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Exhibit 4.2
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CREDIT AGREEMENT
among
INTERSTATE HOTELS COMPANY
INTERSTATE HOTELS CORPORATION
VARIOUS LENDING INSTITUTIONS
and
CREDIT LYONNAIS NEW YORK BRANCH
as
ADMINISTRATIVE AGENT
------------------------------------
Dated as of June __, 1996
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$295,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.......................................... 1
1.01 Commitments...................................................... 1
1.02 Minimum Borrowing Amounts, etc................................... 2
1.03 Notice of Borrowing.............................................. 2
1.04 Disbursement of Funds............................................ 3
1.05 Notes............................................................ 3
1.06 Conversions...................................................... 4
1.07 Pro Rata Borrowings.............................................. 5
1.08 Interest......................................................... 5
1.09 Interest Periods................................................. 6
1.10 Increased Costs, Illegality, etc................................. 7
1.11 Compensation..................................................... 10
1.12 Change of Lending Office......................................... 10
SECTION 2. Letters of Credit................................................... 10
2.01 Letters of Credit................................................ 10
2.02 Letter of Credit Requests; Notices of Issuance................... 11
2.03 Agreement to Repay Letter of Credit Drawings..................... 12
2.04 Letter of Credit Participations.................................. 12
2.05 Increased Costs.................................................. 15
SECTION 3. Fees; Commitments................................................... 15
3.01 Fees............................................................. 15
3.02 Voluntary Reduction of Commitments............................... 16
3.03 Mandatory Adjustments of Commitments, etc........................ 16
SECTION 4. Payments............................................................ 17
4.01 Voluntary Prepayments............................................ 17
4.02 Mandatory Prepayments............................................ 18
4.03 Method and Place of Payment...................................... 21
4.04 Net Payments..................................................... 22
SECTION 5. Conditions Precedent................................................ 24
5.01 Conditions Precedent to Initial Borrowing Date................... 24
5.02 Conditions Precedent to All Credit Events........................ 32
(i)
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SECTION 6. Representations, Warranties and Agreements.......................... 33
6.01 Corporate Status................................................. 33
6.02 Corporate Power and Authority.................................... 33
6.03 No Violation..................................................... 34
6.04 Litigation....................................................... 34
6.05 Use of Proceeds; Margin Regulations.............................. 34
6.06 Governmental Approvals........................................... 34
6.07 True and Complete Disclosure..................................... 35
6.08 Financial Condition; Financial Statements........................ 35
6.09 Security Interests............................................... 36
6.10 Representations and Warranties in Transaction Documents.......... 37
6.11 Tax Returns and Payments......................................... 37
6.12 Compliance with ERISA............................................ 37
6.13 Subsidiaries..................................................... 38
6.14 Intellectual Property, etc....................................... 38
6.15 Environmental Matters............................................ 38
6.16 Properties....................................................... 39
6.17 Labor Relations; Collective Bargaining Agreements................ 39
6.18 Indebtedness..................................................... 40
6.19 Transaction...................................................... 40
6.20 Certain Material Agreements...................................... 40
6.21 Third-Party Rights............................................... 40
SECTION 7. Affirmative Covenants............................................... 40
7.01 Reporting Requirements........................................... 41
7.02 Books, Records and Inspections................................... 43
7.03 Insurance........................................................ 44
7.04 Payment of Taxes................................................. 44
7.05 Corporate Franchises............................................. 45
7.06 Compliance with Statutes, etc.................................... 45
7.07 Good Repair...................................................... 45
7.08 Compliance with Environmental Laws............................... 45
7.09 End of Fiscal Years; Fiscal Quarters............................. 46
7.10 Interest Rate Hedging............................................ 46
7.11 Additional Security; Further Assurances.......................... 47
7.12 Corporate Separateness........................................... 48
7.13 ERISA............................................................ 48
SECTION 8. Negative Covenants.................................................. 49
8.01 Changes in Business.............................................. 49
8.02 Consolidation, Merger or Sale of Assets, etc..................... 49
(ii)
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8.03 Liens............................................................ 52
8.04 Indebtedness..................................................... 54
8.05 Advances, Investments and Loans.................................. 56
8.06 Capital Expenditures; Leases..................................... 56
8.07 Prepayments of Indebtedness, Modifications of Agreements, etc.... 57
8.08 Dividends, etc................................................... 57
8.09 Transactions with Affiliates..................................... 58
8.10 Leverage Ratio................................................... 58
8.11 Minimum EBITDA................................................... 59
8.12 Interest Coverage................................................ 59
8.13 Consolidated Net Worth........................................... 60
8.14 Debt Service Coverage............................................ 60
8.15 Creation of Subsidiaries......................................... 60
8.16 Limitation on Certain Restrictions on Subsidiaries............... 61
8.17 Holdings......................................................... 61
SECTION 9. Events of Default................................................... 61
9.01 Payments......................................................... 61
9.02 Representations, etc............................................. 61
9.03 Covenants........................................................ 61
9.04 Default Under Other Agreements................................... 62
9.05 Bankruptcy, etc.................................................. 62
9.06 ERISA............................................................ 63
9.07 Security Documents............................................... 63
9.08 Judgments........................................................ 64
9.09 Environmental Matters............................................ 64
9.10 Guaranty......................................................... 64
SECTION 10 Definitions......................................................... 65
SECTION 11. The Administrative Agent........................................... 87
11.01 Appointment..................................................... 87
11.02 Delegation of Duties............................................ 87
11.03 Exculpatory Provisions.......................................... 88
11.04 Reliance by Administrative Agent................................ 88
11.05 Notice of Default............................................... 89
11.06 Non-Reliance.................................................... 89
11.07 Indemnification................................................. 89
11.08 The Administrative Agent in Individual Capacity................. 90
11.09 Successor Administrative Agent.................................. 90
(iii)
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SECTION 12. Miscellaneous...................................................... 91
12.01 Payment of Expenses, etc........................................ 91
12.02 Right of Setoff................................................. 92
12.03 Notices......................................................... 92
12.04 Benefit of Agreement............................................ 92
12.05 No Waiver; Remedies Cumulative.................................. 95
12.06 Payments Pro Rata............................................... 95
12.07 Calculations; Computations...................................... 96
12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial.................................................... 96
12.09 Counterparts.................................................... 97
12.10 Effectiveness................................................... 97
12.11 Headings Descriptive............................................ 98
12.12 Amendment or Waiver............................................. 98
12.13 Survival........................................................ 98
12.14 Domicile of Loans............................................... 98
12.15 Confidentiality................................................. 98
12.16 Bank Register................................................... 99
SECTION 13. Guaranty........................................................... 99
13.01 The Guaranty.................................................... 99
13.02 Bankruptcy...................................................... 100
13.03 Nature of Liability............................................. 100
13.04 Independent Obligation.......................................... 100
13.05 Authorization................................................... 101
13.06 Reliance........................................................ 101
13.07 Subordination................................................... 101
13.08 Waiver.......................................................... 101
13.09 Limitation on Enforcement....................................... 102
ANNEX I -- Commitments
ANNEX II -- Bank Addresses
ANNEX III -- Schedule of Subsidiaries
ANNEX IV -- Real Properties
ANNEX V -- Existing Indebtedness
ANNEX VI -- Existing Liens
ANNEX VII -- Existing Advances, Loans and Investments
ANNEX VIII -- Existing Letters of Credit
ANNEX IX -- Underground Storage Tanks
(iv)
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ANNEX X -- Third-Party Rights
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B-1 -- Form of Term Note
EXHIBIT B-2 -- Form of Revolving Note
EXHIBIT C-1 -- Form of Opinion of Jones, Day, Reavis & Pogue Special
Counsel to Holdings and its Subsidiaries
EXHIBIT C-2 -- Form of Opinion of General Counsel to Borrower
EXHIBIT C-3 -- Form of Opinion of White & Case, Special Counsel to the
Banks
EXHIBIT D -- Form of Officers' Certificate
EXHIBIT E -- Form of Subsidiary Guaranty
EXHIBIT F -- Form of Pledge Agreement
EXHIBIT G -- Form of Security Agreement
EXHIBIT H -- Form of Solvency Certificate
EXHIBIT I -- Form of Consent Letter
EXHIBIT J -- Form of Assignment Agreement
EXHIBIT K -- Form of Section 4.04(b)(ii) Certificate
(v)
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CREDIT AGREEMENT, dated as of June__, 1996, among INTERSTATE
HOTELS COMPANY ("Holdings"), a Pennsylvania corporation, INTERSTATE HOTELS
CORPORATION (the "Borrower"), a Pennsylvania corporation, the lending
institutions listed from time to time on Annex I hereto (each a "Bank" and,
collectively, the "Banks") and CREDIT LYONNAIS NEW YORK BRANCH, as
administrative agent (the "Administrative Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks 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 Commitments. Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees to make a loan or loans (each a
"Loan" and, collectively, the "Loans") to the Borrower, which Loans shall be
drawn, to the extent such Bank has a commitment under such Facility, under the
Term Facility or the Revolving Facility, as set forth below:
(a) Loans under the Term Facility (each a "Term Loan" and,
collectively, the "Term Loans"): (i) shall be made pursuant to a single
Borrowing on the Initial Borrowing Date; (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that all Term Loans made by all Banks pursuant to the
same Borrowing shall, unless otherwise specifically provided herein,
consist entirely of Term Loans of the same Type; and (iii) shall not
exceed in initial aggregate principal amount for any Bank the Term
Commitment, if any, of such Bank as in effect on the Initial Borrowing
Date. Once repaid, Term Loans borrowed hereunder may not be reborrowed.
(b) Loans under the Revolving Facility (each a "Revolving
Loan" and, collectively, the "Revolving Loans"): (i) may be made at any
time and from time to time on and after the Initial Borrowing Date and
prior to the RF Maturity Date; (ii)
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except as hereinafter provided, may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that (x) prior to the Syndication Date,
Revolving Loans may only be incurred as Eurodollar Loans on the first
day of a PSD Interest Period and (y) all Revolving Loans made as part
of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Revolving Loans of the same Type; (iii) may be
repaid and reborrowed in accordance with the provisions hereof; and
(iv) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product at such
time of (x) such Bank's RF Percentage and (y) the sum of the Letter of
Credit Outstandings, equals the Revolving Commitment of such Bank at
such time. In addition the aggregate outstanding principal amount of
all Acquisition Loans for all Banks at any time shall not exceed the
Acquisition Sublimit at such time.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing shall not be less than the Minimum Borrowing Amount for
such Borrowing. More than one Borrowing may be incurred on any day, provided
that at no time shall there be outstanding more than eight Borrowings of
Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
incur Term Loans or Revolving Loans, it shall give the Administrative Agent at
its Notice Office, (x) prior to 1:00 P.M. (New York time), at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of Eurodollar Loans and (y) prior to 10:00 A.M. (New
York time) on the proposed date thereof written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Base Rate Loans to be made
hereunder. Each such notice (each such notice, a "Notice of Borrowing") (or the
written confirmation) shall be in the form of Exhibit A-1 and (y) shall be
irrevocable and shall specify: (i) the Facility pursuant to which such Borrowing
is being made; (ii) the aggregate principal amount of the Loans to be made
pursuant to such Borrowing; (iii) the date of Borrowing (which shall be a
Business Day); and (iv) whether the respective Borrowing shall consist of Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period to
be initially applicable thereto. The Administrative Agent shall promptly give
each Bank written notice (or telephonic notice promptly confirmed in writing) of
each proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf
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of the Borrower. In each such case, the Administrative Agent's record of the
terms of such telephonic notice shall be conclusive absent manifest error.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing, each Bank will
make available its pro rata share, if any, of each Borrowing requested to be
made on such date in the manner provided below. All amounts shall be made
available to the Administrative Agent in U.S. dollars and immediately available
funds at the Payment Office and the Administrative Agent promptly will make
available to the Borrower by depositing to its account at the Payment Office the
aggregate of the amounts so made available in the type of funds received. Unless
the Administrative Agent shall have been notified by any Bank prior to the date
of Borrowing that such Bank does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume that such Bank has made such
amount available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Bank and the Administrative Agent has made
available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount from such Bank. If such Bank 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 immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Bank 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 made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Bank, the overnight Federal Funds Effective Rate or (y) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 1.08, for the respective Loans.
(b) Nothing herein and no subsequent termination of the
Commitments pursuant to Section 3.02 or 3.03 shall be deemed to relieve any Bank
from its obligation to fulfill its commitments hereunder and in existence from
time to time or to prejudice any rights which the Borrower may have against any
Bank as a result of any default by such Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made to it by each Bank shall be evidenced: (i)
if Term Loans, by a promissory note substantially in the form of Exhibit B-1
with blanks appropriately completed in conformity herewith (each a "Term Note"
and, collectively, the "Term Notes"); and (ii) if Revolving Loans, by a
promissory note substantially in the form of Exhibit B-2
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with blanks appropriately completed in conformity herewith (each a "Revolving
Note" and, collectively, the "Revolving Notes").
(b) The Term Note issued to a Bank shall: (i) be executed by
the Borrower; (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date; (iii) be in a stated principal amount equal to the Term
Commitment of such Bank (or in the case of a new Note issued pursuant to Section
12.04, the Term Loans evidenced thereby at the time of issuance) and be payable
in the principal amount of Term Loans evidenced thereby; (iv) mature on the TF
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 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 Revolving Note issued to a Bank shall: (i) be executed
by the Borrower; (ii) be payable to the order of such Bank and be dated the
Initial Borrowing Date; (iii) be in a stated principal amount equal to the
Revolving Commitment of such Bank and be payable in the principal amount of
Revolving Loans evidenced thereby; (iv) mature on the RF 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 mandatory repayment as provided in Section 4.02; and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) Each Bank 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 make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.06 Conversions. The Borrower shall have the option to
convert on any Business Day all or a portion at least equal to the applicable
Minimum Borrowing Amount of the outstanding principal amount of the Loans owing
pursuant to a single Facility into a Borrowing or Borrowings pursuant to such
Facility of the other Type of Loan, provided that: (i) no conversion of Base
Rate Loans into Eurodollar Loans may be made prior to the Syndication Date
except for a conversion made on the first day of a PSD Interest Period; (ii) no
partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto; (iii)
Base Rate Loans may only be converted into Eurodollar Loans if no Default under
Section 9.01 or Event of Default is in existence on the date of the conversion
unless the Required Banks otherwise agree; and (iv) Borrowings of Eurodollar
Loans resulting from this Section 1.06 shall be limited in numbers as provided
in Section 1.02. Each such conversion shall be effected by the Borrower giving
the Administrative Agent at its Notice Office, prior to 1:00 P.M. (New
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York time), at least three Business Days' (or one Business Day's, in the case of
a conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") specifying the
Loans to be so converted, the Type of Loans to be converted into and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Bank
prompt notice of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans or
Revolving Loans shall be made by the Banks pro rata on the basis of their Term
Commitments or Revolving Commitments, as the case may be. It is understood that
no Bank shall be responsible for any default by any other Bank in its obligation
to make Loans hereunder and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other Bank
to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable Percentage plus the Base Rate in effect from time
to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Percentage plus the relevant Eurodollar Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall bear interest at a rate per annum
equal to the Base Rate in effect from time to time plus the sum of (i) 2% and
(ii) the Applicable Percentage then in effect for Base Rate Loans, provided that
each Eurodollar Loan shall bear interest after maturity (whether by acceleration
or otherwise) until the end of the Interest Period then applicable thereto at a
rate per annum equal to 2% in excess of the rate of interest applicable thereto
at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, monthly in arrears on the last
Business Day of each calendar month, (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 the dates which are successively
three months after the commencement of such Interest Period and (iii) in respect
of each Loan, on any prepayment or conversion (on the amount prepaid or
converted), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
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(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest
rate for any Borrowing of Eurodollar Loans for any Interest Period, shall
promptly notify the Borrower and the Banks thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the initial
Interest Period applicable thereto) or prior to 1:00 P.M. (New York time) on the
third Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three or six month
period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) 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 that if any Interest Period
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;
(iv) subject to the foregoing clauses (i) through (iii), only a
one month Interest Period shall be available to be selected prior to
the Syndication Date, with all Term Loans constituting Eurodollar Loans
during said period to be outstanding pursuant to a single Borrowing and
all Revolving Loans constituting Eurodollar Loans during such period to
be outstanding pursuant to a single Borrowing, with both such
Borrowings to commence and end on the same day;
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(v) no Interest Period with respect to any Borrowing of
Revolving Loans may (x) extend beyond any date upon which a Scheduled
RF Reduction is required to be made if after giving affect to the
selection of such Interest Period, the sum of (I) the aggregate
principal amount of Revolving Loans maintained as Eurodollar Loans with
Interest Periods ending after such date plus (II) Letter of Credit
Outstandings under Letters of Credit with expiry dates beyond such date
would exceed the Total Revolving Commitment after giving effect to such
reduction or (y) extend beyond the RF Maturity Date;
(vi) no Interest Period with respect to any Borrowing of Term
Loans may (x) extend beyond any date upon which a Scheduled Repayment
is required to be made if, after giving effect to the selection of such
Interest Period, the aggregate principal amount of Term Loans
maintained as Eurodollar Loans with Interest Periods ending after such
date would exceed the aggregate principal amount of Term Loans
permitted to be outstanding after such Scheduled Repayment or (y)
extend beyond the TF Maturity Date; and
(vii) no Interest Period may be elected at any time when a
Default under Section 9.01 or an Event of Default is then in existence
unless the Required Banks otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower
has failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of 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
(x) in the case of clause (i) below, the Administrative Agent or (y) in the case
of clauses (ii) and (iii) below, any Bank shall have determined on a reasonable
basis (which determination shall, absent manifest error, be final and conclusive
and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the
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 Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder in an amount
which such Bank deems material with respect to any Eurodollar Loans
(other than any increased cost or reduction in the amount received or
receivable resulting from the imposition of or
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a change in the rate of taxes or similar charges) because of (x) any
change since the Effective Date in any applicable law, governmental
rule, regulation, guideline, order 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, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Eurodollar Rate pursuant
to the definition thereof) and/or (y) other circumstances adversely
affecting the interbank Eurodollar market or the position of such Bank
in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Bank in good
faith with any change since the Effective Date in any law, governmental
rule, regulation, guideline or order, or the interpretation or
application thereof, or would conflict with any thereof not having the
force of law but with which such Bank customarily complies;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall (x) on such date and (y) within 10 Business Days of
the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Banks 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 shall be deemed rescinded
by the Borrower or, in the case of a Notice of Borrowing, shall, at the option
of the Borrower, be deemed converted into a Notice of Borrowing for Base Rate
Loans to be made on the date of Borrowing contained in such Notice of Borrowing,
(y) in the case of clause (ii) above, the Borrower shall pay to such Bank, 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
Bank shall determine) as shall be required to compensate such Bank for such
increased costs or reductions in amounts receivable hereunder (a written notice
as to the additional amounts owed to such Bank, showing the basis for the
calculation thereof, which basis must be reasonable, submitted to the Borrower
by such Bank shall, absent manifest error, be final and conclusive and binding
upon all 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.
(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 pursuant to Section 1.10(a)(iii) the
Borrower shall) either (i) if the affected
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Eurodollar Loan is then being made pursuant to a Borrowing, by giving the
Administrative Agent telephonic notice (confirmed promptly in writing) thereof
on the same date that the Borrower was notified by a Bank pursuant to Section
1.10(a)(ii) or (iii), cancel said Borrowing, convert the related Notice of
Borrowing into one requesting a Borrowing of Base Rate Loans or require the
affected Bank to make its requested Loan as a Base Rate Loan, or (ii) if the
affected Eurodollar Loan is then outstanding, upon at least one Business Day's
notice to the Administrative Agent, require the affected Bank to convert each
such Eurodollar Loan into a Base Rate Loan, provided that if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the Effective
Date, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Bank or its parent corporation with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, in each case made subsequent to
the Effective Date, has or would have the effect of reducing by an amount
reasonably deemed by such Bank to be material the rate of return on such Bank's
or its parent corporation's capital or assets as a consequence of such Bank's
commitments or obligations hereunder to a level below that which such Bank or
its parent corporation could have achieved but for such adoption, effectiveness,
change or compliance (taking into consideration such Bank's or its parent
corporation's policies with respect to capital adequacy), then from time to
time, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank or its parent corporation for
such reduction. Each Bank, upon determining in good faith 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 set forth the basis
of the calculation of such additional amounts, which basis must be reasonable,
although the failure to give any such notice shall not release or diminish any
of the Borrower's obligations to pay additional amounts pursuant to this Section
1.10(c) upon the subsequent receipt of such notice. No Bank shall demand
compensation for any reduction referred to in this Section 1.10(c) if it shall
not at the time be the general policy or practice of such Bank to demand such
compensation in similar circumstances under comparable provisions of other
credit agreements.
(d) Notwithstanding anything in this Agreement to the
contrary, no Bank shall be entitled to compensation under Section 1.10, 2.05 or
4.04 for any amounts incurred or accruing more than 180 days prior to the giving
of notice to the Borrower of additional costs of the type described in such
Sections.
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1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the detailed basis for
requesting and the method of calculating 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 Bank to fund its Eurodollar Loans)
which such Bank may sustain: (i) if for any reason (other than a default by such
Bank or the Administrative Agent) a Borrowing of 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 or conversion of any of its Eurodollar
Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any of its 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
Eurodollar Loans when required by the terms of this Agreement or (y) an election
made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office for any Loans or Commitments
affected by such event, provided that such designation is made on such terms
that such Bank 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 any such Section. Nothing in this Section 1.12 shall
affect or postpone any of the obligations of the Borrower or the right of any
Bank provided in Section 1.10, 2.05 or 4.04.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Initial Borrowing Date and
prior to the RF Maturity Date to issue, for the account of the Borrower and in
support of (x) trade obligations, workmen's compensation and other obligations
of the Borrower or any Subsidiary (other than a Specified Subsidiary) incurred
in the ordinary course of its business and/or (y) such other obligations of the
Borrower or any Subsidiary (other than a Specified Subsidiary) to any other
Person that are acceptable to the Administrative Agent and such Letter of Credit
Issuer, and subject to and upon the terms and conditions herein set forth such
Letter of Credit Issuer agrees to issue from time to time, irrevocable letters
of credit in such form as may be approved by such Letter of Credit Issuer and
the Administrative Agent (each such letter of credit, and each Existing Letter
of Credit described in Section 2.01(d), a "Letter of Credit" and collectively,
the "Letters of Credit").
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(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $5,000,000 or (y) when added
to the aggregate principal amount of all Revolving Loans then outstanding, an
amount equal to the Total Revolving Commitment at such time and (ii) each Letter
of Credit shall have an expiry date occurring not later than one year after such
Letter of Credit's date of issuance, although any Letter of Credit may be
renewable for successive periods of up to 12 months, but not beyond the Business
Day next preceding the RF Maturity Date, on terms acceptable to the
Administrative Agent and the relevant Letter of Credit Issuer.
(c) Notwithstanding the foregoing, in the event a Bank Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless such Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Bank or Banks, including by cash collateralizing such Defaulting Bank's or
Banks' RF Percentage of the Letter of Credit Outstandings.
(d) Annex VIII hereto contains a description of all letters of
credit outstanding on, and to continue in effect after, the Initial Borrowing
Date. Each such letter of credit issued by a bank that becomes a Bank under this
Agreement prior to the Syndication Date (each, an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement,
issued, for purposes of Section 2.04(a), on the date such bank so becomes a Bank
(or, if later, the Initial Borrowing Date), and the Borrower, the Administrative
Agent and the Banks hereby agree that, from and after such date, the terms of
this Agreement shall apply to such Letters of Credit, superseding any other
agreement theretofore applicable to them.
2.02 Letter of Credit Requests; Notices of Issuance. (a)
Whenever it desires that a Letter of Credit be issued, the Borrower shall give
the Administrative Agent and the Letter of Credit Issuer written notice
(including by way of telecopier) in the form of Exhibit A-2 thereof prior to
1:00 P.M. (New York time) at least five Business Days (or such shorter period as
may be acceptable to the relevant Letter of Credit Issuer) prior to the proposed
date of issuance (which shall be a Business Day) (each a "Letter of Credit
Request"), which Letter of Credit Request shall include an application for such
Letter of Credit and any other documents that such Letter of Credit Issuer
customarily requires in connection therewith. The Administrative Agent shall
promptly notify each Bank of each Letter of Credit Request.
(b) Each Letter of Credit Issuer shall, on the date of each
issuance of a Letter of Credit by it, give the Administrative Agent, each Bank
and the Borrower written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of the Letter of Credit or
Letters of Credit issued by it. Each Letter of Credit
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Issuer shall provide to the Administrative Agent a monthly summary describing
each Letter of Credit issued by such Letter of Credit Issuer and then
outstanding.
2.03 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse each Letter of Credit Issuer, by making
payment to the Administrative Agent in immediately available funds at the
Payment Office, for any payment or disbursement made by such Letter of Credit
Issuer under any Letter of Credit (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") immediately after, and in any event on the date
on which, such Letter of Credit Issuer notifies the Administrative Agent and the
Borrower of such payment or disbursement (which notice to the Borrower shall be
delivered reasonably promptly after any such payment or disbursement), with
interest on the amount so paid or disbursed by such Letter of Credit Issuer, to
the extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
not including the date such Letter of Credit Issuer is reimbursed therefor at a
rate per annum which shall be the rate then applicable to Base Rate Loans (plus
an additional 2% per annum if not reimbursed by the third Business Day after the
date of such payment or disbursement), such interest also to be payable on
demand.
(b) The Borrower's obligation under this Section 2.03 to
reimburse each Letter of Credit Issuer 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 such Letter
of Credit Issuer, the Administrative Agent, any other Letter of Credit Issuer or
any Bank, including, without limitation, any defense based upon the failure of
any drawing under a Letter of Credit to conform to the terms of the Letter of
Credit or any non-application or misapplication by the beneficiary of the
proceeds of such drawing, provided however that the Borrower shall not be
obligated to reimburse a Letter of Credit Issuer for any wrongful payment made
by such Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
such Letter of Credit Issuer.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each Bank, and
each Bank (each a "Participant") shall be deemed irrevocably and unconditionally
to have purchased and received from such Letter of Credit Issuer, without
recourse or warranty, an undivided interest and participation, to the extent of
such Bank's RF Percentage, in such Letter of Credit, each substitute letter of
credit, each drawing made thereunder and the obligations of the Borrower under
this Agreement with respect thereto (although Letter of Credit Fees shall be
payable directly to the Administrative Agent for the account of the Banks as
provided in Section 3.01(b) and the Participants shall have no right to receive
any portion of any Facing
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Fees) and any security therefor or guaranty pertaining thereto. Upon any change
in the Revolving Commitments of the Banks pursuant to Section 12.04(b), 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 RF Percentages of the assigning and
assignee Bank.
(b) In determining whether to pay under any Letter of Credit,
a Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit. Any action taken
or omitted to be taken by a Letter of Credit Issuer 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 Letter of Credit Issuer any
resulting liability.
(c) In the event that a Letter of Credit Issuer makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to such Letter of Credit Issuer pursuant to Section 2.03(a),
such Letter of Credit Issuer shall promptly notify the Administrative Agent, and
the Administrative Agent shall promptly notify each Participant of such failure,
and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of such Letter of Credit Issuer, the amount
of such Participant's RF Percentage of such payment in U.S. dollars and in same
day funds, provided, however, that no Participant shall be obligated to pay to
the Administrative Agent its RF Percentage of such unreimbursed amount for any
wrongful payment made by such Letter of Credit Issuer under a Letter of Credit
as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer. If the Administrative
Agent so notifies any Participant required to fund a payment under a Letter of
Credit prior to 11:00 A.M. (New York time) on any Business Day, such Participant
shall make available to the Administrative Agent for the account of the relevant
Letter of Credit Issuer such RF's Revolving 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 RF Percentage of the amount of such
payment available to the Administrative Agent for the account of the relevant
Letter of Credit Issuer, such Participant agrees to pay to the Administrative
Agent for the account of such Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Administrative Agent for the account of such
Letter of Credit Issuer at the Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
relevant Letter of Credit Issuer its RF Percentage of any payment under any
Letter of Credit shall not relieve any other Participant of its obligation
hereunder to make available to the Administrative Agent for the account of such
Letter of Credit Issuer its RF Percentage of any payment under any Letter of
Credit on the date required, as specified
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above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Administrative Agent for the account of
such Letter of Credit Issuer such other Participant's RF Percentage of any such
payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its RF Percentage thereof, in U.S. dollars and in
same day funds, an amount equal to such Participant's RF Percentage of the
principal amount thereof and interest thereon accruing after the purchase of the
respective participations.
(e) The obligations of the Participants to make payments to
the Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other 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, set-off, defense or other
right which the Borrower 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 Letter of Credit Issuer, any Bank, or 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
and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under
the 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 Increased Costs. If after the Effective Date, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Letter of Credit Issuer or any Bank
with any request or directive (whether or not having the force of law) by any
such authority, central bank or comparable agency (in each case made subsequent
to the Effective Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Bank's participation
therein, or (ii) shall impose on such Letter of Credit Issuer or any Bank any
other conditions affecting this Agreement, any Letter of Credit or such Bank's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Bank of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Bank hereunder
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Borrower by such Letter of Credit Issuer or
such Bank (a copy of which notice shall be sent by such Letter of Credit Issuer
or such Bank to the Administrative Agent), the Borrower shall pay to such Letter
of Credit Issuer or such Bank such additional amount or amounts as will
compensate any such Letter of Credit Issuer or such Bank for such increased cost
or reduction. A certificate submitted to the Borrower by any Letter of Credit
Issuer or any Bank, as the case may be (a copy of which certificate shall be
sent by such Letter of Credit Issuer or such Bank to the Administrative Agent),
setting forth the basis for the determination of such additional amount or
amounts necessary to compensate any Letter of Credit Issuer or such Bank as
aforesaid shall be conclusive and binding on the Borrower absent manifest error,
although the failure to deliver any such certificate shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 2.05.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent a Commitment Commission ("Commitment Commission") for the
account of each Non-Defaulting Bank for the period from and including the
Effective Date to but not including the date the Total Revolving Commitment has
been terminated, computed at a rate equal to 3/8 of 1% per annum on the average
daily Unutilized Revolving Commitment of such Bank. Such Commitment Commission
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December of each year, commencing September, 1996,
and on the date upon which the Total Revolving Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent,
for the account of each Non-Defaulting Bank, pro rata on the basis of its RF
Percentage, a fee in
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respect of each Letter of Credit (the "Letter of Credit Fee") computed at the
rate of 2% per annum on the average daily Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December of
each year, commencing September, 1996, and on the date upon which the Total
Revolving Commitment is terminated.
(c) The Borrower agrees to pay to the Administrative Agent for
the account of each Letter of Credit Issuer a fee in respect of each Letter of
Credit issued by it (the "Facing Fee") computed at the rate of 1/4 of 1% per
annum on the average daily Stated Amount of such Letter of Credit. Accrued
Facing Fees shall be due and payable quarterly in arrears on the last Business
Day of each March, June, September and December of each year, commencing
September, 1996, and on the date upon which the Total Revolving Commitment is
terminated.
(d) The Borrower agrees to pay directly to each Letter of
Credit Issuer upon each issuance of, drawing under, and/or amendment of, a
Letter of Credit issued by it such amount as shall at the time of such issuance,
drawing or amendment be the administrative charge which such Letter of Credit
Issuer is customarily charging for issuances of, drawings under or amendments
of, letters of credit issued by it.
(e) The Borrower shall pay to the Administrative Agent on the
Initial Borrowing Date and thereafter for its own account and/or for
distribution to the Banks such fees as heretofore agreed by the Borrower and the
Administrative Agent.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, without premium or penalty, to terminate or partially
reduce the Unutilized Total Revolving Commitment, provided that (i) any such
termination shall apply to proportionately and permanently reduce the Revolving
Commitment, if any, of each of the Banks, (ii) any partial reduction pursuant to
this Section 3.02 shall be in the amount of at least $5,000,000 (or, if greater,
in integral multiples of $1,000,000) and (iii) each such reduction shall reduce
the then remaining Scheduled RF Reductions on a pro rata basis (based on the
then remaining amount of each such Scheduled RF Reduction).
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
Commitment (and the Term Commitment and Revolving Commitment of each Bank) shall
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terminate on the Expiration Date unless the Initial Borrowing Date has occurred
on or before such date.
(b) The Total Term Commitment shall terminate in its entirety
on the Initial Borrowing Date (after giving effect to the making of Term Loans
on such date).
(c) The Total Revolving Commitment shall be reduced in an
amount of $5,000,000 on each of the last Business Day of each March, June,
September and December commencing September 2001 (each such reduction, a
"Scheduled RF Reduction").
(d) On each date upon which a mandatory repayment of Loans
pursuant to Section 4.02(A)(d), (e), (f), (g), (h) or (i) is required, or would
be required if any Acquisition Loans or Term Loans were then outstanding, the
Total Revolving Commitment shall be permanently reduced by the amount, if any,
by which the amount that would be required to be repaid pursuant to said
Sections if an unlimited amount of Acquisition Loans and Term Loans were
actually then outstanding exceeds the aggregate principal amount of Acquisition
Loans and Term Loans then outstanding.
(e) The Total Revolving Commitment (and the Revolving
Commitment of each Bank) shall terminate on the earlier of (x) the RF Maturity
Date and (y) the date on which a Change of Control occurs.
(f) Each partial reduction of the Total Revolving Commitment
provided for in this Section 3.03 shall apply pro rata to the Revolving
Commitment (if any) of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay Loans, in whole or in part, without premium or penalty, from time to
time on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent at the Payment Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loans, whether such
Loans are Term Loans or Revolving Loans, the amount of such prepayment and (in
the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made,
which notice shall be received by the Administrative Agent by 1:00 P.M. (New
York time) one Business Day prior to the date of such prepayment (and which
notice shall promptly be transmitted by the Administrative Agent to each of the
Banks); (ii) each partial prepayment of any Borrowing shall be in an aggregate
principal amount of at least $5,000,000, provided that no partial prepayment of
Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable
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thereto; (iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; and (iv) each prepayment
of Term Loans pursuant to this Section 4.01 shall reduce the then remaining
Scheduled Repayments on a pro rata basis (based upon the then remaining
principal amount of each such Scheduled Repayment).
4.02 Mandatory Prepayments.
(A) Requirements:
(a) If on any date (after giving effect to any other payments
on such date) the sum of (i) the aggregate outstanding principal amount of
Revolving Loans plus (ii) the aggregate amount of Letter of Credit Outstandings
exceeds the Total Revolving Commitment as then in effect, the Borrower shall
repay on such date that principal amount of Revolving Loans and, after Revolving
Loans have been paid in full, Unpaid Drawings, in an aggregate amount equal to
such excess. If, after giving effect to the prepayment of Revolving Loans and
Unpaid Drawings, the aggregate amount of Letter of Credit Outstandings exceeds
the Total Revolving Commitment as then in effect, the Borrower shall pay to the
Administrative Agent an amount in cash and/or Cash Equivalents equal to such
excess and the Administrative Agent shall hold such payment as security for the
obligations of the Borrower hereunder pursuant to a cash collateral agreement to
be entered into in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower (which shall permit certain investments in
Cash Equivalents reasonably satisfactory to the Administrative Agent and the
Borrower until the proceeds are applied to the secured obligations). In
addition, if on any date (after giving effect to any other payments on such
date) the aggregate outstanding principal amount of Acquisition Loans exceeds
the Acquisition Sublimit then in effect, the Borrower shall repay on such date
that principal amount of Acquisition Loans in an aggregate amount equal to such
excess.
(b) On June 1 of each year commencing June 1, 1997, if a
Clean-Down Period shall not have occurred since the preceding July 1, the
Borrower shall prepay the principal amount of Working Capital Loans in an amount
(if any) necessary to reduce the sum of the aggregate outstanding principal
amount of Working Capital Loans plus the Letter of Credit Outstandings to not
more than $10,000,000, with the outstanding principal amount of Working Capital
Loans plus the Letter of Credit Outstandings not to exceed such $10,000,000 sum
until the Clean-Down Period has ended.
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(c) On each date set forth below the Borrower shall be required to
repay the principal amount of Term Loans as is set forth opposite such date
(each such repayment, a "Scheduled Repayment"):
Scheduled Repayment Date Amount
------------------------ -------
September 30, 1996 $1,250,000
December 31, 1996 1,250,000
March 31, 1997 1,250,000
June 30, 1997 1,250,000
September 30, 1997 2,500,000
December 31, 1997 2,500,000
March 31, 1998 2,500,000
June 30, 1998 2,500,000
September 30, 1998 3,750,000
December 31, 1998 3,750,000
March 31, 1999 3,750,000
June 30, 1999 3,750,000
September 30, 1999 6,250,000
December 31, 1999 6,250,000
March 31, 2000 6,250,000
June 30, 2000 6,250,000
September 30, 2000 8,750,000
December 31, 2000 8,750,000
March 31, 2001 8,750,000
June 30, 2001 8,750,000
September 30, 2001 10,000,000
December 31, 2001 10,000,000
March 31, 2002 10,000,000
June 30, 2002 10,000,000
September 30, 2002 11,250,000
December 31, 2002 11,250,000
March 31, 2003 11,250,000
TF Maturity Date 31,250,000
(d) On or prior to the third Business Day following the date of
receipt thereof by Holdings and/or any of its Subsidiaries of the Cash Proceeds
from any Asset Sale, an amount equal to 100% of the Net Cash Proceeds then
received from such Asset Sale shall be applied as a mandatory repayment of
principal of (x) first, the then outstanding Acquisition Loans and (y) second,
once no Acquisition Loans remain outstanding, the then outstanding Term Loans
provided that to the extent any such Asset Sale constitutes a
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Specified Asset Sale then the mandatory repayments required to be made with the
Net Cash Proceeds thereof pursuant to this clause (d) shall be applied first to
Term Loans and second to Acquisition Loans.
(e) On the date of the receipt thereof by Holdings and/or any of its
Subsidiaries an amount equal to 100% of the cash proceeds (net of underwriting
discounts and commissions and other customary fees and costs associated
therewith) from the incurrence of Indebtedness for borrowed money by Holdings or
any of its Subsidiaries (other than Indebtedness permitted by Section 8.04 as in
effect on the Effective Date but excluding from such exception Non-Recourse Debt
that refinances properties financed by Acquisition Loans) shall be applied as a
mandatory repayment of principal of (x) first, the then outstanding Acquisition
Loans and (y) second, once no Acquisition Loans remain outstanding, the then
outstanding Term Loans.
(f) On the date of the receipt thereof by Holdings, an amount equal
to 100% of the cash proceeds (net of underwriting discounts and commissions and
other customary fees and costs associated therewith) from any sale or issuance
of equity by Holdings after the Initial Borrowing Date (other than (i) any over
allotment option related to the IPO and (ii) any sale or issuance to management
or employees) shall be applied as a mandatory repayment of principal of (x)
first, the then outstanding Acquisition Loans and (y) second, once no
Acquisition Loans remain outstanding, the then outstanding Term Loans.
(g) On each date which is 90 days after the last day of each fiscal
year of Holdings (commencing with the fiscal year ending on December 31, 1996),
an amount equal to 50% of Excess Cash Flow for such fiscal year (which in the
case of the first fiscal year shall be for the period from the Initial Borrowing
Date to the end of such first fiscal year) shall be applied as a mandatory
repayment of principal of (x) first, the then outstanding Acquisition Loans and
(y) second, once no Acquisition Loans remain outstanding, the then outstanding
Term Loans.
(h) On the date of the receipt thereof by Holdings or any of its
Subsidiaries, an amount equal to 100% of the net cash proceeds constituting
termination fees under any Management Contract shall be applied as a mandatory
repayment of principal of (x) first, the then outstanding Acquisition Loans and
(y) second, once no Acquisition Loans remain outstanding, the then outstanding
Term Loans, provided that to the extent the affected Management Contract was in
effect on the Effective Date (and notwithstanding any subsequent modification or
extension thereof), then the mandatory repayments required to be made with the
termination fees paid thereunder pursuant to this clause (h) shall be applied
first to Term Loans and second to Acquisition Loans, provided further that any
such net cash proceeds aggregating less than $500,000 for a Management Contract
that are received in any fiscal year of Holdings shall not be required to be
used to repay Loans
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pursuant to this clause (h) until such time as all such exempted net cash
proceeds aggregate $500,000 in such fiscal year and, in such event, only to the
extent of such excess.
(i) On the date of the receipt thereof by the Borrower, an amount
equal to 100% of a payment received by the Borrower under the CGL Participation
relating to principal indebtedness (and not to interest thereon) shall be
applied as a mandatory repayment of principal of (x) first, the then outstanding
Term Loans and (y) second, once no Term Loans remain outstanding, the
Acquisition Loans.
(j) On the date of which a Change of Control occurs, the then
outstanding principal amount of Term Loans, if any, shall become due and payable
in full.
(B) Application:
(a) Each mandatory repayment of Term Loans required pursuant to
Section 4.02(A)(d), (e), (f), (g), (h) or (i) shall be applied to the repayment
of the then remaining Scheduled Repayments on a pro rata basis (based upon the
then remaining principal amount of each such Scheduled Repayment).
(b) With respect to each repayment of Loans required by this
Section 4.02, the Borrower shall designate the Types of Loans which are to be
repaid and the specific Borrowing(s) under the affected Facility pursuant to
which made, provided that (i) the Borrower shall first so designate all Loans of
the respective Facility that are Base Rate Loans and Eurodollar Loans with
Interest Periods ending on the date of repayment prior to designating any other
Eurodollar Loans of such Facility for repayment, (ii) if the outstanding
principal amount of Eurodollar Loans made pursuant to a Borrowing is reduced
below the applicable Minimum Borrowing Amount as a result of any such
prepayment, then all the Loans outstanding pursuant to such Borrowing shall be
converted into Base Rate Loans, and (iii) each prepayment of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans. 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 with a view, but no obligation, to minimize breakage costs
owing under Section 1.11.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
the Banks entitled thereto, not later than 1:00 P.M. (New York time) on the date
when due and shall be made in immediately available funds and in lawful money of
the United States of America at the Payment Office, it being understood that
written notice by the Borrower to the Administrative Agent to make a payment
from the funds in the Borrower's account at the Payment Office shall constitute
the making of such payment to the extent of such funds held in such account. Any
pay-
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ments under this Agreement which are made later than 1:00 P.M. (New York time)
shall be deemed to have been made on the next succeeding Business Day. Whenever
any payment to be made hereunder 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 during such extension at the applicable rate in effect immediately prior
to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as provided for 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 Bank pursuant to the laws of the jurisdiction under which such
Bank is organized or the jurisdiction in which the principal office or
applicable lending office of such Bank is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect to such
nonexcluded taxes, levies, imposts, duties, fees, assessments or other charges
(all such nonexcluded taxes, levies, imposts, duties, fees assessments or other
charges being referred to collectively as "Taxes"). 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
hereunder, under any Note or under any other Credit Document, 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 or in such other Credit Document. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, the
Borrower agrees to reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which such bank is organized or in
which the principal office or applicable lending office of such Bank is located
or under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such bank is organized or in which the principal office or
applicable lending office of such Bank is located and for any withholding of
income or similar taxes imposed by the United States of America as such Bank
shall determine are payable by, or withheld from, such Bank in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Borrower will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes, or any withholding or deduction on
account thereof, is due pursuant to applicable law certified copies of tax
receipts, or other evidence satisfactory to the Bank, evidencing such payment by
the Borrower. The Borrower will indemnify and hold harmless the Administrative
Agent and
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each Bank, and reimburse the Administrative Agent or such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid or withheld
by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the case of a Bank that is an assignee or transferee
of an interest under this Agreement pursuant to Section 12.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer and such Bank is in compliance with the provisions of
this Section 4.04(b)), on the date of such assignment or transfer to such Bank,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Bank's entitlement to
a complete exemption from United States withholding tax with respect to payments
to be made under this Agreement, any Note or any other Credit Document, or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit K (any such certificate, a Section 4.04(b)(ii) Certificate) and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Credit Document.
In addition, each Bank agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 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 Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note or any other Credit Document,
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 Bank
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 12.04(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 other 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 Bank which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for United States federal income tax purposes
and which has not provided to the Borrower such 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) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United States or any
additional amounts with respect thereto (I) if
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such Bank 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 Bank 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
specifically provided for in Section 12.04(b), the Borrower agrees to pay
additional amounts and indemnify each Bank 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 Taxes deducted or withheld by it as
described in the previous 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 interpretation thereof, relating to the deducting
or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent.
5.01 Conditions Precedent to Initial Borrowing Date. The obligation
of the Banks to make Loans, and of the Letter of Credit Issuer to issue Letters
of Credit, on the Initial Borrowing Date is subject to the satisfaction of each
of the following conditions at such time:
(a) Effectiveness; Notes. On or prior to the Initial Borrowing
Date, (i) the Effective Date shall have occurred and (ii) there
shall have been delivered to the Administrative Agent for the
account of each Bank the appropriate Term Note and Revolving Note
executed by the Borrower, in each case, in the amount, maturity and
as otherwise provided herein.
(b) Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Banks and dated the Initial
Borrowing Date, from (i) Jones, Day, Reavis & Pogue, special counsel
to Holdings and its Subsidiaries, which opinion shall cover the
matters covered in Exhibit C-1 hereto, (ii) Marvin I. Droz, Esq.,
General Counsel of Holdings, which opinion shall cover the matters
contained in Exhibit C-2 hereto, (iii) White & Case, special counsel
to the Banks, which opinion shall cover the matters contained in
Exhibit C-3 hereto and (iv) local counsel satisfactory to the
Administrative Agent covering the perfection of the Liens granted
pursuant to the Security Documents and such other matters incident
to the transactions contemplated by this Agreement as the
Administrative Agent may reasonably request, in such jurisdictions
as the Administrative Agent may reasonably specify, all such
opinions to be in form and substance reasonably satisfactory to the
Administrative Agent.
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(c) Corporate Proceedings. (i) On the Initial Borrowing Date,
the Administrative Agent shall have received from (x) each Credit
Party a certificate, dated the Initial Borrowing Date, signed by the
President or any Vice-President of such Credit Party in the form of
Exhibit D hereto with appropriate insertions and deletions, together
with copies of the articles of incorporation, partnership agreement,
limited liability company agreement, certificate of formation and
the by-laws or other organizational documents of such Credit Party
and the resolutions, or such other administrative approval, of such
Credit Party referred to in such certificate and all of the
foregoing shall be reasonably satisfactory to the Administrative
Agent, (y) the Borrower a certificate of its chief financial
officer, dated the Initial Borrowing Date, to the effect that all of
the applicable conditions set forth in Sections 5.01(g), (h), (i),
(j), (k), and (o) and 5.02 have been satisfied as of such date and
(z) CGL a true and correct copy of the amendment, if any, to the CGL
Partnership Agreement executed in connection with the CGL
Participation (the "CGL Partnership Amendment"), which amendment
shall be in form and substance satisfactory to the Administrative
Agent and shall be in full force and effect.
(ii) On 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
Transaction Documents shall be reasonably satisfactory in form and
substance to the Administrative Agent, and the Administrative Agent
shall have received all information and copies of all certificates,
documents and papers, including good standing certificates and any
other records of corporate proceedings and governmental approvals,
if any, which the Administrative Agent may have reasonably requested
in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental
authorities.
(d) Plans; etc. On or prior to the Initial Borrowing Date,
there shall have been made available for review by the
Administrative Agent true and correct copies of:
(i) any Plans, and for each Plan (x) that is a
Single-Employer plan the most recently completed actuarial
valuation prepared therefor by such Plan's regular enrolled
actuary and the Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) for each Plan filed
with the Internal Revenue Service and (y) that is a
Multiemployer Plan, each of the documents referred to in
clause (x) either in the possession of Holdings or any of its
Subsidiaries or any ERISA Affiliate or reasonably available
thereto from the sponsor or trustees of such Plan;
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(ii) any collective bargaining agreements or any other
similar agreement or arrangements covering the employees of
Holdings or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(iii) all agreements evidencing or relating to the
Existing Indebtedness (the "Existing Indebtedness
Agreements");
(iv) all agreements entered into by Holdings governing
the terms and relative rights of its capital stock, and any
agreements entered into by members or shareholders of Holdings
with respect to its capital stock (collectively, the
"Shareholders' Agreements");
(v) any agreement with respect to, the management of
Holdings or any of its Subsidiaries (collectively, the
"Management Agreements");
(vi) any material employment agreements entered into by
Holdings or any of its Subsidiaries (collectively, the
"Employment Agreements");
(vii) management contracts relating to hotels managed by
Holdings or any of its Subsidiaries (collectively the
"Management Contracts") to the extent in existence on the
Initial Borrowing Date; and
(viii) any tax sharing, tax allocation and other similar
agreements entered into by Holdings and/or any of its
Subsidiaries (collectively, the "Tax Sharing Agreements");
all of which Plans, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Shareholders' Agreements, Management
Agreements, Employment Agreements, Management Contracts and Tax
Sharing Agreements shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(e) Adverse Change, etc. From May 15, 1996 to the Initial
Borrowing Date, nothing shall have occurred which the Administrative
Agent or the Required Banks shall reasonably determine (i) has, or
could reasonably be expected to have, a material adverse effect on
the Assets or the rights or remedies of the Banks or the
Administrative Agent under this Agreement or any other Credit
Document, or on the ability of the Borrower to perform its
obligations to them, or (ii) has, or could reasonably be expected to
have, a Material Adverse Effect.
(f) Litigation. No actions, suits or proceedings shall be
pending or, to the knowledge of the Borrower, threatened against
Holdings or any of its Subsidiaries or any of their assets on the
Initial Borrowing Date (i) with respect to this Agree-
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ment or any other Credit Document or (ii) which the Administrative
Agent or the Required Banks shall determine has, or could reasonably
be expected to have, (x) a Material Adverse Effect or (y) a material
adverse effect on the Assets or the rights or remedies of the Banks
or the Administrative Agent hereunder or under any other Credit
Document or on the ability of any Credit Party to perform its
respective obligations to the Banks hereunder or under any other
Credit Document.
(g) Approvals. On the Initial Borrowing Date, all material
governmental and third party approvals in connection with the
transactions contemplated by the Credit Documents and the other
Transaction 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 (including any court having jurisdiction)
which restrains or prevents such transactions or imposes, in the
reasonable judgment of the Required Banks or the Administrative
Agent, materially adverse conditions upon the consummation of such
transactions.
(h) Reorganization. On or prior to the Initial Borrowing Date,
(x) the shareholders of (i) IHC shall have contributed 100% of the
outstanding capital stock of IHC to Holdings in exchange for common
stock of Holdings and (ii) each of Member and the Subsidiaries of
IHC shall have contributed 100% of the outstanding capital stock,
equity and/or partnership interests of such Persons not already
owned by the Borrower to Holdings in exchange for common stock of
Holdings and (y) Holdings shall have contributed such stock and
interests received by it pursuant to the proceeding clause (x) to
the Borrower (collectively, the "Reorganization"), such
Reorganization to be effected pursuant to the Formation Agreement, a
copy of which certified as true and correct by an Authorized Officer
of the Borrower to have been delivered to the Administrative Agent
prior to the Initial Borrowing Date, which Formation Agreement shall
be in form and substance reasonably satisfactory to the
Administrative Agent. The Reorganization shall have been consummated
in accordance with the terms and conditions of the Formation
Agreement (without any material waiver thereto not consented to by
the Administrative Agent) and all applicable laws.
(i) IPO. On or prior to the Initial Borrowing Date, Holdings
shall have received in available funds at least $203,000,000 in net
cash proceeds from the initial public issuance of its common stock
(the "IPO") effected as contemplated by the Registration Statement.
(j) Acquisitions. (i) On or prior to the Initial Borrowing
Date, the Borrower shall have delivered to the Administrative Agent
all Acquisition Documents, certified as true and correct by an
Authorized Officer, all of which
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Acquisition Documents shall be in the same form as they were in on
May 15, 1996 or shall otherwise be reasonably satisfactory to the
Administrative Agent and each of the conditions precedent to the
obligations of the Borrower to consummate the Acquisition shall have
been satisfied (without any material waiver thereto not consented to
by the Administrative Agent) to the reasonable satisfaction of the
Administrative Agent. The Acquisition shall have been consummated in
compliance with the terms of the Acquisition Documents and all
applicable laws.
(ii) In the event that the Westborough Acquisition is effected
on the Initial Borrowing Date the Borrower shall have delivered to
the Administrative Agent on or prior to the Initial Borrowing Date
all Westborough Acquisition Documents, certified as true and correct
by an Authorized Officer, all of which Westborough Acquisition
Documents shall be in form and substance reasonably satisfactory to
the Administrative Agent and each of the conditions precedent to the
obligations of the Borrower to consummate the Westborough
Acquisition shall have been satisfied (without any material waiver
thereto not consented to by the Administrative Agent) to the
reasonable satisfaction of the Administrative Agent. The Westborough
Acquisition shall have been consummated in compliance with the terms
of the Westborough Acquisition Documents and all applicable laws.
(k) Refinancing. (i) On the Initial Borrowing Date and
concurrently with the Credit Events to occur on such date, the
commitments under the Existing PNC Credit Agreement shall have been
terminated, all loans thereunder shall have been repaid in full,
together with interest thereon, all letters of credit issued
thereunder shall have been terminated [or incorporated hereunder as,
or supported hereunder by, Letters of Credit], all other amounts
owing pursuant to the Existing PNC Credit Agreement shall have been
repaid in full and the creditors under the Existing PNC Credit
Agreement shall have terminated and released all Liens incurred in
connection therewith and the Administrative Agent shall have
received evidence in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section
5.01(k)(i) have been satisfied at such time.
(ii) On the Initial Borrowing Date and concurrently with the
Credit Events to occur on such date, all loans under the Existing
Wells Fargo Credit Agreements shall have been repaid in full,
together with interest thereon, all letters of credit issued in
connection therewith shall have been terminated, all other amounts
owing pursuant to the Existing Wells Fargo Credit Agreements shall
have been repaid in full and the creditors under the Existing Wells
Fargo Credit Agreements shall have terminated and released all Liens
incurred in connection therewith and the Administrative Agent shall
have received evidence in form, scope and substance reasonably
satisfactory to it that the matter set forth in this Section
5.01(k)(ii) have been satisfied at such time.
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(iii) On the Initial Borrowing Date and concurrently with the
Credit Events to occur on such date, all loans under the Existing
Hilltop Credit Agreement shall have been repaid in full, together
with interest thereon, all other amounts owing pursuant to the
Existing Hilltop Credit Agreement shall have been repaid in full and
the creditors under the Existing Hilltop Credit Agreement shall have
terminated and released all Liens incurred in connection therewith
and the Administrative Agent shall have received evidence in form,
scope and substance reasonably satisfactory to it that the matters
set forth in this Section 5.01(k)(iii) have been satisfied at such
time.
(iv) On the Initial Borrowing Date and concurrently with the
Credit Events to occur on such date, all loans under the Existing
CIGNA Note shall have been repaid in full, together with interest
thereon, all other amounts owing pursuant to the Existing CIGNA Note
shall have been repaid in full and the creditors under the Existing
CIGNA Note shall have terminated and released all Liens incurred in
connection therewith and the Administrative Agent shall have
received evidence in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section
5.01(k)(iv) have been satisfied at such time.
(v) On the Initial Borrowing Date and concurrently with the
Credit Events to occur on such date, the Borrower shall have
purchased, out of the proceeds of the Term Loans, subordinated
participations (the "CGL Participations") in $90,000,000 aggregate
principal amount of the loans outstanding under the Existing CGL
Credit Agreements and the Administrative Agent shall have received,
and be reasonably satisfied with, all documents relating to the CGL
Participations.
(vi) On the Initial Borrowing Date and after giving effect to
the refinancings referred to in Section 5.01(k)(i), (ii), (iii) and
(iv) (collectively the "Refinancing"), neither Holdings nor any of
its Subsidiaries shall have any outstanding Indebtedness other than
the Existing Indebtedness described in Section 6.18, and no default
or event of default under and as defined in the documentation
governing any such Existing Indebtedness shall have occurred or be
continuing both before and after giving effect to the Transaction.
(l) Subsidiary Guaranty. On the Initial Borrowing Date,
Capital Corp and each Wholly-Owned Subsidiary shall have duly
authorized, executed and delivered a Guaranty in the form of Exhibit
E hereto (as modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof, the "Subsidiary
Guaranty"), and the Subsidiary Guaranty shall be in full force and
effect.
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(m) Security Documents. (i) On the Initial Borrowing Date,
each Credit Party shall have duly authorized, executed and delivered
a Pledge Agreement substantially in the form of Exhibit F hereto (as
modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Pledge Agreement"), and
shall have delivered to the Collateral Agent, as pledgee there-
under, all of the certificates representing the Pledged Securities
referred to therein, endorsed in blank or accompanied by executed
and undated stock powers, and the Pledge Agreement shall be in full
force and effect.
(ii) On the Initial Borrowing Date, each Credit Party shall
have duly authorized, executed and delivered a Security Agreement
substantially in the form of Exhibit G (as modified, supplemented or
amended from time to time in accordance with the terms thereof and
hereof, the "Security Agreement") covering all of such Credit
Party's present and future Security Agreement Collateral, in each
case together with:
(A) executed copies of Financing Statements (Form UCC-1)
in appropriate form for filing under the UCC of each
jurisdiction as may be necessary to perfect the security
interests purported to be created by the Security Agreement;
(B) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, each of recent
date listing all effective financing statements that name each
Credit Party as debtor and that are filed in the jurisdictions
referred to in clause (A), together with copies of such
financing statements (none of which shall cover the Collateral
except (x) those with respect to which appropriate termination
statements executed by the secured lender thereunder have been
delivered to the Agent and (y) to the extent evidencing Liens
permitted pursuant to Section 8.03(d));
(C) evidence of the completion of all other recordings
and filings of, or with respect to, the Security Agreement as
may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests intended to be
created by the Security Agreement;
(D) executed copies of notices delivered to each entity
which is the issuer of partnership interests and/or membership
interests pledged under the Security Agreement and executed
copies of acknowledgements executed by each such entity,
together with evidence that such other actions have been taken
as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interest purported to
be created by the Security Agreement (including, without
limitation, evidence that each such
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entity has duly recorded the security interest created by the
Security Agreement on the books and records of such entity);
and
(E) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to
perfect and protect the security interest purported to be
created by the Security Agreement have been taken.
(iii) On the Initial Borrowing Date, the Collateral Agent
shall have received:
(A) fully executed counterparts of mortgages, deeds of
trust or deeds to secure debt, in each case in form and
substance reasonably satisfactory to the Collateral Agent
(each as modified, amended or supplemented from time to time
in accordance under the terms hereof and thereof, a "Mortgage"
and, collectively, the "Mortgages"), which Mortgages shall
cover such of the Real Property owned or leased by any Credit
Party as is designated on Part B of Annex IV as a mortgaged
property (each a "Mortgaged Property" and, collectively, the
"Mortgaged Properties"), together with evidence that
counterparts of the Mortgages have been delivered to the title
insurance company insuring the Lien of the Mortgages for
recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent, desirable to
effectively create a valid and enforceable first priority
mortgage lien on such Credit Party's interest in each
Mortgaged Property (subject only to Permitted Encumbrances) in
favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the
Banks;
(B) executed copies of Financing Statements (Form UCC-1
or other applicable form) in appropriate form for filing under
the UCC of each jurisdiction as may be reasonably necessary to
perfect the security interests in fixtures, equipment and
personal property purported to be created by the Mortgages;
(C) mortgagee title insurance policies (or marked
commitments to issue the same) for the Mortgaged Properties
issued by title insurers reasonably satisfactory to the
Collateral Agent (each a "Mortgage Policy" and, collectively,
the "Mortgage Policies") in amounts reasonably satisfactory to
the Collateral Agent assuring the Collateral Agent that the
Mortgages on such Mortgaged Properties are valid and
enforceable first priority mortgage liens on such Mortgaged
Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances, and the
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Mortgage Policies shall otherwise be in form and substance
reasonably satisfactory to the Collateral Agent; and
(D) surveys, in form and substance reasonably
satisfactory to the Collateral Agent, of the Mortgaged
Properties specified by the Administrative Agent, certified in
a manner satisfactory to the Collateral Agent by a licensed
professional surveyor reasonably satisfactory to the
Administrative Agent.
(n) Solvency. On the Initial Borrowing Date, the
Administrative Agent shall have received from the chief financial
officer of Holdings a certificate in the form of Exhibit H hereto,
expressing opinions of value and other appropriate facts or
information regarding the solvency of Holdings and its Subsidiaries
taken as a whole.
(o) Fees. On or prior to the Initial Borrowing Date, the
Borrower shall have paid to the Administrative Agent and the Banks
all Fees and expenses agreed upon by such parties to be paid on or
prior to such date.
(p) Consent Letter. On the Initial Borrowing Date, the
Administrative Agent shall have received a letter from Corporation
Service Company, presently located at 375 Hudson Street, New York,
New York 10014, in the form of Exhibit I hereto indicating its
consent to its appointment by each Credit Party as their agent to
receive service of process.
(q) Insurance Policies. On the Initial Borrowing Date, the
Collateral Agent shall have received evidence of insurance complying
with the requirements of Section 7.03 for the business and
properties of Holdings and its Subsidiaries, in form and substance
satisfactory to the Agent and, with respect to all casualty
insurance, naming the Collateral Agent as an additional insured and
loss payee.
5.02 Conditions Precedent to All Credit Events. The obligation
of the Banks to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) Notice of Borrowing, etc. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of
Section 1.03 with respect to the incurrence of Loans or a Letter of
Credit Request meeting the requirement of Section 2.03 with respect
to the issuance of a Letter of Credit.
(b) No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto, (i) there
shall exist no Default or Event
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of Default and (ii) all representations and warranties contained
herein or 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 and as of the date
of such Credit Event, except to the extent that such representations
and warranties expressly relate to an earlier date.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Borrower to each of the Banks
that all of the applicable conditions specified in Section 5.01 and/or 5.02, as
the case may be, exist as of that time. All of the certificates, legal opinions
and other documents and papers referred to in this Section 5, unless otherwise
specified, shall be delivered to the Administrative Agent for the account of
each of the Banks and, except for the Notes, in sufficient counterparts for each
of the Banks.
SECTION 6. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans,
and/or to issue and/or to participate in the Letters of Credit provided for
herein, each of Holdings and the Borrower makes the following representations
and warranties to, and agreements with, the Banks, all of which shall survive
the execution and delivery of this Agreement and each Credit Event:
6.01 Corporate Status. Each of Holdings and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, limited
liability company or partnership, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the organizational 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 (ii) has duly qualified and
is authorized to do business in all jurisdictions where it is required to be so
qualified except where the failure to be so qualified would not have a Material
Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is party. Each Credit Party has duly executed and delivered each Credit
Document to which it is party and each Credit Document to which it is party
constitutes the legal, valid and binding obligation of each 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 (including laws and principles applicable to fraudulent transfers) and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
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6.03 No Violation. Neither the execution, delivery and
performance by any Credit Party of the Credit Documents to which it is party nor
compliance with the terms and provisions thereof, nor the consummation of the
loan transactions contemplated therein (i) will contravene any provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any court
or governmental instrumentality applicable to such Credit Party or its
properties and assets, (ii) will conflict or result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of Holdings or any of its Subsidiaries pursuant to the terms
of any indenture, mortgage, deed of trust, agreement or other instrument to
which Holdings or any of its Subsidiaries is a party or by which it or any of
its property or assets are bound or to which it may be subject or (iii) will
violate any provision of the partnership agreement, certificate of formation,
certificate of incorporation or by-laws, as the case may be, of such Credit
Party.
6.04 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of Holdings, threatened with respect to Holdings or
any of its Subsidiaries (i) that have, or could reasonably be expected likely to
have, a Material Adverse Effect or (ii) that have, or could reasonably be
expected to have, a material adverse effect on the rights or remedies of the
Banks or on the ability of any Credit Party to perform its obligations to them
hereunder and under the other Credit Documents.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
all Term Loans shall be utilized (i) to finance, in part, the Transaction and
(ii) to pay certain fees and expenses arising in connection with the Transaction
Documents. The proceeds of Revolving Loans may be utilized (x) on the Initial
Borrowing Date to finance, in part, the Westborough Acquisition in the event
that the Westborough Acquisition is consummated on the Initial Borrowing Date,
provided that the aggregate amount so utilized shall not exceed $15,000,000, and
(y) as provided in the following sentence. The proceeds of Acquisition Loans may
only be utilized to finance Permitted Acquisitions, while the proceeds of
Working Capital Loans may be utilized for general corporate purposes, other than
to finance Permitted Acquisitions and/or any other acquisition.
(b) No part of the proceeds of any Credit Event will be used
to purchase or carry Margin Stock. Neither any Credit Event, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System.
6.06 Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing (other than filings related
to the perfection of the security interests granted to the Collateral Agent
pursuant to the Security Documents), recording or registration with, or
exemption by, any foreign or domestic governmental or
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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 Credit Document.
6.07 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
Holdings, the Borrower or any of its Subsidiaries in writing to the
Administrative Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of such
Person in writing to any Bank in connection with this Agreement 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 material fact
necessary to make such information (taken as a whole) not misleading at such
time in light of the circumstances under which such information was or is
provided. The projections and pro forma financial information prepared by
Holdings and the Borrower which are contained in such materials are based on
good faith estimates and assumptions believed by such Persons to be reasonable
at the time made, it being recognized by the Banks that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ materially from the
projected results. As of the Effective Date, there is no fact known to Holdings,
the Borrower or any of its Subsidiaries which has, or could likely have, a
Material Adverse Effect which has not theretofore been disclosed to the
Administrative Agent.
6.08 Financial Condition; Financial Statements. (a) On and as
of the Initial Borrowing Date on a pro forma basis after giving effect to the
Transaction and to all Indebtedness incurred and to be incurred, and Liens
created, and to be created, by the Credit Parties in connection therewith, (i)
the sum of the assets, at a fair valuation, of Holdings and its Subsidiaries
taken as a whole will exceed their debts, (ii) Holdings and its Subsidiaries
taken as a whole will not have incurred or intended to (and Holdings and the
Borrower do not believe that they will) incur debts beyond their ability to pay
such debts as such debts mature and (iii) Holdings and its Subsidiaries taken as
a whole will have sufficient capital with which to conduct their business. For
purposes of this Section 6.08, "debt" means any liability on a claim, and
"claim" means (x) 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 (y) 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.
(b) (i) The combined balance sheets of the Borrower and its
affiliates at December 31, 1994 and December 31, 1995, and the related combined
statements of income, changes in equity and cash flows for the fiscal periods
ended as of said dates,
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which have been examined by Coopers & Lybrand L.L.P., independent certified
public accountants, and (ii) the pro forma (after giving effect to the
Transaction and the related financings thereof) consolidated balance sheet of
Holdings and its Subsidiaries as of December 31, 1995, copies of each of which
have heretofore been furnished to each Bank, present fairly the financial
position of the respective entities as of the dates of said statements and the
results for the periods covered thereby (or, in the case of the pro forma
balance sheet, presents a good faith estimate of the consolidated pro forma
financial condition of Holdings and its Subsidiaries after giving effect to the
Transaction and the related financings thereof at the date thereof). All such
financial statements (other than the aforesaid pro forma balance sheets) have
been prepared in accordance with generally accepted accounting principles and
practices consistently applied except to the extent provided in the notes to
said financial statements. Nothing has occurred since December 31, 1995 that has
had a Material Adverse Effect.
(c) Except as fully reflected in the financial statements and
the notes thereto described in Section 6.08(b), there were as of the Initial
Borrowing Date (after giving effect to the Loans made on such date), no material
Contingent Obligations, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including, without
limitation, interest rate or foreign currency swap or exchange transaction with
respect to Holdings or any of its Subsidiaries which, either individually or in
aggregate, would be material to Holdings and its Subsidiaries taken as a whole,
except as incurred in the ordinary course of business consistent with past
practices subsequent to December 31, 1995.
6.09 Security Interests. Once executed and delivered, and
until terminated in accordance with the terms thereof, each of the Security
Documents creates, as security for the obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and Lien on all
of the Collateral subject thereto from time to time, superior to and prior to
the rights of all third Persons (subject in the case of the Mortgages to
Permitted Encumbrances and subject to no other Liens (except that the Security
Agreement Collateral and/or Mortgage Properties may be subject to Permitted
Liens and (in the case of the Mortgaged Properties) Permitted Encumbrances
relating thereto)) in favor of the Collateral Agent for the benefit of the
Banks. No filings or recordings are required in order to perfect the security
interests created under any Security Document except for filings or recordings
required in connection with any such Security Document which shall have been
made, or for which satisfactory arrangements have been made, upon or prior to
the execution and delivery thereof. All mortgage, mortgage recording, stamp,
intangible or other similar taxes required to be paid by any Person under
applicable Legal Requirements or other laws applicable to the Real Property
encumbered by the Mortgages in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of the Mortgages
have been paid.
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6.10 Representations and Warranties in Transaction Documents.
All representations and warranties of Holdings and/or any of its Subsidiaries
set forth in any of the Transaction Documents were true and correct in all
material respects as of the time such representations and warranties were made
and shall be true and correct in all material respects as of the Initial
Borrowing Date as if such representations and warranties were made on and as of
such date, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
6.11 Tax Returns and Payments. Each of Holdings 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, other than
those not yet delinquent and except for those contested in good faith. Holdings
and each of its Subsidiaries have paid, or have provided adequate reserves for
the payment of, all federal, state and foreign income taxes applicable for all
prior fiscal years and for the current fiscal year to the date hereof (giving
effect to the Reorganization).
6.12 Compliance with ERISA. 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; no Plan has an Unfunded Current Liability; 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 Holdings nor any Subsidiary of
Holdings 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 Holdings or any
Subsidiary of Holdings 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, 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,
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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 Holdings 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, would not exceed $500,000. 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 Holdings, any
Subsidiary of Holdings, or any ERISA Affiliate has at all times been operated in
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 Holdings or any Subsidiary of Holdings or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and Holdings and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan
the obligations with respect to which could reasonably be expected to have a
material adverse effect on the ability of any Credit Party to perform its
obligations under this Agreement or the other Credit Documents.
6.13 Subsidiaries. On the Initial Borrowing Date and after
giving effect to the Transaction, the only direct Subsidiary of Holdings is the
Borrower. Annex III hereto lists each Subsidiary of the Borrower (and the direct
and indirect ownership interest of Holdings therein), in each case existing on
the Initial Borrowing Date but after giving effect to the Transaction.
6.14 Intellectual Property, etc. Holdings, the Borrower and
each of its Subsidiaries has obtained or has the right to use all material
patents, trademarks, servicemarks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary for the operation
of its business as presently conducted and as proposed to be conducted.
6.15 Environmental Matters. (a) Holdings, the Borrower and
each of its Subsidiaries is in compliance with all Environmental Laws governing
its business except to the extent that any such failure to comply (together with
any resulting penalties, fines or forfeitures) would not reasonably be expected
to have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of Holdings, the Borrower and each of its
Subsidiaries, as conducted as of the Initial Borrowing Date, under any
Environmental Law have been secured and Holdings, the Borrower and each of its
Subsidiaries is in substantial compliance therewith, except for such licenses,
permits, registrations or approvals the failure to secure or to comply therewith
is not reasonably likely to have a Material Adverse Effect. Neither Holdings,
the Borrower nor any of its Subsidiaries is in any respect in noncompliance
with, breach of or default under any applicable writ, order, judgment,
injunction, or decree to which Holdings, the Borrower or such Subsidiary is a
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party or which would affect the ability of Holdings, the Borrower or such
Subsidiary to operate any real property and no event has occurred and is
continuing which, with the passage of time or the giving of notice or both,
would constitute noncompliance, breach of or default thereunder, except in each
such case, such noncompliance, breaches or defaults as would not reasonably be
expected to, in the aggregate, have a Material Adverse Effect. There are as of
the Initial Borrowing Date no Environmental Claims pending or, to the best
knowledge of Holdings and the Borrower, threatened wherein an unfavorable
decision, ruling or finding would reasonably be expected to have a Material
Adverse Effect. There are no facts, circumstances, conditions or occurrences on
any Real Property now or at any time owned, leased or operated by Holdings, the
Borrower or any of its Subsidiaries or, to the knowledge of Holdings and the
Borrower, on any property adjacent to any such Real Property that could
reasonably be expected (i) to form the basis of an Environmental Claim against
Holdings, the Borrower or any of its Subsidiaries or any Real Property of
Holdings, the Borrower or any of its Subsidiaries, or (ii) to cause such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law, except in
each such case, such Environmental Claims or restrictions that individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect.
(b) Except as disclosed on Annex IX, as of the Initial
Borrowing Date (after giving effect to the Transaction) there are no underground
storage tanks located on any Real Property owned, leased or operated by
Holdings, the Borrower or any of its Subsidiaries.
6.16 Properties. Annex IV contains a true and complete list of
each Real Property owned or leased by Holdings, the Borrower or any of its
Subsidiaries on the Initial Borrowing Date (after giving effect to the
Transaction) and the type of interest therein held by Holdings, the Borrower or
the respective Subsidiary. Holdings, the Borrower and each of its Subsidiaries
has good and indefeasible title in fee to each Real Property owned by it and a
valid Leasehold in each Real Property leased by it, in each case, after giving
effect to the Transaction, free and clear of all Liens and security interests
other than the Liens created pursuant to the Mortgages, Permitted Liens and
Permitted Encumbrances. Holdings, the Borrower and each of its Subsidiaries has
received all material assignments, waivers, consents and other documents, and
duly effected all material recordings, filings and other material actions
necessary to establish, protect and perfect its right, title and interest in and
to each Real Property owned or leased by it. All material transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements or other
laws applicable to the Real Property in connection with the Transaction have
been paid.
6.17 Labor Relations; Collective Bargaining Agreements. There
is (i) no significant unfair labor practice complaint pending against Holdings,
the Borrower or any of its Subsidiaries or, to the knowledge of Holdings and the
Borrower, threatened against
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any of them, before the National Labor Relations Board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is now pending against Holdings, the Borrower or
any of its Subsidiaries or, to the knowledge of Holdings and the Borrower,
threatened against any of them, (ii) no significant strike, labor dispute,
slowdown or stoppage is pending against Holdings, the Borrower or any of its
Subsidiaries or, to the best knowledge of Holdings and the Borrower, threatened
against Holdings, the Borrower or any of its Subsidiaries and (iii) to the
knowledge of Holdings and the Borrower, no union representation question exists
with respect to the employees of Holdings, the Borrower or any of its
Subsidiaries, 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.
6.18 Indebtedness. Annex V sets forth a true and complete list
of all Indebtedness of the Borrower and each of its Subsidiaries (after giving
effect to the Transaction) incurred prior to, but which is to remain outstanding
after, the Initial Borrowing Date (collectively, the "Existing Indebtedness"),
in each case showing the aggregate principal amount, amortization and interest
rate thereof (and available commitments, if any, thereunder) and the name of the
respective borrower and any other entity which directly or indirectly guaranteed
such debt.
6.19 Transaction. On and as of the Initial Borrowing Date, (i)
all material consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required to be obtained, given, filed or taken by the
Holdings, the Borrower or any other Credit Party in order to make or consummate
each component of the Transaction will have been obtained, given, filed or taken
and are or will be in full force and effect (or effective judicial relief with
respect thereto will have been obtained) except for filings, consents or notices
not required by federal or state securities laws to be made at such time, which
filings, consents or notices have been or will be made during the period in
which they are required to be made and (ii) each component of the Transaction
shall have been consummated in accordance, in all material respects, with the
applicable Transaction Documents and in compliance, in all material respects,
with all applicable laws.
6.20 Certain Material Agreements. After giving effect to the
Transaction, each Management Contract and each Existing Indebtedness Agreement
is in full force and effect in accordance with its respective terms, without any
material default existing thereunder.
6.21 Third-Party Rights. Except as disclosed on Annex X, as of
the Initial Borrowing Date, no Person holds any right of first refusal, option
to purchase or lease, buy-out right, right of first offer or other similar right
or option with respect to any portion
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of the Collateral or any partnership interest, joint venture interest,
membership interest or shareholder interest owned by Holdings in any of its
Subsidiaries.
SECTION 7. Affirmative Covenants. Each of Holdings and the
Borrower hereby covenants and agrees that so long as this Agreement is in effect
and until such time as the Total Commitment has been terminated, no Notes are
outstanding and the Loans, together with interest, Fees and all other
Obligations hereunder, have been paid in full:
7.01 Reporting Requirements. Holdings will furnish to each of
the Banks:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the close of each fiscal year of
Holdings, the consolidated balance sheet of Holdings and its
consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income, of stockholder's equity
and of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year and examined by
independent certified public accountants of recognized national
standing whose opinion shall not be qualified as to the scope of
audit or as to the status of Holdings and its Subsidiaries as a
going concern, together with a certificate of such accounting firm
stating that in the course of its regular audit of the business of
Holdings and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, nothing came
to the attention of such accounting firm which would lead it to
believe that any Default or Event of Default as they relate to
accounting matters has occurred and is continuing or if in the
opinion of such accounting firm such a Default or Event of Default
has occurred and is continuing, a statement as to the nature
thereof, it being understood that the delivery of Holdings Form 10-K
for any fiscal year or Form 10-Q for any fiscal quarter, as the case
may be, within the time frame specified in Section 7.01(a) or (b),
respectively, shall satisfy the requirements of Section 7.01(a) or
(b), as the case may be, to the extent covering the financial
information specified herein or therein.
(b) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the close of each of the first
three quarterly accounting periods in each fiscal year of Holdings,
the consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such quarterly period and the related
consolidated statements of income, of stockholder's equity and of
cash flows for such quarterly period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period, in
each case setting forth comparative figures for the related periods
in the prior fiscal year and which shall be certified by the Chief
Financial Officer or other Authorized Officer of Holdings, subject
to changes resulting from normal year-end audit adjustments.
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(c) Budget. Not less than 10 days prior to the commencement of
each fiscal year of Holdings, a preliminary consolidated budget (to
be followed no later than 30 days after the commencement of such
fiscal year by a final consolidated budget) of Holdings and its
Subsidiaries in reasonable detail for each of the four fiscal
quarters of such fiscal year, as customarily prepared by management
for its internal use, setting forth, with appropriate discussion,
the principal assumptions upon which such plans are based.
(d) Officer's Certificates. At the time of (i) the delivery of
the financial statements provided for in Sections 7.01(a) and (b), a
certificate of the Chief Financial Officer or other Authorized
Officer of Holdings to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate shall
set forth the calculations required to establish compliance with the
provisions of Sections 8.10, 8.11, 8.12, 8.13 and 8.14 as at the end
of such fiscal year or quarter, as the case may be and (ii) if
delivered with the financial statements required by Section 7.01(a),
set forth the calculations required to establish the amount of
Excess Cash Flow for the fiscal year of Holdings then last ended.
(e) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after Holdings or any of its
Subsidiaries obtains knowledge thereof, notice of (x) the occurrence
of any event which constitutes a Default or Event of Default, which
notice shall specify the nature thereof, the period of existence
thereof and what action Holdings proposes to take with respect
thereto and (y) any litigation or governmental or regulatory
proceeding pending against Holdings or any of its Subsidiaries which
is likely to have a Material Adverse Effect or a material adverse
effect on the Collateral or the ability of any Credit Party to
perform its obligations hereunder or under any other Credit
Document.
(f) Auditors' Reports. Promptly upon receipt thereof, a copy
of each other report or "management letter" submitted to Holdings or
any of its Subsidiaries by their independent accountants or
independent actuaries in connection with any annual, interim or
special audit made by them of the books of Holdings or any of its
Subsidiaries.
(g) ERISA. Promptly upon completion thereof, deliver to each
of the Banks a complete copy of the annual report (Form 5500) of
each Plan (including, to the extent required, the related financial
and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to
be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Banks pursuant to the first
sentence hereof, copies of reports and any material notices received
by Holdings, any Subsidiary of Holdings
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or any ERISA Affiliate with respect to any Plan shall be delivered
to the Banks no later than 10 days after the date such report has
been filed with the Internal Revenue Service or such notice has been
received by Holdings, such Subsidiary or such ERISA Affiliate, as
applicable.
(h) Environmental Matters. Promptly upon, and in any event
within 10 Business Days after, an officer of Holdings, the Borrower
or any of its Subsidiaries obtains knowledge thereof, notice of one
or more of the following environmental matters: (i) any pending or
threatened (in writing) material Environmental Claim against
Holdings, the Borrower or any of its Subsidiaries or any Real
Property owned or operated by Holdings, the Borrower or any of its
Subsidiaries; (ii) any condition or occurrence on or arising from
any Real Property owned or operated by Holdings, the Borrower or any
of its Subsidiaries that (a) results in material noncompliance by
Holdings, the Borrower or any of its Subsidiaries with any
applicable Environmental Law or (b) would reasonably be expected to
form the basis of a material Environmental Claim against Holdings,
the Borrower or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned, leased
or operated by Holdings, the Borrower or any of its Subsidiaries
that could reasonably be expected to cause such Real Property to be
subject to any material restrictions on the ownership, occupancy,
use or transferability by Holdings, the Borrower or any of its
Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned, leased or operated by Holdings, the
Borrower or any of its Subsidiaries as required by any Environmental
Law or any governmental or other administrative agency. All such
notices shall describe in reasonable detail the nature of the
Environmental Claim and Holdings', the Borrower's or such
Subsidiary's response thereto.
(i) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the
SEC by Holdings or any of its Subsidiaries (other than any
registration statement on Form S-8) and copies of all financial
statements, proxy statements, notices and reports as Holdings or any
of its Subsidiaries shall send to analysts generally or to the
holders (other than Holdings and its Subsidiaries) of their capital
stock or of the Indebtedness in their capacity as such holders (in
each case to the extent not theretofore delivered to the Banks
pursuant to this Agreement) and, with reasonable promptness, such
other information or documents (financial or otherwise) as the
Administrative Agent on its own behalf or on behalf of the Required
Banks may reasonably request from time to time.
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7.02 Books, Records and Inspections. Holdings will, and will
cause each of its Subsidiaries to, permit, upon at least five Business Days'
notice to the Chief Financial Officer or any other Authorized Officer of
Holdings, officers and designated representatives of the Administrative Agent or
the Required Banks to visit and inspect any of the properties or assets of
Holdings and any of its Subsidiaries in whomsoever's possession (but only to the
extent Holdings or such Subsidiary has the right to do so to the extent in the
possession of another Person), and to examine the books of account of Holdings
and any of its Subsidiaries and discuss the affairs, finances and accounts of
Holdings and of any of its Subsidiaries with, and be advised as to the same by,
its and their officers and independent accountants and independent actuaries, if
any, all at such reasonable times and intervals and to such reasonable extent as
the Administrative Agent or the Required Banks may request.
7.03 Insurance. (a) Holdings will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurers (which may include Subsidiaries which are
licensed insurance carriers) in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice, provided that
this covenant shall be satisfied in respect of any Mortgaged Property to the
extent the insurance covenants in the related Mortgage are satisfied. Holdings
will, and will cause each of its Subsidiaries to, furnish annually to the
Administrative Agent a summary of the insurance carried.
(b) Holdings will, and will cause each of its Subsidiaries to,
at all times keep their respective property insured in favor of the Collateral
Agent, and all policies (including the Mortgage Policies) or certificates (or
certified copies thereof) with respect to, or other evidence acceptable to the
Administrative Agent of, such insurance (and any other insurance maintained by
Holdings or any such Subsidiary) (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 (with respect to
Collateral) or, to the extent permitted by applicable law, as an additional
insured), (ii) shall state that such insurance policies shall not be cancelled
without 30 days' prior written notice thereof (or 10 days' prior written notice
in the case of cancellation for the non-payment of premiums) by the respective
insurer to the Collateral Agent, (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent and the Banks and (iv) shall be deposited with the Collateral
Agent. In no event shall Holdings be required to deposit the actual insurance
policies with the Collateral Agent. The Administrative Agent shall deliver
copies of any certificates of insurance to a Bank upon such Bank's request.
(c) If Holdings or any of its Subsidiaries shall fail to
maintain all insurance in accordance with this Section 7.03, or if Holdings or
any of its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Administrative Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation),
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upon prior notice to Holdings, to procure such insurance, and Holdings agrees to
reimburse the Administrative Agent or the Collateral Agent, as the case may be,
for all costs and expenses of procuring such insurance.
7.04 Payment of Taxes. Holdings 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 (other than claims relating to
the adjustment or settling, in the ordinary course of business, of claims in
respect of insurance policies or reinsurance contracts) which, if unpaid, might
become a Lien or charge upon any properties of Holdings or any of its
Subsidiaries, provided that neither Holdings 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.
7.05 Corporate Franchises. Holdings will do, 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 effect its corporate existence, rights and
authority, provided that any transaction permitted by Section 8.02 will not
constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. Holdings will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property other than those the non-compliance
with which would not have, and which would not be reasonably expected to have, a
Material Adverse Effect or a material adverse effect on the Collateral or the
ability of any Credit Party to perform its obligations under any Credit
Document.
7.07 Good Repair. Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner customary for
companies in similar businesses.
7.08 Compliance with Environmental Laws. (a) (i) Holdings will
comply, and will cause each of its Subsidiaries to comply, in all material
respects, with all Environmental Laws applicable to the ownership, lease or use
of all Real Property now or hereafter owned, leased or operated by the Borrower
or any of its Subsidiaries, will promptly pay or cause to be paid all costs and
expenses incurred in connection with such
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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 and (ii) neither
Holdings, the Borrower nor any of its Subsidiaries will generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of, Hazardous Materials on any Real Property now or
hereafter owned, leased or operated by Holdings, the Borrower or any of its
Subsidiaries or transport or permit the transportation of Hazardous Materials to
or from any such Real Property other than in substantial compliance with
applicable Environmental Laws and in the ordinary course of business. If
required to do so under any applicable directive or order of any governmental
agency, Holdings and the Borrower each agrees to undertake, and cause each of
its Subsidiaries to undertake, any clean up, removal, remedial or other action
necessary to remove and clean up any Hazardous Materials from any Real Property
owned, leased or operated by Holdings, the Borrower or any of its Subsidiaries
in accordance with, in all material respects, the requirements of all applicable
Environmental Laws and in accordance with, in all material respects, such orders
and directives of all governmental authorities, except to the extent that
Holdings, the Borrower or such Subsidiary is contesting such order or directive
in good faith and by appropriate proceedings and for which adequate reserves
have been established to the extent required by GAAP.
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time after the Banks receive notice under
Section 7.01(h) for any event for which notice is required to be delivered for
any Real Property which discloses an Environmental Claim or any potential
requirement for remedial or similar work aggregating in excess of $1,000,000,
the Borrower will provide, at its sole cost and expense, an environmental site
assessment report concerning any such Real Property now or hereafter owned,
leased or operated by Holdings, the Borrower or any of its Subsidiaries,
prepared by an environmental consulting firm reasonably satisfactory to the
Administrative Agent, 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 days after such request was made, the Administrative Agent may
order the same, and the Borrower shall grant and hereby grants, to the
Administrative Agent and the Banks and their agents, access to such Real
Property and specifically grants the Administrative Agent and the Banks an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Borrower's expense.
7.09 End of Fiscal Years; Fiscal Quarters. Holdings will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries' fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
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7.10 Interest Rate Hedging. The Borrower will, no later than
the date occurring 30 days after the Initial Borrowing Date, enter into an
Interest Rate Agreement, reasonably satisfactory to the Administrative Agent,
establishing a fixed or maximum rate in respect of an amount equal to at least
(x) 60% of Total Indebtedness outstanding on the Initial Borrowing Date (after
giving effect to the Transaction) less (y) the aggregate principal amount of the
CGL Participations, for a period of years reasonably acceptable to the
Administrative Agent.
7.11 Additional Security; Further Assurances. (a) The Borrower
will give the Collateral Agent not less than 15 days prior written notice of the
scheduled closing date for any Permitted Acquisition by the Borrower or any of
its Subsidiaries occurring after the Initial Borrowing Date. Subject to
obtaining any consents from third parties (including third party lessors and
co-venturers) necessary to be obtained for the granting of a Lien on the
interests or assets acquired pursuant to any such Permitted Acquisition (with
the Borrower hereby agreeing to use its reasonable efforts to obtain such
consents), the Borrower will, and will cause its Subsidiaries to, grant the
Collateral Agent for the benefit of the Banks security interests and mortgages
(each an "Additional Security Document") in the interests or properties (other
than (I) any Real Property and related personal property assets acquired by a
joint venture with the proceeds of equity investments made by the Borrower or a
Subsidiary to the extent such equity investments are pledged to the Collateral
Agent, (II) any Real Property and related personal property assets acquired with
the proceeds of, and securing, or subject to assumed, Non-Recourse Debt and
those constituting expansions of existing facilities subject to mortgages in
favor of other Persons) as are acquired after the Initial Borrowing Date by the
Borrower or such Subsidiary with the proceeds of Acquisition Loans and as may be
requested from time to time by the Administrative Agent or the Required Banks,
as additional security for the Obligations. Each Additional Security Document
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and shall constitute a valid and
enforceable perfected Lien upon the interests or properties so acquired,
superior to and prior to the rights of all third Persons and subject to no other
Liens except those permitted by Section 8.03 or otherwise agreed by the
Administrative Agent at the time of perfection thereof and such other
encumbrances as may be set forth in the mortgage policy, if any, relating to
such Additional Security Document which shall be delivered to the Collateral
Agent together with such Additional Security Document and which shall be
reasonably satisfactory in form and substance to the Collateral Agent. The
Additional Security Document 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 created thereby required to
be granted pursuant to the Additional Security Document and all taxes, fees and
other charges payable in connection therewith shall have been paid in full.
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(b) Holdings and the Borrower will, and will cause each of its
Subsidiaries to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, and other assurances or instruments and take such further steps
relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require. If at any time the Collateral Agent
determines, based on applicable law, that all applicable taxes (including,
without limitation, mortgage recording taxes or similar charges) were not paid
in connection with the recordation of any Mortgage, the Borrower shall promptly
pay the same upon demand. Furthermore, the Borrower shall cause to be delivered
to the Collateral Agent such opinions of counsel, title insurance, surveys and
other related documents as may be reasonably requested by the Collateral Agent
to assure itself that this Section 7.11 has been complied with, all of which
documents shall be in form and substance reasonably satisfactory to the
Collateral Agent.
(c) Holdings and the Borrower each agrees that each action
required above by this Section 7.11 shall be completed as soon as practicable,
but in no event later than 60 days after such action is requested to be taken by
the Administrative Agent or the Required Banks.
7.12 Corporate Separateness. Holdings and the Borrower will
take, and will cause each of its Subsidiaries to take, all such action as is
necessary to keep the operations of Holdings, the Borrower and its Subsidiaries
separate and apart from those of each Specified Subsidiary, including, without
limitation, ensuring that all customary formalities regarding corporate
existence, including holding regular board of directors' meetings and
maintenance of corporate records, are followed. All financial statements of
Holdings and its Subsidiaries provided to creditors will clearly evidence the
corporate separateness of Holdings and its other Subsidiaries from each
Specified Subsidiary. Finally, neither Holdings nor any of its other
Subsidiaries will take any action, or conduct its affairs in a manner which is
likely to result in the corporate existence of a Specified Subsidiary on the one
hand, and Holdings and its other Subsidiaries on the other, being ignored, or in
the assets and liabilities of Holdings or any of its other Subsidiaries being
substantively consolidated with those of a Specified Subsidiary in a bankruptcy,
reorganization or other insolvency proceeding. No action or indemnity expressly
permitted by this Agreement will breach this covenant.
7.13 ERISA. As soon as possible and, in any event, within ten
(10) days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, Holdings
will deliver to each of the Banks a certificate of the chief financial officer
of Holdings setting forth the full details as to such occurrence and the action,
if any, that Holdings, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given
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to or filed with or by Holdings, the Subsidiary, the ERISA Affiliate, the PBGC,
a Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred; 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 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; 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 Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or may
incur any 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 Holdings or any Subsidiary of Holdings 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.
SECTION 8. Negative Covenants. Each of Holdings and the
Borrower hereby covenants and agrees that on the Effective Date and thereafter
for so long as this Agreement is in effect and until such time as the Total
Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder are
paid in full:
8.01 Changes in Business. Holdings will not, and will not
permit the Borrower or any of its Subsidiaries to, engage in any significant
business or activities in any industries or business segments, other than the
business and activities conducted by Holdings and its Subsidiaries (taken as a
whole) on the Initial Borrowing Date (after giving effect to the Transaction) in
the business segments and industries described in the Registration Statement,
and other businesses and activities related or incidental thereto.
8.02 Consolidation, Merger or Sale of Assets, etc. Holdings
will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation or sell or
otherwise dispose of any of its property or assets (but excluding any sale or
disposition of obsolete or excess FF&E or excess land in the ordinary course of
business), or purchase, lease or otherwise acquire (in
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one transaction or a series of related transactions) all or any part of the
property or assets of any Person (excluding any purchases, leases or other
acquisitions of property or assets in, and for use in, the ordinary course of
business) or agree to do any of the foregoing at any future time, except that
the following shall be permitted:
(a) capital expenditures by the Borrower and its Subsidiaries;
(b) the investments permitted pursuant to Section 8.05;
(c) (i) the merger or consolidation of any Subsidiary
Guarantor (other than Capital Corp) with or into the Borrower or
another Subsidiary Guarantor (other than Capital Corp) or the
liquidation or dissolution of any Subsidiary that is not a Material
Subsidiary or a Specified Subsidiary or (ii) the transfer or other
disposition of any property (other than the Capital Note) by the
Borrower to any Subsidiary Guarantor or by any Subsidiary Guarantor to
the Borrower or any other Subsidiary Guarantor, provided that all Liens
granted pursuant to the Security Documents on any property or assets
involved in any of the foregoing transactions shall remain in full
force and effect (with the same priority as they would have if such
transfer pursuant to this clause (ii) had not occurred), either as a
result of any such transfer being made subject to such Liens or as a
result of the surviving or transferee entity executing and delivering
new Security Documents, in each case to the satisfaction of the
Administrative Agent;
(d) the Borrower or any Subsidiary Guarantor (other than
Capital Corp) (or to the extent limited to one Permitted Acquisition,
any NRD Borrower) may make Permitted Acquisitions provided that at
least 15 days prior to the date of such acquisition, the Borrower shall
have delivered to the Administrative Agent an officer's certificate
executed by an authorized officer of the Borrower, which certificate
shall (i) contain the date such Permitted Acquisition is scheduled to
be consummated, (ii) contained the estimated purchase price of such
Permitted Acquisition, (iii) contain a description of the property
and/or assets acquired in connection with such Permitted Acquisition,
(iv) demonstrate that at the time of making any such Permitted
Acquisition the covenants contained in Sections 8.10, 8.11, 8.12, 8.13
and 8.14 shall be complied with on a pro forma basis as if the
properties and/or assets so acquired had been owned by the Borrower,
and the Indebtedness assumed and/or incurred to acquire and/or finance
same has been outstanding, for the 12 month period immediately
preceding such acquisition (without giving effect to any credit for
unobtained or unrealized gains in connection with such Permitted
Acquisition), (v) to the extent applicable, confirms that the Borrower
has performed physical inspections, including, without limitation,
Phase I environmental assessments, which demonstrate that the
representations and warranties of the Borrower contained in this
Agreement (including those set forth
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in Section 6.15) shall be true and correct after giving effect to such
Permitted Acquisition, (vi) except in the case of a Permitted
Acquisition of a Non-Managed Hotel, confirms that the hotel property
acquired pursuant to such Permitted Acquisition (or owned by the
partnership in which interests have been acquired or to which loans
and/or advances have been made pursuant to such Permitted Acquisition)
is to be managed by the Borrower and (vii) attach thereto a true and
correct copy of the then proposed purchase agreement or similar
agreement, partnership agreement, lease and/or management contract
entered into in connection with such Permitted Acquisition;
(e) the Borrower or any of its Subsidiaries may sell any hotel
property, land or building and/or any capital stock and/or equity
interests of any Person that owns such hotel property, land or
building, provided that after giving effect to such sale the covenants
contained in Sections 8.10, 8.11 , 8.12, 8.13 and 8.14 shall be
complied with on a pro forma basis as if such hotel property, land or
building so sold had not been owned by the Borrower and/or any of its
Subsidiaries for the 12- month period immediately preceding such sale;
(f) the Reorganization;
(g) the Borrower or any of its Subsidiaries (other than an NRL
Subsidiary) may enter into leases of property or assets not
constituting Permitted Acquisitions in the ordinary course of business
not otherwise in violation of this Agreement and to the extent not
prohibited by Section 8.06(b);
(h) the Borrower and its Subsidiaries (other than any
Specified Subsidiary) may purchase or otherwise acquire any property or
assets of any Person (other than pursuant to Permitted Acquisitions),
provided that (x) such purchases or acquisitions are made with funds
other than the proceeds of Loans and Non-Recourse Debt, (y) no Default
or Event of Default exists at the time thereof or after giving effect
thereto and (z) after giving effect thereto, Section 8.01 is complied
with;
(i) the Borrower and its Subsidiaries may sell or discount
accounts receivable in the ordinary course of business consistent with
past practices, but only in connection with the collection or
compromise thereof , so long as the aggregate outstanding face amount
of accounts receivable sold or discounted at any time does not exceed
$5,000,000; and
(j) any NRL Subsidiary may enter into leases of hotel
properties in connection with obtaining, or as a method of effectively
obtaining, the benefits of (and entered in lieu of) a Management
Contract relating to the hotel properties which are the subject of such
leases, provided that any such lease shall not be
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guaranteed (or otherwise supported) directly or indirectly by Holdings,
the Borrower, any Subsidiary Guarantor or any other Subsidiary (other
than the NRL Subsidiary entering into same) except that (x) the
documentation governing any such lease may contain provisions relating
to customary indemnities from the Borrower or a Subsidiary Guarantor
for fraud, use of proceeds and environmental matters or as are
otherwise reasonably acceptable to the Administrative Agent and (y) the
Borrower may incur guaranteed and other Contingent Obligations in
respect of such leases to the extent permitted by Section
8.04(f)(A)(z).
To the extent the Required Banks (or all of the Banks as shall be required by
Section 12.12) waive the provisions of this Section 8.02 with respect to the
sale, transfer or other disposition of any Collateral, or any Collateral is
sold, transferred or disposed of as permitted by this Section 8.02, (i) such
Collateral shall be sold, transferred or disposed of free and clear of the Liens
created by the respective Security Document; (ii) if such Collateral includes
all of the capital stock of a Subsidiary Guarantor, such capital stock shall be
released from the Pledge Agreement and such Subsidiary shall be released from
the Subsidiary Guaranty; and (iii) the Administrative Agent and the Collateral
Agent shall be authorized to take actions deemed appropriate by them in order to
effectuate the foregoing.
8.03 Liens. Holdings 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 of any kind (real or personal, tangible or
intangible) of Holdings or any such Subsidiary 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 or notes with recourse to Holdings or
any of its Subsidiaries) or assign any right to receive income, or file 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, except:
(a) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of
Holdings) have been established;
(b) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of Holdings or any Subsidiary;
(c) Liens created by this Agreement or the other Credit
Documents;
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(d) Liens in existence on the Initial Borrowing Date which (x)
are listed, and the property subject thereto on the Initial Borrowing
Date described, in Annex VI, without giving effect to any extensions or
renewals thereof or (y) are otherwise permitted under this Section
8.03;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.08;
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made 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 and appeal bonds, bids, leases, 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);
(g) Leases or subleases granted to others not interfering in
any material respect with the business of Holdings or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(h) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of Holdings or any of its Subsidiaries;
(i) Liens arising from financing statements regarding leases
not in violation of this Agreement;
(j) Liens securing Non-Recourse Debt to the extent such Liens
do not attach to any property or assets other than the property or
asset financed or refinanced by any such Debt;
(k) Liens created by virtue of Capitalized Lease Obligations,
provided that such Liens are only in respect of the property or assets
subject to, and secure only, the respective Capital Lease;
(l) Liens (x) placed upon equipment or machinery used in the
ordinary course of business of the Borrower, any Subsidiary Guarantor
(other than Capital Corp) or any NRD Borrower at the time of (or within
180 days after) the acquisition thereof by the Borrower, any such
Subsidiary Guarantor (other than Capital Corp) or any such NRD Borrower
to secure Indebtedness incurred to pay all or a portion of the purchase
price thereof, provided that the Lien encumbering
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the equipment or machinery so acquired does not encumber any other
asset of the Borrower or any Subsidiary; or (y) existing on specific
tangible assets at the time acquired by the Borrower, any Subsidiary
Guarantor (other than Capital Corp) or any NRD Borrower or on assets of
a Person at the time such Person first becomes a Subsidiary of the
Borrower, provided that (i) any such Liens were not created at the time
of or in contemplation of the acquisition of such assets or Person by
the Borrower or any of its Subsidiaries, (ii) in the case of any such
acquisition of a Person, any such Lien attaches only to specific
tangible assets of such Person and not assets of such Person generally,
(iii) the Indebtedness secured by any such Lien does not exceed 100% of
the fair market value of the asset to which such lien attaches,
determined at the time of the acquisition of such asset or the time at
which such Person becomes a Subsidiary of the Borrower (except in the
circumstances described in clause (y) above to the extent such Liens
constituted customary purchase money Liens at the time of incurrence
entered into in the ordinary course of business) and (iv) the
Indebtedness secured thereby is permitted by Section 8.04(b);
(m) Permitted Encumbrances;
(n) Liens arising from the transactions permitted by Section
8.02(i) and attached only to the receivable so sold or discounted; and
(o) Liens securing lease obligations of an NRL Subsidiary
permitted pursuant to Section 8.02(j) to the extent such Liens do not
attach to any property or assets other than the property or assets
subject to such leases.
8.04 Indebtedness. Holdings will not, and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower, any Subsidiary Guarantor
(other than Capital Corp) or any NRD Borrower subject to Liens
permitted by Section 8.03(l) or constituting Capitalized Lease
Obligations, provided that the aggregate principal amount of such
Indebtedness and Capitalized Lease Obligations under all Capital Leases
shall not exceed $6,000,000 at any time outstanding;
(c) Existing Indebtedness without giving effect to any
subsequent extension, renewal or refinancing thereof;
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(d) Indebtedness of the Borrower under the Interest Rate
Agreements entered into pursuant to Section 7.10;
(e) Indebtedness of (x) Holdings to the Borrower to the extent
the proceeds thereof are promptly utilized to pay administrative and
reporting costs, (y) the Borrower to Holdings or any Subsidiary
Guarantor or (z) any Subsidiary Guarantor to the Borrower or any other
Subsidiary Guarantor, provided that (x) such Indebtedness shall be
evidenced by a promissory note which shall be pledged to the Collateral
Agent pursuant to the Pledge Agreement and (y) no Indebtedness owing to
or by Capital Corp shall be permitted by this clause (e);
(f) Contingent Obligations of (A) the Borrower in respect of
(x) leases of real property entered into by the Borrower, (y)
obligations of any Subsidiary Guarantor permitted under this Agreement
and (z) leases entered into by any NRL Subsidiary permitted by Section
8.02(j), provided that the aggregate amount of such Contingent
Obligations shall not exceed $3,000,000, and (B) the Borrower or any
Subsidiary in respect of any other Person (other than in respect of
indebtedness for borrowed money) arising as a matter of applicable law
because the Borrower or such Subsidiary is or is deemed to be a general
partner of such other Person;
(g) any NRD Borrower may incur indebtedness ("Non-Recourse
Debt") to finance or refinance a hotel property acquired pursuant to a
Permitted Acquisition, provided that (i) Non-Recourse Debt may only be
incurred on and after the date on which pro forma annual Consolidated
EBITDA of Holdings (after giving effect to all Permitted Acquisitions
then consummated or being consummated) first equals or exceeds
$70,000,000, (ii) Non-Recourse Debt shall not be guaranteed (or
otherwise supported) directly or indirectly by Holdings, the Borrower,
any Subsidiary Guarantor or any other Subsidiary (other than the NRD
Borrower incurring same) (except that the documentation governing any
Non-Recourse Debt may contain provisions relating to customary
indemnities from the Borrower or a Subsidiary Guarantor for fraud, use
of proceeds and environmental matters or as are otherwise reasonably
acceptable to the Administrative Agent), (iii) the principal amount of
any issue of Non-Recourse Debt shall not exceed 65% of the fair market
value of the property securing such Debt, determined at the time of the
acquisition of such property by a valuation firm of national standing
utilizing appraisal standards satisfying the Real Estate Appraisal
Reform Amendments of The Financial Institution Reform, Recovery and
Enforcement Act of 1989, as amended, and (iv) the aggregate principal
amount of Non-Recourse Debt incurred by all NRD Borrowers shall not
exceed $50,000,000 at any time outstanding;
(h) the Borrower or any Subsidiary Guarantor (other than
Capital Corp) may incur additional Indebtedness other than any guaranty
or other Contingent
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Obligation created in respect of Non-Recourse Debt (except for the
indemnities specifically referred to in clause (g)) in an aggregate
principal amount not to exceed $10,000,000 at any time outstanding; and
(i) the Borrower may incur Indebtedness evidenced by the
Capital Note in an aggregate principal amount not to exceed the net
cash proceeds from the IPO.
8.05 Advances, Investments and Loans. Holdings will not, and
will not permit any of its Subsidiaries to, 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 Person, except:
(a) Holdings or any of its Subsidiaries may invest in cash and
Cash Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(c) loans and advances (x) to employees for business-related
travel expenses, moving expenses and other similar expenses, in each
case incurred in the ordinary course of business and (y) to employees
in an aggregate principal amount not to exceed $8,000,000 at any time
outstanding, shall be permitted;
(d) to the extent allowed by Section 8.02(c), (d) or (h), and
the creation of Subsidiaries in compliance with Section 8.15 shall be
permitted;
(e) investments acquired by the Borrower or any of its
Subsidiaries (x) in exchange for any other investment held by the
Borrower or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other investment or (y) as a result of a foreclosure by the
Borrower or any of its Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured
investment in default;
(f) investments of the Borrower in Interest Rate Agreements
entered into pursuant to Section 7.10;
(g) Loans and advances permitted by Section 8.04(e) and/or
(i); and
(h) The investments (other than in Subsidiaries) outstanding
on the Initial Borrowing Date which are listed on Annex VII hereto
(without any increase thereto).
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8.06 Capital Expenditures; Leases. (a) The Borrower will not
permit the amount expended during any fiscal year for Consolidated Capital
Expenditures to be less than 3% (it being understood and agreed that up to 50%
of such amount may be in the form of a Reserve created during such fiscal year)
but not more than 6% of the aggregate revenues for such fiscal year of all
hotels owned or leased by the Borrower and its Subsidiaries.
(b) Holdings will not permit the aggregate payments
(including, without limitation, any property taxes paid by the Borrower and its
Subsidiaries (other than a Specified Subsidiary) as additional rent or lease
payments) by the Borrower and its Subsidiaries (other than a Specified
Subsidiary) on a consolidated basis under agreements in effect as of the Initial
Borrowing Date and/or entered into after the Initial Borrowing Date (including
any such agreement that is an extension, replacement, substitution, or renewal
of any agreement entered into prior to such date) to rent or lease any real or
personal property (exclusive of Capitalized Lease Obligations) to exceed
$2,500,000 in any fiscal year of Holdings.
8.07 Prepayments of Indebtedness, Modifications of Agreements,
etc. Holdings will not, and will not permit any of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary
or optional payment or prepayment or redemption or acquisition for
value of (including, without limitation, by way of depositing with the
trustee with respect thereto money or securities before due for the
purpose of paying when due) or exchange of any Existing Indebtedness or
the Capital Note;
(b) amend or modify (or permit the amendment or modification
of) any of the terms or provisions of or terminate (other than any
scheduled termination in accordance with the terms thereof) (A) the
Capital Note and/or any document or agreement governing same, (B) in
any manner adverse to the interests of the Banks any documents or
agreement governing any Existing Indebtedness or the CGL Participation
or (C) in any manner that has, or which would reasonably be expected to
have, a Material Adverse Effect, any Acquisition Document or any
Westborough Acquisition Document; and/or
(c) amend, modify or change in any manner materially adverse
to the interests of the Banks the certificate of incorporation
(including, without limitation, and in any event, by the filing of any
certificate of designation), partnership agreement, certificate of
formation or by-laws of any Credit Party, or enter into any new
agreement with respect to the capital stock or equity interests, as the
case may be, of any Credit Party (to the extent adverse to the
interests of the Banks).
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8.08 Dividends, etc. Holdings will not, and will not permit
any Subsidiary to declare or pay any dividends (other than, in the case of
Holdings, dividends payable solely in common stock of Holdings) or return any
capital to, its stockholders, equity holders, members or partners or authorize
or make any other distribution, payment or delivery of property or cash to its
stockholders, equity holders, members or partners, as such, or redeem, retire,
purchase or otherwise acquire, directly or indirectly, for a consideration, any
shares of any class of its capital stock or equity or partnership interests or
membership interests now or hereafter outstanding (or any warrants for or
options or stock appreciation rights in respect of any of such shares), or set
aside any funds for any of the foregoing purposes, or permit any Subsidiary to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock or equity or partnership interests or membership interests of
Holdings or any such Subsidiary, as the case may be, now or hereafter
outstanding (or any options or warrants or stock appreciation rights issued with
respect to such capital stock or membership interests or partnership interests)
(all of the foregoing "Dividends"), except that (i) any Subsidiary of the
Borrower may pay Dividends to the Borrower or to any Subsidiary Guarantor and
(ii) Capital Corp may pay cash Dividends to Holdings so long as Holdings shall
immediately utilize 100% of the proceeds thereof to make a capital contribution
to the Borrower.
8.09 Transactions with Affiliates. Holdings will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions with any Affiliate (other than, in the case of a Subsidiary,
Holdings, the Borrower or a Subsidiary Guarantor) other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would be obtainable, in Holdings' reasonable
judgment, by Holdings or such Subsidiary at the time in a comparable
arm's-length transaction with a Person other than an Affiliate except (i)
Management Contracts, (ii) investments permitted by Section 8.06 and (iii)
payments made pursuant to Section 8.09.
8.10 Leverage Ratio. The Borrower will not permit the ratio of
(i) Modified Total Indebtedness as of a date set forth below to (ii) EBITDA for
the Test Period ended on such date to be greater than the ratio set forth
opposite such date below:
Date Ratio
---- -----
September 30 and December 31, 1996,
March 31, June 30, September 30
and December 31, 1997 4.5:1
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March 31, June 30, September 30 and
December 31, 1998, March 31, June
30, September 30 and December 31,
1999 4.25:1
March 31, June 30, September 30 and
December 31, 2000, March 31, June
30, September 30 and December 31,
2001 4.00:1
March 31, June 30, September 30 and
December 31, 2002 3.75:1
March 31, 2003 and each fiscal
quarter thereafter 3.50:1
8.11 Minimum EBITDA. Holdings will not permit EBITDA for any
Test Period ending on a date set forth below to be less than the amount set
forth opposite such date:
Date Amount
---- ------
September 30
and December 31, 1996 $65,000,000
March 31, June 30,
September 30 and
December 31, 1997,
March 31, June 30,
September 30 and
December 31, 1998 $70,000,000
March 31, 1999 and each
fiscal quarter thereafter $75,000,000
8.12 Interest Coverage. Holdings will not permit the Interest
Coverage Ratio for any Test Period ending on a date set forth below to be less
than the ratio set forth opposite such date:
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Date Ratio
---- -----
September 30 and December 31, 1996,
March 31, June 30, September 30
and December 31, 1997 2.50:1
March 31, 1998 and each
fiscal quarter thereafter 2.75:1
8.13 Consolidated Net Worth. Holdings will not permit
Consolidated Net Worth as of the end of any fiscal quarter of Holdings to be
less than an amount equal to the sum of (x) $190,000,000 plus (y) the aggregate
of 80% (70% for each fiscal quarter ending after December 31, 1998) of the
Consolidated Net Income, if positive, for each fiscal quarter ending after the
Initial Borrowing Date and on or prior to the end of the fiscal quarter as of
which Consolidated Net Worth is being determined.
8.14 Debt Service Coverage. Holdings will not permit the Debt
Service Coverage Ratio for any Test Period ending on a date set forth below to
be less than the ratio set forth opposite such date:
Date Ratio
---- -----
September 30 and December 31, 1996,
March 31, June 30, September 30
and December 31, 1997 2.00:1
March 31, 1998 and each
fiscal quarter thereafter 2.25:1
8.15 Creation of Subsidiaries. Holdings will not, and will not
permit any Subsidiary to, create or acquire any Subsidiary other than (x) a
Wholly-Owned Subsidiary that executes a counterpart of the Subsidiary Guaranty,
Pledge Agreement and Security Agreement or (y) a Specified Subsidiary, to the
extent, in each case, that 100% of the capital stock of such entity is pledged
to the Collateral Agent pursuant to the Pledge Agreement. Upon an entity ceasing
to be a Specified Subsidiary, such entity, unless liquidated, shall become a
Subsidiary Guarantor and execute all documents required by the preceding and
following sentences. In addition, each new Subsidiary Guarantor created as
permitted by this Section 8.15 shall execute and deliver, or cause to be
executed, all other relevant documentation of the type described in Section 5 as
such new Subsidiary Guarantor
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would have had to deliver if such new Subsidiary were a Credit Party on the
Initial Borrowing Date.
8.16 Limitation on Certain Restrictions on Subsidiaries.
Holdings 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 in the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Holdings or any Subsidiary of
Holdings, or pay any Indebtedness owed to Holdings or a Subsidiary of Holdings,
(b) make loans or advances to Holdings or any of Holdings' subsidiaries, or (c)
transfer any of its property or assets to Holdings or any of Holdings'
Subsidiaries, except 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 Holdings or a Subsidiary of
Holdings, (iv) customary provisions restricting assignment of any licensing
agreement entered into by Holdings or any Subsidiary of Holdings in the ordinary
course of business, (v) customary provisions restricting the transfer of assets
subject to Liens permitted under Section 8.03(j) and (l), (vi) customary
provisions restricting assignment of any Management Contract (as defined in the
Security Agreement) or Franchise Agreement (as defined in the Security
Agreement) and (vii) restrictions governing any of the Non-Recourse Debt of an
NRD Borrower or any lease of an NRL Subsidiary.
8.17 Holdings. Holdings will not engage in any business or
activities other than the ownership of all of the capital stock of Capital Corp
and the Borrower and administrative and reporting activities entitled thereto.
Capital Corp will not engage in any business or activities other than holding
the Capital Note.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder or under
any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
9.03 Covenants. Holdings or the Borrower shall (i) default in
the due performance or observance by it of any term, covenant or agreement
contained in Section
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7.10, 7.11 or 8, or (ii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in Section 9.01,
9.02 or clause (i) of this Section 9.03) contained in this Agreement and such
default shall continue unremedied for a period of at least 30 days after notice
by the Administrative Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) Holdings, the
Borrower or any of its Subsidiaries shall (i) default in any payment with
respect to any Indebtedness (other than the Obligations and/or any non-recourse
Indebtedness), and such default shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or (ii) default in the observance or performance of any agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto (and all grace periods
applicable to such observance, performance or condition shall have expired), 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 any such Indebtedness to become due prior to its stated maturity; or (b)
any such Indebtedness of Holdings, the Borrower or any of its Subsidiaries shall
be declared to be due and payable, or shall be required to be prepaid (other
than by a regularly scheduled required prepayment or redemption or as a
mandatory prepayment or redemption (unless such required or mandatory prepayment
or redemption results from a default thereunder or an event of type that
constitutes an Event of Default hereunder), provided that it shall not
constitute an Event of Default pursuant to this Section 9.04 unless the
aggregate amount of all Indebtedness referred to in clauses (a) and (b) above
exceeds $5,000,000 at any one time; or
9.05 Bankruptcy, etc. Holdings, the Borrower or any of its
Material Subsidiaries 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 Holdings, the Borrower or any of its Material Subsidiaries
and the petition is not controverted within 10 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 Holdings, the Borrower or any of its Material Subsidiaries;
or Holdings, the Borrower or any of its Material Subsidiaries commences
(including by way of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian, trustee,
conservator or liquidator (collectively, a "conservator") of itself or all or
any substantial portion of its property) any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency, liquidation, rehabilitation, conservatorship or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings, the
Borrower or any of its Material Subsidiaries; or any such proceeding is
commenced against Holdings, the
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Borrower or any of its Material Subsidiaries to the extent such proceeding is
consented to by such Person or remains undismissed for a period of 60 days; or
Holdings, the Borrower or any of its Material Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or Holdings, the Borrower or any of its Material
Subsidiaries suffers any appointment of any conservator or the like for it or
any substantial part of its property which continues undischarged or unstayed
for a period of 60 days; or Holdings, the Borrower or any of its Material
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by Holdings, the Borrower or any of its Material
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 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, 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 has not
been timely made, Holdings, or any Subsidiary of Holdings 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 Holdings, or any Subsidiary of
Holdings 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; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a Material Adverse Effect; or
9.07 Security Documents. (a) Any Security Document shall cease
to be in full force and effect (other than upon termination thereof in
accordance with its terms), or shall cease to give the Collateral Agent the
Liens purported to be created thereby in favor of the Collateral Agent or (b)
any Credit Party 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 any Security Document and such default shall continue beyond any
cure or grace period specifically provided for in such Security Document; or
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9.08 Judgments. One or more judgments or decrees shall be
entered against Holdings, the Borrower and/or any of its Subsidiaries involving
a liability (not paid or fully covered by insurance) of $5,000,000 or more in
the aggregate for all such judgments and decrees for Holdings, the Borrower and
its Subsidiaries) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.09 Environmental Matters. Any Hazardous Materials shall have
been at any time (i) generated, used, treated or stored on, or transferred to or
from, any Real Property of Holdings or any of its Subsidiaries or (ii) released
on any such Real Property in violation of Environmental Laws, in each case where
such occurrence or event has had, or is reasonably likely to have, a Material
Adverse Effect; or
9.10 Guaranty. Any Guaranty or any provision thereof shall
cease to be in full force or effect, or any Guarantor or any Person acting by or
on behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under such Guaranty or any 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 relevant Guaranty;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Bank to enforce its claims against the Borrower,
except as otherwise specifically provided for in this Agreement (provided that,
if an Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Bank 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, all Unpaid Drawings and all
obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Administrative Agent (or direct the Collateral Agent to enforce),
any or all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct the Borrower to pay (and the Borrower
hereby agrees that on receipt of such notice or upon the occurrence of an Event
of Default with respect to the Borrower under Section 9.05, it will pay) to the
Collateral Agent an amount of cash equal to the aggregate Stated Amount of all
Letters of Credit
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then outstanding (such amount to be held as security after the Borrower's
reimbursement obligations in respect thereof).
SECTION 10 Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquisition" shall mean the acquisition by the Borrower of
the Assets as provided in the Acquisition Documents.
"Acquisition Documents" shall mean (i) the Agreement of
Purchase and Sale and (ii) the Contribution Agreement, in each case in the form
delivered to the Administrative Agent pursuant to Section 5.01(j) and without
giving effect to any amendment or modification thereof not consented to by the
Required Banks.
"Acquisition Loans" shall mean Revolving Loans the proceeds of
which are utilized to make Permitted Acquisitions or to refinance loans or
advances the proceeds of which were utilized to make Permitted Acquisitions.
"Acquisition Sublimit" shall mean at any time the Total
Revolving Commitment at such time less $5,000,000.
"Additional Security Documents" shall have the meaning
provided in Section 7.11.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
second Person if such first Person possesses, directly or indirectly, the power
(i) to vote 10% or more of the securities having ordinary voting power for the
election of directors or managers of such second Person or (ii) to direct or
cause the direction of the management and policies of such second Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time further modified, amended and/or supplemented.
"Agreement of Purchase and Sale" shall mean the Agreement of
Purchase and Sale, dated as of March 29, 1996, among the sellers named therein
and Member, in
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the form delivered to the Administrative Agent pursuant to Section 5.01(j)(i)
amended through the Effective Date.
"Applicable Percentage" shall mean (i) in the case of Loans
maintained as Base Rate Loans, 1% and (ii) in the case of Loans maintained as
Eurodollar Loans, 2%.
"Assets" shall mean the partnership interests and hotel assets
acquired by the Borrower pursuant to, and as more fully described in, the
Acquisition Documents.
"Asset Sale" shall mean the sale, transfer or other
disposition (including by liquidations of a partnership of the interests therein
of the Borrower or any Subsidiary) by the Borrower or any Subsidiary to any
Person other than the Borrower or any Subsidiary Guarantor of any of their
respective assets (other than (i) sales, transfers or other dispositions of
obsolete or excess FF&E in the ordinary course of business and (ii) sales,
transfers or other dispositions with Net Cash Proceeds aggregating no more than
$500,000 in any fiscal year).
"Assignment Agreement" shall mean an Assignment Agreement
substantially in the form of Exhibit J hereto.
"Authorized Officer" shall mean any executive officer of
Holdings or the Borrower, as the case may be, designated as such in writing to
the Administrative Agent by Holdings or the Borrower, respectively, to the
extent acceptable to the Administrative Agent.
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any incurrence of Loans or
to fund its portion of any unreimbursed payment under Section 2.04(c) or (ii) a
Bank having notified the Administrative Agent and/or the Borrower that it does
not intend to comply with the obligations under Section 1.01 and/or Section
2.04(c), in the case of either (i) or (ii) as a result of the appointment of a
receiver or conservator with respect to such Bank at the direction or request of
any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" shall mean the higher of (x) the rate established
by the Administrative Agent from time to time as the reference rate for short
term commercial loans in U.S. dollars and (y) 1/2 of 1% in excess of the
overnight cost of funds of the Administrative Agent (as determined by the
Administrative Agent in its sole discretion).
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"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan
pursuant to a single Facility by the Borrower from all of the Banks having
Commitments with respect to such Facility on a pro rata basis on a given date
(or resulting from conversions on a given 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 any related
Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions 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) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Corp" shall mean IHC Capital Corporation, a Delaware
corporation.
"Capital Lease" as applied to any Person shall mean any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Capital Note" shall mean the subordinated promissory note
issued by the Borrower and payable to Capital Corp in an aggregate principal
amount equal to the net proceeds of the IPO, which Capital Note shall be in form
and substance reasonably satisfactory to the Administrative Agent and shall be
pledged to the Collateral Agent pursuant to the Pledge Agreement to which
Capital Corp is party. Not less than $182,972,500 of the amounts received by the
Borrower pursuant to the Capital Note shall be utilized to effect the
Transaction prior to or contemporaneously with the utilization of proceeds of
initial Loans hereunder.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Borrower or any of its Subsidiaries in each case
taken at the amount thereof accounted for as liabilities in accordance with
GAAP.
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"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof) having maturities of
not more than one year from the date of acquisition, (ii) U.S. dollar
denominated time deposits, certificates of deposit and bankers' acceptances of
(x) any Bank or (y) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank, an "Approved Bank"), in each case with
maturities of not more than one year from the date of acquisition, (iii)
commercial paper issued by any Bank or Approved Bank or by the parent company of
any Bank or Approved Bank and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short- term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition and (iv) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iii) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset Sale,
other than the portion of such deferred payment constituting interest, but only
as and when so received) received by Holdings, the Borrower and/or any
Subsidiary from such Asset Sale.
"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. Section 9601 et seq.
"CGL" shall mean Interstone/CGL Partners, L.P., a Delaware
Limited Partnership.
"CGL Partnership Agreement" shall mean the Amended and
Restated Limited Partnership Agreement, dated as of November 20, 1995, among
Interstone/CGL Management Associates, Interstone Two Partners I L.P., Interstone
Two Partners II L.P., Interstone Two Partners III L.P., Interstone Two Partners
IV L.P., Connecticut General Life Insurance Company, CGI Partners, L.P. and
Quebec Street Investments, Inc.
"CGL Participation" shall have the meaning provided in Section
5.01(k)(v).
"Change of Control" shall mean and include (i) during any
period of two consecutive calendar years, individuals who at the beginning of
such period constituted Holdings' Board of Directors (together with any new
directors whose election by Holdings'
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Board of Directors or whose nomination for election by Holding's shareholders
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office (ii) any Person
or group (as such term is defined in Section 13(da)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), other than the Fine
Family, shall acquire, directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 and 13d-5 of the Exchange Act) of 30% or more, on a fully
diluted basis, of the economic or voting interest in Holdings' capital stock
and/or (iii) any "change in control" or any similar term as defined in any of
the indentures, agreements or instruments governing any Indebtedness of Holdings
or any of its Subsidiaries.
"Clean-Down Period" shall mean a 30 consecutive day period
which shall commence on or after July 1 of each year and terminate on or before
June 30 of the following year during which the sum of the aggregate outstanding
principal amount of Working Capital Loans plus the Letter of Credit Outstandings
do not exceed $10,000,000 at any time during such period.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in effect
at the Effective Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in
each of the Security Documents.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Banks pursuant to the Security Documents.
"Collective Bargaining Agreement" shall have the meaning
provided in Section 5.01(d).
"Commitment" shall mean, with respect to each Bank, such
Bank's Term Commitment plus its Revolving Commitment.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated Capital Expenditures" shall mean all
expenditures made by the Borrower and its Subsidiaries for the maintenance of
properties in the ordinary course (and not in connection with acquisitions or
major expansion/renovation programs).
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"Consolidated Net Income" shall mean for any period, the net
income (or loss), without deduction for minority interests, of Holdings and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP, provided that there shall
be excluded (i) the income (or loss) of any entity (other than a Subsidiary) in
which any other Person (other than the Borrower or any of its Subsidiaries) has
a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of its Subsidiaries by any
such entity during such period, (ii) the income (or loss) of any entity accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
the Borrower or any of its Subsidiaries or on which its assets are acquired by
the Borrower or any of its Subsidiaries and (iii) the income of any Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary.
"Consolidated Net Worth" shall mean at any time for the
determination thereof all amounts which, in conformity with GAAP, would be
included under the caption "total stockholders' equity" (or any like caption) on
a consolidated balance sheet of Holdings as at such date.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing 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, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) 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 (d) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof, provided, however, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. 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.
"Contribution Agreement" shall mean the Contribution
Agreement, dated as of March 29, 1996, among the contributors named therein and
the Borrower, as amended through the Initial Borrowing Date.
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"Credit Documents" shall mean this Agreement, the Notes, the
Security Documents and the Subsidiary Guaranty.
"Credit Event" shall mean the making of any Loans and/or the
issuance of any Letter of Credit.
"Credit Lyonnais" shall mean Credit Lyonnais New York Branch.
"Credit Party" shall mean Holdings, the Borrower and each
Subsidiary Guarantor.
"Debt Service Coverage Ratio" shall mean, for any Test Period,
the ratio of (x) EBITDA to (y) the Total Debt Service, in each case for such
Test Period.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividends" shall have the meaning provided in Section 8.08.
"EBIT" shall mean, for any period, (A) the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) provisions for taxes based
on income, (iii) Total Interest Expense, (iv) amortization or write-off of
deferred financing costs to the extent deducted in determining Consolidated Net
Income and (v) losses on sales of assets (excluding sales in the ordinary course
of business) and other extraordinary losses and other one-time non-cash charges
less (B) gains on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary gains and other one-time non-cash gains, all
as determined for Holdings and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"EBITDA" shall mean, for any period, the sum of the amounts
for such period of (i) EBIT, (ii) depreciation expense, (iii) amortization
expense and (iv) any other non-cash charges, all as determined for Holdings and
its Subsidiaries on a consolidated basis in accordance with GAAP.
"Effective Date" shall have the meaning provided in Section
12.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which is not a direct competitor of the Borrower or
engaged in the same or similar business
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as the Borrower, or any of its respective Subsidiaries or is not an Affiliate of
any such competitors of the Borrower or any of its respective Subsidiaries.
"Employment Agreements" shall have the meaning provided in
Section 5.01(d).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, 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 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 resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy or any rule of
common law, and any binding and enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment issued to or rendered against the Borrower or any of its
Subsidiaries (in each of the foregoing cases, now or hereafter in effect and as
amended) 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. Section 1251 et seq., the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f
et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 7401
et seq.; and the Occupational Safety and Health Act, 29 U.S.C. Section 651 et
seq. (to the extent it regulates occupational exposure to Hazardous Materials);
and any state and local or foreign counterparts or equivalents, in each case as
now or hereafter in effect and 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 Effective Date and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or a Subsidiary of Holdings
would be deemed to be
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a "single employer" (i) within the meaning of Section 414(b),(c), (m) or (o) of
the Code or (ii) as a result of Holdings or a Subsidiary of Holdings being or
having been a general partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at
the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (A) (i) the rate for deposits in U.S. Dollars for
a period equal to such Interest Period which appears on the Telerate Page 3750
as of 11:00 A.M. London time, on the day that is two Business Days prior to the
commencement of such Interest Period or (ii) in the event that the Eurodollar
Rate can not be determined pursuant to the preceding clause (i), the offered
quotation to first-class banks in the interbank Eurodollar market by the
Administrative Agent for dollar deposits of amounts in same day funds comparable
to the outstanding principal amount of the Eurodollar Loan of the Administrative
Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period, in each case divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (B) 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) applicable to any member bank of the Federal Reserve System
in respect of Eurocurrency liabilities as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
9.
"Excess Cash Flow" shall mean, for any period, (x) EBITDA for
such period less (y) the sum, without duplication, of the amount for such period
of (i) Total Interest Expense, (ii) provisions for taxes based on income, (iii)
Consolidated Capital Expenditures other than any thereof made from a Reserve
established prior to such period, (iv) all scheduled principal payments on Total
Indebtedness (including all Scheduled Repayments), (v) all partnership
distributions made by any Subsidiary of the Borrower to any entity that is not a
wholly-owned direct or indirect Subsidiary of the Borrower and (vi) any Reserve
created (including any increase to an existing Reserve) during such period.
"Existing CGL Credit Agreements" shall mean the Loan
Agreements, each dated as of December 15, 1995, between CGL and Credit Lyonnais
as in effect on the Initial Borrowing Date and as the same may be subsequently
amended, modified or supplemented in accordance with the provisions thereof and
hereof.
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"Existing CIGNA Note" shall mean the Deed of Trust Note, dated
March 7, 1994, issued by Interstone/Houston Partnership, L.P. and payable to
Connecticut General Life Insurance Company.
"Existing Hilltop Credit Agreement" shall mean the Credit
Agreement, dated as of February 19, 1993, between Hilltop Equipment Leasing
Company, L.P. and PNC Bank, National Association.
"Existing Indebtedness" shall have the meaning provided in
Section 6.18.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.01(d).
"Existing Letter of Credit" shall have the meaning provided in
Section 2.01(d).
"Existing PNC Credit Agreement" shall mean the Credit
Agreement, dated as of December 13, 1995, among the Borrower, the financial
institution from time to time party thereto and PNC Bank, National Association,
as agent.
"Existing Wells Fargo Credit Agreements" shall mean,
collectively, (i) the Loan and Security Agreement, dated as of June 26, 1995,
between Interstone/Huntington Partnership L.P. and Wells Fargo Bank, N.A., (ii)
the Loan Agreement, dated as of August 31, 1995, among Interstone/Atlanta
Partnership, L.P., Interstone/Colorado Springs, L.P., Interstone/Denver
Partnership, L.P., Interstone/Lisle Partnership, L.P., Interstone/Conshohocken
Partnership, L.P. and Wells Fargo Bank, National Association, and (iii) the Loan
Agreement, dated as of October 10, 1995, between Interstone/Williamsburg
Partnership, L.P. and Wells Fargo Bank, National Association.
"Expiration Date" shall mean July 31, 1996.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Facility" shall mean either of the credit facilities
established under this Agreement, i.e., the Term Facility or the Revolving
Facility.
"Federal Funds Effective 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 quota-
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tions 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.
"FF&E" shall mean furniture, fixtures and equipment.
"Fine" shall mean Milton Fine, individually and in his
capacity as trustee of the Fine Revocable Trust.
"Fine Children Trust" shall mean the three irrevocable trusts
established pursuant to that certain single Irrevocable Trust Agreement, dated
December 15, 1989, for the benefit respectively of the grantors thereof made
among Carolyn Fine Freidman, Sibyl A. Fine King and David J. Fine, as grantors,
and David J. Fine, as trustee.
"Fine Family" shall mean, collectively, Fine and the Fine
Children Trust.
"Fine Revocable Trust" shall mean the revocable trust
established pursuant to that certain Second Amended and Restated Trust
Agreement, dated November 11, 1994, for the benefit of Milton Fine.
"Formation Agreement" shall mean the Formation Agreement,
dated as of June ___, 1996, among Holdings and the contributors named therein,
in the form delivered pursuant to Section 5.01(h) and as the same may be
subsequently amended with the consent of the Administrative Agent.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; it being understood
and agreed that determinations in accordance with GAAP for purposes of Section
8, including defined terms as used therein, are subject (to the extent provided
therein) to Section 12.07(a).
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties" shall mean the guaranty provided by Holdings
pursuant to Section 13 of this Agreement and the Subsidiary Guaranty.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
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"Hazardous Materials" shall mean (a) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; and (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.
"Holdings" shall have the meaning provided in the first
paragraph of this Agreement.
"IHC" shall mean Interstate Hotels Corporation, a Pennsylvania
corporation.
"Indebtedness" of any Person shall mean without duplication
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such indebtedness has been assumed, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all net obligations
of such Person under Interest Rate Agreements and (viii) all Contingent
Obligations of such Person, provided that Indebtedness shall not include trade
payables and accrued expenses, in each case arising in the ordinary course of
business.
"Initial Borrowing Date" shall mean the date, on or after the
Effective Date, upon which the initial Borrowing of Loans occurs.
"Interest Coverage Ratio" shall mean, for any Test Period, the
ratio of (x) EBITDA to (y) Total Interest Expense, in each case for such Test
Period.
"Interest Period" with respect to any Loan shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect against
fluctuations in interest rates.
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"Interstone II" shall mean IHC/Interstone Partnership II,
L.P., a Delaware Limited Partnership.
"IPO" shall have the meaning provided in Section 5.01(i).
"Leaseholds" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Legal Requirements" shall mean all applicable laws, rules,
orders and regulations made by any legislature or government or any governmental
body or regulatory authority having jurisdiction over Holdings or a Subsidiary.
"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(b).
"Letter of Credit Issuer" shall mean (i) Credit Lyonnais[,
(ii) in respect of each Existing Letter of Credit, the Bank that has issued same
as of the Effective Date] and/or (iii) such other Bank that is requested, and
agrees, to so act by the Borrower and acceptable to the Administrative Agent.
"Letter of Credit Outstandings" shall mean, at any time, the
sum, without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Loan" shall have the meaning provided in Section 1.01.
"Management Agreements" shall have the meaning provided in
Section 5.01(d).
"Management Contracts" shall have the meaning provided in
Section 5.01(d).
"Margin Stock" shall have the meaning provided in Regulation
U.
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"Material Adverse Effect" shall mean a material adverse effect
on the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of Holdings and its Subsidiaries taken as a whole
(after giving effect to the Transaction).
"Material Subsidiary" shall mean, at any time, any Subsidiary
of the Borrower that (x) has assets at such time comprising 5% or more of the
consolidated assets of the Borrower and its Subsidiaries or (y) had net income
in the most recently ended fiscal year of the Borrower comprising 5% or more of
the consolidated net income of the Borrower and its Subsidiaries for such fiscal
year.
"Member" shall mean IHC Member Corporation, a Delaware
corporation.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$1,000,000, (ii) for Eurodollar Loans, $5,000,000.
"Modified Total Indebtedness" shall mean at any time (i) Total
Indebtedness less (ii) the outstanding principal amount up to $30,000,000 in the
aggregate of Non- Recourse Debt included in determining Total Indebtedness.
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Mortgage" shall have the meaning provided in Section
5.01(m)(iii) and, after the execution and delivery thereof, shall include each
mortgage constituting an Additional Security Document.
"Mortgage Policies" shall have the meaning provided in Section
5.01(m)(iii).
"Mortgaged Property" shall have the meaning provided in
Section 5.01(m)(iii) and, after the execution and delivery of any mortgage or
deed of trust constituting an Additional Security Document, shall include the
respective property subject thereto but shall not include after the date of such
release any real property theretofore a Mortgaged Property that has been
released from the Liens of the Security Documents in accordance with the terms
thereof or of this Agreement.
"Net Cash Proceeds" shall mean, with respect to any Asset
Sale, the Cash Proceeds resulting therefrom net of (i) reasonable and customary
expenses of sale incurred in connection with such Asset Sale, and other
reasonable and customary fees and expenses incurred, and all state, and local
taxes paid or reasonably estimated to be payable by such Person, as a
consequence of such Asset Sale and the payment of principal, premium and
interest of Indebtedness secured by the asset which is the subject of the Asset
Sale and required to be, and which is, repaid under the terms thereof as a
result of such Asset Sale, (ii) amounts of any distributions payable to holders
of minority interests in the relevant
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Person or in the relevant property or assets and (iii) incremental income taxes
paid or payable as a result thereof.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Non-Managed Hotel" shall mean the Marriott property located
at Tysons Corner, Virginia and one other hotel property acquired by the Borrower
or a Subsidiary Guarantor after the Initial Borrowing Date and identified at the
time of acquisition as a Non-Managed Hotel by the Borrower to the Administrative
Agent, provided that such identified Non-Managed Hotel shall be managed by the
Borrower or any of its Subsidiaries from and after the first anniversary of the
consummation of the acquisition of such hotel property.
"Non-Recourse Debt" shall have the meaning provided in Section
8.04(g).
"Note" shall mean and include each Term Note and each
Revolving 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 at 1301 Avenue of the Americas, New York, New York 10019, Attention:
Mischa Zabotin, or such other office as the Administrative Agent may designate
to the Borrower from time to time.
"NRD Borrower" shall mean each corporation (i) all of the
capital stock of which is directly owned by the Borrower, (ii) that owns one
(but not more than one) hotel property acquired pursuant to a Permitted
Acquisition and (iii) that incurs Non-Recourse Debt to finance or refinance the
acquisition of the property discussed in clause (ii) above, provided that upon
the repayment in full of such Non-Recourse Debt (other than from the proceeds of
refinancing Non-Recourse Debt), such corporation shall cease to be an NRD
Borrower.
"NRL Subsidiary" shall mean each corporation (i) all of the
capital stock of which is directly owned by the Borrower, (ii) that enters into
a lease or leases permitted by Section 8.02(j) and (iii) that incurs no
Indebtedness (except any such leases to the extent constituting Indebtedness),
provided that upon the termination of all such leases entered into by an NRL
Subsidiary, such corporation shall cease to be an NRL Subsidiary.
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"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Administrative Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Administrative
Agent at 1301 Avenue of the Americas, New York, New York, Attention: Mischa
Zabotin, or such other office as the Administrative Agent may designate to the
Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisitions" shall mean and include (i)
expenditures (including the purchase of adjacent land) to expand then existing
hotel facilities located in the United States or Canada to the extent owned by
the Borrower or any Subsidiary Guarantor on the Initial Borrowing Date or
acquired pursuant to a Permitted Acquisition, in an aggregate amount not to
exceed $10,000,000 for all expenditures pursuant to this clause (i); (ii)
advances or credit extensions to, or other investments in, any Person owing a
hotel property located in the United States or Canada made in connection with
the Borrower or any Subsidiary Guarantor obtaining a management contact for such
hotel property, in an aggregate amount not to exceed $30,000,000 for all
advances, credit extensions and investments pursuant to this clause (ii), with
advances, extensions and investments in NRL Subsidiaries in an aggregate amount
of up to $5,000,000 to be included as a Permitted Acquisition pursuant to this
clause (ii); and (iii) acquisitions (whether by purchase, lease or otherwise,
and including expenditures for start-up activities and operations and
renovations) of hotel properties (or interests in such properties) located in
the United States or Canada and/or interests in (or the making of advances or
credit extensions to or investments in) partnerships or limited liability
companies owning hotel properties located in the United States or Canada,
provided that (x) the only Indebtedness that may be incurred by Holdings, the
Borrower and its Subsidiaries to effect a Permitted Acquisition shall be
Acquisition Loans and Non-Recourse Debt, and (y) the aggregate amount that may
be expended for all Permitted Acquisitions in respect of hotel properties and
facilities located in Canada will not exceed $25,000,000.
"Permitted Encumbrances" shall mean, with respect to a Real
Property constituting part of the Collateral, (i) the liens, encumbrances and
other matters disclosed in the Mortgage Policy relating to the Mortgage on such
Real Property or "insured over" or "insured around" to the satisfaction of the
Collateral Agent in such Mortgage Policy, (ii) such other title and survey
exceptions as the Collateral Agent may approve in writing in its reasonable
discretion, and (iii) the Permitted Liens, if any, described in Section 8.03(h)
affecting such Real Property.
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"Permitted Liens" shall mean Liens described in Section 8.03.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) Holdings or a Subsidiary of
Holdings or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which Holdings, or a Subsidiary of
Holdings 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
5.01(m)(i).
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Pledge Agreement.
"Prohibited Transaction" shall mean a transaction with respect
to a Plan that is prohibited under Section 4975 of the Code or Section 406 of
ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA.
"PSD Interest Period" shall mean an Interest Period commenced
prior to the Syndication Date, each of which Interest Periods must satisfy the
requirements of Section 1.09(iv).
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all of the right,
title and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Reference Rate" shall mean the rate which the Administrative
Agent establishes from time to time as its reference rate for short term
commercial loans in U.S. dollars, the Reference Rate to change when and as such
reference rate changes. The Reference 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 Reference Rate.
"Refinancing" shall have the meaning provided in Section
5.01(k)(vi).
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"Registration Statement" shall mean the Registration Statement
on Form S-1, Registration Number 333-3958 filed by Holdings with the SEC on
April 24, 1996, together with the amendments thereto filed on or prior to the
Effective Date (copies of which have been delivered to the Banks) and any
subsequent amendment thereto reasonably satisfactory to the Administrative
Agent.
"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 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 establishing margin requirements.
"Reorganization" shall have the meaning provided in Section
5.01(h).
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan other than those events as to which the
30-day notice period is waived under subsection .13, .14, .16, .18, .19 or .20
of PBGC Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks whose
outstanding Term Loans and Term Commitments, and Revolving Commitments (or, if
after the Total Revolving Commitment has been terminated, outstanding Revolving
Loans) aggregate more than 50% of the sum of (i) the total outstanding Term
Loans and Term Commitments of Non-Defaulting Banks and (ii) the total Revolving
Commitments of Non-Defaulting Banks (or, if after the Total Revolving Commitment
has been terminated, the total outstanding Revolving Loans of Non-Defaulting
Banks).
"Reserve" shall mean for any period any cash reserve
reasonably taken by the Borrower in good faith and in accordance with GAAP (to
the extent applicable thereto) or pursuant to the requirements of any credit
agreement binding on the Borrower and/or any Subsidiary in respect of cash
payments to be made in future periods relating to Consolidated Capital
Expenditures (other than any such Reserve relating to Consolidated Capital
Expenditures not permitted to be made in such period as a result of Section
8.06(a)).
"Revolving Commitment" shall mean, with respect to each Bank,
the amount set forth opposite such Bank's name in Annex I hereto directly below
the column entitled "Revolving Commitment," as the same may be reduced from time
to time pursuant to Section 3.02, 3.03 and/or 9 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to Section 12.04.
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"Revolving Facility" shall mean the Facility evidenced by the
Total Revolving Commitment.
"Revolving Loan" shall have the meaning provided in Section
1.01(b).
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RF Maturity Date" shall mean June __, 2003.
"RF Percentage" shall mean, at any time for each Bank with a
Revolving Commitment, the percentage obtained by dividing such Bank's Revolving
Commitment by the Total Revolving Commitment, provided that if the Total
Revolving Commitment has been terminated, the RF Percentage of each Bank shall
be determined by dividing such Bank's Revolving Commitment immediately prior to
such termination by the Total Revolving Commitment immediately prior to such
termination.
"S&P" shall mean Standard & Poor's Corporation and its
successors.
"Scheduled Repayment" shall have the meaning provided in
Section 4.02(A)(c).
"Scheduled RF Reduction" shall have the meaning provided in
Section 3.03(c).
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act of 1933, as amended, as the same may be in effect from
time to time.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Security Agreement" shall have the meaning provided in
Section 5.01(m)(ii).
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the
Security Agreement, each Mortgage, each other Additional Security Document and
each security document entered into pursuant to Section 8.02(c).
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"Shareholders' Agreements" shall have the meaning provided in
Section 5.01(d).
"Specified Asset Sale" shall mean and include a sale by the
Borrower or any of its Subsidiaries of any assets owned by such Person on the
Initial Borrowing Date but shall not include the sale of the Boston Marriott
Westborough Hotel.
"Specified Subsidiary" shall mean and include at any time each
NRD Borrower and each NRL Subsidiary existing at such time.
"Stated Amount" of each Letter of Credit shall mean the
maximum available to be drawn thereunder (regardless of whether any conditions
for drawing could then be met).
"Subsidiary" of any Person shall mean and include (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 directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean Capital Corp and each
Wholly-Owned Subsidiary that is party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in
Section 5.01(l).
"Syndication Date" shall mean the earlier of (x) the date
which is 60 days after the Initial Borrowing Date and (y) the date upon which
the Administrative Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication has been completed.
"Tax Sharing Agreement" shall have the meaning provided in
Section 5.01(d).
"Taxes" shall have the meaning provided in Section 4.04.
"Term Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I hereto directly below the
column entitled "Term Commitment," as the same may be reduced or terminated
pursuant to Section 3.03.
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"Term Facility" shall mean the Facility evidenced by the Total
Term Commitment.
"Term Loan" shall have the meaning provided in Section
1.01(a).
"Term Note" shall have the meaning provided in Section
1.05(a).
"Test Period" shall mean at any time the period (taken as one
accounting period) of four consecutive fiscal quarters then last ended, provided
that the computation of any amount (e.g. EBITDA) for a Test Period that includes
less than four full fiscal quarters commencing on or after the Initial Borrowing
Date shall include such amount for the Borrower, Member and their respective
Subsidiaries on a combined basis for the portion of such Test Period occurring
prior to the Initial Borrowing Date (determined on a basis consistent with the
Borrower's and Member's financial statements and the definitions contained
herein).
"TF Maturity Date" shall mean June __, 2003.
"Total Commitment" shall mean the sum of the Total Term
Commitment and the Total Revolving Commitment.
"Total Debt Service" shall mean, for any period, the sum,
without duplication, of the amounts for such period of (i) Total Interest
Expense and (ii) all scheduled principal payments on Total Indebtedness
(including all Scheduled Repayments).
"Total Indebtedness" shall mean all Indebtedness for borrowed
money of or guaranteed by the Borrower and/or any of its Subsidiaries all as
determined on a consolidated basis.
"Total Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of Holdings and its Subsidiaries on a consolidated basis with respect
to all outstanding Indebtedness of Holdings and its Subsidiaries including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and net costs under Interest Rate Agreements,
but excluding, however, any amortization of deferred financing costs, all as
determined in accordance with GAAP.
"Total Revolving Commitment" shall mean the sum of the
Revolving Commitments of each of the Banks.
"Total Term Commitment" shall mean the sum of the Term
Commitments of each of the Banks.
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"Transaction" shall include (i) the Reorganization, (ii) the
IPO, (iii) the Refinancing, (iv) the Acquisition and (v) if consummated on the
Initial Borrowing Date, the Westborough Acquisition.
"Transaction Documents" shall mean and include the Acquisition
Documents, the Westborough Acquisition Documents (in the event that the
Westborough Acquisition is consummated on the Initial Borrowing Date), the
Registration Statement, all agreements and documents governing the Refinancing
(including the CGL Participation) and the Credit Documents.
"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code.
"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 exceeds the
fair market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
"Unpaid Drawing" shall have the meaning provided in Section
2.03(a).
"Unutilized Revolving Commitment" for any Bank at any time
shall mean the excess of (i) such Bank's Revolving Commitment at such time over
(ii) the sum of the principal amount of Revolving Loans made by such Bank and
outstanding at such time and (y) such Bank's RF Percentage of Letter of Credit
Outstandings at such time.
"Unutilized Total Revolving Commitment" shall mean, at any
time, the excess of (i) the Total Revolving Commitment at such time over (ii)
the sum of (x) the aggregate principal amount of all Revolving Loans then
outstanding plus (y) the aggregate Letter of Credit Outstandings at such time.
"Westborough Acquisition" shall mean the acquisition by the
Borrower of the Boston Marriott Westborough Hotel as provided in the Westborough
Acquisition Documents.
"Westborough Acquisition Documents" shall mean Agreement to
Sell and Purchase, effective as of March 1, 1996, by and between First Allmerica
Financial Life Insurance and the Borrower.
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"Wholly-Owned Subsidiary" shall mean each Subsidiary of the
Borrower all of whose capital stock, equity interests and partnership interests
are owned directly or indirectly by the Borrower, its officers, stockholders and
affiliates but excluding any Subsidiary primarily engaged in the business of
issuing insurance and/or insurance policies.
"Working Capital Loans" shall mean all Revolving Loans that
are not Acquisition Loans.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
SECTION 11. The Administrative Agent.
11.01 Appointment. Each Bank hereby irrevocably designates and
appoints Credit Lyonnais as Administrative Agent (such term to include for the
purposes of this Section 11 Credit Lyonnais acting as Collateral Agent) to act
as specified herein and in the other Credit Documents, and each such Bank hereby
irrevocably authorizes Credit Lyonnais as the Administrative Agent for such
Bank, to take such action on its behalf under the provisions of this Agreement
and the other Credit Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. The Administrative Agent agrees to act as
such upon the express conditions contained in this Section 11. Notwithstanding
any provision to the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein or in the other Credit Documents, nor any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent. The provisions of this Section 11 are solely
for the benefit of the Administrative Agent, and the Banks, and no Credit Party
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the
Administrative Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation or relationship of agency
or trust with or for any Credit Party.
11.02 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement or any other Credit Document by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 11.03.
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11.03 Exculpatory Provisions. Neither the Administrative Agent
nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by Holdings or any
Subsidiary or any of their respective officers contained in this Agreement, any
other Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Credit Document or for any
failure of Holdings or any Subsidiary or any of their respective officers to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of Holdings
or any Subsidiary. The Administrative Agent shall not be responsible to any Bank
for the effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Banks or by or on behalf of
Holdings to the Administrative Agent or any Bank or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default.
11.04 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it, in good
faith, to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Holdings), independent accountants
and other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Banks as it deems appropriate or it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Banks, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks.
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11.05 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Bank or the Borrower or any other Credit Party referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give prompt notice thereof to the Banks.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks, provided
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Banks.
11.06 Non-Reliance. Each Bank expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any Subsidiary, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of Holdings and its Subsidiaries and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon the
Administrative Agent, or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of Holdings and its Subsidiaries. The
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
assets, property, financial and other conditions, prospects or creditworthiness
of Holdings or any Subsidiary which may come into the possession of the
Administrative Agent or any of their officers, directors, employees, agents,
attorneys-in-fact or affiliates.
11.07 Indemnification. The Banks agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective Loans and unutilized Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the
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Administrative Agent in its capacity as such in any way relating to or arising
out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Administrative Agent under or in
connection with any of the foregoing, but only to the extent that any of the
foregoing is not paid by Holdings or any of its Subsidiaries, provided that no
Bank shall be liable to the Administrative Agent for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting
solely from the Administrative Agent's gross negligence or willful misconduct.
If any indemnity furnished to the Administrative Agent for any purpose shall, in
the opinion of the Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section 11.07 shall survive the payment of all
Obligations.
11.08 The Administrative Agent in Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with Holdings and its Subsidiaries
as though not acting as Administrative Agent hereunder. With respect to the
Loans made by it and all Obligations owing to it, the Administrative Agent shall
have the same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Administrative Agent, and the terms
"Bank" and "Banks" shall include the Administrative Agent in its individual
capacity.
11.09 Successor Administrative Agent. The Administrative Agent
may resign as the Administrative Agent upon 20 days' notice to the Banks and
Holdings. The Required Banks shall appoint from among the Banks a successor
Administrative Agent for the Banks subject to prior approval by Holdings (such
approval not to be unreasonably withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" shall include such successor agent effective upon
its appointment, and the resigning Administrative Agent's rights, powers and
duties as the Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement. After the retiring Administrative Agent's
resignation hereunder as the Administrative Agent, the provisions of this
Section 11 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
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SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of White & Case) and of the Administrative
Agent and each of the Banks in connection with the enforcement of the Credit
Documents and the documents and instruments referred to therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and for each of the Banks); (ii) in the event (x) that any
of the Mortgages are foreclosed in whole or in part or that any of the Mortgages
are put into the hands of an attorney for collection, suit, action or
foreclosure, (y) of the foreclosure of any mortgage prior to or subsequent to
any of the Mortgages in which proceeding the Collateral Agent is made a party,
or (z) of the bankruptcy, insolvency, rehabilitation or other similar proceeding
in respect of the Borrower or any of its Subsidiaries, pay all costs of
collection and defense, including reasonable attorneys' fees in connection
therewith and in connection with any appellate proceeding or post-judgment
action involved therein, which shall be due and payable together with all
required service or use taxes; (iii) pay and hold each of the Banks harmless
from and against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save each of the Banks 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 Bank) to pay such
taxes; and (iv) indemnify each Bank, its officers, directors, employees,
representatives and agents (collectively, the "Indemnitees") from and hold each
of them harmless against any and all losses, liabilities, obligations (including
removal or remedial actions), claims, damages or expenses (including reasonable
attorneys' and consultants' fees and disbursements) incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of (a) any
interest in any Real Property (other than as permitted hereunder and/or under
the other Credit Documents) is claimed by any other Person, (b) any
investigation, litigation or other proceeding (whether or not any Bank is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the Transaction or
the consummation of any transactions contemplated in any Credit Document, or (c)
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,
leased or at any time operated by the Borrower 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 the Borrower or
any of its Subsidiaries, the non-compliance by the Borrower or any of its
Subsidiaries of any Real Property with foreign, federal, state and local laws,
regulations, ordinances or Environmental Laws (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim relating
to the Borrower or
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any of its Subsidiaries or any Real Property owned, leased or at any time
operated by the Borrower or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such 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 or of any other Indemnitee who is such Person or an
affiliate of such Person). To the extent that the undertaking to indemnify, pay
or hold harmless any Person 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.
12.02 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 of an Event of Default, each
Bank 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
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Bank under this Agreement or
under any of the other Credit Documents, including, without limitation, all
interests in Obligations the Borrower purchased by such Bank pursuant to Section
12.06(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 Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, if to the
Borrower, at the address specified opposite its signature below; if to any Bank,
at its address specified for such Bank on Annex II hereto; or, at such other
address as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.
12.04 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 that no Credit Party may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of all the Banks. Each Bank may at any time grant participations
in any of its rights hereunder or under any of the Notes to
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another financial institution, provided that in the case of any such
participation, (i) the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including rights of consent,
approval or waiver (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such Bank
in favor of the participant relating thereto), (ii) such Bank's obligations
under this Agreement (including, without limitation, its Commitment hereunder)
shall remain unchanged, (iii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iv) such Bank
shall remain the holder of any Note for all purposes of this Agreement and (v)
the Borrower, the Administrative Agent, and the other Banks shall continue to
deal solely and directly with the selling Bank in connection with such Bank's
rights and obligations under this Agreement, and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation, except that the participant shall be entitled to the benefits of
Sections 1.10, 1.11 and 4.04 of this Agreement to the extent that such Bank
would be entitled to such benefits if the participation had not been entered
into or sold, and, provided further, that no Bank shall transfer, grant or sell
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 (x) extend the final scheduled
maturity of the Term Loans or Revolving Loans in which such participant is
participating (it being understood that any waiver of the making of, or the
application of any amortization payment or other prepayment or the method of any
application of any prepayment to the amortization of the Loans shall not
constitute an extension of the final maturity date thereof), or reduce the rate
or extend the time of payment of interest or Fees thereon (except in connection
with a waiver of the applicability of any post-default increase in interest
rates), or reduce the principal amount thereof, or increase such participant's
participating interest in any Commitment over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default or of any
mandatory prepayment or a mandatory reduction in the Total Commitment, or a
mandatory prepayment, shall not constitute a change in the terms of any
Commitment), (y) release all or substantially all of the Collateral (in each
case except as expressly provided in the Credit Documents) or (z) consent to the
assignment or transfer by Holdings and/or the Borrower of any of its rights and
obligations under this Agreement.
(b) Notwithstanding the foregoing, (x) any Bank may assign all
or a portion of its Loans and/or Commitments, which does not have to be pro rata
among the Facilities, and its rights and obligations hereunder to another Bank
that is not a Defaulting Bank, and (y) any Bank may assign all, or if less than
all, a portion equal to at least $5,000,000 in the aggregate for the assigning
Bank or assigning Banks, of its Loans and/ or Commitments and its rights and
obligations hereunder, which assignment does not have to be pro rata between the
Facilities, to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Bank by execution of an Assignment
Agreement, provided that, (i) at such time Annex I shall be deemed modified to
reflect the
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Commitments (and/or outstanding Term Loans, as the case may be) of such new Bank
and of the existing Banks, (ii) upon surrender of the old Notes, new Notes will
be issued, at the Borrower's expense, to such new Bank and to the assigning
Bank, 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 Term Loans, as the case may be), (iii) in the
case of clause (y) only, the consent of the Administrative Agent shall be
required in connection with any such assignment and (iv) the Administrative
Agent shall receive at the time of each such assignment, from the assigning or
assignee Bank, the payment of a non-refundable assignment fee of $3,000 and,
provided further, that such transfer or assignment will not be effective until
recorded by the Administrative Agent on a register maintained by it. To the
extent of any assignment pursuant to this Section 12.04(b) the assigning Bank
shall be relieved of its obligations hereunder with respect to its assigned
Commitments. At the time of each assignment pursuant to this Section 12.04(b) to
a Person which is not already a Bank 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 Bank 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 assignment of all or any portion of a Bank's
Commitments and related outstanding Obligations pursuant to this Section
12.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10 from those being charged by the respective assigning Bank prior to
such assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower shall be obligated to any other increased costs of
the type described above resulting from changes after the date of the respective
assignment). Nothing in this clause (b) shall prevent or prohibit any Bank from
pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings
made by such Bank from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section
12.04, no transfer or assignment of the interests or obligations of any Bank
hereunder or any grant of participation therein shall be permitted if such
transfer, assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any
State.
(d) Each Bank initially party to this Agreement hereby
represents, and each Person that became a Bank pursuant to an assignment
permitted by this Section 12.04 will, upon its becoming party to this Agreement,
represent that it is a commercial lender, other financial institution or other
"accredited" investor (as defined in SEC Regulation D) which makes or acquires
loans in the ordinary course of its business and that it will make or acquire
Loans for its own account in the ordinary course of such business, provided that
subject to the preceding clauses (a) and (b), the disposition of any promissory
notes or other
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evidences of or interests in Indebtedness held by such Bank shall at all times
be within its exclusive control.
(e) The Administrative Agent shall maintain at its Notice
Office a copy of each Assignment Agreement delivered to and accepted by it and a
register for the recorda- tion of the names and addresses of the Banks and the
Commitment of, and principal amount of the Loans owing to, each Bank from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower and the Administrative Agent or any Bank 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 and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Bank would otherwise have. No notice to or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Banks to any other or further action
in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of the
Borrower in respect of any Obligations, it shall distribute such payment to the
Banks (other than any Bank that has expressly waived its right to receive its
pro rata share thereof) pro rata based upon their respective shares, if any, of
the Obligations with respect to which such payment was received.
(b) Each of the Banks 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 or Fees, of a sum which with respect to the related sum or sums
received by other Banks is in a greater proportion than the total of such
Obligation then owed and due to such Bank bears to the total of such Obligation
then owed and due to all of the Banks immediately prior to such receipt, then
such Bank receiving such excess
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payment shall purchase for cash without recourse or warranty from the other
Banks an interest in the Obligations to such Banks in such amount as shall
result in a proportional participation by all of the Banks in such amount,
provided that if all or any portion of such excess amount is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by Holdings to the Banks); provided, that except as otherwise specifically
provided herein, all computations determining compliance with Sections 4.02 and
8, including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 1995 financial statements delivered to
the Banks pursuant to Section 6.10(b), but shall be prepared on a consolidated
basis instead of a combined basis and shall not give effect to purchase
accounting adjustments required or permitted by APB 16 (including non-cash
write-ups and non-cash charges relating to inventory and fixed assets, in each
case arising in connection with the Transaction) and APB 17 (including non-cash
charges relating to intangibles and goodwill arising in connection with the
Transactions).
(b) All computations of interest on Loans and Fees hereunder
shall be made on the actual number of days elapsed over a year of 360 days.
12.08 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, EXCEPT THAT
THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS
CREATED PURSUANT TO THE MORTGAGES SHALL BE GOVERNED BY AND CONSTRUED ACCORDING
TO THE LAW OF THE STATE IN WHICH THE APPLICABLE REAL PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF
ALL CREDIT DOCUMENTS, INCLUDING ALL MORTGAGES, AND ALL OF THE OBLIGATIONS
ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK GOVERNS THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, EXCEPT TO THE EXTENT AFORESAID
WITH RESPECT TO THE LIENS CREATED BY THE MORTGAGES. 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
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unconditionally, the jurisdiction of the aforesaid courts. Holdings and the
Borrower hereby irrevocably designate, appoint and empower Corporation Service
Company, with offices on the date hereof at 375 Hudson Street, New York, New
York 10014, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which may be served in
any such action or proceeding. If for any reason such designee, appointee and
agent shall cease to be available to act as such, Holdings and the Borrower
agrees to designate a new designee, appointee and agent in New York City on the
terms and for the purposes of this provision satisfactory to the agent under
this Agreement. Holdings and the Borrower hereby 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 Holdings or the Borrower, as the case may be, at its
address for notices pursuant to Section 12.03, such service to become effective
30 days after such mailing. Nothing herein shall affect the right of the
Administrative Agent, any Bank to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against Holdings and
the Borrower in any other jurisdiction.
(b) Holdings and 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.
12.09 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.
12.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which each of Holdings, the Borrower and each
of the Banks shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at the
Notice Office of the Administrative Agent or, in the case of the Banks, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written telex or facsimile transmission notice (actually received) at such
office that the same has been signed and mailed to it.
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12.11 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.
12.12 Amendment or Waiver. Neither this Agreement 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
Borrower and the Required Banks, provided that no such change, waiver, discharge
or termination shall, without the consent of each Bank (other than a Defaulting
Bank) affected thereby, (i) extend the final maturity date applicable to a
Facility (it being understood that any waiver of the making of, or application
of any prepayment of or the method of application of any amortization payment or
other prepayment to, the amortization of, the Loans shall not constitute an
extension of such final maturity thereof), reduce the rate or extend the time of
payment of interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) or Fees thereon, or reduce the
principal amount thereof, or increase the Commitment of any Bank over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of any mandatory prepayment or a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of any Commitment of
any Bank), (ii) release all or substantially all of the Collateral (in each case
except as expressly provided in the Credit Documents), (iii) amend, modify or
waive any provision of this Section 12.12, or Section 11.07, 12.01, 12.04, 12.06
or 12.07(b), (iv) reduce the percentage specified in, or otherwise modify, the
definition of Required Banks or (v) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement. No provision
of Section 2 or 11 may be amended without the consent of (x) any Letter of
Credit Issuer adversely affected thereby or (y) the Administrative Agent,
respectively.
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01 shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Bank, provided that the Borrower shall not be responsible for costs arising
under Section 1.10 or 4.04 resulting from any such transfer (other than a
transfer pursuant to Section 1.12) to the extent not otherwise applicable to
such Bank prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, the Banks
shall hold all non-public information obtained pursuant to the requirements of
this Agreement which has been identified as such by the Borrower in accordance
with its customary procedure for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by any bona
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fide transferee or participant in connection with the contemplated transfer of
any Loans or Commitments or participation therein (provided that each such
prospective transferee and/or participant shall execute an agreement for the
benefit of the Borrower with such prospective transferor Bank containing
provisions substantially identical to those contained in this Section 12.15), to
its auditors, attorneys or as required or requested by any governmental agency
or representative thereof or pursuant to legal process, provided that, unless
specifically prohibited by applicable law or court order, each Bank shall notify
the Borrower of any request by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information, and provided
further that in no event shall any Bank be obligated or required to return any
materials furnished by Holdings or any Subsidiary. Holdings and the Borrower
hereby agrees that the failure of a Bank to comply with the provisions of this
Section 12.15 shall not relieve Holdings or the Borrower of any of the
obligations to such Bank under this Agreement and the other Credit Documents.
12.16 Bank Register. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this Section
12.16, to maintain a register (the "Bank Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. 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 Bank, the transfer of the Commitments of such Bank
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
Bank 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. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the Bank
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). 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 12.16.
SECTION 13. Guaranty.
13.01 The Guaranty. In order to induce the Banks to enter into
this Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans, Holdings
hereby agrees with the Banks as follows: Holdings hereby, unconditionally and
irrevocably, guarantees as primary
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obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all indebtedness of the
Borrower to the Banks. If any or all of the indebtedness of the Borrower to the
Banks becomes due and payable hereunder, Holdings unconditionally promises to
pay such indebtedness to the Banks, or order, on demand, together with any and
all expenses which may be incurred by the Agent or the Banks in collecting any
of the indebtedness. The word "indebtedness" is used in this Section 13 in its
most comprehensive sense and includes any and all advances, debts, obligations
and liabilities of the Borrower arising in connection with this Agreement or any
other Credit Document or under any Interest Rate Agreement with a Bank, in each
case, heretofore, now, or hereafter made, incurred or created, whether
voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether the Borrower may be liable individually or jointly with others, whether
or not recovery upon such indebtedness may be or hereafter become barred by any
statute of limitations, and whether or not such indebtedness may be or hereafter
become otherwise unenforceable.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Banks 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 9.05, and
unconditionally promises to pay such indebtedness to the Banks, or order, on
demand, in lawful money of the United States.
13.03 Nature of Liability. The liability of Holdings hereunder
is exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by Holdings, any other guarantor
or by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent or the Banks on the indebtedness which the Administrative
Agent or such Banks repay the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Parent Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding. This
Guaranty is a guaranty of payment and not a guaranty of collectibility.
13.04 Independent Obligation. The obligations of Holdings
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
Holdings whether or not action is brought against any other guarantor or the
Borrower and whether or not any other guarantor or the
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Borrower be joined in any such action or actions. Holdings 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
Holdings.
13.05 Authorization. Holdings authorizes the Administrative
Agent and the Banks without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the indebtedness or any part thereof in accordance with this
Agreement, including any increase or decrease of the rate of interest thereon,
(b) take and hold security from any guarantor or any other party for the payment
of this guaranty or the indebtedness and exchange, enforce, waive and release
any such security, (c) apply such security and direct the order or manner of
sale thereof as the Administrative Agent and the Banks in their discretion may
determine and (d) release or substitute any one or more endorsers, guarantors,
the Borrower or other obligors.
13.06 Reliance. It is not necessary for the Administrative
Agent or the Banks to inquire into the capacity or powers of the Borrower or 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.
13.07 Subordination. Any indebtedness of the Borrower now or
hereafter held by Holdings is hereby subordinated to the indebtedness of the
Borrower to the Administrative Agent and the Banks; and such indebtedness of the
Borrower to Holdings, if the Administrative Agent, after an Event of Default has
occurred, so requests, shall be collected, enforced and received by Holdings as
trustee for the Banks and be paid over to the Banks on account of the
indebtedness of the Borrower to the Banks, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this
Guaranty. Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any indebtedness of the Borrower to Holdings, Holdings shall mark
such note or negotiable instrument with a legend that the same is subject to
this subordination.
13.08 Waiver. (a) Holdings waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent or the Banks to (a) proceed against the Borrower, any other
guarantor or any other party, (b) proceed against or exhaust any security held
from the Borrower, any other guarantor or any other party or (c) pursue any
other remedy in the Administrative Agent's or the Banks' power whatsoever.
Holdings waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party other than payment in full of
the
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indebtedness, including without limitation any defense based on or arising out
of the disability of the Borrower, any other guarantor or any other party, or
the unenforceability of the indebtedness or any part thereof from any cause, or
the cessation from any cause of the liability of the Borrower other than payment
in full of the indebtedness. The Administrative Agent and the Banks may, at
their election, foreclose on any security held by the Administrative Agent or
the Banks 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
Administrative Agent and the Banks may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of Holdings hereunder except to the extent the indebtedness has been paid.
Holdings waives any defense arising out of any such election by the
Administrative Agent and the Banks, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of Holdings against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notice of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Holdings 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 indebtedness and the
nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that the Administrative Agent and the Banks shall have no
duty to advise Holdings of information known to them regarding such
circumstances or risks.
13.09 Limitation on Enforcement. The Banks 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
Banks and that no Bank shall have any right individually to seek to enforce or
to enforce this Guaranty or to realize upon the security to be granted by any
Security Document, it being understood and agreed that such rights and remedies
may be exercised by the Administrative Agent or the Collateral Agent for the
benefit of the Banks upon the terms of this Agreement and any Security Document.
The Banks further agree that the Guaranty may not be enforced against any
director, officer, employee or stockholder of Holdings.
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