10.10(c)
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TRANCHE C SUPPLEMENT
among
EXTENDED STAY AMERICA, INC.
and
VARIOUS TRANCHE C BANKS
----------------
Dated as of December 15, 1998
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Page 1
TRANCHE C SUPPLEMENT
DATED: December 15, 1998
Reference is made to the Credit Agreement described in Item 1
of Annex I annexed hereto and made a part hereof (as such Credit Agreement may
hereafter be amended, modified, extended, renewed, replaced, restated or
supplemented from time to time, the "Credit Agreement"). Unless defined in Annex
I attached hereto, capitalized terms defined in the Credit Agreement are used
herein as therein defined. Extended Stay America, Inc. and each of the
undersigned lending institutions (each a "Tranche C Bank") hereby agree as
follows:
1. Each Tranche C Bank agrees that, subject to the terms and
conditions set forth herein, in Annex I and in the Credit Agreement, it shall
provide the Commitment under the Relevant Tranche C Term Loan Sub-Facility, as
is indicated for such Tranche C Bank in Item 3 of Annex I. Each Tranche C Bank
hereby agrees that after giving effect to this Tranche C Supplement, each
Tranche C Bank's Tranche C Term Loan Commitment will be as set forth in Item 3
of Annex I hereto. As used herein, the term "Relevant Tranche C Term Loan
Sub-Facility" shall mean the Tranche C Term Loan Sub-Facility established
pursuant to the Tranche C Supplement dated December 15, 1998.
2. Each Tranche C Bank (i) confirms that it has received a
copy of the Credit Agreement and the other Credit Documents, together with
copies of the financial statements referred to therein and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Tranche C Supplement; (ii) agrees that it will,
independently and without reliance upon any 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 decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Administrative Agent and
the Syndication Agent to take such action as agents on its behalf and to
exercise such powers under the Credit Agreement and the other Credit Documents
as are delegated to the Administrative Agent and the Syndication Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
and (iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (v) in the case of a Tranche C Bank that is not
already a Bank under the Credit Agreement 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, agrees to 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) of the Credit
Agreement.
3. Following the execution of this Tranche C Supplement by the
Borrower and the Tranche C Banks, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. Upon the delivery of
a fully executed original hereof to the Administrative Agent, as of the
Supplement Effective Date, each Tranche C Bank shall be a party to the Credit
Agreement and, to the extent provided in this Tranche C Supplement, have the
rights and obligations of a Bank thereunder and under the other Credit
Documents.
Page 2
4. This Tranche C Supplement shall become effective as of the
date (the "Supplement Effective Date") when (i) the Borrower, each Tranche C
Bank and the Syndication Agent shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered (including by way
of telecopier) the same to the Administrative Agent at the Notice Office and
(ii) each condition precedent set forth in Item 9 of Annex I attached hereto
shall have been satisfied.
5. THIS TRANCHE C SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6. From and after the Supplement Effective Date, all
references in the Credit Agreement and the other Credit Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement as
supplemented hereby.
Page 3
IN WITNESS WHEREOF, the parties hereto have caused this
Tranche C Supplement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
EXTENDED STAY AMERICA, INC.
By: /s/ Robert A. Brannon
----------------------
Name: Robert A. Brannon
Title: Senior Vice-President
Acknowledged and Agreed: MORGAN STANLEY SENIOR FUNDING
INC., Individually, as Syndication Agent
MORGAN STANLEY SENIOR and as Arranger
FUNDING, INC. as Syndication Agent
and as Arranger By: /s/ Michael T. McLaughlin
--------------------------
Name: Michael T. McLaughlin
By: /s/ Michael T. McLaughlin Title: Principal
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, Individually and as
Administrative Agent
By: /s/ Takuya Honjo
-------------------------
Name: Takuya Honjo
Title: Senior Vice President
Page 4
KZH STERLING LLC
By: /s/ Virginia Conway
---------------------
Name: Virginia Conway
Title: Authorized Agent
FRANKLIN FLOATING RATE TRUST
By: /s/ Chauncey Lufkin
---------------------
Name: Chauncey Lufkin
Title:
PILGRIM PRIME RATE TRUST
By: /s/ Jeffrey A. Bakalar
-----------------------
Name: Jeffrey A. Bakalar
Title: Vice President
ARCHIMEDES FUNDING II, LTD.
By: ING CAPITAL ADVISORS, INC., as
Collateral Managers
By: /s/ Michael J. Campbell
------------------------
Name: Michael J. Campbell
Title: Senior Vice President
& Portfolio Manager
KZH ING-3 LLC
By: /s/ Virginia Conway
--------------------
Name: Virginia Conway
Title: Authorized Agent
Page 5
KZH ING-1 LLC
By: /s/ Virginia Conway
--------------------
Name: Virginia Conway
Title: Authorized Agent
ANNEX I
Page 1
ANNEX FOR TRANCHE C SUPPLEMENT
ANNEX I
1. Name and Date of Credit Agreement:
Credit Agreement, dated as of September 26, 1997 and amended and
restated as of March 10, 1998, among Extended Stay America, Inc., the
lenders from time to time party thereto, Morgan Stanley Senior Funding,
Inc., as Syndication Agent and as Arranger, and The Industrial Bank of
Japan, Limited, as Administrative Agent, including any amendments,
modifications, extensions, renewals, replacements, restatements or
supplements thereto.
2. Supplement Effective Date:
December 15, 1998 (the "Supplement Effective Date")
3. Amounts (as of date of item #2 above):
Commitment Under Relevant
Bank Tranche C Term Loan Sub-Facility
Archimedes Funding II, Ltd. $ 8,000,000
KZH ING-3 LLC $ 2,000,000
KZH ING-1 LLC $ 5,000,000
The Industrial Bank of Japan, Ltd. $ 11,000,000
KZH Sterling, LLC $ 5,000,000
Franklin Floating Rate Trust $ 10,000,000
Pilgrim Prime Rate Trust $ 5,000,000
Morgan Stanley Senior Funding, Inc. $ 54,000,000
Total Commitment $100,000,000
============
4. Maturity Date for Relevant Tranche C Term Loan Sub-Facility:
December 31, 2004 (the "C Maturity Date")
5. Scheduled Amortizations:
In addition to any other mandatory repayments or commitment
reductions pursuant to Section 4.02 of the Credit Agreement, the
Borrower shall be required to repay on each date set forth below the
principal amount of the Tranche C Term Loans, to the extent
outstanding, set forth opposite such date (each such repayment as the
same may be reduced as provided in Section 4.01 and 4.02(h) and (i), a
"Tranche C Term Loan Scheduled Repayment"):
ANNEX I
Page 2
Tranche C Scheduled Repayment Date Amount
Each December 31 commencing December 31, 2000 An amount equal to 1% of the
and ended December 31, 2003 aggregate principal amount of
Tranche C Term Loans outstanding
on the last date of the Tranche
C Drawing Period (as defined
below)
Each March 21, 2004, June 30, 2004, September An amount equal to 24% of the
30, 2004 and the C Maturity Date aggregate principal amount of
Tranche C Term Loans outstanding
on the last day of the Tranche C
Drawing Period
6. Applicable C Margin:
For Base Rate Loans: 2.50%;
For Eurodollar Loans: 3.50%.
7. Commitment Commission: The Borrower agrees to pay to the Administrative
Agent for distribution to each Tranche C Bank with a Tranche C Term Loan
Commitment a commitment commission (the "Tranche C Term Loan Commitment
Commission") for the period from the Supplement Effective Date to but not
including the last day of the Tranche C Drawing Period computed at a
rate per annum for each day equal to3/4of 1% on the Tranche C Term Loan
Commitment of such Tranche C Bank on such day. Accrued Tranche C
Term Loan Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the last day of the Tranche
C Drawing Period or such earlier date upon which the Total Tranche C Term
Loan Commitment is terminated.
8. Facility Fee; Other Fees: The Borrower shall pay to the Agents such
other fees as have been separately agreed to in writing by the Borrower
with the Agents with respect to the Tranche C Term Loan Commitment.
9. Additional Conditions Precedent to the Supplement Effective Date.
Except as otherwise set forth below, the occurrence of the Supplement
Effective Date is subject at the time of occurrence to the satisfaction
of the following conditions:
9.01 Execution of Agreement; Notes. (i) On or prior to the
Supplement Effective Date (i) this Agreement shall have been executed
and delivered as provided in paragraph 4, (ii) an Acknowledgment and
Agreement in the form of Annex II to this Supplement shall be executed
and delivered to the Administrative Agent by each
ANNEX I
Page 3
Subsidiary Guarantor and (iii) there shall have been delivered to the
Administrative Agent for the account of each of the Tranche C Banks
the appropriate Tranche C Term Note executed by the Borrower, in
each case in the amount, maturity and as otherwise provided herein.
9.02 Fees, etc. On or prior to the Supplement Effective Date,
the Borrower shall have paid to the Agents and the Banks all reasonable
costs, fees and expenses (including, without limitation, reasonable
legal fees and expenses) payable to the respective Agents and the Banks
to the extent then due.
9.03 Opinion of Counsel. (a) On the Supplement Effective Date,
the Administrative Agent shall have received from Bell, Boyd & Lloyd,
counsel to the Borrower and the Subsidiary Guarantors, an opinion
addressed to each of the Agents and each of the Banks and dated the
Supplement Effective Date covering the matters set forth in Annex III
to this Supplement and such other matters incident to the transactions
contemplated herein as either Agent may reasonably request.
(b) To the extent that any condition precedent required to be
satisfied under 9.03 (a) above is not satisfied on the Supplement
Effective Date, the satisfaction of such shall be solely a condition
precedent to the incurrence of the Tranche C Term Loans on the initial
Borrowing date.
9.04 Corporate Documents; Proceedings; etc. (a) On the
Supplement Effective Date, the Administrative Agent shall have received
a certificate, dated the Supplement Effective Date, signed by the
chairman of the board, the president, any vice president or the
treasurer of the Borrower and each Subsidiary of the Borrower, if any,
which is to become a Credit Party on the Supplement Effective Date, and
attested to by the secretary or any assistant secretary of the
respective such Person, in the form of Exhibit F to the Credit
Agreement with appropriate insertions, together with copies of the
certificate of incorporation and by-laws of the respective such Person,
and the resolutions of the respective such Person referred to in such
certificate, and the foregoing shall be reasonably acceptable to the
Agents.
(b) On the Supplement Effective Date, the Administrative Agent
shall have received certificates of all Credit Parties (other than the
Credit Parties delivering certificates pursuant to preceding clause
(a)) (x) certifying that there were no changes, or providing the text
of any changes, to the certificate of incorporation and by-laws of such
Credit Parties as delivered pursuant to Section 5.04 of the Credit
Agreement, (y) to the effect that each such Credit Party is in good
standing in its respective state of incorporation and in those states
where each such Credit Party conducts business and (z) providing the
resolutions adopted by each such Credit Party with respect to the
actions contemplated in this Agreement (including, without limitation,
with respect to the amendment and restatement of this Agreement, and
the obligations of such Credit Party with respect to the increased
extensions of credit pursuant hereto), and the foregoing shall be
reasonably acceptable to the Agents in their reasonable discretion.
ANNEX I
Page 4
(c) On or prior to the Supplement Effective Date, all
corporate, and legal proceedings and all instruments and agreements in
connection with the transactions contemplated by this Agreement and the
other Credit Documents shall be reasonably satisfactory in form and
substance to the Agents and the Banks, and the Agents shall have
received all information and copies of all documents and papers,
including records of corporate and partnership proceedings,
governmental approvals, good standing certificates and bring-down
telegrams, if any, which any Agent may have reasonably requested in
connection therewith, such documents and papers where appropriate to be
certified by proper corporate, or governmental authorities.
(d) To the extent that any condition precedent required to be
satisfied under 9.04 (a), (b), or (c) above is not satisfied on the
Supplement Effective Date, the satisfaction of such shall be solely a
condition precedent to the incurrence of the Tranche C Term Loans on
the initial Borrowing date.
9.05 Adverse Change, etc. (a) On the Supplement Effective
Date, nothing shall have occurred (and the Banks shall have become
aware of no facts, conditions or other information not previously
known) which any Agent or the Banks believe would reasonably be
expected to have a material adverse effect (i) on the rights or
remedies of the Agents or the Banks, or on the ability of any Credit
Party to perform its respective obligations to the Agents and the Banks
or (ii) on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
(b) On or prior to the Supplement Effective Date, all
necessary governmental (domestic and foreign) and third party approvals
and/or consents (if any) in connection with the making of the Tranche C
Term Loans and the transactions contemplated by the Credit Documents
and otherwise referred to herein or therein shall have been obtained
and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
making of the Tranche C Term Loans and the transactions contemplated by
the Credit Documents or otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief
or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the making of the Tranche C Term
Loans or the transactions contemplated by the Credit Documents.
(c) On or prior to the Supplement Effective Date, (i) no
Default or Event of Default exists and (ii) all representations and
warranties contained in the Credit Agreement and other Credit Documents
shall be true and correct in all material respects with the same effect
as though such representations and warranties had been made on the
Supplement Effective Date.
9.06 Litigation. On the Supplement Effective Date, no
litigation by any entity (private or governmental) shall be pending or,
to the best of the Borrower's knowledge,
ANNEX I
Page 5
threatened with respect to the making of the Tranche C Term Loans or
any Loans under the Credit Agreement or the Credit Documents or
any documentation executed in connection therewith or the
transactions contemplated thereby.
9.07 Conditions under Section 1.14. On the Supplement
Effective Date, all conditions to the establishment of the Tranche C
Term Loan Facility specified under Section 1.14 of the Credit Agreement
shall have been satisfied.
10. Additional Conditions Precedent to the Incurrence of Tranche C Term
Loans: In addition to the conditions set forth in Section 6 of the
Credit Agreement, the obligation of each Tranche C Bank to make Tranche
C Term Loans is subject at the time of the making of such Tranche C
Term Loans to the satisfaction of the following conditions:
(a) Tranche C Term Loans may be borrowed from time to time
after the later of (x) January 1, 1999 and (y) the Supplement Effective
Date until April 15, 1999 (such period being herein referred to as
"Tranche C Drawing Period"), provided that the Tranche C Term Loans may
not be borrowed on more than two dates; and
(b) The initial aggregate principal amount of the Tranche C
Term Loans shall not exceed the Maximum Tranche C Permitted Amount.
11. Notice and Information:
MORGAN STANLEY SENIOR FUNDING, INC.
1585 Broadway
New York, NY 10036
Attention: Mike McLaughlin
Telephone: 212-761-2838
Telecopier: 212-761-0322
ARCHIMEDES FUNDING II, LTD.
333 South Grand Avenue
Suite 4250
Los Angeles, CA 90071
Attention: Mike Campbell
Telephone: 213-346-3971
Telecopier: 213-346-3995
ANNEX I
Page 6
KZH ING-1 LLC
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, NY 10001
Attention: Virginia Conway
Telephone: 212-946-7575
Telecopier: 212-946-7776
KZH ING-3 LLC
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, NY 10001
Attention: Virginia Conway
Telephone: 212-946-7575
Telecopier: 212-946-7776
THE INDUSTRIAL BANK OF JAPAN, LTD.
1251 Avenue of the Americas
New York, NY 10020-1104
Attention: Chris Droussiotis
Telephone: 212-282-3323
Telecopier: 212-282-4490
KZH STERLING LLC
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, NY 10001
Attention: Virginia Conway
Telephone: 212-946-7575
Telecopier: 212-946-7776
FRANKLIN FLOATING RATE TRUST
777 Mariners Island Blvd.
San Mateo, CA 94404
Attention: Chauncey Lufkin
Telephone: 650-525-7424
Telecopier: 650-312-3346
ANNEX I
Page 7
PILGRIM PRIME RATE TRUST
Two Renaisance Square
40 N. Central Ave., Suite 1200
Phoenix, AZ 85004-4424
Attention: Jeff Bakalar
Telephone: 602-417-8259
Telecopier: 602-417-8327