,000 of such loans and advances made to senior
management of the Borrower and its Subsidiaries may at any time be
outstanding);
(vi) the Borrower and its Subsidiaries may enter into Other
Hedging Agreements to the extent permitted by Section 9.04(vii);
(vii) the Borrower and its Subsidiaries may receive non-cash
consideration in connection with any asset sale permitted by Sections
9.02(vi), (vii), (xii) and (xiii) but only to the extent set forth in
such Sections 9.02(vi), (vii), (xii) and (xiii);
(viii) the Borrower and its Subsidiaries may acquire Hotel
Properties which may consist in whole or in part of stock acquisitions
(and otherwise in compliance with this Agreement);
(ix) the Borrower and its Subsidiaries may make Investments in
Unrestricted Subsidiaries effected through the issuance of the
Borrower's common stock; and
(x) in addition to Investments permitted by clauses (i)
through (ix) above, the Borrower and its Wholly-Owned Subsidiaries may
make Investments in Unrestricted Subsidiaries so long as (I) no Default
or Event of Default then exists or would result
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therefrom and (II) the aggregate amount of Investments made pursuant to
this clause (x) after the Effective Date does not exceed $50,000,000,
provided that Investments in excess of $50,000,000 may be made pursuant
to this clause (x) to the extent that, on the date of such excess
Investments, the Borrower certifies to the Administrative Agent that
the amount of such excess Investments does not exceed the Retained
Excess Cash Flow Amount as then in effect (and such excess Investments
shall constitute a utilization of the Retained Excess Cash Flow Amount
in accordance with the definition thereof). The Investments permitted
under clause (ix) above shall not be counted against the limit set
forth in this clause (x).
9.06 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of related transactions, whether or not in the ordinary course of business, with
(x) any Affiliate of the Borrower or any of its Subsidiaries or (y) any
Unrestricted Subsidiary, other than in the ordinary course of business and on
terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would reasonably be obtained by the Borrower or such Subsidiary at
that time in a comparable arm's-length transaction with a Person other than an
Affiliate, except that notwithstanding the foregoing:
(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) loans may be made and other transactions may be entered
into by and among the Borrower and the Borrower's Subsidiaries to the
extent permitted by Section 9.02, 9.04 or 9.05;
(iii) customary fees may be paid to non-officer directors of
the Borrower; and
(iv) Subsidiaries of the Borrower may pay management and
similar fees to the Borrower or any Wholly-Owned Subsidiary of the
Borrower.
9.07 Capital Expenditures. (a) The Borrower will not, and will
not permit any of its Subsidiaries to make any Capital Expenditures (other than
such Capital Expenditures of the type permitted by clauses (b), (c) and (d)
hereof), except that the Borrower and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed the Permitted CapEx Amount at
the time of such Capital Expenditure.
(b) In addition to the foregoing, the Borrower and its
Subsidiaries may effect construction and acquisitions of Hotel Properties.
(c) In addition to the Capital Expenditures permitted pursuant
to preceding clauses (a) and (b), the Borrower and its Subsidiaries may make
additional Capital Expenditures consisting of the reinvestment of proceeds of
Recovery Events not required to be applied as a mandatory repayment (and/or
commitment reduction) pursuant to Section 4.02(g).
(d) In addition to the Capital Expenditures permitted pursuant
to preceding clauses (a), (b) and (c), the Borrower and its Subsidiaries may
make additional Capital Expenditures during the period from the Effective Date
to March 31, 2005 as part of the
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construction of its new corporate headquarters (including the furnishing and
outfitting thereof) and in an aggregate amount not to exceed $20,000,000.
9.08 Consolidated Interest Coverage Ratio. The Borrower will
not permit the Consolidated Interest Coverage Ratio for any Test Period to be
less than 2.50:1.00.
9.09 Maximum Consolidated Leverage Ratio. The Borrower will
not permit the Consolidated Leverage Ratio at any time during any period set
forth below to be greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
Effective Date to 4.75:1.00
March 30, 2003
March 31, 2003 4.50:1.00
and thereafter
9.10 Maximum Consolidated Senior Debt Leverage Ratio. The
Borrower will not permit the Consolidated Senior Debt Leverage Ratio at any time
during any period set forth below to be greater than the ratio set forth
opposite such period below:
Period Ratio
------ -----
Effective Date 3.75:1.00
to March 30, 2004
March 31, 2004 3.50:1.00
and thereafter
9.11 Limitation on Payments of Certain Indebtedness;
Modifications of Certain Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Agreements; etc. The Borrower will not, and
will not permit any of the Borrower's Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for
value of, or any prepayment or redemption as a result of any change of
control or similar event of, including, in each case without
limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due, any
9.15% Senior Subordinated Notes, 9-7/8% Senior Subordinated Notes or
any Incremental Third Party Debt provided that, so long as no Default
or Event of Default then exists or would result therefrom, the Borrower
may (A) repurchase outstanding 9.15% Senior Subordinated Notes and
outstanding 9-7/8% Senior Subordinated Notes and (B) repay or
repurchase Incremental Third Party Debt, so long as the aggregate
amount of all such repayments and repurchases made after the Effective
Date, when added to the aggregate amount of all Dividends made pursuant
to Section 9.03(iii) shall not exceed an amount equal to $100,000,000,
provided that the Borrower may make such repurchases in excess
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of such amount to the extent Borrower certifies to the Administrative
Agent on the date of such excess repayments and/or repurchases that the
amount of such excess repayments and/or repurchases does not exceed the
Retained Excess Cash Flow Amount as then in effect (and such excess
repayments and repurchases shall constitute a utilization of the
Retained Excess Cash Flow Amount pursuant to the definition thereof);
(ii) amend or modify, or permit the amendment or modification
of, any provision of (x) the 9.15% Senior Subordinated Notes, the
9-7/8% Senior Subordinated Notes or, in each case, any agreement
(including, without limitation, any purchase agreement, indenture or
loan agreement) related thereto or (y) any agreement evidencing or
relating to any Incremental Third Party Debt (including, without
limitation, any purchase agreement, indenture or loan agreement), in
the case of clause (x) or (y), other than amendments not adverse to the
interests of the Lenders in any material respect provided that a copy
of such amendment is delivered to the Lead Arranger at least 5 Business
Days prior to the execution thereof by the Borrower;
(iii) amend or modify, or permit the amendment or modification
of, any provision of any Hotel Property Management Agreement between
the Borrower and a Person other than a Subsidiary Guarantor (other than
any amendment or modification thereto which would not violate or be
inconsistent with any of the terms or provisions of this Agreement and
the other Credit Documents and could not be adverse to the interests of
the Lenders in any respect) or enter into any new management agreement
(other than Hotel Property Management Agreements, if applicable,
entered into in connection with the acquisition or construction of new
Hotel Properties); or
(iv) amend, modify or change its certificate of incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or by-laws, or any agreement entered into
by it, with respect to its capital stock, or enter into any new
agreement with respect to its capital stock, other than any amendments,
modifications or changes or any such new agreements which are not
materially adverse in any respect to the interests of the Lenders.
9.12 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary of the Borrower to
(a) pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by the Borrower or any of
its Subsidiaries, or pay any Indebtedness owed to the Borrower or any Subsidiary
of the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower, except in each case for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of the
Borrower or any Subsidiary of the Borrower, (iv) customary provisions
restricting assignment of any licensing agreement entered into by the Borrower
or any Subsidiary of the Borrower in the ordinary course of business and (v)
customary
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provisions restricting the transfer of assets subject to Liens permitted under
Section 9.01(vii) or (viii).
9.13 Limitation on Issuance of Capital Stock. (a) The Borrower
will not issue (i) any preferred stock other than Qualified Preferred Stock or
(ii) any redeemable common stock.
(b) The Borrower will not permit any of its Subsidiaries to
issue any capital stock (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into, capital stock,
except (i) for transfers and replacements of then outstanding shares of capital
stock, (ii) for stock splits, stock dividends and similar or additional
issuances which do not decrease the percentage ownership of the Borrower or any
of the Borrower's Subsidiaries in any class of the capital stock of such
Subsidiary, (iii) to qualify directors to the extent required by applicable law,
(iv) for issuances by newly created or acquired Subsidiaries in accordance with
the terms of this Agreement or (v) issuances of capital stock to the Borrower or
a Wholly-Owned Subsidiary provided that such capital stock is pledged to the
Collateral Agent pursuant to the Security Documents.
9.14 Business. The Borrower will not, and will not permit any
of its Subsidiaries to, engage (directly or indirectly) in any business other
than the business in which the Borrower and its Subsidiaries are engaged on the
Effective Date and reasonable extensions thereof and other businesses reasonably
related thereto.
9.15 Limitation on Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to establish, create or acquire after
the Effective Date any Subsidiary, provided that the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to (i) establish or create one or
more Wholly-Owned Subsidiaries so long as within a reasonable time from such
establishment or creation (x) the equity interests of such new Wholly-Owned
Subsidiary that is owned by any Credit Party is pledged pursuant to, and to the
extent required by, the Pledge Agreement and the certificates representing such
equity interests, together with endorsements for the transfer thereof duly
executed in blank, are delivered to the Collateral Agent for the benefit of the
Secured Creditors, (y) such new Wholly-Owned Subsidiary (other than a
Wholly-Owned Foreign Subsidiary, except to the extent otherwise required
pursuant to Section 8.12) executes a counterpart of the Subsidiaries Guaranty,
the Pledge Agreement and the Security Agreement, and (z) such new Wholly-Owned
Subsidiary, to the extent requested by the Administrative Agent or the Required
Lenders, takes all actions required pursuant to Section 8.11 and (ii) acquire a
Person which immediately upon such acquisition will constitute a Subsidiary of
the Borrower in connection with the acquisition of a Hotel Property so long as
within a reasonable time from such acquisition (x) the equity interests of such
Subsidiary that is owned by any Credit Party is pledged pursuant to, and to the
extent required by, the Pledge Agreement and the certificates representing such
equity interests, together with endorsements for the transfer thereof duly
executed in blank, are delivered to the Collateral Agent for the benefit of the
Secured Creditors, (y) such Subsidiary (including any such Subsidiary which is a
Foreign Subsidiary) executes a counterpart of the Subsidiaries Guaranty, the
Pledge Agreement and the Security Agreement, and (z) such Subsidiary, to the
extent requested by the Administrative Agent or the Required Lenders, takes all
actions required pursuant to Section 8.11. In addition, each such Subsidiary
shall
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execute and deliver, or cause to be executed and delivered, all other relevant
documentation of the type described in Section 5 as such Subsidiary would have
had to deliver if such new Wholly-Owned Subsidiary were a Credit Party on the
Effective Date.
9.16 Representative. The Borrower will not, and will not
permit any of its Subsidiaries to, designate any holder of Indebtedness, other
than the Lenders or their representative, to deliver blockage notices which the
holders of senior debt are permitted to provide under the 9.15% Senior
Subordinated Notes, the 9-7/8% Senior Subordinated Notes or any other
Indebtedness of the Borrower or any of its Subsidiaries which is subordinated to
the Obligations.
9.17 Changes To Legal Names; Organizational Identification
Numbers, Jurisdiction or Type of Organization. No Credit Party shall change, or
permit any change to, its legal name until (i) it shall have given to the
Administrative Agent not less than 15 days prior written notice of its intention
so to do, clearly describing such new name and providing other information in
connection therewith as the Administrative Agent may reasonably request and (ii)
with respect to such new name, it shall have taken all action reasonably
requested by the Administrative Agent to maintain the security interests of the
Administrative Agent in the Collateral intended to be granted pursuant to the
Security Documents at all times fully perfected and in full force and effect. In
addition, to the extent that any Credit Party does not have an organizational
identification number on the date hereof and later obtains one, or if there is
any change in the organizational identification number of any Credit Party, the
Borrower or such Credit Party shall promptly notify the Administrative Agent of
such new or changed organizational identification number and shall take all
actions reasonably satisfactory to the Administrative Agent to the extent
necessary to maintain the security interests of the Administrative Agent in the
Collateral intended to be granted pursuant to the Security Documents fully
perfected and in full force and effect. Furthermore, no Credit Party shall
change its jurisdiction of organization or its type of organization until (i) it
shall have given to the Administrative Agent not less than 15 days prior written
notice of its intention so to do, clearly describing such new jurisdiction of
organization and/or type of organization and providing such other information in
connection therewith as the the Administrative Agent may reasonably request and
(ii) with respect to such new jurisdiction and/or type of organization, it shall
have taken all actions reasonably requested by the Administrative Agent to
maintain the security interests of the Administrative Agent in the Collateral
intended to be granted pursuant to the Security Documents at all times fully
perfected and in full force and effect. If at any time Schedule XI hereto is not
true and correct (as of the date in question, which may be after the Effective
Date), whether because of changes thereto or as a result of the creation or
acquisition of additional Credit Parties, the Borrower shall promptly furnish to
the Administrative Agent a true and correct updated Schedule XI, which shall
contain the updated information required therein with respect to each Credit
Party as of the date of any change thereto.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for
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three or more Business Days, in the payment when due of any interest on any Loan
or Note, any Unpaid Drawing or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
10.02 Representations, etc. Any representation or warranty
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered to the Lead Arranger, the Administrative Agent or any
Lender pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 9 or (ii) default in the due performance or observance by it of any
other term, covenant or agreement contained in this Agreement or any other
Credit Document (other than as provided in Sections 10.01 and 10.02) and such
default shall continue unremedied for a period of 45 days after written notice
to the Borrower by the Administrative Agent or the Required Lenders; or
10.04 Default Under Other Agreements. (i) The Borrower or any
of its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Obligations) beyond the period of grace or cure, if any, provided in
the instrument or agreement under which such Indebtedness was created or (y)
default in the observance or performance of any agreement or condition relating
to any Indebtedness (other than the Obligations) or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Obligations) of the Borrower or any of its Subsidiaries shall be declared to
be (or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment (including, without limitation, by
reason of the occurrence of a change of control or other similar event), prior
to the stated maturity thereof, provided that it shall not be a Default or an
Event of Default under clauses (i) or (ii) of this Section 10.04 unless the
aggregate outstanding principal amount of all Indebtedness as described in such
clauses (i) and (ii) is at least $20,000,000; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
(other than an Immaterial Subsidiary) shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled "Bankruptcy," as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against the Borrower or any of its Subsidiaries
(other than an Immaterial Subsidiary) and the petition is not controverted
within 15 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the Borrower or any
of its Subsidiaries (other than an Immaterial Subsidiary) or the Borrower or any
of its Subsidiaries (other than an Immaterial Subsidiary) commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries (other than an Immaterial Subsidiary),
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or there is commenced against the Borrower or any of its Subsidiaries (other
than an Immaterial Subsidiary) any such proceeding which remains undismissed for
a period of 60 days, or the Borrower or any of its Subsidiaries (other than an
Immaterial Subsidiary) is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Borrower or any of its Subsidiaries (other than an Immaterial Subsidiary)
suffers any appointment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a period of 60
days; or the Borrower or any of its Subsidiaries (other than an Immaterial
Subsidiary) makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower or any of its Subsidiaries (other than
an Immaterial Subsidiary) for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans; (b) there shall result from any such
event or events the imposition of a lien on, the granting of a security interest
by, or a liability or a material risk of incurring a liability by, the Borrower,
a Subsidiary of the Borrower or an ERISA Affiliate; and (c) such lien, security
interest or liability, individually, and/or in the aggregate, in the opinion of
the Required Lenders, has had, or could reasonably be expected to have, a
material adverse effect upon the business, operations, condition (financial or
otherwise) or prospects of the Borrower or any Subsidiary of the Borrower; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 9.01), and subject to no other Liens (except as
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permitted by Section 9.01), provided that it shall not be a Default or Event of
Default under this Section 10.07 unless the value of the Collateral adversely
affected thereby exceeds $1,000,000 in the aggregate; or
10.08 Subsidiaries Guaranty. At any time after the execution
and delivery thereof, the Subsidiaries Guaranty or any provision thereof shall
cease to be in full force or effect as to any Subsidiary Guarantor (other than a
Subsidiary Guarantor which is an Immaterial Subsidiary), or any Subsidiary
Guarantor (other than a Subsidiary Guarantor which is an Immaterial Subsidiary)
or any Person acting by or on behalf of such Subsidiary Guarantor shall deny or
disaffirm such Subsidiary Guarantor's obligations under the Subsidiaries
Guaranty or any Subsidiary Guarantor shall default in the due performance or
observance of any material term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving in the
aggregate for the Borrower and its Subsidiaries a liability (not paid or not
fully covered by a reputable and solvent insurance company) and such judgments
and decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments exceeds $20,000,000; or
10.10 Manager Subordination Agreements. Any Manager
Subordination Agreement (to the extent executed and delivered as required under
Section 8.13) or any provision thereof shall cease to be a legal, valid and
binding obligation enforceable against any party to such Manager Subordination
Agreement, or any party to a Manager Subordination Agreement (other than the
Administrative Agent) or any Person acting by or on behalf of any such party
shall deny or disaffirm such party's obligations under any such Manager
Subordination Agreement, or any such party shall default in the due performance
of any term, covenant or agreement on its part to be performed or observed
pursuant to any such Manager Subordination Agreement, in each case so long as
such event, act or condition would either individually or in the aggregate have
a material adverse effect in the interests of the Lenders; or
10.11 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent to the Borrower as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitments terminated,
whereupon all of the Commitments of each Lender shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and the Notes and all Obligations owing
hereunder and thereunder to be, whereupon the
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same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 10.05 with respect to the Borrower, it will pay) to
the Collateral Agent at the Payment Office such additional amount of cash, to be
held as security by the Collateral Agent, as is equal to the aggregate Stated
Amount of all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; and (vi) apply any cash
collateral held by the Administrative Agent pursuant to Section 4.02 to the
repayment of the Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"A Maturity Date" shall mean July 24, 2007.
"A Term Loans" shall mean each of the A-1 Term Loans, the A-2 Term
Loans and the A-3 Term Loans.
"A-1 Term Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "A-1 Term Loan Commitment," as the same may be terminated pursuant to
Sections 3.03 and/or 10.
"A-1 Term Loans" shall have the meaning provided in Section 1.01(a).
"A-1 Term Notes" shall have the meaning provided in Section 1.05(a).
"A-2 Term Loan Borrowing Date" shall mean each date on which a
Borrowing of A-2 Term Loans is incurred pursuant to Section 1.01(b), provided
that in no event shall any Borrowing of A-2 Term Loans be incurred after the A-2
Term Loan Commitment Termination Date.
"A-2 Term Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "A-2 Term Loan Commitment", as the same may be (i) reduced pursuant to
Sections 3.02 and 3.03(c) and (ii) terminated pursuant to Section 3.03 and/or
10.
"A-2 Term Loan Commitment Commission" shall have the meaning provided
in Section 3.01(a).
"A-2 Term Loan Commitment Termination Date" shall mean October 24,
2001.
"A-2 Term Loans" shall have the meaning provided in Section 1.01(b).
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"A-2 Term Notes" shall have the meaning provided in Section 1.05(a).
"A-3 Term Loan Borrowing Date" shall mean each day on which a Borrowing
of A-3 Term Loans is incurred pursuant to Section 1.01(c), provided that in no
event shall any Borrowing of any A-3 Term Loans be incurred (i) before the A-2
Term Loan Commitment Termination Date (or such earlier date as when the A-2 Term
Loan Commitment shall have been terminated or reduced to zero) or (ii) after the
A-3 Term Loan Commitment Termination Date.
"A-3 Term Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "A-3 Term Loan Commitment", as the same may be (i) reduced pursuant to
Sections 3.02 and 3.03(d) and (ii) terminated pursuant to Section 3.03 and/or
10.
"A-3 Term Loan Commitment Commission" shall have the meaning provided
in Section 3.01(b).
"A-3 Term Loan Commitment Termination Date" shall mean January 24,
2002.
"A-3 Term Loans" shall have the meaning provided in Section 1.01(c).
"A-3 Term Notes" shall have the meaning provided in Section 1.05(a).
"Additional Security Documents" shall have the meaning provided in
Section 8.11(a).
"Adjusted Consolidated Net Income" shall mean, for any period,
Consolidated Net Income of the Borrower and its Subsidiaries for such period
plus, without duplication, the sum of the amount of all net non-cash charges
(including, without limitation, depreciation, amortization, deferred tax
expense, non-cash interest expense) and net non-cash losses which were included
in arriving at Consolidated Net Income for such period less the sum of the
amount of all net non-cash gains and gains from the sale of assets (other than
sales of inventory in the ordinary course of business) which were included in
arriving at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Administrative Agent" shall mean IBJ in its capacity as Administrative
Agent (including in its capacity as Collateral Agent) for the Lenders hereunder,
and shall include any successor to the Administrative Agent appointed pursuant
to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors, officers and partners of such Person) controlled by, or under direct
or indirect common control with, such Person or (ii) that directly or indirectly
owns more than 5% of any class of the voting securities or capital stock of or
equity interests in such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to direct or
cause the direction of the
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management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall mean the Lead Arranger, the Administrative Agent and each
Co-Syndication Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed, refinanced or replaced from
time to time.
"Applicable Margin" shall mean (i) in the case of Swingline Loans,
1.25%, (ii) in the case of A Term Loans and Revolving Loans (A) maintained as
Base Rate Loans, 1.25% and (B) maintained as Eurodollar Loans, 2.25%, (iii) in
the case of B Term Loans (A) maintained as Base Rate Loans, 1.75% and (B)
maintained as Eurodollar Loans, 2.75% and (iv) in the case of Incremental Term
Loans incurred under a particular Tranche, the respective Applicable Margins for
each Type of such Tranche of Loans as set forth in the applicable Incremental
Term Loan Commitment Agreement, provided that all Incremental Term Loans of a
particular Tranche shall have the same Applicable Margins for each type of such
Tranche of Incremental Term Loans.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit L (appropriately
completed).
"Authorized Officer" of any Credit Party shall mean any of the
President, the Chief Financial Officer or any Vice-President of such Credit
Party or any other officer of such Credit Party which is designated in writing
to the Administrative Agent by any of the foregoing officers of such Credit
Party as being authorized to give such notices under this Agreement.
"B Maturity Date" shall mean January 15, 2008.
"B Term Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "B Term Loan Commitment", as the same may be terminated pursuant to
Section 3.03 and/or 10.
"B Term Loans" shall have the meaning provided in Section 1.01(d).
"B Term Notes" shall have the meaning provided in Section 1.05(a).
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) the rate which is
1/2 of 1% in excess of the Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each other
Loan designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
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"Borrowing" shall mean the borrowing of one Type of Loan from all the
Lenders (or from the Swingline Lender in the case of Swingline Loans) on a given
date (or resulting from a conversion or conversions on such date) having in the
case of Eurodollar Loans the same Interest Period, provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York, New York a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person (other than with respect to any Investment) which
should be capitalized in accordance with generally accepted accounting
principles, and, without duplication, the amount of Capitalized Lease
Obligations incurred by such Person, provided that Capital Expenditures shall
not include financing costs required to be capitalized.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) Dollar denominated time deposits
and certificates of deposit of any commercial bank having, or which is the
principal banking subsidiary of a bank holding company having, a long-term
unsecured debt rating of at least "A" or the equivalent thereof from S&P or "A2"
or the equivalent thereof from Moody's with maturities of not more than six
months from the date of acquisition by such Person, (iii) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued by
any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's
and in each case maturing not more than six months after the date of acquisition
by such Person, (v) other Dollar denominated securities issued by any Person
incorporated in the United States rated at least "A-" or the equivalent by S&P
or at least "A3" or the equivalent by Moody's and in each case either (x)
maturing not more than 90 days after the date of acquisition by such Person or
(y) which are subject to a repricing arrangement (such as a Dutch auction) not
more than 90 days after the date of acquisition by such Person which such Person
believes in good faith will permit such Person to sell such security at par in
connection with such repricing mechanism and (vi) investments in money market
funds substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above.
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"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C.A. ss. 9601 et seq.
"Change of Control" shall mean (i) any Person or "group" (within the
meaning of Rules 13d-3 or 13d-5 under the Exchange Act (as in effect on the
Effective Date)), other than the Permitted Holders, shall (A) have acquired
beneficial ownership of 35% or more on a fully diluted basis of the voting
and/or economic interest in the Borrower's capital stock or (B) have obtained
the power (whether or not exercised) to elect a majority of the Borrowers'
directors or (ii) the Board of Directors of the Borrower shall cease to consist
of a majority of Continuing Directors.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder. Section references to
the Code are to the Code, as in effect at the date of this Agreement, and to any
subsequent provision of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" shall mean all property with respect to which any security
interests have been granted (or purported to be granted) pursuant to any
Security Document, including, without limitation, all Pledge Agreement
Collateral and all Security Agreement Collateral.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.05.
"Commitment" shall mean any of the commitments of any Lender, i.e.,
whether the A-1 Term Loan Commitment, A-2 Term Loan Commitment, A-3 Term Loan
Commitment, B Term Loan Commitment, any Incremental Term Loan Commitment or the
Revolving Loan Commitment.
"Commitment Commission" shall mean the A-2 Term Loan Commitment
Commission, the A-3 Term Loan Commitment Commission, the Revolving Loan
Commitment Commission and any commitment commission payable pursuant to Section
3.01(d).
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (or adjectival form thereof, where
appropriate).
"Consolidated Current Assets" shall mean, at any time, the amounts that
would be classified as consolidated current assets of the Borrower and its
Subsidiaries in accordance with GAAP in a classified balance sheet.
"Consolidated Current Liabilities" shall mean, at any time, the amounts
that would be classified as consolidated current liabilities of the Borrower and
its Subsidiaries at such time in accordance with GAAP in a classified balance
sheet, but excluding the current portion of any
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Indebtedness under this Agreement and any other long-term Indebtedness which
would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, the principal amount of
all Indebtedness of the Borrower and its Subsidiaries at such time (including
any Indebtedness incurred at such time).
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income
of the Borrower and its Subsidiaries before Consolidated Interest Expense and
provision for income taxes for such period and without giving effect to (u) the
cumulative effects of changes in accounting principles, (v) non-recurring
expenses incurred during such period in connection with the Borrower relocating
its corporate headquarters to the extent same do not exceed $10,000,000 in the
aggregate, (w) any non-cash write-ups and non-cash write-downs during such
period resulting from the marking to market of any Interest Rate Protection
Agreements or Other Hedging Agreements, (x) non-cash write-offs of amortization
of deferred financing costs, during such period, (y) any extraordinary gains or
losses during such period and (z) any gains or losses from sales of assets
during such period other than from sales of inventory sold in the ordinary
course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT for
such period, adjusted by adding thereto the amount of all amortization of
intangibles and depreciation that were deducted in arriving at Consolidated EBIT
for such period.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA for such period to Consolidated Interest Expense
for such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated cash interest expense reduced by cash interest income and other
investment earnings earned on Cash Equivalents of the Borrower and its
Subsidiaries, in each case, for such period (calculated without regard to any
limitations on the payment thereof) plus, without duplication, that portion of
Capitalized Lease Obligations of the Borrower and its Subsidiaries representing
the interest factor for such period, but excluding the amortization of any
deferred financing costs.
"Consolidated Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Debt at such time to Consolidated EBITDA for the then most recently
ended Test Period.
"Consolidated Net Income" shall mean, for any Person and period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis, provided that (A) in determining
Consolidated Net Income of the Borrower, (i) the net income of any other Person
which is not a Subsidiary of the Borrower or a Subsidiary thereof or is
accounted for by the Borrower or a Subsidiary thereof by the equity method of
accounting shall be included only to the extent of the payment of dividends or
distributions by such other Person to the Borrower or a Subsidiary thereof
during such period, (ii) the net income (or loss) of any other Person acquired
by such specified Person or a Subsidiary of such Person in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (iii) to the extent Consolidated Net Income reflects amounts
attributable to minority interests in
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Subsidiaries that are not Wholly-Owned Subsidiaries of the Borrower,
Consolidated Net Income shall be reduced by the amounts attributable to such
minority interests and (B) in determining Consolidated Net Income of the
Borrower for any Test Period for the purposes of determining Consolidated
Leverage Ratio and Consolidated Senior Debt Leverage Ratio, (i) if during such
Test Period the Borrower or any Subsidiaries shall have consummated any Material
Acquisition, Consolidated Net Income for such Test Period shall be calculated
after giving pro forma effect thereto as if such Material Acquisition had
occurred on the first day of such Test Period, (ii) if at any time during such
Test Period the Borrower or any of its Subsidiaries shall have consummated any
Material Disposition, Consolidated Net Income for such Test Period shall be
reduced by an amount equal to the Consolidated Net Income (if positive)
attributable to the Hotel Property which is the subject of such Material
Disposition for such period and (iii) pro forma calculations of Consolidated Net
Income shall give effect to anticipated cost savings to the extent such cost
savings for the relevant period are directly attributable to the respective
acquisition, are permitted by Regulation S-X under the Securities Act and are
demonstrated in writing by the Borrower (with supporting calculations) to the
Administrative Agent at the time of the relevant acquisition.
"Consolidated Senior Debt" at any time shall mean Consolidated Debt on
such date, adjusted by excluding therefrom the amount of (i) the 9.15% Senior
Subordinated Notes, (ii) the 9-7/8% Senior Subordinated Notes and (iii) all
other subordinated debt incurred pursuant to Section 9.04(viii), in each case
reflected in Consolidated Debt on such date.
"Consolidated Senior Debt Leverage Ratio" shall mean, at any time, the
ratio of Consolidated Senior Debt at such time to Consolidated EBITDA for the
then most recently ended Test Period.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee (including, without
limitation, as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner) any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of any
such primary obligation or (y) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
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"Continuing Directors" shall mean the directors of the Borrower on the
Effective Date and each other director if such other director's nomination for
election or appointment to the Board of Directors of the Borrower is recommended
or approved by a majority of the then Continuing Directors or is recommended or
approved by a committee of the Board of Directors a majority of which is
composed of the then Continuing Directors.
"Co-Syndication Agent" shall have the meaning provided in the first
paragraph hereof.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, each
Incremental Term Loan Commitment Agreement, the Subsidiary Guaranty, each
Security Document and each Manager Subordination Agreement.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit but shall not include the commencement of a new Interest Period
applicable to a Borrowing of Eurodollar Loans upon the expiration of the
Interest Period applicable thereto or the conversion of Loans of one Type into
Loans of the other Type, provided that, in any such case, the aggregate
outstanding principal amount of Loans is not increased as a result thereof.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"Crossland Hotel Properties" shall mean those extended stay hotels
operated by the Borrower or any of its Subsidiaries under the Crossland Economy
Studios(R) brand.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Designated Properties" shall mean each of the properties set forth on
Schedule IX hereto.
"Dividends" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or partners or authorized or made any other distribution, payment or delivery of
property (other than common stock of such Person and, in the case of the
Borrower, other than additional shares of Qualified Preferred Stock) or cash to
its stockholders or partners as such, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for consideration any shares of any
class of its capital stock or any partnership interests outstanding on or after
the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock or partnership interest), or set aside any funds
for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock or any partnership interests of such Person
outstanding on or after the Effective Date (or any options or warrants issued by
such Person with respect to its capital stock or partnership interest). Without
limiting the foregoing, "Dividends" with respect to any Person shall also
include all payments (other than as excluded above) made or required to be made
by such Person with respect to any
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stock appreciation rights, plans, equity incentive or achievement plans or any
similar plans or setting aside of any funds for the foregoing purposes.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in Section
5.05.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, formal demands, demand letters, claims,
liens, notices of non-compliance or violation, investigations or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such law (hereafter "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, written
guideline, written policy and rule of common law now or hereafter in effect and
in each case as amended, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment relating to the environment, employee health and safety or Hazardous
Materials, including, without limitation, CERCLA; RCRA; the Federal Water
Pollution Control Act, 33 U.S.C.A.ss. 2601 et seq., the Toxic Substances Control
Act, 15 U.S.C.ss. 2601 et seq.; the Clean Air Act, 42 U.S.C.A.ss. 7401 et seq.;
the Safe Drinking Water Act, 42 U.S.C.A.ss. 3803 et seq.; the Oil Pollution Act
of 1990, 33 U.S.C.A.ss. 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C.A.ss. 11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C.A.ss.1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C.A.ss. 651 et seq.; and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean for any Interest Determination Date with
respect to an Interest Period for a Eurodollar Loan, the rate per annum obtained
by dividing (i)(a) per annum rate for deposits in Dollars for a period
corresponding to the duration of the relevant Interest Period which appears on
Telerate Page 3750 at approximately 11:00 a.m. (London time) on such Interest
Determination Date or (b) if such rate does not appear on Telerate Page 3750 on
such Interest Determination Date, per annum rate (rounded upward to the nearest
1/16 of one percent) at which deposits in Dollars are offered by Administrative
Agent to first-class banks in the London interbank market, in the approximate
amount of Administrative Agent's relevant Eurodollar Loan and having a maturity
approximately equal to such Interest Period, at approximately 11:00 a.m. (London
time) on such Interest Determination Date by (ii) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D). The Eurodollar Rate shall be rounded to the next higher multiple
of 1/100 of 1% if the rate is not such a multiple. The reference to Telerate
Page 3750 in this definition shall be construed to be a reference to the
relevant page or any other page that may replace such page on the Telerate
service or any other service that may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for deposits in Dollars.
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (i) the
sum of (a) Adjusted Consolidated Net Income for such period and (b) the
decrease, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, minus (ii) the sum of (a) the amount of all Capital
Expenditures made by the Borrower and its Subsidiaries pursuant to Sections
9.07(a), (b) and (d) during such period, (b) the aggregate principal amount of
permanent principal payments of Indebtedness for borrowed money of the Borrower
and its Subsidiaries (other than repayments of Loans, provided that repayments
of Loans shall be deducted in determining Excess Cash Flow if such repayments
were (x) required as a result of a Scheduled Repayment under Section 4.02(b) or
(y) made as a voluntary prepayment with internally generated funds (but in the
case of a voluntary prepayment of Revolving Loans or Swingline Loans, only to
the extent accompanied by a voluntary reduction to the Total Revolving Loan
Commitment in an equal amount)) during such period, (c) the aggregate amount of
Dividends made pursuant to Section 9.03(iii) and 9.03(iv) during such period
(other than any such Dividends to the extent financed with equity proceeds,
asset sale proceeds or Indebtedness),
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(d) the aggregate amount of repurchases of 9.15% Senior Subordinated Notes and
9-7/8% Senior Subordinated Notes, and repayments or repurchases of Incremental
Third Party Debt, in each case made pursuant to Section 9.14(i) during such
period (other than any such repayments or repurchases to the extent financed
with equity proceeds, asset sale proceeds or Indebtedness) and (e) the increase,
if any, in Adjusted Consolidated Working Capital from the first day to the last
day of such period.
"Excess Cash Payment Date" shall mean the date occurring 100 days after
the last day of each fiscal year of the Borrower (beginning with its fiscal year
ending December 31, 2001).
"Excess Cash Payment Period" shall mean, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of the Borrower.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Taxes" shall have the meaning provided in Section 4.04(a).
"Existing Credit Agreement" shall mean the Credit Agreement, dated as
of September 26, 1997 and amended and restated as of March 10, 1998 and further
amended and restated as of June 7, 2000, and as further amended to the Effective
Date, among the Borrower, the banks signatory thereto, MSSF, as Sole Book Runner
and Sole Lead Arranger and The Industrial Bank of Japan, Limited, as
Administrative Agent.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.05.
"Existing Letters of Credit" shall have the meaning provided in Section
2.01(a).
"Facility Manager" shall mean each manager under a Hotel Property
Management Agreement of a Hotel Property owned or leased by the Borrower or any
Subsidiary Guarantor.
"Facing Fee" shall have the meaning provided in Section 3.01(f).
"Federal Funds Rate" shall mean, 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 Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
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"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower other
than a Domestic Subsidiary.
"GAAP" shall have the meaning provided in Section 13.07(a).
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous wastes," "restrictive
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar meaning and regulatory effect under any
applicable Environmental Law; and (c) any other chemical, material or substance,
the Release of which is prohibited, limited or regulated by any governmental
authority.
"Hotel Property" shall mean each hotel owned or leased directly by the
Borrower or any of its Subsidiaries (including the furniture, fixture and
equipment thereon), provided that the term "Hotel Property" shall not include
any casino or gaming hotel or any hotel owned or leased by an Unrestricted
Subsidiary.
"Hotel Property Management Agreement" shall mean an agreement, in form
and substance reasonably satisfactory to the Lead Arranger, with respect to the
management of a Hotel Property.
"IBJ" shall mean The Industrial Bank of Japan, Limited, in its
individual capacity.
"Immaterial Subsidiary" shall mean any Subsidiary of the Borrower that
does not have assets with a fair market value or book value in excess of
$1,500,000 and has not had revenues in excess of $1,500,000 for the Test Period
then most recently ended and whose obligations are non-recourse to the Borrower
or any other Subsidiary of the Borrower that is not an Immaterial Subsidiary,
provided that (x) a Subsidiary shall not be considered to be an Immaterial
Subsidiary for purposes of Sections 10.05 and 10.08 if more than 15 other
Subsidiaries are affected by the events, acts or conditions described in
Sections 10.05 and 10.08 and (y) the net income of Hotel Properties of
Immaterial Subsidiaries affected by the events, acts or conditions described in
Sections 10.05 and 10.08 shall not be included in the determination of
Consolidated Net Income.
"Incremental Term Loan" shall have the meaning provided in Section
1.01(e).
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"Incremental Term Loan Borrowing Date" shall mean each date on which a
Borrowing (or Borrowings) of Incremental Term Loans are incurred pursuant to
Section 1.01(e).
"Incremental Term Loan Commitment" shall mean, for each Incremental
Term Loan Lender, the commitment of such Incremental Term Loan Lender to make
Incremental Term Loans pursuant to Section 1.01(e) on a given Incremental Term
Loan Borrowing Date, as such commitment (x) is set forth in the respective
Incremental Term Loan Commitment Agreement delivered pursuant to Section 1.14(b)
and (y) may be terminated pursuant to Sections 3.03 and/or 10.
"Incremental Term Loan Commitment Agreement" shall mean an Incremental
Term Loan Commitment Agreement substantially in the form of Exhibit C
(appropriately completed and with such modifications as may be acceptable to the
Lead Arranger).
"Incremental Term Loan Commitment Termination Date" shall mean the 90th
day prior to the Revolving Loan Maturity Date.
"Incremental Term Loan Lender" shall have the meaning provided in
Section 1.14(b).
"Incremental Term Loan Maturity Date" shall mean, (i) in the case of
any Incremental Term Loans designated as "B Term Loans" in the Incremental Term
Loan Agreement relating thereto, the B Maturity Date and (ii) in the case of any
other Tranche of Incremental Term Loans, the maturity date for such Tranche of
Incremental Term Loans as set forth in the Incremental Term Loan Commitment
Agreement relating thereto, provided that the Maturity Date for all Incremental
Term Loans of a given Tranche shall be the same date.
"Incremental Term Note" shall have the meaning provided in Section
1.05(a).
"Incremental Third Party Debt" shall mean unsecured Indebtedness for
borrowed money incurred by the Borrower pursuant to Section 9.04(viii), provided
that (i) Incremental Term Loans and Incremental Term Loan Commitments shall not
constitute Incremental Third Party Debt and (ii) in no event shall any
Incremental Third Party Debt be recourse to any Subsidiary of the Borrower.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (provided that, if the Person has not assumed or
otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the fair market value of the property to
which such Lien relates as determined in good faith by such Person), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
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take-or-pay and similar obligations, (vi) all Contingent Obligations of such
Person, and (vii) all obligations under any Interest Rate Protection Agreement
or Other Hedging Agreement or under any similar type of agreement or
arrangement. Notwithstanding the foregoing, Indebtedness shall not include
obligations under (or in respect of) construction contracts (to the extent such
obligations do not constitute Indebtedness for borrowed money), trade payables
and accrued expenses incurred by any Person in accordance with its customary
practices and in the ordinary course of business of such Person.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the Initial Borrowing of Term Loans occurs.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement, interest rate floor agreement or other similar agreement
or arrangement.
"Investment" shall have the meaning provided in Section 9.05.
"Issuing Lender" shall mean IBJ and any other Lender which at the
request of the Borrower and with the consent of the Lead Arranger and the
Administrative Agent (which consent shall not be unreasonably withheld) agrees,
in such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing Letters of Credit pursuant to Section 2. The only Issuing Lender on the
Effective Date is IBJ.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business
with respect to workers compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of the Borrower or any of its
Subsidiaries as are otherwise permitted to exist pursuant to (or otherwise not
restricted by) the terms of this Agreement.
"Lead Arranger" shall have the meaning provided in the first paragraph
of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under any lease or
license of land, improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I or
Schedule II, as well as any Person which becomes a "Lender" hereunder pursuant
to Section 1.13, 1.14 or 13.04(b).
"Lender Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) in violation of this
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Agreement or (ii) a Lender having notified in writing the Borrower and/or the
Administrative Agent that it does not intend to comply with its obligations
under Section 1.01 or Section 2, in case of either clause (i) or (ii) as a
result of any takeover or control (including, without limitation, as a result of
the occurrence of any event of the type described in Section 10.05 with respect
to such Lender) of such Lender by any regulatory authority or agency.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(e).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other) or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each A-1 Term Loan, each A-2 Term Loan, each A-3 Term
Loan, each B Term Loan, each Incremental Term Loan, each Revolving Loan and each
Swingline Loan.
"Majority Lenders" of any Tranche shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if all outstanding Obligations under the other Tranches under
this Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Management Agreements" shall have the meaning provided in Section
5.05.
"Manager Subordination Agreement" shall mean an agreement, in form and
substance reasonably satisfactory to the Lead Arranger, in respect of a Hotel
Property whereby, inter alia, the manager thereof subordinates certain of the
obligations, owed to it under the respective Hotel Property Management
Agreement, to the payment of the Obligations hereunder.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(h).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Acquisition" shall mean any acquisition (or series of related
acquisitions) of assets of the type described in the definition of Hotel
Properties contained in this Section 11.01 (including by purchasing the capital
stock or other equity interest of any Person or Persons whose assets are all or
substantially of the type described in the definition of Hotel Properties
contained in this Section 11.01), the consideration for which paid by the
Borrower and its Subsidiaries (valued at the initial principal amount thereof,
in the case of non-cash proceeds consisting of
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notes or other debt securities and valued at the fair market value, in each case
of other non-cash proceeds) exceeds $35,000,000.
"Material Disposition" shall mean any disposition (or series of related
dispositions) of Hotel Properties (or the equity of any Person which owns such
Hotel Properties) which in yield gross proceeds to the Borrower or any of its
Subsidiaries (valued at the initial principal amount thereof, in the case of
non-cash proceeds consisting of notes or other debt securities and valued at the
fair market value, in the case of other non-cash proceeds) in excess of
$35,000,000.
"Material Leases" shall have the meaning provided in Section 5.05.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the A
Maturity Date, the Revolving Maturity Date, the B Maturity Date, the Swingline
Expiry Date or the Incremental Term Loan Maturity Date for such Tranche of
Loans, as the case may be.
"Maximum Swingline Amount" shall mean $20,000,000.
"Minimum Borrowing Amount" shall mean (i) for Swingline Loans, $250,000
and (ii) for all other Loans, $2,500,000.
"Moody's" shall mean Moody's Investors Service, Inc.
"MSSF" shall mean Morgan Stanley Senior Funding, Inc., in its
individual capacity.
"9.15% Senior Subordinated Note Documents" shall mean the 9.15% Senior
Subordinated Note Indenture and all other documents executed and delivered with
respect to the 9.15% Senior Subordinated Notes and the 9.15% Senior Subordinated
Note Indenture, as in effect on the Effective Date and as the same may be
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"9.15% Senior Subordinated Note Indenture" shall mean the Indenture,
dated as of March 10, 1998, among the Borrower, and Manufacturers and Traders
Trust Company, as Trustee, as in effect on the Initial Borrowing Date and as
thereafter amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"9.15% Senior Subordinated Notes" shall mean the Borrower's 9.15%
Senior Subordinated Notes due 2008, issued pursuant to the 9.15% Senior
Subordinated Note Indenture.
"9-7/8% Senior Subordinated Note Documents" shall mean the 9-7/8%
Senior Subordinated Note Indenture and all other documents executed and
delivered with respect to the 9-7/8% Senior Subordinated Notes and the 9-7/8%
Senior Subordinated Note Indenture, as in effect on the Effective Date and as
the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"9-7/8% Senior Subordinated Note Indenture" shall mean the Indenture,
dated as of June 27, 2001, among the Borrower, and Manufacturers and Traders
Trust Company, as Trustee,
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as in effect on the Effective Date and as thereafter amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
"9-7/8% Senior Subordinated Notes" shall mean the Borrower's 9-7/8%
Senior Subordinated Notes due 2011, issued pursuant to the 9-7/8% Senior
Subordinated Note Indenture.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Debt Proceeds" shall mean, with respect to each incurrence of
Indebtedness for borrowed money by any Person, the cash proceeds (net of (i)
underwriting discounts and commissions and other reasonable costs associated
therewith and (ii) the incremental taxes (if any) paid or payable as a result of
such incurrence of Indebtedness for borrowed money) received by such Person from
the respective incurrence of such Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or sale
of any equity by any Person or any capital contribution to such Person, the cash
proceeds (net of (i) underwriting discounts and commissions and other reasonable
costs associated therewith and (ii) the incremental taxes (if any) paid or
payable as a result of such issuance or sale of equity or such capital
contribution) received by such Person from the respective sale or issuance of
its equity or from the respective capital contribution.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Sale Proceeds" shall mean, for any asset sale, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness under the Credit Documents or any Indebtedness owned to the
Borrower or a Subsidiary thereof) which is secured by the respective assets
which were sold), and the incremental taxes paid or payable as a result of such
asset sale.
"Non-Defaulting Lender" shall mean and include each Lender other than a
Defaulting Lender.
"Note" shall mean each A-1 Term Note, each A-2 Term Note, each A-3 Term
Note, each B Term Note, each Incremental Term Loan Note, each Revolving Note and
the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 600 East Las Colinas Blvd., Suite 1300, 13th Floor, Irving, TX 75309,
Attention: Kevin Miles or Monica
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Stevens, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to any Agent, the Collateral
Agent or any Lender pursuant to the terms of this Agreement or any other Credit
Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent
located at 600 East Las Colinas Blvd., Suite 1300, 13th Floor, Irving, TX 75309,
Attention: Kevin Miles or Monica Stevens, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted CapEx Amount" shall mean, on any date of the determination
thereof, an amount equal to the remainder of (i) the sum of $75,000,000 plus 5%
of the aggregate gross revenues from Hotel Properties owned or leased by the
Borrower or any of its Wholly-Owned Subsidiaries for the period from the
Effective Date to such date of determination less (ii) the amount theretofore
expended by the Borrower and its Subsidiaries to make Capital Expenditures
pursuant to Section 9.07(a) during such period.
"Permitted Encumbrances" shall mean, with respect to any Real Property,
such exceptions to title (i) which, individually or in the aggregate, do not
materially detract from the value of such Real Property or (ii) are otherwise
acceptable to the Lead Arranger in its reasonable discretion.
"Permitted Facility Manager" shall mean, with respect to each Hotel
Property owned or leased by a Subsidiary of Borrower, a Wholly-Owned Subsidiary
of the Borrower or another hotel management company in good standing.
"Permitted Holders" shall mean the directors of the Borrower on the
Effective Date, their spouses and any one or more of their lineal descendants
and their spouses or any trust which has been created solely for the benefit of
any such Person or any corporation, partnership or other entity controlled by
any such Person.
"Permitted Incremental Debt Amount" shall mean, on any date of
determination, an amount equal to the sum of (i) $700,000,000 plus (ii) 50% of
the Net Equity Proceeds received by the Borrower from issuances of its common
equity after the Effective Date and on or prior to such date, plus (iii) 33% of
the Net Debt Proceeds received by the Borrower from any issuance of any
Qualified Convertible Subordinated Notes after the Effective Date and on or
prior to such date.
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"Permitted Liens" shall have the meaning provided in Section 9.01.
"Person" shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the Borrower, or a Subsidiary of the Borrower or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pledge Agreement" shall have the meaning provided in Section 5.07.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in
the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which the Administrative Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Administrative Agent may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"Projections" shall mean the financial assumptions and projections
prepared by the Borrower, dated June 2001 and delivered to Administrative Agent
and the Lenders prior to the Initial Borrowing Date.
"Qualified Convertible Subordinated Notes" shall mean Incremental Third
Party Debt which (i) is subordinated to the Obligations in a manner satisfactory
to the Lead Arranger (it being understood that the subordination provisions in
the 9-7/8% Senior Subordinated Notes are satisfactory to the Lead Arranger, (ii)
convertible into common equity of the Borrower, (iii) bears interest (after
giving effect to any original issue discount) at a rate per annum not to exceed
7.50% and (iv) matures not less than one year after the latest Maturity Date in
respect of Term Loans outstanding at the time of the issuance of any such
Qualified Convertible Subordinated Notes.
"Qualified Preferred Stock" shall mean any preferred stock of the
Borrower so long as the terms of any such preferred stock (i) do not contain any
mandatory put, redemption, repayment, sinking fund or other similar provision
occurring before the latest Maturity Date in respect of Term Loans outstanding
at the time of the issuance of any such Qualified Preferred Stock, (ii) do not
require the cash payment of dividends prior to the latest Maturity Date in
respect of Term Loans outstanding at the time of the issuance of any such
Qualified Preferred Stock (provided that the terms of Qualified Preferred Stock
shall provide that the payment of such Dividends are
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otherwise subject to the provisions set forth in this Agreement, as same may be
amended, modified, replaced or refinanced from time to time), (iii) do not
contain any covenants that are more restrictive in any material respect than
those covenants contained in any indenture in respect of subordinated
Incremental Third Party Indebtedness, (iv) do not grant the holders thereof any
voting rights except for (x) voting rights required to be granted to such
holders under applicable law and (y) limited customary voting rights on
fundamental matters such as mergers, consolidations, sales of all or
substantially all of the assets of the Borrower, liquidations involving the
Borrower or amendments to any of the covenants set forth therein, and (v) as
otherwise reasonably satisfactory to the Lead Arranger.
"Quarterly Payment Date" shall mean the last Business Day of each
September, December, March and June occurring after the Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction or damage or any other similar
event with respect to any property or assets of the Borrower or any of its
Subsidiaries and (ii) under any policy of insurance required to be maintained
under Section 8.03.
"Refinancing" shall mean the repayment of all outstanding loans and all
other obligations (and the termination of all commitments) under the Existing
Credit Agreement as described in Section 5.06.
"Register" shall have the meaning provided in Section 13.16.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Related Business" shall mean the business of developing, owning and
operating lodging facilities, conducted by the Borrower and its Subsidiaries
(or, if the reference is to an Unrestricted Subsidiary, by such Unrestricted
Subsidiary) and any and all related businesses in
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support of and ancillary to or reasonably related to such business of
developing, owning and operating lodging facilities.
"Related Fund" shall mean, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Release" shall have the meaning provided such term in CERCLA.
"Relevant Incremental Term Loan Commitment Percentage" shall mean, with
respect to any mandatory reduction of any Incremental Term Loan Commitment of
any Tranche at any time, a fraction (expressed as a percentage), the numerator
of which is equal to the aggregate amount of Incremental Term Loan Commitments
of such Tranche at such time and the denominator of which is equal to the
aggregate amount of all Incremental Term Loan Commitments of all Tranches at
such time.
"Relevant Term Loan Percentage" shall mean, with respect to any
voluntary prepayment or mandatory repayment of a particular Tranche of Term
Loans at any time, a fraction (expressed as a percentage), the numerator of
which is equal to the aggregate outstanding principal amount of Term Loans of
such Tranche at such time and the denominator of which is equal to the aggregate
outstanding principal amount of all Term Loans at such time.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders, the sum of whose
outstanding Term Loans (and Term Loan Commitments, if any) and Revolving Loan
Commitments (or after the termination of the Revolving Loan Commitments,
outstanding Revolving Loans and RL Percentage of Swingline Loans and Letter of
Credit Outstandings) represent an amount greater than 50% of the sum of all
outstanding Term Loans (or Term Loan Commitments, if any) of Non-Defaulting
Lenders and the Total Revolving Loan Commitment (or after the termination of the
Total Revolving Loan Commitment, the sum of the then total outstanding Revolving
Loans of Non-Defaulting Lenders and the aggregate RL Percentages of all
Non-Defaulting Lenders of the total outstanding Swingline Loans and Letter of
Credit Outstandings at such time).
"Retained Excess Cash Flow Amount" shall initially mean $0, provided
that (u) on each Excess Cash Payment Date where Excess Cash Flow for the
relevant Excess Cash Payment Period is in excess of $30,000,000, the Retained
Excess Cash Flow Amount shall be increased (so long as any required repayments
of Loans and/or reductions of Commitments are made as required by Section
4.02(f)) by an amount equal to that portion of Excess Cash Flow in excess of
$30,000,000 for the relevant Excess Cash Payment Period which is permitted to be
retained by
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the Borrower pursuant to the provisions of Section 4.02(f), (v) on the date the
Borrower makes any repurchases of its outstanding capital stock which involves a
utilization of Retained Excess Cash Flow Amount as then in effect in accordance
with the provisions of Section 9.03(iii), the Retained Excess Cash Flow Amount
shall be reduced by the aggregate amount of repurchases so justified, (w) on the
date the Borrower pays any Dividends which involve a utilization of the Retained
Excess Cash Flow Amount as then in effect in accordance with the provisions of
Section 9.03(iv), the Retained Excess Cash Flow Amount shall be reduced by the
aggregate amount of Dividends so justified, (x) on the date the Borrower or any
of its Subsidiaries makes any Investments which involve a utilization of the
Retained Excess Cash Flow Amount as then in effect in accordance with the
provisions of Section 9.05(x), the Retained Excess Cash Flow Amount shall be
reduced by the aggregate amount of Investments so justified, (y) on the date the
Borrower makes any repurchases of outstanding 9.15% Senior Subordinated Notes
and/or outstanding 9-7/8% Subordinated Notes which involve a utilization of the
Retained Excess Cash Flow Amount as then in effect in accordance with the
provisions of Section 9.11(i), the Retained Excess Cash Flow Amount shall be
reduced by the aggregate amount of repurchases so justified and (z) on the date
the Borrower makes any repayments or repurchases of Incremental Third Party Debt
which involve a utilization of the Retained Excess Cash Flow Amount as then in
effect in accordance with the provisions of Section 9.11(i), the Retained Excess
Cash Flow Amount shall be reduced by the aggregate amount of such repurchases so
justified.
"Revolving Loan" shall have the meaning provided in Section 1.01(f).
"Revolving Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time
as a result of assignments to or from such Lender pursuant to Section 1.13 or
13.04(b).
"Revolving Loan Commitment Commission" shall have the meaning provided
in Section 3.01(c).
"Revolving Maturity Date" shall mean July 24, 2007.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Lender" shall mean, at any time, each Lender with a Revolving Loan
Commitment or with outstanding Revolving Loans.
"RL Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Lender at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Lender is to be determined after the Total Revolving Loan Commitment has
been terminated, then the RL Percentages of the Lenders shall be determined
immediately prior (and without giving effect) to such termination.
"S&P" shall mean Standard & Poor's Ratings Services.
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"Scheduled A-1 Term Loan Repayment" shall have the meaning provided in
Section 4.02(b)(i).
"Scheduled A-2 Term Loan Repayment" shall have the meaning provided in
Section 4.02(b)(ii).
"Scheduled A-3 Term Loan Repayment" shall have the meaning provided in
Section 4.02(b)(iii).
"Scheduled B Term Loan Repayment" shall have the meaning provided in
Section 4.02(b)(iv).
"Scheduled Incremental Term Loan Repayment" shall have the meaning
provided in Section 4.02(b)(v).
"Scheduled Repayments" shall mean Scheduled A-1 Term Loan Repayments,
Scheduled A-2 Term Loan Repayments, Scheduled A-3 Term Loan Repayments,
Scheduled B Term Loan Repayments and Scheduled Incremental Term Loan Repayments.
"SEC" shall have the meaning provided in Section 8.01(g).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning provided in the respective
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section 5.08.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement and each Additional Security Document.
"Shareholders' Agreements" shall have the meaning provided in Section
5.05.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Stated Amount" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.09.
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"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time. Notwithstanding the foregoing (and except for purposes of the
definition of Unrestricted Subsidiary contained herein) an Unrestricted
Subsidiary shall be deemed not to be a Subsidiary of the Borrower or any of its
other Subsidiaries for purposes of this Agreement.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
designated as a "Subsidiary Guarantor" on Schedule V hereto or which executes a
guarantee after the Effective Date pursuant to Section 9.15.
"Swingline Expiry Date" shall mean the date which is five Business Days
prior to the Revolving Maturity Date.
"Swingline Lender" shall mean IBJ and its successors and assigns.
"Swingline Loan" shall have the meaning provided in Section 1.01(g).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Date" shall mean that date upon which the Lead Arranger
determines in its sole discretion (and notifies the Borrower) that the primary
syndication (and resultant addition of Persons as Lenders pursuant to Section
13.04(b)) has been completed.
"Tax Benefit" shall have the meaning provided in Section 4.04(c).
"Tax Sharing Agreements" shall have the meaning provided in Section
5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each A-1 Term Loan, A-2 Term Loan, A-3 Term
Loan, B Term Loan and Incremental Term Loan.
"Test Period" shall mean each period of four consecutive fiscal
quarters of the Borrower last ended prior to such date for which financial
statements have been delivered (or should have been delivered on or before such
date) to the Administrative Agent pursuant to Section 8.01(a) or (b), as the
case may be, in each case taken as one accounting period.
"Total A-1 Term Loan Commitment" shall mean, at any time, the sum of
the A-1 Term Loan Commitments of each of the Lenders.
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"Total A-2 Term Loan Commitment" shall mean, at any time, the sum of
the A-2 Term Loan Commitments of each of the Lenders.
"Total A-3 Term Loan Commitment" shall mean, at any time, the sum of
the A-3 Term Loan Commitments of each of the Lenders.
"Total B Term Loan Commitment" shall mean, at any time, the sum of the
B Term Loan Commitments of each of the Lenders.
"Total Commitments" shall mean, at any time, the sum of the Commitments
of each of the Lenders.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the Total Revolving Loan Commitment then
in effect less (y) the sum of the aggregate principal amount of Revolving Loans
and Swingline Loans then outstanding plus the then aggregate amount of Letter of
Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, i.e., (i) on the Initial Borrowing Date, A-1 Term
Loans, A-2 Term Loans, A-3 Term Loans, B Term Loans, Revolving Loans and
Swingline Loans and (ii) from and after the Syndication Date, with respect to
any Incremental Term Loans, such facility designated by the Borrower in the
respective Incremental Term Loan Commitment Agreement or Agreements pursuant to
which such Incremental Term Loans are made.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance with
actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
that, at the time of determination, shall be an Unrestricted Subsidiary (as
designated by the Borrower, as provided
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below) provided that such Subsidiary does not and shall not engage, to any
substantial extent, in any line or lines of business activity other than a
Related Business. The Borrower may designate any Person acquired after the
Effective Date to be an Unrestricted Subsidiary so long as (a) no Default or
Event of Default is existing or will occur as a consequence thereof, and (b)
such Subsidiary does not own any equity interests in, or hold any Lien on any
property of, the Borrower or any other Subsidiary (excluding other Unrestricted
Subsidiaries). Any such designation shall also be deemed to constitute an
investment pursuant to Sections 9.05(ix) or (x), as the case may be, in an
amount equal to the Borrower's and its Subsidiaries' percentage ownership
interest of such Unrestricted Subsidiary of the sum of the net assets (with
assets other than cash and Cash Equivalents valued at fair market value) of such
Subsidiary at the time of the designation (which investment must be permitted to
be made in accordance with the requirements of Sections 9.05(ix) or (x), as the
case may be). The Borrower may designate any Unrestricted Subsidiary to be a
Subsidiary, provided that no Default or Event of Default is existing or will
occur as a consequence thereof and the provisions of Section 9.15 are complied
with for such Subsidiary at the time of such designation. Each such designation
shall be evidenced by filing with the Administrative Agent a certified copy of
the resolution giving effect to such designation and an officers' certificate of
an Authorized Officer of the Borrower certifying that such designation complied
with the foregoing conditions.
"Unutilized Revolving Loan Commitment" with respect to any Lender at
any time shall mean such Lender's Revolving Loan Commitment at such time, if
any, less the sum of (i) the aggregate outstanding principal amount of Revolving
Loans made by such Lender and (ii) such Lender's RL Percentage of the Letter of
Credit Outstandings.
"Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the total of the
product obtained by multiplying (x) the amount of each then remaining
installment or other required scheduled payments of principal, including payment
at final maturity, in respect thereof, by (y) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment.
"Wholly-Owned Foreign Subsidiary" shall mean each Wholly-Owned
Subsidiary of a Person that is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability company,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
SECTION 12. The Administrative Agents.
12.01 Appointment. The Lenders hereby designate IBJ as
Administrative Agent (for purposes of this Section 12, the term "Administrative
Agent" shall include IBJ in its capacity as Collateral Agent pursuant to the
Security Documents) to act as specified herein and in the other Credit
Documents. The Lenders hereby designate MSSF as Lead Arranger to act as
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specified herein and in the other Credit Documents. The Lenders hereby designate
Bear Stearns Corporate Lending Inc. and Fleet National Bank to act as
Co-Syndication Agents as specified herein and in the other Credit Documents.
Each Lender hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, each Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. Each Agent may perform any of its duties hereunder by or through its
respective officers, directors, agents, employees or affiliates.
12.02 Nature of Duties. No Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. No Agent nor any of its respective officers, directors,
agents, employees or affiliates shall be liable for any action taken or omitted
by it or them hereunder or under any other Credit Document or in connection
herewith or therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of each Agent shall be mechanical and administrative in
nature; no Agent shall have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Lender or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon any Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
12.03 Lack of Reliance on the Agents. Independently and
without reliance upon any Agent, each Lender and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Borrower
and each of its Subsidiaries in connection with the making and the continuance
of the Loans and the taking or not taking of any action in connection herewith
and (ii) its own appraisal of the creditworthiness of the Borrower and each of
its Subsidiaries and, except as expressly provided in this Agreement, no Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. No Agent shall be
responsible to any Lender or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectability, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower or any of its Subsidiaries
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of the Borrower or any of
its Subsidiaries or the existence or possible existence of any Default or Event
of Default.
12.04 Certain Rights of the Agents. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from
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the Required Lenders; and such Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender or the holder
of any Note shall have any right of action whatsoever against such Agent as a
result of such Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders.
12.05 Reliance. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent believed to be the proper Person, and, with respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by such
Agent.
12.06 Indemnification. To the extent any Agent is not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify such Agent, in proportion to their respective "percentages" as used in
determining the Required Lenders (determined as if there were no Defaulting
Lenders), for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by such Agent in performing its duties hereunder or under any other Credit
Document, in any way relating to or arising out of this Agreement or any other
Credit Document; provided that to the extent that such Agent is reimbursed by
the Borrower for amounts paid by the Lenders pursuant to this Section 12.06,
such Agent shall reimburse the Lenders for such amounts; provided further 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 such Agent's gross negligence or willful
misconduct.
12.07 The Agents in Their Individual Capacities. With respect
to its obligation to make Loans, or issue or participate in Letters of Credit,
under this Agreement, each Agent shall have the rights and powers specified
herein for a "Lender" and may exercise the same rights and powers as though it
were not performing the duties specified herein; and the term "Lenders,"
"Required Lenders," Majority Lenders", "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include each Agent in its
individual capacity. Each Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, investment banking, trust or other
business with, or provide debt financing, equity capital or other services
(including financial advisory services) to, any Credit Party or any Affiliate of
any Credit Party (or any Person engaged in a similar business with any Credit
Party or any Affiliate thereof) as if they were not performing the duties
specified herein, and may accept fees and other consideration from the Borrower
or any other Credit Party or any Affiliate of any Credit Party for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
12.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of
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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,
assignee or indorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor.
12.09 Resignation by the Agents. (a) The Administrative Agent
may resign from the performance of all their respective functions and duties
hereunder and/or under the other Credit Documents at any time by giving 15
Business Days' prior written notice to the Lenders and the Borrower (provided
that no such notice shall be required to be given to the Borrower if a Default
or an Event of Default of the type described in Section 10.05 exists with
respect to the Borrower). Such resignation, in the case of the Administrative
Agent, shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Administrative Agent hereunder or thereunder with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed but shall not be required at any time when a Default or an Event of
Default exists).
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed but shall not be required at any time when a Default or an Event of
Default exists), shall then appoint a successor Administrative Agent who shall
serve as Administrative Agent hereunder or thereunder until such time, if any,
as the Required Lenders appoint a successor Administrative Agent as provided
above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 30th Business Day after the date such
notice of resignation was given by the Administrative Agent, Administrative
Agent's resignation shall become effective and the Required Lenders shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above.
(e) The Lead Arranger and each Co-Syndication Agent may, upon
fifteen Business Days' notice to the Borrower, the Administrative Agent and the
Lenders, resign at any time (effective upon the fifteenth Business Day after the
giving of such notice).
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower agrees that it
shall: (i) whether or not the transactions contemplated herein are consummated,
pay all reasonable out-of-pocket costs and expenses of the Agents (including,
without limitation, the reasonable fees and disbursements of White & Case LLP),
in connection with the preparation, execution, delivery and performance of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein, any amendment, waiver or consent relating hereto
or thereto, of the Agents in connection with its syndication efforts with
respect to this Agreement and, upon the occurrence and during the continuance of
an Event of Default, the reasonable costs
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and expenses of each of the Agents and each of the Lenders in connection with
the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel for the Agents and,
following an Event of Default, for each of the Lenders), provided that the
Borrower's obligation to reimburse the Agents for the reasonable fees and
disbursements of White & Case LLP incurred in connection with the preparation,
execution and delivery of this Agreement shall be subject to the letter dated
June 1, 2001 from MSSF to the Borrower; (ii) pay and hold each of the Lenders
harmless from and against any and all present and future stamp, excise and other
similar documentary taxes with respect to the foregoing matters and save each of
the Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Agent and each Lender,
and each of their respective officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not any Agent or any Lender is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of any transactions contemplated herein or in any
other Credit Document or the exercise of any of their rights or remedies
provided herein or in the other Credit Documents, or (b) the actual or alleged
presence of Hazardous Materials in the air, surface water or groundwater or on
the surface or subsurface of any Real Property owned or at any time operated by
any Credit Party or any of its Subsidiaries, the Release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by any Credit Party or any of its Subsidiaries,
the non-compliance of any Real Property with foreign, federal, state and local
laws, regulations, and ordinances (including applicable permits thereunder)
applicable to any Real Property, or any Environmental Claim asserted against any
Credit Party, any of its Subsidiaries or any Real Property owned or at any time
operated by any Credit Party or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation, litigation
or other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to indemnify, pay or hold harmless any Agent or any Lender set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law.
13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to
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appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of such Credit Party to such Lender under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Lender pursuant to
Section 13.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
13.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to any Lender, at its address specified on Schedule II; and
if to the Administrative Agent, at its Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each
Lender, at such other address as shall be designated by such Lender in a written
notice to the Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to the Administrative Agent or any Credit Party shall not be
effective until received by the Administrative Agent or such Credit Party.
13.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, the Borrower
may not assign or transfer any of its rights, obligations or interest hereunder
or under any other Credit Document without the prior written consent of the
Lenders and, provided further, that, although any Lender may transfer, assign or
grant participations in its rights hereunder, such Lender shall remain a
"Lender" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments hereunder except as provided in Section 13.04(b)) and
the transferee, assignee or participant, as the case may be, shall not
constitute a "Lender" hereunder and, provided further, that no Lender shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Maturity Date) in which
such participant is participating, or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitments shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's
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participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the Collateral
under all of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder) and/or
its outstanding Term Loans (or, if not theretofore terminated, Term Loan
Commitment) to (i) one or more Lenders, (ii) any Related Fund that is an
Eligible Transferee or (iii) its parent company, or any Affiliate of such Lender
which is an Eligible Transferee and which is at least 50% owned by such Lender
or its parent company or (y) assign all, or if less than all, a portion equal to
at least $1,000,000 in the aggregate for the assigning Lender or assigning
Lenders, of such Revolving Loan Commitment (and related outstanding Obligations
hereunder) and/or its outstanding Term Loans (or, if not theretofore terminated,
Term Loan Commitment) to one or more Eligible Transferees (treating any fund
that invests in commercial loans and any other fund that invests in commercial
loans and is managed by the same investment advisor of such fund or by an
Affiliate of such investment advisor as a single assignee), each of which
assignees shall become a party to this Agreement as a Lender by execution of an
Assignment and Assumption Agreement, provided that (i) at such time Schedule I
shall be deemed modified to reflect the Commitments (and/or outstanding Loans,
as the case may be) of such new Lender and of the existing Lenders, (ii) upon
surrender of the old Notes (or, upon such assigning Lender's indemnifying the
Borrower for any lost Note pursuant to a customary indemnification agreement),
new Notes will be issued, at the Borrower's expense, to such new Lender and to
the assigning Lender upon the request of such new Lender or assigning Lender,
such new Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments (and/or outstanding Loans, as the case may be), (iii) the consent
(which shall not be unreasonably withheld or delayed) of the Lead Arranger shall
be required in connection with any such assignment pursuant to clause (y) above
and (iv) so long as no Default or Event of Default exists, the consent of the
Borrower shall be required in connection with any assignment to an Eligible
Transferee pursuant to clause (y) above (which consent shall not be unreasonably
withheld or delayed), and, provided further, that such transfer or assignment
will not be effective until recorded by the Administrative Agent on the Register
pursuant to Section 13.16. To the extent of any assignment pursuant to this
Section 13.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments. At the time of each
assignment pursuant to this Section 13.04(b) to a Person which is not already a
Lender hereunder and which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if applicable a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an
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assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10,
1.11, 2.06 or 4.04 from those being charged by the respective assigning Lender
prior to such assignment, then the Borrower shall not be obligated to pay or
reimburse such increased costs (although the Borrower shall be obligated to pay
any other increased costs of the type described above resulting from changes
after the date of the respective assignment).
(c) Notwithstanding any other provision set forth in this
Agreement, any Lender may, without the consent of the Borrower or the
Administrative Agent, pledge its Loans and Notes hereunder to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve Bank
or to any trustee for, or any other representative of, holders of obligations
owed or securities issued, by such Lender, as security for such obligations or
securities; provided that any foreclosure or similar action by such trustee or
representative shall be subject to the provisions of this Section 13.04
concerning assignments. No pledge pursuant to this clause (c) shall release the
transferor Lender from its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of any Agent or any Lender or any holder of any Note in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between any Borrower or any other Credit Party and any Agent
or any Lender or the holder of any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights, powers and remedies herein or in any other Credit
Document expressly provided are cumulative and not exclusive of any rights,
powers or remedies which any Agent or any Lender or the holder of any Note would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any Agent or any
Lender or the holder of any Note to any other or further action in any
circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in
this Agreement, the Administrative Agent agrees that promptly after its receipt
of each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Lenders
is in a greater proportion than the total of such Obligation then owed and due
to such Lender bears to the total of such Obligation then owed and due to all of
the Lenders immediately prior to such receipt,
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then such Lender receiving such excess payment shall purchase for cash without
recourse or warranty from the other Lenders an interest in the Obligations of
the respective Credit Party to such Lenders in such amount as shall result in a
proportional participation by all the Lenders in such amount; provided that if
all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
13.07 Calculations; Computations. (a) The financial statements
to be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders) ("GAAP"); provided that, (i) except as otherwise specifically provided
herein, all computations of Excess Cash Flow and all computations determining
compliance with Sections 9.08 through 9.10, inclusive, shall utilize accounting
principles and policies in conformity with those used to prepare the annual
financial statements first delivered to the Lenders pursuant to Section 7.05(a)
and (ii) for purposes of calculating financial terms, all covenants and related
definitions, all such calculations based on the operations of the Borrower and
its Subsidiaries on a consolidated basis shall be made without giving effect to
the operations of any Unrestricted Subsidiaries.
(b) All computations of interest, Commitment Commission, and
other Fees hereunder shall be made (i) in the case of Base Rate Loans maintained
at the Prime Lending Rate, on the actual number of days elapsed over a year of
365 or 366 days, as applicable and (ii) in all other cases, on the actual number
of days over a year of 360 days (in each case including the first day but
excluding the last day).
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH COURTS LACK JURISDICTION OVER THE BORROWER, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY
SUCH COURT LACKS JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE
- 113 -
PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE BORROWER IN ANY OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which the Borrower, each Agent and each of
the Lenders shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at the Notice Office or, in the case of the Lenders, shall have given to
the Administrative Agent telephonic (confirmed in writing), written or telex
notice (actually received) at such office that the same has been signed and
mailed to it. The Administrative Agent will give the Borrower and each Lender
prompt written notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
- 114 -
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Lenders, provided that no such change, waiver, discharge or
termination shall, without the consent of each Lender (other than a Defaulting
Lender) (with Obligations being directly affected in the case of following
clause (i)), (i) extend the final scheduled maturity of any Loan or Note, extend
the date for any Scheduled Repayment or extend the stated expiration date of any
Letter of Credit beyond the A Maturity Date, or reduce the rate or extend the
time of payment of interest or Fees thereon, or reduce the principal amount
thereof (except to the extent repaid in cash), (ii) release all or substantially
all of the Collateral (in each case, except as expressly provided in the Credit
Documents) under all the Security Documents or release all or substantially all
of the Subsidiary Guarantors under the Subsidiaries Guaranty (except as
expressly provided in the Subsidiaries Guaranty), (iii) amend, modify or waive
any provision of this Section 13.12, (iv) reduce the percentage specified in the
definition of Required Lenders (it being understood that, with the consent of
the Required Lenders, additional extensions of credit pursuant to this Agreement
may be included in the determination of the Required Lenders on substantially
the same basis as the extensions of Loans and Commitments are included on the
Effective Date) or (v) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement; provided further, that
no such change, waiver, discharge or termination shall (1) increase the
Commitment of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Commitments shall not constitute an increase of the
Commitment of any Lender, and that an increase in the available portion of any
Commitment of any Lender shall not constitute an increase in the Commitment of
such Lender), (2) without the consent of each Issuing Lender, amend, modify or
waive any provision of Section 2 or alter any such Issuing Lender's rights or
obligations with respect to Letters of Credit, (3) without the consent of each
Agent affected thereby, amend, modify or waive any provision of Section 12 as
same applies to such Agent or any other provision as same relates to the rights
or obligations of such Agent, (4) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent or (5) except in cases where additional extensions of term
loans and/or revolving loans are being afforded substantially the same treatment
afforded to the Term Loans and Revolving Loans pursuant to this Agreement as
originally in effect, without the consent of the Majority Lenders of each
Tranche which is being allocated a lesser prepayment, repayment or commitment
reduction as a result of the actions described below (or without the consent of
the Majority Lenders of each Tranche in the case of an amendment to the
definition of Majority Lenders), amend the definition of Majority Lenders or
alter the required application of any prepayments or repayments (or commitment
reduction), as between the various Tranches, pursuant to Section 4.01(a) or 4.02
(although the Required Lenders may waive, in whole or in part, any such
prepayment, repayment or commitment reduction, so long as the application, as
amongst the various Tranches, of any such prepayment, repayment or commitment
reduction which is still required to be made is not altered).
- 115 -
(b) If, in connection with any proposed change, waiver,
discharge or termination with respect to any of the provisions of this Agreement
as contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not
obtained, then the Borrower shall have the right, so long as all non-consenting
Lenders whose individual consent is required are treated as described in either
clause (A) or (B) below, to either (A) replace each such non-consenting Lender
or Lenders with one or more Replacement Lenders pursuant to Section 1.13 so long
as at the time of such replacement, each such Replacement Lender consents to the
proposed change, waiver, discharge or termination or (B) terminate such
non-consenting Lender's Commitments in accordance with Sections 3.02(c) and/or
4.01(b), provided that, unless the Commitments terminated, and Loans repaid,
pursuant to preceding clause (B) are immediately replaced in full at such time
through the addition of new Lenders or the increase of the Commitments and/or
outstanding Loans of existing Lenders (who in each case must specifically
consent thereto), then in the case of any action pursuant to preceding clause
(B) the Required Lenders (determined before giving effect to the proposed
action) shall specifically consent thereto, provided further, that in any event
the Borrower shall not have the right to replace a Lender, terminate any of its
Commitments or repay its Loans solely as a result of the exercise of such
Lender's rights (and the withholding of any required consent by such Lender)
pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Obligations.
13.14 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 13.14 would, at the
time of such transfer, result in increased costs under Section 1.10, 1.11, 2.06
or 4.04 from those being charged by the respective Lender prior to such
transfer, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
transfer).
13.15 Confidentiality. (a) Subject to the provisions of clause
(b) of this Section 13.15, each Lender agrees that it will use its reasonable
efforts not to disclose without the prior written consent of the Borrower (other
than to its directors, employees, auditors, advisors or counsel or to another
Lender if the Lender or such Lender's holding or parent company in its sole
discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 13.15 to the same extent as such Lender) any information with respect to
any Credit Party or any of its Subsidiaries which is now or in the future
furnished pursuant to this Agreement or any other Credit Document and which is
designated by any Credit Party to the Lenders in writing as confidential,
provided that any Lender may disclose any such information (a) as has become
generally available to the public other than by virtue of a breach of this
Section 13.15(a), (b) as may be required or appropriate in any report, statement
or testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over such Lender or to the Federal Reserve
Board, the Federal
- 116 -
Deposit Insurance Corporation or the NAIC or similar organizations (whether in
the United States or elsewhere) or their successors, (c) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Lender, (e) to any Agent or the Collateral Agent, (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or any
interest therein by such Lender, provided, that such prospective transferee
agrees in writing with such Lender for the benefit of the Borrower to be subject
to the provisions of this Section 13.15(a) and (g) to any direct or indirect
contractual counterparty in any swap, hedge or similar agreement (or to any such
contractual counterparty's professional advisor, so long as such contractual
counterparty (or such professional advisor) agrees to be bound by the provisions
of this Section 13.15(a).
(b) The Borrower hereby acknowledges and agrees that each
Lender may share with any of its affiliates any information related to Credit
Parties or any of their respective Subsidiaries (including, without limitation,
any nonpublic customer information regarding the creditworthiness of the Credit
Parties and their respective Subsidiaries, provided such Persons shall be
subject to the provisions of this Section 13.15 to the same extent as such
Lender), it being understood that for purposes of this Section 13.15(b) the term
"affiliate" shall mean any direct or indirect holding company of a Lender as
well as any direct or indirect Subsidiary of such holding company.
13.16 Register. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 13.16, to maintain a register (the "Register") on which it will
record the Commitments from time to time of each of the Lenders, the Loans made
by each of the Lenders and each repayment in respect of the principal amount of
the Loans of each Lender. Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. Upon receipt of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 13.04(b), the
Administrative Agent shall record on the Register the assignment or transfer of
all or part of any Commitments and Loans set forth in such Assignment and
Assumption Agreement. Coincident with the delivery of such an Assignment and
Assumption Agreement to the Administrative Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new Lender. The Borrower agrees to indemnify the Administrative Agent from
and against any and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.16.
- 117 -
13.17 Limitation on Increased Costs. Notwithstanding anything
to the contrary contained in Section 1.10, 1.11, 2.06 or 4.04, unless a Lender
gives notice to the Borrower that it is obligated to pay an amount under any
such Section within 180 days after the later of (x) the date such Lender incurs
the respective increased costs, Taxes, loss, expense or liability, or reduction
in amounts received or receivable or reduction in return on capital or (y) the
date such Lender has actual knowledge of its incurrence of the respective
increased costs, Taxes, loss, expense or liability, or reductions in amounts
received or receivable or reduction in return on capital, then such Lender shall
only be entitled to be compensated for such amount by the Borrower pursuant to
said Section 1.10, 1.11, 2.06 or 4.04, as the case may be, to the extent the
costs, Taxes, loss, expense or liability, or reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs 180 days prior to such Lender giving notice to the
Borrower that it is obligated to pay the respective amounts pursuant to said
Section 1.10, 1.11, 2.06 or 4.04, as the case may be. This Section 13.17 shall
have no applicability to any Section of this Agreement or any other Credit
Document other than said Sections 1.10, 1.11, 2.06 and 4.04.
* * *
- 118 -
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
- -------
450 East Las Olas Boulevard EXTENDED STAY AMERICA, INC.
Suite 1100
Ft. Lauderdale, FL 33301
Telephone No.: (954) 713-1600
Telecopier No.: (954) 713-1650
Attention: Gregory R. Moxley By: /s/ Gregory R. Moxley
----------------------------------
Name: Gregory R. Moxley
Title: Chief Financial Office
MORGAN STANLEY SENIOR FUNDING, INC.,
Individually and as Lead Arranger
By: /s/ Todd Vannucci
----------------------------------
Name: Todd Vannucci
Title: Principal
BEAR STEARNS CORPORATE LENDING INC.,
Individually and as a Co-Syndication
Agent
By: /s/ Lawrence B. Alletto
----------------------------------
Name: Lawrence B. Alletto
Title: Authorized Signatory
FLEET NATIONAL BANK,
Individually and as a Co-Syndication
Agent
By: /s/ James B. McLaughlin
----------------------------------
Name: James B. McLaughlin
Title: Director
- 119 -
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
Individually and as Administrative
Agent
By: /s/ Takuya Honjo
----------------------------------
Name: Takuya Honjo
Title: Deputy General Manager
- 120 -
FIRST UNION NATIONAL BANK
By: /s/ David S. Sampson
-----------------------------------
Name: David S. Sampson
Title:
- 121 -
MERRILL LYNCH CAPITAL CORPORATION
By: /s/ Christopher K. Straub
-----------------------------------
Name: Christopher K. Straub
Title:
- 122 -
RZB FINANCE LLC
By: /s/ Astrid Wilke
-----------------------------------
Name: Astrid Wilke
Title: Vice President
By: /s/ Pearl Geffers
-----------------------------------
Name: Pearl Geffers
Title: First Vice President
- 123 -
CHEVY CHASE BANK, FSB
By: /s/ Dory Halatt
-----------------------------------
Name: Dory Halatt
Title: Vice President
- 124 -
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ Kevin B. Quinn
-----------------------------------
Name: Kevin B. Quinn
Title: Vice President
- 125 -
CHANG HWA COMMERCIAL BANK, LTD.,
NEW YORK BRANCH
By: /s/ Ming-Hsien Lin
-----------------------------------
Name: Ming-Hsien Lin
Title: Vice President and
General Manager
- 126 -
ALLIED IRISH BANKS, P.L.C.
By: /s/ John Farrace
-----------------------------------
Name: John Farrace
Title: Senior Vice President
- 127 -
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By: /s/ Steve Goetschius
-----------------------------------
Name: Steve Goetschius
Title: Senior Vice President
- 128 -
BANK OF AMERICA, N.A.
By: /s/ Ansel McDowell
-----------------------------------
Name: Ansel McDowell
Title: Principal
- 129 -
CREDIT INDUSTRIEL ET COMMERCIAL
By: /s/ Marcus Edward /s/ Anthony Rock
-----------------------------------
Name: Marcus Edward and
Anthony Rock
Title: Vice Presidents
- 130 -
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ Robert Wagner
-----------------------------------
Name: Robert Wagner
Title: Authorized Signatory
- 131 -
LAND BANK OF TAIWAN LOS ANGELES BRANCH
By: /s/ Mayer Chen
-----------------------------------
Name: Mayer Chen
Title: Senior Vice President and
General Manager
- 132 -
Exhibit B-1
-----------
A-1 TERM NOTE
-------------
$ New York, New York
-----------------
[Date]
FOR VALUE RECEIVED, EXTENDED STAY AMERICA, INC. (the
"Borrower"), a Delaware corporation, hereby promises to pay to _____________ or
its registered assigns (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of The Industrial Bank of
Japan, Limited (the "Administrative Agent") located at 1251 Avenue of the
Americas, New York, New York 10020-1104 on the A Maturity Date (as defined in
the Agreement referred to below) the principal sum of _______________ DOLLARS
($_______) or, if less, the then unpaid principal amount of all A-1 Term Loans
(as defined in the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the A-1 Term Notes referred to in the
Credit Agreement, dated as of July 24, 2001, among the Borrower, the Lenders
from time to time party thereto, Morgan Stanley Senior Funding, Inc., as Sole
Lead Arranger and Sole Book Runner, Bear Stearns Corporate Lending Inc. and
Fleet National Bank, as Co-Syndication Agents, and The Industrial Bank of Japan,
Limited, as Administrative Agent (as amended, modified, extended, renewed,
replaced, restated or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined in
the Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the A Maturity Date, in whole or in part, as
provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
This Note is registered on the books of the Borrower
maintained by the Administrative Agent, as agent for the Borrower, and is
transferrable only in accordance with the provisions of the Agreement.
Exhibit B-1
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
EXTENDED STAY AMERICA, INC.
By:
------------------------
Name:
Title:
Exhibit B-2
-----------
A-2 TERM NOTE
-------------
$ New York, New York
-----------------
[Date]
FOR VALUE RECEIVED, EXTENDED STAY AMERICA, INC. (the
"Borrower"), a Delaware corporation, hereby promises to pay to _____________ or
its registered assigns (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of The Industrial Bank of
Japan, Limited (the "Administrative Agent") located at 1251 Avenue of the
Americas, New York, New York 10020-1104 on the A Maturity Date (as defined in
the Agreement referred to below) the principal sum of _______________ DOLLARS
($_______) or, if less, the then unpaid principal amount of all A-2 Term Loans
(as defined in the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the A-2 Term Notes referred to in the
Credit Agreement, dated as of July 24, 2001, among the Borrower, the Lenders
from time to time party thereto, Morgan Stanley Senior Funding, Inc., as Sole
Lead Arranger and Sole Book Runner, Bear Stearns Corporate Lending Inc. and
Fleet National Bank, as Co-Syndication Agents, and The Industrial Bank of Japan,
Limited, as Administrative Agent (as amended, modified, extended, renewed,
replaced, restated or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined in
the Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the A Maturity Date, in whole or in part, as
provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
This Note is registered on the books of the Borrower
maintained by the Administrative Agent, as agent for the Borrower, and is
transferrable only in accordance with the provisions of the Agreement.
Exhibit B-2
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
EXTENDED STAY AMERICA, INC.
By:
------------------------
Name:
Title:
Exhibit B-3
-----------
A-3 TERM NOTE
--------------
$ New York, New York
-----------------
[Date]
FOR VALUE RECEIVED, EXTENDED STAY AMERICA, INC. (the
"Borrower"), a Delaware corporation, hereby promises to pay to _____________ or
its registered assigns (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of The Industrial Bank of
Japan, Limited (the "Administrative Agent") located at 1251 Avenue of the
Americas, New York, New York 10020-1104 on the A Maturity Date (as defined in
the Agreement referred to below) the principal sum of _______________ DOLLARS
($_______) or, if less, the then unpaid principal amount of all A-3 Term Loans
(as defined in the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the A-3 Term Notes referred to in the
Credit Agreement, dated as of July 24, 2001, among the Borrower, the Lenders
from time to time party thereto, Morgan Stanley Senior Funding, Inc., as Sole
Lead Arranger and Sole Book Runner, Bear Stearns Corporate Lending Inc. and
Fleet National Bank, as Co-Syndication Agents, and The Industrial Bank of Japan,
Limited, as Administrative Agent (as amended, modified, extended, renewed,
replaced, restated or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined in
the Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the A Maturity Date, in whole or in part, as
provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
This Note is registered on the books of the Borrower
maintained by the Administrative Agent, as agent for the Borrower, and is
transferrable only in accordance with the provisions of the Agreement.
Exhibit B-3
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
EXTENDED STAY AMERICA, INC.
By:
------------------------
Name:
Title:
Exhibit B-4
-----------
B TERM NOTE
-----------
$ New York, New York
-----------------
[Date]
FOR VALUE RECEIVED, EXTENDED STAY AMERICA, INC. (the
"Borrower"), a Delaware corporation, hereby promises to pay to _____________ or
its registered assigns (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of The Industrial Bank of
Japan, Limited (the "Administrative Agent") located at 1251 Avenue of the
Americas, New York, New York 10020-1104 on the B Maturity Date (as defined in
the Agreement referred to below) the principal sum of _______________ DOLLARS
($_______) or, if less, the then unpaid principal amount of all B Term Loans (as
defined in the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the B Term Notes referred to in the Credit
Agreement, dated as of July 24, 2001, among the Borrower, the Lenders from time
to time party thereto, Morgan Stanley Senior Funding, Inc., as Sole Lead
Arranger and Sole Book Runner, Bear Stearns Corporate Lending Inc. and Fleet
National Bank, as Co-Syndication Agents, and The Industrial Bank of Japan,
Limited, as Administrative Agent (as amended, modified, extended, renewed,
replaced, restated or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined in
the Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the B Maturity Date, in whole or in part, as
provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
This Note is registered on the books of the Borrower
maintained by the Administrative Agent, as agent for the Borrower, and is
transferrable only in accordance with the provisions of the Agreement.
Exhibit B-4
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
EXTENDED STAY AMERICA, INC.
By:
------------------------
Name:
Title:
Exhibit B-5
-----------
REVOLVING NOTE
--------------
$ New York, New York
-----------------
[Date]
FOR VALUE RECEIVED, EXTENDED STAY AMERICA, INC. (the
"Borrower"), a Delaware corporation, hereby promises to pay to _____________ or
its registered assigns (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of The Industrial Bank of
Japan, Limited (the "Administrative Agent") located at 1251 Avenue of the
Americas, New York, New York 10020-1104 on the Revolving Maturity Date (as
defined in the Agreement referred to below) the principal sum of _______________
DOLLARS ($_______) or, if less, the then unpaid principal amount of all
Revolving Loans (as defined in the Agreement) made by the Lender pursuant to the
Agreement.
The Borrower promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the
Credit Agreement, dated as of July 24, 2001, among the Borrower, the Lenders
from time to time party thereto, Morgan Stanley Senior Funding, Inc., as Sole
Lead Arranger and Sole Book Runner, Bear Stearns Corporate Lending Inc. and
Fleet National Bank, as Co-Syndication Agents, and The Industrial Bank of Japan,
Limited, as Administrative Agent (as amended, modified, extended, renewed,
replaced, restated or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined in
the Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the Revolving Maturity Date, in whole or in part,
as provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
This Note is registered on the books of the Borrower
maintained by the Administrative Agent, as agent for the Borrower, and is
transferable only in accordance with the provisions of the Agreement.
Exhibit B-5
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
EXTENDED STAY AMERICA, INC.
By:
------------------------
Name:
Title:
EXHIBIT B-6
-----------
SWINGLINE NOTE
--------------
$20,000,000 New York, New York
[Initial Borrowing Date]
FOR VALUE RECEIVED, EXTENDED STAY AMERICA, INC. (the
"Borrower"), a Delaware corporation, hereby promises to pay to The Industrial
Bank of Japan, Limited or its registered assigns (the "Lender"), in lawful money
of the United States of America in immediately available funds, at the office of
The Industrial Bank of Japan, Limited (the "Administrative Agent") located at
1251 Avenue of the Americas, New York, New York 10020-1104 on the Swingline
Expiry Date (as defined in the Agreement referred to below) the principal sum of
TWENTY MILLION DOLLARS ($20,000,000) or, if less, the then unpaid principal
amount of all Swingline Loans (as defined in the Agreement) made by the Lender
pursuant to the Agreement.
The Borrower promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit
Agreement, dated as of July 24, 2001, among the Borrower, the Lenders from time
to time party thereto, Morgan Stanley Senior Funding, Inc., as Sole Lead
Arranger and Sole Book Runner, Bear Stearns Corporate Lending Inc. and Fleet
National Bank, as Co-Syndication Agents, and The Industrial Bank of Japan,
Limited, as Administrative Agent (as amended, modified, extended, renewed,
replaced, restated or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined in
the Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the Swingline Expiry Date, in whole or in part, as
provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
Exhibit B-6
Page 2
This Note is registered on the books of the Borrower
maintained by the Administrative Agent, as agent for the Borrower, and is
transferrable only in accordance with the provisions of the Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
EXTENDED STAY AMERICA, INC.
By:
-----------------------
Name:
Title:
EXHIBIT C
---------
INCREMENTAL TERM LOAN COMMITMENT AGREEMENT
-----------------------------------------
[Names(s) of Lenders(s)]
[Date]
Extended Stay America, Inc.
450 East Las Olas Boulevard
Suite 1100
Ft. Lauderdale, FL 33301
re Incremental Term Loan Commitments
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement, dated as of
July 24, 2001 (as amended, modified or supplemented from time to time, the
"Credit Agreement"), among Extended Stay America, Inc. (the "Borrower" or
"you"), the lenders from time to time party thereto (the "Lenders") Morgan
Stanley Senior Funding, Inc., as Sole Lead Arranger and Sole Book Runner (the
"Lead Arranger") Bean Stearns Corporate Lending Inc. and Fleet National Bank,
N.A., as Co-Syndication Agents and The Industrial Bank of Japan, Limited, as
Administrative Agent (the "Administrative Agent"). Unless otherwise defined
herein, capitalized terms used herein shall have the respective meanings set
forth in the Credit Agreement.
Each Lender (each an "Incremental Term Loan Lender") party to
this letter agreement (this "Agreement") hereby severally agrees to provide the
Incremental Term Loan Commitments set forth opposite its name on Annex I
attached hereto (for each such Incremental Term Loan Lender, its "Incremental
Term Loan Commitment"). Each Incremental Term Loan Commitment provided pursuant
to this Agreement shall be subject to the terms and conditions set forth in the
Credit Agreement, including Section 1.14 thereof.
Each Incremental Term Loan Lender, the Borrower and the Lead
Arranger acknowledge and agree that the Incremental Term Loan Commitments
provided pursuant to this Agreement shall constitute Incremental Term Loan
Commitments of the respective Tranche specified in Annex I attached hereto and,
upon the incurrence of Incremental Term Loans pursuant to such Incremental Term
Loan Commitments, shall constitute Incremental Term Loans under such specified
Tranche for all purposes of the Credit Agreement and the other Credit Documents.
Each Incremental Term Loan Lender and the Borrower further
agree that, with respect to the Incremental Term Loan Commitments provided by
such Incremental Term Loan
Exhibit C
Page 2
Lender pursuant to this Agreement, such Incremental Term Loan Lender shall
receive an upfront fee equal to that amount set forth opposite its name on Annex
I attached hereto, which upfront fee shall be due and payable to such
Incremental Term Loan Lender as set forth in such Annex I.
Each Incremental Term Loan Lender party to this Agreement (i)
confirms that it has received a copy of the Credit Agreement and the other
Credit Documents, together with copies of the financial statements referred to
therein and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Agreement and, to
the extent applicable, to become a Lender under the Credit Agreement, (ii)
agrees that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement, (iii) appoints and
authorizes the Administrative Agent and the Collateral Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
and the other Credit Documents as are delegated to the Administrative Agent and
the Collateral Agent, as the case may be, by the terms thereof, together with
such powers as are reasonably incidental thereto, (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender, and (v)
in the case of each lending institution organized under the laws of a
jurisdiction outside the United States, attaches the applicable forms described
in Section 4.04(b) of the Credit Agreement certifying as to its entitlement to a
complete exemption from United States withholding taxes with respect to all
payments to be made under the Credit Agreement and the other Credit Documents.
Upon the execution of a counterpart of this Agreement by such Incremental Term
Loan Lenders, the Administrative Agent and the Borrower, the delivery to the
Administrative Agent of a fully executed copy (including by way of counterparts
and by facsimile) hereof and, to the extent due pursuant to the terms hereof,
the payment of any fees required in connection herewith, each Incremental Term
Loan Lender party hereto (i) shall be obligated to make the Incremental Term
Loans provided to be made by it as provided in this Agreement on the terms, and
subject to the conditions, set forth in the Credit Agreement and (ii) to the
extent provided in this Agreement, shall have the rights and obligations of a
Lender thereunder and under the other Credit Documents.
The Borrower acknowledges and agrees that (i) it shall be
liable for all Obligations with respect to the Incremental Term Loan Commitments
provided hereby including, without limitation, any loans made pursuant thereto
and (ii) all such Obligations (including any such loans) shall be entitled to
the benefits of the Security Documents.
Each Subsidiary Guarantor acknowledges and agrees that all
Obligations with respect to the Incremental Term Loan Commitments provided
hereby and any loans made pursuant thereto shall (i) be fully guaranteed
pursuant to the Subsidiaries Guaranty in accordance with the terms and
provisions thereof and (ii) be entitled to the benefits of the Security
Documents.
The Obligations to be incurred pursuant to the Incremental
Term Loan Commitments provided hereunder are permitted by, and constitute
"Senior Indebtedness" (or any similar term) under, the 9.15% Senior Subordinated
Note Documents, the 9-7/8% Senior
Exhibit C
Page 3
Subordinated Note Documents, and attached hereto as Annex II are calculations
showing that such Obligations are permitted by the terms of the aforementioned
documentation.
Attached hereto as Annex III is an opinion of _________,
counsel to the Borrower, delivered as required pursuant to Section 1.14(b)(iv)
of the Credit Agreement.
You may accept this Agreement by signing the enclosed copies
in the space provided below, and returning one copy of same to us before the
close of business on __________ __, _____. If you do not so accept this
Agreement by such time, our Incremental Term Loan Commitments set forth in this
Agreement shall be deemed cancelled.
After the execution and delivery to the Administrative Agent
of a fully executed copy of this Agreement (including by way of counterparts and
by facsimile) by the parties hereto, this Agreement may only be changed,
modified or varied by written instrument in accordance with the requirements for
the modification of Credit Documents pursuant to Section 13.12 of the Credit
Agreement.
Exhibit C
Page 4
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
Very truly yours,
[NAMES OF LENDERS]
By
-------------------------
Name:
Title:
Agreed and Accepted
this ___ day of __________, ____:
EXTENDED STAY AMERICA, INC.
By:
-----------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Administrative Agent
By:
-----------------------------
Name:
Title:
[OTHER LENDERS]
Exhibit C
Annex I
TERMS AND CONDITIONS FOR INCREMENTAL TERM LOAN COMMITMENT AGREEMENT
-------------------------------------------------------------------
1. Agreement Effective Date: ___________________.
2. Incremental Term Loan Commitment Amounts (as of the Agreement Effective
Date):
Amount of Incremental
Name of Lender Term Loan Commitment
Total(1) _____________
3. Designation of Tranche:
4. Maturity Date.(2)
5. Dates for Incremental Term Loan Scheduled
Repayments(3):
6. Up-Front Fee; Other Fees(4):
- ----------
1 Must be at least $50,000,000.
2 Insert maturity date for the Incremental Term Loans to be incurred
pursuant to the Incremental Term Loan Commitments provided hereunder,
provided that in no event shall the maturity date be earlier than the B
Maturity Date.
3 Set forth the dates for Incremental Term Loan Scheduled Repayments and the
principal amount (expressed as a dollar amount or as a percentage of the
aggregate amount of Incremental Term Loans to be incurred pursuant to the
Incremental Term Loan Commitments provided hereunder), provided that in no
event shall the Weighted Average Life to Maturity of the Incremental Term
Loans to be incurred pursuant to the Incremental Term Loan Commitments
provided hereunder be less than the Weighted Average Life to Maturity
applicable to the B Term Loans. To the extent the Incremental Term Loan
Commitments provided hereunder are being provided under the B Term Loan
Tranche, the principal amount of each Incremental Term Loan Scheduled
Repayment shall comply with the provisions contained in clause (ii) of the
proviso appearing in Section 4.02(b)(v) of the Credit Agreement.
Exhibit C
Annex I
Page 2
7. Interest Rates:
- ----------
(...continued)
4 Insert up-front fees and any other fees as may be agreed to by the
Borrower, the Administrative Agent and the Incremental Term Loan Lenders
with respect to the Incremental Term Loan Commitments.
EXHIBIT H
---------
PLEDGE AGREEMENT
----------------
PLEDGE AGREEMENT (as amended, modified or supplemented from
time to time, this "Agreement"), dated as of July 24, 2001, made by each of the
undersigned pledgors (each a "Pledgor" and, together with any other entity that
becomes a pledgor hereunder pursuant to Section 25 hereof, the "Pledgors") to
The Industrial Bank of Japan, Limited, as Collateral Agent (together with any
successor Collateral Agent, the "Pledgee"), for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Extended Stay America, Inc. (the "Borrower"), the
lenders from time to time party thereto (the "Lenders"), Morgan Stanley Senior
Funding, Inc., as Sole Lead Arranger and Sole Book Runner, Bear Stearns
Corporate Lending Inc. and Fleet National Bank, as Co-Syndication Agents, and
The Industrial Bank of Japan, Limited, as Administrative Agent (together with
any successor Administrative Agent, the "Administrative Agent"), have entered
into a Credit Agreement dated as of July 24, 2001 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrower as contemplated therein (the Lenders, each Issuing Lender, the
Administrative Agent and the Pledgee are herein called the "Lender Creditors") ;
WHEREAS, one or more Pledgors may at any time and from time to
time after the date hereof enter into, or guaranty the obligations of one or
more other Pledgors or any of their respective Subsidiaries under, one or more
Interest Rate Protection Agreements or Other Hedging Agreements with one or more
Lender Creditors or any affiliate thereof (each such Lender Creditor or
affiliate, even if the respective Lender Creditor subsequently ceases to be a
Lender under the Credit Agreement for any reason, together with such Lender
Creditor's or affiliate's successors and assigns, if any, collectively, the
"Other Creditors" and, together with the Lender Creditors, are herein called the
"Secured Creditors");
WHEREAS, it is a condition precedent to the making of Loans
to, and the issuance of Letters of Credit for the account of, the Borrower under
the Credit Agreement that each Pledgor shall have executed and delivered to the
Pledgee this Agreement; and
WHEREAS, each Pledgor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Pledgor, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the
Exhibit H
Page 2
Secured Creditors and hereby covenants and agrees with the Pledgee for the
benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation, principal,
premium, interest, reimbursement obligations, fees and indemnities
(including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of any
Pledgor at the rate provided for in the respective documentation,
whether or not a claim for post-petition interest is allowed in any
such proceeding)) of such Pledgor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection
with, the Credit Agreement and the other Credit Documents to which such
Pledgor is a party (including, in the case of each Pledgor that is a
Subsidiary Guarantor, all such obligations, liabilities and
indebtedness of such Pledgor under the Subsidiaries Guaranty) and the
due performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained in the Credit Agreement and in such
other Credit Documents (all such obligations, liabilities and
indebtedness under this clause (i), except to the extent consisting of
obligations, liabilities or indebtedness with respect to Interest Rate
Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or
similar proceeding of any Pledgor at the rate provided for in the
respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding) owing by such Pledgor to
the Other Creditors under, or with respect to, any Interest Rate
Protection Agreement or Other Hedging Agreement (including, in the case
of each Pledgor that is a Subsidiary Guarantor, all such obligations,
liabilities and indebtedness of such Pledgor under the Subsidiaries
Guaranty), whether such Interest Rate Protection Agreement or Other
Hedging Agreement is now in existence or hereafter arising, and the due
performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained therein (all such obligations,
liabilities and indebtedness described in this clause (ii) being herein
collectively called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of such
Pledgor referred to in clauses (i) and (ii)
Exhibit H
Page 3
above, after an Event of Default shall have occurred and be continuing,
the reasonable expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of
this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITIONS. (a) Reference to singular terms shall include
the plural and vice versa.
(b) The following capitalized terms used herein shall have the
definitions specified below:
"Administrative Agent" has the meaning set forth in the
Recitals hereto.
"Adverse Claim" has the meaning given such term in Section
8-102(a)(1) of the UCC.
"Agreement" has the meaning set forth in the first paragraph
hereof.
"Borrower" has the meaning set forth in the Recitals hereto.
"Certificated Security" has the meaning given such term in
Section 8-102(a)(4) of the UCC.
"Clearing Corporation" has the meaning given such term in
Section 8-102(a)(5) of the UCC.
"Collateral" has the meaning set forth in Section 3.1 hereof.
"Collateral Accounts" means any and all accounts established
and maintained by the Pledgee in the name of any Pledgor to which Collateral may
be credited.
"Credit Agreement" has the meaning set forth in the Recitals
hereto.
"Credit Document Obligations" has the meaning set forth in
Section 1(i) hereof.
"Domestic Corporation" has the meaning set forth in the
definition of "Stock."
Exhibit H
Page 4
"Domestic Subsidiary" means, as to any Person, each Subsidiary
of such Person that is incorporated under the laws of the United States, any
State thereof or the District of Columbia.
"Event of Default" means any Event of Default under, and as
defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
"Financial Asset" has the meaning given such term in Section
8-102(a)(9) of the UCC.
"Foreign Corporation" has the meaning set forth in the
definition of "Stock."
"Indemnitees" has the meaning set forth in Section 11 hereof.
"Instrument" has the meaning given such term in Section
9-102(a)(47) of the UCC.
"Investment Property" has the meaning given such term in
Section 9-102(a)(49) of the UCC.
"Lender Creditors" has the meaning set forth in the Recitals
hereto.
"Lenders" has the meaning set forth in the Recitals hereto.
"Limited Liability Company Assets" means all assets, whether
tangible or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.
"Limited Liability Company Interests" means the entire limited
liability company membership interest at any time owned by any Pledgor in any
limited liability company.
"Non-Voting Stock" means all capital stock which is not Voting
Stock.
"Notes" means all promissory notes from time to time issued
to, or held by, each Pledgor.
"Obligations" has the meaning set forth in Section 1 hereof.
"Other Creditors" has the meaning set forth in the Recitals
hereto.
"Other Obligations" has the meaning set forth in Section 1(ii)
hereof.
"Partnership Assets" means all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
or represented by any Partnership Interest.
Exhibit H
Page 5
"Partnership Interest" means the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in any
general partnership or limited partnership.
"Person" means any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Pledged Notes" has the meaning set forth in Section 3.5
hereof.
"Pledgee" has the meaning set forth in the first paragraph
hereof.
"Pledgor" has the meaning set forth in the first paragraph
hereof.
"Proceeds" has the meaning given such term in Section
9-102(a)(64) of the UCC.
"Required Secured Creditors" has the meaning provided in the
Security Agreement.
"Secured Creditors" has the meaning set forth in the Recitals
hereto.
"Secured Debt Agreements" means and includes this Agreement,
the other Credit Documents and the Interest Rate Protection Agreements and Other
Hedging Agreements entered into with any Other Creditors.
"Securities Account" has the meaning given such term in
Section 8-501(a) of the UCC.
"Securities Act" means the Securities Act of 1933, as amended,
as in effect from time to time.
"Security" and "Securities" has the meaning given such term in
Section 8-102(a)(15) of the UCC and shall in any event also include all Stock
and all Notes.
"Security Entitlement" has the meaning given such term in
Section 8-102(a)(17) of the UCC.
"Stock" means (x) with respect to corporations incorporated
under the laws of the United States or any State thereof or the District of
Columbia (each a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any corporation at any time owned by any Pledgor of
any Domestic Corporation and (y) with respect to corporations not Domestic
Corporations (each a "Foreign Corporation"), all of the issued and outstanding
shares of capital stock at any time owned by any Pledgor of any Foreign
Corporation.
"Subsidiary" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of
Exhibit H
Page 6
any class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time owned by such
Person and/or one or more Subsidiaries of such Person and (ii) any partnership,
limited liability company, association, joint venture or other entity in which
such Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time.
"Termination Date" has the meaning set forth in Section 20
hereof.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time; provided that all references herein to
specific sections or subsections of the UCC are references to such sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on the date hereof.
"Uncertificated Security" has the meaning given such term in
Section 8-102(a)(18) of the UCC.
"Voting Stock" means all classes of capital stock of any
Foreign Corporation entitled to vote.
3. PLEDGE OF SECURITIES, ETC.
3.1 Pledge. To secure the Obligations now or hereafter owed or
to be performed by such Pledgor, each Pledgor does hereby grant, pledge and
assign to the Pledgee for the benefit of the Secured Creditors, and does hereby
create a continuing security interest in favor of the Pledgee for the benefit of
the Secured Creditors in, all of the right, title and interest in and to the
following, whether now existing or hereafter from time to time acquired
(collectively, the "Collateral"):
(a) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by such Pledgor in such
Collateral Account, whether now owned or hereafter acquired, existing
or arising, including, without limitation, all Financial Assets,
Investment Property, moneys, checks, drafts, Instruments, Securities or
interests therein of any type or nature deposited or required by the
Credit Agreement or any other Secured Debt Agreement to be deposited in
such Collateral Account, and all investments and all certificates and
other Instruments (including depository receipts, if any) from time to
time representing or evidencing the same, and all dividends, interest,
distributions, cash and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing;
(b) all Securities owned by such Pledgor from time to time and
all options and warrants owned by such Pledgor from time to time to
purchase Securities;
(c) all Limited Liability Company Interests owned by such
Pledgor from time to time and all of its right, title and interest in
each limited liability company to which each such interest relates,
whether now existing or hereafter acquired, including, without
Exhibit H
Page 7
limitation, to the fullest extent permitted under the terms and
provisions of the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all the capital thereof and its interest in all
profits, losses, Limited Liability Company Assets and other
distributions to which such Pledgor shall at any time be
entitled in respect of such Limited Liability Company
Interests;
(B) all other payments due or to become due to such
Pledgor in respect of Limited Liability Company Interests,
whether under any limited liability company agreement or
otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any limited liability company agreement or
operating agreement, or at law or otherwise in respect of such
Limited Liability Company Interests;
(D) all present and future claims, if any, of such
Pledgor against any such limited liability company for moneys
loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any limited
liability company agreement or operating agreement or at law
to exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to such Limited
Liability Company Interests, including any power to terminate,
cancel or modify any limited liability company agreement or
operating agreement, to execute any instruments and to take
any and all other action on behalf of and in the name of any
of such Pledgor in respect of such Limited Liability Company
Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not
limited to, election of remedies) or option or to give or
receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing or for
any Limited Liability Company Asset, to enforce or execute any
checks, or other instruments or orders, to file any claims and
to take any action in connection with any of the foregoing;
and
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(d) all Partnership Interests owned by such Pledgor from time
to time and all of its right, title and interest in each partnership to
which each such interest relates, whether now existing or hereafter
acquired, including, without limitation, to the fullest
Exhibit H
Page 8
extent permitted under the terms and provisions of the documents and
agreements governing such Partnership Interests and applicable law:
(A) all the capital thereof and its interest in all
profits, losses, Partnership Assets and other distributions to
which such Pledgor shall at any time be entitled in respect of
such Partnership Interests;
(B) all other payments due or to become due to such
Pledgor in respect of Partnership Interests, whether under any
partnership agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any partnership agreement or operating agreement,
or at law or otherwise in respect of such Partnership
Interests;
(D) all present and future claims, if any, of such
Pledgor against any such partnership for moneys loaned or
advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any
partnership agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to such
Partnership Interests, including any power to terminate,
cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all
other action on behalf of and in the name of any of such
Pledgor in respect of such Partnership Interests and any such
partnership, to make determinations, to exercise any election
(including, but not limited to, election of remedies) or
option or to give or receive any notice, consent, amendment,
waiver or approval, together with full power and authority to
demand, receive, enforce, collect or receipt for any of the
foregoing or for any Partnership Asset, to enforce or execute
any checks, or other instruments or orders, to file any claims
and to take any action in connection with any of the
foregoing; and
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(e) all Security Entitlements owned by such Pledgor from time
to time in any and all of the foregoing;
(f) all Financial Assets and Investment Property owned by such
Pledgor from time to time; and
Exhibit H
Page 9
(g) all Proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained in this
Section 3.1, (x) except as otherwise provided in Section 8.12 of the Credit
Agreement, no Pledgor (to the extent that it is the Borrower or a Domestic
Subsidiary of the Borrower) shall be required at any time to pledge hereunder
more than 65% of the Voting Stock of any Foreign Corporation and (y) each
Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at
any time and from time to time acquired by such Pledgor of any Foreign
Corporation.
3.2. Procedures. (a) To the extent that any Pledgor at any
time or from time to time owns, acquires or obtains any right, title or interest
in any Collateral, such Collateral shall automatically (and without the taking
of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of
this Agreement and, in addition thereto, such Pledgor shall (to the extent
provided below) take the following actions as set forth below (as promptly as
practicable and, in any event, within 10 days after it obtains such Collateral)
for the benefit of the Pledgee and the Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation),
the respective Pledgor shall deliver such Certificated Security to the
Pledgee, indorsed to the Pledgee or indorsed in blank;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing
Corporation), the respective Pledgor shall cause the issuer of such
Uncertificated Security (or, in the case of an issuer that is not a
Subsidiary of such Pledgor, will use reasonable efforts to cause such
issuer) to duly authorize and execute, and deliver to the Pledgee, an
agreement for the benefit of the Pledgee and the other Secured
Creditors substantially in the form of Annex H hereto (appropriately
completed to the reasonable satisfaction of the Pledgee and with such
modifications, if any, as shall be reasonably satisfactory to the
Pledgee) pursuant to which such issuer agrees to comply with any and
all instructions originated by the Pledgee without further consent by
the registered owner and not to comply with instructions regarding such
Uncertificated Security originated by any other Person other than a
court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation (including a Federal
Reserve Bank, Participants Trust Company or The Depository Trust
Company), the respective Pledgor shall promptly notify the Pledgee
thereof and shall promptly take all actions required (i) to comply with
the applicable rules of such Clearing Corporation and (ii) to perfect
the security interest of the Pledgee under applicable law (including,
in any event, under Sections 9-312(a) and (b), 9-106 and 8-106(d) of
the UCC). The Pledgor further agrees to take such actions as the
Pledgee deems reasonably necessary or desirable to effect the
foregoing;
(iv) with respect to a Partnership Interest or a Limited
Liability Company Interest (other than a Partnership Interest or
Limited Liability Interest credited on the books of a
Exhibit H
Page 10
Clearing Corporation), (1) if such Partnership Interest or Limited
Liability Company Interest is represented by a certificate and is a
Security for purposes of the UCC, the procedure set forth in Section
3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited
Liability Company Interest is not represented by a certificate or is
not a Security for purposes of the UCC, the procedure set forth in
Section 3.2(a)(ii) hereof;
(v) with respect to any Note, delivery of such Note to the
Pledgee, indorsed to the Pledgee or indorsed in blank; and
(vi) with respect to cash proceeds from any of the Collateral
described in Section 3.1 hereof, (i) establishment by the Pledgee of a
cash account in the name of such Pledgor over which the Pledgee shall
have exclusive and absolute control and dominion (and no withdrawals or
transfers may be made therefrom by any Person except with the prior
written consent of the Pledgee) and (ii) deposit of such cash in such
cash account.
(b) In addition to the actions required to be taken pursuant
to Section 3.2(a) hereof, each Pledgor shall take the following additional
actions with respect to the Securities and Collateral:
(i) with respect to all Collateral of such Pledgor whereby or
with respect to which the Pledgee may obtain "control" thereof within
the meaning of Section 8-106 of the UCC (or under any provision of the
UCC as same may be amended or supplemented from time to time, or under
the laws of any relevant State other than the State of New York), the
respective Pledgor shall take all actions as may be reasonably
requested from time to time by the Pledgee so that "control" of such
Collateral is obtained and at all times held by the Pledgee; and
(ii) each Pledgor shall from time to time cause appropriate
financing statements (on Form UCC-1 or other appropriate form) under
the Uniform Commercial Code as in effect in the various relevant
States, covering all Collateral hereunder (with the form of such
financing statements to be satisfactory to the Pledgee), to be filed in
the relevant filing offices so that at all times the Pledgee has a
security interest in all Investment Property and other Collateral which
is perfected by the filing of such financing statements (in each case
to the maximum extent perfection by filing may be obtained under the
laws of the relevant States, including, without limitation, Section
9-312(a) of the UCC).
3.3. Subsequently Acquired Collateral. If any Pledgor shall
acquire (by purchase, stock dividend or similar distribution or otherwise) any
additional Collateral at any time or from time to time after the date hereof,
such Collateral shall automatically (and without any further action being
required to be taken) be subject to the pledge and security interests created
pursuant to Section 3.1 hereof and, furthermore, the respective Pledgor will
promptly thereafter take (or cause to be taken) all action with respect to such
Collateral in accordance with the procedures set forth in Section 3.2 hereof,
and will promptly thereafter deliver to the Pledgee (i) a certificate executed
by a principal executive officer of such Pledgor describing such Collateral and
certifying that the same has been duly pledged in favor of the Pledgee (for the
benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes A
through G hereto as are
Exhibit H
Page 11
reasonably necessary to cause such annexes to be complete and accurate at such
time. Without limiting the foregoing, each Pledgor shall be required to pledge
hereunder any shares of stock at any time and from time to time after the date
hereof acquired by such Pledgor of any Foreign Corporation, provided that (x)
except as provided in Section 8.12 of the Credit Agreement, no Pledgor (to the
extent that it is the Borrower or a Domestic Subsidiary of the Borrower) shall
be required at any time to pledge hereunder more than 65% of the Voting Stock of
any Foreign Corporation and (y) each Pledgor shall be required to pledge
hereunder 100% of any Non-Voting Stock at any time and from time to time
acquired by such Pledgor of any Foreign Corporation.
3.4. Transfer Taxes. Each pledge of Collateral under Section
3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps
required in connection with the pledge of such Collateral.
3.5. Definition of Pledged Notes. All Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes".
3.6. Certain Representations and Warranties Regarding the
Collateral. Each Pledgor represents and warrants that on the date hereof: (i)
the jurisdiction of organization of such Pledgor, and such Pledgor's
organizational identification number, is listed on Annex A hereto; (ii) each
Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex
B hereto; (iii) the Stock (and any warrants or options to purchase Stock) held
by such Pledgor consists of the number and type of shares of the stock (or
warrants or options to purchase any stock) of the corporations as described in
Annex C hereto; (iv) such Stock constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in Annex C
hereto; (v) the Notes held by such Pledgor consist of the promissory notes
described in Annex D hereto where such Pledgor is listed as the lender; (vi) the
Limited Liability Company Interests held by such Pledgor consist of the number
and type of interests of the Persons described in Annex E hereto; (vii) each
such Limited Liability Company Interest constitutes that percentage of the
issued and outstanding equity interest of the issuing Person as set forth in
Annex E hereto; (viii) the Partnership Interests held by such Pledgor consist of
the number and type of interests of the Persons described in Annex F hereto;
(ix) each such Partnership Interest constitutes that percentage or portion of
the entire partnership interest of the Partnership as set forth in Annex F
hereto; (x) the Pledgor has complied with the respective procedure set forth in
Section 3.2(a) hereof with respect to each item of Collateral described in
Annexes C through F hereto; and (xi) on the date hereof, such Pledgor owns no
other Securities, Limited Liability Company Interests or Partnership Interests.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to the
extent necessary to enable the Pledgee to perfect its security interest in any
of the Collateral or to exercise any of its remedies hereunder, the Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Collateral, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
Exhibit H
Page 12
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default, each Pledgor
shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral owned by it, and to give consents, waivers or
ratifications in respect thereof; provided that, in each case, no vote shall be
cast or any consent, waiver or ratification given or any action taken or omitted
to be taken which would violate or be inconsistent with any of the terms of any
Secured Debt Agreement, or which could reasonably be expected to have the effect
of impairing the value of the Collateral or any part thereof or the position or
interests of the Pledgee or any other Secured Creditor in the Collateral unless
expressly permitted by the terms of the Secured Debt Agreements. All such rights
of each Pledgor to vote and to give consents, waivers and ratifications shall
cease in case an Event of Default has occurred and is continuing, and Section 7
hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default, all cash dividends,
cash distributions, cash Proceeds and other cash amounts payable in respect of
the Collateral shall be paid to the respective Pledgor. The Pledgee shall be
entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property (other than cash) paid or distributed by way of
dividend or otherwise in respect of the Collateral;
(ii) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities paid or distributed in respect of the Collateral by way of
stock-split, spin-off, split-up, reclassification, combination of
shares or similar rearrangement; and
(iii) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property which may be paid in respect of the Collateral
by reason of any consolidation, merger, exchange of stock, conveyance
of assets, liquidation or similar corporate or other reorganization.
All dividends, distributions or other payments which are received by any Pledgor
contrary to the provisions of this Section 6 and Section 7 hereof shall be
received in trust for the benefit of the Pledgee, shall be segregated from other
property or funds of such Pledgor and shall be forthwith paid over to the
Pledgee as Collateral in the same form as so received (with any necessary
endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. If there shall
have occurred and be continuing an Event of Default, then and in every such
case, the Pledgee shall be entitled to exercise all of the rights, powers and
remedies (whether vested in it by this Agreement, any other Secured Debt
Agreement or by law) for the protection and enforcement of its rights in respect
of the Collateral, and the Pledgee shall be entitled to exercise all the rights
and remedies of a secured party under the Uniform Commercial Code as in effect
in any relevant
Exhibit H
Page 13
jurisdiction and also shall be entitled, without limitation, to exercise the
following rights, which each Pledgor hereby agrees to be commercially
reasonable:
(i) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 hereof to the respective
Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated
in accordance with its terms, and take any other lawful action to
collect upon any Pledged Note (including, without limitation, to make
any demand for payment thereon);
(iv) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(each Pledgor hereby irrevocably constituting and appointing the
Pledgee the proxy and attorney-in-fact of such Pledgor, with full power
of substitution to do so);
(v) at any time and from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by each Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine, provided that at least 10 days' written notice of the time
and place of any such sale shall be given to the respective Pledgor.
The Pledgee shall not be obligated to make any such sale of Collateral
regardless of whether any such notice of sale has theretofore been
given. Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if
any, of marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of the Secured Creditors may bid
for and purchase all or any part of the Collateral so sold free from
any such right or equity of redemption. Neither the Pledgee nor any
other Secured Creditor shall be liable for failure to collect or
realize upon any or all of the Collateral or for any delay in so doing
nor shall any of them be under any obligation to take any action
whatsoever with regard thereto; and
(vi) to set-off any and all Collateral against any and all
Obligations, and to withdraw any and all cash or other Collateral from
any and all Collateral Accounts and to apply such cash and other
Collateral to the payment of any and all Obligations.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or in any other Secured
Debt Agreement, or now or hereafter existing at law or in equity or by statute
shall be cumulative and concurrent and shall
Exhibit H
Page 14
be in addition to every other such right, power or remedy. The exercise or
beginning of the exercise by the Pledgee or any other Secured Creditor of any
one or more of the rights, powers or remedies provided for in this Agreement or
any other Secured Debt Agreement or now or hereafter existing at law or in
equity or by statute or otherwise shall not preclude the simultaneous or later
exercise by the Pledgee or any other Secured Creditor of all such other rights,
powers or remedies, and no failure or delay on the part of the Pledgee or any
other Secured Creditor to exercise any such right, power or remedy shall operate
as a waiver thereof. No notice to or demand on any Pledgor in any case shall
entitle it to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Pledgee or any
other Secured Creditor to any other or further action in any circumstances
without notice or demand. The Secured Creditors agree that this Agreement may be
enforced only by the action of the Pledgee, in each case acting upon the
instructions of the Required Secured Creditors as provided in the Security
Agreement, and that no other Secured Creditor shall have any right individually
to seek to enforce or to enforce this Agreement or to realize upon the security
to be granted hereby, it being understood and agreed that such rights and
remedies may be exercised by the Pledgee for the benefit of the Secured
Creditors upon the terms of this Agreement and the Security Agreement.
9. APPLICATION OF PROCEEDS. (a) All monies collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other monies received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i)
to indemnify and hold harmless the Pledgee and each other Secured Creditor and
their respective successors, assigns, employees, agents and affiliates
(individually an "Indemnitee," and collectively the "Indemnitees") from and
against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse each Indemnitee for all reasonable costs and expenses, including
reasonable attorneys' fees, in each case growing out of or resulting from this
Agreement or the exercise by any Indemnitee of any right or remedy granted to it
hereunder or under any other Secured Debt Agreement (but excluding any claims,
demands, losses, judgments and liabilities or expenses to the extent incurred by
reason of gross negligence or willful misconduct of such Indemnitee (as
determined by a court of competent jurisdiction in a final and non-appealable
decision)). In no event shall
Exhibit H
Page 15
the Pledgee be liable, in the absence of gross negligence or willful misconduct
on its part, for any matter or thing in connection with this Agreement other
than to account for monies actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of any Pledgor under this
Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER.
(a) Nothing herein shall be construed to make the Pledgee or any other Secured
Creditor liable as a member of any limited liability company or as a partner of
any partnership and neither the Pledgee nor any other Secured Creditor by virtue
of this Agreement or otherwise (except as referred to in the following sentence)
shall have any of the duties, obligations or liabilities of a member of any
limited liability company or partnership. The parties hereto expressly agree
that, unless the Pledgee shall become the absolute owner of Collateral
consisting of a Limited Liability Company Interest or Partnership Interest
pursuant hereto, this Agreement shall not be construed as creating a partnership
or joint venture among the Pledgee, any other Secured Creditor, any Pledgor
and/or any other Person.
(b) Except as provided in the last sentence of paragraph (a)
of this Section 12, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or a partner of any partnership
or otherwise be deemed to be a co-venturer with respect to any Pledgor, any
limited liability company, partnership and/or any other Person either before or
after an Event of Default shall have occurred. The Pledgee shall have only those
powers set forth herein and the Secured Creditors shall assume none of the
duties, obligations or liabilities of a member of any limited liability company
or as a partner of any partnership or any Pledgor except as provided in the last
sentence of paragraph (a) of this Section 12.
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any other Secured Creditor to appear in
or defend any action or proceeding relating to the Collateral to which it is not
a party, or to take any action hereunder or thereunder, or to expend any money
or incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the Uniform Commercial Code or other
applicable law such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem reasonably necessary and
wherever required by law in order to perfect and preserve the Pledgee's security
interest in the Collateral and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of such Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional conveyances, assignments, agreements and instruments as
Exhibit H
Page 16
the Pledgee may reasonably require or deem necessary to carry into effect the
purposes of this Agreement or to further assure and confirm unto the Pledgee its
rights, powers and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, to act from time to time solely after
the occurrence and during the continuance of an Event of Default in the
Pledgee's reasonable discretion to take any action and to execute any instrument
which the Pledgee may deem reasonably necessary or advisable to accomplish the
purposes of this Agreement.
14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by each Secured Creditor that
by accepting the benefits of this Agreement each such Secured Creditor
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement and in Section 12 of the Credit Agreement. The Pledgee shall act
hereunder on the terms and conditions set forth herein and in Section 12 of the
Credit Agreement.
15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Secured Debt Agreements).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
(a) Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has
good and marketable title to, all Collateral consisting of one or more
Securities, Partnership Interests and Limited Liability Company
Interests and that it has sufficient interest in all Collateral in
which a security interest is purported to be created hereunder for such
security interest to attach (subject, in each case, to no pledge, lien,
mortgage, hypothecation, security interest, charge, option, Adverse
Claim or other encumbrance whatsoever, except the liens and security
interests created by this Agreement);
(ii) it has full power, authority and legal right to pledge
all the Collateral pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and
delivered by such Pledgor and constitutes a legal, valid and binding
obligation of such Pledgor enforceable against such Pledgor in
accordance with its terms, except to the extent that the enforceability
hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law);
Exhibit H
Page 17
(iv) except to the extent already obtained or made, no consent
of any other party (including, without limitation, any stockholder,
partner, member or creditor of such Pledgor or any of its Subsidiaries)
and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained
by such Pledgor in connection with (a) the execution, delivery or
performance of this Agreement, (b) the validity or enforceability of
this Agreement, (c) the perfection or enforceability of the Pledgee's
security interest in the Collateral or (d) except for compliance with
or as may be required by applicable securities laws, the exercise by
the Pledgee of any of its rights or remedies provided herein;
(v) the execution, delivery and performance of this Agreement
will not violate any provision of any applicable law or regulation or
of any order, judgment, writ, award or decree of any court, arbitrator
or governmental authority, domestic or foreign, applicable to such
Pledgor, or of the certificate or articles of incorporation,
certificate of formation, operating agreement, limited liability
company agreement, partnership agreement or by-laws of such Pledgor, as
applicable, or of any securities issued by such Pledgor or any of its
Subsidiaries, or of any mortgage, deed of trust, indenture, lease, loan
agreement, credit agreement or other material contract, agreement or
instrument or undertaking to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such
Pledgor or any of its Subsidiaries or upon any of their respective
assets and will not result in the creation or imposition of (or the
obligation to create or impose) any lien or encumbrance on any of the
assets of such Pledgor or any of its Subsidiaries except as
contemplated by this Agreement;
(vi) all of the Collateral (consisting of Securities, Limited
Liability Company Interests or Partnership Interests) has been duly and
validly issued and acquired, is fully paid and non-assessable and is
subject to no options to purchase or similar rights;
(vii) each of the Pledged Notes constitutes, or when executed
by the obligor thereof will constitute, the legal, valid and binding
obligation of such obligor, enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law);
(viii) the pledge and collateral assignment to, and possession
by, the Pledgee of the Collateral consisting of Certificated Securities
and Pledged Notes pursuant to this Agreement creates a valid and
perfected first priority security interest in such Certificated
Securities and Pledged Notes, and the proceeds thereof, subject to no
prior Lien or encumbrance or to any agreement purporting to grant to
any third party a Lien or encumbrance on the property or assets of such
Pledgor which would include the Securities and the Pledgee is entitled
to all the rights, priorities and benefits afforded by the UCC or other
relevant law as enacted in any relevant jurisdiction to perfect
security interests in respect of such Collateral; and
Exhibit H
Page 18
(ix) "control" (as defined in Section 8-106 of the UCC) has
been obtained by the Pledgee over all Collateral consisting of
Securities (including Notes which are Securities) with respect to which
such "control" may be obtained pursuant to Section 8-106 of the UCC.
(b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Securities and the
proceeds thereof against the claims and demands of all persons whomsoever; and
each Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the other Secured Creditors.
17. JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE;
RECORDS. The jurisdiction of organization of each Pledgor is specified in Annex
A hereto. The chief executive office of each Pledgor is located at the address
specified in Annex G hereto. Each Pledgor will not change the jurisdiction of
its organization or move its chief executive office except to such new
jurisdiction or location as such Pledgor may establish in accordance with the
last sentence of this Section 17. The originals of all documents in the
possession of such Pledgor evidencing all Collateral, including but not limited
to all Limited Liability Company Interests and Partnership Interests, and the
only original books of account and records of such Pledgor relating thereto are,
and will continue to be, kept at such chief executive office as specified in
Annex G hereto, or at such new locations as such Pledgor may establish in
accordance with the last sentence of this Section 17. All Limited Liability
Company Interests and Partnership Interests are, and will continue to be,
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, such chief executive office as specified in
Annex G hereto, or such new locations as such Pledgor may establish in
accordance with the last sentence of this Section 17. No Pledgor shall establish
a new jurisdiction of organization or a new location for such chief executive
offices until (i) it shall have given to the Pledgee not less than 15 days'
prior written notice of its intention so to do, clearly describing such new
jurisdiction of organization or new location, as the case may be, and providing
such other information in connection therewith as the Pledgee may reasonably
request, and (ii) with respect to such new jurisdiction of organization or new
location, as the case may be, it shall have taken all action, satisfactory to
the Pledgee, to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect. Promptly after establishing a new jurisdiction of
organization or new location for such chief executive offices in accordance with
the immediately preceding sentence, the respective Pledgor shall deliver to the
Pledgee a supplement to Annex A hereto or Annex G hereto, as the case may be, so
as to cause such Annex A or G, as the case may be, to be complete and accurate.
18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or
Exhibit H
Page 19
deletion from any Secured Debt Agreement or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (ii) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument including, without limitation, this
Agreement; (iii) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the Pledgee
or its assignee; (iv) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof; or
(v) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any Pledgor or any
Subsidiary of any Pledgor, or any action taken with respect to this Agreement by
any trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.
19. REGISTRATION, ETC. (a) If there shall have occurred and be
continuing an Event of Default then, and in every such case, upon receipt by any
Pledgor from the Pledgee of a written request or requests that such Pledgor
cause any registration, qualification or compliance under any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities, Limited Liability Company Interests or Partnership Interests of, or
owned by, such Pledgor, such Pledgor as soon as practicable and at its expense
will cause such registration to be effected (and be kept effective) and will
cause such qualification and compliance to be declared effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale and
distribution of such Collateral, including, without limitation, registration
under the Securities Act, as then in effect (or any similar statute then in
effect), appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with any other government
requirements, provided, that the Pledgee shall furnish to such Pledgor such
information regarding the Pledgee as such Pledgor may reasonably request in
writing and as shall be required in connection with any such registration,
qualification or compliance. The respective Pledgor will cause the Pledgee to be
kept advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Pledgee such number of prospectuses, offering circulars or other documents
incident thereto as the Pledgee from time to time may reasonably request, and
will indemnify the Pledgee, each other Secured Creditor and all others
participating in the distribution of such Collateral against all claims, losses,
damages and liabilities caused by any untrue statement (or alleged untrue
statement) of a material fact contained therein (or in any related registration
statement, notification or the like) or by any omission (or alleged omission) to
state therein (or in any related registration statement, notification or the
like) a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same may have been
caused by an untrue statement or omission based upon information furnished in
writing to such Pledgor by the Pledgee or such other Secured Creditor expressly
for use therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Collateral consisting of
Securities, Limited Liability Company Interests or Partnership Interests
pursuant to Section 7 hereof, and the Collateral or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act, as then in effect, the Pledgee may, in its sole and absolute
discretion, sell such Collateral, as the case may
Exhibit H
Page 20
be, or part thereof by private sale in such manner and under such circumstances
as the Pledgee may deem necessary or advisable in order that such sale may
legally be effected without such registration. Without limiting the generality
of the foregoing, in any such event the Pledgee, in its sole and absolute
discretion (i) may proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Collateral or part
thereof shall have been filed under such Securities Act, (ii) may approach and
negotiate with a single possible purchaser to effect such sale, and (iii) may
restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Collateral or part thereof. In the event of
any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Collateral at a price which the Pledgee, in its
sole and absolute discretion, in good faith deems reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.
20. TERMINATION; RELEASE. (a) After the Termination Date, this
Agreement and the security interest created hereby shall terminate (provided
that all indemnities set forth herein including, without limitation, in Section
11 hereof shall survive any such termination), and the Pledgee, at the request
and expense of any Pledgor, will execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any monies at the time held by the Pledgee or any of
its sub-agents hereunder. As used in this Agreement, "Termination Date" shall
mean the date upon which the Total Commitments under the Credit Agreement have
been terminated and all Interest Rate Protection Agreements and Other Hedging
Agreements entered into with any Other Creditors have been terminated, no Note
under the Credit Agreement is outstanding and all Loans thereunder have been
repaid in full, all Letters of Credit issued under the Credit Agreement have
been terminated and all Obligations then due and payable have been paid in full
and no further Incremental Term Loan Commitments may be requested or provided
pursuant to Section 1.14 of the Credit Agreement.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by the Secured Debt Agreements (other than a
sale to any Pledgor or any Subsidiary thereof) or is otherwise released with the
consent of the Required Secured Creditors and the proceeds of such sale or sales
or from such release are applied in accordance with the provisions of the Credit
Agreement, to the extent required to be so applied, the Pledgee, at the request
and expense of the respective Pledgor, will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral (and releases therefor) as is then being (or has been) so sold
or released and has not theretofore been released pursuant to this Agreement.
(c) At any time that a Pledgor desires that the Pledgee
assign, transfer and deliver Collateral (and releases therefor) as provided in
Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate
signed by a principal executive officer of such Pledgor stating that the release
of the respective Collateral is permitted pursuant to such Section 20(a) or (b).
Exhibit H
Page 21
(d) The Pledgee shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with this Section 20.
21. NOTICES, ETC. All notices and communications hereunder
shall be in writing and sent or delivered by mail, telegraph, telex,
telecopy, cable or overnight courier service and all such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or
cabled or sent by overnight courier, be effective when deposited in the
mails, delivered to the telegraph company, cable company or overnight
courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Pledgee or any Pledgor shall not
be effective until received by the Pledgee or such Pledgor, as the case
may be. All such notices and other communications shall be addressed as
follows:
(a) if to any Pledgor, c/o:
Extended Stay America, Inc.
450 East Las Olas Boulevard
Suite 1100
Ft. Lauderdale, FL 33301
Telephone No.: (954) 713-1600
Telecopier No.: (954) 713-1650
Attention: Gregory R. Moxley
(b) if to the Pledgee, at:
600 East Las Colinas Blvd.
Suite 1300, 13th Floor
Irving, TX 75309
Attention: Kevin Miles or
Monica Stevens
Telephone No.: (972) 401-8533
Telecopier No.: (972) 401-8557
(c) if to any Lender Creditor, at such address as such Lender
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor at such address as such Other
Creditor shall have specified in writing to the Borrower and the
Pledgee;
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
22. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever except in accordance with the Security Agreement.
Exhibit H
Page 22
23. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns, provided that no Pledgor may assign any of its rights or
obligations under this Agreement except in accordance with the terms of the
Secured Debt Agreements. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH
PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. The headings in this Agreement are for
purposes of reference only and shall not limit or define the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which shall constitute one instrument. In the
event that any provision of this Agreement shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on all parties hereto.
24. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
25. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall become a
Pledgor hereunder by executing a counterpart hereof and delivering the same to
the Pledgee.
* * * *
Exhibit H
Page 23
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
Extended Stay America, Inc.
ESA 0123, Inc.
ESA 0124, Inc.
ESA 0155, Inc.
ESA Arizona, Inc.
ESA Arkansas, Inc.
ESA 0311, Inc.
ESA 0885, Inc.
ESA 0901, Inc.
ESA 0994, Inc.
ESA 7502, Inc.
ESA 7508, Inc.
ESA 7513, Inc.
ESA COL, Inc.
ESA Connecticut, Inc.
ESA International, Inc.
ESA Management, Inc.
ESA Services, Inc.
Extended Stay CA, Inc.
Studio Plus Hotels, Inc.
ESA 0174, Inc.
ESA 0302, Inc.
ESA 0303, Inc.
ESA 0328, Inc.
ESA 0381, Inc.
ESA 0789, Inc.
ESA 0869, Inc.
ESA 0884, Inc.
ESA 1510, Inc.
ESA 1546, Inc.
ESA Florida, Inc.
ESA 0102, Inc.
ESA 0373, Inc.
ESA 0382, Inc.
ESA 0788, Inc.
ESA 0990, Inc.
ESA 0991, Inc.
ESA 0992, Inc.
ESA 0993, Inc.
ESA 0996, Inc.
ESA 1501, Inc.
Exhibit H
Page 24
ESA 1502, Inc.
ESA 1550, Inc.
ESA Georgia, Inc.
ESA Idaho, Inc.
ESA 0153, Inc.
ESA 0510, Inc.
ESA 0525, Inc.
ESA 0530, Inc.
ESA 0532, Inc.
ESA 0541, Inc.
ESA 0640, Inc.
ESA 0660, Inc.
ESA 0677, Inc.
ESA 0752, Inc.
ESA 0753, Inc.
ESA 4012, Inc.
ESA 4016, Inc.
ESA 4019, Inc.
ESA 4023, Inc.
ESA Illinois, Inc.
ESA Indiana, Inc.
ESA Iowa, Inc.
ESA Kansas, Inc.
ESA Kentucky, Inc.
ESA Louisiana, Inc.
ESA Maine, Inc.
ESA Maryland, Inc.
Extended Stay MA, Inc.
ESA 0527, Inc.
ESA 0552, Inc.
ESA 0600, Inc.
ESA 0670, Inc.
ESA 0675, Inc.
ESA 0680, Inc.
ESA 0780, Inc.
ESA 4013, Inc.
ESA Michigan, Inc.
ESA 0733, Inc.
ESA 0734, Inc.
ESA 0737, Inc.
ESA 0745, Inc.
ESA 3504, Inc.
ESA Minnesota, Inc.
ESA Mississippi, Inc.
ESA Missouri, Inc.
Exhibit H
Page 25
ESA 0858, Inc.
ESA 0859, Inc.
ESA 0860, Inc.
ESA 0861, Inc.
ESA Nevada, Inc.
ESA West, Inc.
ESA New Hampshire, Inc.
ESA 0454, Inc.
ESA 0455, Inc.
ESA 0479, Inc.
ESA 0646, Inc.
ESA 2509, Inc.
ESA 2522, Inc.
ESA 2653, Inc.
ESA New Jersey, Inc.
ESA New Mexico, Inc.
ESA New York, Inc.
ESA 0106, Inc.
ESA 0127, Inc.
ESA 0161, Inc.
ESA 0186, Inc.
ESA 0201, Inc.
ESA 0206, Inc.
ESA 0231, Inc.
ESA 0232, Inc.
ESA 0280, Inc.
ESA 0370, Inc.
ESA 0371, Inc.
ESA 0417, Inc.
ESA 1500, Inc.
ESA 1514, Inc.
ESA 1591, Inc.
ESA 1594, Inc.
ESA 1596, Inc.
ESA 1634, Inc.
ESA Ohio, Inc.
ESA Oklahoma, Inc.
ESA Oregon, Inc.
Extended Stay 0453, Inc.
Extended Stay 0463, Inc.
Extended Stay 0507, Inc.
Extended Stay 0547, Inc.
Extended Stay 2506, Inc.
Extended Stay 2511, Inc.
Extended Stay 2565, Inc.
Exhibit H
Page 26
Extended Stay 2667, Inc.
ESA Rhode Island, Inc.
ESA South Carolina, Inc.
ESA 0121, Inc.
ESA 0125, Inc.
ESA 0163, Inc.
ESA 0305, Inc.
ESA 0315, Inc.
ESA 0450, Inc.
ESA Tennessee, Inc.
ESA Tejas, Inc.
ESA Utah, Inc.
ESA Virginia, Inc.
Studio Plus Properties, Inc.
ESA Washington, Inc.
ESA Wisconsin, Inc.
By:
-----------------------------------------
Name:
Title:
On behalf of each Pledgor listed above
Accepted and Agreed to:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Collateral Agent and Pledgee
By:
-------------------------------------
Name:
Title:
EXHIBIT I
---------
================================================================================
SECURITY AGREEMENT
among
EXTENDED STAY AMERICA, INC.,
CERTAIN SUBSIDIARIES OF
EXTENDED STAY AMERICA, INC.
and
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as COLLATERAL AGENT
--------------------------------
Dated as of July 24, 2001
--------------------------------
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY INTERESTS...................................................................................2
1.1. Grant of Security Interests........................................................................2
1.2. Power of Attorney..................................................................................2
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS...................................................3
2.1. Necessary Filings..................................................................................3
2.2. No Liens...........................................................................................3
2.3. Other Financing Statements.........................................................................3
2.4. Chief Executive Office, Record Locations...........................................................4
2.5. Location of Inventory and Equipment................................................................4
2.6. Legal Names; Organizational Identification Number; Trade Names; Change of Name; etc................4
2.7. Jurisdiction and Type of Organization..............................................................5
2.8. Collateral in the Possession of a Bailee...........................................................5
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND
CERTAIN OTHER COLLATERAL....................................................................5
3.1. Additional Representations and Warranties..........................................................5
3.2. Maintenance of Records.............................................................................6
3.3. Direction to Account Debtors; Contracting Parties; etc.............................................6
3.4. Modification of Terms; etc.........................................................................7
3.5. Collection.........................................................................................7
3.6. Instruments........................................................................................7
3.7. Assignors Remain Liable Under Receivables..........................................................7
3.8. Assignors Remain Liable Under Contracts............................................................8
3.9. Deposit Accounts...................................................................................8
3.10. Letter-of-Credit Rights...........................................................................8
3.11. Commercial Tort Claims............................................................................9
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS............................................................9
4.1. Additional Representations and Warranties..........................................................9
4.2. Licenses and Assignments...........................................................................9
4.3. Infringements......................................................................................9
4.4. Preservation of Marks.............................................................................10
4.5. Maintenance of Registration.......................................................................10
4.6. Future Registered Marks...........................................................................10
4.7. Remedies..........................................................................................10
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS.................................11
5.1. Additional Representations and Warranties.........................................................11
5.2. Licenses and Assignments..........................................................................11
5.3. Infringements.....................................................................................11
5.4. Maintenance of Patents or Copyright...............................................................11
5.5. Prosecution of Patent Applications................................................................12
5.6. Other Patents and Copyrights......................................................................12
5.7. Remedies..........................................................................................12
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL...............................................................12
6.1. Protection of Collateral Agent's Security.........................................................12
6.2. Warehouse Receipts Non-negotiable.................................................................13
6.3. Further Actions...................................................................................13
6.4. Financing Statements..............................................................................13
ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT...................................................13
7.1. Remedies; Obtaining the Collateral Upon Default...................................................13
7.2. Remedies; Disposition of the Collateral...........................................................15
7.3. Waiver of Claims..................................................................................15
7.4. Application of Proceeds...........................................................................16
7.5. Remedies Cumulative...............................................................................18
7.6. Discontinuance of Proceedings.....................................................................19
ARTICLE VIII INDEMNITY........................................................................................19
8.1. Indemnity.........................................................................................19
8.2. Indemnity Obligations Secured by Collateral; Survival.............................................20
ARTICLE IX DEFINITIONS........................................................................................20
ARTICLE X MISCELLANEOUS.......................................................................................26
10.1. Notices..........................................................................................26
10.2. Waiver; Amendment................................................................................27
10.3. Obligations Absolute.............................................................................27
10.4. Successors and Assigns...........................................................................27
10.5. Headings Descriptive.............................................................................27
10.6. Governing Law....................................................................................27
10.7. Assignor's Duties................................................................................28
10.8. Termination; Release.............................................................................28
10.9. Counterparts.....................................................................................28
10.10. Severability....................................................................................29
10.11. The Collateral Agent and the other Secured Creditors............................................29
10.12. Benefit of Agreement............................................................................29
10.13. Additional Assignors............................................................................29
ANNEX A Schedule of Chief Executive Offices and Other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Legal Names, Organizational Identification Numbers and
Trade and Fictitious Names
ANNEX D Schedule of Jurisdictions and Types of Organizations
ANNEX E Schedule of Marks
ANNEX F Schedule of Patents
ANNEX G Schedule of Copyrights
ANNEX H Form of Grant of Security Interest in United States Trademarks
ANNEX I Form of Grant of Security Interest in United States Patents
ANNEX J Form of Grant of Security Interest in United States Copyrights
EXHIBIT I
---------
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of July 24, 2001, made by each of
the undersigned assignors (each an "Assignor" and, together with any other
entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the
"Assignors") in favor of The Industrial Bank of Japan, Limited, as Collateral
Agent (together with any successor Collateral Agent, the "Collateral Agent"),
for the benefit of the Secured Creditors (as defined below). Except as otherwise
defined herein, all capitalized terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Extended Stay America, Inc. (the "Borrower"), the
lenders from time to time party thereto (the "Lenders"), Morgan Stanley Senior
Funding, Inc., as Sole Lead Arranger and Sole Book Runner, Bear Stearns
Corporate Lending Inc. and Fleet National Bank, as Co-Syndication Agents, and
The Industrial Bank of Japan, Limited, as Administrative Agent (together with
any successor Administrative Agent, the "Administrative Agent"), have entered
into a Credit Agreement, dated as of July 24, 2001 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrower as contemplated therein (the Lenders, each Issuing Lender, the
Administrative Agent and the Collateral Agent are herein called the "Lenders
Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof (each such Lender
or affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors"
and, together with the Lender Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
herein;
WHEREAS, it is a condition precedent to the making of Loans
to, and the issuance of Letters of Credit for the account of, the Borrower under
the Credit Agreement that each Assignor shall have executed and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the
incurrence of Loans by, and the issuance of Letters of Credit for the account
of, the Borrower under the Credit Agreement and the entering into by the
Borrower of Interest Rate Protection Agreements and Other Hedging Agreements
and, accordingly, each Assignor desires to enter into this Agreement in order to
satisfy the condition described in the preceding paragraph;
Exhibit I
Page 2
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of its Obligations,
each Assignor does hereby assign and transfer unto the Collateral Agent, and
does hereby pledge and grant to the Collateral Agent for the benefit of the
Secured Creditors, a continuing security interest in all of the right, title and
interest of such Assignor in, to and under all personal and fixture property of
such Assignor of every kind and nature, whether now existing or hereafter from
time to time acquired, including, without limitation, in, to and under all of
the following, whether now existing or hereafter from time to time acquired: (i)
each and every Receivable, (ii) all Contracts, together with all Contract Rights
arising thereunder, (iii) all Inventory, (iv) all Equipment, (v) all Marks,
together with the registrations and right to all renewals thereof, and the
goodwill of the business of such Assignor symbolized by the Marks, (vi) all
Patents and Copyrights, (vii) all computer programs of such Assignor and all
intellectual property rights therein and all other proprietary information of
such Assignor, including, but not limited to, Trade Secret Rights, (viii) all
software and all software licensing rights, all writings, plans, specifications
and schematics, all engineering drawings, customer lists, goodwill and licenses,
and all other recorded data of any kind or nature, regardless of the medium of
recording, (ix) all other Goods, General Intangibles, Investment Property,
Permits, Chattel Paper (whether tangible or electronic), Documents and
Instruments, (x) all Letter of Credit Rights (whether or not the respective
letter of credit is evidenced by a writing), (xi) all commercial tort claims,
(xii) all cash, (xiii) the Cash Collateral Account and all monies, securities,
instruments and other investments deposited or required to be deposited in the
Cash Collateral Account, (xiv) all other bank, demand, deposit, time savings,
cash management, passbook, certificates of deposit and similar accounts
maintained by such Assignor and all monies, securities, instruments and other
investments deposited or required to be deposited in any of the foregoing
accounts, (xv) all Supporting Obligations, and (xvi) all Proceeds and products
of any and all of the foregoing (all of the above, collectively, the
"Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral which any Assignor may acquire at any time
during the term of this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquaintance for any and all moneys and claims for
moneys due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any
Exhibit I
Page 3
claims or take any action or institute any proceedings which the Collateral
Agent may deem to be necessary or advisable to protect the interests of the
Secured Creditors, which appointment as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement,
as follows:
2.1. Necessary Filings. All filings, registrations, recordings
and other actions necessary or appropriate to create, preserve and perfect the
security interest granted by such Assignor to the Collateral Agent hereby in
respect of the Collateral have been accomplished and the security interest
granted to the Collateral Agent pursuant to this Agreement in and to the
Collateral creates a valid, and together with all such filings, registrations,
recordings and other actions, a perfected security interest therein prior to the
rights of all other Persons therein and subject to no other Liens (other than
Permitted Liens) and is entitled to all the rights, priorities and benefits
afforded by the Uniform Commercial Code or other relevant law as enacted in any
relevant jurisdiction to perfected security interests, in each case to the
extent that the Collateral consists of the type of property in which a security
interest may be perfected by possession or control (within the meaning of the
UCC as in effect on the date hereof in the State of New York), by filing a
financing statement under the Uniform Commercial Code as enacted in any relevant
jurisdiction and by a filing of a Grant of Security Interest in the respective
form attached hereto in the United States Patent and Trademark Office or in the
United States Copyright Office; it being understood that no actions described in
Section 3.9 hereof in respect of Collateral of the type described in clause
(xiv) of Section 1.1(a) hereof shall be required to have been accomplished (and
no representation or warranty with respect to same shall be required to be made
pursuant to this Section 2.1) at any time prior to the Collateral Agent's
request that such actions be taken in accordance with the provisions of such
Section 3.9.
2.2. No Liens. Such Assignor is, and as to Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Permitted Liens), and such
Assignor shall defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there
is no financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) covering or purporting to cover any interest
of any kind in the Collateral (other than financing statements filed in respect
of Permitted Liens), and so long as the Termination Date has not occurred, such
Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be
Exhibit I
Page 4
filed in respect of and covering the security interests granted hereby by such
Assignor or in connection with Permitted Liens.
2.4. Chief Executive Office, Record Locations. The chief
executive office of such Assignor is located at the address indicated on Annex A
hereto for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents evidencing
all Receivables and Contract Rights of such Assignor and the only original books
of account and records of such Assignor relating thereto are, and will continue
to be, kept at such chief executive office, at one or more of the other
locations set forth on Annex A hereto or at such new locations as such Assignor
may establish in accordance with the last sentence of this Section 2.4. All
Receivables and Contract Rights of such Assignor are, and will continue to be,
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, the office locations described above or such
new location established in accordance with the last sentence of this Section
2.4. No Assignor shall establish new locations for such offices until (i) it
shall have given to the Collateral Agent not less than 15 days' prior written
notice of its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may reasonably request, and (ii) with respect to such new location, it shall
have taken all action reasonably satisfactory to the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor. To the extent that any
Assignor desires to establish a new location for Inventory and Equipment that is
located in Alabama, Connecticut, Florida or Mississippi, such Assignor only may
do so if (i) it shall have given to the Collateral Agent not less than 15 days'
prior written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, and (ii) with respect to such new
location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect; provided, however, (x) from and after October 1, 2001,
the provisions of this sentence shall not be applicable if such new location is
located in Connecticut and (y) from and after January 1, 2002, the provisions of
this sentence shall not be applicable if such new location is located in
Alabama, Florida or Mississippi.
2.6. Legal Names; Organizational Identification Number; Trade
Names; Change of Name; etc. The legal name of each Assignor, and the
organizational identification number (if any) of each Assignor, is listed on
Annex C hereto for such Assignor. No Assignor has or operates in any
jurisdiction under, or in the preceding five years has had or has operated in
any jurisdiction under, any trade names, fictitious names or other names except
its legal name and such other trade or fictitious names as are listed on Annex C
hereto for such Assignor. No Assignor shall change its legal name,
organizational identification number (if any) or assume or operate in any
jurisdiction under any trade, fictitious or other name except its legal name,
organizational identification number and those trade names in each case listed
on Annex C hereto
Exhibit I
Page 5
for such Assignor and those that may be established in accordance with the
immediately succeeding sentence of this Section 2.6. No Assignor shall change
its legal name or organizational identification number or assume or operate in
any jurisdiction under any new trade, fictitious or other name until (i) it
shall have given to the Collateral Agent not less than 15 days' prior written
notice of its intention so to do, clearly describing such new name and the
jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request, and (ii) with respect to such new name, it shall have taken all action
reasonably requested by the Collateral Agent to maintain the security interest
of the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect. In addition, to the extent
that any Assignor does not have an organizational identification number on the
date hereof and later obtains one, such Assignor shall promptly thereafter
notify the Collateral Agent of such organizational identification number and
shall take all actions reasonably satisfactory to the Collateral Agent to the
extent necessary to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby fully perfected and in full force
and effect.
2.7. Jurisdiction and Type of Organization. The jurisdiction
of organization of each Assignor, and the type of organization of each Assignor,
is listed on Annex D hereto for such Assignor. No Assignor shall change its
jurisdiction of organization or its type of organization until (i) it shall have
given to the Collateral Agent not less than 15 days' prior written notice of
intention so to do, clearly describing such new jurisdiction of organization
and/or type of organization and providing such other information in connection
therewith as the Collateral Agent may reasonably request and (ii) with respect
to such new jurisdiction of organization and/or type of organization, it shall
have taken all actions reasonably requested by the Collateral Agent to maintain
the security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
2.8. Collateral in the Possession of a Bailee. If any
Inventory or other Goods are at any time in the possession of a bailee, the
respective Assignor shall promptly notify the Collateral Agent thereof and, if
requested by the Collateral Agent, shall promptly obtain an acknowledgment from
such bailee, in form and substance reasonably satisfactory to the Collateral
Agent, that the bailee holds such Collateral for the benefit of the Collateral
Agent and shall act upon the instructions of the Collateral Agent, without the
further consent of the respective Assignor. The Collateral Agent agrees with the
Assignors that the Collateral Agent shall not give any such instructions unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by the respective Assignor with respect to any such
bailee.
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1. Additional Representations and Warranties. As of the time
when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that each
Exhibit I
Page 6
such Receivable, and all records, papers and documents relating thereto (if any)
are genuine and what they purport to be, and that all papers and documents (if
any) relating thereto (i) will, to the knowledge of such Assignor, represent the
genuine, legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
merchandise listed therein, or both, (ii) will be the only original writings
evidencing and embodying such obligation of the account debtor named therein
(other than copies created for general accounting purposes), (iii) will, to the
knowledge of such Assignor, evidence true and valid obligations, enforceable in
accordance with their respective terms, and (iv) will be in compliance and will
conform in all material respects with all applicable federal, state and local
laws and applicable laws of any relevant foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Receivables and
Contracts, including, but not limited to, originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times upon prior notice to such
Assignor and otherwise in accordance with the Credit Agreement. Upon the
occurrence and during the continuance of an Event of Default and at the request
of the Collateral Agent, such Assignor shall, at its own cost and expense,
deliver all tangible evidence of its Receivables and Contract Rights (including,
without limitation, all documents evidencing the Receivables and all Contracts)
and such books and records to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Assignor). Upon the occurrence and during the continuance of an Event of Default
and if the Collateral Agent so directs, such Assignor shall legend, in form and
manner satisfactory to the Collateral Agent, the Receivables and the Contracts,
as well as books, records and documents (if any) of such Assignor evidencing or
pertaining to such Receivables and Contracts with an appropriate reference to
the fact that such Receivables and Contracts have been assigned to the
Collateral Agent and that the Collateral Agent has a security interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x), and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor.
Without notice to or assent by any Assignor, the Collateral Agent may, upon the
occurrence and during the continuance of an Event of Default, apply any or all
amounts then in, or thereafter deposited in, the Cash Collateral Account toward
the payment of the Obligations in the manner provided in Section 7.4 of this
Agreement. The reasonable costs and expenses of collection (including reasonable
attorneys' fees), whether incurred by an Assignor or the Collateral Agent, shall
be borne by the relevant Assignor. The Collateral Agent shall deliver a copy of
each notice referred to in the preceding clause (y) to the relevant Assignor,
provided
Exhibit I
Page 7
that (x) the failure by the Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the
Collateral Agent created by this Section 3.3 and (y) no such notice shall be
required if an Event of Default of the type described in Section 10.05 of the
Credit Agreement has occurred and is continuing.
3.4. Modification of Terms; etc. Except in accordance with
such Assignor's ordinary course of business and consistent with reasonable
business judgment, no Assignor shall rescind or cancel any indebtedness
evidenced by any Receivable or under any Contract, or modify any term thereof or
make any adjustment with respect thereto, or extend or renew the same, or
compromise or settle any material dispute, claim, suit or legal proceeding
relating thereto, or sell any Receivable or Contract, or interest therein,
without the prior written consent of the Collateral Agent. No Assignor will do
anything to impair the rights of the Collateral Agent in the Receivables or
Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance
with reasonable business practices to cause to be collected from the account
debtor named in each of its Receivables or obligor under any Contract, as and
when due (including, without limitation, amounts which are delinquent, such
amounts to be collected in accordance with generally accepted lawful collection
procedures) any and all amounts owing under or on account of such Receivable or
Contract, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Receivable or under such Contract.
Except as otherwise directed by the Collateral Agent after the occurrence and
during the continuation of an Event of Default, any Assignor may allow in the
ordinary course of business as adjustments to amounts owing under its
Receivables and Contracts (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any
Instrument constituting Collateral (other than checks and other payment
instruments received and collected in the ordinary course of business), such
Assignor will within 10 Business Days notify the Collateral Agent thereof, and
upon request by the Collateral Agent will promptly deliver such Instrument to
the Collateral Agent appropriately endorsed to the order of the Collateral Agent
as further security hereunder.
3.7. Assignors Remain Liable Under Receivables. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Receivables to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to such Receivables. Neither the
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Collateral Agent or
any other Secured Creditor of any payment
Exhibit I
Page 8
relating to such Receivable pursuant hereto, nor shall the Collateral Agent or
any other Secured Creditor be obligated in any manner to perform any of the
obligations of any Assignor under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by them or as to the
sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to them or to which they may be entitled at any time or
times.
3.8. Assignors Remain Liable Under Contracts. Anything herein
to the contrary notwithstanding, the Assignors shall remain liable under each of
the Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.9. Deposit Accounts. For each deposit or similar account
that any Assignor at any time opens or maintains, such Assignor shall, at the
Collateral Agent's request at any time when an Event of Default then exists and
is continuing, pursuant to a control agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (a) cause the depositary bank to
agree to comply at any time with instructions from the Collateral Agent to such
depositary bank directing the disposition of funds from time to time credited to
such deposit account, without further consent of the respective Assignor, or (b)
arrange for the Collateral Agent to become the customer of the depositary bank
with respect to the deposit account, with the respective Assignor being
permitted, only with the consent of the Collateral Agent, to exercise rights to
withdraw funds from such deposit account. The Collateral Agent agrees with the
Assignors that the Collateral Agent shall not give any such instructions or
withhold any withdrawal rights from any Assignor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any withdrawal not
otherwise permitted by the Secured Debt Agreements, would occur.
3.10. Letter-of-Credit Rights. If any Assignor is at any time
a beneficiary under a letter of credit with a stated amount of $5,000,000 or
more, such Assignor shall promptly notify the Collateral Agent thereof and, at
the request of the Collateral Agent, such Assignor shall, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral Agent,
either (i) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to the Collateral Agent of the proceeds of any drawing
under such letter of credit or (ii) arrange for the Collateral Agent to become
the transferee beneficiary of such letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter
Exhibit I
Page 9
of credit are to be applied as provided in the Security Agreement after the
occurrence of an Event of Default.
3.11. Commercial Tort Claims. If any Assignor shall at any time
hold or acquire a commercial tort claim with a value of $5,000,000 or more, such
Assignor shall promptly notify the Collateral Agent thereof in a writing signed
by such Assignor and describing the brief details thereof and shall grant to the
Collateral Agent in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance reasonably satisfactory to the Collateral Agent.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the registered Marks listed in Annex E hereto for such Assignor
and that said listed Marks include all United States marks and applications for
United States marks registered in the United States Patent and Trademark Office
that such Assignor owns or uses in connection with its business as of the date
hereof. Each Assignor represents and warrants that it owns, is licensed to use
or otherwise has the right to use, all Marks that it uses. Each Assignor further
warrants that it has no knowledge of any third party claim received by it that
any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any trademark, service mark or trade name of any
other Person other than as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use all U.S. trademark registrations and applications listed in
Annex E hereto and that said registrations are valid, subsisting, have not been
canceled and that such Assignor is not aware of any third-party claim that any
of said registrations is invalid or unenforceable, and is not aware that there
is any reason that any of said registrations is invalid or unenforceable. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of an Event of Default, any
document which may be required by the United States Patent and Trademark Office
in order to effect an absolute assignment of all right, title and interest in
each Mark, and record the same.
4.2. Licenses and Assignments. Except as otherwise permitted
by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself
of any right under any Mark absent prior written approval of the Collateral
Agent.
4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to, any party who such Assignor believes is infringing or diluting or
otherwise violating any of such Assignor's rights in and to any Mark in any
manner that could reasonably be expected to have a Material Adverse Effect, or
with respect to any party claiming that such Assignor's use of any Mark violates
in any material respect any property right of that party. Each Assignor further
agrees to prosecute in accordance with
Exhibit I
Page 10
reasonable business practices any Person infringing any Mark in any manner that
could reasonably be expected to have a Material Adverse Effect.
4.4. Preservation of Marks. Each Assignor agrees to use its
Marks in interstate commerce during the time in which this Agreement is in
effect and to take all such other actions as are reasonably necessary to
preserve such Marks as trademarks or service marks under the laws of the United
States (other than any such Marks which are no longer used or useful in its
business or operations).
4.5. Maintenance of Registration. Each Assignor shall, at its
own expense, diligently process all documents reasonably required to maintain
trademark registrations, including but not limited to affidavits of use and
applications for renewals of registration in the United States Patent and
Trademark Office for all of its material registered Marks, and shall pay all
fees and disbursements in connection therewith and shall not abandon any such
filing of affidavit of use or any such application of renewal prior to the
exhaustion of all administrative and judicial remedies without prior written
consent of the Collateral Agent (other than with respect to registrations and
applications deemed by such Assignor to be no longer prudent to pursue).
4.6. Future Registered Marks. If any Mark registration is
issued hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and an assignment for security in such Mark, to the
Collateral Agent and at the expense of such Assignor, confirming the assignment
for security in such Mark to the Collateral Agent hereunder, the form of such
security to be substantially in the form of Annex H hereto or in such other form
as may be reasonably satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title and interest of such Assignor in and to each of the Marks, together
with all trademark rights and rights of protection to the same, vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
rights, title and interest shall immediately vest, in the Collateral Agent for
the benefit of the Secured Creditors, and the Collateral Agent shall be entitled
to exercise the power of attorney referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency; (ii) take and use or sell the Marks and the goodwill of
such Assignor's business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly, and such Assignor shall execute such further documents that the
Collateral Agent may reasonably request to further confirm this and to transfer
ownership of the Marks and registrations and any pending trademark application
in the United States Patent and Trademark Office to the Collateral Agent.
Exhibit I
Page 11
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of all rights in
(i) all United States trade secrets and proprietary information necessary to
operate the business of the Assignor (the "Trade Secret Rights"), (ii) the
Patents listed in Annex F hereto for such Assignor and that said Patents include
all the United States patents and applications for United States patents that
such Assignor owns as of the date hereof and (iii) the Copyrights listed in
Annex G hereto for such Assignor and that said Copyrights constitute all the
United States copyrights registered with the United States Copyright Office and
applications to United States copyrights that such Assignor owns as of the date
hereof. Each Assignor further warrants that it has no knowledge of any third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any patent of any other Person or such
Assignor has misappropriated any trade secret or proprietary information which,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of any Event of Default, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Patent, and to record the
same.
5.2. Licenses and Assignments. Except as otherwise permitted
by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself
of any right under any Patent or Copyright absent prior written approval of the
Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe in any Patent or
Copyright or to any claim that the practice of any Patent or use of any
Copyright violates any property right of a third party, or with respect to any
misappropriation of any Trade Secret Right or any claim that practice of any
Trade Secret Right violates any property right of a third party, in each case,
in any manner which, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. Each Assignor further agrees,
absent direction of the Collateral Agent to the contrary, to diligently
prosecute any Person infringing any Patent or Copyright or any Person
misappropriating any Trade Secret Right, in each case to the extent that such
infringement or misappropriation, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.4. Maintenance of Patents or Copyright. At its own expense,
each Assignor shall make timely payment of all post-issuance fees required
pursuant to 35 U.S.C. ss. 41 to maintain in force its rights under each Patent
or Copyright, absent prior written consent of the Collateral Agent (other than
any such Patents or Copyrights which are no longer used or useful in its
business or operations).
Exhibit I
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5.5. Prosecution of Patent Applications. At its own expense,
each Assignor shall diligently prosecute all material applications for (i)
United States Patents listed in Annex F hereto and (ii) Copyrights listed on
Annex G hereto, in each case for such Assignor and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies
(other than applications deemed by such Assignor to be no longer prudent to
pursue), absent written consent of the Collateral Agent.
5.6. Other Patents and Copyrights. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a Copyright,
or acquisition of a registered Copyright, or of filing of an application for a
United States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Copyright or Patent, or certificate or
registration of, or application therefor, as the case may be, with an assignment
for security as to such Patent or Copyright, as the case may be, to the
Collateral Agent and at the expense of such Assignor, confirming the assignment
for security, the form of such assignment for security to be substantially in
the form of Annex I or J hereto, as appropriate, or in such other form as may be
reasonably satisfactory to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the Collateral Agent for the benefit of the Secured
Creditors, in which event such right, title, and interest shall immediately vest
in the Collateral Agent for the benefit of the Secured Creditors, in which case
the Collateral Agent shall be entitled to exercise the power of attorney
referred to in Section 5.1 hereof to execute, cause to be acknowledged and
notarized and to record said absolute assignment with the applicable agency;
(ii) take and practice or sell the Patents and Copyrights; and (iii) direct such
Assignor to refrain, in which event such Assignor shall refrain, from practicing
the Patents and using the Copyrights directly or indirectly, and such Assignor
shall execute such further documents as the Collateral Agent may reasonably
request further to confirm this and to transfer ownership of the Patents and
Copyrights to the Collateral Agent for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Except as
otherwise permitted by the Secured Debt Agreements, each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at such Assignor's own expense to the extent and in the
manner provided in the Secured Debt Agreements. Except to the extent otherwise
permitted to be retained by such Assignor or applied by such Assignor pursuant
to the terms of the Secured Debt Agreements, the Collateral Agent shall, at the
time any proceeds of such insurance are distributed to the Secured Creditors,
apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes
all liability and responsibility in connection with the Collateral acquired by
it and the liability of such Assignor to pay the Obligations shall in no way
Exhibit I
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be affected or diminished by reason of the fact that such Collateral may be
lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to
such Assignor.
6.2. Warehouse Receipts Non-negotiable. To the extent
practicable, each Assignor agrees that if any warehouse receipt or receipt in
the nature of a warehouse receipt is issued with respect to any of its
Inventory, such Assignor shall request that such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense
and upon the reasonable request of the Collateral Agent, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
lists, descriptions and designations of its Collateral, warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, certificates, reports and other
assurances or instruments and take such further steps relating to the Collateral
and other property or rights covered by the security interest hereby granted,
which the Collateral Agent deems reasonably appropriate or advisable to perfect,
preserve or protect its security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are reasonably necessary or desirable in the
opinion of the Collateral Agent to establish and maintain a valid, enforceable,
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby. Each Assignor will pay any applicable
filing fees, recordation taxes and related expenses relating to its Collateral.
Each Assignor hereby authorizes the Collateral Agent to file any such financing
statements without the signature of such Assignor where permitted by law (and
such authorization includes describing the Collateral as "all assets" of such
Assignor).
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law and under the other
provisions of this Agreement, shall have all rights as a secured creditor under
any UCC, and such additional rights and remedies to which a secured creditor is
entitled under the laws in effect in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located
Exhibit I
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and remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and
all remedies of such Assignor in respect of such Collateral;
(iii) instruct all depositary banks which have entered into a
control agreement with the Collateral Agent to transfer all monies,
securities and instruments held by such depositary bank to the Cash
Collateral Account;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof,
or direct the relevant Assignor to sell, assign or otherwise liquidate
any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any reasonable place or places designated by the
Collateral Agent, in which event such Assignor shall at its own
expense:
(x) forthwith cause the same to be moved to the place
or places so designated by the Collateral Agent and there
delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 7.2
hereof; and
(z) while the Collateral shall be so stored and kept,
provide such security and maintenance services as shall be
reasonably necessary to protect the same and to preserve and
maintain it in good condition; and
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. By
accepting the benefits of this Agreement and each other Security Document, the
Secured Creditors expressly acknowledge and agree that this Agreement and each
other Security Document may be enforced only by the action of the Collateral
Agent acting upon the instructions of the Required Secured Creditors and that no
other Secured Creditor shall have any right individually to seek to enforce this
Agreement or any other Security Document or to
Exhibit I
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realize upon the security to be granted hereby or thereby, it being understood
and agreed that such rights and remedies may be exercised by the Collateral
Agent for the benefit of the Secured Creditors upon the terms of this Agreement
and the other Security Documents.
7.2. Remedies; Disposition of the Collateral. If any Event of
Default shall have occurred and be continuing, then any Collateral repossessed
by the Collateral Agent under or pursuant to Section 7.1 hereof and any other
Collateral whether or not so repossessed by the Collateral Agent, may be sold,
assigned, leased or otherwise disposed of under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' prior written notice to the relevant Assignor specifying the time at which
such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the giving
of such notice, to the right of the relevant Assignor or any nominee of such
Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' prior written notice
to the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction (where required by applicable law) not less than 10
days prior thereto. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned. To the
extent permitted by any such requirement of law, the Collateral Agent may bid
for and become the purchaser of the Collateral or any item thereof, offered for
sale in accordance with this Section 7.2 without accountability to the relevant
Assignor. If, under applicable law, the Collateral Agent shall be permitted to
make disposition of the Collateral within a period of time which does not permit
the giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such applicable law. Each Assignor
agrees to do or cause to be done all such other acts and things as may be
reasonably necessary to make such sale or sales of all or any portion of the
Collateral valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales, all at such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF
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ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby
further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision);
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement or any other Security
Document requires proceeds of collateral under such other Security Document to
be applied in accordance with the provisions of this Agreement, the Pledgee or
Collateral Agent under such other Security Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows.
(i) first, to the payment of all amounts owing the Collateral
Agent of the type described in clauses (iii) and (iv) of the definition
of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured
Creditor receiving an amount equal to its outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share of the amount remaining to
be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 7.4(e) hereof, with each
Exhibit I
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Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount remaining
to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement, (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, premium, fees and
interest on, all Loans, all Unpaid Drawings and all Fees and (ii) in the case of
the Other Obligations, all amounts due under such Interest Rate Protection
Agreements or Other Hedging Agreements (other than indemnities, fees (including,
without limitation, attorneys' fees) and similar obligations and liabilities)
and (z) "Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of such Secured Creditor and the denominator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) Each of the Secured Creditors, by their acceptance of the
benefits hereof and of the other Security Documents, agrees and acknowledges
that if the Lender Creditors are to receive a distribution on account of undrawn
amounts with respect to Letters of Credit issued under the Credit Agreement
(which shall only occur after all outstanding Loans under the Credit Agreement
and Unpaid Drawings have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Lender Creditors, as cash security for the repayment
of Obligations owing to the Lender Creditors as such. If any amounts are held as
cash security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit under the Credit Agreement, and
after the application of all such cash security to the repayment of all
Obligations owing to the Lender Creditors after giving effect to the termination
of all such Letters of Credit, if there remains any excess cash, such excess
cash shall be returned by the
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Administrative Agent to the Collateral Agent for distribution in accordance with
Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made
(x) if to the Lender Creditors, to the Administrative Agent for the account of
the Lender Creditors and (y) if to the Other Creditors, to the trustee, paying
agent or other similar representative (each a "Representative") for the Other
Creditors or, in the absence of such a Representative, directly to the Other
Creditors.
(f) For purposes of applying payments received in accordance
with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i)
the Administrative Agent and (ii) the Representative or, in the absence of such
a Representative, upon the Other Creditors for a determination (which the
Administrative Agent, each Representative and the Other Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has received written notice
from a Lender Creditor or an Other Creditor to the contrary, the Administrative
Agent and each Representative, in furnishing information pursuant to the
preceding sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that no Secondary Obligations are outstanding. Unless it has
written notice from an Other Creditor to the contrary, the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Other Hedging Agreements are in existence.
(g) This Agreement is made with full recourse to each Assignor
(including, without limitation, with full recourse to all assets of such
Assignor) and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Secured Debt Agreements and otherwise in writing in connection herewith or
therewith. It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given to the Collateral Agent
under this Agreement, the other Secured Debt Agreements or now or hereafter
existing at law, in equity or by statute and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time or simultaneously and as often and in such order as may be
deemed expedient by the Collateral Agent. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of the exercise of one
shall not be deemed a waiver of the right to exercise any other or others. No
delay or omission of the Collateral Agent in the exercise of any such right,
power or remedy and no renewal or extension of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence therein. No notice to or
demand on any Assignor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Collateral Agent to any other or further action in any
circumstances without notice or demand. In the event that the Collateral Agent
shall bring any suit to enforce
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any of its rights hereunder and shall be entitled to judgment, then in such suit
the Collateral Agent may recover reasonable expenses, including reasonable
attorneys' fees, and the amounts thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Agent, each other Secured
Creditor and their respective successors, assigns, employees, affiliates and
agents (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including reasonable attorneys' fees and expenses) (for the purposes of this
Section 8.1 the foregoing are collectively called "expenses") of whatsoever kind
and nature imposed on, asserted against or incurred by any of the Indemnitees in
any way relating to or arising out of this Agreement, any other Secured Debt
Agreement or any other document executed in connection herewith or therewith or
in any other way connected with the administration of the transactions
contemplated hereby or thereby or the enforcement of any of the terms of, or the
preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), the violation
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine of
strict liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage), or contract claim; provided
that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for
losses, damages or liabilities to the extent caused by the gross negligence or
willful misconduct of such Indemnitee (as determined by a court of competent
jurisdiction in a final and non-appealable decision). Each Assignor agrees that
upon written notice by any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action, suit or judgment,
the relevant Assignor shall assume full responsibility for the defense thereof.
Each Indemnitee agrees to use its best efforts to promptly notify the relevant
Assignor of any such assertion of which such Indemnitee has knowledge.
Exhibit I
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(b) Without limiting the application of Section 8.1(a) hereof,
each Assignor agrees, jointly and severally, to pay or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement, any other
Secured Debt Agreement or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any other Secured Debt
Agreement.
(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and Loans made, under the Credit Agreement, the termination of all Letters of
Credit issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements and Other Hedging Agreements entered into with the Other
Creditors and the payment of all other Obligations and notwithstanding the
discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.
Exhibit I
Page 21
"Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Cash Collateral Account" shall mean a cash collateral account
maintained with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of
this Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a)
of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Commercial Tort Claims" shall have the meaning provided in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Contract Rights" shall mean all rights of any Assignor under
each Contract, including, without limitation, (i) any and all rights to receive
and demand payments under any or all Contracts, (ii) any and all rights to
receive and compel performance under any or all Contracts and (iii) any and all
other rights, interests and claims now existing or in the future arising in
connection with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor and
one or more additional parties (including, without limitation, any Interest Rate
Protection Agreements, Other Hedging Agreements, licensing agreements and any
partnership agreements, joint venture agreements and limited liability company
agreements), but excluding any contract to the extent that (but only as long as)
the terms thereof prohibit the assignment of, or granting a security interest
in, such contract (it being understood and agreed, however, (i) that
notwithstanding the foregoing, all rights to payment for money due or to become
due pursuant to any such excluded contract shall be subject to the security
interests created by this Agreement and (ii) such excluded contract shall
otherwise be subject to the security interests created by this Agreement upon
receiving any necessary approvals or waivers permitting the assignment thereof).
"Copyrights" shall mean any United States copyright owned by
any Assignor, including any registrations of any Copyrights, in the United
States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by any Assignor.
"Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.
Exhibit I
Page 22
"Credit Document Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Default" shall mean any event which with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures and vehicles now or hereafter owned by any Assignor and
any and all additions, substitutions and replacements of any of the foregoing
and all accessions thereto, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.
"Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New York
(and shall include all payment intangibles, partnership interests and all
limited liability company and membership interests to the extent that same
constitutes a general intangible under such Uniform Commercial Code).
"Goods" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1(a)
of this Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and
all additions, substitutions and replacements thereof and all accessions
thereto, wherever located, together with all goods, supplies, incidentals,
packaging materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Collateral
Agent from any Assignor's customers, and shall specifically include all
"inventory" as such term in defined in the Uniform Commercial Code as in effect
on the date hereof in the State of New York, now or hereafter owned by any
Assignor.
Exhibit I
Page 23
"Investment Property" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Lender Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Lenders" shall have the meaning provided in the recitals of
this Agreement.
"Letter of Credit Rights" shall have the meaning provided in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Liens" shall mean any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
in a financing lease or analogous instrument, in, of, or on any Assignor's
property.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration of any trademarks and service marks in the
United States Patent and Trademark Office or in any equivalent foreign office
and any trade dress including logos and/or designs used by any Assignor, but
excluding any such right, title and interest of an Assignor in and to same as
licensee pursuant to a contract which is expressly excluded from the definition
of "Contract" contained herein pursuant to the terms of such definition.
"Material Adverse Effect" shall mean a material adverse effect
on the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole.
"Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations, liabilities and indebtedness (including, without limitation,
principal, premium, interest, reimbursement obligations under Letters of Credit,
fees, costs and indemnities (including, without limitation, all interest that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor at the rate provided for in the respective documentation, whether or
not a claim for post-petition interest is allowed in any such proceeding)) of
each Assignor to the Lender Creditors, whether now existing or hereafter
incurred under, arising out of, or in connection with, the Credit Agreement and
the other Credit Documents to which such Assignor is a party (including, in the
case of each Assignor that is a Subsidiary Guarantor, all such obligations,
liabilities and indebtedness of such Assignor under the Subsidiaries Guaranty)
and the due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained in the Credit Agreement and in such other
Credit Documents (all such obligations, liabilities and indebtedness under this
clause (i), except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging Agreements,
being herein collectively called the "Credit Document Obligations"); (ii) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement
of any case,
Exhibit I
Page 24
proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by such Assignor to the Other Creditors
under, or with respect to (including, in the case of each Assignor that is a
Subsidiary Guarantor, all such obligations, liabilities and indebtedness of such
Assignor under the Subsidiaries Guaranty), each Interest Rate Protection
Agreement or Other Hedging Agreement, whether such Interest Rate Protection
Agreement or Other Hedging Agreement is now in existence or hereafter arising,
and the due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained therein (all such obligations, liabilities
and indebtedness described in this clause (ii) being herein collectively called
the "Other Obligations"); (iii) any and all sums advanced by the Assignee in
order to preserve the Collateral or preserve its security interest in the
Collateral; (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such Assignor
referred to in clauses (i) and (ii) above, after an Event of Default shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, or of any exercise by the Assignee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and (v) all amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 8.1 of this Agreement; it being acknowledged and
agreed that the "Obligations" shall include extensions of credit of the types
described above, whether outstanding on the date of this Agreement or extended
from time to time after the date of this Agreement.
"Other Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any patent to which any Assignor now or
hereafter has right, title and interest therein, and any divisions,
continuations (including, but not limited to, continuations-in-parts) and
improvements thereof, as well as any application for a patent now or hereafter
made by any Assignor, but excluding any patent to which any such Assignor has
right, title and interest as licensee pursuant to a contract which is expressly
excluded from the definition of "Contract" contained herein pursuant to the
terms of such definition.
"Permits" shall mean, to the extent permitted to be assigned
by the terms thereof or by applicable law, all licenses, permits, rights,
orders, variances, franchises or authorizations of or from any governmental
authority or agency.
"Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
Exhibit I
Page 25
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all of such Assignor's rights to
health-care insurance receivables and to payment for goods sold or leased or
services performed by such Assignor, whether now in existence or arising from
time to time hereafter, including, without limitation, rights evidenced by an
account, note contract, security agreement, chattel paper, or other evidence of
indebtedness or security, together with (a) all security pledged, assigned,
hypothecated or granted to or held by such Assignor to secure the foregoing, (b)
all of any Assignor's right, title and interest in and to any goods, the sale of
which gave rise thereto, (c) all guarantees, endorsements and indemnifications
on, or of, any of the foregoing, (d) all powers of attorney for the execution of
any evidence of indebtedness or security or other writing in connection
therewith, (e) all books, records, ledger cards, and invoices relating thereto,
(f) all instruments in connection therewith and amendments thereto, notices to
other creditors or secured parties, and certificates from filing or other
registration officers, (g) all credit information, reports and memoranda
relating thereto and (h) all other writings related in any way to the foregoing.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) at any time when
any Credit Document Obligations are outstanding or any Commitments under the
Credit Agreement exist, the Required Lenders (or, to the extent provided in
Section 13.12 of the Credit Agreement, each of the Lenders) and (ii) at any time
after all of the Credit Document Obligations have been paid in full in cash, all
Commitments under the Credit Agreement have been terminated and no further
Commitments may be provided thereunder, the holders of a majority of the Other
Obligations.
"Requisite Creditors" shall have the meaning provided in
Section 10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
recitals of this Agreement.
Exhibit I
Page 26
"Secured Debt Agreements" shall mean and include this
Agreement, the other Credit Documents and the Interest Rate Protection
Agreements and Other Hedging Agreements entered into with an Other Creditor.
"Supporting Obligations" shall have the meaning provided in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Termination Date" shall have the meaning provided in Section
10.8(a) of this Agreement.
"Trade Secret Rights" shall have the meaning provided in
Section 5.1 of this Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be
effective when deposited in the mails, delivered to the telegraph company, cable
company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Collateral Agent or
any Assignor shall not be effective until received by the Collateral Agent or
such Assignor, as the case may be. All notices and other communications shall be
in writing and addressed as follows:
(a) if to any Assignor, c/o:
Extended Stay America, Inc.
450 East Las Olas Boulevard
Suite 1100
Ft. Lauderdale, FL 33301
Telephone No.: (954) 713-1600
Telecopier No.: (954) 713-1650
Attention: Gregory R. Moxley
(b) if to the Collateral Agent, at:
600 East Las Colinas Blvd.,
Suite 1300, 13th Floor
Irving, TX 75309
Attention: Kevin Miles or
Monica Stevens
Exhibit I
Page 27
Telephone No.: (972) 401-8533
Telecopier No.: (972) 401-8557
(c) if to any Lender Creditor other than the Collateral Agent,
at such address as such Lender Creditor shall have specified in the
Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
Collateral Agent;
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement or any other Security Document may be changed, waived, modified
or varied in any manner whatsoever unless in writing duly signed by each
Assignor directly affected thereby and the Collateral Agent (with the written
consent of the Required Secured Creditors); provided, however, that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class of Secured Creditors (and not all Secured Creditors in a like or similar
manner) also shall require the written consent of the Requisite Secured
Creditors of such affected Class. For the purpose of this Agreement and each
other Security Document, the term "Class" shall mean each class of Secured
Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Agreement and each other Security Document,
the term "Requisite Secured Creditors" of any Class shall mean each of (x) with
respect to the Credit Document Obligations, the Required Lenders (or, to the
extent provided in Section 13.12 of the Credit Agreement, each of the Lenders),
and (y) with respect to the Other Obligations, the holders of at least a
majority of all Other Obligations outstanding from time to time.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any of the Obligations; whether or not such Assignor shall
have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns (although no Assignor may
assign its rights and obligations hereunder except in accordance with the
provisions of the Secured Debt Agreements) and shall inure to the benefit of the
Collateral Agent and the other Secured Creditors and their respective successors
and assigns. All agreements, statements, representations and warranties made by
each Assignor herein or in any certificate or other instrument delivered by such
Assignor or on its behalf under this Agreement shall be considered to have been
relied upon by the Secured Creditors and shall survive the execution and
delivery of this Agreement and the
Exhibit I
Page 28
other Secured Debt Agreements regardless of any investigation made by the
Secured Creditors or on their behalf.
10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Commitment under the Credit Agreement has been terminated and all Interest Rate
Protection Agreements and Other Hedging Agreements entered into with any Other
Creditor have been terminated, no Note under the Credit Agreement is outstanding
and all Loans thereunder have been repaid in full, all Letters of Credit issued
under the Credit Agreement have been terminated and all Obligations then due and
payable have been paid in full and no further Incremental Term Loan Commitments
may be requested or provided pursuant to the terms of the Credit Agreement.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by the Secured Debt Agreements (other than a
sale to any Assignor or a Subsidiary thereof) or is otherwise released with the
consent of the Required Secured Creditors and the proceeds of such sale or sales
or from such release are applied in accordance with the provisions of the Credit
Agreement, to the extent required to be so applied, such Collateral will be sold
free and clear of the Liens created by this Agreement and the Collateral Agent,
at the request and expense of the relevant Assignor, will duly and promptly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in the possession of the Collateral
Agent and has not theretofore been released pursuant to this Agreement.
Exhibit I
Page 29
(c) At any time that an Assignor desires that the Collateral
Agent take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall deliver to
the Collateral Agent a certificate signed by a senior officer of such Assignor
stating that the release of the respective Collateral is permitted pursuant to
such Section 10.8(a) or (b).
10.9. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with each
Assignor and the Collateral Agent.
10.10. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.11. The Collateral Agent and the other Secured Creditors.
The Collateral Agent will hold in accordance with this Agreement all items of
the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Collateral Agent as holder of
the Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this Agreement and in Section 12 of the Credit Agreement. The Collateral
Agent shall act hereunder on the terms and conditions set forth herein and in
Section 12 of the Credit Agreement.
10.12. Benefit of Agreement. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.
10.13. Additional Assignors. It is understood and agreed that
any Subsidiary of Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall become an
Assignor hereunder by executing a counterpart hereof and delivering same to the
Collateral Agent.
* * *
Exhibit I
Page 30
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
Extended Stay America, Inc.
ESA 0123, Inc.
ESA 0124, Inc.
ESA 0155, Inc.
ESA Arizona, Inc.
ESA Arkansas, Inc.
ESA 0311, Inc.
ESA 0885, Inc.
ESA 0901, Inc.
ESA 0994, Inc.
ESA 7502, Inc.
ESA 7508, Inc.
ESA 7513, Inc.
ESA COL, Inc.
ESA Connecticut, Inc.
ESA International, Inc.
ESA Management, Inc.
ESA Services, Inc.
Extended Stay CA, Inc.
Studio Plus Hotels, Inc.
ESA 0174, Inc.
ESA 0302, Inc.
ESA 0303, Inc.
ESA 0328, Inc.
ESA 0381, Inc.
ESA 0789, Inc.
ESA 0869, Inc.
ESA 0884, Inc.
ESA 1510, Inc.
ESA 1546, Inc.
ESA Florida, Inc.
ESA 0102, Inc.
ESA 0373, Inc.
ESA 0382, Inc.
ESA 0788, Inc.
ESA 0990, Inc.
ESA 0991, Inc.
ESA 0992, Inc.
ESA 0993, Inc.
ESA 0996, Inc.
ESA 1501, Inc.
ESA 1502, Inc.
Exhibit I
Page 31
ESA 1550, Inc.
ESA Georgia, Inc.
ESA Idaho, Inc.
ESA 0153, Inc.
ESA 0510, Inc.
ESA 0525, Inc.
ESA 0530, Inc.
ESA 0532, Inc.
ESA 0541, Inc.
ESA 0640, Inc.
ESA 0660, Inc.
ESA 0677, Inc.
ESA 0752, Inc.
ESA 0753, Inc.
ESA 4012, Inc.
ESA 4016, Inc.
ESA 4019, Inc.
ESA 4023, Inc.
ESA Illinois, Inc.
ESA Indiana, Inc.
ESA Iowa, Inc.
ESA Kansas, Inc.
ESA Kentucky, Inc.
ESA Louisiana, Inc.
ESA Maine, Inc.
ESA Maryland, Inc.
Extended Stay MA, Inc.
ESA 0527, Inc.
ESA 0552, Inc.
ESA 0600, Inc.
ESA 0670, Inc.
ESA 0675, Inc.
ESA 0680, Inc.
ESA 0780, Inc.
ESA 4013, Inc.
ESA Michigan, Inc.
ESA 0733, Inc.
ESA 0734, Inc.
ESA 0737, Inc.
ESA 0745, Inc.
ESA 3504, Inc.
ESA Minnesota, Inc.
ESA Mississippi, Inc.
ESA Missouri, Inc.
ESA 0858, Inc.
Exhibit I
Page 32
ESA 0859, Inc.
ESA 0860, Inc.
ESA 0861, Inc.
ESA Nevada, Inc.
ESA West, Inc.
ESA New Hampshire, Inc.
ESA 0454, Inc.
ESA 0455, Inc.
ESA 0479, Inc.
ESA 0646, Inc.
ESA 2509, Inc.
ESA 2522, Inc.
ESA 2653, Inc.
ESA New Jersey, Inc.
ESA New Mexico, Inc.
ESA New York, Inc.
ESA 0106, Inc.
ESA 0127, Inc.
ESA 0161, Inc.
ESA 0186, Inc.
ESA 0201, Inc.
ESA 0206, Inc.
ESA 0231, Inc.
ESA 0232, Inc.
ESA 0280, Inc.
ESA 0370, Inc.
ESA 0371, Inc.
ESA 0417, Inc.
ESA 1500, Inc.
ESA 1514, Inc.
ESA 1591, Inc.
ESA 1594, Inc.
ESA 1596, Inc.
ESA 1634, Inc.
ESA Ohio, Inc.
ESA Oklahoma, Inc.
ESA Oregon, Inc.
Extended Stay 0453, Inc.
Extended Stay 0463, Inc.
Extended Stay 0507, Inc.
Extended Stay 0547, Inc.
Extended Stay 2506, Inc.
Extended Stay 2511, Inc.
Extended Stay 2565, Inc.
Extended Stay 2667, Inc.
Exhibit I
Page 33
ESA Rhode Island, Inc.
ESA South Carolina, Inc.
ESA 0121, Inc.
ESA 0125, Inc.
ESA 0163, Inc.
ESA 0305, Inc.
ESA 0315, Inc.
ESA 0450, Inc.
ESA Tennessee, Inc.
ESA Tejas, Inc.
ESA Utah, Inc.
ESA Virginia, Inc.
Studio Plus Properties, Inc.
ESA Washington, Inc.
ESA Wisconsin, Inc.
By:
-------------------------------------
Name:
Title:
On behalf of each Assignor
listed above
Accepted and Agreed to:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Collateral Agent and Assignee
By:
-------------------------------------
Name:
Title:
EXHIBIT J
---------
SUBSIDIARIES GUARANTY
---------------------
GUARANTY, dated as of July 24, 2001 (as amended, modified or supplemented
from time to time, this "Guaranty"), made by each of the undersigned (each, a
"Guarantor" and, together with any other entity that becomes a party hereto
pursuant to Section 25 hereof, the "Guarantors"), to The Industrial Bank of
Japan, Limited, as Collateral Agent, for the benefit of the Secured Creditors
(as defined below). Except as otherwise defined herein, terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Extended Stay America, Inc. (the "Borrower"), various lenders
party thereto from time to time (the "Lenders"), Morgan Stanley Senior Funding,
Inc., as Sole Lead Arranger and Sole Book Runner (the "Lead Arranger"), Bear
Stearns Corporate Lending Inc. and Fleet National Bank, as Co-Syndication Agents
(the "Co-Syndication Agents"), and The Industrial Bank of Japan, Limited, as
Administrative Agent (together with any successor administrative agent, the
"Administrative Agent") have entered into a Credit Agreement, dated as of July
24, 2001 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans to the Borrower and the issuance
of, and participation in, Letters of Credit for the account of the Borrower, all
as contemplated therein (the Lenders, the Lead Arranger, the Co-Syndication
Agents, each Issuing Lender and the Administrative Agent are herein called the
"Lender Creditors");
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
with one or more Lenders or any affiliate thereof (each such Lender or
affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors,"
and together with the Lender Creditors, the "Secured Creditors");
WHEREAS, each Guarantor is a Subsidiary of the Borrower;
WHEREAS, it is a condition to the making of Loans and issuing of
Letters of Credit under the Credit Agreement that each Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence
of Loans by the Borrower and the issuance of Letters of Credit pursuant to the
Credit Agreement and the entering into of Interest Rate Protection Agreements or
Other Hedging Agreements and, accordingly, desires to execute this Guaranty in
order to (i) satisfy the conditions described in the preceding paragraph and
(ii) induce (x) the Lenders to make Loans and each Issuing Lender to
2
issue Letters of Credit to the Borrower and (y) the Other Creditors to enter
into Interest Rate Protection Agreements or Other Hedging Agreements with the
Borrower;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Secured Creditors and hereby covenants and agrees with
each Secured Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Lender Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit Agreement and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit and (y) all other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Borrower to the Lender Creditors under the Credit Agreement (including,
without limitation, indemnities, Fees and interest thereon (including any
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding, whether or not such interest is an allowed
claim against the debtor in any such proceeding)) and the other Credit Documents
to which the Borrower is a party, whether now existing or hereafter incurred
under, arising out of or in connection with the Credit Agreement or any such
other Credit Document and the due performance and compliance with the terms of
the Credit Documents by the Borrower (all such principal, interest, liabilities
and obligations under this clause (i), except to the extent consisting of
obligations or liabilities with respect to Interest Rate Protection Agreements
or Other Hedging Agreements, being herein collectively called the "Credit
Document Obligations"); and (ii) to each Other Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower to one or more Other Creditors under any Interest Rate
Protection Agreements or Other Hedging Agreements (including any interest
accruing after the commencement of any bankruptcy, insolvency, receivership or
similar proceeding, whether or not such interest is an allowed claim against the
debtor in any such proceeding), whether now in existence or hereafter arising,
and the due performance and compliance by the Borrower with all terms,
conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Other Obligations", and
together with the Credit Document Obligations are herein collectively called the
"Guaranteed Obligations").
2. Additionally, but subject to the proviso to the first sentence
of Section 1 hereof, each Guarantor, jointly and severally, unconditionally and
irrevocably, guarantees the payment of any and all Guaranteed Obligations of the
Borrower to the Secured Creditors whether or not due or payable by the Borrower
upon the occurrence in respect of the Borrower of any of the events specified in
Section 10.05 of the Credit Agreement, and unconditionally and irrevocably,
jointly and severally, promises to pay such Guaranteed Obligations to the
Secured Creditors, or order, on demand. This Guaranty shall constitute a
guaranty of payment, and not of collection.
3
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
of the Borrower whether executed by such Guarantor, any other Guarantor, any
other guarantor or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the Guaranteed Obligations of the Borrower, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, (e) any payment made to any Secured Creditor on the Guaranteed
Obligations which any Secured Creditor repays the Borrower pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (f)
any action or inaction by the Secured Creditors as contemplated in Section 6
hereof, or (g) any invalidity, irregularity or unenforceability of all or part
of the Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor of the Borrower or the Borrower be joined in any such action or
actions. Each Guarantor waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives (to the fullest extent permitted
by applicable law) notice of acceptance of this Guaranty and notice of any
liability to which it may apply, and waives promptness, diligence, presentment,
demand of payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Administrative Agent or any
other Secured Creditor against, and any other notice to, any party liable
thereon (including such Guarantor or any other guarantor or the Borrower).
6. Any Secured Creditor may (except as shall be required by
applicable statute and cannot be waived) at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, without impairing or releasing the obligations
of such Guarantor hereunder, upon or without any terms or conditions and in
whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations, any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty herein
made shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
4
(b) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Secured Creditors
regardless of what liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or default
under, any of the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements;
(g) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty; and/or
(h) release or substitute any one or more endorsors, guarantors, the
Borrower or other obligors.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full in cash of the
Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the
5
exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Secured Creditor would otherwise have. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Secured Creditor to any other or further action in
any circumstances without notice or demand. It is not necessary for any Secured
Creditor to inquire into the capacity or powers of the Borrower or any of its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Secured Creditors; and such indebtedness of the Borrower to any Guarantor, if
the Administrative Agent, after an Event of Default has occurred and is
continuing, so requests, shall be collected, enforced and received by such
Guarantor as trustee for the Secured Creditors and be paid over to the Secured
Creditors on account of the indebtedness of the Borrower to the Secured
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Prior to the
transfer by any Guarantor of any note or negotiable instrument evidencing any
indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such
note or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be
required by applicable statute or law and cannot be waived) to require the
Secured Creditors to: (i) proceed against the Borrower, any other Guarantor, any
other guarantor of the Borrower or any other party; (ii) proceed against or
exhaust any security held from the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other party; or (iii) pursue any other remedy
in the Secured Creditors' power whatsoever. Each Guarantor waives (to the
fullest extent permitted by applicable law) any defense based on or arising out
of any defense of the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party other than payment in full in cash of the Guaranteed
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full in cash of the
Guaranteed Obligations. The Secured Creditors may, at their election, foreclose
on any security held by the Administrative Agent, the Collateral Agent or the
other Secured Creditors by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Secured Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid in full in
6
cash. Each Guarantor waives any defense arising out of any such
election by the Secured Creditors, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of such Guarantor against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. The Secured Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Lenders (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least a majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Guaranty or to realize upon the security to be granted by the Security
Documents, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Collateral Agent or the holders of
at least a majority of the outstanding Other Obligations, as the case may be,
for the benefit of the Secured Creditors upon the terms of this Guaranty and the
Security Documents. The Secured Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee, or stockholder of any
Guarantor (except to the extent such stockholder is also a Guarantor hereunder).
12. In order to induce the Lenders to make Loans and each Issuing
Lender to issue Letters of Credit pursuant to the Credit Agreement, and in order
to induce the Other Creditors to execute, deliver and perform the Interest Rate
Protection Agreements or Other Hedging Agreements, each Guarantor represents,
warrants and covenants that:
(a) Such Guarantor (i) except as set forth on Schedule X to the
Credit Agreement, is a duly organized and validly existing
corporation, partnership or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate, partnership or limited liability
company power and authority, as the case be, to own its property and
assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction
where the conduct of its business requires such qualification except
for failures to be so qualified which, individually or in the
aggregate, would not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
7
(b) Such Guarantor has the corporate, partnership or limited
liability company power and authority, as the case be, to execute,
deliver and perform the terms and provisions of this Guaranty and each
other Credit Document to which it is a party and has taken all
necessary corporate, partnership or limited liability company action,
as the case be, to authorize the execution, delivery and performance
by it of each such Credit Document. Such Guarantor has duly executed
and delivered this Guaranty and each other Credit Document to which it
is a party, and each such Credit Document constitutes the legal, valid
and binding obligation of such Guarantor enforceable in accordance
with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is
sought in equity or at (law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Credit Document to which it is
a party, nor compliance by it with the terms and provisions hereof and
thereof, (i) will contravene any provision of any applicable law,
statute, rule or regulation, or any applicable order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or
impose) any Lien (except pursuant to the Security Documents) upon any
of the property or assets of such Guarantor or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, credit agreement, or any other material agreement or other
instrument to which such Guarantor or any of its Subsidiaries is a
party or by which it or any of its property or assets is bound or to
which it may be subject or (iii) will violate any provision of the
certificate of incorporation or by-laws (or equivalent organizational
documents) of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as
have been obtained or made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, (i) the execution,
delivery and performance of this Guaranty or any other Credit Document
to which such Guarantor is a party or (ii) the legality, validity,
binding effect or enforceability of this Guaranty or any other Credit
Document to which such Guarantor is a party.
(e) There are no actions, suits or proceedings (private or
governmental) pending or, to such Guarantor's knowledge, threatened
(i) with respect to any Credit Documents to which such Guarantor is a
party or (ii) with respect to such Guarantor that would reasonably be
expected to materially and adversely affect (a) the business,
operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as
a whole or (b) the rights or remedies of the Secured Creditors or on
the ability of such Guarantor to perform its respective obligations to
the Secured Creditors hereunder and under the other Credit Documents
to which it is a party.
8
13. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitments and all Interest Rate
Protection Agreements or Other Hedging Agreements and when no Note or Letter of
Credit remains outstanding and all Guaranteed Obligations have been paid in
full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in Section 8 or 9 of the
Credit Agreement, and so that no Default or Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Secured Creditor in
connection with the enforcement of this Guaranty and any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by any of the
Secured Creditors).
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and either (x) the Required Lenders (or to
the extent required by Section 13.12 of the Credit Agreement, with the written
consent of each Lender) at all times prior to the time on which all Credit
Document Obligations have been paid in full or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time on
which all Credit Document Obligations have been paid in full; provided, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class (as defined below) of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors (as defined below) of such Class of Secured Creditors (it
being understood that the addition or release of any Guarantor hereunder shall
not constitute a change, waiver, discharge or termination affecting any
Guarantor other than the Guarantor so added or released). For the purpose of
this Guaranty the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Lender Creditors as holders of the Credit Document Obligations
or (y) the Other Creditors as the holders of the Other Obligations. For the
purpose of this Guaranty, the term "Requisite Creditors" of any Class shall mean
each of (x) with respect to the Credit Document Obligations, the Required
Lenders (or to the extent required by Section 13.12 of the Credit Agreement,
each Lender) and (y) with respect to the Other Obligations, the holders of at
least a majority of all obligations outstanding from time to time under the
Interest Rate Protection Agreements or Other Hedging Agreements.
16. Each Guarantor acknowledges that an executed (or conformed)
copy of each of the Credit Documents and Interest Rate Protection Agreements or
Other Hedging Agreements has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit
9
Agreement or any payment default under any Interest Rate Protection Agreement or
Other Hedging Agreement continuing after any applicable grace period), each
Secured Creditor is hereby authorized at any time or from time to time, without
notice to any Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Creditor to or for the credit or the account of such Guarantor, against and on
account of the obligations and liabilities of such Guarantor to such Secured
Creditor under this Guaranty, irrespective of whether or not such Secured
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured. Each Secured Creditor acknowledges and agrees that the provisions set
forth in this Section 17 are subject to the sharing provisions set forth in
Section 13.06 of the Credit Agreement.
18. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to such
party (i) in the case of any Lender Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, c/o Extended Stay America, 450
East Las Olas Boulevard, Suite 1100, Ft. Lauderdale, FL 33301, Attention:
Gregory R. Moxley, Telephone No.: (954) 713-1600, Telecopier No.: (954) 713-1650
and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the Persons listed above may hereafter notify the
others in writing.
19. If claim is ever made upon any Secured Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected in good faith by
such payee with any such claimant (including the Borrower), then and in such
event each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action
or proceeding with respect to this Guaranty or any other Credit Document to
which any Guarantor is a party may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
further irrevocably waives any
10
claim that any such court lacks personal jurisdiction over such Guarantor, and
agrees not to plead or claim in any legal action or proceeding with respect to
this Guaranty or any other Credit Document to which such Guarantor is a party
brought in any of the aforesaid courts that any such court lacks personal
jurisdiction over such Guarantor. Each Guarantor further irrevocably consents to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to such Guarantor as provided in Section 18 hereof, such
service to become effective 30 days after such mailing. Each Guarantor hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document to which such Guarantor
is a party that such service of process was in any way invalid or ineffective.
Nothing herein shall affect the right of any of the Secured Creditors to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against each Guarantor in any other jurisdiction.
(B) Each Guarantor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Guaranty or any
other Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (A) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that such action or proceeding brought
in any such court has been brought in an inconvenient forum.
(C) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF
THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of (except to the Borrower or any of
its Subsidiaries) or liquidated in compliance with the requirements of Section
9.02 of the Credit Agreement (or such sale or other disposition or liquidation
has been approved in writing by the Required Lenders) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock or partnership interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this Section
21).
22. At any time a payment in respect of the Guaranteed Obligations
is made under this Guaranty, the right of contribution of each Guarantor against
each other Guarantor shall be determined as provided in the immediately
following sentence, with the right of contribution of each Guarantor to be
revised and restated as of each date on which a payment (a "Relevant Payment")
is made on the Guaranteed Obligations under this Guaranty. At any time
11
that a Relevant Payment is made by a Guarantor that results in the aggregate
payments made by such Guarantor in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment exceeding such Guarantor's
Contribution Percentage (as defined below) of the aggregate payments made by all
Guarantors in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of each computation; provided that no
Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been irrevocably paid in full in cash, it being expressly
recognized and agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this Section 22 against any other Guarantor
shall be expressly junior and subordinate to such other Guarantor's obligations
and liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 22: (i) each
Guarantor's "Contribution Percentage" shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y)
the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net
Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined
below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each
Guarantor shall mean the amount by which the fair saleable value of such
Guarantor's assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty, under
any guaranty of the 9.15% Senior Subordinated Notes or the 9-7/8% Senior
Subordinated Notes or any guaranty of any Incremental Third Party Debt) on such
date. All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 22, each Guarantor who makes any
payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment until all of the Guaranteed Obligations have been irrevocably paid in
full in cash. Each of the Guarantors recognizes and acknowledges that the rights
to contribution arising hereunder shall constitute an asset in favor of the
party entitled to such contribution. In this connection, each Guarantor has the
right to waive its contribution right against any Guarantor to the extent that
after giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Lenders.
23. Each Guarantor and each Secured Creditor (by its acceptance of
the benefits of this Guaranty) hereby confirms that it is its intention that
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar
Federal or state law. To effectuate the foregoing intention, each Guarantor and
each Secured Creditor (by its acceptance of the benefits of this Guaranty)
hereby
12
irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor
shall be limited to such amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such Guarantor
that are relevant under such laws and after giving effect to any rights to
contribution pursuant to any agreement providing for an equitable contribution
among such Guarantor and the other Guarantors, result in the Guaranteed
Obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent transfer or conveyance.
24. This Guaranty may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
25. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense, and on the same basis as payments
are made by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
26. It is understood and agreed that any Subsidiary of the
Borrower that is required to execute a counterpart of this Guaranty after the
date hereof pursuant to the Credit Agreement shall automatically become a
Guarantor hereunder by executing a counterpart hereof and delivering the same to
the Administrative Agent.
* * *
13
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
ESA 0123, Inc.
ESA 0124, Inc.
ESA 0155, Inc.
ESA Arizona, Inc.
ESA Arkansas, Inc.
ESA 0311, Inc.
ESA 0885, Inc.
ESA 0901, Inc.
ESA 0994, Inc.
ESA 7502, Inc.
ESA 7508, Inc.
ESA 7513, Inc.
ESA COL, Inc.
ESA Connecticut, Inc.
ESA International, Inc.
ESA Management, Inc.
ESA Services, Inc.
Extended Stay CA, Inc.
Studio Plus Hotels, Inc.
ESA 0174, Inc.
ESA 0302, Inc.
ESA 0303, Inc.
ESA 0328, Inc.
ESA 0381, Inc.
ESA 0789, Inc.
ESA 0869, Inc.
ESA 0884, Inc.
ESA 1510, Inc.
ESA 1546, Inc.
ESA Florida, Inc.
ESA 0102, Inc.
ESA 0373, Inc.
ESA 0382, Inc.
ESA 0788, Inc.
ESA 0990, Inc.
ESA 0991, Inc.
ESA 0992, Inc.
ESA 0993, Inc.
ESA 0996, Inc.
ESA 1501, Inc.
ESA 1502, Inc.
14
ESA 1550, Inc.
ESA Georgia, Inc.
ESA Idaho, Inc.
ESA 0153, Inc.
ESA 0510, Inc.
ESA 0525, Inc.
ESA 0530, Inc.
ESA 0532, Inc.
ESA 0541, Inc.
ESA 0640, Inc.
ESA 0660, Inc.
ESA 0677, Inc.
ESA 0752, Inc.
ESA 0753, Inc.
ESA 4012, Inc.
ESA 4016, Inc.
ESA 4019, Inc.
ESA 4023, Inc.
ESA Illinois, Inc.
ESA Indiana, Inc.
ESA Iowa, Inc.
ESA Kansas, Inc.
ESA Kentucky, Inc.
ESA Louisiana, Inc.
ESA Maine, Inc.
ESA Maryland, Inc.
Extended Stay MA, Inc.
ESA 0527, Inc.
ESA 0552, Inc.
ESA 0600, Inc.
ESA 0670, Inc.
ESA 0675, Inc.
ESA 0680, Inc.
ESA 0780, Inc.
ESA 4013, Inc.
ESA Michigan, Inc.
ESA 0733, Inc.
ESA 0734, Inc.
ESA 0737, Inc.
ESA 0745, Inc.
ESA 3504, Inc.
ESA Minnesota, Inc.
ESA Mississippi, Inc.
ESA Missouri, Inc.
15
ESA 0858, Inc.
ESA 0859, Inc.
ESA 0860, Inc.
ESA 0861, Inc.
ESA Nevada, Inc.
ESA West, Inc.
ESA New Hampshire, Inc.
ESA 0454, Inc.
ESA 0455, Inc.
ESA 0479, Inc.
ESA 0646, Inc.
ESA 2509, Inc.
ESA 2522, Inc.
ESA 2653, Inc.
ESA New Jersey, Inc.
ESA New Mexico, Inc.
ESA New York, Inc.
ESA 0106, Inc.
ESA 0127, Inc.
ESA 0161, Inc.
ESA 0186, Inc.
ESA 0201, Inc.
ESA 0206, Inc.
ESA 0231, Inc.
ESA 0232, Inc.
ESA 0280, Inc.
ESA 0370, Inc.
ESA 0371, Inc.
ESA 0417, Inc.
ESA 1500, Inc.
ESA 1514, Inc.
ESA 1591, Inc.
ESA 1594, Inc.
ESA 1596, Inc.
ESA 1634, Inc.
ESA Ohio, Inc.
ESA Oklahoma, Inc.
ESA Oregon, Inc.
Extended Stay 0453, Inc.
Extended Stay 0463, Inc.
Extended Stay 0507, Inc.
Extended Stay 0547, Inc.
Extended Stay 2506, Inc.
Extended Stay 2511, Inc.
16
Extended Stay 2565, Inc.
Extended Stay 2667, Inc.
ESA Rhode Island, Inc.
ESA South Carolina, Inc.
ESA 0121, Inc.
ESA 0125, Inc.
ESA 0163, Inc.
ESA 0305, Inc.
ESA 0315, Inc.
ESA 0450, Inc.
ESA Tennessee, Inc.
ESA Tejas, Inc.
ESA Utah, Inc.
ESA Virginia, Inc.
Studio Plus Properties, Inc.
ESA Washington, Inc.
ESA Wisconsin, Inc.
By:
-------------------------------
Name:
Title:
On behalf of each Subsidiary
Guarantor listed above.
Accepted and Agreed to:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Administrative Agent and Collateral Agent
By:
---------------------------------
Title: