Exhibit 10.4
FIRST AMENDMENT AND WAIVER
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FIRST AMENDMENT AND WAIVER (this "Amendment"), dated as of November
25, 1998, among HOST MARRIOTT CORPORATION, a Delaware corporation ("Host
Marriott"), HOST MARRIOTT HOSPITALITY, INC., a Delaware corporation
("Hospitality"), HMH PROPERTIES, INC., a Delaware corporation ("HMH"), HOST
MARRIOTT, L.P., a Delaware limited partnership (the "Operating Partnership"),
HMC CAPITAL RESOURCES CORP., a Delaware corporation ("CRC"), the lenders (the
"Banks") party to the Credit Agreement referred to below, WELLS FARGO BANK,
NATIONAL ASSOCIATION, THE BANK OF NOVA SCOTIA and CREDIT LYONNAIS NEW YORK
BRANCH, as Co-Arrangers (the "Co-Arrangers"), and BANKERS TRUST COMPANY, as
Arranger and Administrative Agent (the "Administrative Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined in the
Credit Agreement are used herein as so defined.
W I T N E S S E T H:
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WHEREAS, Host Marriott, Hospitality, HMH, the Operating Partnership,
CRC, the Banks, the Co-Arrangers and the Administrative Agent are parties to a
Credit Agreement, dated as of June 19, 1997 and amended and restated as of
August 5, 1998 (the "Credit Agreement");
WHEREAS, the parties hereto wish to amend the Credit Agreement, and
waive certain provisions thereunder, all as herein provided; and
WHEREAS, subject to the terms and conditions of this Amendment, the
parties hereto agree as follows;
NOW, THEREFORE, it is agreed:
1. Notwithstanding anything to the contrary contained in Section
3.02(d) of the Credit Agreement, the Banks hereby agree that HMH may issue up to
$500,000,000 of Indebtedness pursuant to Section 9.04(xi) of the Credit
Agreement (as modified pursuant to Section 3 of this Amendment) on or prior to
December 31, 1998 without any requirement to repay outstanding Term Loans
pursuant to such Section 3.02(d).
2. Section 9.03(a) of the Credit Agreement is hereby amended by
deleting the words "shall not be less than $100,000,000" appearing in sub-clause
(II) of the proviso to clause (vi) of such Section 9.03(a) and inserting the
words "shall not exceed $100,000,000" in lieu thereof.
3. Notwithstanding anything to the contrary contained in Section
9.04(xi) of the Credit Agreement or in the definition of "Permitted Refinancing
Indebtedness" appearing in Section 11.01 of the Credit Agreement, the Banks
hereby agree that HMH may issue up to $500,000,000 of additional senior notes
(the "Additional Senior Notes") on or prior to December 31, 1998 and on terms
and conditions (other than interest rates) no less favorable to HMH than those
set forth in the Senior Note Documents and that such indebtedness shall
constitute "Permitted Refinancing Indebtedness" incurred pursuant to such
Section 9.04(xi) so long as the Net Debt proceeds therefrom are used to
refinance Indebtedness otherwise permitted to be refinance pursuant to Section
9.04(xi) on or prior to June 30, 1999, it being understood and agreed, however,
(i) to the extent that the Net Debt Proceeds from the Additional Senior Notes
are not so used by June 30, 1999, such Indebtedness will be deemed to have been
incurred under (and will otherwise reduce the then available basket under)
Section 9.04(xii) of the Credit Agreement without any requirement by Holdings or
the borrower to demonstrate pro forma covenant compliance at such time and (ii)
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that until the earlier of (x) such time as all of the Net Debt Proceeds from the
Additional Senior Notes are used to effect a permitted refinancing as described
above and (y) June 30, 1999, Holdings and the Borrower will ensure that there is
sufficient availability to incur the Additional Senior Notes (or the portion
thereof not theretofore used to effect such a refinancing) under Section
9.04(xii) of the Credit Agreement.
4. In the event (and only in the event) that more than $350,000,000
of Additional Series Notes are issued on or prior to December 31, 1998, Section
9.08 of the Credit Agreement shall be amended by deleting clause (b) thereof in
its entirety and inserting the following new clause (b) in lieu thereof:
"(b) Holdings and the Borrower will not permit the Unsecured Interest
Coverage Ratio (i) for the Test Period ended closet to September 30, 1998
to be less than 2.00:1.00, and (ii) for any Test Period ending thereafter
to be less than 2.00:1.00."
5. In the event (and only in the event) that more than $350,000,000
of Additional Senior Notes are issued on or prior to December 31, 1998, Section
9.09 of the Credit Agreement shall be deleted in its entirety and the following
new Section 9.09 shall be inserted in lieu thereof:
"9.09 Minimum Fixed Charge Coverage Ratio. Holdings and the Borrower
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will not permit the Consolidated Fixed Charge Coverage Ratio (i) for the
Test period ended closest to September 30, 1998 to be less than 1.50:1.00,
(ii) for the Test Period ending closest to December 31, 1998 to be less
than 1.45:1.00 and (iii) for any Test Period ending thereafter to be less
than 1.50:1.00."
6. Section 13.07 of the Credit Agreement is hereby amended by
inserting the following new clause (c) at the end thereof:
"(c) Notwithstanding anything to the contrary contained in this
Agreement, for purposes of determining compliance with Sections 9.08(b) and
9.09 only in respect of the Test Period ending closest to March 31, 1999,
to
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the extent that the Blackstone Acquisition, and Partnership Roll-Up
and/or any refinancing of Indebtedness of Holdings or any of its
Subsidiaries occurs after the last day of such Test Period and on or before
April 1, 1999, such transactions shall be treated as having occurred on the
first day of such Test Period."
7. (a) Sections 1, 2 and 3 of this Amendment shall become effective
on the date (the "First Amendment Effective Date") when Host Marriott,
Hospitality, HMH, CRC, the Operating Partnership and the Required Banks shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of facsimile transmission) the same
to the Administrative Agent at the Notice Office and (b) Sections 4, 5 and 6 of
this Amendment shall become effective on the date when Host Marriott,
Hospitality, HMH, CRC, the Operating Partnership and the Supermajority Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Administrative Agent at the Notice Office.
8. In order to induce the Banks to enter into this Amendment, each
Credit Party hereto hereby represents and warrants that (i) the representations,
warranties and agreements contained in Section 7 of the Credit Agreement are
true and correct in all material respects on and as of the First Amendment
Effective Date, after giving effect to this Amendment and (ii) there exists no
Default or Event of Default on the First Amendment Effective Date, after giving
effect to this Agreement.
9. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
10. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the US Borrower and the Administrative Agent.
11. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
12. From and after the First Amendment Effective Date, all references
in the Credit Agreement and in the other Credit Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement as modified
hereby.
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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.
HOST MARRIOTT CORPORATION
By:_____________________________
Title:
HOST MARRIOTT HOSPITALITY, INC.
By:_____________________________
Title:
HMH PROPERTIES, INC.
By:_____________________________
Title:
HOST MARRIOTT, L.P.
By: HMC Real Estate LLC its General Partners
By:_____________________________
Title:
HMC CAPITAL RESOURCES CORP.
By:_____________________________
Title:
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